My son David last week reminded me that Theodore Roosevelt’s presidency (1901–1909) marked a decisive pivot in American statecraft, moving the nation from relative isolationism toward active imperial engagement, often justifying this expansion through a lens of “civilization” and national vigor that marginalized the “weak idealists” of his time.
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Reinterpretation of the Monroe Doctrine: While the original 1823 doctrine was passive—warning Europe to stay out of the Americas—Roosevelt (often called “The Big Stick”) inverted it with his 1904 Roosevelt Corollary. He asserted that the United States had the right to intervene in the internal affairs of Latin American nations to correct “chronic wrongdoing” or “impotence”. This effectively established the U.S. as an international police power in the Western Hemisphere, legitimizing interventions in Venezuela, the Dominican Republic, and Panama.
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Contempt for “Weak Idealists”: Roosevelt harbored deep disdain for anti-imperialists like Mark Twain, whom he privately called “insane” and a “formidable disaster”. He viewed their principled opposition to expansion as a sign of national weakness, famously stating he would “like to skin Mark Twain alive” for his critiques.
Mark Twain became a prominent anti-imperialist, undergoing a dramatic political transformation around 1899. He initially supported American imperial expansion and called the Spanish-American War “the worthiest” war ever fought, but completely reversed his position after witnessing U.S. actions in the Philippines.(wikipedia+1)
Twain’s awakening came when he realized American intentions in the Philippines were conquest rather than liberation. In October 1900, he explained: “I have read carefully the treaty of Paris, and I have seen that we do not intend to free, but to subjugate the people of the Philippines. We have gone there to conquer, not to redeem”. He formally joined the American Anti-Imperialist League in January 1901 as vice-president, lending his considerable literary fame to the movement. (peoplesworld+3)
Then, Sunday Jan. 26, Cumberland Advisors CEO David Kotok posted
US-Venezuela Policy: Follow the Money To understand some of the US-Venezuela policy, we must follow the money. Here’s the story as we see it today.
The United States’ handling of Venezuelan oil revenue has evolved into one of the most unusual financial and diplomatic arrangements in modern American foreign policy. The core of the story is straightforward: The US government seized Venezuelan oil under long-standing sanctions authority, sold that oil on the global market, and placed a portion of the proceeds into a US-controlled bank account located in Qatar. (…)
The amount of money involved will quickly grow into the billions and may eventually reach very large sums using this monetary transfer technique.
Currently this revenue is off the congressional budget radar screen and does not fall under congressional scrutiny. Debate about it is assured in the coming days, weeks, and months. Every politician wants to try to do something with a large and growing pool of money.
But scrutiny isn’t a change in law. Trump 2.0 will defend this novel mechanism against all legal attacks. We can assume that legal actions are coming from multiple sources, as all those with claims on Venezuela will try to assert them. Lawyers in this arena are in for a field day in a new business.
The monetary implications are also substantial. This is a US government-owned fund placed in a bank. It will assuredly start out invested in US T-bills. So, we now have a new buyer of US government debt, and that development has implications for a positive monetary force that will enable the financing of some of the additional deficits that Trump 2.0 seems to be delivering if deficit forecasts come close to their marks.
Other countries besides Venezuela become targets for this innovative financial approach. It’s simple: Seize sanctioned oil or other stuff; sell it; put the money where you control it and lawyers cannot get to it.
And maybe other jurisdictions besides the United States have similar possibilities. Where this ends is anybody’s guess. But, for now, this horse has left the barn.
Global finances and indeed the international order of the global financial system have been changed with a single novel innovation. My expectation is that the changes will be huge. Here’s a single instance to consider: “US control of Venezuela oil risks debt r goews estructuring showdown with China” | Reuters,https://www.reuters.com/business/energy/us-control-venezuela-oil-risks-debt-restructuring-showdown-with-china-2026-01-23/.
In succinct form, with citations, the report that follows explains how this happened, why it happened, and why the Qatar transfer stands out as historically unprecedented. The implications of this novel approach are massive.
David goes on documenting his findings. Well worth reading his complete posts linked above.
You should also read Reuters’ account dated Jan 23, linked within Kotok’s post above. Some excerpts:
U.S. control of Venezuela’s oil exports has ensnared barrels that had been servicing debt to China, lining up another potential showdown between the two superpowers that could further complicate the South American country’s path out of default.
Around a tenth of Venezuela’s $150 billion foreign debt pile is estimated to be loans from China that the OPEC member was paying in oil cargoes – until the U.S. seized Venezuelan President Nicolas Maduro earlier this month.
Debt experts said the ramifications of China’s claim on the cargoes and any clash with the United States could make it tougher for Venezuela to restructure its debt after a 2017 default and put at risk Beijing’s cooperation in restructuring deals for other developing nations.
“Even under the best circumstances, this was going to be very messy – trying to disentangle where all these creditors stand in the credit hierarchy,” said Christopher Hodge, chief economist with Natixis and a former U.S. Treasury official.
“The fact that now America is controlling all the finances into and out of the country…this seems to be unprecedented to me, that we’re going to have such entanglements, such opacity about the finances of a government,” Hodge said. (…)
The Trump administration has now said that proceeds from the sale of Venezuela’s oil will go into a Qatar-based account controlled by Washington, potentially giving the U.S. President himself substantial leverage over which creditors get paid, and when.
