Red Rag Chronicles

Quico says: In the last few weeks, Venezuelans have faced a paradox. A government that, by and large, has never allowed itself to be hemmed in by written laws has, nonetheless, pushed a wide legislative offensive, approving any number of new laws that expand its scope to punish private actors.

The result is disorienting, contradictory, baffling. Take the issue of property rights. Within a few days, the government both greatly simplified the legal procedure for taking over privately owned businesses and demonstrated that it doesn't actually care about those procedures by ignoring all due process and sending actual tanks to take over the nation's largest cement manufacturer.

This pattern, where the government approves punitive new laws and, in the next breath, gleefully ignores them, has been one of the defining characteristics of chavismo's onslaught against rule-based governance; a practice that badly undermines of the entire cognitive and cultural apparatus that supports idea of a state bound by laws.

How to interpret all this? Why does a government that clearly doesn't give a rat's ass about laws spend so much time and energy changing them?

For me, the key is to wise-up to the political role these new laws play, to understand them not as enshrining substantive new powers but rather as signals, messages within a signaling game.

What is alarming about the new Telecoms Bill, for instance, isn't actually the specific new powers it would grant the presidency. To realize that, it's enough to witness chavismo's move against two opposition radio stations in Guarico state last week. The stations, whose broadcasting licenses were not in order, were shut down in a delirious show of strength, by hundreds of armed soldiers that went on to seize their broadcasting equipment outside any due process mechanism whatsoever. Even the new Telecoms Bill, however punitive and authoritarian it may be, wouldn't empower the government to randomly seize stations' equipment like that...and that bill isn't even law yet!

Episodes like the one in Guarico show that the government's M.O. for screwing us doesn't consist of tightening the law, it consists of just ignoring laws with impunity whenever it feels like it. In that context, the question becomes: what's the point of tightening laws at all, of making them much more punitive than they were, but still less punitive than the government's real-world actions?

The answer, I think, is that these new laws aren't laws, they're messages. Signalling mechanisms. Language. They're the way Chávez communicates with his own bureaucrats, to indicate to them of which sectors are now "fair game". And it's the way he communicates with specific sectors to let them know that they've been marked out.

If you are, say, a tour operator, you're right to be alarmed by the new Tourism Decree Law - but not fundamentally due to the dozens of arbitrary new permits and authorizations you're now supposed to obtain just to do business, or to the heavy punishments you face for breaking any of them. After all, if the government had wanted to shut you down or bankrupt you, it certainly could've done so de facto, with or without the new law.

The reason you should be alarmed is that the Decree Law itself acts as a statement of intent, a none-too-subtle sign that, for whatever reason, your business is in the bureaucracy's cross hairs. That the people singled out for newly punitive treatment should react with alarm isn't at all surprising.

What's shocking is the breadth of new targets the latest batch of chavista laws take on: everyone from real estate developers and food processors to media companies and retail businesses. Marking them all out at once, Chávez waves a huge red rag in front of their faces. He invites them to charge, as though it was the red-rag that was threatening them.

But it isn't the red rag that threatens them. It's the sword concealed just behind it. Of course, he had that sword long before he started waving the red rag. All the red rag is meant to do is to lure us into a panicked charge, a hopeless attack launched without a plan that merely leaves us all the more exposed to the real threat we face.

There is no doubt that a bull has very good reason to be alarmed if he sees a red rag waved in front of his face at a bullfight. That rag signals an intent that he can only find alarming. But it's just as clear that, if the bull mistakes the signal for the threat itself, he'll only help the torero move in for the final blow.

Trust me, I know. After all, I'm a Toro.

Buckshot Provocation

Quico says: Reading back on what I wrote yesterday, it strikes me that I'm just now grasping the actual mechanics of chavista provocation. All at once, I realized that the reason the new Telecoms Law struck me as especially alarming isn't so much that it's worse than any of the other new laws, it's that I'm me!

Chávez knows that different sectors will react to different outrages differently. A punitive new law on Food Security may strike me as relatively unremarkable, but it'll freak the hell out of food distributors. A crazy new Armed Forces Law may be no skin off your back if you make a living distributing food, but it'll set all kinds of alarms ringing if you're an old-school military officer. The theft-cum-expropriation of Cemex may not keep military officers up at night, but it'll scare the hell out of foreign investors big and small. And a new Telecoms Law that sets up a Sword of Damocles over all electronic telecommunications may not bother foreign investors that much, but it'll freak the hell out of media types like me.

