The Venezuelan Curse (Part 2)

Hi, quick note before we start this week, while this episode is about Venezuela, a country that recently found itself the focus of our country's confusing ADHD-inspired imperial ambitions. Greenland has also landed in a similar spot. And very surprisingly, we happened to have reported an hour-long documentary about Greenland. I went to visit there a few years ago to a melting glacier on a trip with climate change activists and crypto people. Our Greenland story contains a lot about Greenland's history, just what the place is like, it's very strange, even ideas about resource extraction there. Story is absolutely one of my favorite things I've ever gotten to work on. If you want to hear it, it's called The End, we'll throw a link to it in our show notes. That is Greenland this week, Venezuela, after this short break. This episode of Search Engine is brought to you in part by Mooby, the global film company at the Champions Great Cinema. 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That's M-U-B-I.com/ Search Engine for a whole month of great cinema for free. Hello, Search Engine listeners. This is the final part, part two of our very fascinating, in my opinion, history of Venezuela, told to us by the platonic ideal of a history professor, Alejandro Velasco. If you've not yet heard part one, please go listen. But if you have, we pick up our story where we last left it. The country's president, Hugo Chavez, star of the TV show "Alo Presidente" is in an extremely strong position. The year is 2005. Now Chavez has control over the military, control over the national oil industry, international credibility, democratic credibility, and control over the Congress, just at the time when oil prices are hitting their peak. It's just an immense amount of power. Its complete power is what it is. It is total power, which eventually will be the Achilles Hill and the reason why Chavez no fails. So today, we're going to talk about that failure. We're going to chart a series of really heartbreaking mistakes. Chavez will make many of them himself. The US will contribute at some crucial moments as well. And as we follow the story, we'll see a country gripped by the strange amnesia Alejandro Velasco described in episode one. A place that during the boom times seems to almost forget the bust, forget that everything that rises eventually falls. So to begin, chapter one, the socialist oil company. Even before Chavez, Venezuela had been engaged in a multi-decade project of nationalizing its oil industry. Pedevesa, the state oil company, had begun back in the 1970s. But before Chavez, it's a more complicated picture. You have other foreign oil companies freely operating in Venezuela. And Pedevesa itself operates fairly autonomously from the whims of the president. Chavez will change both of those things. One big change he'll make is to tell multinational oil companies like ExxonMobile, they have to give Venezuela a 60% stake in their Venezuelan operations in order to stay in the country. The companies that resist, he expropriates their assets. The ones that stay are made to understand that their relationship to Venezuela will be very different now. Here's Alejandro. So it was a much more contentious nationalization process, not only because of the finances, but because of the implication that now foreign oil companies are no longer partners in Venezuela's oil industry. Now, if anything, we are clients of Venezuela's oil industry and on their terms. And so the ones calling the shots are not just the oil industry executives. It is in very important ways the whims of one person, Hugo Chavez. And so with them out of the picture largely with the oil industry nationalized, how well does it run as a nationalized industry? The major problem is that once you nationalize, you of course take complete ownership over the profits. But unlike in a process of cooperation with private partners or contracting, you now assume all of the risk and all of the investment costs as well, which also imply, of course, maintenance, upkeep improvements, et cetera, et cetera. Now, again, in context of high oil prices, you can possibly do this. But because of the absence number one of accountability, no institutional accountability. And also because of the stated project of we are going to use literally the oil wealth and redistribute it as much as possible into the population, the intentsives are said such that the primary focus of the oil industry is not reinvestment in itself, but reinvestment in the nation as a whole. Now, you think that's not a problem. If it's the nation's oil, shouldn't that be the the end goal of a national oil industry? And I think the answer is yes, but to a point, not at the sacrifice of the industry itself. And so what happens to the oil industry? Like how quickly does it fall apart? The decline of the industry had begun as soon as the oil industry shrank in 2002 and 2003. And as we talked about, that moment was one marked by the firing of 18,000 longstanding, mostly professional engineering personnel. So for instance, you started to see things, I'll give you one small anecdote. So growing up every other weekend, we would go to the beach from Caracas. And there was one beach in particular that we liked to go to. And to get to this beach, you had to go through one of the primary oil refineries in Venezuela. And I have a very distinct memory imprinted in my mind of you drove by this refinery and there was a big placard on the side of the road that said, days since the last accident. And it was something like, you know, years worth of days. Yeah. And then I remember going back there, years later, during this time and the placard was gone. So like many accidents would happen. And some of these would be deadly. Of course, it's hard, apart because of the visibility of the oil industry in Venezuela. It's not something that's out of sight. It's quite plain. When an accident happens, you know about it. Right. And so, you know, you started to see like explosions and refineries. You started to see leaks in the lake. Things