The Real News Network has the interview they have titled US Backing the Destabilization of Venezuela. Ok, so maybe the title is a little misleading, but the actual interview is straight forward. Maybe the US Government isn’t directly involved in the destabalization (the headline never said government), but other forces in the US are probably involved.
Here I quote the bio of the interviewee.
Keane Bhatt is a Washington, D.C.-based activist and writer, and a contributing editor to the North American Congress on Latin America. He has worked in the United States and Latin America on a variety of campaigns related to community development and social justice. His analyses and opinions have appeared in a range of outlets, including NPR.org, The Nation, The St. Petersburg Times, CNN En Español and Al Jazeera. He is the author of the NACLA blog “Manufacturing Contempt,” which critically analyzes the U.S. press and its portrayal of the hemisphere.
I’ll quote just the positive comments about the Venezuelan situation from the interviewee. I’ll llet you view the interview or read the transcript to swee and hear the other parts.
If you look at unemployment, it’s at a very low point. It’s about, you know, 6 percent. If you look at poverty from 2011 to 2012, Venezuela presided over the sharpest decline in poverty throughout the entire region. So it fell by 19 percent in 2013. Despite the problems of inflation and so on, you have further reductions in the rate of household poverty. So that fell by an entire percentage point over 2013, despite the inflation.
So what you’re seeing is a portrayal of Venezuela as some kind of a chaotic economic basket case. But when you look at a lot of the macroindicators, you’ve had real respectable per capita income growth. Over the past decade it’s been at about 2.7 percent annually. Again, you know, if you look at this historically, poverty has been slashed by half, absolute poverty by 70 percent. The inequality has been reduced so drastically that it’s now the lowest in Latin America.
And to give you a historic perspective, the inflation problems that beset Venezuela now are nothing like the inflation that predates the Chávez era, in which it was much, much higher.
So what you’re seeing is a very distorted and false rendering of what’s taken place in Venezuela during the Chávez years, and even during the Maduro years
If you think only this guy and The Real News Network feel this way about the situation, I have looked up the newspaper story whose image is shown in the video.
The UK Guardian has the story Sorry, Venezuela haters: this economy is not Greece of Latin America.
But how can a government with more than $90bn in oil revenue end up with a balance-of-payments crisis? Well, the answer is: it can’t, and won’t. In 2012 Venezuela had $93.6bn in oil revenues, and total imports in the economy were $59.3bn. The current account was in surplus to the tune of $11bn, or 2.9% of GDP. Interest payments on the public foreign debt, the most important measure of public indebtedness, were just $3.7bn. This government is not going to run out of dollars. The Bank of America’s analysis of Venezuela last month recognised this, and decided as a result that Venezuelan government bonds were a good buy.
On the web page where this article is being displayed are links to other stories from Venezuela that I am going to read. You might also be interested in them.
I think the whole upshot of this post is that, you, too, may be wondering how could Venezuela be having these problems if the Chavez government had not really been nearly as bad as it has been portrayed in the US noise media? This seems to show that if the US noise media had been deceiving us before, it is quite possible that they are at it again.
If you follow some of the links at The Guardian, the picture gets a little cloudy.
There is the story Venezuela’s poor join protests as turmoil grips Chávez’s revolution.
The poor neighbourhood of Petare in western Caracas is not an obvious hotbed of anti-government sentiment. In the past, its residents have been among the major beneficiaries of Venezuela’s public health and education campaigns, and an economic policy that resulted in one of the sharpest falls in inequality in the world.
But as demonstrations sweep several major cities, even the people of Petare have taken to the streets to protest again surging inflation, alarming murder rates and shortages of essential commodities.
There is also the story Venezuela protests: demonstrators tell us why they’re taking part.
We asked protesters in Venezuela why they have taken part in the anti-government demonstrations. Here is a selection of their views.
If you read the 4 selections, you find that they are all anti-government. Of course, if these are anti-government protests, that is what you would expect. (I naively thought that there might be some responses from pro-government demonstrators.)
Of course, we can rationalize either side as being closer to the truth, but we have no real way of knowing. When the CIA or the powerful multi-national corporations want to foment regime change, they are usually pretty good at covering their tracks or at least having plausible deniability. Still, this observation doesn’t prove anything, one way or another.
To add to the rationalizations, there is a little gem buried in my previous post Why Is The 2008 Crisis Taking So Long To Resolve?
As the Fed has got closer to ending the QE3 and the long-term U.S. rates have edged up, strong downward pressures have started to build up on the currencies, stocks and bonds of several emerging economies such as Brazil, India, South Africa and Turkey, which were widely seen as rising stars only a couple of years ago.
If you follow the trail of where this quote came from and an even older post than that, Tapering of Quantitative Easing Is Throwing Emerging Markets into Chaos, you might see another possibility of the unintended consequences of US policy having very harmful effects on emerging economies. Anyone unaware of this connection could blame the problems on those emerging economies rather than the U.S.
As you read the story of Venezuela’s economic problems, you might want to keep in mind the article from New Economic Perspectives MMT AND EXTERNAL CONSTRAINTS. (MMT is Modern Money Theory.)
To Fix or To Float, that is the question.
MMT argues that a sovereign government that issues its own “nonconvertible” currency cannot become insolvent in terms of its own currency. It cannot be forced into involuntary default on its obligations denominated in its own currency. It can “afford” to buy anything for sale that is priced in its own currency. It might be able to buy things for sale in foreign currency by offering up its own currency in exchange—but that is not certain.
If, instead, it promises to convert its currency at a fixed price to something else (gold, foreign currency) then it might not be able to keep that promise. Insolvency and involuntary default become possible.
As I read the story of Venezuela, I think it looks like Venezuela has tried to fix their currency rather than float it. They may be learning that they just cannot do that.