For five months investigative journalists from the New York Times sought and uncovered the truth about Nicolas Maduro’s socialist paradise in Venezuela, and then blamed the horror they found on “economic mismanagement.” This is a lie of the first magnitude, as expressed by Alfred Lord Tennyson: “A lie which is half a truth is ever the blackest of lies.”
The half-truth referred to by Tennyson assumes that the Times got their story at least half right: that “economic mismanagement” had something to do with the quadrupling of infant deaths due to malnutrition it found during its investigation. Students of socialism in history know better: Such mismanagement is one of the inevitable fruits of socialism. Once price information is removed through price controls and the division of labor is disrupted through government intervention, the end is predictable. Noted the Times:
Venezuela has been shuddering since its economy began to collapse in 2014. Riots and protests over the lack of affordable food, excruciatingly long lines for basic provisions, soldiers posted outside bakeries and angry crowds ransacking grocery stores have rattled cities, providing a telling, public display of the depths of the crisis.
Nothing was revealed in the 5,000-word study about the root cause, just some of the more pernicious, outrageous, and heart-rending results:
In a five-month investigation by The New York Times, doctors at 21 public hospitals in 17 states across the country said that their emergency rooms were being overwhelmed by children with severe malnutrition — a condition they had rarely encountered before the economic crisis began.
Some of the doctors interviewed said the children were arriving at their hospitals weighing not much more than when they were born, and said they were seeing the type of extreme malnutrition found in refugee camps.
Matt Vespa, an associate editor at Townhall, suffered under no such compunctions about the root cause of the disaster unfolding in Venezuela:
Venezuela was once a beacon of what the late Hugo Chavez called 21st Century Socialism. Oil prices were up; things were going well. Then, things fell apart. The drop in oil prices has been a contributing factor. Venezuelans for a few years now have lacked access to medicine, food, soap, toilet paper, and other basic commodities. They’re eating out of trashcans. Cats, dogs, and birds are being eaten. Even animals at the zoo are being stolen for consumption. There’s a food police that targets people who wait in food lines. That’s bad public relations for the government. The hospital system is in an awful state of disrepair, with soap and gloves being items that are in short supply. As a result, health care in the country has reverted back to 19th century conditions. Even educated people, like doctors and teachers, are resorting to prostitution to feed themselves and their families. Children have begun joining the sex industry to help their families eat. It truly is a horror show.
Vespa noted that Maduro’s government made it difficult for the Times’ people to get to the truth by “blacking out key medical data to keep this problem buried, with doctors being told to omit malnutrition notes in children’s medical records.… It’s because 21st Century Socialism has failed. It’s because the government knows there’s a serious problem, but isn’t willing to admit this.”
It’s much easier to find other evidences of Venezuela’s collapse as reported by The New American and elsewhere. In his efforts to focus attention away from his own corrupt policies, Maduro has had arrested and is keeping in jail top people from Citgo, wholly owned by his government’s PDVSA oil company. He has laughed off efforts by the Trump administration to release them because they are American citizens, claiming that they are also Venezuelans and therefore guilty of corrupt practices in running PDVSA.
Production is plunging at PDVSA, thanks to lack of maintenance and its inability to pay its bills. At the moment there are an estimated dozen oil tankers waiting to be unloaded. But as the unloading fees haven’t been paid, they remain in place. On Monday RBC Capital Markets reported that the company’s production in 2018 is likely to be far lower than previous estimates, perhaps bringing production down to less than half what it was just two years ago.
PDVSA bond holders are being stiffed. It’s been a month since Maduro held a creditors’ meeting in Caracas with nary a word, or payment, since then. The last time PDVSA made any bond interest payments was in September, with the total now overdue exceeding $700 million on eight separate bonds.
Question: What’s keeping this corrupt and failing enterprise afloat? Unfortunately it is a combination of help from American and Russian oil interests. American oil refiners with facilities on the Gulf Coast continue to purchase PDVSA oil to the tune of $1 billion a month, while a deal with Russia’s Rosneft Energy Company was just inked for an unknown amount, helping as well.
That Rosneft deal is interesting not only in its opacity regarding how much it paid Maduro to complete the deal but for its length. The deal — the development of two of the country’s offshore gas fields — lasts for 30 years, long after Maduro makes his unlamented passage into history. What Russia is doing is buying up precious assets on the cheap. It has already loaned the hapless socialist regime more than $6 billion, and this deal merely provides additional collateral.
Despite the Time’s deliberate unwillingness to call a spade a spade, its study is fruitful in exposing the failures of socialism. Such a system can only continue to exist with outside help.
Photo of man eating from garbage in Venezuela: Voice of America
An Ivy League graduate and former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at LightFromTheRight.com, primarily on economics and politics. He can be reached at firstname.lastname@example.org.