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A Hero, Slain

Former (and perhaps, future) Pakastani Prime Minister Benazir Bhutto was slain on Thursday by an assassin's bullet, and subsequently others around her died at the hands of that same assassin's suicidal explosion.  The world and democracy suffer at the hands of a terrorist:  a terrorist who couldn't allow the people of Pakistan to decide for themselves, as individuals, the leaders of their country and the direction of their future.

Heroes are hard to find, and when they do emerge among us it is easy to ascribe to them other-worldly traits and forget their humanity, their flaws.  Courage airbrushes many flaws on the canvas of character.  Thus we see the lionization, and in some cases, near deification, of such larger-than-life figures as Winston Churchill, Mohandas Ghandi, Martin Luther King, Jr., Ronald Reagan, et al.  We forget their flaws.  But this is not, at least not necessarily, a negative attribute of our collective intelligence.  When we see greatness in the arts, in sports, in writing, and especially in leadership, we tend to focus on the positive; the object of our adulation then seems to transcend ordinary constraints and assume the embodiment of a particular ideal.  For example:  Martin Luther King has come to symbolize equality and rejection of racial discrimination; Winston Churchill embodies the very spirit of the fight against fascism (and later, Communism); Ghandi has become synonymous with peaceful resistance.  Personal failings become unimportant, even ones that would otherwise be significant -- the larger meaning is the important and over-riding factor.

With Benazir Bhutto, we have just such a situation.  She was certainly a flawed individual -- to say so is redundant, as we are all, as humans, flawed.  I won't profess to know the details of her guilt or innocence on charges of corruption during her time as Prime Minister of Pakistan.  But even if one were to concede that each and every allegation were true, the fact still remains:  Ms. Bhutto showed the ultimate in courage and strength of character when faced with mortal danger.  Given the choice to live out a quiet, respectable life in comfort versus fighting, at great personal risk, for a greater ideal, she chose to fight.  She chose to face the "slings and arrows of outrageous fortune", and to oppose them.  She chose to stand, knowing her life was at risk -- even after a previous attempt on her life.  She chose to stand, much like our own Founding Fathers (themselves flawed, each) "with a firm reliance on the protection of Divine Providence" on her own "sacred Honor".  Unfortunately she stood, and was felled.

The future of Pakistan is, in the ultimate cliche, at a crossroad.  A corrupt and self-serving dissident (and also a former Prime Minister), Nawaz Sharif, has blamed President Pervez Musharraf for the assassination; he is now advocating a boycott of next month's currently-scheduled elections.  Musharraf himself has a mixed record when it comes to both democracy and dealing with fundamentalist jihadist Muslims in Pakistan.  The country has been thrown into turmoil by the gruesome act, and as a nuclear power, the entire world is a less stable place now than it was 24 hours ago.  But one thing is certain:  we have seen first-hand that we still have among us men and women who are willing to lay down their own respective lives to advance the cause of liberty.  Let us hope that others use that courage, that spirit, as inspiration toward the greater good, towards liberty and freedom and democracy for Pakistan.  Let us hope that this act of violence helps inspire new leadership that eschews violence in favor of persuasion, that chooses empowerment of the individual over enslavement of the masses.

Benazir Bhutto:  may she rest in peace as a symbol of freedom, liberty, democracy, and courage.
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The Campaign Finance Reform We Need

The Federal Election Commission was created by Congress in 1975, one of the knee-jerk government reactions to the excesses of Nixon and the Watergate scandal.  Worried about the impact of money on the election process and the potential for "the rich" to "buy" elections, government infringement upon free speech in the political arena has been increasing ever since.  Despite the First Amendment, Congress has instituted limitations on what individuals, unions, and corporations can donate to political candidates and causes, and attempted to limit what a person could even spend on his own campaign.  With the so-called "campaign finance reform" implemented with the McCain-Feingold bill in 2001, even more strictures were levied on what could be said about whom by whom and when.  It's a mess, with fundamentally flawed underlying principles -- that there's too much money (speech) in campaigns, and that government regulation will improve the situation.  Prior to the passage of McCain-Feingold, when the Constitutionality of the legislation was questioned, there were even Democratic legislators who suggested that if the speech restrictions were un-Constitutional, then we should consider amending the Constitution to give the government more authority to regulate political speech.

