Monday, August 09, 2010

Paul Krugman writes about Venezuela investment for the future

Well, not really but I got your attention, maybe.


In his OpEd today Paul Krugman bemoans justifiably that the current recession in the US coupled with years of silly anti government rhetoric from the right will have terrible consequences for the future of the US as roads and infrastructure start crumbling while no one accepts any increase in taxes, even local.

The intelligent  left tends to admire the work of Krugman and I wonder if some of those who include chavista sycophants make the connection with what is happening in Venezuela today.  During the last 11 years chavismo has invested little in infrastructure considering the flow of money it received during the oil boom that ended in 2008.  As for maintenance of infrastructure, the investment is less, if possible.  Only when a bridge falls or something like that, does the government comes with a big production to try to make the people forget years of neglect.

In my very humble opinion what Krugman write has already happened in Venezuela.  We need to rebuild the country, we are past the repair only point.  Just drive between San Felipe and Caracas to convince yourself.

17 comments:

  1. Boludo Tejano5:50 PM

    Daniel, here is one reason why I do not listen to Dr, Krugman, yes the same Dr. Krugman of Enron consultant fame: Paul Krugman gets Pwned on Canadian Health care.


    While from 1951-1970, California devoted at least 15% of its budget to infrastructure, since 1980 the figure has been around 6-8% of its budget devoted to infrastructure.

    The lack of investment in infrastructure is consistent with what Thugo has done with PDVSA and with electricity. Grasshopper, meet ant. Or vice versa.

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  2. Krugman is a hack who thinks the stimulus should have been twice as big here in the U.S. (simply unaffordable). In my own community, every other road seems to have been recently torn up, repaved and or intersections improved, etc... There's seem to be plenty of investment in infrastructure through the traditional means, municipal bonds and our gasoline tax. Krugman doesn't even have a driver's license much less ever filled a tank full of gas. He's out of touch with what's going on beyond Manhattan.

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  3. JSB

    My point in posting this is not whether Krugman is actually right, but to point out a certainty: Venezuela is crumbling and any new income we get will need to be spent in RE-building rather than mere building anew. Whichever way one wants to look at it, it can only be slowing down any eventual progress for Venezuela. Right now it is causing misery as the costs of doing business have skyrocketed in Venezuela in part due to the crumbling road system.

    I am sure that there are many variants around the States, depending on how many taxes local communities are willing to collect.

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  4. Actually Krugman is completely and tragically right, though people like jsb - whose opinions might well represent a permanent entrenced majority in this country - will never ever believe it, even if their once-great nation were to slowly sink into second-world status, with decaying infrastructure, a wealthy elite, no middle class and a huge permanent underbelly of hopeless poverty. Even if you were to hire ten thousand trucks with loudspeakers to drive around every neighborhood in the country proclaiming continuously day after day "Tax is not a four letter word" - still these people would not be convinced. Having spent 30 years here I have hardly a glimmer of hope that this will ever change.
    As for Venezuela, yes, Daniel, he may be inadvertantly describing it too, but I do hold out the possibility in this case that there still exists some element in the 'national will' that someday in the future can turn their fortunes around. In the one case we are looking at a foreign growth, a cancer if you will, that can at least potentially be exorcised. In the other much larger case, there is, I think, a fatal national flaw.

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  5. Boludo Tejano3:04 PM

    Thugo’s position on infrastructure has been made abundantly obvious over the years. If it doesn’t vote for him, it deserves no money, He has starved PDVSA of investment money after he took it over: rotten food is better than drilling wells or replacing rusted out machinery. The main reason for the electricity shortages of the last year, as we well know, is that Thugo didn’t follow engineering plans for investment in maintenance, transmission lines, and new power facilities.

    This article points out that California spent at least 15% of its state budget from 1950 to 1970 on infrastructure. From 1980 on, that figure has been more like 6%- 8%. With similar results and similar reasoning as the above.

    Here is one reason why I don’t spend a lot of time any more reading Dr. Paul Krugman, - yes the Dr. Paul Krugman who was a well-paid Enron consultant .Like a stopped clock, even Dr. Krugman can occasionally be correct.

    Daniel: jsb's and my point is that for a lot of people, Dr. Krugman doesn't have a lot of credibility. Such as wanting more Stimulus when the first one did worse than predictions for what would occur if no Stimulus were passed. Guess I am not a member of "the intelligent left." :)

    But yes, you did get our attention. Alfred E. Neuman, Monty Python, or Lady Gaga would also get our attention. Moreover, they would have more credibility than Dr. Krugman.

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  6. Anonymous5:14 PM

    I think contrary to what democratic activist paul krugman says, infrastructure investment is rather popular in america. what krugman objects to is the method of payment. he wants tax increases and more government. whereas a great many people want spending cuts elsewhere.

    for example in the enormously bloated and 99% democratic controlled public unions.

    the reality is it is the left that has consistently been against boring long term projects like infrastructure investment. every penny that comes in must get shipped out to win votes. increase pensions, increase welfare payments, win union votes. then after all the money has been spent, the democrats say, "ok now lets build a road." and the rational people in the argument say, "YOU'VE SPENT ALL THE DAMN MONEY." and the democrats respond, "YOU EVIL STUPID BIGOT RACIST ANTI-GOVERNMENT REDNECKS ARE AGAINST INFRASTRUCTURE DEVELOPMENT!!"

