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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. One of the more brain-scrambling responses of the US government to Russia's invasion of Ukraine is that we are now looking to get more oil from authoritarian Venezuela as we stopped buying any from authoritarian Russia, which prompts this question, what's the moral calculus of lifting sanctions on one country that we're sanctioning because of its authoritarianism to sanction another country for the same reason? Venezuela's place in the war in the Ukraine era is one thing we'll talk about now with New York Times correspondent William Neuman, who has written a book that could serve as a how not to guide for practically any country on Earth, documenting Venezuela's decline by almost any measure, despite being about the most oil-rich nation on earth.

He says what may have started as socialism under firebrand leader Hugo Chávez became merely a theater that Neuman calls showcialism and with its riches to rags story, its safety to crime story, its fairly open society to authoritarianism story, it's unfortunately reflective of what's going on elsewhere in the world too. Inflation, rising crime, polarization, a charismatic authoritarian type leader. Sound familiar? Maybe there are even lessons for the United States, though, obviously, our countries are extremely different.

The book's title speaks for itself, Things Are Never So Bad That They Can't Get Worse. Again, it's by New York Times correspondent William Neuman, who first started covering Venezuela in 2012, then had an interim where he was covering Mayor de Blasio. We'll talk about how that relates, which in some funny way he says it does. Then back to Venezuela. William, thanks for coming back on WNYC. Hi, there.

William Neuman: Hi, Brian. Thank you for having me on the program.

Brian Lehrer: Listeners with ties to Venezuela, we invite your calls on this. What has happened down there over the last decade as you have experienced it or know about it? 212-433-WNYC. What from the before times, if you want to call it that, set the scene for this, certainly before the authoritarian Hugo Chávez, who makes an easy bad guy? The underlying conditions for the decline were there, William reports, including inequality amid vast national wealth.

Venezuelans or people with ties down there, 212-433-WNYC, including lessons for the United States and the rest of the world. 212-433-9692 or tweet @BrianLehrer. William, let me start here. How oil-rich a country is Venezuela?

William Neuman: Venezuela has the largest estimated oil reserves in the world. It's sitting on top of more oil than any other country, including Saudi Arabia. Venezuela was at one point one of the richest countries in the hemisphere. Excuse me. Now as a result of this economic collapse that it's gone through over the last eight years, it's one of the poorest.

Brian Lehrer: You trace this story--

William Neuman: Despite sitting on top of all that oil.

Brian Lehrer: We'll get to that story of decline and how Things Are Never So Bad That They Can't Get Worse. Yikes, what a book title. You trace this story all the way back to, I think it was, 1914 when a major oil discovery was made? How did that striking gold, in effect, begin to change the country?

William Neuman: What happens in Venezuela is it's intensely a poor country. Then in 1914, the first oil well begins producing in Venezuela, and very quickly oil becomes the largest export, whereas before it was cattle hides and a little bit of coffee and cocoa. They start exporting oil and then very soon they become the world's largest oil exporter. You get this country that's very underdeveloped, both in terms of its economy and the society and the way that government operates, and suddenly it becomes an oil producer. One way to look at it is that it's not so much that Venezuela produces oil, it's that oil produced Venezuela.

So many of its institutions and its political and social institutions and customs formed around the country as an oil producer. There's a lot of aspects to it, but I use the example of The Beverly Hillbillies where Pa, he's shooting at a varmint and he strikes oil and it changes their life. Essentially, that's what happens with Venezuela. Suddenly it becomes a very rich country and that sets the tone for what comes next.

Brian Lehrer: Was there a social and economic high point before the descent that takes up so much of your book?

William Neuman: For about the first half of the century, there was a series of military dictatorships. Then in 1959, there's a change to democracy where the dictator is overthrown and democracy begins. Venezuela starts to develop and become prosperous already in the 1950s. That prosperity continues to gradually develop into the '70s when you get this tremendous oil boom, which we in the United States called the oil shock, but in oil-producing countries, it was a boom.

Suddenly you had this prospect of what they call the great Venezuela developing and they saw themselves becoming a first-world country. All this money pours in and the problem is that they didn't manage that money very well. There was a lot of corruption, incurred a lot of debt, and oil is very cyclical. Then when the price of oil fell again, the country crashed. It was actually poorer after the boom than it was before it in terms of people's income and people's quality of living.

