What's With the Price of Oil?

Note: I wrote this post several weeks ago, but am only getting around to posting it now.

Last week, while the Dow Jones index was showing a precipitous decline, my thoughts turned toward "opportunities" to protect the current value of my savings. I've always been cautious regarding investments, to the point of (perhaps) hurting myself. Even when things looked rosy, I hesitated to buy into the American economy. For far too long the financial system has felt like a shell game. It doesn't seem like we make anything anymore, although (of course) I realize that isn't really true. Still I get the feeling that, more than anything else, the "success" of the dollar has much more to do with how fast people can keep it moving. So much of the time it seems like nothing is being produced in that process.

I'd be the last person to try and claim any expertise when it comes to understanding market forces. But now I am suspicious of so many who have put themselves forward as experts. There have been so many layers of complexity and obfuscation that no one really can provide a straight answer that will describe the current situation. Most of the time it appears that people are merely making decisions based upon "gut feelings". A consensus builds that the current climate is favorable, or alternatively that it is perilous, and ordinary folks tend to accept whatever conclusions are put forth in the name of "conventional wisdom". Ultimately if the argument can be framed in terms of supply and demand, then the argument is all the more convincing.

So what makes the price per barrel of crude drop so quickly at the same time the market is tanking? Logic suggests that as the US dollar value decreases, the cost of gasoline should rise (and vice-versa). Yet one of the most dramatic downturns of the economy in 100 years has been accompanied by sharply decreasing prices. One could suggest that the oncoming recession (or depression, or whatever) is has been affecting the demand for oil. After all, less activity requires less fuel. However, I'd be surprised if the markets are really responding that fast. One could also point to the frenzied speculation on energy commodities over the past year. That could certainly be playing a role as well.

The interesting thing is that when I talked about investing in oil commodities to a friend who many recognize as a "financial wizard", he advised me against it. His outlook on the potential recovery of the banking and credit systems is intensely pessimistic, and he expects oil prices to continue on a steep decline. And yet that still seems counterintuitive to me, as I would expect a functional resource of undeniable utility to retain (or even increase) its value during a sustained economic downturn. People may look to cut costs, but they still need to get to work. Add to that the variable of home heating costs during the upcoming winter, and everything appears further out-of-whack. It's hard not to suspect that there are shenanigans at work.

I've never gotten around to a formal study of the phenomenon, but it seems to me that gasoline prices always fall before a presidential election. I realize that oil trading is tied to the US currency, and that certainly complicates the picture even more. Ultimately we are at the mercy of these fluctuations, and it's disturbing that external forces could be manipulating the situation to make us act in a particular way. Alternatively, oil could merely be caught up in the huge sell-off of Wall Street, with everyone (including hedge funds) rushing to liquidate all their assets at once. I wonder if this affected the election cycle, with the challenge of energy independence seemingly at the top of everyone's list. I hope this crucial issue doesn't get relegated to the back-burner again.

Robert Baer on NPR's Fresh Air, Part 2.

Note: Please read Part 1 of this series before proceeding.


It may sound strange to hear Robert Baer's characterization of the Iranian government as "maturing", especially given the inflammatory statements by Mahmoud Ahmadinejad, but he correctly points out the limited role the President actually plays in setting foreign policy. While the McCain/Palin ticket seems disproportionately obsessed with Ahmadinejad's rhetoric regarding the future of Isreal, they seem to be missing the point that it is cleric Ali Khamenei that is the actual Supreme Leader of Iran. Not only has Khamanei contradicted Ahmadinejad's anti-Israeli stance, but he has actually issued a fatwa against the production, stockpiling and use of nuclear weapons.

This seems to support Baer's argument that Iran could represent a rational partner in forming a security accord in the Middle East. A major complication for cooperative action between Iran and the West involves the Palestinan question. Hezbollah takes its marching orders from Tehran, and this has been a constant source of enmity between Israel and Iran. Still, Baer says that Ali Khamenei has implied that he wants no more than the Palestinians want- self-rule in the West Bank and East Jerusalem. He further insists that the Iranians see Saudi Arabia as their main rival in the Midde East. The Emirates of that country represent the 1400-year legacy of Sunni repression of the Shi'ites. The Wahabi form of Islam is a particular anathema to the Iranian clerics.

