Saturday, March 15, 2008

Oil: Why So High?

For us market dummies Ronald Bailey explains what is going on with the price of oil and why it makes no sense. Depend is down, supply is up but prices insist on racing skywards. Bailey does admit a political factor and a falling dollar contribute but speculation is definitely contributing to the rise:

That brings us to speculation. Evans observes that since September 2003, the total number of open crude oil futures and options contracts rose by 364 percent. Meanwhile the global demand for petroleum rose by just 8.2 percent. "So the futures and options market has become more important than the physical supplies in driving the price," concludes Evans. "We are seeing investment flows into the oil market that don't have anything to do with the demand and supply of oil."

Investors are treating oil as a hedge against inflation and a falling dollar. Oil markets are part of a negative positive feedback loop in which higher oil prices contribute to higher inflation, which in turn lowers the value of the dollar, which boosts oil prices, and so forth. In other words, the oil market is coming to resemble the gold market (which has also been soaring). Evans notes that most gold traders don't even ask the question of how much gold was mined last year or how much spare gold mining capacity there is.

So where will prices end up? Bailey sees the bubble bursting at some point:
No one is predicting $10 per barrel oil. However, once the current bubble bursts, both Evans and Lynch believe that the price of crude will settle at around $60 to $70 per barrel in the next couple of years. "It's very hard to pinpoint just how long a bubble can expand before it breaks. Getting the timing right is not an easy matter," says Evans. But he adds, "I think that this is the riskiest time to be long in crude oil since 1980."

Monday, March 10, 2008

The Hugo Dems

WSJ has an editorial on what it labels the "Chavez Democrats." WSJ correctly castigates the Dems for trying to slap down Colombia during its high stakes confrantation with Hugo. They also note that the "soft power" lovers of the left seem to have forgotten what soft power is about:

Even as Mr. Chávez was doing his war dance, Senate Finance Chairman Max Baucus was warning the White House not to send the Colombia deal to the Hill for a vote without the permission of Democratic leaders. He was seconded by Ways and Means Chairman Charlie Rangel, who told Congress Daily that "they don't have the votes for it, it's not going to come on the floor," adding that "what they [the White House] don't understand it's not the facts on the ground, it's the politics that's in the air."

Mr. Rangel is right about the politics. No matter what U.S. strategic interests may be in Colombia, this is an election year in America. And Democrats don't want to upset their union and anti-trade allies. The problem is that the time available to pass anything this year is growing short. The closer the election gets, the more leverage protectionists have to run out the clock on the Bush Presidency. The deal has the support of a bipartisan majority in the Senate, and probably also in the House. Sooner or later the White House will have to force the issue.

Unfortunately the ed. goes overboard bringing up the supposed fraud of the Hugo recall of 2004. Fraud or not he still had overwhelming support at the time. It was unlikely that he would have been defeated in that instance. WSJ singles out my personal favorites Delahunt and Dodd as being particularly close to Hugo:

These are the same Democrats who preach the virtues of "soft power" and diplomacy, while deriding Mr. Bush for being too quick to use military force. But trade is a classic form of soft power that would expand U.S. and Latin ties in a web of commercial interests. More than 8,000 U.S. companies currently export to Colombia, nearly 85% of which are small and medium-sized firms. Colombia is already the largest South American market for U.S. farm products, and the pact would open Colombia to new competition and entrepreneurship.

Which brings us back to Mr. Chávez and his many Democratic friends. Connecticut Senator Chris Dodd's early support helped the strongman consolidate his power. Former President Jimmy Carter blessed Mr. Chávez's August 2004 recall victory, despite evidence of fraud. And then there are the many House Democrats, current and former, who have accepted discount oil from Venezuela and then distributed it in the U.S. to boost their own political fortunes. Joseph P. Kennedy II and Massachusetts Congressman Bill Delahunt have been especially cozy with Venezuela's oil company. If Democrats spurn free trade with Colombia, these Democratic ties with Mr. Chávez will deserve more political scrutiny.