that hadn't really happened, or at least we didn't know about. Yeah. And so that's contriving to give a sense that the kind of high level of professionalism and expertise is no longer there. But it really begins to kind of kick into overdrive right around 2008 and 2009. Again, the mission of Pellevis has shifted dramatically. And it's also, of course, now grown massively in size. We talked about how, you know, the entire oil industry before the strike was around 42,000 people and almost half of them were fired similarly. By 2007-2008, because of the incorporation of all of these like social programs within the scope and the remit of the oil industry, now the oil industry employed directly or directly hundreds of thousands of people. Right. And so if you send your kids to school, you get this amount of money. If you yourself go to school to learn how to, you know, do whatever you get this amount of money, right. So everyone is tapping into the state quite directly in this moment. And the reinvestments into the oil industry become secondary. We're going to come back to the oil company to Pellevis later to see what happened to the state-owned state-run oil company when prices inevitably began to fall. But in our story, it's still 2008, prices are high, and the bus time is unimaginable. The best estimates I've seen put the total value of oil revenues that came into Chavez's government during those boom years at around a trillion dollars. A trillion dollars in revenue, flowing into a country whose population is a bit higher than the state of Florida's. As one academic put it quote, "the largest resource windfall in the history of Latin America." And Chavez's power meant that he would get to direct that cash wherever he thought appropriate, which brings us to chapter two, pipe dreams. Alejandro said there are many examples from these years of wild blank check government infrastructure ideas, but there was a specific story he wanted to share. I'll tell you one that brings together this domestic component of trying to refashion the nation now under socialist lines, beginning in 2006, 2007, with larger hemispheric ambitions. So in 2006, 2007, there are now an array of leftist presidents elected throughout Latin America, some of them neighboring Venezuela, Ecuador, Bolivia, Brazil, Argentina, all the way down to Chile. And again, this is a region that is very rich in natural resources, one of them being gas, natural gas. And so the idea in terms of refashioning solidarity and alliances no longer just around material interests, but around a shared purpose of political and ideological solidarity is made manifest in a project to build a continental gas pipeline that is going to stretch all the way down to Argentina and go all the way up to Venezuela. And then from there, gas can be exported elsewhere. And all the various countries that have natural gas would just pipe their gas into this pipeline and then ship it off to the benefit of the entire continent. Okay, so it's going to be a national gas pipeline going through the continent and the idea is that it's like the same way countries are internally sharing their natural resources. It's like it's towards a more communal idea of this as an export from the region to the rest of the world. Exactly. It's an effort to create a united Latin America, which is Bolivarian in nature, right? It goes all the way back to Bolivia's ideas of a Gran Colombia of, you know, in Latin American nations that come together as a confederacy of nations. Obviously, there's tragedy involved in the billions of dollars that were misspent in these kinds of projects, but there's also kind of, dark humor in the idea of the jokes tell themselves, like the pipe dream, literally is a pipe dream, right? There's, you know, pipe that I remember in Alopera Sienta is like Sunday TV talk show that the Chavez had where he would bring out maps and then he would show these maps of the continent and tell you exactly where the pipeline was going to go and they'd explain the geography and like, well, we can't go through here because the terrain does not lend itself to, so we have to go through here, but we're going to preserve nature. Don't worry about that. Nature's going to be fine. Of course, environmentalists were sounding the alarm all along, but as you were watching this, on the one hand, you had this idea of, as an historian of Venezuela, this is exactly the magical thinking that has for so long put us in really precarious moments when we feel that the future is limitless. Yeah. This is it. Like, we're watching it. And yet, at the same time, you're like, wow, that's pre-fucking awesome. Like, maybe this time, maybe. Yeah. And, you know, as I look back upon that moment, I'm like, wow, I can read all about the magical state, but here I am feeling the enchantment of it, right? The grandiosity of it, like, and kind of weird asymptotic relationship, the bigger the design, the bigger the ambition, the more seductive it is. Because there's just something intoxicating about maybe it's impossible, but what if it's not? Yes. Maybe this is the time. Yeah. Right. Economic principles be damned. Geography be damned. History be damned. Maybe this is the moment. Huh. And it's like in a place where there's been so much disappointment, the way you revive people's capacity for hope isn't through smaller promises, it's through bigger promises. Right. What ends up happening to the gas pipeline, like, why was this utopian infrastructure projects not completed? In the same way that many of these projects end up being not completed, it dies with a whimper, not a bang. But very soon, they realize the actual practical impossibility of the project, the amount to spend to upkeep was far larger than any potential profit that it could return. And so for as many shows as I remember Chavez bringing out the map and telling us exactly where the pipeline was going to go, I remember no shows where they said, and now it's no longer going to happen. I see. Yeah. It just big promises. And then once it gets hard, just like quietly, just like make other