Robert Baer agrees that the Sunni fundamentalists are manifestly more anarchic and unreliable than their Shia counterparts. He raises the question of Saudi involvement in the 9-11 attacks, and rightfully points out that the Saudis have never been held to account for the participation of more than 15 of their citizens. In calling for formal negotiations between the US and Iranian governments, Baer realizes that he risks alienating Saudi Arabia- a longtime ally of the Bush family and the neo-con wing of the Republican Party. But if we are truly interested in combating "Islamofascism" in the region, it is appropriate to trace its sources. The reality is that the hardline fudamentalist madrasas throughout the Muslim world are financed by Saudi oil profits.

So why should we continue our irrational stance of loyalty to the Saudi Royal Family? As Robert Baer asks, "Do we really care who pumps the oil?" Certainly we need a Middle Eastern supply of crude, but must we buy it from Saudi Arabia? Baer insists that Iran wants the United States as a partner in stabilizing the Middle East. While he admits that this is an awfully tough sell for the majority of America (especially in light of the vilification that has been heaped on that country during the last eight years), he is clear that the alternative is a 30-year war with the most significant military power in the region. Yet the development of nuclear weapons in Iran presents a serious obstacle to negotiations.

There is no doubt in Robert Baer's mind that a nuclear arms race in the Middle East should be avoided. But he doesn't think that the current US approach of threatening preemptive military action is pragamatic or wise. It's useful to speculate on what consequences such an aggresive policy could bring. VP candidate Sarah Palin was recently asked how a McCain Administration would react to Israel if that nation made air attacks on Iranian nuclear facilities. She responded by saying that “We are friends with Israel, and I don’t think that we should second-guess the measures that Israel has to take to defend themselves and for their security.” This was almost undoubtedly a tacit approval of a prospective attack, and an eminently foolish position.

TO BE CONTINUED IN PART 3...

Hopes and Fears in the Presidential Race.

One of the things that I've found particularly fascinating during this presidential race has been hearing about the reasons different people support their respective favorites. While a few individuals have been motivated by the defense of a particular ideology, many find themselves choosing between the lesser of two evils (and these aren't necessarily mutually exclusive motivations). Many of the arguments that I have heard formulated over the last couple of weeks are framed in terms of fears. As is typical in cases of divisive elections (like the vast majority of national races nowadays), there are a lot of poorly reasoned accusations being bandied about. Only occasionally do they seem to have some grounding in reality.

I'd like to think that I could make my decision primarily on hopes, rather than fears. In my case I can truly say that I am ultimately voting FOR someone, rather than AGAINST his opponent. But that line has certainly been blurred for me recently. There was a time not long ago when (though I supported Obama) I believed that a McCain presidency would not be disastrous for the nation. He seemed to genuinely want to reach across the aisle and consider ideas on their merits. Perhaps his gradual shift back to the most conservative wing of his party over the last few years should have been a tip-off. Still I can admit that I was honestly shocked when he announced Sarah Palin as his running mate.

I have mentioned a lot of negatives regarding the Governor of Alaska in this blog. However I think it's important to keep a sound foundation in the real-world when it comes to my doubts about a McCain/Palin ticket. As much as Palin represents an extreme version of social conservatism, as long as McCain is able to fulfill the duties of the office (should he win, of course) I don't think this will be much of an issue. I don't believe that Palin wil be able to get the nation to agree to outlaw abortion in cases where a woman has been impregnated as the result of rape or incest. I don't think the citizenry will look favorably on her urges to ban books. And I don't think she'll be able to fully integrate creationism into our science curriculum at a national level.

On the other hand, I think it's unlikely that the Obama/Biden ticket will likely enact comprehensive health care reform that substantially increases our national debt. I don't believe he will boost corporate taxes by any meaningful degree. And I'm certain he won't seek to outlaw personal property rights (as some wingnuts suggest). My expectations regarding his (or McCain's) presidency are naturally contained by the limits of the office. The Chief Executive serves as Commander-in-Chief, and sets the tone for the country's foreign and domestic policy. I want a president who approaches relations with other nations with an intellectual and overtly diplomatic approach. I want him to consider war only as a LAST Resort. I want nuanced and considered strategies that enhance our international standing.

The biggest national issue facing the United States is energy independence. It has extraordinary ramifications for national security, the future of our economic success, and our relations with the rest of the world. We MUST somehow develop alternative sources of energy. Aside from the issue of global climate change, it is in our best interest. We cannot bear another presidential administration that is beholden to the military-industrial complex and the oil industry. Compare the records and stated positions of the two tickets. McCain has not supported tax credits for companies developing solar/wind power, and Obama has. Look up their voting records. The GOP platform is "Drill, Baby, Drill" and Palin practices "Alaskanomics". That's enough reason right there to support Obama/Biden.

