Originally Published on the Sultan Knish blogHugo Chavez's death was met with tributes from Iran, Bolivia, China and El Salvador. The Western left did not waste much time adding their withered roses to El Comandante's coffin. George Galloway called him another Spartacus. Jimmy Carter described him as a leader who fought for the "neglected and trampled". Michael Moore praised him for declaring that the oil belongs to the people.
Whether or not the oil belongs
to the people is a matter of some debate considering how much of it seemed to end up in Chavez's pocket.Chavez died with an estimated net worth of 2 billion dollars making him the 4th richest man in Venezuela and the 49th richest man in Latin America. For a while, Chavez weathered attacks from the media empire of Gustavo A. Cisneros, the richest man in Venezuela. Then before the 2004 election, their mutual friend Jimmy Carter brokered an agreement between them. Cisneros' media stopped criticizing Chavez and both men bent to the task of getting even richer.
While the Bolivarian Spartacus lined his pockets with oil money, Venezuela's middle-class was struggling to get by in a country where the private sector had imploded. Income increased on paper, but decreased in reality as inflation increases ate the difference. Around the same time that Comrade Hugo was launching the third phase of his Bolivarian Revolution, inflation had decreased household income 8.8 percent while consumer goods prices increased 27 percent.
On his deathbed, Hugo Chavez devalued his country's currency for the fifth time by 32 percent, after tripling the deficit during his previous term when the national debt had increased by 90 percent. From 2008 to 2011, Chavez's oil-rich government increased the debt by nearly 50 billion in a country of less than 30 million. That same year, The Economist speculated that Venezuela might go bankrupt.
Chavez had swollen the ranks of Venezuela's public employees to 2.5 million in a country where the 15-64 population numbered only 18 million. With 1 public employee to every 7 working adults, the entire mess was subsidized by oil exports and debt. When the price of oil fell, only debt was left.
Those public employees became Chavez's campaign staff with no choice but to vote for him or see their positions wiped out to keep the economy from crashing. And they won him one last election.
The dead tyrant leaves behind the lowest GDP growth rate and highest inflation rate in Latin America. He leaves behind an economy where more than half the population depends on government benefits or government jobs. He leaves behind a giant pile of debt for the people and 2 billion dollars in misappropriated oil money for his heirs.
But we don't need to look to a leftist banana republic south of the border to see how profitable fighting for the poor can be.
7 of the 10 richest counties in America are now in the Washington D.C. area. Arlington County alone added $6,000 to its average income in one year alone. D.C. and its bedroom communities got rich at twice the rate of the rest of the country and in the last election; Obama won 8 of the 10 richest counties in the country.
Washington D.C. is richer than Silicon Valley. Median income in the D.C. area has hit $84,523 despite the city itself having horrendous unemployment and poverty statistics. The top 5 percent in D.C. earns 60% more than the top 5 percent in other cities and 54 times what the bottom fifth earns in that same city.This wealth of government money isn't a rising tide that lifts all boats. Income inequality in Washington D.C. is one of the worst in the nation. For families with children, the income inequality level in D.C. is double the average for the rest of the country.
But when you concentrate the wealth of the land in a single imperial city, then you end up with a sharp gap between the poor and the fighters for the poor. Mid-level jobs are disappearing, but high-level jobs continue to grow. Small businesses are going out of business, but lawyers and consultants are being hired at a breathtaking rate.
Washington D.C. has the highest concentration of lawyers in the country. 1 out of every 12 city residents is a lawyer. 1 in 25 of the country's lawyers lives in Washington D.C. In 2009, the Office of Personnel Management reported that there were 31,797 practicing lawyers in the Federal government earning an average salary of $127,500 a year. Or to put it another way, the taxpayers were spending double Hugo Chavez's 2 billion dollar net worth each year just to pay the lawyers.
That was in 2009. The numbers have undoubtedly gotten much worse since.
That same year there were 383,000 federal civilian workers with six figure salaries. Multiply that and you get all the debt that Hugo Chavez dumped on Venezuela being dumped out in a single year on American taxpayers.
The number of Federal civilian employees is only slightly higher than in Chavez's utopian Socialist paradise, but average Federal employee salary clocks in at a mean $75,000. The closest private sector match to working for Uncle Sam, in a non-military position, is working for Microsoft.
Federal civilian employee wages and benefits run around $200 billion. The end of the pay freeze that wasn't really a pay freeze alone added $763,125,000 to the Federal budget. Or to put it another way, the cost of the Federal workforce in a single year is more than double Venezuela's entire national debt.
During Nixon's first year in office, $200 billion would have covered the entire Federal budget. Now it's just the paychecks. In the United States Department of Health and Human Services, which oversees welfare and food stamps, among other things, 1,461 of HHS' 64,750 employees earn over $155,000.
While the Obama Administration fires marines, it hires more civilian employees. 101 new Federal employees have been hired every day of Obama's first term in office. In 1962, there were more American military personnel than Federal civilian employees. The number of military personnel has dropped sharply, but the number of civilian employees is higher now than it was then. And their salaries have become much higher.
But the civilian employees are only part of the picture. The massive deficit spending has turned Washington D.C. into a treasure trove of government grants and stimulus plans on the favor train. The national debt grew by 6 trillion dollars in one term of Obama adding $50,521 in debt per household. That money was used to buy favors and support across the country.
While Obama ran on a platform of taking care of the poor, he was raiding the social safety net to buy support from a coalition of billionaires that paid him back with bundled contributions and SuperPACs. Green Energy tycoons got rich on loans and grants, while the middle class imploded. Billions in taxpayer money was traded for millions and hundreds of thousands in contributions in one of the dirtiest deals to take place outside an actual banana republic.
Like Chavez, Obama presides
over a poorer country whose poor are convinced that he is the only thing standing between them and absolute poverty. Deficit spending and high debt has destroyed any potential for GDP growth leaving America looking like an oversized version of Venezuela.The new America is not a booming economy, but a political power structure built on unsustainable spending. Like Chavez, Obama has created an impossible trap that leaves half the country dependent on him and leaves his opponents with no alternative but to propose some form of austerity. It is an economic kamikaze maneuver that invariably ends with economic or political destruction.
Obama, like Chavez, has made economic recovery structurally impossible, perpetuating poverty in order to profit politically from the national state of misery. Chavez died before the consequences of his economic policies caught up with Venezuela. Like Chavez, Obama won a contentious election, but he has no easy escape from the economic destruction coming up on the road ahead.
Daniel Greenfield
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