Cases of bribery and corruption, like those of Congressmen Duke Cunningham and Bob Ney, are pointed to as symptoms of a need for more government intrusion on political campaigns.  The problem is that access to political figures and money is not the root of the problem.  The root problem is the excessive impact that the government has on economic matters that makes it worthwhile for someone to bribe officials with large amounts of money.  Rep. Cunningham was being bribed to send millions in construction and military projects to favored groups; this is an obvious problem.  Less sinister, but no less insidious are the billions in pork barrel projects, special favors, and tax and other competitive advantages doled out by the government every year.  It is worth hundreds of millions of dollars to dairy farmers to have price supports continue, so it is worth it to them to band together and spend millions lobbying (or, in the sinister form, bribing) Congress; the increase in price of milk for an individual family doesn't justify such an effort on their part.  An increase in ethanol subsidies means more corn being grown, which means more pesticides and fertilizers; thus, a giant agricultural corporation has a huge incentive, along with manufacturers of pesticides and fertilizers, to lobby Congress to pass ethanol subsidies.  The family paying more for corn has no similar means or incentive to lobby against these subsidies, and perhaps is being told these subsidies are necessary to protect the environment (regardless of how dubious the claims may be, which is noteworthy in the case of corn-based ethanol, in part because of the increased pesticide and fertilizer use).

If the government had less of an economic impact on society, however, there would be less incentive for corporations to spend millions on lobbying and bribes.  The more powerful a person is, the more obviously a target he is for the currying of favor -- who's going to bribe the janitor at a bank to get a big loan?  The first key to campaign "reform" then is to decrease the size, intrusiveness, and economic impact of government.  The obvious other benefit to such action is to decrease the cost of government (and thus its financial drain on our earnings via taxes) and to increase individual liberty, for every decision made by the government is a decision individuals and families aren't making for themselves.

The secondary issue is how to finance the elections themselves.  I believe that two principles should be involved:  minimizing the amount of intrusion by the government, and maximizing the information available to the voters.  To minimize the government intrusion, all financial restrictions on political donations by individuals should be removed.  If I want to spend every penny of my salary trying to get, say, Tila Tequila elected to Congress, it should be no more business of the government than if I want to spend it getting myself elected (although my name recognition is a good bit less than Tila's) or if I want to spend it on Playstation games, botox, or following U2 on tour.  It's my money, and in politics, money is speech.  The First Amendment was written first and foremost to protect political speech.

Once removing the government restrictions on individual donations to campaigns, let's provide people with the information they need to help guide their ballot decision.  Therefore, while campaign donations by individuals have no restriction, every donation to a campaign, regardless of how big or how small, must be disclosed within 24 hours.  I would suggest putting it on the internet, where bloggers, journalists, interest groups, or just interested individuals could plow through the information and decide if they think it is a problem that Candidate X is receiving $10,000,000 from, let's say, Michael Jackson.  Or perhaps we find that the owner of the largest corn producer is financing the campaign of Candidate Y, who just happens to favor ethanol subsidies -- that would be a pretty important detail, one worth further inspection (note that in and of itself, that might not constitute any kind of corruption, as Candidate Y may have been sounding the call for ethanol subsidies long before ever getting the donation).  At any rate, people would have the information and could decide for themselves how to use it.

Decreasing the economic impact of government would reduce the incentive for corporations and unions to contribute to campaigns; this along with removing restrictions on individual donations would make the voices of individuals more powerful.  With immediate and full disclosure, voters would have information about where the candidates are getting their money.  Freer people with more information making decisions on our leaders sounds to me like the best possible system.
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The Tax Reform We Need

Previous posts have mentioned the so-called "FairTax", a national retail sales tax plan advocated by former Arkansas Governor Mike Huckabee.  As I detailed, advocates of the "FairTax" have made extraordinary claims about the benefits of replacing the income tax system with a single-rate sales tax, and they regularly accuse critics of the system of advocating the status quo.

