By George, I think he's got it.

There is an interesting blog called Oil Wars that I have criticized in the past for getting things wrong about development. But now I gotta give credit, because they are getting it right on Venezuela's nationalization program (all the interesting formatting is in the original post):

"But what is important to note is what Venezuela will NOT get through any of these nationalizations; new steel mills or cement factories or new telephone systems – those already existed and simply changed hands. There won’t be any new jobs as all the jobs working for those firms already existed. There won’t be any new economic output as the goods and services produced after nationalization were already being produced before it.

In sum, the only benefit that Venezuela gets from nationalizing these companies is it now controls their profits and it only even gets that if it ensures the companies are well run and remain profitable.

Now let’s turn to an alternative use of that money. Instead of buying existing steel mills or cement factories suppose the government built new ones.

By contrast if the government built a new steel mill with the same $2 billion it would create thousands of NEW jobs, it would generate NEW economic activity, it would generate NEW tax revenue and, if the company is run well, it would even get NEW profits.

In summary, if the Venezuelan government uses its oil revenues to purchase an existing company its Venezuela’s only gain is whatever the profits of that company are. But if it instead uses those resources to build NEW industries it gets far more as much new wealth is created, economic output increases, and the standard of living of Venezuelan’s increases. This is not to even count other tangential benefits that may accrue such as increasing the skill level of your work force, obtaining new technologies, reducing the economies dependence on oil, etc.

It is more than clear that from an economic point of view it would be better not to nationalize Sidor and the other companies and instead invest the money in building up new industries. These nationalizations are therefore a misguided and a wrong policy for Venezuela to be pursuing.

The fact that the Venezuelan government is pursuing this type of policy is evidence that it is fighting the wrong battles. Yes, Venezuelan’s are generally underpaid and have a low standard of living.

The reason for that, however, is not that they are exploited by foreign companies who take vast sums of wealth out of the country. The principle reason is that the country is underdeveloped and simply doesn’t generate enough wealth for Venezuelans to live well, even if all of that wealth remains in the country. Hence, the central issue facing Venezuela isn’t how to distribute the countries economic output more equitably (though that too can be worked on in various ways) but how to INCREASE its economic output.

Putting this in terms that would be familiar to Marxists, Venezuela’s problem isn’t who OWNS the means of production; it is that it doesn’t have ENOUGH means of production."

Awesome!! If this guy gets it right, how can anyone NOT?? Phone call for Hugo Chavez on line 7!!

Places I would go live if they tripled my salary

Tyler, in his post about how (not?) to build a great university, said he wouldn't move to Saudi Arabia or Japan for triple his current salary. Me neither, but here are some places where I would go:

Argentina, Peru, Mexico, Chile, Brazil, Costa Rica, Belize, Panama, Germany, Switzerland, Netherlands, Italy, Spain, Portugal.

Lol, you guys can start lobbying people there and / or taking up a collection!!

Are you thinking what I'm thinking?

There are some very confused people in NY as this story shows:

NY suburb: Gere fence too high

Richard Gere, like Martha Stewart before him, is running into some zoning hurdles as he tries to put his imprint on the wealthy New York suburb of Bedford.The 58-year-old actor and a partner have opened a cafe and bakery and have plans for a luxury inn and fine restaurant. But their new 180-foot-long cedar fence may not pass muster, building inspector Richard Megna said Monday. Bedford's rules call for a fence no higher than 4 feet along the street side of a property, he said, and Gere's is 5 feet tall.


Are you freakin' kidding me?? People, this is clearly a "that tiger wall is too LOW" situation here. When it comes to Richard Gere, I'd say 18 feet is the minimum safe wall height!!

Will Boliva split apart?

Here at KPC we have been following the dual saga of Evo Morales' attempts to pass a new consititution in Bolivia that re-distributes political power and several of the richer individual states making plans to hold autonomy referenda (see here for a story and other links).

The Miami Herald ran a story yesterday about how this situation is still unresolved and a cause for concern.

A major diplomatic effort is underway to ease tensions in Bolivia, where planned autonomy referendums by rich, renegade provinces have stoked fears of political strife. Dante Caputo, the head of the political unit of the Organization of American States, is to meet on Monday with the governors of five provinces that have challenged Bolivia's left-wing President Evo Morales' push to pass a draft constitution. The text gives indigenous peoples more power and the state greater control of the economy, deepening regional and ethnic rifts in the Andean country. This has produced an unprecedented international reaction, with the foreign ministers of Brazil and Argentina visiting the country in recent days and on Friday the European Union and 16 more countries offering to mediate, underscoring international concerns over the direction of the poor, landlocked nation, which sits on some of South America's largest natural-gas reserves and is a major producer of cocaine.

The state of Santa Cruz has an autonomy referendum scheduled for May 4th, two others on June 1, and a fourth on June 22.

The article ends on a cautionary note:

Economic woes are adding to the tensions. Inflation has been creeping up in Bolivia and natural-gas output has been slipping since Morales nationalized the industry in 2006. Bolivia is a major natural-gas supplier to Argentina and Brazil.

