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.

WSJ: As Threats to Oil Supply Grow, A General Says U.S. Isn't Ready

Three years into the sharpest spike in oil prices in a generation, policy makers and military leaders across the globe are grappling with the implications of fundamental change in energy geopolitics. One such leader is the new U.S. defense secretary, Robert Gates, who took part last year in a war game simulating disruptions to the oil trade. It concluded the U.S. had few short-term fixes if supplies were jolted.

Supply lines are longer and oil fields more numerous than a generation ago. New threats have emerged, from rebels in West Africa to terrorists targeting Saudi Arabia. With supply and demand tightly balanced, even small disruptions can cause big price swings, endangering economic growth. Nationalistic fossil-fuel powers such as Russia have shown willingness to brandish energy as a weapon. The war in Iraq has hammered the oil industry in the world's third-largest holder of conventional oil reserves.

In this new era, one of the central security assumptions of the 20th century -- that a powerful U.S. military can protect America's energy interests across the globe -- falls short.

As Threats to Oil Supply Grow, A General Says U.S. Isn't Ready (Wall Street Journal [subscription required], December 19, 2006)

The New 'Sputnik' Challenges: They All Run on Oil - New York Times

I'm going to break with a house rule here and actually link to something that lives behind the Times Select firewall.

Two house rules, actually... as it's a column by Tom Friedman, aka Captain Obvious.

But this particular one pulls some ideas together in a particularly useful way (read: for once, I agree with Tom) and you might want to get your hands on it if the topic interests you.

The topic is "oil."

Excerpt:

Friends, we are in the midst of an energy crisis...

First, we are in a war against a radical, violent stream of Islam that is fueled and funded by our own energy purchases. We are financing both sides in the war on terrorism: the U.S. Army with our tax dollars, and Islamist charities, madrasas and terrorist organizations through our oil purchases.

Second, the world has gotten flat, and three billion new players from India, China and the former Soviet Union just walked onto the field with their version of the American dream: a house, a car, a toaster and a refrigerator. If we don't quickly move to renewable alternatives to fossil fuels, we will warm up, smoke up and choke up this planet far faster than at any time in the history of the world. Katrina will look like a day at the beach.

Third, because of the above, green energy-saving technologies and designs - for cars, planes, homes, appliances or office buildings - will be one of the biggest industries of the 21st century. Tell your kids. China is already rushing down this path because it can't breathe and can't grow if it doesn't reduce its energy consumption. Will we dominate the green industry, or will we all be driving cars from China, Japan and Europe?

Finally, if we continue to depend on oil, we are going to undermine the whole democratic trend that was unleashed by the fall of the Berlin Wall. Because oil will remain at $60 a barrel and will fuel the worst regimes in the world - like Iran - to do the worst things for the world. Indeed, this $60-a-barrel boom in the hands of criminal regimes, and just plain criminals, will, if sustained, pose a bigger threat to democracies than communism or Islamism. It will be a black tide that turns back the democratic wave everywhere, including in Iraq.

If anybody finds a non-firewalled link to this piece, please let me know. I haven't turned anything up (yet.)

The New 'Sputnik' Challenges: They All Run on Oil - New York Times