big promises. Exactly. There were a lot of projects like this, like just billions of dollars spent on like ideas that sounded great, but either we're not well executed or maybe could never have been well executed. What was Chavez's understanding of this? Like, how much did he understand the waste that he was presiding over? How much did he believe the promises he was making? I mean, obviously, I don't know because I'm not in Chavez's head, but you know, at least from everything that one has access to both in his public pronouncements and what he wrote and speeches that he gave and interviews, etc. He was a true believer. And I think that inspired among his supporters a sense of confidence. There's a book I read that really describes what life in Venezuela felt like under the spell of this confidence. It's called things are never so bad that they can't get worse. The writer journalist William Newman actually interviews a former information minister for Chavez. Part of this information minister's responsibility was Chavez's TV show, "Alo Presidente". The information minister describes how when Chavez appeared on TV, they were constantly looking for good news he could take credit for on air, which often meant faking stuff. Pretending a factory was ready to start production when it wasn't, sprucing up a derelict farm so it was ready for prime time. According to this information minister, Chavez himself often didn't know that the victories he was presenting were gussied up or fake. The writer tells one insane story about yet another infrastructure project. This was the Bolivarian cable train, a transit project which was still under construction. But Chavez wanted it completed in time for an election. He wanted to ride the train himself on live TV. The European engineering firm who had been doing the construction said this was not possible, at least not on Chavez's timeline. One of his ministers went back to them and said, "No European engineer is going to tell the people of Venezuela what can and cannot be done." Perhaps recognizing the implication here that they were at risk of losing significant amounts of government money in contracts, the engineers changed their tack. They agreed for a million dollars to help create a fake train ride for Venezuelan TV. The solution was to attach a thin wire to the train, run the wire down the tracks to a winch state hidden. One of those devices that turns a wire, like you'd use to pull it cheap out of a ditch. The train couldn't actually run, but with this winch, the idea was that they could fake it. So here's what Venezuelan TV viewers saw that day. They're president standing on a train platform, the train in the background, extolling the virtues of Venezuelan socialism. Chavez is saying this is only possible in socialism. The kingdom of God on earth, the kingdom of Christ on earth. And then he tells the crowd to applaud because here's the train. The train, though, is barely moving. And so Chavez has to just keep vamping to kill time. Chavez is saying it's going slowly because this is just a test run. The real Bolivarian cable train when it launches will go much faster, 50 kilometers per hour. The train meanwhile finally arrives at the station. My Spanish is terrible, but even I can feel the effects of the political charisma of this president selling me gleefully on his somewhat dubious train project. Eight days after this TV appearance, Chavez would go on to win the election handling. It was later calculated that just this section of railway track, less than a mile, cost the country $440 million. At the end of Chavez's time in power, he'd leave Venezuela with its external debts quadrupled to about $150 billion. All Honduras has part of the reason that a lot of Venezuelans missed what was going on. It wasn't just that there was so much money that you could hide the waste. It was also that Chavez had many projects whose results were actually quite tangible. Government subsidized gasoline, pennies per liter, free apartments and free houses that Chavez would give away to citizens on TV. Cuban doctors brought in to give people better health care. Another project, for instance, Chavez funded this continental program to remove cataracts from people's eyes. People would travel from all over the continent. They would send Venezuelan planes or charter planes. It's not just Venezuelans. It's like people, Bolivia, Ecuador, Peru, Argentina, Central America, Caribbean. This was a continental project for people to come from elsewhere and have their cataracts removed. I think about it a little bit more. There was something about the metaphor of seeing and a visibility that was important to Chavez. Removing the cataracts you can see clearly. The idea is that you live in their conditions of misery only because you're unable to see the realities of the world. If you just think differently and see differently, if you see people coming from all over the continent and being benefited in their health, if you know that you now have access to doctors that you didn't have before, sure they're Cuban, but you have access to health. That is the promise of a different world and it is made real. All the rest of it, we don't have to worry about because who does? We have so much wealth coming in that it's not wrong. Chapter three. The people's black market. One of the other dynamics I've read about and I'm curious, it seems like it's tied to this moment, but correct me if I'm wrong, is that just the fact that there's this gusher of money coming from the state, it creates this incentive structure which is like you're almost a sucker if you're not mainly thinking about how to capture that money. Any other way you would apply your time or thinking or work would be silly when this volcano of cash is coming from the government. That is such a good point and let me let me confess something to you. We tend to think rightly, we have lots of evidence, that most of the social programs that Chavez implemented were directed at the poor or working classes. That is true, but one of the more expensive social programs that