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The Venezuela Calumny

Summary:
Alas, Michael Bloomberg. You aren’t the man I thought you were.On Tuesday, asked about Elizabeth Warren’s (very smart) proposal for a wealth tax, he responded with the favorite right-wing calumny of the moment – suggesting that her plan would turn us into Venezuela.That’s a shameful line of argument. In fact, whenever you see someone invoking Venezuela as a reason not to consider progressive policy ideas, you know right away that the person in question is uninformed, dishonest, or both. It basically shows that the speaker or writer isn’t willing to engage in serious discussion, preferring to scare people with a boogeyman of which he or she knows nothing.What, after all, do we learn from the Venezuelan experience? Yes, the country is a mess. Venezuela has always been a one-industry economy,

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Alas, Michael Bloomberg. You aren’t the man I thought you were.

On Tuesday, asked about Elizabeth Warren’s (very smart) proposal for a wealth tax, he responded with the favorite right-wing calumny of the moment – suggesting that her plan would turn us into Venezuela.

That’s a shameful line of argument. In fact, whenever you see someone invoking Venezuela as a reason not to consider progressive policy ideas, you know right away that the person in question is uninformed, dishonest, or both. It basically shows that the speaker or writer isn’t willing to engage in serious discussion, preferring to scare people with a boogeyman of which he or she knows nothing.

What, after all, do we learn from the Venezuelan experience? Yes, the country is a mess. Venezuela has always been a one-industry economy, with huge inequality. Hugo Chavez got into power because of rage against the nation’s elite, but used the power badly. He seized the oil sector, which you only do if you can run it honestly and efficiently; instead, he turned it over to corrupt cronies, who degraded its performance. Then, when oil prices fell, his successor tried to cover the income gap by printing money. Hence the crisis.

It’s a bad story, and not without precedent: “Macroeconomic populism” has a long history in Latin America, and usually comes to grief.

But what, exactly, does any of this have to do with the policy ideas of Elizabeth Warren, or Kamala Harris, or even a genuine radical like Alexandria Ocasio-Cortez? Is anyone in U.S. politics, even those who call themselves socialists, proposing that we nationalize large parts of the private sector? Is there anything in the record of U.S. progressives suggesting that they are less fiscally responsible than the people who keep using voodoo economics to push massive tax cuts for the rich?

Look at the actual content of Warren’s proposal, and it’s Teddy Roosevelt, not Hugo Chavez. Harris’s call for single-payer health care would put us in the same category as socialist hellholes like … Canada. Ocasio-Cortez has suggested tax rates for very high incomes that nobody would endorse except, um, Nobel laureate experts in public finance, and that have never been implemented in any country except, well, the United States for the whole of its great postwar boom.

Maybe you disagree with all these policy ideas. But if your first response, literally, is to scream “Venezuela,” you’re demonstrating both your unscrupulousness and your lack of any serious arguments for your position.

In Bloomberg’s case, one can hope that this was a one-time lapse, brought on by too much time spent talking to other billionaires and those who try to please them. But from now on, here’s my rule: anyone who tries to use Venezuela as a cudgel in U.S. political debate doesn’t deserve to be part of that debate.

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Paul Krugman
Paul Robin Krugman (born February 28, 1953) is an American economist, Distinguished Professor of Economics at the Graduate Center of the City University of New York, and an op-ed columnist for The New York Times. In 2008, Krugman won the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography.

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