The "New" Culture War of McCain and Palin.

I'm glad I watched John McCain's speech on Thursday. I got to see the would-be president proclaim his commitment to bipartisanship and "reaching across the aisle. Despite all the evidence to the contrary, he almost had me going too. But then he proceeded to outline a policy that keeps the entrenched political power in Washington exactly where it is. Still the most obvious disclosure of McCain's fealty to party politics is his decision to run with the GOP's culture war meme. Despite their record on the issues, the Republican Party is still insisting that it represents "small-town" values. Implicit in that contention is the idea that there is just something about city people that's essentially wrong and Anti-American.

Even the surface details of the Republican convention were carefully constructed to deliver this point. The slogan "Country First" was an insidious appeal to our nation's townsfolk. It took me a while to figure out what that essentially meaningless phrase was meant to suggest. Yet all it really took is one look at the projected back-drop behind McCain as he was giving his nomination convention speech- waves and waves of endless corn flowing in the wind. You see- it's the folks in the country and in the small town that really "get it", according to the GOP. They represent values like community pride, marital fidelity, honest and hard work, pride and love for family. That's their profile, and the Republicans claim to be the sole representatives of them.

To hear this cynical strategy shoved behind its "innocent" shell is particularly offensive to any city-dweller. The Republicans would like to portray us all as baby-killing, decadent, elitist, criminal-coddling, drug-addled, communist sympathizers and neglectful parents. They would like to make America believe that "community pride, marital fidelity, honest and hard work, pride and love for family" aren't values that are universally professed no matter where one travels. But they obviously won't come out and accuse us directly. Instead they have the audacity to suggest that urbanites look down on small-towns for what we ostensibly see as these "redneck values". We are enthralled by the Ivy-League elites who have propagandized us.

After leveling these charges they go one step further by warning us not to underestimate the "ordinary folks" who are just like the candidates (Sarah Palin, George Bush, etc.) that they float for national office. Never mind the reality behind these carefully-manipulated public personae. The GOP has even made higher education seem like a bad thing. This anti-intellectualism is the end-result of the cultural war that many Republicans are trying to foment (and have been for decades). What's needed is simple "common sense".... faith in these party leaders and in their ability to transform our entire nation into the "Shining City on the Hill" that will provide all the world's saints and sinners a perfect role model. This is where the "family values" platform comes from- wedge issues like gun ownership, abortion and gay marriage.

The thing is that I believe that it is the GOP that is actually insulting small town citizens. They are assuming that they are so stupid that they will never be able to see behind the facade. They act as if country people are too "simple" to catch on that the Republican leadership never has any intention of addressing the wedge issues that they promise to "resolve", and every intention to save them in order to encourage future divisiveness. They are too "naive" to challenge the hype- the reality is that the GOP continues to be led by the oil industries and the military-industrial complex. They won't notice that McCain has initiated a campaign of change that employs Sarah Palin as his front-line warrior in this age-old culture war. And they certainly aren't expected to see through the Bush-like hypocrisy of putting Palin* in the projected new role of "energy independence chief".

But you know what? I think the Republicans are wrong. I think that there are people all throughout the United States (the small towns, the cities, the exurbs AND the suburbs) that will see through to the truth of the McCain/Palin ticket. I think they'll reject this GOP "Culture War".


*Sarah Palin freely promotes "Alaska-first" values, is committed to the interests of "Big Oil", and currently married to a BP employee of nearly two decades. Here's an idea- why doesn't McCain cut out the middleman (and the middle-woman) and just appoint a board of oil company executives? After all they have the kind of experience the GOP is touting in their VP candidate. Palin is completely unqualified to work on "energy independence", as she is inextricably linked to the oil industry.

McCain's Bold Strategy for Saving America.

Here's a good indication of the type of longterm vision we should expect if John McCain gets elected- he proposes to end the ban on offshore drilling. Obviously this very issue has not originated with John McCain. In fact, in the 2000 election McCain was clear in his stance that he opposed an extension of drilling. He actually stood up to Bush and a previous Republican Congress to help thwart such a move previously. Nonetheless it is no longer politically expedient for John McCain to exercise any kind of consistency in his energy policy. Right now it is all about oil prices. The American citizenry (by-and-large) doesn't give a shit about a continuing dependency on foreign oil. They only want to see prices decrease at the pump. It's in their immediate interest to have more of the crude extracted from the Earth, no matter where it happens.