Chavez implemented was not a social program at all, but that benefited almost exclusively the middle class. The way that it worked is this. After the oil industry strike in 2002-2003, Venezuela is under liquidity crisis. It doesn't have dollars coming in. If you're a country that relies on this revenue that is traded internationally in the dollar and that's what you use to then pay your state employees, services, etc. and the way you do that is by converting dollars into your national currency. Then there's also this fear of the economy tanking and people are just sending their dollars abroad because they feel like it's a safe currency. What do you do? Do you implement currency controls? That's what Venezuela does begin in 2003 to forestall this capital flight that is happening as a result of the oil industry. Compounded by the lack of influx of resources that are coming in. That is a perfectly both fine legitimate and in fact necessary financial economic tool in a moment of crisis, but when the crisis abates, they didn't remove the currency controls. They kept them. Now why is that a problem? Because what a currency control does is say you only have access to this amount of dollars, for instance in a given calendar month or calendar year. At least when I was there at the time, it was $2,000 a year as an individual. You have access to this. If you want more than that, you have to take out a special permission. If you want more than that, how are you going to get it? A black market. It's like the state is saying any Venezuelan can only exchange a certain amount of, what is that currency? Bolívar. Bolívares. Bolívares. So it's like, if I were going to Europe, and I wanted euros, you just go to a four X, you give a bunch of dollars, you give a bunch of euros. In Venezuela at the time, if I wanted American dollars, they were just a annual limit on what I could get. The problem being people, because people want to buy foreign goods, because they want travel, because they have so much money, and the country does not make that much, like goods, they are then just getting the extra dollars on the black market. Yes. Exactly. So they implement something called "gadivi", "compañe no limada de avisas". "Divisas" is currency, right? So this is the entity, the national entity that controls all of the literal dollars, and decides who gets access to those dollars. It's such an abusable system. Are you kidding me? And so you have these cards, these "gadivi" cards, right, that whenever I would go back to Venezuela for research or to visit family or whatnot, you would come back with these cards that had a certain amount, and each one was like, I think they increased it to 2500 at some point, right? And so what would happen? There's all sorts of scams. Let me just preface this by saying, like the reason why I was making a confession is because this is primarily accessible to the middle classes. People who have relatives, family abroad, people who are studying abroad, whatever the case might have. So you need actually access to dollars to travel on the rest of it. So this is a primarily a middle class social program built as a currency exchange system, right? But yes, so you'd get this card. And so I'd go, and people would buy the card with a 2500 dollar limit at the official exchange rate. Call it, I don't know, 10 to 1. Yeah, right. But because the black market dollar is the one that reigns supreme, black market dollar might have been 1000 to 1. Okay. So I have bought that dollar at 10 to 1, but I can sell it at 1000 to 1. So what would happen? Confession. So people would give me these cards. Yeah. And then I would come to the states and I would get, say, 2500 bucks worth of it. And then I'd come back with the cash. They have now the cash that they bought at the official rate 10 to 1, but they can sell that 2500 dollars in cash at the black market rate for 100 to 1, 1000 to 1. It is a massive money making machine that most people in the middle class take advantage of, including me. So you would come back from studying with your allocated 2500 bucks. And then how much could you, what was the profit? If you sold 2500 bucks back then on the black market, you would have, I mean, it fluctuated over time, right? It might have been 100 to 1, or it might have been 1000 to 1 at like the end of the Gidevi era. That's crazy. Yeah. Yeah. I mean, I guess I'm just like spilling it all up and I don't know. But so, you know, growing up, so we were, my family was a solidly middle class family that was aspirational, right? And so my parents put a lot of their money into making sure that my sister and I had really good schooling. But that also meant that, you know, we didn't have like a really fancy house. We lived in a small apartment that we did travel, but it was, you know, travel not to like fancy destinations per se, but it was where we could friends and family. And we also didn't go to like fancy restaurants. When I went back and I had access to all this money that I had, you know, one of my things was like, I'm going to go visit all those restaurants that is a kid. I mean, I never got to go to, right? Because now I can go there and like eat like a king. Yeah. And I did. And my understanding is that like this was just happening throughout society. Like you saw, you saw a lot of people taking advantage of this. It was like such a huge opportunity that it perverted anyone's desire if they had access to this to do anything else. Yes. But also, and this is I think a really crucial part. The influx of petrodollars is such that it could sustain both things at the same time. I didn't feel at the time. And of course, this is kind of exposed justification, I think. It didn't feel at the time like I'm milking off a corrupt system. And this is really problematic. But like, well, I can do this. And social programs are still thriving. Right. Public health is still accessible. It's not a zero-sum game. It's additive, right? And so in a weird way, the incentives that are created are less in terms of, and then again, this could all be just exposed justification. But