Our current system is impossibly complicated, complex, inefficient, and punitive.  Politicians use the tax code to attempt to incentivize people to adhere to their wishes and act in ways meant to decrease their tax liability rather than choosing the actions most advantageous for individuals and families.  The current tax code even promotes higher state and local taxes, forcing people in low-tax states to subsidize taxes in high tax states (state taxes are deductible from the federal taxable income).

There is another way.  In 1996 and 2000, Steve Forbes ran campaigns for the presidency largely centered around one main idea:  replacing the current income tax system with a "flat tax" system.  The flat tax involved having one income tax rate of 17%, replacing all itemization with a standard deduction and a standard exemption.  Everyone would be able to fill out his or her respective tax return on basically a postcard, everyone would get the same exemption and deduction (so no itemization would be required), and everyone would be paying the same rate of taxation.  Likewise, businesses would pay the same rate as well, with no depreciation schedules or other complexities; rather, businesses would take income and deduct expenses, paying 17% on the difference.  Because investments are made with income that has already been taxed, investment and interest income would not be taxed -- thus, no taxes on dividends, interest, or capital gains from the sale of stocks, bonds, or homes.

The flat tax would be fair, in that a person making ten times the income of another would pay basically ten times the income tax (actually, more than that because of the exemptions and deductions).  The deductions and exemptions would be generous, meaning that the "first fruits" of a person's labor belong to him, not the government, and thus taking away any charges of cutting taxes for "the rich" on the "backs" of "the poor"; under Forbes's flat tax plan, a family of four would have gotten something like $45,000 of exemptions before the 17% tax kicked in.  Because of the simplicity of calculating a tax bill, families would no longer need to pay someone to assist them; nor would families need to keep boxes of receipts and live in fear of an audit.

Under a flat tax plan, businesses would have more incentive to make capital improvements, as capital would no longer be depreciated over several years, but rather would be on the books as soon as it was spent as a business expense.  This would also reduce the need for accountants to calculate the depreciations and to ensure tax compliance.

Several nations have implemented flat tax plans in the past few years, led by Estonia in 1994.  Hong Kong implemented a flat tax system in the 1940s.  The results have been an overwhelming success, ironically occurring mostly in formerly Communist countries.  Because the rate is low, there is little incentive to cheat the system; because compliance is simple, less money is spent filling out forms and calculating rates; because savings and investment aren't double- and triple-taxed, economic growth is robust.  A dollar of consumption is taxed once and only once (and yes, the flat tax, while levied on income, is actually a consumption tax; it takes a bit of algebra to understand it, but if you balance the equation on what is taxed on the business and personal level, noting that savings and investment aren't taxed, it is consumption that is ultimately taxed), so the system is efficient and fair.

I had the opportunity this summer to speak with a cabinet minister from Hungary, which has implemented a flat tax.  The result in his country was not only robust economic growth but a huge increase in tax revenues.  Paradoxically, cutting tax rates often causes tax revenues to rise rather than fall; the reason is two-fold.  First of all, lower tax rates spur economic growth, and greater economic growth results in greater tax revenue.  Secondly, a lower tax rate means there's less incentive to take a risk on cheating, as mentioned above.  In an economy growing at a faster rate, consumption is increasing; a consumption tax captures that.

One other seemingly paradoxical result comes from cutting marginal tax rates:  even though the tax rate they pay goes down, the overall share of total taxation paid by the very rich tends to increase rather than decrease.  This was seen, for example, following the tax rate reductions implemented by President Kennedy (the top rate was lowered from 90% to 70%), by President Reagan (the top rate was lowered from 70% to 50%, and later from 50% to 28% by the bipartisan Tax Reform Act of 1986), and by President Bush (the top rate was lowered from 39.6% to 35%).  The same phenomenon has been observed in flat tax nations, dispelling fears of benefiting "the rich" at the expense of the middle class or the poor.

For decades, dissidents in the Soviet bloc nations of eastern Europe looked to the United States as a shining example of economic freedom and individual liberty.  Today, America should look towards nations like Romania and Slovakia for an example of how to unshackle our economy and institute a fairer, more efficient, less intrusive tax system.  The flat tax is the way to go.
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Fact, Analysis, and Commentary

From time-to-time I am asked where to find good analysis and opinion pieces that go beyond the sound bytes and catch phrases found in so many newspaper editorials and political publications, and that are written from a free market capitalist point of view.  I decided to share a few good places for information to which I turn on a consistent basis.