Brian Lehrer: Was there an oligarch class hoarding most of this wealth or some other really unequal reaping of the spoils of the oil wells because otherwise, one might think that that kind of national prosperity might leave a country relatively immune from the temptations of populist authoritarianism, Hugo Chávez style?

William Neuman: There was a tremendous amount of inequality and then you get this period of great-- People's livelihoods, people's quality of living increased in the '70s, but then they crashed again. You have this setting of these heightened expectations followed by this great disappointment. Then you get this period of the '80s and '90s of economic stagnation and inequality and poverty. That sets the stage for Chávez to come in. Chávez comes in. First, he stages a failed coup against the democratic government in '92, but then in '98, he runs for president. He runs as a disrupter candidate, as a political outsider. He wins and he becomes president in 1999.

You talked about socialism at the beginning, but really Chávez wasn't so much a socialist as he was a populist. Socialism for Chavez was a form of branding, a kind of marketing, a way to establish an identity, but what he was very much was a populist. We can look at Trump as the American Chávez because it's the same pattern regardless of the ideology that's attached to it. Very much the primary impetus there is this division of society, polarization, the people versus the enemy of the people, the people versus the elite. It's a very similar pattern.

Brian Lehrer: What was the US relationship to this? Because we have a sometimes very sorry history of undermining socialist leaders in Latin America even when they are democratically elected and acting more or less on behalf of the people of their countries?

William Neuman: Sure. The US and Venezuela were very close for a long time. The two countries culturally have been very close. The oil industry had a strong US presence in Venezuela. Culturally, there's a lot of interchange between the countries. Then Chávez comes in and Chávez sets himself up as the anti-imperialist versus the empire to the north. Part of his leftist branding or his leftist discourse is standing up to the US.

He becomes one of the most prominent figures in Latin America at the time, standing up to the US. There was a coup against Chávez in 2002, which the US doesn't appear to have participated in directly, but was very happy to encourage once it began. It only lasted a couple of days and Chávez came back to power. After that, the US approach changes. The US tries to take a hands-off approach to Venezuela.

Tom Shannon was a US diplomat who formulated this approach, which was essentially, "If we confront Chávez, we're going to feed him and raise his stature." The US basically just tried to carry out its policy and its relations with other countries without trying to play into the anti-imperialist provocations of Chávez.

Brian Lehrer: New York Times Correspondent William Neuman is with us. His new book about Venezuela is called Things Are Never So Bad That They Can't Get Worse. We'll get to Venezuela's place in war in Ukraine-era politics as we go. Again, our lines are open for anybody with ties to Venezuela who wants to say something or ask something, 212-433-WNYC, 212-433-9692, or tweet @BrianLehrer.

We'll also get to how William Neuman's interim between his two stints of Venezuela reporting, here in New York reporting on the de Blasio administration may have informed this book in some way. William, I can never resist the good Yogi Berra analogy, but a book about Hugo Chávez in Venezuela is not where I expected to find one, but you have one, the prices are so cheap, nobody can afford them. I guess it's like when Yogi said, "Nobody goes there anymore, it's too crowded." What does this mean, the prices are so cheap, nobody can afford them?

William Neuman: First Brian, I should say I'm no longer a New York Times correspondent, I was at The Times for 15 years and I was the correspondent in the Andes region for several years, but I left The Times when I started working on the books.

Brian Lehrer: Got it.

William Neuman: Just wanted to clarify that. Venezuela has gone through this historic unprecedented horrific economic collapse, they've lost 80% of their economic productivity over the last eight years, they've had hyperinflation, hospitals have ceased to function, basic services like electricity and water have failed, over 6 million refugees that have left the country, mostly for economic reasons, but also because of political repression.

The main reason for that is, first the price of oil fell, and Venezuela's economy is entirely centered on oil, but then the Maduro government-- Maduro became president after Chávez died in 2013. The Maduro government just made a lot of mistakes in terms of their managing of the economy. One of the big mistakes they made was price controls. In other words, the prices started to rise, inflation got worse and worse, and the government which already had price controls in place, doubled down and increased them and enforced them. What that does is--

That means that the price of a product, say a bag of cornflour, which is one of the staples in Venezuela, is set way below what the real marketplace is. People go into the stores, and they buy up all this extremely low-priced merchandise, and then they take it on the street, and they sell it on the black market at what is essentially the market price which is much higher. What that does is it means that the store shelves are empty because everything disappears out of the stores because people buy it and a lot of it gets diverted before it even gets to the stores, it just gets pushed into the black market surreptitiously.

