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Chavez Exits the Stage

Hugo Chavez was the latest example of an age-old South American tradition...

HUGO CHAVEZ was such a great entertainer, writes Daily Reckoning founder Bill Bonner.

He was bigger than life; real life was too small for him. He had to stretch the truth bend the real world into a larger, more fantastic puff it up with hot air, until it could hold him.

In real life, people go about their business, taking what fortune sends their way and doing their best with it. That stage was much too restricted for Chavez. He aimed to play a more important role under a much bigger proscenium arch. Naturally, he took up politics, the refuge of all fantasists, and tried to overthrow the lawful Venezuelan government; he landed in jail.

The authorities let him out after a couple of years. He went right back to his mischief. A few years later and he was elected president of the country. But even that wasn't enough. He conspired to twist the nation's constitution to make himself 'president for life', which, in an act of divine mercy towards the Venezuelan people, ended last week.

Chavez was a great showman. He kept TV audiences entertained for hours, concocting a larger-than-life fairy tale about how terrible the foreign capitalists were and how his Bolivarian revolution was setting things straight.

Alas, his lines were written by hacks; perhaps he wrote them himself. It took a real A-list actor to deliver his speeches with a straight face. The idea of a 21st century socialism, for example, that he claimed to have invented himself, was so transparently hollow and self-serving that a lesser thespian would have been laughed off stage.

Chavez followed in a long South American tradition of crowd-pleasing strongmen. Like Peron, Castro and Melgarejo, he was not only a leader the masses could adore, he was also one they deserved.

Mariano Melgarejo has been largely forgotten. But he was one of the great standup guys of Bolivian politics. Like Chavez, he attempted a coup d'etat in 1854 against the legitimate dictatorship of the time. He was captured. He was tried and found guilty. That should have been the end of him, but he came out with a convincing argument for clemency; that he was drunk at the time and not responsible for his actions.

Melgarejo was pardoned by President Belzu. A few years later, just to show his gratitude, Melgarejo murdered the president himself. Then came a real tour-de-force of political theatre, illustrating not only Melgarejo's magisterial stage presence but also the masses' deep attachment to their leaders.

A crowd had gathered in front of the presidential palace demanding the return of Belzu. 'Viva Belzu,' they chanted.

Melgarejo appeared on the balcony. He had the dead body brought out and displayed to the crowd.

'Who lives now?' he asked them.

'Viva Melgarejo,' they replied.

Having whacked his rival, Melgarejo soon became perhaps the most disastrous leader in the history of South America, a hotly contested title. He is said to have signed the Treaty of Ayacucho with Brazil, in which he traded millions of acres of Bolivian territory for a 'magnificent white horse'.

In 1870, France and Germany went to war. Hearing reports of the German assault on Paris, Melgarejo rushed to defend the City of Light. He reputedly could not locate it on a map, but he was fascinated by what he had heard of it.

So, he told his army to march to Europe. His military commanders informed him that they had no means to cross the Atlantic Ocean. Melgarejo replied, 'Don't be stupid! We will take a short cut through the brush!'

That was the sort of Bolivarian tradition to which Chavez was heir.

But Melgarejo was hardly the only legator. Chavez learned from Juan Peron too. Argentina had been one of the richest countries in the world, in the early 20th century. You can see the residue of it here today - broad, tree-lined avenues...and beautiful beaux arts, belle époque and arts nouveaux private buildings and public monuments. (The Argentines were great admirers of the French too!)

Now, Argentina is way down the list of the world's richest countries. Today, it is number 54 on the CIA Factbook list, with Trinidad and Tobago, Equatorial Guinea and Greece far ahead of it. That, along with periodic financial crises, massive strikes, disappearances, and pointless wars, is the legacy given Argentina by Peron and his Peronist successors.

You'd think the gauchos and the portenos would have had enough of it by now. But they still elect Cristina Fernandez de Kirchner, the Peronist candidate...just as they voted for Chavez in Venezuela despite an economic record worthy of Mariano Melgarejo.

That's what makes the masses so attractive to leaders like Chavez - they are incredibly stupid. Consumer prices rise faster in Caracas than even in Buenos Aires. Money changes hands on the black market at many times the official rate. The power goes out, too.

Despite being one of the world's top oil producers, supplies are so tight, people are urged to take 'socialist showers' to conserve energy. And the murder rate is among the highest in the world, so high that even people from Baltimore are afraid to go there.

He made their lives more miserable, but the masses still loved him. Hugo Chavez paid for their affection. He took $100m in annual oil revenues and spread it around. Realising that it would go farther in poor neighbourhoods than in rich ones, he built his popular support on cash and claptrap.

And now he is gone. The performances have come to an end. The show's over.

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New York Times best-selling finance author Bill Bonner founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group exposed and predicted some of the world's biggest shifts since, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and the election of President Trump (2016). Sharing his personal thoughts and opinions each day from 1999 in the globally successful Daily Reckoning and then his Diary of a Rogue Economist, Bonner now makes his views and ideas available alongside analysis from a small hand-picked team of specialists through Bonner Private Research.

See full archive of Bill Bonner articles

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