The Castro in Caracas: Venezuelan strongman Hugo Chavez, in Fidel's image.

It's a little after midnight in Caracas, and Hugo Chavez has just finished his weekly visit with the Venezuelan people. In tonight's four-hour address, the president has blamed the country's woes on the United States, the international capitalist system, Venezuela's "rotten oligarchy" and "squalid elites," bankers, coup plotters in Miami, "savage neoliberalism," bad weather, and the recent shortage of full moons.

Welcome to the world of Hugo Chavez. It would be easy to dismiss Chavez as a character from a Woody Allen movie if the stakes weren't so high and the consequences so grave. Recent defectors from the presidential palace accuse Chavez of supporting Hezbollah and al-Qaeda activists in Venezuela, and Chavez was one of the few heads of state to denounce the U.S.-led war in Afghanistan. In 2000, he became the first Western leader since the Gulf War to pay a state visit to Saddam. ("Imagine what the Pharisees will say when they see me with Saddam Hussein," he gloated.) Chavez has also imported hundreds of Cuban activists -- he calls them "sports instructors" -- to arm his thousands of civilian supporters in the "Bolivarian Circles," a private militia that rivals the national police force.

To understand how South America's oldest democracy fell into this sorry state, one first has to understand Chavez's rise to power. Arrested for leading a bloody military coup in 1992, Chavez was granted a presidential pardon in 1994 and immediately began mapping his own presidential bid. By tapping into widespread frustration with the corrupt two-party system that had misgoverned the country for four decades, Chavez's platform struck a chord with the poor, who compose 80 percent of Venezuela's electorate. He was elected president by a landslide in 1998.

Since then, Chavez has systematically worked to eliminate all checks on his power. Backed by initial approval ratings of nearly 90 percent, he drafted a new constitution (which gave him sweeping decree powers), abolished the senate, and lifted a 40-year-old ban on consecutive re- election. He "unretired" three dozen former coup plotters and placed them in positions of confidence. He even directed public and private schools to begin teaching a "Bolivarian" curriculum -- a hodgepodge of Marxist, nationalist, and jingoistic propaganda. The power grab was striking even by Latin American standards; scholar Maxwell A. Cameron calls it the world's first "slow-motion constitutional coup."

Chavez's constitution includes a "Right to Truthful Information" clause that makes "lying" about the government a federal crime. The administration, of course, determines what constitutes a lie. A separate law -- duly passed by congress, Chavistas note -- allows the president to suspend radio and television broadcasts "when it is deemed convenient to the interests of the nation." Add to that the recurring death threats against journalists. There is no formal censorship, Chavistas crow. But then, there doesn't need to be.

The United States did little to protest these abuses during Chavez's first two years in power. According to Jim Steinberg, deputy national security adviser during the Clinton administration and now director of Foreign Policy Studies at the Brookings Institution: "President Clinton thought that we should try to embrace him [Chavez], that we should work to bring out the best in him and reinforce the positive. Taking the bait of his rhetoric would've only played into his hands."

But Chavez grew bolder over time. In 2001, his Bolivarian Circles began launching illegal land grabs as Chavez looked the other way. Chavez enacted a package of 49 statist economic decrees that targeted the assets of his political enemies, shrinking the economy 15 percent in two years -- a remarkable feat given that the price of oil, Venezuela's main commodity, was soaring to all-time highs. When the U.S. began its military campaign in Afghanistan, Chavez took to the airwaves angrily waving pictures of alleged Afghan civilian casualties. "Mr. Bush," Chavez warned, "you must not respond to terror with more terror." Washington recalled its ambassador in Caracas to signal its displeasure.

All of this was too much for junior military officers, business leaders, and labor bosses, who stumbled into an ill-considered and short-lived coup in April 2002. The coup plotters soon fell into infighting, amassing Chavez-like powers for themselves before they had even decided what to do with Chavez. The Bolivarian Circles took to the streets threatening to unleash a civil war. Military officers had second thoughts, and Chavez was whisked back into power less than 48 hours later.

