- Bernd Debusmann is a Reuters columnist. The opinions expressed are his own -

Spare a thought for Hugo Chavez, the larger-than-life Venezuelan leader who flourished in the role of Latin America’s defender against an evil empire led by a devil who smelt of sulphur and was named George W. Bush.

Those were the easy days for Chavez. Now he has become a dragon-slayer without a dragon, an actor on a stage without the most important prop. It was one thing to rally the Latin masses against the widely-detested Bush, it is another to deal with Barack Obama, “the first (U.S.) president who looks like us,” in the words of Brazilian President Luiz Inacio Lula da Silva.

“The devil, the devil himself, is right in the house, ” Chavez said, to laughter and applause, in his infamous 2006 anti-Bush speech to the United Nations General Assembly. “And the devil came here yesterday. Yesterday, the devil came here. Right here. And it smells of sulphur still today.”

Chavez’s reaction to the bizarre coup that ousted Honduran president Manuel Zelaya was evidence that the Venezuelan knows the rules of the game he played for years no longer apply. In his weekly television show, he said he did not think Obama was behind the plot.

Claiming otherwise would have been difficult even for a president given to surreal conspiracy theories. Within hours of the coup against Zelaya, a Chavez ally, Obama condemned the action, as did the Organization of American States and the European Union, which promptly withdrew its ambassadors from Tegucigalpa, the Honduran capital.

Contrast Washington’s reaction to the way it greeted a short-lived coup against Chavez and you might well come to the conclusion that he owes a debt of gratitude to the Bush administration.

On April 12, 2002, the White House greeted with barely concealed glee news that a coup had ousted Chavez, an elected president. He had created the conditions that led to his ouster, according to then White House spokesman Ari Fleischer. In other words, he only had to blame himself.

Washington looked forward, Fleischer said, to working with Venezuelan democratic forces (a euphemism for the plotters) to “restore the essential elements of democracy.” As it turned out, that wasn’t necessary. Chavez was back in power within 48 hours and has portrayed himself as a victim and a target of CIA plots ever since.

The role of victim will be more difficult to play in future, barring big missteps on the Latin American scene by the Obama team. So far, there have been none. Commenting on the Honduras coup during a visit to Moscow, Obama said policy differences were no reason to abandon democratic principles. During the abortive coup against Chavez, the Bush team seemed eager to do just that.

U.S. ANTAGONISM BOOSTED CHAVEZ

Chavez’s political fortunes have been boosted considerably by confrontational U.S. moves, and not only during the eight years of George W. Bush. In 1998, when Chavez campaigned for the Venezuelan presidency, the Clinton administration denied him a visa to visit the United States. At the time, polls put his support at between three and five percent.

Those numbers shot up when Chavez incorporated the visa denial into his campaign. Holding aloft a visa credit card, he would tell cheering crowds that “this is the only visa I need,” not the visa the U.S. denied him. He won the election.

Since then, Chavez has emerged as a role model for Latin American leaders who want to perpetuate themselves in power by way of changing their countries’ constitutions. After narrowly losing a referendum on term limits in 2007, he tried again this year and won. He now can run for re-election as often as he wants.The opposition saw it as a move towards a lifetime presidency.

In January, Chavez’s left-wing ally Evo Morales won a referendum that allows him to run for a second five-year term. Last September, another Chavez ally, Ecuador’s Rafael Correa, won a referendum on a new constitution that vastly expanded his powers and allowed him to hold office for two additional four-year terms.

Another leftist, Nicaragua’s Daniel Ortega, has begun pushing for changes to let him stay on after his present term expires in 2011. (The urge to perpetuate themselves in power is not restricted to Chavez’s leftist allies: In Colombia, President Alvaro Uribe is mulling ways to run for a third time, after having the constitution changed to give him a second term).

In Honduras, Zelaya tried and failed to follow the Chavez script. Soldiers stormed into his residence and bundled him onto an Air Force plane, still in his pyjamas, bound for Costa Rica, after days of tension over his attempt to gauge public support for a referendum on term limits.

And for once, Chavez does not have an American president to blame.

Poor Hugo.

