Cooper: Lessons, warnings from Venezuela

Venezuelan President Nicolas Maduro holds up his fists during a press conference at the country's presidential palace in Caracas, Venezuela, on Friday.
Venezuelan President Nicolas Maduro holds up his fists during a press conference at the country's presidential palace in Caracas, Venezuela, on Friday.

The crisis in Venezuela has both lessons and warnings for the United States.

Once the richest country in South America, it's now in chaos with a collapsing economy, hungry citizens and a near dictatorship for a government.

U.S. President Donald Trump has recognized opposition leader Juan Guaidó as the country's president and said recently that all options are on the table about U.S. action there. The U.S. president is right to be concerned about the country, in which Russia and China are heavily invested, but it should tread carefully.

Meanwhile, many far-left U.S. Democrats - who make up the bulk of the party today - advocate similar policies in the U.S. that were instituted in the socialist country before its economy collapsed.

In the 1960s, Venezuela produced more than 10 percent of the world's crude oil and had a gross national product that far exceeded its neighbors Brazil and Colombia. Indeed, its GDP was not far behind that of the U.S. It also was a popular tourist destination for international travelers.

But over the next decade-plus the country evolved into a petrostate, a government deeply reliant on its oil/gas industry but in which much of the wealth was concentrated in an elite minority and in which political institutions were weak and corruption was widespread. Then the most recent plunge in global oil prices in 2014 sent the country into a tailspin it will not escape from anytime soon.

As evidence, Venezuela's GDP shrunk by double digits for a third straight year in 2018, its defaulted on two of its global bond debts in 2017 and now has annual inflation of more than 80,000 percent.

During the good times, the country nationalized its oil industry, promised free health care and higher education for all, and provided a strong social safety net. But by the time failed government coup leader Hugo Chávez was elected president in 1998, economic stagnation had set in.

With Cuba as a model, Venezuela's new leader drew power around him and - similar to the 2008 U.S. presidential campaign of Barack Obama - mined discontent of the voters. Eventually, he nationalized additional sectors of the economy and expropriated companies.

Before dying in 2013, Chávez made known his backing of Nicolas Maduro, his vice president, as his successor. Maduro, as president, continued and strengthened autocratic rule over the country - including a widely disputed 2018 re-election.

The result has seen Venezuela become a murder capital, a heavy source of drug trafficking and a cesspool of governmental fraud. And an estimated nearly 900,000 of its citizens have fled to next-door Colombia.

Though Trump has said in the past he is "not going to rule out the military option," the options that have been tried by several presidential administrations - direct engagement, sanctions and freezing assets, among them - haven't worked. And Russia and China continue to stand behind Maduro.

But Sen. Marco Rubio, R-Florida, a vocal critic of Maduro, played down any military option on CNN's "State of the Union" over the weekend.

"I don't know of anyone who is calling for a military intervention," he said, adding, however, that "the United States always retains the right, always, anywhere in the world, in any instance, to protect its national security."

In the end, we count on cooler heads in Trump's administration to win the day against a military option by providing recent-memory evidence of invasions of Afghanistan, Iraq and Libya. We don't need another you-break-it, you-buy-it country, and this one would be a doozy to attempt to set right.

In the meantime, newly elected Democrats like U.S. Rep. Alexandria Ocasio-Cortez, D-New York, are pushing Venezuela-like policies such as the "Green New Deal" that would mandate the type of energy used, allow communities instead of private businesses to control energy markets, and offer a federal jobs guarantee and a universal basic income.

Similarly, the "Medicare for All" health plan being pushed by U.S. Sen. Bernie Sanders, I-Vermont, is estimated by the Mercatus Center to cost $32 trillion for the first 10 years, and an Office of Drug Manufacturing suggested by U.S. Sen. Elizabeth Warren, D-Massachusetts, would put the power to manufacture generic drugs in the hands of the federal government.

Far-left Hollywood celebrities have long cooed over Chávez and Maduro, from actor Danny Glover saying Chávez's "vision for humanity and the world can only be compared to that of leaders like Nelson Mandela" to actor Sean Penn saying Venezuela's "revolution will endure under the proven leadership of [then-]vice president Nicolas Maduro."

The U.S. can't afford what it's funding now, even in solid economic times, much less any of the aforementioned new proposals. Why would we even think about taking such a Venezuela-like economic route - running up more debt and printing money - when we don't have to?

Upcoming Events