Since then, Chavez has responded with a mix of guile and vengeance. He has hired a public-relations firm to manage his image in Washington, and has increased international circulation of a government newspaper - - Chavez is the editor, his wife the publisher -- to spread the gospel of the Bolivarian revolution abroad. Chavez, who is of mixed race, has also announced that simple racism is behind Washington's criticism of his government. The message has resonated with the Congressional Black Caucus, which has sent representatives to Caracas three times since the failed April coup. Never one for subtlety, Chavez has also begun to appreciate the benefits of strategic allies abroad. "Chavez isn't clever enough to think of that all by himself," says Brian Latell, a professor at Georgetown University who previously served as the American intelligence community's senior analyst on Latin America. "He's getting that advice from his mentor in Havana. Castro knows how to exploit divisions in the U.S., and now the teacher is training his star pupil."

That international cover has allowed Chavez to further crack down on his domestic enemies, both real and imagined. He has purged more than 100 military officers suspected of sympathizing with the opposition; earlier this year, he fired 16,000 workers at the state oil firm for joining a nationwide strike -- even though his own constitution bans the dismissal of government workers. He has also launched a nationwide manhunt for the strike's leaders, and threatens to jail them for treason. In February, Chavez announced that the government would decide on a case-by-case basis who can convert local bolivars into dollars. Wall Street denounced the scheme as disastrous, but there is a method to the madness. Most dailies import their newsprint; by denying newspapers access to dollars, Chavez will be able to effectively stifle the press -- legally -- in a matter of months.

And what's next? With few internal checks on Chavez's power, "international pressure is the last, best hope for Venezuela," according to Miguel Diaz, a South America specialist at the Center for Strategic and International Studies in Washington, D.C. "Chavez will push the envelope as far as possible unless the international community makes a unified effort to keep up the pressure."

The prospects for such unity are not encouraging. Washington backs a "Friends of Venezuela" group, which includes Chile and Mexico, to help defuse the crisis. But Chavez is playing coy. Some days he insists on including China and Libya in the group of "democratic friends." Other days, he prefers to deal with the Carter Center, which critics view as being too soft on him.

Both at home and abroad, talk is now turning to a possible August referendum on ending Chavez's term before it is set to expire in January 2007. "Chavez will string along [former president] Carter, but he has no intention of stepping aside," says Georgetown's Latell. The rules for administering the plebiscite are murky, and Chavez is already looking for ways to tilt the playing field. He controls 90 percent of all federal judges, suggesting that he wouldn't have too much trouble finding a court to rubber-stamp any legal subterfuge. And his political theology would indicate that Chavez has no intention of compromising. "You're either with the Revolution or against it," Chavez likes to warn. "And Jesus Christ would be with the Revolution."

Whatever diplomatic path the Bush administration settles on, it should not expect many Latin American governments to line up behind its efforts. Latin American leaders resent the damage Chavez is doing to the region's international image, but they are even more dubious of any initiative that allows outsiders -- particularly Washington -- a say in defining what does and doesn't constitute a democracy. Others are chastened by the costs of confronting Chavez. When neighboring Colombia complained in February that Chavez was providing safe haven to Colombia's Marxist rebels, a bomb exploded outside Colombia's consulate in Caracas within days. A faction of the Bolivarian Circles claimed credit.

The risk in intervening diplomatically in Venezuelan politics is especially grave because the opposition is almost as feckless as Chavez is authoritarian. And the once-popular notion that the president is all talk and no action is hopelessly misguided. "A lot of people have consistently underestimated Chavez," says CSIS's Diaz. "They dismissed him as clownish and harmless. But from the beginning he has had a master plan for consolidating power."

That master plan will matter mightily to Washington in the coming months and years. Chavez calls President Bush's efforts to reach a hemispheric-free-trade deal by 2005 "the caldron of hell itself" and is threatening to create a more protectionist, Latins-only trade bloc to derail the U.S.-backed initiative. His politicization of the state oil company has drained it of nearly one million man-years of experience and made Caracas an increasingly unreliable supplier of oil -- all the more worrisome as instability looms in the Arab world. And if Chavez really is providing safe haven to rebels who are holding American citizens hostage and trying to overthrow Colombia's democratic government, the Bush administration can expect calls from Bogota -- and Capitol Hill -- to designate Venezuela as a state sponsor of terrorism.

When Chavez took office in 1999, he boasted that he would set Venezuela "swimming together toward the same sea of happiness" as Cuba. With its head of state hinting that he plans to stay in power until 2013 -- and with its economy already in ruins -- Venezuela may soon have more in common with Cuba than anyone realizes.