Optimizing What?

The previous post got a pretty good debate going about oil policy. One point, though, kept coming up in different ways from different commenters: seeing “optimizing the tax take” as the goal of the exercise is badly misguided. It’s the development outcomes associated with oil exploitation that we need to optimize, not the tax take.…

You can’t put optimal oil policy on a bumper sticker

…well, not a sensible bumper sticker, anyway. Oil policy in a context like Venezuela’s is irreducibly complex. You could say you want to maximize the cash flow to the public purse, but it only takes a moment’s reflection to realize that’s a non-answer, because the question becomes – when? The policy that will maximize the…

XIIIth Century Socialism

So far we haven’t commented much on chavismo’s batty new Law on Fair Costs and Prices – mostly because it’s too depressing. Criticizing the economics behind it in detail would be farcical, like a point-by-point scientific refutation of the idea that a cow can jump over the moon. Suffice it to say that the law…

Mr. Big Oil

What would oil policy look like in a Leopoldo López presidency? 1. Lots of investment in production, geared toward making Venezuela the world’s top producer 2. Lots of investment in gas, making us the continent’s top gas exporter. 3. Democratize the industry. 4. The creation of a solidarity fund with oil rents to finance poverty-alleviation…

Borrowing at Credit Card Rates

Let’s be clear: for a country to issue a sovereign bond with an 11.95% coupon is really just a polite way of saying it’s broke. Moderately responsible individuals in the first world can literally get credit card debt cheaper than that. Over the last year or two, we’ve all gotten pretty much inured to news…