So why shouldn't we go ahead and do it? Well, for starters, it's simply a short term solution to the biggest global crisis we face in the 21st Century. The United States has been putting its trust in the oil industry for more than four decades. Its representatives have reached the zenith of their power in the George W. Bush Administration. The entire executive branch is determined to hold on to the fossil fuel energy paradigm as long as they can continue to increase their wealth. They simply don't care what happens to the rest of us. We've been investing obscene amounts of taxpayer dollars into military adventurism and government subsidies paid out to the oil companies- and the current situation is a direct result of this mismanagement of the nation's resources.

Obviously it is time to wake up and re-evaluate our approach. Is offshore drilling going to lead to immediate relief at the pump? Absolutely not. By the time those platforms are online and producing (estimates range from 7-10 years for their optimization), gasoline will have gone up exponentially. It won't make a dent in world oil prices. And unfortunately, American oil companies are not going to reduce their prices just for the USA. This is strictly international business. Meanwhile they will continue to pollute our environment and distract us from the ultimate task at hand- developing and utilizing alternate energy. Until we make a concerted and organized effort to exploit the technology that is already available to us, we will continue to see economic hardships and anxiety.

The simple fact is that our entire foreign policy is wrapped around the "stabilization" of oil markets. The Republicans are driving the federal government into financial insolvency in order to profit an increasingly shrinking upper class. The neocons (and theocons) have been multiplying our enemies worldwide with their efforts to control politics in the oil-rich regions. But those that benefit from the current perilous conditions couldn't care less about what is happening to the middle and lower classes. As long as there is a market somewhere in the world for them to exploit, they are well satisfied. If Americans can't afford rising gas prices, they will sell the oil to China or India. If the oppressed in oil-producing nations rise up, they will be bombed into submission. And we (the citizenry) will pay the price.

The current legislation under consideration by Congress is a very cynical strategy put in place by the GOP to narrow Obama's current campaign advantage. Who is spearheading this proposal? Simply identify those characters that are loudest in their support of the bill- John McCain and George W. Bush. McCain has taken great pains in the past to separate himself from his would-be predecessor's failed policies. He has tried to curry favor with environmentalists, but what is his revolutionary plan to change the direction that the country is heading in? Bomb Iran, maintain a permanent military presence in Iraq, increase offshore drilling, and promote nuclear and coal energy... all misguided extensions of activities that have helped put the United States where it is today- slipping into a third-rate, former-superpower status.

The Middle Eastern City of the Future.

If leaders of the United Arab Emirates get their way, there will be a revolutionary new urban landscape built in the desert. Masdar City is only a theory now, but if its planned construction outside of Abu Dhabi actually occurs, then the United States could end up falling behind the Middle East in the new global energy paradigm. The word "masdar" means "the source" in Arabic, and considering the global commodity that has transformed this nation of city-states, observers should be stunned when they find out what will actually power the new development. Unlike the Sun Belt cities sprawling through the American Southwest, Masdar City is deliberately being constructed to be sustainable.

The goals of this project are formidable. First of all, there will be absolutely no cars. This proposition by itself is virtually heretical to modern society. The predominant mode of conveyance will be magnetic light rail. The city's energy will be derived mostly from solar and wind powers- sources to be found in great abundance in the dry climate of the region, and alongside the Gulf waters. Age-old wisdom and sensitivity to geography will be employed as well. Designers have imagined narrow streets whereby convective air forces will provide a natural type of "air conditioning". When all is said and done, Masdar City is to have absolutely no ecological footprint, since there will be no carbon emissions or other wastes. This would be remarkable, as the UAE currently produces five times as many carbon pollutants as the world average.

The official plans have set a target for 15,000 inhabitants by 2018. Apparently it is also expected to employ 50,000 workers on a regular basis, and may eventually expand to a population of 100 thousand. Obviously, in a city of any substantial size, energy is not the only problem. In a region with more energy than it can possibly use, water is a much more valuable premium. The planners of Masdar City expect to meet their needs with desalination technology that's been slowly evolving for decades. Meanwhile, palm and grove trees will profit from this inexhaustible supply, and yield biofuels (which the Emirates anticipate as a possible replacement for oil in the future). Crop production will be facilitated by the use of "gray water".

