Like Oil for Chocolate

It's not enough that our own rotten economy is hammering folks at home, NPR (like the Miami Herald) is very excited that dropping oil prices might hurt their favorite bogey man, Venezuelan President, Hugo Chavez.

Montagne begins the report by gleefully stating that Venezuela's "oil based economy is highly vulnerable to instability in the oil markets, so the recent drop in oil prices...is likely to hit Venezuela [pause] HARD."

Then Juan Forero, sounding positively jazzed at he possibility, jumps in with "...the sharp drop in the price of oil...may whipsaw Venezuela harder than most oil producers." As the Borev.net piece on the Miami Herald article notes many, many economists have weighed in on Venezuela's generally good economic health. Borev.net cites Reuters and Bloomberg articles among others, but Forero limits his consultations to...guess who?...enemies of Chavez.

Forero talks to "Robert Bottome [who] runs the VenEconomia newsletter in Caracas...he says low oil prices could end Venezuela's free spending ways..." Then we hear Bottome claim that for the past 5 years "we've had a consumption-led expansion of the economy but no investment." No investment? Really? Even a recent critical CFR report notes significant social investment, while spotlighting a lack of investment back into the state controlled oil company, PDVSA. Facts be damned, Forero just reasserts Bottome's claim and says "that lack of investment also means Venezuela relies almost solely on oil for export earnings." (Of course Forero doesn't mention Bottome's brother who is a big-wig of the pro-coup RCTV in Venezuela.)

Forero has to admit some reality in his piece, noting that "economic analysts agree that the economic crisis will not hit Venezuela soon...but those same analysts say the government has not shown it's about to slow spending." With that sly admission he quickly turns for more critical "analysis" to Chavez critic Ramon Espinasa who "stepped down as PDVSA's chief economist when Chávez took office in 1999."

It's kind of funny to have NPR working away down in South America, keen on a "story" about an administration that has championed a "consumption-led expansion" while woefully ignoring infrastructure and long-term investments. Seems to me that story might just be a little closer to home than anyone there wants to admit.