Bob Deschner’s Blog

20071010 Economy Stiglitz in

Venezuela Pushes Public Private Balance (Update1)  

The last statement in this article kind of sums of the attitudes of the

Clintons about economics.  When their Chair of the U.S. Council of Economic Advisors endorses Hugo Chavezuelas seizing of the oil company assets (for the second time in 20 years), it suggests that they are really do lean toward Big Guvm’t in a Big Way.Stiglitz, who won the Nobel Prize in economics in 2001, chaired the U.S. Council of Economic Advisers under former U.S. President Bill Clinton. He is a professor at

Columbia University. He said Venezuela has managed its oil boom better than

Russia.

Venezuela is managing their oil boom by stealing the assets bought, developed and paid for by the oil companies.  What is

Venezuela going to do for oil field development and technology for the next twenty years?   They have huge oil deposits but they can not produce their heavy oil resources without extensive investment and develop of new technology.Hugo Chavezuela is spending the capital that needs to be re-invested to develop future reserves.  Look at Russia (who didn’t steal their oil industry) and

Iran who did. 

Russia is still in business with the oil companies and continues to expand production (after many years of stagnation and waste). 

Iran is soon going to be a net oil importer.  They have squandered one of the best oil resources on the planet by mis-management, decrepit equipment and ancient technology.You can steal assets.  You can buy some technology.  You can avoid re-investing.  You can drop production and make back some of the losses by raising prices.  But the honey pot does run out.  The high market prices do cycle down.  And pay backs are tough.Time to develop clean coal burning technology, low cost solar and cheap fusion power.And Energy CONSERVATION!http://www.bloomberg.com/apps/news?pid=20601086&sid=aqop3ptj2ktg&refer=news By Matthew WalterOct. 10 (Bloomberg) — Joseph Stiglitz, a Nobel economics laureate visiting

Venezuela, said developing nations must strike a balance between public and private control of the economy. After meeting in the presidential palace with Venezuelan leader Hugo Chavez, Stiglitz praised the South American country’s success at distributing its oil income among citizens. He urged the government to ensure its economic policies are leading to sustainable growth. “What’s fundamental is to have a balance in the role of the market and the government in the economy,” Stiglitz said at a forum on emerging markets sponsored by a local bank. “We have to realize it’s not just about setting interest rates, but also about supporting growth.” The Nobel Prize winner said

Venezuela’s economic growth in recent years has been “impressive.” Chavez, a critic of the U.S. government and a self-described foe of capitalism, has cited Stiglitz in speeches this year warning about the

U.S.’s “irresponsible” economic policies. Venezuela, the fourth-biggest supplier of crude oil to the

United States, had an 8.9 percent economic growth rate in the second quarter, its fifteenth straight quarter of expansion. Increased consumer demand and government spending has pushed inflation to 15.3 percent, the highest in

Latin America. Stiglitz said during his speech today that relatively high inflation isn’t necessarily harmful to economic growth, and that central-bank autonomy shouldn’t be “excessive.” Bank Autonomy Chavez plans to formally do away with the Venezuelan central bank’s independence later this year through a rewrite of the constitution. Stiglitz praised China’s and India’s success in reducing poverty and maintaining economic growth, and criticized

Brazil’s high lending rates during his presentation. He said Venezuela has managed its oil boom better than

Russia. The economist’s trip to Caracas follows a series of high- profile visits from U.S. citizens interested in the South American nation’s so-called “Bolivarian” socialist revolution. Actors Kevin Spacey and Sean Penn visited

Caracas earlier this year and were received by President Chavez. Actor Danny Glover is co-starring in a film sponsored by the Venezuelan government called “Miranda Regresa,” about the life of Latin American revolutionary hero Francisco de Miranda. The movie opens in

Caracas theaters Oct. 12. Stiglitz, who won the Nobel Prize in economics in 2001, chaired the U.S. Council of Economic Advisers under former U.S. President Bill Clinton. He is a professor at

Columbia University. To contact the reporter on this story: Matthew Walter in

Caracas at mwalter4@bloomberg.net Last Updated: October 10, 2007 19:05 EDT