Senators Hillary Clinton and Barack Obama are both competing for union support. But if they wanted to demonstrate their own Presidential qualities, they'd be privately telling Ms. Pelosi to pass the Colombia pact while Mr. Bush is still in office. That would spare either one of them from having to spend political capital to pass it next year.Instead, both say they oppose the deal on grounds that Mr. Uribe has not done more to protect "trade unionists." In fact, Mr. Uribe has done more to reduce violence in Colombia than any modern leader in Bogotá. The real question for Democrats is
whether they're going to choose Colombia -- or Hugo Chávez.

Sunday, March 09, 2008

NYT's Mac Attack Continues

Since he took the GOP lead the NYT has discovered that John McCain may (or may not) have had an inappropriate relationship with a lobbyist, he is inconsistent and now that McCain's health is questionable. Wow! Pretty amazing how for a whole year they could figure this stuff out but in a span of a couple of weeks they are just on a roll!

Saturday, March 08, 2008

Uribe, Chavez & Correa Hold Hands and Sing Kumbaya

The mess is over...for now. More on this later when I can expand on it.

Bad News for the Next Prez

Whatever you think about what is going on in Iraq I think that regardless of political leanings all would concur that Crocker/Petraeus combo has been our best by far. As fortune would have it, however, both Crocker and Petraeus will be gone by January of next year. Just in time for the next prez to find someone else to step into the mire.

What I always wondered was Amb. Crocker's relation to '80's neo-con bete noire Chester Crocker.

NYTimes Goes After McCain

NYT is just flat out pathetic. After hyping and loving for years they are going all out after Mac. This comes as no great surprise but even for them the way they turned on a dime the moment he became the presumptive nominee of the GOP. Now what used to be celebrated, "the maverick," is frowned upon, "inconsistent."

Kaplan's Kolkata and Kaplan's Colombia

Robert Kaplan has a new piece in the April issue of The Atlantic. I would love to post it but it's not up yet on their site. Kaplan is obviously still working on his new book, this article is about his visit to Kolkata (formerly Calcutta). Apparently the name was changed in 2001. I want to say more but today is our baby girl's baptism and my wife is going to beat me posterior if I don't start wrapping this up.

CSM pronounced The Atlantic's daily post The Current as one of its "Monitor Picks." This is what they said:
Struggling to find time to wade through a 5,000-word essay on global affairs? Go the easier route, and check out The Current, where Atlantic scribes offer their pithy takes on timely topics.
Kaplan was a recent contributer with his take on Colombia and Alvaro Uribe which I consider spot on:
Venezuelan megalomaniac Hugo Chavez's dispatch of troops to the Colombian border is meant not just as an affront to the Colombians but to Colombia's ally, the United States. Chavez must have deep sense of inferiority, because Colombian President Alvaro Uribe Velez is everything Chavez is not. Indeed, handicapped for size and importance of the country, Colombian President Uribe is the most impressive and successful ruler in the democratic world. A quiet, workaholic, he is the opposite of a demagogue. If Pakistan or Iraq had an Uribe, they would both be increasingly out-of-the-news success stories.

Anthony Lewis on Cuban Libraries

First off a massive hat tip and maybe even a "We're not worthy bow" to Ziva at Babalu on Anthony Lewis's spirited defense of Cuban libraries and librarians in front of the commie loving American Library Association. I have to give props to both Lewis and Nat Hentoff, two prominent civil libertarians that I often don't agree with for their consistent support for the cause of Cuban freedom. You have to respect individuals that are consistent with their beliefs. Yes that is my way of admitting that I am not consistent with my beliefs. By the way the ALA may not have said anything about his criticizing them but .Lewis's speech is posted on their site To be honest, I have not listened yet so I assume it has not been cut out.

No Longer Obama's Problem From Hell

Samantha Power, Obama shill and lightning rod for the "Israeli Lobby" is no longer associated with the campaign. Her fall not so much being the object of the so-called lobby's ire but rather a hiccup of unadulterated honesty - she called Hillary a "monster." Despite being a fan of her Pulitzer prize winning book, A Problem From Hell: America in the Age of Genocide, I am not a fan of hers. She comes from the foreign policy school that seems to think that it is great to use the military for anything at all as long as it does not have anything whatsoever to do with our national interests. My only concern is that she has blown up too soon. There is ample time between now and January for her to resurface in an Obama administration.