All of this activity will be monitored with a network of sensors and data miners. Academics and efficiency experts will have the chance to continuously re-evaluate their methods, and learn from the mistakes. The Masdar Institute of Science and Technology will be formed, and will work in conjunction with MIT to offer Masters and PhD programs. The real world expertise gleaned from the observation and management of a functionally sustainable city will help provide solutions to current energy and ecological problems throughout the world. Alongside with ambitious plans for carbon sequestration (CO2 Capture and storage), the UAE could well position itself as a global leader for generations to come.

Preparations for this model city mirror a similar project in another nation with a similarly brutal environmental record. China's proposed "zero-emission" city is called Dongtan, and will be located on an island at the mouth of the Yangtse River. Anyway- it's ironic that a Middle Eastern country that has so prospered from the world's dependence on oil can form a vision of foresight that includes a sustainable future once its key resource has run out. While the UAE invests its treasure in alternative energies, the United States wastes its own increasingly limited resources on wars to stabilize their access to "black gold". Even our former Cold War opponent Russia has embraced green technologies with a huge project at the heart of Moscow (using Japanese expertise). If we continue our current trajectory, we are doomed to increasing irrelevance.

Dark Days A-Coming.

I'm not very shy about the fact that I have contempt for radio hack AM Glenn Beck. Most of what he says is tremendously easy to write off as right wing propaganda. Generally I feel that you could take the opposite of what he says, and embrace it as truth. Still there is one obsession I have that I share with this asshole- the coming collapse of the American economy. Beck is certainly not the first figure to warn of bad times ahead. Roger Waters, bassist and songwriter for the band Pink Floyd, predicted the implosion of the Western economy in the 1970's. His numbers were off, but not by much. Before the debacle of George W. Bush's administration, such concerns seemed alarmist. Now they just appear merely realistic.

So what's my response to this type of noise? How do I confront the fears of an impending depression? I mostly try to push it to the back of my mind, and prepare to enjoy the ride the best I can. After all... how long did the Great Depression of the 1930's last? A couple of decades, perhaps? Can that still happen here? Look at oil prices. Doing that very thing made me take the step of creating a personal household budget the other day. I went to fill up my foreign sedan, and noticed that prices have exceeded $3.50 per gallon. This is becoming the single biggest drain on my finances. I drive about 1600 miles a month, and the costs of refueling certainly add up quickly.

I decided that I would get a taste of the future by adding up all of my expenditures, and including gasoline at an anticipated cost of $5 per gallon. I thought that maybe my salary could absorb such a price, and still allow me to save a few bucks. When all was accounted for, I found a shortfall of about $300 per month. This reality sent my mood into an immediate tailspin. I began to realize just how close I am to the margins of insolvency. My prospective budget did include a fair amount of wiggle room. If I quit smoking cigarettes (which I really ought to do anyway), I can save about $130 a month. I can go out less on the weekends and cut another hundred out of my loss column. I could cut down on the number of iced mochas I buy every week.

But there are some expenditures that can't be negotiated. Having a kid is very expensive- more so than I had expected. Between household necessities (non-food) and stuff for regular maintenance of the baby, my wife and I are spending about $900 a month. And that number is only as low as it is because we are getting a tremendous deal on daycare. We will be paying out this money until E. is in kindergarten. Also my mortgage and car payments will remain stable. And the price of food (for which I budgeted $300) threatens to rise dramatically with the increase in oil prices. Utilities are also subject to fluctuations in the oil market. Perhaps I could get a better deal on car insurance (if I have a better driving record for a few years), but I can't count on that either.

What's especially scary is that my prospective budget does not take into account emergencies or unanticipated costs. I didn't figure in car maintenance- like inspection, oil changes and new tires. There is no accounting for clothing purchases. I didn't figure in the cost of giving gifts to family and friends. I didn't include money for replacement appliances, should something break around the house. No cash for vacation, for art materials, for art... no DVDs, music, or books. No eating out. Absolutely no luxuries. And when I look at my salary, I know that it is above average. It makes me wonder how the bulk of America is going to weather a steep economic downturn. This is going to be a very different country in the next several years. If you don't believe me, make out a budget for yourself, and see how your own life is likely to change.

Bush, Smoke and Mirrors.

