Obama, Chavez Are Both Nationalizing Private Companies, Venezuelan Political Analyst Says

July 27, 2009 - 11:06 PM
The Venezuelan strongman and President Obama are both taking over private companies in order to deal with the economic crisis that has affected both countries, a noted Venezuelan political analyst said Monday.  
Washington (CNSNews.com) -- Venezuelan President Hugo Chavez is taking over private companies in order to deal with the economic crisis that has affected both his country and the United States, and the Obama administration is trying to do roughly the same thing, Venezuelan political analyst Dr. Luis Vicente León told CNSNews.com Monday.
 
“I don’t like to make comparisons (between the U.S. and Venezuela) because you can only compare concepts,” León, a noted political analyst and pollster in Venezuela said in Spanish. “But conceptually, one can say that in order to solve the crisis, President Obama has had to overtake private companies.” 
 
He added: “Chavez is using the thesis that he is going to solve the crisis (by taking over) private companies.”
 
Although both countries utilize different rhetoric, ultimately the “concept” behind the state meddling with the private sector in order to deal with the economy is the same in both countries, according to León.
 
“You can say the institutions function differently--the (U.S.) government does not want to permanently own those companies and wants to return them to the private sector--but, in the end, the concept of the state’s participation is the same,” he told CNSNews.com
 
“In other words, it is the state getting involved with the private sector,” León added.
 
The Venezuelan political analyst talked to CNSNews.com after a discussion in Washington D.C., sponsored by the American Enterprise Institute, about the relationship between President Chavez and the collapse of the Venezuelan economy.
 
Panelists involved in the discussion included Dr. Antonio Canova, an economic expert for Bolinaga, Levy, Márquez & Canova in Venezuela and Asdrúbal Oliveros, an economic expert for Ecoanalítica in Venezuela.
 
Under President Obama, the U.S. government has become the main proprietor of car-maker General Motors when it decided to take over 61 percent of the company.   
 
In addition, billions of dollars have been infused into the private sector through the $700 billion Troubled Assets Relief Program aimed at shoring up financial institutions by reliving them of bad assets.
 
Furthermore, the $787 billion dollar Recovery and Reinvestment Act of 2009, also known at the stimulus package, also provides money for private sector projects in an effort to revive the overall economy.
 
It is still unclear whether the economic programs that the Obama administration has enacted are helping the economy. While supporters of the programs say it will take time to see the effects of the Obama’s ambitious agenda, others maintain that it will inflate the national deficit.
 
The current U.S. administration is also seeking to pass an overhaul of the health-care system by passing the Healthcare Act of 2009, which according to the nonpartisan Congressional Budget Office could cost more than $1 trillion and lacks spending restrictions.
 
If passed, the legislation will also provide an option for government subsidized health care.
 
One difference between Venezuela and the U.S. --while Chavez is nationalizing many of the country’s private countries by means of oppression, President Obama still has to answer to the U.S. Congress.
 
The panel of Venezuelan political and economic experts, meanwhile, pointed out that inflation in Venezuela stands at 30 percent, the highest rate in the hemisphere – largely attributable to the decline in oil cost and demand.
 
“The Chavez administration proclaims that it is government for the poor yet inflation is really high,” Oliveros said.
 
Nevertheless, Chavez, who promises to complete the “Bolivarian socialist revolution,” remains at an over 50 percent popularity rate since taking power and continues to spend money.
 
“Thus far the (Venezuelan) government has invested approximately $22 billion in nationalization programs,” said Oliveros. “This does not include the dispute that Venezuela is engaged in (nationalizing Venezuelan operations of) ExxonMobil and Sunoco, which accounts to about $8 billion, bringing the total to $30 billion,” he added. 

There is a reason why Chavez remains popular, León said
 
“Chavez is spending a lot of money, even now, and the relationship is utilitarian, but in addition to the utilitarian relationship, you have to take into account that Chavez is talking about inclusion, is talking about inclusion to the poor people,” he said. “He is buying the people and he is very popular.”