Capitalism Magazine
A collection of articles (many of which can be found elsewhere), Capitalism covers everything the arts & culture to politics.  As the Name suggests, it has a decidedly capitalist slant.

TCS Daily
Originally started as Tech Central Station by James K. Glassman, the site has evolved into Technology - Commerce - Society.  The website carries a lot of opinion, typically more analytically presented, tending to center heavily around free market approaches to global warming, health care, and general economics, but also delves into foreign affairs as well.  The articles tend to be longer and more developed than a typical opinion piece, and most of the contributors are PdDs in their respective fields.  A must read is Dr. Arnold Kling, a libertarian-oriented economics professor who consistently is able to look at things from a unique perspective.

Cafe Hayek is a blog run by two economics professors at George Mason University.  Named after free market Nobel Laureate economist Friedrich Hayek, many of the postings are comments referenced to other articles or copies of letters written to the editors of various publications in response to articles and op-eds.  Again, you get analysis here from a different perspective of that from most other sources; for example, they had an interesting explanation of the relationship between the establishment of Prohibition and the establishment of the federal income tax that I had never before heard.  Always interesting.

20/20 correspondent John Stossel also writes a weekly column.  Typically, his subject matter concerns the incompetence and inefficiency of the government and the importance of private property, individual liberty, and free market capitalism.  His column is published every Wednesday.

Walter Williams is another George Mason University economics professor, and like Stossel he has a weekly Wednesday column.  He regularly deals out "Economics 101"-type lessons, detailing the folly of government intrusions on the free market and individual choice.

The Club for Growth is an advocacy group with an associated PAC.  They favor low-tax, pro-growth economic policies and limited government spending.  They have analyses of the economic records of various presidential candidates, they rate members of Congress on issues of economics and on dispensing of pork barrel spending, and they link to news articles and analysis.

Cato Unbound is a website run by the Cato Institute, a libertarian think-tank.  The information here is in longer form, more along the lines of a research project than an "article"; as such, expect to find more in-depth analysis but also more dryness of material.  Still, there is some excellent analysis to be found.

And on a more light-hearted note, if you're a fan of NFL football, no Monday is complete without reading Peter King's gold standard Monday Morning Quarterback column on Sports Illustrated.  The consummate insider, King gives the scoop on what's really going on in pro football, along with excellent analysis of the teams, games, trades, players, etc.

All of the above are excellent sources for information and thought-provoking commentary.  At some point during the week, I try to hit each of these listings, with some of them being daily reads.  I hope you enjoy!


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Dave's Weekly Riff, 12-4-07

Some midweek musings on passing scene...


I have long said that the alternative to fossil fuels would not come from a government program, but rather from someone in private enterprise acting with a profit motive.  In fact, government funding of, for instance, ethanol actually hurts the efforts, as it distorts the market, encouraging investors to move in the direction of government subsidies rather than pursuing the ideas with the best chances of success.  Encouraging otherwise inefficient agricultural activity also serves to increase environmental pollution through the use of additional pesticides and fertilizers (and the additional fossil fuel consumption required to produce them).