at the time, the incentives are less about, I need to get as much as I can right now because if not, somebody else will get it. It's like, it's just there. Why would I not? But so it's like my view, which I think is a little bit wrong, is that in this socialist country, people were behaving like ravenous, consumerist, capitalist. It's like what you're saying is no. Actually, there was so much money that no one had to make a choice. You could sort of like just slightly ransack this opportunity, but also see that these social programs for the poor are being funded. And if you weren't thinking too hard about the future, about what happens as the price of oil drops, or what happens if the oil industry, which is being run very poorly as a pay-ebank, just collapses under that mismanagement as well, it felt for a moment like no contradictions needed to be resolved. Everything was possible because money was nearly infinite. It didn't feel like it was any kind of contradiction. Yeah. I mean, it's like the problem sometimes of populist leadership is that it sort of says everything is simple and you don't have to make trade-offs. And sometimes I can be true for a little bit, but it's never true in the long run. Right. The problem in us, what does that? It lasted for long enough to feel like it could go on forever. Right. So previous oil booms lasted maybe four or five years, and then the party was over. This seemed to keep going and going and going until it didn't. After the break, the bust. Welcome back to the show. Chapter four, downward spiral. In December 2012, Hugo Chavez announces on television that he is ill. The plan was for him to go to Cuba to treat his cancer. It wasn't the first time that it happened, but this time he made sure to say that while he expected he'd be fine, she did anything happen. He wanted his deputy, Nicolas Maduro, to take over. This was the last time Chavez would appear on Venezuela TV. Just a few months later, March 2013, a visibly distraught Maduro appears to tell the nation that Chavez is dead. Chavez had just won the presidency in 2012, won it again by a significant margin, with a very powerful opposition at the time. When he dies, he's actually very, very popular. His funeral was attended by heads of states for many nations, and I feel like I can say this was some authority as of in his one. This is so classic in his one. Initially, when he dies, like, you know what we have to do, we have to bomb him like Lenin. So he's preserved for posterity, and they talked about it for so long. Miss the window for bombing him. So they couldn't bomb him. They did the next best thing, which was built very quickly, this kind of mausoleum in place that overlooks the presidential palace. What follows from that initial week or so of more than weeks of just frenzy and trauma and collective sense of loss, especially from his supporters, but also, I think, importantly of his opposition. For whom the idea of Chavez no longer being in the picture, yes, I'm sure they dreamed of it fantasized about it, but suddenly now was here, it was disconcerting to say the least, right? Especially more so after Nicolas Maduro, when he won snap elections just a month after Chavez's death with only a 1.4% majority, contrasting that to what had been Chavez's, you know, 13-14% majority, just a few months before, it was quite evident that not only Maduro did not carry the amount of popularity that could hold over or carry over from Chavez, but that the entire political system that Chavez had built was now exposed to be very precarious. Maduro, Chavez's hand-picked successor, a former union leader, he not only lacked his mentor's charisma, he also just lacked the levels of popular support Chavez had had. It's actually something you see in the U.S., the much less charismatic vice president, being offered as the former president's new replacement. Despite all that, Maduro's opposition realized he'd still be hard to ever beat in an election. Because Maduro, like Chavez, controlled the state's resources, and because like Chavez, he could strategically hand them out to gain supporters at election time. He made moves like sending troops into Venezuela's version of Best Buy, detaining the managers, and forcing the stores to sell electronics at rock bottom prices. Seeing maneuvers like this, some contingent of the opposition decided that the real way to unseat Maduro would be either through insurrection or at a minimum widespread protests. And so the opposition, they stayed a series of protests, really significant street demonstrations in 2014, which incur the wrath of the state, especially its police forces. What it does is it convinces the sector of the opposition that Maduro's government is now only driven by one thing alone and that is to stay in power. And that's the primary dynamic that we're going to see, take over all of what eventually becomes Mahoudismo, especially when in 2014 oil prices collapse. So now he can no longer give stuff away in the same way, and not only in the same way, in no way. So oil prices collapse, and under Maduro, it's like, it's really just like repression, repression, and repression. And he creates a kind of viscous cycle where if people protest and we feel like we need to resort to repression to quell those protests in order to stay in power, that increases the incentives for me to remain in power, because the exit costs are really high. If I am ousted or if I remove from the presidency, I might be susceptible to a trial or to ending up in jail, et cetera, et cetera. So of course, at the same time, that increases the incentives of those who say, well, the only way that we're going to get rid of this government is to protest or take more radical action. And so you have this increasing, as it's like a ratchet, we're just constantly ratcheting up the stakes of protest, repression, repression increases exit costs, exit costs increases the amount of determination you have to get that government out of power, which in turn increases repression, which in turn increases exit costs, et cetera, et cetera. You go down