It an old trick played by all dictators - demonize the foreigner. Today, Chavez - the cracker from Caracas - effectively stole a large chunk of the country's oil sector, under the pretext of protecting Venezuela's national assets.

U.S. companies ConocoPhillips, Chevron, Exxon Mobil, Britain's BP, Norway's Statoil and France's Total woke up today to find that their assets had been expropriated. After years of careful private sector development of the oil industry, which benefited both Venezuela and investors alike, Chavez comes along with that well-worn old song about "Homeland, Socialism or Death." What a sad choice to put before the nation. Would not "protection of property rights, democracy, and peace" be a better maxim?

With the benefit of high oil prices, Chavez can afford to offend foreign investors. However, once investors are expropriated, it is hard to convince them to return. Venezuela is a one industry country. It has a long and miserable history of boom following bust as oil prices rise and fall. Without foreign investment, the country's dependence on oil will increase. In the long run, Venezuela's development is jeopardized for the sake of crude quasi-racist anti-Americanism.

Foreign investors brought development, international best practice and technology transfer to Venezuela. Certainly, Venezuela has a sorry record of neglecting the poor. However, that was the responsibility of successive Venezuelan governments, who found it convenient to export responsibility for their failure overseas. Of course, it is always easier to blame Uncle Sam rather than undertake sustainable political and economic reform.

Venezuela's state oil company PDVSA has a well-earned reputation for corruption and mismanagement. Now, the PDVSA's management has even more assets to mismanage. Give PDVSA a little time and it is certain to screw things up. As the current management pulls out, these companies will run into production and safety problems.

Chavez now intends to nationalize the utilities and telecommunications. In the fullness of time, he will propose economic centralization and 5 year plans. Once oil prices fall, financial difficulties will follow. Venezuelans will see Chavez for what he is - a political fraud. One day, he will be racing to the airport, fleeing into exile. It is what usually happens to South American dictators.