Friday, March 07, 2008

Correa Knew About Reyes Being In Ecuador

I know it may come as a shock but according to a report Correa knew of Raul Reyes being in Ecuador back in June 2007. Actually they even mentioned the precise location where he was offed last week. Boz is all over this. Boz mentions that Ecuador arrested five FARC "militants" and is hopeful that this is a sign of something. I am more inclined to believe these are tokens offered up for appearances and that each one of these individuals is inconsequential.

Dealing With Iran & There's No Escaping Chuck Hagel

William Luers, Thomas Pickering and Jim Walsh have a piece in the New York Review of Books on how to deal with Iran's nuclear ambitions. Truthfully I had only heard of Pickering before, but then again I'm a dolt so what do I know? Some rather blah stuff in the piece - the usual "let's talk to Iran because it is the only thing that works" b.s. I'm saying it is not true, it's just not very new or interesting. It takes a bit but the three finally get down to their solution for the nuke impasse - multilateral program:
As a solution to the nuclear dispute, the US and its allies should propose turning Iran's national enrichment efforts into a multinational program. Under this approach, the Iranian government would agree to allow two or more additional governments (for example, France and Germany) to participate in the management and operation of those activities within Iran. In exchange, Iran would be able to jointly own and operate an enrichment facility without facing international sanctions. Resolving the nuclear issue would, in turn, make it possible for Iran to enjoy a variety of other benefits such as membership in the World Trade Organization (WTO), increased trade with Europe, access to badly needed equipment for its aviation and energy industries, and perhaps normalized relations with the United States.
They then flesh it out a bit:

Such an arrangement could take many different forms, but any version of it would likely be subject to the following conditions:

  • Iran would be prohibited from producing either highly enriched uranium or reprocessed plutonium. This is the most important principle in the proposal. If Iran cannot produce or acquire highly enriched uranium, it cannot build a nuclear weapon. If Iran's enrichment program is turned into a multilateral project, it makes it extremely difficult for Iran to produce highly enriched uranium. Any attempt to do so, even secretly, would carry the risk of discovery by the international management team and the staff at the facility; the high probability of getting caught will likely deter Iran from trying to do so in the first place.
  • No work on nuclear fuel, including research and development, could be conducted in Iran outside the multilateral arrangement. In addition, no institution, personnel, or facility associated with the Iranian military would be allowed to participate in the production of nuclear fuel or other nuclear activities. Neither of the two kinds of materials used to make a weapon—highly enriched uranium and reprocessed plutonium—would be produced, only uranium enriched to low levels that could be used in nuclear power plants.
  • Iran would fully implement the Additional Protocol of the Nuclear Non-Proliferation Treaty, which requires member nations to make their nuclear facilities subject to snap inspections, environmental sampling, and more comprehensive reporting requirements. Iran has already offered to go beyond the current safeguards of nuclear processes it adheres to, and it should be held to that offer. Inherent in any multilateral arrangement for Iran's nuclear program is a requirement for greater transparency, since Iran's foreign partners will need full access to records and personnel to carry out their management responsibilities.
  • Iran would commit itself to a program only of light water reactors (LWRs), which require uranium fuel enriched only to low levels and which, compared with other types of reactors, produce relatively small amounts of plutonium in the nuclear waste generated. This is a reasonable demand since the LWR is the de facto international standard.
They are not blind to potential pitfalls:
For all its potential benefits, an attempt to bring Iran's nuclear program under multilateral control also carries risks. It raises a large and complex set of financial, legal, and technical issues. How can a multilateral scheme be reconciled with existing UN sanctions resolutions and national sanctions laws? How would the multinational "owners" and their management team decide policy and resolve internal disagreements?
These are not trivial issues. Still, the main objection to the multilateral approach has
traditionally been that it increases the risk of proliferation. According to this argument, Iran's capacities to build nuclear weapons could improve under a multilateral arrangement because of (a) the transfer of technical knowledge to Iranian managers and workers; (b) the potential diversion of nuclear materials or technology from the multilateral facility to a clandestine, parallel program; and (c) the possibility that Iran could cancel the program by renationalizing it and expelling the multilateral partners.
On the first issue, it seems fair to assume that Iranian technicians would, in fact, obtain technical knowledge that they did not previously possess by working with their international colleagues. What they would learn, whether the acquired knowledge would prove decisive, or whether they would have learned it on their own anyway is unclear.
On the second issue, diversion of material or technology to a clandestine program, it
is worth remembering that even with routine safeguards, diversion is extremely difficult. In practice, the IAEA has been very good at accounting for nuclear material, and Iran would have to be willing to take a large risk of detection to engage in diversion. Given the enhanced transparency of a multilateral arrangement and the constant presence in Iran of foreign monitors that such a plan would require, the risk of detection would be even higher. Indeed, experience during the nuclear age strongly suggests that governments are less likely to attempt diversion or to defeat safeguards when there is an active verification effort within a country. (In general, proliferators prefer to wait until the inspectors have gone home.)
The third concern, cancellation of a multilateral program, is possible but would doubtless prove extremely costly to Iran. Iran could not jettison the program without risking a possible military response and other punishments from the US and its international partners.
So in other words Iran won't abrogate the agreement because the costs would be too high? Seriously, what would these costs be? A possible military response? There hasn't been one yet, what could prompt the Security Council to seek it? Any bets on Russia and China approving that? Punishment from the US and "its international partners?" I suppose they are talking about the EUnuchs. What more can they be willing to do that they haven't done?
Anyway Chuck Hagel thinks it's brilliant Don't get me wrong I like Chuck but he is becoming a total media whore.