We had this period in Venezuela where there were such severe shortages, for instance, that the government designated shopping days for people, you could shop only on certain days based on the last digit of your national identity card. They sent soldiers out to patrol the lines and make sure that you weren't shopping on the wrong day. They sent soldiers in the stores to police the prices, et cetera. The metaphor there is that the products in the stores were so cheap, you couldn't buy anything in the stores because everything had disappeared and was out on the street at a higher price. Does that make sense?

Brian Lehrer: Yes. Let me ask you this. When we think of the United States' problems today, we might start with crime, inflation, inequality, polarization being used as a means to authoritarianism by Trump in an otherwise wealthy nation. Your Venezuela story seems to be built on all those exact same elements. Not to make an easy analogy like we could become Venezuela too, we're such different countries, but are there some lessons for us worth learning?

William Neuman: Oh, absolutely, Brian. Venezuela is very much a cautionary tale for the United States. Obviously, the two countries are very different in size and complexity. Venezuela has essentially a monoculture economy based on oil, the United States is a much larger, much more diverse economy. Here's one story I'll tell you, I just by chance happened to be traveling to Venezuela in 2016, a couple of days after Trump won the election, and all my Venezuelas friends looked at me and they said, "Now it's your turn." Because what they understood immediately was that Trump was another Chávez, that he was a populist demagogue who had all of the same traits as Chávez did in terms of polarization, et cetera.

Then the other thing that they said, and it makes sense was, "At least the US has strong institutions." I said, "We don't actually because Trump will have both houses of Congress controlled by Republicans, they can appoint judges to the judiciary, they're already in the states changing the electoral rules." Fortunately, on January 6th, the institutions held but it was a close call.

Chávez was really a pioneer. He didn't invent populism or the tactics of populism, but he showed that they were still viable in the 20th century. He becomes president in 1999, which coincidentally is the same year that Vladimir Putin first takes national office in Russia. He is the first of this wave that we've seen around the world of populist authoritarian figures who use democracy to get into power and then begin to undermine the tools or the mechanisms of democracy once they're there to keep themselves in power.

Brian Lehrer: Go ahead, sorry.

William Neuman: We're on the road that Venezuela has already traveled. In other words, we can look at Venezuela as a society that's gone through more than two decades of intense polarization, intentionally fomented by its leadership, and we can see where that takes a society. It's not a good picture.

Brian Lehrer: No, but is it also tempting to learn the wrong lessons from Venezuela? We're so on the other extreme, and of hyper-capitalism, not hyper-socialism, or even hyper-fake socialism, as you described Venezuela.

William Neuman: Venezuela was never a socialist country. Venezuela has always been a market-oriented capitalist, intensely consumerist society, very much like the United States in that respect. Its difference economically is that oil is at the center of the economy and the government controls the oil business. The government itself sits at the center of the economy and everybody's economic relations, whether you're a wealthy businessman, a government contractor, or a poor person running housing assistance, your relationship is with the government rather than with other institutions in the society.

It tends to be a much more state-centered country than the US, but it's not. It's wrong to look at Venezuela as an example of socialist. [crosstalk]

Brian Lehrer: Go ahead. An example of?

William Neuman: I was going to say it's an example of populism of a different flavor than what we had because rather than a right-wing populism, it's a populism that wears a red t-shirt, but just coincidentally, the MAGA folks also wear red t-shirts.

Brian Lehrer: Marianne in Bloomfield, New Jersey, you're on WNYC with William Neuman. Hi, Marianne.

Marianne: Hi. As a student of economics, something has always puzzled me about Venezuela and other similar petrol countries. How could such obvious economic blunders have been made? I'm thinking, was he not surrounded by good economic advisers? Wasn't it obvious that oil is a cyclical type of economy? It's always puzzled me.

William Neuman: That's a really good question, Marianne. Thank you. There's a couple of different phases. One Chávez comes in in 1999, and the price of Venezuelan oil is less than $8 a barrel. Very quickly, for reasons that have nothing to do with Chávez, the world price of oil starts to go up and it gets to over $100 a barrel and to about $120 when Chávez is president.

