reuters.com Tue February 25, 2003 09:33 AM ET By Patrick Markey

CARACAS, Venezuela (Reuters) - Two suspected bombs blasted Spanish and Colombian diplomatic buildings in Caracas on Tuesday, injuring five people less than two days after Venezuelan President Hugo Chavez accused the two nations of meddling in his country's crisis.

Three people, including a 4-year-old girl, were slightly injured at the Colombian consulate, where shards of glass and concrete from the badly damaged facade lay scattered across the street after the blast, at around 2:15 a.m.

Fragments from the explosion at the Spanish embassy cooperation office, about 15 minutes earlier, hurt two people, officials said.

Chavez, whose self-styled "Bolivarian Revolution" promises to ease poverty, accused Spain and the United States on Sunday of siding with his enemies and warned Colombia he might break off diplomatic ties.

Police were still investigating what caused the two explosions. But an official from the DISIP state security police told local radio that a powerful plastic explosive had been placed at the Colombian consulate.

No group immediately claimed responsibility for the blasts, but leaflets scattered at both sites were signed by the "Bolivarian Liberation Force -- the Coordinadora Simon Bolivar urban militias." The Coordinadora Simon Bolivar is a known radical Pro-Chavez group.

"Our revolution will not be negotiated, only deepened," one leaflet read.

WRECKAGE

Officers in blue and gray fatigues picked though the wreckage at the Colombian consulate, where the blast sheared into the glass facade of the four-story building. Not far away at the Spanish embassy sub-office, the blast tore off the gate of the building and punched a hole in a wall.

"If this had not been at two in the morning and instead at two in the afternoon, we would have had a lot of dead from the impact," Chacao district mayor Leopoldo Lopez told reporters.

Venezuela's bitter political struggle between Chavez and his opponents has often flared into violence and street clashes; media outlets critical of the president have been the targets of grenade attacks.

"The national government will find those responsible for these crimes," deputy foreign minister Arevalo Mendez said.

The Venezuelan leader's criticisms of the United States, Colombia and Spain on Sunday followed their statements questioning the arrest of Carlos Fernandez, a prominent opposition businessman charged with rebellion for leading a two-month strike against Chavez.

Venezuela's crisis has drawn in the international community, with leaders fearing the world's fifth-largest oil supplier could slide deeper into violence as Chavez allies and enemies battle over his government.

The United States, Spain and four other countries have backed efforts by the Organization of American States (OAS) to broker a deal on elections to defuse the crisis. But the talks have been caught up in wrangling and Chavez on Sunday appeared to brush aside members of the six-nation group.

He warned OAS chief Cesar Gaviria, who has chaired the talks for three months, not to "step out of line." Another leaflet found at the blast sites criticized Gaviria, the OAS and former U.S. President Jimmy Carter, saying the "revolution" did not need their help in the peace talks.

Chavez on Sunday also criticized Colombia after a cabinet minister in the neighboring country said the Venezuelan leader had met with left-wing rebel leaders.

STRUGGLE SINCE COUP

Chavez and his foes have been locked in a fierce political struggle over his rule since April when he survived a short-lived coup by rebel military officers. The president has hardened his stance against critics he brands "terrorists" trying to oust him by sabotaging the oil industry.

The opposition strike began on Dec. 2; it severely disrupted the vital oil exports that account for half of Venezuelan government revenues. The shutdown fizzled out in February, although the oil sector still struggles to recover.

But Chavez, elected in 1998, has so far resisted calls for an early vote for opponents. They accuse him of ruling like a dictator and inspiring supporters to violence with his fiery speeches laced with threats and class warfare rhetoric.

His self-styled "revolutionary" government mingles left-leaning policies, such as land reform and cheap credits for the poor, with nationalism styled after 19th century South American liberation hero Simon Bolivar.

Tuesday's explosions are not the first incidents involving foreign missions in Caracas. A grenade exploded in January at the residence of the ambassador from Algeria. That explosion followed bomb threats against several foreign embassies and the evacuation of the German, Canadian and Australian embassies.

www.barbadosadvocate.com Web Posted - Mon Feb 24 2003 By Petal Smith

THE Venezuela Community in Barbados held a special Church Service yesterday at the St. Dominic’s Roman Catholic Church in Christ Church praying for peace and solidarity in their country.

Lifting the congregation in prayer was Father Anton Dick of the Roman Catholic Church. He remarked that the Venezuelan community here had asked to be a part of their service yesterday so that prayers could be offered for the political instability in Venezuela.

Father Dick said, “We were happy to join with those Venezuelans who formed part of our regular Sunday service. We offered prayers for peace and unity in their country.” Father Dick said he hopes that through their prayers, peace and unity will be accomplished in Venezuela.

However, the Venezuelan Ambassador, Corina Russian, said that the Venezuelan community decided to pray for the peace and to seek solutions to the problems in Venezuela. She added that the community locally comprised of over 150 persons.

