If Venezuelan President Hugo Chavez deliberately intended to sabotage his nation’s economy, he would be hard-pressed to do anything different from what he is now doing to his country.
It has been widely reported that Mr. Chavez has been increasingly taking control of the oil, telecommunications and energy sectors, as well as the media. What has not been reported is the full extent of the corruption in Venezuela and how this ultimately will destroy the economy.
The financial scandal taking place is far bigger than Enron, and may ultimately even exceed the U.N. “oil-for-food” scandal, the biggest financial disgrace of all time. Venezuela has had a rapidly growing economy for the last few years, due to high oil prices, but the house of cards is about to collapse.

That’s Richard W. Rahn, in an op-ed dated for 1/22.

So it would appear that Hugo Chavez is in serious trouble, even though he doesn’t know it yet.  But Rahn’s outlook is not at all rosy for the short term.

Mr. Chavez and his cronies had already been spending far more than they were taking in before the recent drop in oil prices. Without a big jump back up to $70 a barrel or more for oil, the Venezuelans will be increasingly squeezed, and you can bet the blood from the innocent Venezuelan people will be drained long before those on the take from Mr. Chavez agree to have their looting stopped.

The one point that Mr. Rahn and does not mention is the reaction of the United States when these problems develop.  Possibly his lack of comment has to do with the question of who’s going to be in power here in the United States when those problems finally come home to roost in Venezuela.

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