(You can contact the author at Debusmann@Reuters.com.)

– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.  The views expressed are her own. —

In his first one hundred days, President Obama has shown himself to be one of the most radical U.S. presidents in history.  He is harming America’s defenses by publishing memos on interrogation of detainees and threatening to prosecute lawyers who drafted supportive memos.  He shakes hands with America’s enemies, such as Venezuelan leader Hugo Chavez, and sends mixed signals to its friends, such as Colombia’s President Uribe.

And, in the name of combating a recession, he is destroying the fundamental institutions of America’s free-market economy.

Not only would President Obama’s proposed programs move government spending to levels, in relation to the economy, unseen since the end of World War II, but his administration is increasingly involved in the minutiae of a new, unwise, industrial policy, such as how much firms can pay workers, and which banks are allowed to repay government loans, and which industries and companies deserve a government rescue package.

Under Obama’s proposed budget, the nonpartisan Congressional Budget Office projects the government deficit to hit $1.2 trillion in 2019, or six percent of GDP, after “bottoming out”—if it does—at  $658 billion in 2012, a level more than 40 percent above the highest deficit under the presidency of George W. Bush. By 2019, government spending would take up nearly a quarter of GDP, far higher than at the peak of Iraq war spending and the highest, excepting 2009 and 2010, since 1946.

Much has been written about President Obama’s plans for multi-year, growing expenditures on energy and health care. He has proposed to invest billions of dollars in wind, solar power, and other renewables, which now produce about 3 percent of U.S. energy, yet he neglects nuclear power, which produces 20 percent.  He has suggested a substantial cap-and-trade energy tax, which would raise more than a trillion dollars over time, according to some estimates. And he wants a down payment of $634 billion for a universal health care plan whose details he has not yet confided to the public.

In addition, Obama is pushing for other programs which are both costly and naive.  One of his priorities is high-speed passenger rail service, which was given a downpayment of $8 billion in economic stimulus funds and possibly $5 billion more in the budget.  This proposal is, to put it charitably, poorly-designed. Real high-speed rail, with trains that travel 150 miles an hour and faster, can be found in Europe and Japan, but they have not stemmed the increasing use of road transportation.  And these trains need their own, specially engineered rights-of-way, which would cost much more than $13 billion.

Some of Obama’s economic proposals appear to be aimed at placating labor unions, an important element in his political base, rather than encouraging economic recovery.  In March, even before the swine flu scare, he signed legislation ending a program, opposed by the Teamsters union, allowing a small number of Mexican trucks to enter into the United States.  Mexico is retaliating by imposing tariffs on almost 100 agricultural products, including wheat, beans, beef and rice, hurting American exporters.

In another concession to unions, the president has let the U.S. Labor Department end some disclosure requirements for union finances, originally put in place so that union members can learn how their dues are being spent.

Although Obama lauds transparency, the Labor Department has announced that it would not enforce the filing of the form that requires union officials to report conflicts of interest, such as whether they had personal relationships with firms doing union business.  In addition, unions will no longer be required to disclose supplemental information about officers’ pensions and compensation.

Even as unions are allowed to reveal less about their finances, financial institutions that have taken government funds, some reluctantly and under Treasury Department duress, are subject to an unprecedented level of scrutiny as to their compensation of senior executives.  Goldman Sachs, Morgan Stanley, and J.P. Morgan are being discouraged from repaying their Troubled Assets Relief Program funds, even though pay caps are interfering with retention of talented staff.  A government pressuring banks to do something not required by law is engaged in extra-legal behavior.

The government’s treatment of executive compensation bonuses, standard in many industries, has also been capricious. Some executives working in banks that received TARP funds were paid their bonuses without complaints from Washington.  Others, notably those working at AIG, were demonized both by the press and government.

For those who favor nationalization of the economy, or at least of big business, Obama’s first 100 days have been a roaring success.  Others, however, pray that the economy can survive not only the recession but also the president’s prescriptions.

