Chavez's Big Grab

IBD Editorials ^ | August 20, 2008

[Kaslin]

Socialism: Venezuela's seizure of Cemex assets Monday is more than a typical nationalization of resources. Its vindictive manner has much to do with the firm's Mexican headquarters. It's a message to others in the region.

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Like a quasi-military conquest, Venezuelan strongman Hugo Chavez marched in troops to "take back" four Cemex cement plants in the dead of night as part of his nationalization of cement announced in April. "It was time," he said Tuesday, calling it one of his "steps toward socialism."

Chavez then popped out fireworks as red T-shirted mobs, judges and politicians headed to the plants and cheered their "victory."

Why was Cemex "defeated"? Because last April, Mexico's Cemex told Chavez its plants were worth $1.3 billion, based on standard norms of value. Chavistas said no dice, and after driving their stock price down in Caracas trade, offered $800 million tops.

The Venezuelans, of course, had the last word, and moved into their clownish conquest even before Chavez's 90-day negotiation period expired.

For Latin Americans, this is something of a wake-up call. No longer will Latin American companies be exempt from Chavez's power plays. In fact, a Latin American company might now expect even worse treatment than the western ones Chavez has grabbed.

[econjack]

Chevez has placed himself between a rock and a hard place and probably doesn't even know it. He's counting on his petro dollars to carry the weight that will now be imposed due to the lack of foreign investment. He should be able to pull it off...for a while. But then, socialism has a way of demanding more and more from its gov’t and ultimately reaches a point of implosion. It's only then that Chevez will bask in the clear light of stupidity.

[Deetes]

BUMP

[villagerjoel]

Man I love the impartiality of market forces.

[Chode]

tax the rich, feed the poor; tax them till there are no more...

[bamahead]

bookmark

[VeniVidiVici]

Like a quasi-military conquest, Venezuelan strongman Hugo Chavez marched in troops to "take back" four Cemex cement plants in the dead of night as part of his nationalization of cement announced in April. "It was time," he said Tuesday, calling it one of his "steps toward socialism."

Pretty cool how much socialism looks like fascism. Somebody should point that out to the Democrat Party, Hillary and Osama.

[dr_who]

Cuba and North Korea have shown that both the US and the autocratic regime can impose all sorts of hardship on the common people and the autocrats will survive just fine. Unless something forces Chavez out of power, he will stay. He acts like a total fool, but he’s managed to not screw up and get toppled by the armed forces in his country, much less demonstrators. This in spite of the fact that he should be making mortal enemies out of ever larger portions of the population. He’s looking increasingly like another Mugabe. He may turn the country into little more than a rubbish heap, but he’s not going anywhere.

[MaxMax]

Don’t worry Chavez, Putin will kill you last.

[lowbridge]

bump

[onedoug]

So a communist grabs more infrastructure.

What are we doing about it?

[Clay Moore]

Well Mexico ought to know how this works. That is how Pemex got started in ‘38.

[ModelBreaker]

Just deserts. Mexico has done its share of nationalizing.

[arkady_renko]

Sounds a lot like Richard Daley taking bulldozers to Miegs Field in the middle of the night in the socialist paradise of Chicago.

[CORedneck]

Chavez needs to be removed from power ! (I hope that I don’t get arrested for saying this especially if we get stuck with an Obama administration)

[Tzimisce]

Is Venz the new Fascist Italy?

[Don Carlos]

I’d be surprised if some young captain in Chavez’ army was not weighing his own chances as we speak. Latino dictators tend to have a limited shelf life. Castro being the big exception, of course.

[econjack]

Cuba and North Korea have shown that both the US and the autocratic regime can impose all sorts of hardship on the common people and the autocrats will survive just fine.

I'm not so sure. Cuba was propped up by Russia just as North Korea has been propped up by China. Also, South America seems more susceptible to coups than many other parts of the world (e.g., Allende in Chile). Chavez is courting suitors (e.g., Iran) to pick up the slack when foreign investment dries up. However, Iran has it's own set of problems and I see that "friendship" probably less close than Chavez would like. Kicking his neighbor in the teeth just doesn't seem like a smart move.

[dr_who]

Cuba has been on its own since the Soviet Union died, and that’s 17 years. Moreover, Fidel Castro, the cult of personality who has been running the show, is at death’s door but still was able to hand over power to his brother Raul without incident. His other pupil is of course Chavez. As for North Korea, China can only do so much without Kim Jong Il serving as a puppet ruler, and he isn’t.

[davidlachnicht]

UPDATE:
“Mexican cement giant Cemex plans to go to the World Bank to seek arbitration after Venezuela’s government seized the firm’s local subsidiary.”
http://news.bbc.co.uk/2/hi/business/7573830.stm