Every so often, this blog zooms out a little from the micro auto picture and looks at some larger trends affecting the industry and the nation. This is one of those posts, and it is quite timely as we clearly have some work to do as a country.
This week on Venezuelan State Television (or should we say Bolivarian Republic of Venezuela State Television), the socialist dictator, Hugo Chavez, declared that it was clearly time for the US to join Venezuela in socialism by saying the following:
Mr. Chavez your notion is pithy, but ridiculous. Let's look at some some facts. As America faces its highest unemployment in over 25 years at 8.3% Venezuela is coming in at its lowest ever at about 9.1%. Is that a model to be envied? And then let's look at why Venezuela is at its own historic unemployment low. Venezuela's economy is dominated by petroleum, as oil accounts for one third of GDP, around 80% of exports, and more than half of government revenues. And, last I checked, oil prices have been fairly good. However, taking a quick look at history, say during the late 80's, when oil prices took a dive, so did the Venezuela economy, which went into crisis in that time period.
“It’s regrettable the crisis that the U.S. is living through. Millions of workers are being left in the street, thousands of companies are closing, in the U.S. there isn’t a single new infrastructure project. Go look for a highway there, the country has gone bust.”
“Now President Obama arrived with some announcements, hopefully, but the capitalist model and its perverse values have failed.”
“I recommend to Obama -- they’re criticizing him because they say he’s moving towards socialism -- come Obama, ally with us on the path to socialism, it’s the only road.”
“Imagine a socialist revolution in the U.S. Nothing is impossible.”
(source: Bloomberg Caracas)
Venezuela is a one trick economic pony, and that pony is oil. Her economy has had no diversification under Mr. Chavez' rule because there is no incentive to change. Don't forget Venezuela suffers from one of the worst cases of Dutch Disease and as yet, you have no cure. Meanwhile the US economy has continued to reinvent itself time and time again. Agriculture, textiles, petroleum, steel, automotive, education, software, micro-electronics, and services. And why? Because there is freedom of choice and incentive loaded in.
Mr. Chavez, you are hanging on by a thread because we have chosen to drive cars that have combustion engines. Forget all the planes, buses, heaters, and generators, without gas powered cars, oil prices are toast. We are one Capitalist innovator away from putting you out of business, and I guarantee that there are millions of us going to work every day with that single goal - to innovate out of the current automotive economy. If it were a horse race between you and us, I would bet on the country whose capitalist innovators brought you the cotton gin, the radio, the light bulb, the automobile, the nuclear bomb, the DOS operating system, the integrated circuit...need I go on.
No, that is all for the pesky Mr. Chavez.
Meanwhile, I have a note for American companies, entrepreneurs, and financiers.
"Now is the time."
While a bandito like Chavez is crowing on his oil-slick mountain top, we ought to be getting about our business of reinventing him out of business.
Time to stop watching your stock portfolio.
Time to stop waiting for a handout from Washington.
Time to stop blaming Madoff.
Time to stop letting go of your innovators.
Time to stop hoarding your cash.
Time to stop investing in middle market business at the expense of your early-stage allocation.
Cowboy up, and let's show this Venezuelan turkey, how a business and a nation ought to be run.
We are starting right here with Local Motors.