- Maduro is a tyrant; any defence of him is inexcusable. Under Maduro’s presidency, Venezuela’s economy has collapsed, inflation has skyrocketed and goods shortages are increasingly common. Despite being blessed with abundant natural resources, systemic corruption, cronyism and an authoritarian political culture have left the country in ruins. No one can defend Maduro and have any moral or critical faculties.
- Chavez was partly responsible for the crisis we see today. While Chavez’s achievements in improving the country’s social welfare system and doubling average incomes were significant, they do not excuse his dictatorial system of leadership or his failure to wean Venezuela off oil- which remains wastefully cheap and heavily subsidised. Chavez removed checks on his power and made it very difficult to criticise the government. This has made holding the current administration to account more difficult.
- Conservatives have a legitimate point that the Venezuelan crisis is a crisis of government. It is the government that has mismanaged the nationalised industries, wasted the oil reserves, failed to invest in education and silenced its critics. You cannot blame the free market for failing when the government has created a climate so hostile to investment. When oil prices are so low, running such large budget deficits is a recipe for disaster.
- Western involvement is likely to play into Maduro’s hands. The West, and America in particular, is very unpopular in Venezuela and across Latin America. The West supported Carlos Andrés Pérez, whose attempts to liberalise the economy led to social unrest. If Guaidó, the current opposition leader in Venezuela, is seen to be a Western puppet, Maduro’s popularity will increase. We should condemn any abuse of human rights and violation of the democratic process, but I strongly suspect any Western intervention will backfire.
- The crisis is not a crisis of socialism per se, but a crisis of authoritarian statism. Conservatives in both America and Britain have used the Venezuelan crisis to warn against the perils of socialism. But in reality, there’s very little the West can learn from Venezuela. The crisis was caused by an authoritarian and corrupt leader running the state for his own benefit. Industries were nationalised and social welfare expanded- not for the good of the people, but to enhance state control. Venezuela is in crisis for the same reason the Soviet Union collapsed: any system which does not have the consent of the governed is inherently unsustainable. This is a very different situation to the one America and Britain finds themselves in, where leftists have proposed a more interventionist state while keeping the democratic process intact. If you hear someone say we can’t have universal healthcare or affordable higher education because of Venezuela, you know they’ve lost the argument.
Time to break up Google and Facebook
In today’s divided Washington there is one thing the Left and Right agree about: that some companies have grown too powerful. Even conservatives were disgusted by the way states recently showered perks on Amazon in the hope of winning the right to host its new headquarters. “The richest man in the world just got $2bn in taxpayer subsidies,” said Tucker Carlson of Fox News. “How does that work?”
Monopolies are rife across the US economy. Facebook and Google control 63% of online ad revenue; two companies produce 78% of America’s corn seeds; one assembles 61% of its syringes. Lawmakers are increasingly calling for Congress to intervene, whether by making mergers harder to complete, tightening oversight, or directly breaking up firms – as it did in the 1930s, with the banks and electric utilities. Critics say direct intervention is too drastic, but in practice it could just mean reversing mergers that “shouldn’t have been allowed in the first place”, such as Facebook’s purchase of WhatsApp. The conditions are ripe for Congress to be more assertive against corporate concentration. The benefits for the public if it did so would be “profound”. (Matt Stoller, The New Republic, New York and The Week, 14 Jan 2019).
So corrupted has Washington and congress become that these monopolies proliferate. They are a blight on what is supposed to be a competitive economy and, and, because they all encourage predatory pricing (why else do they do it?) they are leeches on the pockets of men and women in the street. We are never privy to discussion in smoke-filled, darkened rooms, where company executives promise goodies to politicians if they wave through unwelcome and unnecessary takeovers and mergers and acquisitions, but that they happen there is little doubt. It is anti-democratic and both political parties should summon up the courage to say “NO!.
Leadership
“To be an effective leader, whether of an orchestra, nonprofit, city council, or country, you must possess confidence, strength, and assuredness. After all, if you’re the one making decisions that impact other people in the short- and long-term, you need to offer assurances that you have what it takes to achieve the mission, steer the ship out of danger, and make radical changes when required to do so.
“Yet the best leaders are those who understand that such gravitas must be balanced with another essential, humility. Not in the sense of devaluing one’s own importance, but in one’s ability to know when help is necessary, and to seek guidance for the benefit of the organization and mission. Effective leaders recognize their limitations and see themselves as continuous learners, accepting that self-evaluation and improvement are requirements of a job well done.” (Graciela Briceno, Managing Editor, The World Ensemble, an offshoot of the Venezuelan El Sistema music system, 1 February 2019).
I would add: a calm, not a volatile, disposition, plus a sense of humour. A laugh and a giggle have a magical way of dispelling tension. Actually, the ability to be light-hearted and to tell a good joke (and the sense to know when these are appropriate!) are both extraordinarily helpful abilities in dealing with staff and customers. They don’t tell you this in the rather serious-minded world of business schools, and you probably couldn’t teach it anyway.
The pension thief: no pensions but plenty of parties
Private equity work has been sweet for Marc Leder, the numero uno at Sun Capital Partners. He’s parlayed his takeovers of troubled firms into a fortune big enough to make him a co-owner of the Philadelphia 76ers in basketball and the New Jersey Devils in hockey. New York’s tabloids, meanwhile, have come to dub the hard-partying Leder “the Hugh Hefner of the Hamptons.” The secret to his success is to plunder assets from the companies he buys. then send them into bankruptcy to sidestep their obligations to workers. Over the past decade alone, Sun Capital has bankrupted five firms and left their pension funds $280 million short. Leder, for his part, claims that the “vast majority” of Sun Capital deals have been successful. And he only parties, the private-equity kingpin adds, 25 nights a year. (Inequality.org).
This man typifies what is wrong with modern capitalism, with the full support of the bloodless, empathy-deprived politicians of the extreme Right. He, and other people like him, should cooling his heels in jail as he reflects on the fact that we are all human beings together and that partying while former employees, deprived of their pensions by legalised theft, is tactless, cruel and inhuman. If the system cannot discover a moral foundation then the system has to change. Let us hope that change does not involve violence. The frightening thing is that hordes of voters and their representatives laud the super-rich and want to emulate them, apparently anyway they can. We need Jesus back to overturn the tables of the moneymen in the Temple. Remember that?
Leveraged loans, the latest threat dreamed up by the banks
We all know that the 2008 financial cataclysm was caused by mortgages offered to customers with weak or no credit histories, bundled together to create “investment opportunities”, causing a chain reaction of losses.
Now it is the turn of “leveraged loans”, which are offered to companies already in debt, without too many strings attached. Most of these loans are sold on and have floating rates of interest, a feature that is attractive to investors who benefit when rates rise. Owing to the rapidity of their trading means there is little incentive to tighten up their terms.
The value of this market is a staggering $1.3 trillion – a potential repeat of 2008 just hanging there, promoted by the get rich quick characters in the banking world who don’t fear a melt-down; after all, no one sent to jail last time.
One of the principles not included in the original thoughts of Epicurus (because if there were rapacious, greedy bankers around to disturb his ataraxia in his era, they were few and could do limited harm) he would, for sure, have condemned them and advocated salutary punishment (chained to a bench on an oar-propelled galley?). The political class must know about the threat posed by leveraged loans, but nothing is being done, nor will it be – the corruption of the system cannot be easily reversed. We, the people, will be the sufferers if and when the financial sector goes belly-up and we have to rescue it – again.