Venezuela’s Economic and Political Crisis
Critical or sympathetic, none of us can minimize the terrible human suffering the Venezuela news documentary included in this post document… Venezuela is caught in a perfect storm with multiple dimensions and causes: economic and political populism rapidly descending into authoritarianism, crime and a very distressing decline in living standards. We have Greece (now Puerto Rico) and our own great Depression (not recession, the 1930s) but the 30%+ decline in Venezuela’s national income since 2013 is unprecedented and vary distressing. As someone said about international capital flow reversals, it not the speed that kills you, it is the sudden stop. The collapse in Venezuela’s economy has indeed been deadly (as many of the news documentaries below document). We may disagree on the causes of this crisis, blaming Chavez, Maduro or U.S. foreign policy, but knowing the cause may or may not help us end this crisis. It is not there yet, but Venezuela in danger of becoming a failed state… as such it is in everyone’s interest to reverse its decline. How to do that is an open questions. A long history of U.S. military intervention in the region removes that option. Sanctions may help punish the guilty but rarely work and can take a very long time to work. All we can do is wish the Venezuelans still there well, and welcome them however and whenever we can. This crisis is yet another illustration of why markets matter and why human mobility can help a lot. Not every immigrant is better of, but families with members abroad have a safety net (remittances, advice and perhaps a ticket out of the country).
An excellent long term view of the crisis, very well done:
Solutions: DACA and migration to Chicago has helped Marina De Bartolo and her family immigration from Venezuela. Why do she need DACA? Why do Marina’s parents need her TPS? Who benefits and who loses from DACA in this case? Might Marina return if conditions improve in Venezuela? Even if she does not, how might her success affect other women in Venezuela? Discuss the Jesuit connection to DACA and this Atlantic Magazine story/video.
John Welch and I worked in Venezuela at Lehman Brothers, we had a good plan, it was ended by Hugo Chavez and a lack of emphasis on redistribution, Chavez redistributed using things instead of case, and relied excessively on oil revenues and nationalization, Venezuela is paying the price under the less effective leadership of Maduro. McLeod and Welch, 1996 Lehman Venezuela outlook