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Pittsburgh Tribune-Review: “Joe & Hugo: Oily characters”

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My Pittsburgh Tribune-Review column for January 13th, 2008, was inspired by hearing a radio ad featuring Joe Kennedy praising Hugo Chavez. This column appears in full beneath the fold. (Other than below, this column is not available on-line.) Joe & Hugo:Oily characters A few days ago while driving my car I heard a radio commercial that caused me to doubt my sanity. Perhaps I was imagining things. So I called my wife to tell her what I might (or might not) have heard. “Oh, yes,” she replied. “I heard that, too.” So I wasn’t imagining things. The commercial featured a man’s voice telling us how, while many Americans enjoy the wintertime because of all the great winter sports, too many Americans suffer cruelly. These poor Americans cannot afford to heat their homes; they must hang

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My Pittsburgh Tribune-Review column for January 13th, 2008, was inspired by hearing a radio ad featuring Joe Kennedy praising Hugo Chavez. This column appears in full beneath the fold. (Other than below, this column is not available on-line.)

Joe & Hugo:Oily characters

A few days ago while driving my car I heard a radio commercial that caused me to doubt my sanity. Perhaps I was imagining things. So I called my wife to tell her what I might (or might not) have heard.

“Oh, yes,” she replied. “I heard that, too.”

So I wasn’t imagining things.

The commercial featured a man’s voice telling us how, while many Americans enjoy the wintertime because of all the great winter sports, too many Americans suffer cruelly. These poor Americans cannot afford to heat their homes; they must hang blankets between rooms in order to help conserve what little heat they have.

My reaction to hearing this tale of distress is: ‘Really? How many Americans can be that poor today? So poor that they cannot afford to heat their homes?’

I understand that questioning reports of deep and persistent poverty in America is worse even than questioning the reality of man-made global warming. But I’ll bravely stick to my skepticism.

In their 1999 book, “Myths of Rich & Poor,” W. Michael Cox and Richard Alm report that the percentage of poor American households that in 1994 owned things such as a clothes dryer, a color-television set and air conditioning was higher than the percentage of all American households that owned such things in 1971.

This evidence powerfully suggests that, as a group, poor Americans in 1994 were richer than were typical Americans just a quarter-century earlier. And because the American economy has continued to grow over the past decade — with the unemployment rate being consistently lower today than it was during Bill Clinton’s tenure in the White House – it’s overwhelmingly likely that the actual material condition of poor Americans since 1994 has only continued to improve.

So, as with an ad that Sodexho runs on NPR — claiming that more than 30 million Americans are “at risk of hunger” — I simply don’t believe the claim.

In this land where obesity is now a problem principally among poor people — and where cell phones and televisions and MP3 players seem to be universally available – it’s unbelievable that a substantial portion of the population cannot afford heat.

But it’s not this false cry of poverty that caused me briefly to wonder if I was hearing things. Instead, it was the ad’s announcer proclaiming that “the people of Venezuela” — as “owners” of CITGO oil — are coming to rescue poor Americans. And then the announcer introduced himself as Joe Kennedy.

CITGO, in case you are unaware, is owned by the Venezuelan government – which now means, in practice, owned by socialist strongman Hugo Chavez. In an obvious propaganda ploy, Chavez gaudily claims to help poor Americans by selling some of CITGO’ s oil to them at prices substantially discounted from world market prices. He does this through Joe Kennedy’s Citizens Energy Corp.

Poor Americans can call a toll-free number to apply for access to the low-cost fuel oil contributed by the Chavez government.

Now, I admire charitable impulses. But Joe Kennedy’s suggestion that the Chavez government is a noble philanthropist is absurd and insulting. That same government has nationalized the assets of major oil companies operating in Venezuela — that is, it has stolen private property. And the property it has stolen, in this case, is precisely the sort that is necessary for extracting oil from the earth. So Chavez’s generosity is being paid for with stolen resources.

And Joe Kennedy’s fronting for this dictator is shameful. While Chavez confiscates the property of corporations that risk their own assets in the complex and costly endeavor to find and extract oil, Joe Kennedy praises Chavez and blames high oil prices on these same oil companies.

Of course, if private investors and companies were unwilling to risk resources exploring for oil, the price of oil would be astronomical, dwarfing today’s prices as Everest dwarfs any mud clump. So more investment by private firms means prices lower than otherwise.

Chavez’s actions push in the opposite direction. His depredations ensure that private firms steer clear of Venezuela.

Sure, Chavez can seize assets, such as oil rigs, already in place in Venezuela and then use these to dupe the likes of Joe Kennedy into assuming that Venezuela’s dictator is a first-rate fellow. But with no further private investors coming to Venezuela — and with its state-owned oil industry inevitably encumbered by corruption and sacrificed to Chavez’s political needs — the world’s supply of oil will be lower than otherwise. The price will be higher than otherwise. And through it all, ordinary Venezuelans — who are poorer than poor Americans — are again robbed of the opportunity to live in a society that grows and prospers through enterprise.

*Donald J. Boudreaux is the chairman of the department of economics at George Mason University in Fairfax, Va. His column appears twice monthly.

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Don Boudreaux
He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

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