Beijing condemned the redirection of Venezuelan oil exports during a January 7 news conference, adding “legitimate rights and interests of China and other countries in Venezuela must be protected”. (…)
The Trump administration is allowing China to purchase Venezuelan oil but not at the “unfair, undercut” prices at which Caracas sold the crude previously, a U.S. official said on Thursday. (…)
“All of these things will have the practical effect of subordinating the claims of legacy debtholders,” said global sovereign debt expert Lee Buchheit, adding it was unclear if Trump had the legal right to determine who gets paid first.
Some $60 billion of Venezuela’s bonds tipped into default in 2017, and a restructuring agreement is essential to enable it to borrow again and attract new investment.
In a typical restructuring, bilateral lenders come together and agree what losses they will accept, usually via the Paris Club of creditor nations. This sets the bar for the “comparable” losses private lenders – bond investors, banks and others – must take.
“Comparability of treatment will be a real challenge, particularly if the U.S. controls the use of oil revenues,” said Mark Walker, a longtime sovereign debt advisor who previously worked on potential Venezuelan restructurings. (…)
China has little immediate leverage. Countries typically do not take other nations to court or arbitration over lending claims, Walker said, and would need to settle the situation “on a government-to-government basis”.
But ramifications are possible: China is the largest bilateral lender to the developing world and its cooperation with the Paris Club has been crucial over the past decade. Beijing agreed restructuring terms via a platform called the Common Framework during Ghana, Zambia and Ethiopia’s debt restructuring talks.
“China’s obvious leverage is to refuse to cooperate in future Common Framework sovereign debt workouts until it feels that it has been treated fairly in Venezuela,” Buchheit said. “And that threat would have some force.”
Many issues from this, mostly problematic to say the least. A non-exhaustive list:
- The US has seized Venezuela’s critical source of revenues and is keeping the money in a “safe” place owned by the USA.
- How good this proves to be for Venezuelans remains to be demonstrated.
- Congress is kept on the sideline.
- Trump is the sole banker and decision maker. More leverage.
- China is importantly impacted:
- Trump controls the spigot for the servicing of its Venezuelan debt.
- The US says China must pay Brent prices, even though Venezuela’s heavy crude, like Canada’s, always sells at a $5-10 discount to light crude because of high transportation and processing costs.
- China was buying around 50% of Venezuelan oil production. Where else could this heavy crude go?
It seems to me that just about everything is getting messy, and messier.
The Roosevelt Corollary and “Big Stick” interventions set precedents for repeated U.S. involvement in Latin America, leading to cycles of occupation, backlash, and long‑term instability that later required further interventions.
Roosevelt’s “Big Stick” Foreign Policy
(…) Roosevelt believed that in light of the country’s recent military successes, it was unnecessary to use force to achieve foreign policy goals, so long as the military could threaten force. This rationale also rested on the young president’s philosophy, which he termed the “strenuous life,” and that prized challenges overseas as opportunities to instill American men with the resolve and vigor they allegedly had once acquired in the Trans-Mississippi West.
Roosevelt was often depicted in cartoons wielding his “big stick” and pushing the U.S. foreign agenda, often through the power of the U.S. Navy.
Roosevelt believed that while the coercive power wielded by the United States could be harmful in the wrong hands, the Western Hemisphere’s best interests were also the best interests of the United States. He felt, in short, that the United States had the right and the obligation to be the policeman of the hemisphere. This belief, and his strategy of “speaking softly and carrying a big stick,” shaped much of Roosevelt’s foreign policy. (…)
Roosevelt wanted to send a clear message to the rest of the world—and in particular to his European counterparts—that the colonization of the Western Hemisphere had now ended, and their interference in the countries there would no longer be tolerated. At the same time, he sent a message to his counterparts in Central and South America, should the United States see problems erupt in the region, that it would intervene in order to maintain peace and stability throughout the hemisphere. (…)
Roosevelt states that the United States would use military force “as an international police power” to correct any “chronic wrongdoing” by any Latin American nation that might threaten stability in the region. Unlike the Monroe Doctrine, which proclaimed an American policy of noninterference with its neighbors’ affairs, the Roosevelt Corollary loudly proclaimed the right and obligation of the United States to involve itself whenever necessary.
Roosevelt immediately began to put the new corollary to work. He used it to establish protectorates over Cuba and Panama, as well as to direct the United States to manage the Dominican Republic’s custom service revenues. Despite growing resentment from neighboring countries over American intervention in their internal affairs, as well as European concerns from afar, knowledge of Roosevelt’s previous actions in Colombia concerning acquisition of land upon which to build the Panama Canal left many fearful of American reprisals should they resist.
Eventually, Presidents Herbert Hoover and Franklin Roosevelt softened American rhetoric regarding U.S. domination of the Western Hemisphere, with the latter proclaiming a new “Good Neighbor Policy” that renounced American intervention in other nations’ affairs.
However, subsequent presidents would continue to reference aspects of the Roosevelt Corollary to justify American involvement in Haiti, Nicaragua, and other nations throughout the twentieth century. (…)
History rhymes, Twain said. Not necessarily in a poetic way.