Krugman is right about Venezuela's macroeconomic mistakes, but he misses a huge, crucial point.
Chavez redirected the revenues of Venezuela's state-owned oil company away from reinvestment and toward A) social programs, and B) corruption, which caused a big drop in output.
Chavez redirected the revenues of Venezuela's state-owned oil company away from reinvestment and toward A) social programs, and B) corruption, which caused a big drop in output.
"Venezuela has always been a corrupt petrostate" ignores the fact that A) before Chavez it managed to keep up oil production, and B) other corrupt petrostates took a far more minor hit when Venezuela was crashing.
Venezuela's arbitrary nationalizations and expropriations also hurt investment.
economist.com/americas-view/…
economist.com/americas-view/…
Yes, macroeconomic mistakes screwed Venezuela. But before that happened, Chavez was screwing it over with a particularly shitty, boneheaded version of "socialism", including disinvestment, expropriation, and mismanagement of state-owned companies.
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