Saturday, January 12, 2008

Oil for the people from the people?

As a resident of Massachusetts I endure commercials that run in the winter by Joe Kennedy extolling Citizens Energy, an organization he founded that sells oil to needy folks at a 40% discount. Citizens Energy buys oil from Citgo, the Venezuelan oil company. I usually ignore these ads figuring that at least Kennedy is doing something himself as opposed to others who campaign for tax increases to fund their favorite causes. (I’m sure Kennedy agrees with this later approach but is also trying to do something himself.) One of these commercials takes a shot at the Bush administration for cutting support to supply oil to the needy and at the oil companies for having “money to burn” while the screen shows a flare stack, something all petrochemical plants use to burn off vapors. The ad also praises the only oil company to help Citizens Energy: Citgo, “owned by the people of Venezuela.”

There are a number of issues packaged into this ad but I want to focus on how describing Citgo as being owned by the people creates a warm and fuzzy image of the noble Venezuelan people altruistically selling their oil to our needy. Experience shows that when you say everyone owns something in reality no one does. Or to put it more accurately, the government owns Citgo. In addition something like 80% of the world’s oil is owned and run by government-run companies who drive the market price of oil. If Kennedy doesn’t like the high price of oil don’t blame the free market. Thank the government owned oil companies.

Of course when we talk about Venezuela the first person most people would think of is its controversial, highly visible president, Hugo Chavez who during a speech at the U.N. labeled Bush “the devil,” which drew raucous applause. Just so you know, I’m not a big fan of George Bush and believe Chavez has the right to his opinion. I also don’t object to Citizens Energy buying oil from Citgo; the U.S. buys 70% of Venezuela’s total oil production. It also doesn’t matter to me if Joe Kennedy collects $400,000 a year for his role in Citizens Energy. I do object to the claim that Citgo is “owned” by the people of Venezuela and the dishonest image this creates.

Here are some other relevant tidbits that reveal the true nature of the Chavez regime and how people friendly it is.

  • Although Chavez was freely elected in 1998 he quelled an attempted coup in 2002. Since then he has stepped up efforts to muzzle the media and packed the Supreme Court with cronies.
  • Human Rights Watch reports that there are “onerous restrictions on the media.”
    According to Amnesty International, “Human rights violations, including torture, extrajudicial executions and enforced disappearances perpetuated by members of the security forces remain unpunished.”
  • The International Finance Corporation, part of the World Bank, ranks countries in terms of “regulations that directly impact economic growth, downloading underlying laws, making cross-country comparisons, and identifying good practice reforms.” How does Venezuela rank? Almost dead last: 172 out of 178. In short, Venezuela is one of the most inhospitable places in the world for creating and running a business.

So why does Kennedy turn a blind eye to the abuses of his buddy Chavez? Why does he criticize our government but says nothing about Venezuela’s abuse of rights? I’m sure Joe Kennedy could argue that he doesn’t want to alienate and thereby threaten his sole supply of oil. (I have not seen any quote saying this in my research.) I believe the real reason is because Kennedy and Chavez share the same philosophical premises. Both accept altruism and collectivism and its consequential hatred of the free market.

Why do I say “consequential”? Because altruism claims we don’t have the right to exist for our own sake: we live only for the sake of others. This is the foundation of collectivism. On the other hand, capitalism is based on the premise that we have the right to pursue our own interests, including starting businesses and striving to make a profit. Since we are not usually willing to curb our natural pursuit of our interests it’s up to our “enlightened” leaders to make us sacrifice our interests. They will tightly control our attempts to start and run businesses (hence Venezuela’s low IFC rating) and limit our ability to express dissent to their draconian measures (hence the control of the media).

As a result of this alliance between two people who dislike our capitalist economy (that allegedly ignores the plight of the poor) and who endorse forced redistribution of wealth, we have an odd variation on Robin Hood. Instead of robbing from the rich to give to the poor, we have Chavez using the poor of Venezuela to subsidize the poor of Massachusetts. Apparently this is OK for Kennedy and Chavez because they both get a chance to tweak the nose of Bush and the U.S. while posing as moral superiors.