Peter Krupa

If you haven’t been following the Betancourt/Colombian military/FARC/dramatic Hollywood rescue saga, Simon Romero has an excellent round-up in the New York Times this morning. The official version is that the Colombian military tricked the FARC into putting their prize hostages onto two “international mission”-looking helicopters that appeared to be of Venezuelan origin. In reality, they were Colombian military. The operation rescued a handful of high-profile hostages and made the FARC look ridiculous.

The thing is, it’s all just a little too perfect. Uribe is coming off as a national hero just at the moment when he must decide whether to make the legally-sketchy move of running for a third term. Some Swedish radio station is saying that the “rescue” was really a ransom, paid by the U.S., of $20 million. While I’m not inclined to believe Swedish radio stations per se, it seems really likely that something “extra” is going on.

Either that, or Colombians are just total bad-asses. Which, you know, is also kind of true.

Thank God!

“Our government only wants peace,” said President Hugo Chávez of Venezuela, who this week had sent 10 tank battalions to Venezuela’s border with Colombia, called Mr. Uribe a mafia boss and threatened to nationalize Colombian companies in Venezuela.

Chavez’ blustering about war with Colombia and whatnot hasn’t apparently impressed Uribe all that much. Colombian troops remain demobilized (or anyway as demobilized as Colombian troops are likely to get). The thing about picking a fight with Colombians, however, is that they don’t back down (Exhibit A: War on Drugs), nor do they fuck around very much.

So while Uribe is playing it cool, he’s also remembering that his army is twice as big as Chavez’, plus they’re battle-hardened. No one realistically expects this to come to blows, unless Chavez has really been hitting the stupid.

But remember that even if it doesn’t, Colombia still isn’t fucking around. Hence, when presented with fightin’ words from Ecuador and Venezuela, Colombia sat back and revealed that Ecuadorean officials have been hanging out with the FARC (confirmed by Ecuador) and Venezuela has funneled $300 million to the FARC.

Ouch. This is bound to get more interesting.

But for now, in the spirit of alleviating tension, I recommend this cartoon of talking Mexican eggs getting drunk.

Two posts in a row about The Nation is a little much, but please indulge me, these are exciting times. The navel-gazers there have finally figured out that, gee, you know what? Chávez might not have good intentions after all!

For more than five years, Chávez has exploited the events of (the) April 11 (2002 coup against him) much the same way Bush has exploited September 11: as a basis for expanding executive power. The coup has provided the main justification for purging the military, packing the Supreme Court, removing RCTV from the public airwaves and, most recently, proposing a constitutional amendment that would empower the president to suspend due process rights indefinitely. Chávez and his supporters have repeatedly condemned presumed coup supporters in the court of public opinion but have shown less interest in trying them in a court of law. In this sense, they have proven themselves to be, like many of their opponents, more concerned with pursuing power than promoting the rule of law.

Coincidentally, they’ve figured this out just in time for Chávez to send troops to the Colombian border. Better late than never, I suppose. Conspicuously missing from The Nation’s 80,000-word Damascus moment, however, is any mention of how everyday life in Venezuela has more or less gone to hell in the last nine years - 20% inflation, food rationing, rampant kidnapping, etc.

It’s understandable. Those details are easy to miss from an office building in Manhattan.

(Full disclosure! I interned at The Nation. And while there, I engaged in so many vein-bulging arguments where I said basically exactly what this guy says in this article, but a year earlier. I just have to take a moment to revel a little bit. Ahhhh. Thanks for reading.)

People used to say Hugo Chávez was the next Fidel Castro, but these days he’s looking more and more like Manuel Noriega:

Chavez, a former soldier, repeated a claim that Colombia was planning to invade neighboring Venezuela and said he would soon test the firepower of Russian-built fighter jets.

“We don’t want to hurt anybody, but don’t make mistakes with us,” he said during an address to the country to mark nine years since he took office. “They would regret it for 100 years.”

No one is going to invade Venezuela because Chavez calls George W. Bush names. But threatening a neighboring country, messing around with narco-trafficking guerrillas, and stockpiling weapons - that’s a whole different story.

I really can’t imagine the international community thinks he’s so entertaining anymore. The thing to keep in mind, however, is that he (like many military rulers before him) is creating an external conflict in order to divert attention from an internal one.

Even with oil at $90 a barrel, the state oil company appears to be having alarming cash-flow problems from years of mismanagement. At the same time, food shortages are such that people are getting in fights over milk (video).

This will end badly. The only question is, when.

Chávez’ vice president had a comment for the representatives of the FARC upon the release of two hostages yesterday:

In the name of President Chávez, we are paying close attention to your fight. Keep up the spirit, keep up your strength, and count on us.

The FARC is a communist narco-terrorist group that operates in Colombia and Venezuela and funds its activities through drug trafficking and ransom from kidnappings. It currently holds 25 Venezuelan hostages, none of whose release Chávez has lobbied for.

Venezuela is planning to build two Kalashnikov rifle factories, and in 2005-2006 spent $3.4 billion on Russian arms.

There is this principle in economics - and I have no idea what it’s called - that goes something like this: With certain commodities, supply and demand are always chasing each other, and therefore overcompensating.

