Venezuela's road to serfdom

Hugo Chavez has launched the next phase of his Ten Year Plan to destroy Venezuela's economy.

He plans to nationalize the electrical and telecommunications companies.  The Associated Press says he's "pledging to create a socialist state in a bold move with echoes of Fidel Castro's revolution in Cuba."

But please, let El Presidente himself make it plain:  "We're heading toward socialism, and nothing and no one can
prevent it."

The country's major electric company happens to have been under the control of an American firm, AES Corp.  The big telcom firm was state-owned before it was privatized in 1991.

As for oil, Chavez says he's still open to forming state-controlled "mixed companies" with Big Oil.  He may be a dope, but just as Lenin had to make token concessions to market realities with his New Economic Plan, Chavez knows he needs help from the outside to refine the heavy crude in the Orinoco belt into something more useful than roofing tar.

But otherwise it's all grim.  He also wants constitutional reforms so that in many cases he can bypass the parliament and rule by decree — accelerating the Ten Year Plan to maybe Eight and a Half.  (There's a Fellini joke somewhere in there.)

And to think certain neocon nutballs in Washington see this guy as a threat.  Chavez will have destroyed whatever capital base is left in his country before he can ever start sowing trouble.  (But then, the neocons always thought the Soviets were an economic powerhouse that would last forever, too.)

To paraphrase Chavez, Venezuela is heading toward ruin, and nothing and no one can prevent it.

The Daily Reckoning