this spiral of repression, protest, exit costs, repeat. And so it's like you have like political prisoners, you have people routinely disappearing. This is also the point in my understanding where just mass migration out of Venezuela begins, like people who can leave, or were they already leaving? They had been leaving in different waves in the past, right? And anecdotally, and I just want to make sure that I emphasize that it's anecdotal. There's a strong correlation between class, race, and migration, waves in Venezuela, such that the earlier waves going back to even early days of Chavez is primarily wealthier, professional, you know, cosmopolitan elites. And then over time, different political events that entrenched Chavez further in power, the elections in 2006, leads to another wave, where some people, again, sort of going down the class ladder, make the calculation, well, there's really nothing left for me here, so I'm going to leave. Then in 2012, another wave of migrants. Then in 2014, after these repressive protests, another wave of migration, right? But each one of these waves is going a little bit lower in the class hierarchy, such that by the time you get into the deepest fray of economic crisis, which really begins in earnest around 2016, and then kicks into overdrive in 2017 with the U.S. Sictorial Sanctions against the oil industry, which had long been seen by Venezuelan observers and Venezuelans themselves as the kind of the red line that we didn't know of the U.S. dirt cross, the Sictorial Sanctions as the tool to try to just bring the economy to its knees and they're for effect regime change. Because even at a with oil prices now at a low, the country can still sell oil. The U.S. wants the like global oil market to be for there to be as much supply as possible. So the regime in Venezuela, people in Venezuela just didn't think the U.S. would do oil sanctions, but then in Trump's first term they do it. They do. Under the executive order, U.S. persons are prohibited from engaging in specified dealings involving the government of Venezuela and its instrumentalities. This includes state-owned oil company Pedavisa. These prohibitions extend to transactions or activities. There's a vast literature on whether or not sanctions are effective to lead to political change and vast consensus in the literature, not unanimity consensus is that they don't. The logic behind this kind of sanctions are meant to induce collective changes. So the greater the pain that is felt collectively, the logic goes. People will blame not the sanctions, but the people who are preventing the political change that are making the sanctions possible. In this case, the leadership of the country. The United States bets on a groundswell of opposition that will rise up. They can't come to Washington in protest, but they can go to Caracas in protest. And that's the idea. The problem being that often having to feel like what really happens with sanctions is the domestic leadership does a pretty good job of actually focusing rage at the United States and just using repression to keep people in mind. Absolutely. And in the government, like Maludo certainly, but Chavismo is more broadly, which had long railed against the United States kind of bullying and power. This fits like, as we say, I'm an Esuela Anillo Aledo, like I ring in the finger. It's like a perfectly matching reality to a long standing narrative. We've long cried about the wolf and the wolf is finally here. And so people are starving. Crime is up. The misery part of the equation works, but it doesn't lead to political change. Is this the point that where you just see massive amounts of migration not just among upper and middle classes, but everybody? Yes. And you start to see it in ways that, you know, as, as event is fun, I think I would say previously unthinkable. Whole families walking hundreds, thousands of miles across Venezuela and then later extremely treacherous terrain. In some ways, not knowing where they're going, just knowing that they can't stay. You know, those images around 2017, 18 especially were really difficult to watch. You can understand how bad things got by looking at migration rates, by looking at crime or GDP, or you can just look at what's left of what had been for years, the country's economic engine. Petevesa, the state oil company. William Newman, the journalist, recounts in his book a 2018 reporting trip where he saw the shambles Petevesa was in. Maduro, at this point, had appointed a loyalist general with no loyal experience to run Petevesa, the head of the company's finances, Maduro's wife's nephew. Newman goes to visit some of the facilities. This is what he writes, quote, "Petevesa wasn't an oil company anymore. It was a junkyard. Thousands of employees had stopped going to work or fled the country because the wages Petevesa paid had become worthless. All the installations I visited were in ruins. Theves installed the motors from pump jacks and tor transformers off poles to remove the copper inside. Workers had no tools. Vehicles were broken down. The company had stopped giving workers the meals required by their contracts. At one storage facility, a leaking tank spewed a lake of black crude." Which brings us almost to today. The country in deep poverty, from mismanagement, from a drop in oil prices, from US sanctions, and Maduro locked in the cycle that Alejandra just described, brutal repression, the fear of consequences, and so more brutal repression. You have an increased presence of police and state repressive apparatuses, which are very powerful in 2017-2018, going to be used by the Maduro government to mask an operation against crime, but in fact, it couldn't be used to exact political control over popular sectors. There's an operation called the Fies, which are essentially meant to deploy much in the same way, I should say, and I'm happy to be taken to task by this firm. I mean, once, much like we're seeing ice right now, just militarized police forces going into popular sector communities with seemingly total impunity. There are the