David Paulin of the Big Carnival examines Hugo Chavez's performance yesterday at the United Nations in terms of Venezuela's contemporary culture, which he likens to that of many Middle Eastern nations, as opposed to its Latin American neighbors.

To understand him, stop thinking of oil—producing Venezuela as a Latin American country. Think of it as a dysfunctional Middle Eastern petro—state. Doing that is the key to understanding Chavez and Venezuela.

Many oil—rich Arabs have a sense of cultural superiority and entitlement. So do many Venezuelans: Chavez is one of them. The 52—year old former Army lieutenant colonel grew up during Venezuela's oil boom years in the 1970s. That's when the South American nation seemed poised to attain First World status; or so many Venezuelans thought.

Chavez and most Venezuelans still entertain the notion that God blessed Venezuelans with fabulous oil wealth. Indeed, they regard themselves as special because of this. Yet 80 percent of 25 millions Venezuelans live in poverty and endure rampant crime and corruption. These indices appear to have worsened under Chavez's administration — all of which Chavez denies.

Venezuela's oil wealth can no longer pay the bills as it did in the 1970s, when Venezuela had half the population as today, and significantly less debt and social problems. Yet the myth of Venezuela's oil wealth persists. Ultimately, it's a source of Chavez's inner conflict — and his anti—Americanism.

One of the leading anti—Chavez blogs is named The Devil's Excrement precisely on the ground that oil has been more of a curse than a blessing. This is also consistent with my own experiences in Venezuela.

I spent some very memorable time in Caracas in 1975, at the height of the first OPEC—led rise in oil prices. Just getting a hotel room was a challenge, as the city was full of foreign executives busily buying and selling to the suddenly very wealthy market. Traffic was perpetually gridlocked with large Ford LTDs (manufactured in Venezuela), and the restaurants were packed with affluent diners ordering champagne and fine scotch as if there were no tomorrow.

Yet even at this height of prosperity, my Venezuelan hosts were profoundly troubled by their country's failure to build a lasting future. They lamented the combination of anger and passivity which seemed to characterize too much of their country's national mood.

They told me stories of nationalized oil companies falling into disrepair with production falling even as prices were sky high. They lamented the way that neighboring Colombia much poorer country, was able to support a flourishing culture while Venezuela published few books.

The contrasts between rich and poor were devastating then, as they are now. I attended a dinner at an estate in Caracas which was guarded by machine gun—toting guards, patrolling the walls and stationed at the gate. It was within view of the miserable hillside slums.

Ultimately, the deal which brought me to Caracas failed to be realized. The government put up protectionist obstacles which could not be overcome. Venezuela lost an industry, and local farmers lost a market for their crops. The details don't matter. Chavez's policies seem rooted in these attitudes.

Thomas Lifson   9 21 06