Monday, March 03, 2008

Hugo the FARC Lover

Hugo is making some noises and Correa is following his lead. Myles Frechette, a former ambassodor to Colombia, made the rounds in the papers. I don't want to read too much into it but it appears to me that the Frechette tailored his message to his audience. For the Herald Frechotte cited Hugo's motivation for his actions:
"You'll see a lot of [diplomatic] movement in the next few days,'' Frechette said, adding, "Chávez is playing to the cheap seats in Venezuela. His ratings are down. The economy is suffering, and the people know it. He's using this as a smoke screen. Note that Chávez has carefully not said he'll attack Colombia"
"Uribe has got to go down there, meet with Correa, calm him down, and he's going to have Chávez fuming at the border," Frechette said. Uribe is "in a pickle, in the sense that diplomatically he's got to get himself out of this corner that he's got himself in."
Every piece even the one at NYTimes notes Chavez is gets along fine with the FARC. NYTimes article defined Chavez/FARC relations as warm and noted, just like WaPost, that Reyes and Hugo had met three times.

Sunday, March 02, 2008

Surging Backlash

Two pieces do not a trend make but they make some salient points that should be addressed. Especially when you consider that John McCain seems to have built his entire candidacy around it. Michael Kinsley point blank says that the surge is a failure. It all boils down to one simple question for Kinsley:
Has it allowed us to reduce troop levels to below where they were when it started? The answer is no.
Kinsley expands on his simple one word answer:

In fact, President Bush laid down the standard of success when he announced the surge more than a year ago: "If we increase our support at this crucial moment, and help the Iraqis break the current cycle of violence, we can hasten the day our troops begin coming home." At the time, there were about 130,000 American soldiers in Iraq. Bush proposed to add up to 20,000 more troops. Although Bush never made any official promises about a timetable, the surge was generally described as lasting six to eight months.

By last summer, the surge had actually added closer to 30,000 troops, making the total American troop count about 160,000. Today, there are still more than 150,000 American troops in Iraq. The official plan has been to get that number back down to 130,000 by July and then to keep going so that there would be about 100,000 American troops in Iraq by the time Bush leaves office. Lately, though, Gen. Petraeus has come up with another zenlike idea: He calls it a "pause." And the administration has signed on, meaning that the total number of American troops in Iraq will remain at 130,000 for an undetermined period.