George Bush has just announced his plan to address greenhouse gases, a major contributor to global warming. He pledges that by 2025 the increase of greenhouse gas emissions in the United States will come to a halt. Does this mean that the president has now fully embraced the imminent threat of climate change? No, he's actually relaxing earlier plans to accelerate the process of CO2 reductions. He has certainly spent a lot of time denying that there is a problem that the federal government can play a role in combating. Many of his public statements in the past have attempted to minimize the effect that human beings are having on the environment. In 2004 James R. Mahoney, director of the administration's climate change science program, stated that the largest influence on changing climate conditions was "water vapor". Conservative AM talk radio pundits have parroted the inanities, going so far as to target trees as the main culprit.

The Bush administration's recalcitrance on this issue is nothing new. It was during the three months of his very first term in office that Christy Todd Whitman (Dubya's EPA director at the time) announced that the United States had no intention of honoring the Kyoto Protocol. This took a few of Bush's supporters by surprise, as he had made a campaign promise that he would make sure to seek some sort of carbon dioxide limits. Still his economic adviser Lawrence Lindsay said that it was a very simple choice for the American people- "We have a major energy crisis ... We have a choice in this country of having the lights on or, at least in the short run, having more carbon dioxide.'' Apparently the Bush administration has never considered alternative (non-polluting) energies as a real possibility.

Whenever Bush or his cronies are confronted by the suggestion that we pursue cleaner energy, they respond that such a move will hurt our economy and American workers. They assert that the necessary infrastructure does not exist to make a substantive transformation. This is no doubt true... the only investments the federal government has been willing to make have been for oil pipelines and refineries. No surprise here- the Bush administration is jam-packed with men and women who have made their personal fortunes from the oil industry. That is patently obvious from their foreign policy agenda. Any true assessment of the costs of maintaining the current fossil fuel paradigm must include the resources the US has invested in controlling Middle Eastern affairs.

Another big obstacle to American participation in the Kyoto Protocol is the contention that none of the world's industrialized powers are on board with it. Why should the United States put itself at a competitive disadvantage? Indeed developing nations are expected to decrease their emissions less than first world nations. China and India are often cited as being the monsters within this subgroup. Chinese dependence on coal is the greatest threat to the well-being of future generations of human life. There is no doubt that the United States should build incentives into its relationships with these nations, and levy economic penalties against them until they adopt cleaner energy technologies. The only interests being served by 'free trade' with China are the global corporations that import/export large quantities of Chinese-made products (cue the Walmart jingle now). The American worker certainly doesn't profit from the current trade deficit.

An honest approach to the reduction of greenhouse gases does indeed require a substantial national commitment. If there was no benefit to curbing pollution (besides the potential health of the human race and its quality of life), then perhaps I could understand the resistance of the Bush administration and its 'free-market' libertarian allies. But that's not the case at all. Opening up new avenues of alternative energies will ultimately position the United States to regain its place as one of the economic giants of the world. We could become leaders in the emerging global industry of green technologies. The job growth and profit potential in this arena will help to offset the losses we would suffer in transforming our infrastructure. I understand that this is a huge project requiring the initial investment of large sums of wealth- and I think the project is absolutely necessary for our future.

Who is Hugo Chavez?

I have to admit being intrigued by Venezuelan president Hugo Chavez. The man has certainly wormed his way into the American public consciousness. I once had a friend tell me that he would be willing to fight under Chavez before he would take the side of George W. Bush. I was amazed that this mild pacifistic intellectual would take such a stance. Don't get me wrong... I certainly understand the invective that many of our frustrated citizens direct against what has turned out to be the worst president in the history of the United States. But I really didn't know anything about Hugo Chavez, other than the fact that many progressive Americans had taken an interest in his political rise.

Like a modern day folk hero, Chavez has patterned his leadership style on his historical hero, Simon Bolivar. In fact his self-styled revolution is even named after "The Great Liberator". The Bolivarian Revolution includes Democratic Socialism, Latin American integration, and anti-imperialism. Furthermore his platform includes strenuous efforts to fight poverty, disease, illiteracy and malnutrition. He has been a vocal critic of American foreign policy under 'Dubya', and regularly voices his opposition to neoliberal globalization. Because of these actions Chavez has made himself one of the most polarizing figures in the Twenty-first Century. Still, with the vast majority of the mainstream US media aligned against him, I felt it might be worthwhile to take a closer look into his ascendancy.

