Monday, January 28, 2013

Curse of oil (Venezuela edition)

The recent New Yorker included a depressing story about life in Hugo Chavez' Caracas ("Slumlord"; only an abstract available here). Politicized allocations are bad enough, but they soon beget thuggishness which makes it much worse. Too many examples are available from around the world to require explanation.

A couple of good friend Venezuelan expats (Tico and Aloha Moreno, now in Florida) sent me this video (and accompanying story in Spanish) about how chickens are distributed (not sold) in Maracaibo. You can tell students all you want about prices rationing on the demand side and eliciting on the supply side, but show them the video first.

We can chuckle from a distance, but these are episodes from the real lives of real people. Today's WSJ includes this essay by Mary Anastasia O'Grady on how oil money allows Chavez to buy just enough votes to keep the show going.

This is "curse of oil" Venezuela edition. One more reason to hope for world oil prices to fall is that it would undermine the Venezulean kleptocracy.