So, the best that we can hope for, in terms of American troops risking their lives in Iraq, is that there will be just as many next July—and probably next January, when time runs out—as there were a year ago. The surge will have surged in and surged out, leaving us back where we started. Maybe the situation in Baghdad, or the whole country, will have improved. But apparently it won't have improved enough to risk an actual reduction in the American troop commitment.

Nir Rosen is even less impressed with the so called surge, placing the success on our efforts to bribe Sunni militants:

Having lost the civil war, many Sunnis were suddenly desperate to switch sides -- and Gen. David Petraeus was eager to oblige. The U.S. has not only added 30,000 more troops in Iraq -- it has essentially bribed the opposition, arming the very Sunni militants who only months ago were waging deadly assaults on American forces. To engineer a fragile peace, the U.S. military has created and backed dozens of new Sunni militias, which now operate beyond the control of Iraq's central government. The Americans call the units by a variety of euphemisms: Iraqi Security Volunteers (ISVs), neighborhood watch groups, Concerned Local Citizens, Critical Infrastructure Security. The militias prefer a simpler and more dramatic name: They call themselves Sahwa, or "the Awakening."

At least 80,000 men across Iraq are now employed by the Americans as ISVs. Nearly all are Sunnis, with the exception of a few thousand Shiites. Operating as a contractor, Osama runs 300 of these new militiamen, former resistance fighters whom the U.S. now counts as allies because they are cashing our checks. The Americans pay Osama once a month; he in turn provides his men with uniforms and pays them ten dollars a day to man checkpoints in the Dora district -- a paltry sum even by Iraqi standards. A former contractor for KBR, Osama is now running an armed network on behalf of the United States government. "We use our own guns," he tells me, expressing regret that his units have not been able to obtain the heavy-caliber machine guns brandished by other Sunni militias.

The American forces responsible for overseeing "volunteer" militias like Osama's have no illusions about their loyalty. "The only reason anything works or anybody deals with us is because we give them money," says a young Army intelligence officer. The 2nd Squadron, 2nd Stryker Cavalry Regiment, which patrols Osama's territory, is handing out $32 million to Iraqis in the district, including $6 million to build the towering walls that, in the words of one U.S. officer, serve only to "make Iraqis more divided than they already are." In districts like Dora, the strategy of the surge seems simple: to buy off every Iraqi in sight. All told, the U.S. is now backing more than 600,000 Iraqi men in the security sector -- more than half the number Saddam had at the height of his power. With the ISVs in place, the Americans are now arming both sides in the civil war. "Iraqi solutions for Iraqi problems," as U.S. strategists like to say. David Kilcullen, the counterinsurgency adviser to Gen. Petraeus, calls it "balancing competing armed interest groups."

Chavez Exposed

Chavez takes a double barreled blast from Foreign Affairs and The Economist. The devastating take down in Foreign Affairs lays bare Hugo's "Empty Revolution." Francisco Rodriguez notes that much of what has been accepted by even Hugo's enemies, that he has generously invested resources on the impoverished, that he has improved health care and that he has attacked illiteracy is in fact all myth. Ironically The Economist is one of those cited as swallowing the Bolivarian lie. This week The Economist checks out the Rodriguez piece and sets the record straight on Hugo's failure on the literacy front:

The literacy scheme was one of a clutch of social “missions” organised by Mr Chávez in 2003, when he faced possible defeat in a recall referendum on his presidency. The government claims that by October 2005 it had all but eliminated illiteracy. That claim has become a centrepiece of the international propaganda effort on behalf of Mr Chávez's “revolution”. But there is no data to support it. Many educationalists doubt it. Even the government itself has retreated from its initial figure of “less than 1% illiteracy” to a figure of around 4%, though it is not clear whether this refers just to adults or to the total population.

It is notoriously difficult to obtain precise literacy figures from census data, which rely on self-assessment. But Francisco Rodríguez of Wesleyan University in Connecticut and Daniel Ortega of IESA, a Caracas business school, have used household surveys from the national statistical institute to assess the programme. In an article in the latest issue of Foreign Affairs, Mr Rodríguez says that they found “little evidence” of any “statistically distinguishable effect on Venezuelan illiteracy”. Where the government says it taught 1.5m, the study found that only 1.1m were illiterate to begin with, and that the fall over the 2003-05 period was less than 100,000. Even this improvement could largely be explained by a long-term demographic trend (many illiterate adults are elderly and die off).