What Chávez is doing is buckshot provocation, scattering his fire widely enough to make sure he hits all kinds of different targets. The latest onslaught has something for everyone to hate: tour operators, real estate developers, farmers, kidnapees, oppo politicians, even bloggers. Things never go well when Chávez starts to go down this route.

Pushing it

Quico says: What would it take to get me really, seriously alarmed about the latest uptick in chavista autocracy? This is a question many of you have been asking, as I dismiss each of Chávez's latest provocative moves in turn as "grave, but not serious." As far as I could see, nothing in the latest legislative onslaught counted as a qualitatively new attack on the fundamental freedoms we have left, the ones that still keep me from labeling chavismo a proper dictatorship. But with this Telecommunications Bill now going through the National Assembly ... well, now Chávez is playing with fire.

The bill would grant the president the authority to suspend all electronic communications, for as long as he wants, to preserve "public order" and "national security". And when I say all, I mean all: not just TV and radio broadcasts, but also cable and satellite TV, the Internet, the phones, SMS text messaging and even - explicitly - any other comparable media that may be invented in the future.

The criteria are vague; the powers open-ended. The chances for meaningful judicial review are nil.

Now, it's true that having bought CANTV, the government is already in a position to shut down 90% of the country's telecommunications de facto, just by flicking a switch. But alternative, non-state telecom channels - the kind you'd want to turn to for independent information in case of trouble, everything from Movistar to Radio Fe y Alegría - do exist, and they're exactly the ones threatened by these proposals.

Even for a government that has made an amateur sport of thumbing its nose at the Constitution, the sheer chutzpah of the constitutional violation involved is staggering. Article 337 unambiguously says the government may not suspend core human rights even in case of emergency and explicitly lists the right to information as one of those rights.

Now, I'm the first to argue that, when it comes down to it, some constitutional rights are more equal than others. With a Constitution littered with good intentions masquerading as rights, it's clear that some rights are "hard" and some are "soft". Nobody is going to call chavismo a dictatorship because it doesn't really guarantee everyone's right to decent housing (Art. 82), say, or vacation pay (Art. 90).

But negative rights are another matter altogether, lying much closer to the "hard constitution" than some pajeric positive right no court could really enforce. And no right is harder than free speech: a constitutive element of the dividing line that separates the kind of postmodern autocratic bananarepublicanism we've had so far from out-and-out dictatorship.

Until now, chavismo has made a routine out of violating the soft constitution but, in the grand scheme of things, has stayed on this side of the yellow line with regard to the hard stuff. But grant Chávez the legal power to shut down any broadcast (or, for that matter, any narrowcast) whenever he wants, for whatever reason he wants, for as long as he wants, and suddenly the case for resisting the D-word starts to wear desperately thin.

There's no question about it, Chávez is really pushing it now. The decision to pick and choose which opponents are allowed to stand in November's local elections. The 26 decree-laws, enacting many of the reforms voters rejected last December. The embrace of Russia's occupation of Georgia. The theft - lets face it, "expropriation" is a euphemism - of Cemex. The closure of two opposition radio stations in Guarico. The crazy-ass kidnapping law. The changes to the Armed Forces Law. And now this openly dictatorial proposal. A drip, drip, drip of outrages and humiliations, each more willfully provocative than the last, each guaranteed to raise the temperature, and the latest of which is so dangerous it'll tip even a die-hard moderate like me into a spasm of alarm.

There are people in Venezuela who have been trained to think it's their responsibility to save the country from tyranny. If you didn't know better, you'd think the guy was trying provoke an extreme response from them.

Who moves the markets?

We move the markets!

[hat tip: Omar]

Does Cemex matter?

Juan Cristobal says: - The government is confiscating Venezuela’s largest cement company. Our readers are incensed. Some are wondering when we are going to write about this latest outrage. So here it is: it’s not that important.