In spite of the government ethanol boondoggle, there are some folks outside of the subsidy business looking for alternatives; two of them were detailed in a recent commentary by Thomas Friedman.  One is the internet giant Google, who has announced it is investing in a business promoting renewable energy.  The other is a group of MIT students who are managing an initiative with contributors from around the world; the goal:  a plug-in hybrid car that achieves 200 mpg.  Who knows whether either group will be successful; however, even if not, perhaps they spur other investments or initiatives that do make significant contributions.  Their efforts will move at the speed of the market, while ethanol is still moving at the snail's pace of government.
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According to news reports, the latest National Intelligence Estimate claims that Iran, while still openly pursuing nuclear energy, gave up its pursuit of nuclear weapons in 2003.  If true, then our intelligence service has shown again why it is unreliable, since they've been telling us for years that they were pursuing weapons.  Presumably these are the same people that told us that weapons of mass destruction in Iraq were a "slam dunk".  Of course, it also calls to attention the actions of the Iranian government since it ostensibly gave up its attempt to join the global nuclear weapons club.  At seemingly every opportunity, when given the chance to open the books and show the world that we had nothing to fear, Iran chose obfuscation and secrecy instead.  Also, in light of the recent bombing of a Syrian nuclear facility by Israel (and the resultant lack of indignation by Syria or by any of its middle eastern allies) it brings to mind another question:  did Iran simply move its weapons program over to Syria to make it less conspicuous?  One can only hope that the NIE is correct and we are only looking at a country trying subtly to disrupt us in Iraq, not one that is also trying to develop weapons of mass destruction.
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Speaking of the Iranian regime, we should still remember that regardless of whether or not it is a potential future nuclear threat, it is a threat to the liberty of its own people.  No, this doesn't mean we undertake another war for the sake of "nation building" or "liberation", but we should do everything we can to support the nascent pro-democracy movement in Iran.  There are many dissidents agitating to rid themselves of the oppressive Islamist regime.  Some of our strongest allies in Europe are former Soviet bloc countries in Eastern Europe who saw the United States as a steadfast supporter of anti-Communist dissidents.  The same could be true of a liberated Iran.
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A few weeks ago I wrote about how it was now "Game On" for the Democrats.  Since then, the polls have tightened and the anti-Hillarys -- Barack Obama and John Edwards -- are like sharks smelling blood in the water.  Hillary Clinton has had to face distractions caused by her erstwhile husband's claims about being against our current war in Iraq -- despite having penned an op-ed favoring military action the week of the vote and his wife (the actual candidate) having voted for the war authorization.  Her criticisms of Obama seem to be mind numbingly self injurious, as she has criticized him for entering the Senate with immediate designs on the Presidency despite the obviousness of her own long-held ambition for power; she has further criticized his lack of foreign policy experience, despite the fact that a First Lady isn't exactly Secretary of State.

As Clinton's poll numbers continue to drop and her inevitability collapses, it will be interesting to see just how negative she is willing to go.  "Game on" indeed!
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Speaking of poll numbers, one might assume that Obama's support in Iowa is analogous to Howard Dean's in 2004:  based on a lot of people new to the caucusing process and who are thus less likely to show up and participate.  Instead, surprisingly, the polls show that it is actually Clinton's support in Iowa that is coming from the novices politiques and Obama who is commanding the more reliable support.  Could we be witnessing a meltdown of historic proportions?
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My iPod died, so I went to buy another one.  I had one of the older 40 gig models, which I bought probably 4-5 years ago for something like $400.  My new one has 80 gigs of memory, can do video (with very good resolution), and is roughly half as thick.  The price?  $249.  So for a little more than half the price I get more than double the performance in a smaller, more convenient package.  Similar improvements are noticeable with cell phones and laptop computers:  all areas where there is extensive competition, not only between companies but also competition against buying nothing.  Yet in the area of health care, where there is intense government regulation and little to no competition on an individual level, expenses keep going up.  Of course, all of the Democratic candidates for the Presidency are advocating more government control over health care and less individual choice.  Does anyone think we'd be seeing the vast improvements in iPods if the government took over?  More likely, they'd be more expensive and supply would be spotty; after Christmas, we'd probably discover a warehouse in Montana full of them.