Adán Chávez, who is the education minister as well as the president's brother, has complained of statistical “manipulation” by the government's foes. But Mr Rodríguez, for one, is no reactionary; he was the chief economist of Venezuela's National Assembly in 2000-04, and was once a chavista sympathiser.

Last year the statistics institute launched its own study on the impact of the social missions. This was supposed to be ready by January. But delays in buying equipment mean it has yet to start, according to Irene Gurrea, the economist in charge. Asked if there were any reliable statistics on the impact of Misión Robinson, Ms Gurrea said: “As far as we know, no—that's why we're doing the study.”

Staff of an older literacy programme run by Fe y Alegría, a Catholic charity, say they continue to enroll students. In Machiques, near the Colombian border, 100 joined in the past semester. They say that up to 40% of the Warao Indians in the Orinoco delta are illiterate. In 2005 Mr Chávez told local officials to declare their towns officially “illiteracy free”. Knowing this to be untrue, the mayor of Machiques resisted, but gave in to pressure, according to Jesús Vilorio, who works for Fe y Alegría.

It is not hard to find individuals like Ms Silva who say their lives were changed by Misión Robinson. But the missions have gone hand-in-hand with neglect of schools and hospitals. Mr Rodríguez estimates that Robinson spent $1,000 for each of its literate graduates, compared with around $60 for other literacy schemes in Latin America. At the least, that money could have been better spent.

The Rodriguez case in Foreign Affairs does not stop with the withering attack on Hugo's literacy propaganda. First there is the failure of Hugo's antipoverty programs:
Soon after joining the National Assembly, I clashed with the administration over underfunding of the Consolidated Social Fund (known by its Spanish acronym FUS), which had been created by Chávez to coordinate the distribution of resources to antipoverty programs. The law establishing the fund included a special provision to ensure that it would benefit from rising oil revenues. But when oil revenues started to go up, the Finance Ministry ignored the provision, allocating to the fund in the 2001 budget only $295 million -- 15 percent less than the previous year and less than a third of the legally mandated $1.1 billion. When my office pointed out this inconsistency, the Finance Ministry came up with the creative accounting gimmick of rearranging the law so that programs not coordinated by the FUS would nevertheless appear to be receiving resources from it. The effect was to direct resources away from the poor even as oil profits were surging. (Hard-liners in the government, incensed by my office's criticisms, immediately called for my ouster. When the last moderates, who understood the need for an independent research team to evaluate policies, left the Chávez camp in 2004, the government finally disbanded our office.)
Rodriguez notes that income inequality has actually increased during Hugo's tenure:
One would expect such a consensus to be backed up by an impressive array of evidence. But in fact, there is remarkably little data supporting the claim that the Chávez administration has acted any differently from previous Venezuelan governments -- or, for that matter, from those of other developing and Latin American nations -- in redistributing the gains from economic growth to the poor. One oft-cited statistic is the decline in poverty from a peak of 54 percent at the height of the national strike in 2003 to 27.5 percent in the first half of 2007. Although this decline may appear impressive, it is also known that poverty reduction is strongly associated with economic growth and that Venezuela's per capita GDP grew by nearly 50 percent during the same time period -- thanks in great part to a tripling of oil prices. The real question is thus not whether poverty has fallen but whether the Chávez government has been particularly effective at converting this period of economic growth into poverty reduction. One way to evaluate this is by calculating the reduction in poverty for every percentage point increase in per capita income -- in economists' lingo, the income elasticity of poverty reduction. This calculation shows an average reduction of one percentage point in poverty for every percentage point in per capita GDP growth during this recovery, a ratio that compares unfavorably with those of many other developing countries, for which studies tend to put the figure at around two percentage points. Similarly, one would expect pro-poor growth to be accompanied by a marked decrease in income inequality. But according to the Venezuelan Central Bank, inequality has actually increased during the Chávez administration, with the Gini coefficient (a measure of economic inequality, with zero indicating perfect equality and one indicating perfect inequality) increasing from 0.44 to 0.48 between 2000 and 2005.
In fact by almost every measure things have managed to get worse for many Venezuelans:
...official statistics show no signs of a substantial improvement in the well-being of ordinary Venezuelans, and in many cases there have been worrying deteriorations. The percentage of underweight babies, for example, increased from 8.4 percent to 9.1 percent between 1999 and 2006. During the same period, the percentage of households without access to running water rose from 7.2 percent to 9.4 percent, and the percentage of families living in dwellings with earthen floors multiplied almost threefold, from 2.5 percent to 6.8 percent.
How about that largesse being diverted to the poor? Non-existent says Rodriguez, although he eschews raw numbers and goes by percentage of the budget:
Remarkably, given Chávez's rhetoric and reputation, official figures show no significant change in the priority given to social spending during his administration. The average share of the budget devoted to health, education, and housing under Chávez in his first eight years in office was 25.12 percent, essentially identical to the average share (25.08 percent) in the previous eight years. And it is lower today than it was in 1992, the last year in office of the "neoliberal" administration of Carlos Andrés Pérez -- the leader whom Chávez, then a lieutenant colonel in the Venezuelan army, tried to overthrow in a coup, purportedly on behalf of Venezuela's neglected poor majority.
Health stats are also quite bleek:
In a number of recent studies, I have worked with colleagues to look more systematically at the results of Chávez's health and education misiones. Our findings confirm that Chávez has in fact done little for the poor. For example, his government often claims that the influx of Cuban doctors under the Barrio Adentro health program is responsible for a decline in infant mortality in Venezuela. In fact, a careful analysis of trends in infant and neonatal mortality shows that the rate of decline is not significantly different from that of the pre-Chávez period, nor from the rate of decline in other Latin American countries. Since 1999, the infant mortality rate in Venezuela has declined at an annual rate of 3.4 percent, essentially identical to the 3.3 percent rate at which it had declined during the previous nine-year period and lower than the rates of decline for the same period in Argentina (5.5 percent), Chile (5.3 percent), and Mexico (5.2 percent).
Bills are coming due:

