Marc Weisbrot: Wrong on Venezuela Yet Again…Blaming Sanctions, not Socialism, for Venezuelan Decline

Economist Marc Weisbrot has spent the better part of two decades making ludicrously inaccurate predictions about Venezuela; now he's wrong yet again, claiming that sanctions, not socialism, have led to the current economic woes.

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Economist Marc Weisbrot ludicrously blames Venezuela’s economic collapse on US sanctions.

Economist Marc Weisbrot, of the Center for Economic and Policy Research, has been the world’s leading academic cheerleader for Venezuela’s Chavista regime for some time. A close confidant of the late Hugo Chavez, he has been repeatedly and conclusively denounced by his critics for manipulating and distorting data to present a rosy picture of Hugo Chavez’s 14 year tenure as president.

Now Weisbrot, in a new study, is proudly proclaiming that the Venezuelan catastrophe is not, in fact, the fault of the Chavistas, but due to injust, illegal, and heartless US sanctions. The Chavistas have tried so hard to provide a wondrous standard of living to their people, but the US has done its darnedest to make sure they can’t.

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In the heroic narrative proposed by Weisbrot and allies, Chavez was that paragon of social justice virtue, who selflessly put the interests of Venezuela’s poor first, to the detriment of a greedy capitalist oligarchy, while lifting millions out of poverty, and using Venezuela’s oil wealth to bestow socialist largesse on a grateful public.

Yes, the Venezuelan people reveled in the wondrous healthcare, education, public services, transportation, and infrastructure that the 1999-2013 period bestowed upon them. And a crowning achievement of the Chavista regime: the free oil that all Venezuelan enjoyed access to. (Weisbrot and friends seem oblivious to the climate change implications of a socialist petroleum-based dictatorship giving away fossil fuels for free oil, but that is another story entirely).

Of course, all good things must come to an end. The Venezuelan regime was forced to end its petroleum-based generosity in 2018…but they did it in a typical “Chavista”/classic South American-caudillo fashion. Now only those who would swear allegiance to the regime, by signing up for a “card of the fatherland” would get the still heavily subsidized oil. That’s right. Just call it Venezuela’s “Obama phone” moment. Support us and get a bunch of free stuff from the government…and the money is never going to run out.

To Weisbrot and friends, Hugo Chavez posed no challenge to the rule of law or democratic traditions. He had no interest in eliminating freedom of the press or shutting down opposition media. He never jailed political opponents. He and his family were pure as the driven snow, and they never used their office for political gain. Sure, Chavez had a daughter who never worked, but her USD $4 billion were certainly earned through legitimate means.

Chavez and Maduro and friends never turned major sectors of the economy over to criminal mafias, or launched its very own Cartel of the Suns to control drug trafficking in the region, or collaborated with terrorist groups like Hezbollah to set up drug trafficking and money laundering networks.

But more than anything…it was the the rise is the standard of living for the people, the ordinary Venezuelan people, orchestrated by Chavez and allies, that so impressed Weisbrot and friends. As an entirely orthodox Marxist economist, one could sense Weisbrot’s excitement as Maduro supposedly lifted so many people out of poverty, in the pursuit of social justice, despite the constant slings and arrows from a greedy oligarchy, an unfair international press, and meddlesome US presidential administrations.

Few outside of leftist South American circles actually believed Weisbrot’s analysis. Economist Francisco Rodriguez, at Wesleyan University, wrote a particularly damning piece accusing Weisbrot of grievous statistical representation. In the abstract he writes claimed that Weisbrot claimed that:

“Under the Chávez administration in Venezuela the share of pro-poor spending has increased, inequality has declined, poverty has fallen rapidly, and there has been a massive reduction in illiteracy. All of these conclusions are based on the use of heavily slanted data and on the misinterpretation of the existing empirical evidence.”

But the best lines from Weisbrot’s body of “scholarship” undoubtedly come from a November 2013 piece he wrote for The Guardian, in which he scorned the “Venezuela haters” as he termed them, and laughed off concerns over hyperinflation, corruption, foreign reserves, bond payments, and the general state of Venezuela’s finances.

Among the highlights, he begins by assuring us that concerns about Venezuela degenerating into another Greece or Spain are far-fetched at best: “Of course Venezuela is facing serious economic problems. But they are not the kind suffered by Greece or Spain, trapped in an arrangement in which macroeconomic policy is determined by people who have objectives that conflict with the country’s economic recovery.”

Of course, Hugo Chavez had only the interests of the people at heart.

He then lauds the fiscal prudence of the Chavista regime: “How can a government with more than $90bn in oil revenue end up with a balance-of-payments crisis? Well, the answer is: it can’t, and won’t.”

But, it could. It has the most serious balance-of-payments crisis in the history of South America. Perhaps Weisbrot failed to take into account the billions siphoned from Venezuela’s public treasury into foreign bank accounts by Chavista thugs.

On hyperinflation, Weisbrot is indignant that anyone would doubt the monetary policy of the Chavistas: “Hyperinflation is also a very remote possibility…the Venezuelan economy – despite its problems – is very capable of providing healthy growth even while bringing down inflation.”

Healthy economic growth, no inflation, and fiscal prudence: the predictions of this University of Michigan-educated Communist provocateur, disguised as an economist.

Weisbrot was widely ridiculed for his piece, which likely ranks as the most inaccurate economic prediction in Latin American history. Curiously, after writing a regular column at the Guardian from 2009 to 2014, he soon left the publication after the publication of his tour de force: Sorry, Venezuela haters: this economy is not the Greece of Latin America.

Coincidence? Let’s just say that Weisbrot may not want to put that article on his resume, when he applies for his next position in economic forecasting.

Now, Weisbrot has teamed with economist Jeffrey Sachs to release a report that blames US sanctions for 40,000 deaths in Venezuela.

Ricardo Hausmann, at Harvard University, has written a compelling rebuttal, conclusively proving that Venezuela’s economic woes began long before US sanctions arrived in August 2017.

For Weisbrot and delusional friends, it’s the intent of social justice and Marxist redistribution that are important. Not actual results. Like all of the other disasters of “Socialism of the 21st Century”, failed economic theories led to failed countries and miserable people.

And now, the South American people have rejected this ruinous ideology left and right.

The Venezuelan people know the truth: US sanctions did not create the 20 year disaster that has been the Chavista experiment. Socialist economics did.

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