Competition works.  We should harness the free market and individual choice to make health care more affordable and more available, not more government or corporate bureaucracy.
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LSU Coach Les Miles has apparently sold his soul to the devil.  Never have I seen a team with more critical 4th down conversions.  Never has a team climbed to the #1 ranking, lost, climbed back to #1, lost, then clawed its way back into the national championship game.  Yes, it received a gift in the SEC Championship Game from suddenly-inept Tennessee quarterback, but that's what championship teams do:  take advantage of breaks.  Congratulations to the Tigers.  Unfortunately it had to come at the expense of the Volunteers.
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I am still amazed by the continuing revelations of the depth and scope of CNN's ineptitude during the Republican "YouTube" Debate.  Numerous plants by Democratic activists went unnoticed by CNN's editorial staff, and the questions themselves tended toward the inane.  The more that comes to light, the worse CNN looks.  Perhaps they should hire Dan Rather to moderate their next debate; sadly, he might actually raise CNN's credibility.
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Remember how much more exciting Christmas was when we were kids and had toys to which to look forward?
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Anyone who believes that voters and computers choosing the participants in a college football national championship game is better than deciding it on the field via some sort of playoff system is an idiot.  This is not my opinion, this is established inarguable fact.
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The popularity of chain restaurants, e.g., Applebee's and Ruby Tuesday's, never ceases to amaze me.  Why so many people want to eat re-heated frozen food from the same menu as at every other franchise rather than eating at a local, fresh, unique restaurant simply confuses me.
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While Venezuela was voting for freedom, Russia was busy giving the authoritarian Vladimir Putin basically a blank check in parliamentary elections.  Apparently, while Putin is ostensibly going to abide by the Russian Constitution and allow himself to be term-limited out of the Presidency, he is going to become the next Prime Minister, allowing a puppet to be elected President.  Meanwhile, critics of his regime continue to turn up dead...
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One Small Step for Freedom

There was a victory of sorts for freedom and democracy in Venezuela over the weekend, as the latest power-grab by Hugo Chavez went down in the welcome flames of a plebiscite.
 
Chavez fancies himself as the Fidel Castro of the 21st Century, and unlike Cuba, his country has enough petroleum wealth to make up for the inefficiencies and outright incompetence of his increasingly socialist, autocratic, and nepotistic state.  Having taken control of Venezuela in a military coup, he has now won election twice to the presidency through a mixture of old-style fraud at the polls and more subtle tactics, such as “allowing” employees of the state-owned oil company (PDVSA) to retain their jobs in return for their votes.
 
Since nationalizing PDVSA, Chavez has replaced competent, experienced workers with cronies and sycophants; as a result, the efficiency of the company has plummeted.  The cost of a barrel of oil, however, remains sufficiently high that even Chavez’s bumbling socialism still brings in enough cash for him to lavish welfare statism on the poor and bribe other Latin American countries to vote in Chavez “mini-mes”.  His price controls and centralized planning have resulted in food shortages and other problems, but with oil prices nearing $100 per barrel, he could probably light money on fire and still have plenty left over.
 
Concentrating power as he has (his “party” controls literally every seat in the National Assembly and nearly every other political institution in Venezuela) is not enough, however, to satisfy his autocratic and dictatorial urges.  Thus, in a thirst for even more unchecked power, Chavez proposed 69 amendments to the Venezuelan Constitution.  In every case, these amendments solidified and increased his power to the obvious detriment of individual liberty for all Venezuelan citizens not named “Hugo Chavez”.
 
Among the various amendments were measures increasing the presidential term from 6 to 7 years and removing term limits, allowing Chavez a Constitutional claim to becoming president-for-life.  Other measures would have allowed him to rule by presidential decree (bypassing even his own cronies in the National Assembly) and allowed for an easy declaration of martial law-like further suspension of liberties.
 
Chavez’s agenda of Socialist “reform” further included an assault on individual property rights, giving the government more leeway in seizing private property, and allowed him to re-divide the country politically into regions to which he could appoint Vice Presidents to control, bypassing the locally-elected officials.  The independence of the central bank would have been ended in the amendment process.  More private businesses would be seized in the name of “the people”, and access to Venezuela by human rights and election monitoring groups would have been limited.
 
Many who are otherwise supportive of Chavez’s “New Bolivarian Revolution” parted ways with him on this attempt at authoritarianism.  There were high profile “Chavistas” who denounced the amendments, and Venezuela saw several protests over the past few weeks.  Seemingly shocked by poll numbers showing his agenda being viewed negatively by a majority of his citizens, Chavez went on the personal offensive over the past week, tying a vote for the amendments to a vote for him personally and trying to use the bogeyman of United States imperialism to scare people into voting his way.
 
Luckily, Chavez’s efforts failed.  Despite the fear-mongering and threats (there were claims of employment threats again), the people of Venezuela took a step for freedom and stepped on the toes of a would-be dictator.  Venezuela voted for liberty and against the 69 amendments.  No doubt, Chavez will try other methods of achieving the power he craves, but for now at least he has been denied.
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