But by late 2007, Chávez's economic model had begun to unravel. For the first time since early 2004, a majority of voters claimed that both their personal situation and the country's situation had worsened during the preceding year. Scarcities in basic foodstuffs, such as milk, black beans, and sardines, were chronic, and the difference between the official and the black-market exchange rate reached 215 percent. When the Central Bank board received its November price report indicating that monthly inflation had risen to 4.4 percent (equivalent to an annual rate of 67.7 percent), it decided to delay publication of the report until after the vote on the constitutional reform was held.

This growing economic crisis is the predictable result of the gross mismanagement of the economy by Chávez's economic team. During the past five years, the Venezuelan government has pursued strongly expansionary fiscal and economic policies, increasing real spending by 137 percent and real liquidity by 218 percent. This splurge has outstripped even the expansion in oil revenues: the Chávez administration has managed the admirable feat of running a budget deficit in the midst of an oil boom.

But Rodriguez doubts Hugo can do what it takes to fix things:
A sensible solution to Venezuela's overexpansion would require reining in spending and the growth of the money supply. But such a solution is anathema to Chávez, who has repeatedly equated any call for spending reductions with neoliberal dogma. Instead, the government has tried to deal with inflation by expanding the supply of foreign currency to domestic firms and consumers and increasing government subsidies. The result is a highly distorted economy in which the government effectively subsidizes two-thirds of the cost of imports and foreign travel for the wealthy while the poor cannot find basic food items on store shelves. The astounding growth of imports, which have nearly tripled since 2002 (imports of such luxury items as Hummers and 15-year-old Scotch have grown even more dramatically), is now threatening to erase the nation's current account surplus.

Bushies Pining for Paraguay? Lugo Paraguay's Hugo?