— Pedro Burelli, a former Member of the Executive Board of Petróleos de Venezuela is a frequent commentator on matters dealing with Venezuela and oil. He is the Managing Partner of B+V Consulting, a corporate finance advisory firm. The views expressed are his own. —

In the early days of his unrelenting scrap with President George W. Bush, Venezuela’s Hugo Chavez laid a boastful wager: I will outlast you! For most of eight years, Chavez accused Mister Danger – a favorite moniker - of trying to eliminate him and lobbed countless epithets – drunkard, assassin, devil, coward, illiterate, criminal, donkey are but a sample – against the growingly unpopular U.S. president.

Besides sky-rocketing oil prices, nothing aided Chavez’s domestic standing and international projection more than George W. Bush’s mere existence. Blaring “truth” to power and dispensing petrodollars left and right, north and south, brought Chavez both acolytes and notoriety.

President Bush never once uttered publicly the name of Venezuela’s latest caudillo, nor did he respond to any of his often obscene tirades. Close aides report that he almost lost his cool when Condoleezza Rice became the subject of the obscenities. But he chose not to react as nothing rattles a narcissist more than being ignored…all of the time!  In effect, U.S. policy during the second part of the Bush administration was simply to ignore the man and his banter, but painstakingly track his deeds.

While there are mundane topics like energy and commerce that could eek out the beginnings of a dialogue; i.e. $75 billion of bilateral trade in 2008, there are a host of other issues that ensure the parties will remain miles apart. Verifiable facts will continue to impede fruitful dialogue between the U.S and Venezuela. The expectation that the incoming administration in Washington - full of seasoned hands - would shove this information aside and design an agenda to charm and mollify Caracas is ludicrous.

Chavez’s unrepentant liaisons with Colombia’s drug peddling guerrillas remain a threat to U.S. national interests (Read related story from September). The transformation of Venezuela into sanctuary for FARC units and a primary transit route for illicit drugs coming out of Colombia is well documented. U.S. law enforcers have gathered sufficient evidence to designate – and eventually prosecute - three members of Chavez’s innermost circle as complicit.

The unperturbed flow of funds to countless groups in the region, to hot spots in the Middle East and even in the U.S. will remain top of mind. The cast of disreputable characters showing up in Caracas hat-in-hand have turned the place into a XXI century rerun of Casablanca. Embassies have replaced trade and cultural attaches with intelligence officers trained to track such comings and goings, and able to decipher puzzles such as a tri-weekly flights between Tehran-Damascus-Caracas whose mysterious passengers forgo customary immigration controls.

Concerns regarding the state of democracy, human rights and corruption further widen the schism between the two countries. President Obama underlined his concerns masterfully in his inaugural speech, “To those leaders around the globe who seek to sow conflict, or blame their society’s ills on the West: Know that your people will judge you on what you can build, not what you destroy”, and then added “To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.”

Chavez has seen his oil shield weakened by both the collapse of the country’s once dependable oil industry and the downward spiral of oil prices.  Now Chavez will have to confront growing domestic perils without the foil of a perfect adversary and the punch of a limitless wallet. Furthermore, dealing shrewdly with historical nemeses Cuba and Iran will take precedence for the incoming Obama administration. Caracas is bound to feel overlooked and might resort – to grab headlines - to its typical self-destructive folly.

President Obama:

You enter this perilous relationship upending every element of Chavez’s comic book characterization of the United States.  Yet, you must draw a line in the sand and let it be known that you are neither feeble nor naive. Forgetting and forgiving Chavez’s shenanigans will not produce a change in behavior; at this stage his self-styled revolution is too inane and brittle to coexist with U.S. values and interests. More importantly, you could well squander precious political capital by getting entangled with one who impudently envisions continued conflict with the U.S. “whether the chief of the empire is black or white.”

Mr. President, the people of Venezuela do not need foreign saviors nor can we accept foreign accomplices and appeasers. What’s at stake in Venezuela are basic human rights and democratic principles which are being trampled everyday. You would do well to engage Cuba – a mishandled and moribund basket case - and Iran – a real serious almost-nuclear threat.  But on Venezuela, you should walk the path patiently laid by Mister Danger: Shun Chavez the man, help document and assist in the disclosure of his misdeeds, and watch Venezuela’s democratic citizens do the rest.