Chávez was president during this period of intense abundance, and there was just so much money there that the money covered up a lot of the mistakes. He had money to throw it at any problem. Then Chávez dies in 2013, and you essentially have a double crisis that leads to the Venezuelan collapse. The political crisis when the longtime leader Chávez dies is replaced by a much less experienced Maduro. Then an economic crisis that begins when the price of oil drops in 2014 and 2015, a year after Chávez dies. Those two-channel together to become the collapse.

Maduro comes in and he's very inexperienced, and he doesn't know much about the economy and he essentially has no economists on his team or in his inner circle. The crisis begins because the price of oil drops but then he makes a lot of mistakes. Those mistakes involve price controls that I said before. It also involves problems with the monetary or rather the currency exchange policy where the currency; the bolívar was highly overvalued.

When I got to Venezuela in 2012, the bolívar at the official rate was four bolívars to the dollar, the black market was eight bolívars to the dollar. Eventually, it became a 100 bolivars to the dollar on the black market, then 1,000. Today if you were to compare today's currency to then it would be something like 400 trillion bolívars to the dollar. He makes all these policy mistakes when all sorts of people are telling him, "No, you shouldn't be doing that." He just doubles down partly because those were the policies he inherited from Chávez and he seems to have been afraid or unwilling to change them.

There are also people that benefited tremendously from that because even as Venezuela was crashing there was a lot of money to be made through corruption and through currency manipulation. Some of those people were close to Maduro and so we can ask whether Maduro kept those disastrous policies in place because they benefited some of the people who supported him.

Brian Lehrer: Interesting. We look at places that to most American eyes look like they're so horrible who would support the leadership but even a genocidal dictator like Saddam Hussein in Iraq had his Sunni minority portion of the country that was somewhat served by his rule because if almost nobody is being served in Venezuela you would think that people would rise up one way or another.

William Neuman: Populism works in this way which is that you've created these two tribes in your society, it's us versus them. Once you have Chávez who very powerfully creates this thing of we are the people versus the enemies of the people which is anybody who didn't support him. That goes from everyone in the upper class, the elite, the business class to poor people who just happened to be against Chávez. That mentality is very powerful and it doesn't just go away.

Even as the country is collapsing-- The centerpiece of the book is people's real stories because we can talk about policy and economics, but it's really the real people who are going through this. I try to tell the country's story through the stories of people's lives. I talk about a woman who lives in Petare which is a slum in Caracas who lives in a one room tin-shack with her husband and their seven kids. When I met her, her youngest son who was four years old, and his teeth were turning black and falling out because of the lack of calcium. They couldn't afford to buy milk or vegetables. She would sometimes keep the kids home from school because they hadn't eaten for a day and she didn't want them sitting there spacing out unable to pay attention because they were so hungry.

On the other side of the coin, I talk about a guy whose name is Chakun who's a Chávezster. By the way the woman who lived in the slum had been a Chávezster until things went south. Then she saw that it had been a false promise that she had supported. There's this guy named Chakun who's a Chávezster and he's just a true believer. He runs the government bookstore where there's no books because the whole distribution and production system for books has shut down. He told me something-- We were talking about his life and how he only eats once or twice a day now.

He told me something that a lot of people said which is, "I used to wear a size 34 jeans and now why I wear a size 32," because he'd lost so much weight. Then he says, "I used to eat a lot of junk food but now I eat a lot of lentils," because lentils became the staple in Venezuela when other foods disappeared. He says, "Now I eat a lot of lentils and that's how great the revolution it is because it showed us how to eat healthier food."

That's one of the things you definitely think about Venezuela.

Brian Lehrer: You can twist your thinking.

William Neuman: It's one of the things that fascinates me and that I wanted to understand is why do people believe what they do? Why do people stick with the beliefs when there's every evidence before our eyes is that these are failed policies? We have to ask the same questions here in the United States.

Brian Lehrer: By the way speaking of thatt- That is speaking of supporting things even though they're failed policies. -we had a MAGA conspiracy theorist on the 2020 election call yesterday and said Venezuela had an election-- I'm paraphrasing but basically, Venezuela had an election stolen through the use of company dominion voting machines, and aha we use dominion voting machines in some of the states in this country, do you know the dominion story there?

William Neuman: Yes. Chávez in, I forget the year but very early on-- Elections they were very important to Chávez and the Chávezsters, but also to a lot of these types of populist governments because their claim to legitimacy is through democracy. Look, we won an election, we're here because of elections, we continue to hold elections but obviously the issue was you can skew an election or the conditions under which an election are held.