numbers of extra-judicial killings that we know of are extremely high. They're up in the tens of thousands of Venezuelans killed over several years' time. Are they killing? Is it like they're killing protesters? They're just killing people. They just want. They're like everyone's scared and desperate, and the only way we're going to keep social control is if their fear of being murdered exceeds their fear of stepping out of line. Yes, exactly. The justifications are not just hard to come by. It's that they're not even provided as a premise. The broad justification is to tamp in crime. The dynamic you previously described, which is the more repression, the more Madura has to stay in power because he understands that if he loses power, he could end up in jail. It just perpetuates itself over and over. It also becomes manifest because now the repression has reached a level that is in the sites of the International Criminal Court, which opens an investigation into crimes against humanity. Again, this ratcheting up of repression in order to stay in power now has reached a level where an international body, not just the United States, but an international body is taking notice and saying this far exceeds anything that could plausibly be called law enforcement. By 2017, 2018, 2019, it sounds like the vision you're describing of life in the country is pretty close to hell. It's just poverty, repression, fear, people walking out if they can walk out like as bad as it's ever been. As bad as it's ever been. The level of economic collapse and of migration that Venezuela experiences during this time is greater than at any other point in Latin American history and it's comparable globally only to countries that have experienced civil war. It is unprecedented, not just for Venezuela, but the region and the world. The other strange dynamic of this moment is that of course the government has a perverse incentive for people to leave. Why? You have fewer mouths to feed and fewer potential protesters to repress. Right. The most, the people who are unhappy go and you're left with, right? Yeah. And so, you know, this isn't like, say, communist regimes in the 20th century at the tail end of the Soviet Union trying to force people to stay. There's a strong incentive for the government to allow folks to leave for the reasons that I mentioned. But then there's the other reason which is people abroad can send money back in the form of remittances. And so it creates this kind of, and this is what we find beginning around 2020, 2021 where there is as low and as catastrophic as the economic collapse was in those deep years of darkness. There is a sense of economic recovery, not because things are vastly improved, but because they're minimally improved. There's a term in Wall Street, a dead cat bounce, like a thing that is sufficiently crashed will rise up a tiny bit from the bottom. And that is what was experienced. Of course, this grim status quo, life in Venezuela getting marginally more livable as most desperate people flee for a better life elsewhere. There was one politician who did not appreciate that equilibrium, which brings us to our last chapter. After one more short break, Donald Trump. Chapter 5. Donald Trump. Today, the Supreme Court allowed for now the Trump administration to strip legal protections for nearly 350,000 Venezuelans currently living in the U.S. under a program that had protected them from deportation, the court's decision. After talking to Alejandro, I found myself reflecting on the past year of headlines I'd seen without ever really absorbing. The story is about Trump's increased obsession with Venezuelan migrants. Stories about Trump deporting as many Venezuelans as possible from the United States. Andrii Hernandez Romero was among the 238 Venezuelans deported without court hearings under the Alien Enemies Act to an infamous mega prison in El Salvador. So I remember also the Trump administration's at the time very confusing strategy of suddenly launching drone strikes on Venezuelan boats that they led for smuggling cocaine. President Trump says American forces destroyed what he described as a Venezuelan drug boat headed for the United States. The U.S. military has attacked a second boat in the waters of Venezuela. He said yesterday that 11 people on board were killed. And finally, the most recent years. U.S. President Donald Trump launched his most aggressive foreign military action yet, attacking Venezuela, capturing its president Nicolas Maduro on Saturday, and promising to put the South American country under temporary U.S. control. So we are going to run the country until such time as we can do a safe, proper, and judicious transition. They could Donald Trump putting himself in charge of the resource that had already caused so much damage here in Venezuela. We're going to have our very large United States oil companies the biggest anywhere in the world go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country. Listening to Trump explain how easy it was going to be to control Venezuela's oil, to build his own magical vision of the future, I wondered how much the history he knew. I wondered if he knew any. It's not a particularly deep, insightful thought, but the thing that struck me hearing that history really was just its pace. Venezuela, a country that decade to decade, could completely shift from prosperous democracy to authoritarianism to wherever it was we were now. My country, the United States, is currently embroiled in its own confusing spasms of history, quite different, but these days I can't hear a story of another place without looking for some vision of us in its reflection. So I found myself, despite myself, asking Alejandro to compare the pace of change here to the pace of change there. It's just like a crazy sweep of change. I mean, Americans right now feel like our country has suddenly violently changed, but relative to Venezuela, it's like not. Oh, no, no. I mean, I think the fear, and I would submit the legitimate rightful fear, is that many of the warning signs are present, but weirdly