What A Failed Auction Abroad Should Tell America
The United States of America has spent the last year embarked upon a dangerous experiment; of dubious provenance, with no foreseeable outcome that doesn’t end up in tears. Our nation has shifted towards statist policies; at truly alarming rates. So rapidly have we nationalized that our open-minded and wonderful President forgot that he owned the corporation that produced Scott Brown’s pick-up truck when he mocked it as a symbol of cultural ignorance. Given the ambitious velocity with which he has pursued his agenda, perhaps he can no longer see things for what they are under the influence of the Relativistic Doppler Effect.
That being said, we need to adjust our frame of reference a bit and take a serious look at what happens in countries where Barack Obama’s socialist experiment reaches it’s ultimate Progressive conclusion. We see that writ large in Venezuela, where “The People’s” Presidente por vida, rules unchallenged by electoral opposition of any sustained caliber. In Venezuela, when opposition arises, it comes from the fundamental laws of economics.
That opposition has no platform other than native common sense. It has no party beyond the disorganized aggregation of imperfect individual decisions which are based on expectations with varying degrees of ratiocination. There are no phone banks, no picket lines, no rallies that dare brave the depredations of Hugo Chavez’s “People’s” secret police. When Hugo Chavez gets opposed, it’s reality that ultimately rises up to finally vote no. Just such a veto was cast last Friday when Venezuela’s state oil and gas company held auction and nobody bid.
The Venezuelan government courted numerous suitors, but none felt sufficient ardor to trust business conditions under a Chavez regime. Reuters describes the failed process below.
State oil company PDVSA has yet to announce the results. Last year PDVSA invited a group of companies including Japan’s Marubeni (8002.T), Mitsui, Mitsubishi and Itochu, Norway’s Statoil (STL.OL), Russia’s Gazprom and Italy’s ENI (ENI.MI) to consider taking part in the project. Spain’s Repsol (REP.MC) had also shown interest but did not make an offer. PDVSA forecasts that the field will produce 1.2 billion cubic feet per day.
With no knowledge of Venezuelan policy or politics; this result proves astounding to the casual observer of gas and oil markets. The Winter; even in places as far south as Madison, Alabama, has drawn chilling and nigh. Peak Oil models compete to make dire prediction of coming austerity and political turmoil as our world theoretically runs out of oil. For those of us not steeped in the feckless enstupidation of Big Think™, we need only watch the whirring price meter as we fill up our cars at filling stations across the land. An inability to sell fuel sources now is akin to the inability to sell rice during a North Korean famine.
Which brings us to the pregnant question of just how Hugo Chavez managed to copulate the canine, or if you prefer, reenact the Nate Keading field goal attempt, on such obvious an attempt to make a killing. The answer is obvious, twofold, and represents change the progressives do not want to believe in. The bidders cannot ascertain the price in a forced market and cannot trust the seller in a legal environment where property rights can be abjured on The Conjuror’s arbitrary whim.
The inability of Repsol, et al. to ascertain pricing comes from the unwillingness of PDVSA and most of the rest of Venezuela’s junta-regulated economy to allow people to express their honest sentiment on what anything is truly worth. Things are worth what we will pay for them and what their manufacturers will willing provide them for. In a civil society, we negotiate these things out and decide by opening or closing our wallets and initiating or suspending production.
Adam Smith once remarked that “There is a lot of ruin in a nation.” He forgot to consider what happens when that nation doesn’t even have anything people consider worthwhile to wreck. This unfortunate state seems to occur with greater alacrity when Big Brother grows arrogant enough to tell us what we should be paying for everything we would attempt to purchase at market.
American Progressives sincerely resent the comparison to Orwell’s statist villain. Martha Coakley would no doubt insinuate gender discrimination was rampant and that Catherine The Great could tyrannize with the best despots ever. However, I have yet to see any hard-core leftist announce that we should seize an industry or interfere in a market so that someone else could take over and run the show. Once Obamacare gets crammed through, I doubt Dr. Dean will call in search of any second opinions.
Thus, we have today’s election in Massachusetts for a US Senate seat. A US Senate seat that either belongs to The Spectre of Edward Kennedy, or, in a market-based society, is voted by the people to the most attractive bidder. In a newly subinfuedated Venezuela, the resources lie fallow, while the panjandrums pursue political privilege. Today, in Massachusetts, in America, we have the opportunity to once again cultivate the fields of open democracy and tend them with genuinely robust citizen action. It is for this reason, even more than merely my philosophical and moral opposition to Barack Obama’s stupid and confiscatory health care debacle that I hope Scott Brown is America’s newest elected US Senator.