We therefore see cycles of highs and lows. If there is a glut of, say, pork on the market, prices will go down, and farmers will raise fewer hogs. Their decision to raise fewer hogs isn’t felt until a year later, when suddenly there is less pork on the market, so prices go up. Farmers then decide to raise more hogs, and the cycle repeats itself.

Or something along those lines.

Applying that basic observation to oil, Portfolio columnist John Cassidy says we’re in for a big price drop. The reason is simple: High prices have encouraged an overwhelming amount of oil exploration, projects which take several years to bring online. Within the next few years, there will be a lot more oil on the market, bringing prices down:

Already, in Texas and California, hundreds of mothballed, low-producing stripper wells have been brought back into production. In Africa, the Chinese government is making development deals with Sudan, Chad, the Congo Republic, and other impoverished nations with unexploited reserves. In the Canadian province of Alberta, Shell and other energy companies are building massive strip mines to access local tar sands, which can be converted into synthetic oil or refined directly into petroleum at a cost of roughly $30 a barrel. Some experts believe the sands contain more oil than the subdeserts of Saudi Arabia.

Not very long ago, energy companies were slashing their exploration and drilling budgets, refusing to finance any project unless it could generate crude for $15 or $20 a barrel. But since 2003, when the price of crude rose above $30 a barrel, the industry has relaxed its financial assumptions and beefed up capital spending. In the past four years, Exxon Mobil, the world’s largest oil company, has invested more than $60 billion in exploration and development. Between now and 2010, the company plans to begin pumping oil or gas from no fewer than 20 new projects.

It’s an interesting observation, and makes quite a bit of sense. It would be nice for me, since currently gas in Costa Rica is over $4 a gallon. It would be extremely bad for Venezuela, however. That country’s national budget - with its massive social handouts - assumes oil prices of well over $40 a gallon.

There’s a nice story in the New York Times about how Chávez is becoming a failure. First he lost the referendum, now his hostage rescue gimmick has been called off. (Also for you readers at home: The FARC holds 25 Venezuelan hostages. Chávez has yet to lobby for their release.)

It goes along with something Ona and I noticed on our 10-day visit to Venezuela over the holidays: Despite the unbelievable amounts of cash swilling into the economy thanks to the country’s oil boom, there are few signs of prosperity.

No big construction projects. No new highways. People have to wait in line for food staples like flour, milk, and sugar, if they can get them at all. There is plenty of imported whiskey, however, and plenty of state-purchased propaganda billboards, newspaper advertising, and public television channels. (Remember RCTV? It’s now a state owned channel that broadcasts Cuban baseball games.)
There are also plenty of cars and new car dealerships. It’s cheap to drive thanks to massive government fuel subsidies. I watched my father-in-law put 52 liters of gas in his Ford Explorer for about $2.50.

Along with that, inflation last year was at 22 percent - the highest in Latin America - and crime has grown wildly out of control, with 30 or so bodies turning up in Caracas every weekend. In some districts there is literally not enough morgue space.

See, here’s the thing that Chávez and his supporters have missed: Ideology is all well and good, but to get things done you also need a good manager.

Almost a decade into a Chávez administration, I think we can finally say that his tenure has been a failure. He had billions of dollars in cold cash at his disposal, and he built nothing that will last. He has invested nothing and created nothing other than bitter political division.

Chávez won’t be remembered as a dictator. He’ll be remembered as a bad president who squandered his country’s wealth.

Another chapter in the sad story of petro-states.

Finally, after nine years of bullying, Chavez has lost a vote. I suppose a lot of people now are charmed by how graciously he accepted defeat. But his acceptance of a defeat at the polls just goes to prove something I’ve been saying for years: There is nothing wrong with the technical apparatus of Venezuela’s democracy.

Some otherwise moderate pundits like Andres Oppenheimer have suggested in the past that Chavez rigged his other electoral victories, perhaps because they simply couldn’t believe that people, given a choice, would vote away their own freedom.

The truth, however, is that Venezuelans, like centuries of democrats before them, were just voting their pocketbooks. Hand-outs were plenty, cash was flowing, and who cares if he’s buying $4 billion in military weaponry?

On Sunday, however, Venezuelans looked at their bare grocery stores, their soaring inflation, their lack of sustainable employment, and while not exactly voting against Chavez, they were none too damn excited about having him until 2050, so many of them just stayed home.

The mechanism of democracy rotated on its pivot, and suddenly Chavez found his political machine failing. He had perhaps the biggest war chest in the history of electoral politics - literally billions - plus he held the strings of everything from social programs to the national oil company.

Having calculated that all he needed for complete legitimacy was a vote in his favor, he left the mechanism of democracy independent, hoping to twist it with overwhelming force of charisma and dollars. But he couldn’t.

So here is the lesson of Chavez’ loss: With a little luck and 20,000 college students making a ruckus, you can still win a rigged game.

King of Spain to Hugo Chavez at the Americas Summit last week: “Why don’t you shut up?”

Story here. Video here.

Although to be perfectly honest I’m still not sure why Spain has a king, and why he’s at political summits rather than moldering away in some castle, counting his gold.