enveloped under a very different rubric and discourse. It's not socialism. It's not anti-imperialism. It's the opposite. It's like hyper-capitalism, chronic capitalism, and a new form of imperialism. But the mechanics are similar. It's the militarization of policing. It is the patrimonialization of the state such that the only thing that matters is what you can extract from the state and whether you have access to it. And so the kind of nakedness of that project, I think I suspect, as an historian, is occasioning a sense of shock such that, can it really be this crass? And that sense of crassness then creates a little bit of a delay in terms of response. I experienced this since the attack on Venezuela, where so many of the quiet parts were being set out loud, that as an historian of Latin America, who is trained to read subtext, who is trained to read between the lines, who is trained to read behind the blacked out parts of the classified CIA documents. Suddenly, I'm being told all of that. And my first instance is, well, maybe there's something else behind this, rather than the thing itself. It can't just be the American president saying we're going to the country to date the oil. It can't just be that. Or it can't just be Steven Miller saying, then I know the continent is ours. How dare they sell their natural resources to China. Or can't just be Marco Rubio saying the left is over in Latin America for centuries to come. Or can't just be Pete Hegseth saying, you're next, whoever next might happen to be. Like it all feels so contrary to instinct, that the reaction, at least to my part, and I think more generally, we might be sensing this is somewhat of a delay. People are shocked because they can't believe what they're seeing. And so they react more slowly. That's my sense. Yeah, I mean, I find that that is how I have felt. And it just made me want to understand the story of Venezuela better at least. I think like I did not feel I was not a buyer for the grand promise of the Trump administration, like I getting involved. Understanding the history of Venezuela, I think I feel more pessimistic than I was. And I was pessimistic before. It just feels like, you know, there's this temptation, I think, in America for understandable reasons, when I talked to my fellow relatively uninformed friends of the country, it's like we channel the arguments end up being where the problems, problems of socialism, where the problems, problems of imperialism. When you really hear the story, it sure, I think you could make arguments for both, but like it more sounds like a resource. It sounds like while wealth can be helpful, immense sudden growth of anything, really risk being destructive. But if you understand it as a country where the rise and fall of the price of oil has encouraged very, very short-term leadership, having Trump who engages in that kind of leadership anyway, take control, and it's explicitly not on a project of democracy building or like without even the pretense of anything. But we would like to further ravage this not even for short-term Venezuelan gain, but for American gain. It really sounds dire. Yeah, it is absolutely dire. And I mean, there were many surprising turns in Venezuela since the attack on Saturday the 3rd, but certainly one of the most surprising is that the entire regime has remained in place. Right. He arrested Maduro and his wife or whatever. He went into the country with helicopters and took them, but it wasn't everyone around them is in charge. It's not like we're putting in a pro-democracy person or a member of the opposition. They're just like leaving the exact structure intact, but putting the U.S. at the top of it. Yes. And also with the complete support, it seems like, of the United States. So, at least again, in the public pronouncements of Trump and others and his administration, the direct and loud sidelineing of the opposition in favor of the remaining regime, which is again exactly the same as it was before, is certainly a type of regime change that I've never seen or read about. And so we, I think, are at the cusp of reference that don't quite make sense on the surface, but that are laying bare a much scarier reality about the near and distant future for us in Venezuela and in the United States and the world. I do think that what I would most hope for, especially in this moment, for people in the United States, to think about when it comes to Venezuela is to resist the easy narrative of it's this or that. This person is a hero, that person is a devil. And that explains everything. Leaning into complexity when it comes to Venezuela, I think, is the first step towards understanding it. Even if actual understanding it may not come about very easily. This sounds like a good mission. It sounds like not where the our country is most easily resting right now, but it sounds like the right approach. Thank you for explaining this immensely complex country. Thank you. Alejandro Velasco, he's an associate professor of history at New York University. We've included a link to a great piece of analysis he's written on Chavismo in our show notes. Go check it out. Separately, I also recommend William Newman's book, which I've referenced a few times in the story. Things are never so bad that they can't get worse. A title I can now not use for my memoir. God damn it. Third-Chengen is a presentation of Odyssey. It was created by me, PJ Vote, and Shruthi Pitimanini. Garrett Graham is our senior producer, Emily Maltaire is our associate producer. Special thanks this week to Miguel Santiago Cologne, theme, original composition, and mixing by Armand Bazarian, the episode is fact-checked by Piper Dumont. Our executive producer is Leo Ristennis. Thanks to the rest of the team at Odyssey, Rob Morandi, Craig Cox, Eric Donnelly, Collingay, and Mora Curran, Josephina Francis, Kirk Courtney, and Hillary Schof. If you'd like to support our show, get ad-free episodes, zero reruns, and bonus episodes. Please consider signing up for incognito mode at search engine.show. Thanks for listening. We'll see you soon. [Music]