Tonight, the Chávez government will take over the Venezuelan subsidiary of Mexican cement giant Cemex without paying a penny in compensation. Cemex was understandably reluctant to accept the imposition of unfair business terms and become minority shareholders in a joint venture with the unreliable Chávez administration. In this high-stakes gamble, Chávez has decided to take over the entire operation, and the Mexicans have probably lost big-time.

In any other country, this would turn on alarm bells. But in Venezuela, alarm bells have laryngitis.

There is nothing in this operation that we didn’t already know. Is it illegal? Yes, it is. Is it unprecedented? No, it is not. Was in unexpected? Nope. Does it signal a shift in the Chávez government’s war on private property? No, it confirms a trend, one that has been publicly announced by the President over and over again.

Cemex was once the mighty Vencemos, the brainchild of legendary Venezuelan businessman Eugenio Mendoza. In a country with very little private industry, Vencemos was the trailblazer that built an empire, a symbol of what Venezuelan entrepreneurs could accomplish.

But that was long ago – the Mexicans bought it out in the 90s and most of the romance of the old company is simply gone. Up until today, it had been transformed from a national champion to the well-managed local branch of a huge multinational. Its symbolic value is muted at best.

The question, then, is whether this is actually good policy. The easy answer here is that no, it is not. The government’s dismal failure in home-building cannot be attributed to fictional cement shortages – the cement has always been there for the taking, and the government has always been able to buy it. In fact, buying it would have been much cheaper than buying entire cement companies, which is what the government is doing with Cemex rivals Lafarge and Holcim.

It's not lack of cement that's holding the government back. Stealing cement companies is not going to make 200,000 low-income homes build themselves.

Instead of investing in roads, access to water and sanitation services, the government decides to invest in companies it will surely trash. The first thing it will probably do is rename Cemex something like Cebol. Pretty soon we’ll begin hearing Cebol’s board asking for public funds to keep the company going. Shortages will appear and the company will march to its inevitable demise.

Some people think that Cemex and the other cement companies are part of a ploy to keep the opposition guessing and distracted. If it is, it’s surely an expensive one. Not only will these moves cost the government some money: think of the time it takes to negotiate with the companies, the workers, to name a board. Just today we had public statements from both the Vice-president and the Oil Minister. Don't they have other things to worry about?

It’s a distraction alright … a distraction for the government.

There is one piece of the puzzle that is blurry. Years ago, Chavez announced a joint venture with Iran that included building a cement factory. Needless to say, nothing came of it.

And yet just this past week we learn that Chávez wants to set up another cement joint venture, this time with Bolivia and Iran. Never mind that it makes absolutely no sense to export cement from Venezuela to Bolivia or Iran – could these imaginary cement factories be a cover-up for something else? Could Cemex (Cebol) and the other companies be covers for the traffic of illicit material? Only time will tell.

In the meantime, we are left with the takeover of Cemex. What does it boil down to? Another boneheaded decision by the government, one that will surely cripple the industry, cost Venezuelan taxpayers millions, scare away foreign investment, damage Venezuela’s reputation abroad and confirm that we are governed by a bunch of thugs.

So as troubling as it is, it’s just business as usual in the Bolivarian Revolution. There’s nothing in these news that we didn’t already know, no fear that hadn’t already been confirmed long ago. It sucks for the Mexicans, and it’s probably going to suck for the workers. For the rest of us, it’s been sucking for years now. Ho-hum.

Qué rayón

Juan Cristobal says: - Don't miss the latest outburst from chavista congresswoman Desireé Santos Amaral in the front steps of the Mercosur Parliament, where Leopoldo López was about to explain the case of his ban from public office...

Discusión a las puertas del Mercosur
by noticias24

I was reminded of my grandmother, who always said that no matter what problems we had in the family, we should "wash dirty rags at home." How sad that we've lost even that, that discussions one would expect to have in a normal democracy have to take place in front of foreign reporters and in international forums because, well, we are no longer a normal democracy.

I can only imagine what those Uruguayans must be thinking... and these are the people we want to admit to Mercosur? Don't we have enough problems already?

As usual, chavista aggression works against them, as López comes out of this looking like the victim of a political lynching and chavistas come across as fire-breathing hoodlums.

Plantain chronicles

Juan Cristobal says: - Don't miss Alberto Barrera's amusing riff on Venezuela's new barter law. In Spanish only.