Venezuela & Texas

As you might have heard, Venezuela is facing economic collapse. Leftists, many of whom previously praised it as a role model tries to blame it on the sharp drop in oil prices.

Since Venezuela’s economy depend greatly on revenues from oil exports, it is no doubt the case that the price drop has weakened its economy, compared to how it would have been if oil stayed expensive. However, the point is that current weakness isn’t because of cheap oil, it’s that it wasn’t weak before only because oil was expensive.

Venezuela after all, isn’t the only country/region/state that is highly dependent on  revenues from oil exports. Yet you don’t see the hyperinflation and shortages that Venezuela suffers from in for example Saudi Arabia, Norway or Russia. And in Texas,the state whose oil industry, gained international fame in the 1980s through the TV series “Dallas”, not only aren’t wee seeing any shortages or hyperinflation, employment is up 1.6% in the latest year, not very different from the national average.




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