There’s the old bit about history repeating itself that rang at the back of my mind as I read Matt O’Brien on Wonkblog describe Venezuela’s current status:
It’s hard to think of a government that, absent a war, revolution or Stalinist-style purge, has done a worse job running its economy than Venezuela’s. Maybe the United States’ in 1929 or Zimbabwe’s in 2003. What separates Venezuela, though, is that it’s managed to combine the economic collapse of the first with the hyperinflation of the second despite the fact that it has the largest oil reserves in the world. Indeed, the International Monetary Fund estimates that, by the end of the year, Venezuela’s economy will have shrunk 38 percent since the start of 2014, and its prices will be 2,176 times higher. That’s what happens when you put incompetent cronies in charge of the state-owned oil company but keep spending money as if you’re pumping as much oil as ever. You have to print what you need instead, until eventually all this new money pushes up prices so fast that it’s difficult for any part of the economy to function. Going by black market prices, that’s translated into Venezuela’s currency, the bolivar, losing 99.99 percent of its value the past six years.
For me, it’s that bit about putting incompetent cronies in charge. It feels like, oh, I don’t know, the current American distrust of experts?
And Venezuela’s the current mosquito splat against the window. Can we learn from that?