Neil Bush whose only accomplishment thus far in life is to have sired Lauren Bush (yummy) was in Paraguay. I don't know Neil, but hate W as much as you want Neil is the Bush most likely to be kept in a basement and from public view. As some may recall he was involved in a little S&L scandal a ways back. He also made a pretty quick buck on a stock sale under less than ethical circumstances and is somehow connected to former Red China leader Jiang Zemin. His presence in Paraguay was sponsored by the Moonie outfit, Universal Peace Federation. I hate to knock the Moonies since I love WashTimes and was a subscriber of two defunct Moonie pubs Insight and The World & I but they do attract unsavory elements. Hat tip The Latin Americanist.

I should also note that Paraguay and it's undefeated ruling party, Colorado, is the topic of a great piece on OpenDemocracy. Hugo wannabe Lugo is apparently set to end the Colorado winning streak.

Obama and Other Hagel Loving Dems

Obama is making noises that he would be willing to consider a Republican in his cabinet. Retiring Chuck Hagel, taking McCain's place as every Dems favorite Rep, was mentioned. I'm sure it is just a coincidence but insufferable Chris Dodd mentioned Hagel today in the NYT.

There is an interview with Hagel in the latest issue of The American Interest (sub. required). At one point he sounds rather Obama-ish, although he actually means it while Obama, the most leftist member of the Senate (take that Ted!), seems to only pay lip service to the end of partisanship:

AI: With 11 years gone and one more to go in the Senate, how do you think back on your time here? Some say you’ve moved from many standard conservative positions to more centrist ones. You think that’s a fair description?

Senator Hagel: It is, and part of it has to do with what I’ve learned about the complexity of most of the issues we face as a society. We’re rarely confronted with easy calls, with a clearly “right” and a clearly “wrong” side. Life generally is not that way. But some people, from both parties, like to live in a world of absolutes, and that has polarized politics and strangled any bipartisan progress. People won’t work toward any kind of compromise when they feel they’re giving up their values, standards and beliefs. It has become clear to me, over the course of my 11 years working in this sausage factory here, that without any consensus on how to behave in order to move our country forward, we’re essentially paralyzed. I’ve moved toward the middle because that’s where I think the effective solutions are.

I’ve also learned to better appreciate the importance of personal relationships in how things work here. I’ve seen this President of the United States establish virtually no personal relationships, and it has cost the country. His position has been, “It’s either my way or the highway, because I’m the Decider.” But when you don’t have the lubricant of personal relationships in a democratic government—any form of government, really, but especially a two-party democracy—the gears will lock up, and the system will break down. That’s what has happened, and both sides are to blame.

It’s a very distressing dynamic, but I think the next president will understand that and act on that. Better personal relationships will form, and we’ll see a bipartisan cabinet, among other changes. It’s not a matter of choice, because the challenges facing this country are so immense that we can’t afford another four years of paralysis.

Messing Up the Andes and LA

NYT has an editorial that focuses on Republican reluctance for free trade with certain Andean countries. Astounding when you consider that the two Dem candidates openly question current agreements such as NAFTA and do not seem inclined to do anything for our friends in LA. OB the Magnificent seems to be willing to bear hug Raulito and Hugo...who knows? If they are nice enough OB may even reenact the who Brezhnev/Honecker lip-lock with them.

Council of Foreign Relations has an excellent Daily Analysis on the Dem hatred for NAFTA along with some helpful links.

FARC Leader F***ed

Sort of intellectually lazy to resort to profanities but how else to characterize the elimination of Raul Reyes by Colombian forces? I have to give a hat-tip to Boz where I first happened upon the good news. He also has some good analysis and links - so good that anything on my part would be superfluous.

The only new news Boz has not put up is Venezuela's reaction which is to man up along the border to protect FARC guerillas residing in his country...Oh gosh...did I say that out loud? I meant that Chavez put troops along the border to protect the sovereignty of Venezuela. Chavez is also shutting down the embassy in Bogota. Since the Colombians did not touch Venezuelan territory this strikes me as a tad hysterical, assuming that he is not associated with the FARC. Chavez is doing his saber-rattling routine to see if he can boost popularity at home - it worked for Fidel so why not him? At least that seems to be his thinking.