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  7. anonymous

    i think it is not as simplistic as you want us to believe. USA history proves it. if eisenhower presided over the interstate highway system it was democratic presidents that did the TVA and the NASA.

    no US party has the monopole of corruption and political opportunism, be they financed trade union or friendly contractors in iraq.

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  8. boludo

    far from me to praise and evaluate krugman. as a matter of fact i do not know that much about him except that he sort of comes across as the new keynes for liberal politicians.

    i would agree on one thing, in general spending is good to get out of a crisis but its long term success is linked on how that money is spent, not the amount.

    whatever, my point was that venezuela today is beyond even the good offices of krugman :)

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  9. Martin,

    The problem is not so much about increasing taxes per se, though we already have high taxes.

    It is about how taxes are spent that can be so unfortunate.When I arrived from Venezuela in 2002 I was hired as lead teacher of an outreach program for Hispanics funded by the government.My boss received 40,000 dollars for the program through her democratic party contacts.She spent $800 a year on books and paid me $3,000 and another lady $2,000 then boss lady pocketed the rest.She didn't show even once to see how the program was run.This went on for 3 years at which point I quit.Years later she bought downtown buildings with her corrupted taxpayer money.

    I found out later how common this is.Not to mention that it doesn't require much money to teach well.Teaching requires freedom and know how.That means we have to eliminate the evil PC, and corrupt Board of Education.


    As for infrastructure, here in NC there is way too much road building and money thrown away in corrupt educational practices.I live in a small town that takes 15 minutes to circle its entirety and they are making a beltway.Give me a break.Everyday I see a new road being repaired.

    These partisan and phony experts like Krugman, are such bores,
    but dangerous bores.

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  10. Firepigette: I'm glad that your roads are being repaired and your county apparently has the resources to build new ones. I can assure you that's the exception rather than the rule. The big picture nationwide is very different.
    Regarding education there may well be local corruption, but this is a minor issue compared to the overall catastrophic decline in education at all levels in the United States, due to chronic underfunding. Teaching does require money, a lot of it, and if the people are unwilling to provide that money they are putting in jeopardy their children's future and their nation's economic competitiveness. The statistics are all there in black and white. No one who is not directly feeling the effects is making this stuff up.

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  11. Martin,

    I live in one of the poorest counties
    in the Nation so I don't think road building is a matter of having more money.It is NOT the amount of money,
    it is the WAY money is used that tends to be the problem.

    I have been a teacher all my life and I can guarantee you that it is not about money.A good teacher can have success under a tree with a simple blackboard.

    The US board of Education is a mafia whose goals are more about siphoning Government money so that they can collect the best benefits, pensions and working conditions possible, while making sure that those who do not tow the party line stay out.This ends up in the following scenarios:

    1..not expecting Hispanics or blacks to do well, so lower the standards
    2. teaching for tests instead of teaching people to think
    3.making it hard or impossible to fire bad teachers( mafia thinking)No accountability
    4.making it impossible to discipline children because it is not politically correct


    I could go on.

    I am too sophisticated to believe in political statistics.
    Educational burocracy waste and teachers union manipulation is the problem.Distorted policies that kowtow to government are the problem.

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  12. Anonymous4:43 PM

    martin, only through fantastic ignorance or consistent ideological pigheadedness could you come to the conclusion that anything in america's education system is a result of lack of money. america spends more per capita on education than almost every country on the planet. and if outside comparisons don't float your boat. california is regularly the most expensive state in the country per student, and ranks like 48th in results.

    as you may know, all those union pensions are rather expensive.

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  13. Yes, Krugman is a keynesian. My problem is not so much with keynesianism as it is with how you spend the money. The stimulus here in the U.S. did little to stimulate. When you pay hundreds of millions of dollars to install windmills built and bought from Norway and China, for instance, you've done little to actual stimulate the local economy. But yes, the infrastructure in Venezuela will take many decades to repair. ...and so I get Daniel's original point.

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  14. Anonymous: Not only the national infrastructure and the the education system, but the police, emergency systems, criminal justice, health care, housing, plus of course all forms of welfare and social services, and finally local governments themselves - are being degraded and/or failing completely because of lack of money. There is no 'fantastic ignorance' or indeed 'ideological pigheadedness' here, simply observable facts. However, in deference to the blogger and because this site is about Venezuela, I will make this my final comment.

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  15. Well, I will offer to tie it all in with Venezuela.

    There is a tendency in Venezuela, and with some in the US as well to think problems are mostly solved with money, but sometimes money makes things worse.

    Offering the incentive of more and more money to solve problems or improve performance usually ends up in more cheating and corruption.

    For every clever person who goes to create a monetary incentive scheme there is an army of people who will spend even more time trying to exploit it.

    We need to get to the essential reasons of why things work or not that go beyond partisan politics and conventional "wisdom".

    my last comment as well

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  16. Anonymous8:51 PM

    http://www.nationmaster.com/graph/edu_spe_per_sec_sch_stu-spending-per-secondary-school-student

    america is third on the planet in secondary school spending per student. third, we're behind switzerland and austria, and that's it. like i said prior, and your post reinforced, massive ignorance or ideological pigheadedness is what is required to believe that lack of money has anything to do w/ the faults of education in america.

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  17. Not to beat a dead horse, but here's a comical take on the stimulus package:

    http://babalublog.com/2010/08/the-stimulus-jester-robots-and-chinese-hookers/

    ReplyDelete

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