He wasn't kidding

Looks like Hugo Chávez wasn't kidding when he promised to move Venezuela further to the left after the recent elections: he's just announced plans to nationalize telecoms and the electric utilities, pushing his poor country even further down the road to socialism.

Mr. Chávez, who will be sworn in Wednesday to another six-year term, announced his plans at the swearing-in of his new cabinet to a cheering crowd of supporters, sending a chilling message to foreign investors.

American corporations, including Verizon Communications, have large stakes in Venezuela’s largest telecommunications company, CANTV, and its biggest publicly traded electricity company, Electricidad de Caracas.

“Let it be nationalized,” Mr. Chávez said of CANTV. “All that was privatized, let it be nationalized.”

Financial markets appeared to be caught off-guard by Mr. Chávez’s announcement, as speculators reacted with a sell-off of assets that would be affected by the decision. Shares in CANTV plunged 14 percent in New York trading. Venezuela’s currency, the bolívar, fell as much as 20 percent in black market trading here on Monday, traders said.

(Chávez Moves to Nationalize Two Industries, New York Times, January 9, 2007.)

Ordinarily, these kinds of economic policies act like neutron bombs on developing (or, for that matter, developed) economies.

Given Venezuela's massive oil reserves, however, the cashflow from foreign energy trade can likely prop up a considerable amount of boneheadedness for quite some time.

Global investors and especially the bond and currency markets are not thrilled with Chávismo, and given Hugo's habit of cozying up to foreign leaders spanning a moral spectrum from Fidel Castro to Mahmoud Ahmadinejad, political observers are concerned as well.

At least (for now) few people in America are buying his rhetoric, despite his propaganda programs and enlistment of useful idiots like Joe Kennedy II to push his agenda.