Politics | paulhunterjones

Venezuela is South America’s forth largest economy. Many people forget that it was one of the founding countries of OPEC. By the early 1990s Venezuela was the third largest oil producing nation in the world. These facts get lost in the never-ending debate over the effects of President Hugo Chavez’s push towards socialism.

The late Hugo Chavez was considered a defender of the poor. He was admired by many of his contemporaries because of his ability to stand up to Western imperialism. The left-leaning South American presidents supported President Chavez’s efforts to lead Venezuela down a path to socialism. In my opinion no head of state of any South America country have Chavez’s political sophistication or ability to manipulate public opinion. For years President Chavez convinced his supporters that their lot in life had improved because of his leadership. Without Chavez’s imposing personality and fiery rhetoric it is likely that Venezuelans will start to question the nation’s economic health. The Venezuelan community be surprised to learn that President Chavez ruined the nation’s oil industry by using its revenues like a piggy bank to fund his socialist experiment. It is time for Venezuelans to ask where the government gets the money to fund so many expensive social programs.

After waging a long battle with cancer Hugo Chavez died on March 5, 2013. According to a statement released by the military he died of a massive heart attack. Most commentators believe that he had returned from Cuba because no further treatment would arrest the progress of his disease. If is safe to assume that Chavez knew that his time was up. I do not believe that Chavez was actually in charge of the country’s daily operations during his last few weeks. The late president was probably consulted on major policy decisions and actions.

On February 8, 2013 the government devalued its currency by 32%. At that time it was suggested that this action was designed to clear the decks for a new economic regime. Most economists concluded that the devaluation by itself would not lead to an appreciable improvement in the economy. I think that the devaluation was part of a strategy to give the President’s presumptive successor a political advantage in the soon to be held elections. I do not believe that this monetary action was taken to improve the lives of poor Venezuelans.

Generally speaking the value of a given currency is determined by its relativity to the value of another currency. This exchange rate is normally based upon the amount of the home currency which is needed to purchase one unit of the foreign currency. It is common for countries to base their currencies upon the U.S. dollar or Eurozone euro. Currencies rise and fall depending on movements in the financial markets. Today major currencies are said to “float” along with market conditions.

Many third world nations have elected to fix the value of their currencies. The New York Fed. Reserve Bank explains how this method of evaluating a country’s currency works:

“Under a fixed exchange rate system, only a decision by a country’s government or monetary authority can alter the official value of the currency. Governments do, occasionally, take such measures, often in response to unusual market pressures. Devaluation, the deliberate downward adjustment in the official exchange rate, reduces the currency’s value; in contrast, a revaluation is an upward change in the currency’s value.”

Venezuela’s national currency is the bolivar. Its exchange rate is fixed to the US dollar. Many of the world’s Third World Nations’ currencies are fixed. In order to sustain a fixed exchange rate, a country must have sufficient foreign exchange reserves to purchase all offers of its currency at the established rate. Because of the Venezuela’s political and economic isolation the country has always had problems maintaining an adequate amount of foreign reserves. Over the last few years Venezuela has not been able to support (defend) its currency. The country has devalued the Bolivar numerous times the last decade. Most commentators and financial experts believe that Venezuela’s economic problems cannot be addressed by constantly devaluing the Bolivar.

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There are certain world-renowned wonders that are automatically associated with New York City (NYC). Mention Central Park to anyone and they immediately talk about it being in the City of New York. Images of Times Square seem imprinted on the minds of anyone who talks about visiting the City. The Statue of Liberty stands at the mouth of NYC’s harbor as a welcoming beckon to those fleeing prosecution. It seems like everyone, foreigner or national, can tell me something about the Statue of Liberty and its location off the lower end of Manhattan. Depending on your point of view, Wall Street forever represents NYC’s place in the world of finance and power or greed and excess. The iconic symbol of the Yankees is well-known in almost every part of the world. The World Trade Center and 9/11 can only be spoken of in relationship to NYC. Madison Square Garden represents NYC’s preeminence in sports and world-class musical concerts. Irrespective of Geo-location and age most people associate certain symbols only with the City.

Depending on your date of birth or current residency you might not associate certain personalities with the City of New York. The captain of the Yankees, Derrick Jeter, is a City Icon. He is seen as representing the notions of fair play and excellence that have come to symbolize life in NYC. Willis Reed represented the grit and determination of the City when on May 8, 1970 he hobbled onto the basketball court at Madison Square Garden to lead the Knicks to an NBA championship. Joe Namath predicted that the New York Jets would win Super Bowl III and they did. He came to symbolize NYC’s ability to beat all the odds and succeed. After the attack of 9/11 then Mayor Rudy Giuliani represented the collective resiliency and determination of city residents. The mention of Michael Bloomberg evokes a vision of a mayor who is waging a campaign to make a NYC in his image, regardless of the rights the he might trample in the process. In my opinion the person who best symbolizes what it is to be a New Yorker was former Mayor Edward Koch. He is often affectionately called “Mr. New York.”

Tevi D. Troy noted in his February 1, 2013 post in the City Journal that Koch “was a character, a media celebrity and quick with a glib.” As a three term Mayor of the Big Apple Ed Koch handled the media, criticism and the voters with a deft hand that was always geared towards consensus building. His political skills raised him to the office of mayor in 1977. Some of his critics describe him as brash, condescending, arrogant and out-of-touch with his day’s political parties. But it was just this chutzpah that earned him the respect and admiration of all New Yorkers, including many his political critics. Edward Koch passed on February 1, 2013. The City lost an iconic symbol of what it means to be a New Yorker. Importantly, he led the effort to reform of campaign spending laws in NYC. These laws ushered in an era of greater democracy and citizen participation in the political process.

In 1978 I returned for good to the City after years of study in Michigan. Decay and disarray had spread like a cancer NYC for years. When I arrived its infrastructure had badly deteriorated was in complete disrepair. I was not ready for a city that had fallen “so far down the tubes.” The streets were dirty with garbage littered about. The subways were filthy, service was spotty and irregular. The subways cars had not heat in the winter and no air conditioning during the hot summer months. Crime below and above the ground was rampant. To make matters worst the City was on the verge of fiscal bankruptcy. The average New Yorker had long ago lost hope that the things could be turned around. As the newly elected mayor Edward Koch had to deal with an ever-deepening fiscal crisis, blackout riots, and the wounded psyche of the average New Yorker. Yet Mayor Koch offered hope, solutions and took concrete steps to turn the City’s fortunes around. I remember running into him in lower Manhattan. He was greeting the average New Yorker with his coined phrase; “How I am doing?” Ed Koch was not afraid to be judged as Mayor. He welcomed and actively solicited comments about on his performance. Can anyone name one well know politician with the nerve to ask his (her) constituents to publicly evaluate his performance?

Given the difficulties that Mayor Koch faced I think he saved NYC from itself. He forever changed the way NYC operates and conducts business. These subtle and pronounced changes allowed the City to escape the fiscal abyss that it had sunk into. Koch, the ever astute politician and consummate consensus builder, crossed political lines in order to move the City towards a more stable footing. He often feuded with other politicians and community leaders only to later bury the hatchet. Even after retiring from public office Mayor Koch remained in the public spot light until his passing.

We should thank Edward Koch for his tireless work and dedication to restoring pride in being a New Yorker. He proved to us New Yorkers that we live in dynamic and special city. He was truly a political liberal with a fair amount of sanity. Today’s politicians should take a page for Koch’s political playbook and put aside rigid ideological constraints and govern by consensus with the public’s interests as the primary goal.