One of the things that I learned very early on in Venezuela is that democracy isn't about only elections democracy is about elections plus the separation of powers and checks and balances. It's those two things that are wiped out by these populist regimes. Early on, in order to show the legitimacy of the electoral process, they hired this company dominion which was a brand new company actually it was called Smartmatic at the time. It was a company owned by Venezuelans that was essentially created for this purpose and they create this electronic voting system for the country of Venezuela. Certainly, earlier than a lot of states in the US went to electronic voting. Overall, it seems to have been a pretty well engineered and safe system.

What you had in Venezuela wasn't really a manipulation of vote counts, it wasn't the old thing of stuffing ballot boxes what you had is unequal conditions. For a long time, Chávez didn't need to manipulate elections because he was intensively popular, and then more recently under Maduro what Maduro's done is he has jailed or in other ways banned his opponents from running against him, he's banned political parties. There's a tremendous amount of government resources that go to support the government party in elections, there's a lot of intimidation against voters. Those are hard ways that they manipulate the elections but not so much through some secret behind-the-scenes manipulation of the electronic voting system.

Brian Lehrer: All right. Two last things before we ran out of time. One, Venezuela's relationship to Putin's Russia this is where the war in Ukraine comes in. The US as I understand it is now reopening to Venezuelan oil to hurt Putin while Venezuela is one of Putin's allies. At the same time that we had been sanctioning not importing Venezuelan oil because of the authoritarianism there. Have you been looking into that moral dilemma if we can call it that?

William Neuman: First of all, they made an approach to Maduro about oil. There is no deal to start bringing in Venezuelan oil at this point. If the question is what is the moral cost of lifting the sanctions against Venezuela in order to punish another authoritarian country which is Russia, I think we really need to flip that and we have to ask what is the moral cost of maintaining the sanctions?

I want to go back to what we were just saying about why do people support failed policies even long after it's clear that the policies aren't benefiting them? It's the same thing with the sanctions against Venezuela. There's a couple of key things there which is that first under Trump the White House didn't have a Venezuela foreign policy, it had a Florida election strategy that utilize Venezuela. Trump comes in and he's immediately looking forward to 2020 reelection year and he sees Florida is key because of its electoral votes. He realizes that Venezuela can be a topic that can energize Hispanic voters in his favor in that important state. He comes out threatening to invade Venezuela, talking about the military options, and he starts piling on sanctions. [crosstalk]

Brian Lehrer: We're almost out of time, but do our sanctions there hurt the government and its grip on power, or does it only hurt the people?

William Neuman: The economic collapse occurs because the oil price drops and because of the government's policy mistakes, but the collapse is deeper and is more prolonged because of the sanctions that come on top of that. If the goal was to remove Maduro from power, clearly, Maduro is still in power and he's actually stronger today than he was when the sanctions started and the opposition is weaker and more disorganized. As a foreign policy, it's been a total failure. It hasn't reached its objective.

Brian Lehrer: Finally, what was it that you wanted to say about how covering the de Blasio administration as a New York Times City Hall reporter informed your writing of this book about Venezuela?

William Neuman: I just thought you would get a kick out of that. When I was covering Maduro. I was in Venezuela from 2012 to 2016 and then I came back here and I was covering City Hall and de Blasio. As I was watching Maduro take over and govern in Venezuela, one of the really perplexing things was he was incredibly indecisive and there were all these huge problems in the country and he would just dither and dither and he couldn't make up his mind and he couldn't change the policy.

I spent a lot of time trying to figure out why that was and then I came to New York and I started covering de Blasio and I saw the same character trait. I'm sure you remember my colleague, David Goodman wrote that story about the decision memos, and you would watch de Blasio and he would just masticate every decision and think about it and game out all the political possibilities, and then he would send it back for review. You would have these things that go on and on.

I just came to realize that this has nothing to do with ideology or them being on the left or claiming to be, it's simply I realized that there's this political trait that you get, even in leaders at that level, which is this inability to make decisions or this fear that by making a decision, you're giving up something else or there's a political cost to it. That was the insight that de Blasio provided.

Brian Lehrer: Former New York Times correspondent, William Neuman is now the author of Things Are Never So Bad That They Can't Get Worse. Thank you so much for joining us. Really interesting.

William Neuman: Thank you very much, Brian.

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