Libertarian Surge: Where There's A Will.....

George Will's column in Newsweek, about the Libertarian Party:

It has recruited 600 down-ballot candidates around the nation (including Michael Munger, chairman of the political-science department at Duke, who is running for governor of North Carolina) and expects to have 1,500 by Election Day.

George called me last week, and we got to talk for a second. He wanted to make sure I was really running, since it is "irrational."

I pointed out that, as a Cubs fan, George Will is just as irrational as a Libertarian, and maybe more so. He acknowledged that there is some truth in that.

ATSRTWT: A Libertarian Surge?

(Nod to Tim G, who has his own surge)

Roddick to France: "Forget" about it!

Or in pictures, too much of this:

created this:

Story here. Next up for the US team is Spain in the semi finals.

Bittergate II

I second Angus' motion.

An excerpt from an article in TIME this week, with a little Munger quote:

"Mistakes become "gaffes" when they play to an underlying stereotype," said Michael Munger, a polticial science professor at Duke University in North Carolina, which is scheduled to hold its primary May 6. "If Bill Clinton had said this thing about some white people being bitter and using guns, it would have been fine, since he grew up a poor white guy. But the Obama stereotype is a wealthy ivy-league elitist. He's a little too well-spoken; his suits are a little too expensive. From him, the comment comes off as condescending."

But if Clinton, and McCain for that matter, are going to use these comments to cast Obama as an arrogant elitist, they better be prepared to deal with the blowback. As Jamal Simmons, a Democratic consultant and Obama supporter, put it in an email exchange with TIME, "Hillary Clinton calls Barack Obama elitist? Really? Hillary Clinton was a corporate lawyer who sat on the Wal Mart board before becoming First Lady and is now worth over $100 million. Barack Obama is the child of a single mother raised in part by his grandparents who went to school on a scholarship and was a community organizer making $12,000 a year before becoming a law professor, lawyer and state senator. Five years ago he was still paying off student loans. It's a bogus charge."

Let me see if I understand: this would also have been condescending if Hillary had said it. Two things. (1) Yes, that's right. (2) But Hillary DIDN'T say it.

ATSRTWT

Grasping at straws

For the sake of argument, let's grant Obama's point that people cling to religion out of bitterness and desperation. I then wonder, who would/should you rather put your faith in to make your life better? God and your fellow congregants, or Barack / Hillary and big government? Which belief would actually be more "deluded"?

Bittergate (as Tyler is calling it) is lights out for me as far as Obama as something special is concerned. At this point, besides the fact that he can't bowl, what is the difference between him and HRC?

Goob!

I am so tired.

But.....I am now the official candidate for Governor of NC for the LPNC.

The convention was wonderful, really interesting.

More soon....

Your Latin America Roundup

1. Venezuela: the girl can't help it! Hugo, the serial nationalizer has done it again. On top of his recent announcement of nationalization of the cement industry, he is now going to nationalize the main steel producer in the country, which is an Argentine firm. These nationalizations are well beyond screwing with the USA as now firms of neutral (Mexico) and allied (Argentina) countries are being targeted. Predictably but sadly, these action are touted as the way to reduce shortages and lower prices domestically.

2. Ecuador: Standin' on shaky ground. President Correa's campaign to bring the military under his control has hit a very rough patch.

3. Cuba: Be it ever so humble. "Thousands of Cubans will be able to get title to state-owned homes under regulations published Friday, a step that could lay the groundwork for broader housing reform. The measure was the first legal decree formally published since Raúl Castro succeeded his brother Fidel as president in February. It came a day after state television said the government would also do away with wage limits, allowing state employees to earn as much they can as an incentive to productivity. The housing decree spells out rules to let Cubans renting from their state employers keep their apartment or house after leaving their jobs. They could gain title and even pass it on to their children or other relatives. Those who could take advantage of the new law include military families, sugar workers, construction workers, teachers and doctors."

Wow that sounds cool. Any fine print??

By law, Cubans still are not permitted to sell their homes to anyone but the government, though they may swap housing with government approval — a process that can take years.

ouch!

4. Mexico: Little by little. President Calderon has introduced legislation that shine a little light into the black hole that is PEMEX. "But the limited measures effectively ended any expectation that Mexico would soon take steps to open important parts of its energy industry. With one of the world’s most protected energy sectors, Mexico is the third most important supplier of crude oil to the United States. But production by the state-run oil company, Petróleos Mexicanos, or Pemex, has fallen more than 10 percent since reaching a peak in 2004. Crude oil exports, too, have begun to slide. Pemex has failed to invest enough in exploration or refining, and pipelines and storage facilities have deteriorated. Mexico now imports 40 percent of its gasoline. Analysts predicted that the proposed legislation would do little to change all that. “They are maybe taking 50 tiny steps in the right direction,” said David Shields, an analyst based here who writes extensively on Pemex. “That’s better than nothing, but it’s not much better than nothing.”