Thursday, October 23, 2008

Lights Out in the Socialist Paradise

The happy workers in Hugo Chavez's socialist paradise had better get used to working by candle light, since the Venezuelan government can't seem to keep the electricity running in its major cities.

A massive power cut has left millions of Venezuelans without electricity on Sunday, the third big outage this year.

The blackout hit several of the country's most populous states, including the capital, Caracas.

Venezuelan President Hugo Chavez praised officials for quickly detecting and beginning to repair the fault.

Mr Chavez says upgrading the grid after years of under-investment will take time but rejects criticism that nationalisation has made things worse.

The blackout happened mid-morning on Sunday, affecting about a third of the country.

In the capital, power was down for at least an hour, while in some other regions it was double that.

"Technically there is no reason for the failure," the head of the state electricity corporation, Hipolito Izquierdo, told state television.

"It's strange and worrying that a blackout of this size should happen on a Sunday, when demand is much below the daily average and when there is no great demand from industry," he said.

The two previous power cuts were during the week.

Sunday's blackout happened when a major electricity distribution line, supplying about 70% of the electricity consumed in the country, failed, officials said.

Recall that Venezuela is one of the world's largest oil exporters, and should be swimming in billions of dollars of surplus due to astronomically elevated oil prices over the past two years. Unfortunately for Venezuelans, the opportunity to profit from those boom times were squandered by the Chavez regime, which doled out tens of billions to keep his socialist allies like Cuba and Bolivia afloat, while spreading the cash around to his cronies to keep the regime in power. Now with oil prices tumbling on world exchanges, Venezuela finds the value of its primary export crashing even as its ability to produce it has slipped by twenty-five percent. Not good for the welfare state!

The sector has been completely in state hands since 2007 but Mr Chavez has said nationalisation has not contributed to the current problems.

He says the private companies who used to be in charge failed to make the necessary investment to upgrade the system to cope with increasing demand.

One wonders, then, who is to blame for failing to make the necessary investments in the government-run oil company, PSVDA, which has caused its production output to fall by a quarter over the last few years. PSVDA has been government owned for decades.

The power outages and falling oil revenues are putting the squeeze on Chavez's electoral grip.

Venezuela holds state and municipal elections next month, amid indications that Mr Chavez's United Socialist Party of

Venezuela (PSUV) could face tough fights in some areas.

Mr Chavez, who last December suffered his first electoral setback when his plans for constitutional change were defeated, has called the forthcoming vote the most important in the history of Venezuela.

Analysts say power cuts could come to symbolise what some voters feel are the president's failings in running the country.

Chavez does not take criticism, or defeat, very well.

Wednesday, October 22, 2008

The Wonders of Racial Diversity on Long Island

Come see the paradise:

A Long Island school was on guard on Tuesday after two days of fighting led to dozens of suspensions at Hempstead High School. District officials took action against the troublemakers, fearing the violence would escalate.

They held up their suspension notices like badges of honor. One dozen Hempstead High students kicked out Tuesday, separated themselves by racial and ethnic affiliation.

"I am just trying to defend myself and my friends. That's it. I don't know if it is racial," suspended student Brian Gomez said.

Added Johnathan Vega: "They be groupin' up, and I just had to defend my people and that's what I do."

Suspended Jhakim Morrison blamed the school for the incident.

"No security in there … everybody for themselves," Morrison said. "What do you expect … a bunch of Hispanic kids coming at a bunch of black kids."

Following two days of fighting that spiraled out of control, and the cancelling of the homecoming pep rally, police from Hempstead Village and undercover officers from Nassau County Police joined school security in returning peace to the school on Tuesday, patrolling the campus perimeter and walking the hallways, quelling another day of confrontation.

Apparently, Hempstead, Long Island, can now be referred to as a "vibrant" community. Just like all the other hell holes.

The article ends, naturally, on an upbeat note:

Teachers in class Tuesday told students to focus on positive dreams for their futures, reminding them the governor of New York is a Hempstead high grad and that a minority is running for president.

Well, of course, that will make everything so much better.

Tuesday, October 21, 2008

The Downward Slide

With oil prices falling precipitously, thanks to fears of a worldwide recession and a resurgent US dollar, those who were banking on petrodollars to fund their precious utopias now find themselves facing the prospect of bitter economic realities according to the New York Times.

[Venezuelan President Hugo] Chávez was emphatic last month when he announced that Venezuela would engage in naval exercises with the Russian Navy in the Caribbean. “Go ahead and squeal, Yanquis,” he said. “Russia’s naval fleet is welcome here.”

The moment, made possible in part by a flood of petrodollars used to buy Russian weaponry, must have been sweet for a man who has spent his presidency wagging his finger at the United States and railing against its capitalist model. Cozying up to Russia, whose leaders have been increasingly at odds with the United States, evoked cold war rivalries in the hemisphere.

Mr. Chávez has also used his oil money — in direct payments and through subsidized oil shipments — to win friends in the hemisphere and elsewhere, including President Evo Morales of Bolivia, who expelled the United States ambassador in La Paz last month, saying the envoy was involved in plotting a coup.

Domestic spending in Venezuela has also surged, through the creation of a wide array of social welfare programs that furthered Mr. Chávez’s goal of building a socialist-inspired state — and suppressed opposition. The 2009 budget, based on $60-a-barrel oil, includes a 23 percent increase in government spending, to $78.9 billion.

At $140 a barrel for oil, that was conservative. With prices now uncomfortably close to $60 a barrel, economists in Venezuela are expressing alarm over the government’s ability to pay its bills, including those for arms purchases.

Venezuelans are already struggling with an inflation rate of 36 percent, one of the highest in the world.

Venezuela, that prime exemplar of the wonders of socialism, didn't even get to benefit as much as it might have from $140 per barrel oil since its overall oil output has fallen by a quarter under Chavez's beneficent management.

According to the Timesarticle, Iran and Russia, who have exploited high oil prices to push foreign agendas are also likely to feel the pinch of reduced revenues as oil falls, though both are better positioned than Venezuela to deal with the fall out.