Their presence here, she said, was established more than 50 years ago, when the first Venezuelans came to study English in Barbados, and, instead of returning, some took up residence locally.

The Ambassador added that they are looking to God for the strength and faith to solve their problems in the best and peaceful way, and in unity.

Further, Joycelyn Hunte, a Venezuelan national living in Barbados for 53 years commended all Venezuelans and friends who have shown their solidarity during the difficult months when the political climate in Venezuela had deteriorated into alarming proportions.

She claimed also that the political crisis in Venezuela is escalating and nothing has been resolved.

Recently, Venezuelans had experienced a turmoil of a six- week opposition strike that has crippled the oil sector in the world’s fifth-largest petroleum exporter.

The strike was launched by opposition leaders on December 2, 2002 to press leftist President Hugo Chavez to resign and hold earlier elections. His current term ends in 2007.

www.cnn.com Tuesday, February 25, 2003 Posted: 10:11 AM EST (1511 GMT)

Bomb squadron officers carry a tool box outside Colombia's consulate, which was damaged by an explosion Tuesday in Caracas.

CARACAS, Venezuela (CNN) -- Powerful explosions only minutes apart early Tuesday badly damaged the Spanish Embassy and the Colombian consulate in Caracas, officials said, injuring four people.

Leopoldo Lopez, mayor of the district of Chacao in Caracas where the embassy is located, told local media there had been attacks at both locations, injuring a guard at the embassy.

The first blast occurred at 2:10 a.m. (1:10 a.m. ET) at the Spanish Embassy -- located in the La Castellana neighborhood -- badly damaging the main entrance to the property, plus shattering glass and shearing the balconies off adjacent buildings.

A second blast at 2:25 a.m. (2:25 a.m. ET) devastated the Colombian consulate in the Chacaito neighborhood and heavily damaged a two-story building across the street.

A consulate guard was injured in the blast, along with two others.

The explosions came about 24 hours after President Hugo Chavez, on his weekly radio and TV show called "Hello President," warned the world to stop meddling in the affairs of his troubled South American nation.

Last week, Venezuelan police locked up a popular strike leader on "civil rebellion" charges.

During the broadcast, Chavez accused the United States and Spain of siding with his enemies, warned Colombia he might break off diplomatic relations, and reprimanded the chief mediator in peace talks for stepping "out of line."

The U.S. State Department warned that the Venezuelan president's words could incite violence.

"Inflammatory statements such as those attributed to President Chavez are not helpful in advancing the dialogue between the government of Venezuela and the opposition," Philip Reeker, a State Department spokesman, said ahead of the Tuesday attacks.

He also said that "they are concerned that heightened political rhetoric has contributed unnecessarily to some of the recent violence in Caracas."

-- Journalist Adrian Criscaut contributed to this report.

www.upi.com From the Think Tanks & Research Desk Published 2/25/2003 9:24 AM

WASHINGTON, Feb. 25 (UPI) -- The UPI think tank wrap-up is a daily digest covering opinion pieces, reactions to recent news events and position statements released by various think tanks.

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The Ludwig von Mises Institute

(The LVMI is a research and educational center devoted to classical liberalism -- often known as libertarianism -- and the Austrian School of economics. Grounded in the work of economists Ludwig von Mises and Murray N. Rothbard, LVMI seeks a radical shift in the intellectual climate by promoting the market economy, private property, sound money and peaceful international relations, while opposing government intervention.)

AUBURN, Ala.-- War on Gougers?

by Llewellyn H. Rockwell Jr.

Oil prices have reached a 29-month high, reflecting a variety of factors including the prospects for war, expectations of lower supply, strikes and other unrest in Venezuela and Nigeria, and inflationary pressures. At the same time, the Producer Price Index recorded a 1.6 percent jump in January, the biggest across-the-board increase since January 1990.

Just as the script dictates, cries of "gouging" are now heard across the land.

"I think a lot of it is pure greed," a consumer told the New York Times. Another said, "If there's a chance of the oil companies' driving up the prices, they'll do that." Another: "I don't blame the government, I blame the gas companies." Still another: "They are going to get all the money they can out of us."

In covering economic issues, journalists have a way of quoting the most ignorant possible statements by consumers. And you watch: these statements will, in turn, be followed by statements from officials warning gas stations and oil companies against raising prices too much. A poor station owner will be singled out by a local newspaper and might eventually face some sort of federal charges for economic crimes.

Of course gas station owners and oil companies want to make a buck. So does everyone else, in good times and bad. They want to charge the highest price possible, consistent with the highest profit. At the same time, consumers want to pay the lowest price possible. It is in the marketplace that these differences are sorted out in the glorious and peaceful institution of voluntary exchange, where a meeting of minds takes place and society's needs are met.

