It's increasingly likely that the United States economy is falling into its deepest recession in a quarter-century.
Unemployment is rising. Retirement funds are dwindling. And one of the only sectors of the housing industry that's doing well is locksmithing. When banks repossess homes after foreclosure, they have to put new locks on the doors.
Even members of the liberal media elite, such as myself, are starting to feel the pain.
I have downsized from venti to grande lattes. I'll now drink whatever wine I have in the house, even if it isn't ideally paired with the meal I'm eating. I may even start charging my new iPhone 3G at the office – just to shave a couple bucks off my home electricity bill each month. Desperate times call for desperate measures.
Fortunately, not all of the news in the world is so grim.
The sinking economies of North America and Europe are dragging the price of oil down with them. Unemployed people use up a lot less gasoline than people with jobs. This has contributed to the near-record plummet of the price of oil – from more than nearly $150 per barrel over the summer to less than $65 per barrel on the day I'm writing this column.
For car-driving Americans, lower fuel prices mean a few extra bucks in our pockets each week. That's good news.
Even better news: Lower oil prices mean a few extra billion dollars not pouring into the bank accounts of oil-rich countries like Venezuela.
First, I want to make it clear that I wish no ill to the people of Venezuela. It's just that the country happens to be controlled by a nitwit.
Venezuela's president, Hugo Chavez, is democratically elected, yes, but he's also an irresponsible buffoon whose, er, buffoonery has done deep damage to Venezuela.
Ostensibly a poverty fighting socialist, he has used the oil money windfall in recent years to bankroll billions in social programs.
What's wrong with spending tax revenue to help the poor? In theory, nothing. But Chavez's anti-poverty initiatives have been shortsighted and unsustainable. He has failed to use the dollar-stuffed cushion of high oil prices to diversify Venezuela's economy.
At the same time, he's retarded private sector business in Venezuela. The country depends on petroleum for a staggering 90 percent of its export revenues and half its tax revenues. He's made it so hard to do business in Venezuela that in May, Venezuelans reported serious shortages of beans, rice, meat and flour.
Education, health care and welfare spending for the desperately poor are laudable goals. But because the funding for those programs depends on revenue from a single, volatile commodity, Chavez has been setting up his country's poor for another deeper plunge into poverty.
Oil revenue has plummeted, economic growth is stalling out, and inflation in Venezuela has skyrocketed to 35 percent. Translation: People have less money to pay for things that are getting more expensive.
No longer quite as drunk on oil, Chavez has been forced to make nice with Venezuela's business leaders in an attempt to spur growth in the non-oil parts of Venezuela's economy. To the extent that Chavez is forced to help diversify the Venezuelan economy, the Venezuelan people will benefit.
The decline in oil revenue also could push Chavez toward adopting a less paranoid foreign policy. Chavez has mislaid billions of dollars arming his country to fend off a United States invasion.
According to the Washington Post, he's dropped $4.4 billion since 2005 on rifles, helicopters and aircraft. The (ir)rationale for this spending – to fend off a U.S. invasion. Except the U.S. isn't actually planning to invade Venezuela. Yes, the Bush administration supported a 2002 coup attempt in Venezuela. But as far as anyone sane can see, the U.S. isn't planning a D-Day style invasion of Venezuela's beaches anytime soon.
Chavez's military build-up is designed to stoke fear and nationalism while simultaneously painting opponents of his aggressive militarism as unpatriotic pussies.
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