What's Really Going Down in Venezuela.

• Author: Erlich, Reese

Carmelinda Valera and her husband have a small farm perched on a steep hill with a breathtaking view of Caracas, Venezuela. As an early morning fog hugs the farmland, Valera shows me where they grow bananas, coffee, and other subsistence crops.

Venezuela's two-year-old economic crisis has hit the couple hard. They can't find cement to finish building another room for their two-bedroom, concrete block house. And they barely make a living from farming. Valera also works as a school janitor.

"Some months we make no money at all from the farm," says Valera, as she dumps some dirt from a wheelbarrow. Despite her family's hardships, Valera, like many of the country's rural poor population, remains a staunch supporter of the socialist government of President Nicolas Maduro. The government has reduced poverty, she says, and despite the economic crisis, she doesn't trust the opposition parties to solve the country's problems.

Many other Venezuelans disagree. Since April, large numbers have protested in the streets against the government. Food is expensive and in short supply. Everything from medicine to toilet paper is hard to find. Inflation hit 176 percent for the first half of this year, according to the opposition. As the economy worsened and support for the opposition grew, the government took extraordinary steps to maintain power.

Opposition leaders and the Trump Administration claim Venezuela has become a leftist dictatorship that should be overthrown. In July, CIA Director Mike Pompeo hinted at agency involvement in Venezuela. In August, Trump threatened military action.

"We have many options for Venezuela, including a possible military option, if necessary," Trump told a press conference. He strongly backs the opposition parties, who favor neo-liberal economic policies.

Trumps threat angered Latin American leaders, including those firmly in the U.S. camp; they denounced any plans for U.S. military action. And the opposition's close association with Trump may have turned the tide against them.

Trump would have the world believe that Venezuela represents a battle between democracy and dictatorship. But the reality is far more complicated.

The causes of the current crisis go back many years. Since the 1930s, when the Rockefeller family's oil company dominated the country, Venezuela has had the equivalent of a one-crop economy. It produces oil and uses the proceeds to import food, medicine, and almost everything else.

Hugo Chavez, elected president in 1998, made some progress in promoting agriculture and other domestic industries. In 2013, Chavez died of cancer and Nicolas Maduro was elected president. This transition, along with plummeting international oil prices in 2015, led to serious problems. Venezuela's foreign reserves have seen a severe drop, along with the value of its currency, the bolivar fuerte (Bs.E).

So the government implemented multiple dollar-bolivar exchange rates in an effort to prioritize essential imports. Medical equipment, for example, can be imported at a more favorable rate than luxury cars. But corporations quickly figured out they could falsify the paperwork indicating they had imported such equipment or other goods, collect the dollars from the government, then exchange them on the black market.

The economic crisis fostered government and military corruption as some officials lined their own pockets through black market trading and currency speculation.

As of the time of writing, $1 could buy 9,100 Bs.F. at the official exchange rate for nonessential items. The black market rate...