A time capsule look at the worlds worst economist: Mark Weisbrot and Venezuela success

[GatoGordo]

Misreporting Venezuela's economy
Mark Weisbrot
11 September, 2010

If you want a perfect illustration of media toeing the official line, look no further than the forecasts of Venezuela's economic doom

"The bulk of the media often gets pulled along for the ride when the United States government has a serious political and public relations campaign around foreign policy. But almost nowhere is it so monolithic as with Venezuela. Even in the run up to the Iraq war, there were a significant number of reporters and editorial writers who didn't buy the official story. But on Venezuela, the media is more like a jury that has 12 people but only one brain.

Since the Venezuelan opposition decided to campaign for the September elections on the issue of Venezuela's high homicide rate, the international press has been flooded with stories on this theme – some of them highly exaggerated. This is actually quite an amazing public relations achievement for the Venezuelan opposition. Although most of the Venezuelan media, as measured by audience, is still owned by the political opposition there, the international press is not. Normally, it takes some kind of news hook, even if only a milestone such as the 10,000th murder, or a political statement from the White House, for a media campaign of this magnitude to take off. But in this case, all it took was a decision by the Venezuelan political opposition that homicide would be its main campaign issue, and the international press was all over it.

The "all bad news, all the time" theme was overwhelmingly dominant even during Venezuela's record economic expansion, from 2003 to 2008. The economy grew as never before, poverty was cut by more than half, and there were large gains in employment. Real social spending per person more than tripled, and free healthcare was expanded to millions of people. You will have to search very hard to find these basic facts presented in a mainstream media article, although the numbers are hardly in dispute among economists in international organisations that deal with statistics..."

-snip-

https://www.theguardian.com/commentisfree/cifamerica/2010/sep/10/venezuela-economics

A quality read. Mr. Weisbrot clearly knows his stuff. If you want to know what will happen to an economy, listen to him, and then do a 180 degree turn.

[EndGOPPropaganda]

1. What's this guy's agenda?

It’s not just econ, this article has a bs political bent too.

[COLGATE4]

2. He's an unmitigated Chavez/Maduro apologist

[Lucky Luciano]

3. Note that Venezuela doing well from 2003-8 can be directly...

...tied to the crazy oil prices. When oil crashed, so did VZ.

[GatoGordo]

4. Right you are. High oil prices is what kept the wolves at the door... temporarily

There was ZERO accountability to the spending spree that was absolutely unsustainable. The wheels were going to come off the wagon regardless. High oil prices delayed the inevitable.

It was Socialist economics run rampant, and the Marxist Weisbrot lapped it up. Like all Chavists, he blames (fill in the blank) and (fill in the blank), but he hasn't once had the balls to place the least bit of blame where it lies. To this day, he cannot find fault with the thought behind his beloved Socialist Utopia.

[sandensea]

5. But as wrong as he was about Venezuela, he certainly called Argentina right.

From his November 24, 2015, article on Fortune, "Why Macri's win is bad news for Argentina":

With skilled marketing help from an Ecuadorean public relations firm (Jaime Durán Barba), Macri defined himself as something far more moderate than he is likely to be, winning over voters who might otherwise be afraid of a return to the pre-Kirchner depression years.

Some of the things Macri has indicated he would do could have a positive impact, if done correctly.

He will likely cut a deal with vulture funds that have been holding 93% of Argentina’s creditors hostage since New York judge Thomas Griesa ruled in 2014 that the government is not allowed to pay them. If the cost isn’t too high, it could reopen a path for Argentina to return to international borrowing — something Scioli would likely have also done.

An exchange rate liberalization that got rid of the currency black market could be a big step forward. But much depends on how it is done: If it causes inflation to spike and the government does nothing to protect poor and working people, they could lose a lot.

Macri may also take measures to bring down inflation, which is something that needs to be done; but he’s likely to do so by shrinking the economy. He wants to reduce the central government budget deficit, which will instead grow as a percentage of GDP with austerity. Given his ideology, there is serious risk of a downward spiral of austerity and recession, as the country suffered from 1998 to 2001. If there is inflation from the devaluation, this could make matters worse.

In his campaign statements, Macri made it clear that he is against a government role in promoting industry, so the country’s economic development is likely to suffer as a result.

He has proposed tax cuts for upper-income groups. That suggests that budget cuts are in the offing, since Macri has pledged to reduce the government budget deficit. The majority of Argentines are likely to suffer from such an economic transition.

· http://fortune.com/2015/11/24/mauricio-macri-presidential-win-bad-for-argentina/

Weisbrot's predictions on Macri proved to be not only accurate - but if anything, understated.

He only erred in assuming that because "Macri won’t have a working majority in Congress, it’s unclear how much he can do."

King Maurice the Last, of course, got around that by basically governing by decree - and even so Congress has passed 70% of his bill proposals, so he can't really complain.

Part of the opposition accommodated him knowing full well that most of his proposals would lead to crisis; but that letting him hang himself was their best option (plus, what choice did they have, given Macri's fondness for decrees).

Nevertheless, thank you for posting this Gato Gordo. I wouldn't call him the "world's worst economist" - but he certainly made far too many assumptions on Venezuela and the viability of the PSUV era.