For hundreds of years, thanks to the insights of economic science, we've known a lot about the forces that push prices in a range of different directions. We know that producers will offer more supply at a higher price than a lower price, and we know that more consumers will buy more at a lower price than a higher price. We know that all of this happens without the guiding hand of government. Students are taught this in Economics 101 (whether they remember it is another matter).

What we do not know are the precise weighting of factors that go into why prices increase at any particular time. The bits of information that are built into the price of anything are too diffuse and vast. For the same reason that no price on the market can be completely unpacked and dissected, it is also impossible for any outsider to know what the price of anything "should" be. That is why the market price exists in the first place: to provide an evaluation of the value of resources relative to their availability, their desirability, and the costs associated with delivering them.

Ah, prices! How we take them for granted! In fact, they are guides to the conduct of life itself. What should you have for dinner? Should you take that vacation or not? Should you buy or rent? Should you supplement your wardrobe or not? Should you heat your house till it's warm and cozy or just wear a sweater indoors?

All these decisions are made based on the price of things. They are what make rational daily living possible. Without them, all would be chaos.

But somehow, in a time of crisis when prices leap around in various directions, doing their job to coordinate supply and demand and conserve resources to overcome the uncertainty of the future, all this wisdom is forgotten. Consumers suddenly look at their retailer as the enemy and the government starts taking names. The worst part is that it is precisely during times of market uncertainty and change that prices are needed more than ever to coordinate resources.

When the oil price rises, it suggests more supply is needed. More precisely, it sends two signals: to consumers it says conserve, and to producers it says invest. If nothing else changes, and people follow the price signals, the price will end up falling as consumers cut back purchases and producers bring more product to market. Putting a price ceiling on oil will short circuit this mechanism, causing producers to offer no more than is currently available (or even less), and consumers to continue buying as much as they always have. Again, if nothing else changes, the result will be shortages, which the government will attempt to rectify through ever more stupid policies.

In the case of the oil price, there is an additional complication. Many people in powerful position are dead-set against a lower oil price. The environmentalists are nervous about lower prices because they fear it will lead to more gas consumption and SUV purchases. This is one reason, and not love of caribou, that they oppose opening up more public lands for drilling.

In government, we've had sanctions against Iraq that have artificially kept supplies off the market, driving up the price. This is something the Bush administration, closely connected with the oil industry, approves. David Frum reports in his account of his time with the Bush administration that Bush himself is a passionate opponent of lower oil prices. Frum once suggested that Bush call for lower prices to help consumers. Bush looked at him like he was nuts, and pointed out that lower prices are the source of all the problems.

Max Boot, current fellow at the Council on Foreign Relations and former editor of the Wall Street Journal opinion page, provides further evidence that this is the case. "For that matter, would our government really want a steep drop in prices? The domestic oil patch -- including President Bush's home state, Texas -- was devastated in the 1980's when prices fell as low as $10 a barrel. Washington is generally happy with a range of $18 to $25 a barrel."

Even as far back as the 2000 presidential race, Richard Cheney told "Meet the Press" that "we need a national energy policy." He explained that prices can be too high but that they can also be too low ("no one will invest"). He was asked, "what is the correct price of oil," and Cheney mumbled on about the need for price stability.

These are very dangerous attitudes based on remarkable ignorance of the forces of economics. No one can know in advance what the correct price of anything should be. If prices fall, it would indeed signal producers to offer less. Some producers, maybe even most, would go out of business. This is precisely what should happen.

There is no way for government to plan better than the market, especially for unusual market disturbances, which is why Soviet-style programs like the Ford administration's "Strategic Petroleum Reserve" are so ridiculous. They work as subsidies to the oil industry even as they keep supplies on the market artificially low. Knowing that the government may, at any time, unleash all this pent-up supply on the market, producers face a diminished incentive to drill and process oil for consumption.

But to the average consumers, none of this matters. They see only the price meter on the gas pump, and get mad at the poor fellow behind the counter that processes their credit cards. Then they go running to the government for help. This is the worst possible outcome.

Remember that fellow who said "I don't blame the government"? Well, he should. And if the government intervenes to force the price down and shortages result, he will have even more reason to do so.

(Llewellyn H. Rockwell Jr. is president of the Ludwig von Mises Institute.)

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The National Center for Policy Analysis

(The NCPA is a public policy research institute that seeks innovative private sector solutions to public policy problems.)

DALLAS, Tex.-- Conservatives and Deficit Spending

One of the critical differences between conservatives and liberals is that the former think the overall level of taxes and spending is important, economically, whereas the latter think only the difference between the two matters. Conservatives, however, are concerned whenever spending or taxes increase, regardless of whether one happens to be higher than the other.

In 1978, conservative intellectuals, especially the great economist Milton Friedman, argued that the conservative concern for budget deficits had simply led to higher taxes and bigger government, with no offsetting benefits whatsoever.