Chavez was born in a mud hut in 1954. He spent much of his early life working in the military, eventually earning the rank of lieutenant colonel. Ironically, he began that career as part of a counterinsurgency battalion. He ultimately found himself working as a teacher and staff member at the Military Academy of Venezuela. As he rose through the ranks he became outspoken in his opposition to the injustices he observed throughout Venezuelan society. After starting the Revolutionary Bolivarian Movement-200, he became active in national politics. In 1992, he led a failed coup d'etat against President Carlos Perez. He landed himself in Yare Prison. Two years later, after the impeachment of Perez, he was pardoned by President Rafael Caldera. Once freed Chavez continued his campaign to reform his nation.

In 1998, Chavez ran for the Venezuelan presidency on promises to end the puntofijismo- the two-party patronage system which he blamed for much of the corruption which was plaguing his country. He found his support base among the poor and working classes. Upon assuming office, his first moves were to institute programs of mass vaccination, road building and housing construction. He stopped the privatization of the social security system, aluminum industry holdings, and the oil sector. He addressed tax inequities, focusing on major corporations and landholders. Chavez even created a Constitutional Assembly, which fundamentally changed the way Venezuela was governed. In 2001, after being re-elected despite scuffles with both the business community and labor organizations, Chavez instituted programs that lowered infant mortality, provided free public health care, and offered free education up to the university level. Inflation fell and the economy's growth was steady.

In 2002, Chavez barely survived what turned out to be an unsuccessful coup directed against him and his will to nationalize his nation's oil reserves. There has been ample suggestion that the United States government was involved in an effort to overthrow Chavez. In fact the Venezuelan president maintains that the US had even initiated assassination attempts against him. During this time the PDVSA (which managed oil Venezuela revenues) continued to resist Chavez's authority through a series of general strikes. At the end of that tumultuous year, Chavez fired 18,000 PDVSA employees. During 2003 he tried to shore up political support with new programs to confront adult illiteracy, protect the rights of Venezuela's indigenous peoples, and provide free higher and remedial education to the disenfranchised. In 2004, he was rewarded for his efforts with a presidential recall referendum (which he won with a 59% 'no' vote).

With the increased revenues resulting from rising oil prices, Chavez looked to continue his 'Bolivarian missions' in 2005 and 2006. He diverted funds toward the improvement of the nation's medical facilities, and started a citizens' militia. He also became active in international relations, seeking bilateral and multilateral agreements with Argentina, China, Cuba and Iran. Chavez called for a Latin American progressive version of NATO and pronounced the US-backed Free Trade Area of the Americas "dead". Turning away from the traditional US sources of military equipment, Chavez began purchasing arms from Brazil, Russia, China and Spain. In addition he joined with Cuba in an effort to offer free medical training to 100,000 physicians who would agree to work in poor countries in the Southern Hemisphere

Chavez went on to garner both support and increased controversy in the United States by offering free heating oil to 200,000 impoverished New Yorkers. He further inflamed passions in the US by referring to George W. Bush as "the Devil" in a United Nations speech that drew thundering applause. Despite the Bush administration's consistent attempts to undermine his government, Chavez was able to attain re-election in late 2006. This year he has continued plans to nationalize further segments of the Venezuelan economy, including key companies in the electrical sector. He has also sought to eliminate the autonomy of the National Bank, and has formally withdrawn from both the IMF and the World Bank.

The latest news from Venezuela has Chavez actively seeking to end presidential term limits. This move appears to undermine his stated support for grassroots democracy. The concept that entrenched power inevitably leads to vast corruption is commonly accepted by many throughout the worldwide progressive movement. Yet in tough times during the most difficult transition periods, people have generally turned to populist figures who promised to improve the plights of the most unfortunate among a nation's populace (FDR is a good local example). If Chavez's rhetoric meets reality, then he will continue to be a much beloved politician for a large segment of Venezuela. Unlike Fidel Castro in Cuba, Chavez has resources to fund his most ambitious social programs. But that advantage identifies him as a target for aggressive imperialists.

Lately Chavez has been making noise about cutting off the flow of oil to the US if it continues to denounce his administration. Ironically the United States remains Venezuela's biggest trading partner for both oil and general exports. He has been known as the biggest 'price hawk' in OPEC, consistently seeking limits on production in order to increase energy costs worldwide. In a period of increasing concerns regarding diminishing oil resources in general, Chavez retains a large stock in reserve that promises to ensure his place as a power player while simultaneously placing him in an international 'hot seat'. His legacy will continue to depend upon his ability to play that card wisely in uncertain and chaotic times.