Friedman argued forcefully for cutting government any way possible, even if it led to budget deficits. He said, "I would far rather have total federal spending at $200 billion with a deficit of $100 billion than a balanced budget at $500 billion."

His authority helped convince many conservatives to support the burgeoning tax revolt, even though it might result in deficit spending. They also discovered that if deficits became large enough, liberals would finally be forced to cut spending.

Conservatives also learned:

-- There really is no downside to deficits as long as they result from lower taxes rather than higher spending.

-- No Republican candidate was ever defeated for supporting tax cuts, even if they led to large deficits.

-- As long as the Federal Reserve maintained a noninflationary monetary policy, and the United States imposed no restrictions on international capital flows, interest rates could come down even as deficits went up.

Now the Republican Party has completely adopted the Friedman mantra, which he repeated in the Wall Street Journal on Jan. 15: cut taxes any time, anywhere and don't worry about deficits. This has forced Democrats to become "deficit hawks" for lack of any other issue. The evidence suggests that it won't do them much good politically.

(Source: Bruce Bartlett, "Democrats, Republicans, Surplus and Deficit," National Center for Policy Analysis.)

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The Center for Strategic and International Studies

WASHINGTON -- Rebuilding Iraq -- CSIS analysts say administration's post-conflict plans ring hollow, lack coordination

CSIS scholars made the following statements on U.S. policy to rebuild Iraq:

-- Rick Barton, senior adviser, CSIS International Security Program.

"A plan is only as good as the resources that will make it real. Fast and flexible funding, in the hands of locally placed and politically sensitive non Iraqi civilians, is necessary to capture the opportunities presented by regime change. There is little evidence that the United States will meet this liquidity and people challenge. Without it, schools will not restart, police will be adrift, sewage will become a growing problem and daily life will not improve as it must for the local population to believe in the promise of change. We continue to lack standby capacity for reconstruction, which will slow the catalytic effect we need in Iraq."

-- Anthony Cordesman, CSIS Arleigh Burke Chair in Strategy.

"It is not enough for U.S. officials to outline plans and intentions. We face a region filled with anger over the second intifada and conspiracy theories over everything from oil to follow on military attacks on Iran and Syria. What we need is a clear presidential statement on America's intentions, and what we are getting is coming at far too low a level and far too late to properly influence Iraqi, Arab, and Islamic opinion."

-- Michèle Flournoy, senior adviser, CSIS International Security Program.

"The administration's planning for post conflict reconstruction in Iraq is still playing catch up after a belated start. But more important than the plan itself is establishing the coordination mechanisms that will be used inside the U.S. government and with the broader international community to respond to events as they unfold on the ground. These mechanisms are not yet in place, leaving key U.S. agencies and international partners out of the loop in the preparations for winning the peace."

-- Jon Alterman, director, CSIS Middle East Program.

"While not underestimating the challenges of running a successful military campaign, the much harder part of an Iraq war will be winning the peace. There are many more ways that things can go wrong than ways they can go right, and many of Iraq's neighbors prefer a weak, strife ridden state to a strong one that can challenge their interests."

-- Bathsheba Crocker, fellow, CSIS International Security Program.

"The creation of an office at the Pentagon under retired Gen. Garner is potentially an encouraging sign that the administration has recognized the need to coordinate U.S. government efforts regarding post conflict Iraq. But the administration has not yet fully described what the office's role will be, whether it will be adequately funded and staffed, how it will interact with on the ground efforts by NGOs and other countries, and whether it will take the place of creating an international civilian administration in Iraq. If this effort looks like a plan for a U.S. occupation of Iraq, it will only heighten concerns over U.S. intentions in going to war in Iraq."

CSIS notes that these are the views of the individuals cited, not of CSIS, which does not take policy positions.

www.voanews.com VOA News 25 Feb 2003, 12:30 UTC

Authorities in Venezuela say two separate explosions have damaged the Spanish embassy and the Colombian consulate in Caracas. One person was reported to have been slightly injured.

Police say the first blast occurred early Tuesday morning near the Spanish embassy. The force of the explosion destroyed the embassy gate and shattered windows in adjacent buildings.

Minutes later another explosion shook the Colombian consulate, not far away. That blast also broke windows and damaged nearby structures. Police say leaflets were found at both locations bearing the name of a previously unknown political group.

Spain and Colombia are among several nations that expressed concern to Venezuelan authorities about the arrest last week of Venezuelan business leader Carlos Fernandez.

Mr. Fernandez, who had helped organize a two-month nationwide general strike that failed to oust President Hugo Chavez, is now under house arrest. He faces charges of civil rebellion and criminal indictment for helping lead the walkout. Another strike leader, Carlos Ortega, went into hiding after a warrant was issued for his arrest