The colors of the new power - Part 1

Juan Carlos Zapata has written an excellent but far too long article in this week's Descifrado en la Calle. I'll translate chunks of it, in parts.

(Incidentally, JCZ, buddy, you're a good analyst but BOY do you need an editor! You could knock out at least 20% of the words in this article without losing any content.)

Extracts:
What will Chavez do when the contradictions at the heart of the revolution burst into the open? Because they will burst, as they burst with Luis Miquilena, who Chavez called his father in private but in private, between confidants, linked to the past. The Chavista generals knew that the old man was an obstacle to Chavez's purposes, because Chavez knew that Miquilena didn't understand him, didn't agree or approve of talk of revolution or socialism or taking apart the capitalist system, or his siding with Fidel Castro. And so he was faced down by Chavismo's left wing and, in the end, with Chávez himself.

And as they burst with Luis Alfonso Dávila, a right wing military man who traveled the country with Chávez when he was just starting to build his political project, who would chair Congress and become foreign and interior minister. After Miquilena left he also faced the leftist wing of chavismo: he made a grab for control of MVR, was picked out by the movement's vultures, cornered and defeated.

The winners were Chávez and Diosdado Cabello, and their allies. In just a few years they cleansed the movement of outmoded right-wingers - like Davila and viceadmiral Gruber Odremán, and of groups with roots in the past - like those lead by Luis Miquilena and Tobías Carrero, among others. Having cleaned house, they have become lords and masters of the revolutión. But it's obvious that ideology still separates them. While Chávez fights capitalism, Diosdado Cabello cheers it and protects it.

There is no question: the contradictions will blow into the open again because what's a stake in Venezuela is a conception of the state, of the system. How far will the allies go along with Chávez in deepening an anti-capitalist revolution? How far will they back his constitutional changes to guarantee he can perpetuate himself in the presidency?

The Bolibourgeoisie, born of the Chavez era, might claim the spaces it has won at any time - including the space to make agreements with traditional and multinacional capitalists, because nothing is more pragmatic than capital.

Neither Juan Vicente Gómez nor Pérez Jiménez nor Rómulo Betancourt would hang out at the Caracas Country Club, but they understood their tacit pact with capital. Chávez doesn't go to the Country Club and, at the same time, wants to take apart a system for coexistence that has been in place since the Republic exists, since 1830, where, according to historian Ramón J. Velásquez, the generals rule, the learned make the laws and the rich do business. Since Gómez's time, no head of state had accumulated so much power - in fact, it may not be totally crazy to affirm that Chávez has accumulated more power than Gómez.

In 1998, when the business elite ended up backing Chávez, they thought that the 1830 pact would remain intact, that the partition of powers would continue. But the last few years shows that the regime's goal is not just to break the pact - which it has already done formally - but to go beyond that and to take apart the system that underlies the pact.

"The long term objective, in the economy, is to transcend the capitalist model," said Chávez on November 12, 2004 talking to a meeting of government officials. "The capitalist economic model is inviable, impossible. We, the leaders - especially the leaders - have to be very clear about that."

This is why Chavez lumps the entire business establishment together into just one big fascist, counter-revolutionary oligarchy. And so he has taken on the challenge to dominate it and destroy it if needs be.

And yet, while he says that for now "we are not considering getting rid of private property...at this time (2004) that would be crazy...it's not the right time," and at the same time he says "nobody knows what will happen in the future," a good part of the leadership that surrounds him has very different goals: to become the new big players in the business world, to take the spot of the Polar Group, the Cisneros Group, the bankers, etc. That's the deep divide in chavismo. The major contradiction that sooner or later will burst open within the movement. And Chávez knows it. Chávez suspects it. That's why he keeps talking about Juan Vicente Gómez's treachery against Cipriano Castro and he talks about Gómez's surrender to the Caracas oligarchy.

"We must think through the creation of a new economic system. We can't do that in two or five years, that would be a lie," says Chávez. Many who listen to him think of the utopian nature of the discourse, and rather than utopias they prefer to stuff their pockets.

And so after seven years of bolivarian revolution, power has become military-political domination. The Armed Forces' High Command, the Army Command and the MVR's National Tactical Command all respond to Chávez orders, as both political and military leader, and from their orders are handed on down to the military bureaucracy, which dominates not just the armed forces but also the key structures of the government and the state. The National Assembly, the Supreme Tribunal, the National Electoral Council, the Prosecutors, the Ombudsman and the Comptroller, all see their space for action reduced until they've become mere puppets in a system with a democratic facade.

The minority of the structure is powerful, and within that minority there is the president, who accepts no decentralized political decisions from governors, ministers, parlamentarians or heads of State-owned enterprises. When the finance minister, for instance, announces a decision, he has no problem saying that the decision has been made but the president has the last word, when pro-government candidates are selected for the National Assembly, the leaders have no problem admitting that the president has the last word; when Caracas Mayor Juan Barreto announces a plan, the publicity highlights the president's name; when a little square is opened in any town in Venezuela, the mayor unveils a little plaque saying the public work is due to Hugo Chavez.

These details reflect the domination of that autarkic power, which demands of its followers that they must repeat, again and again, "fatherland or death," "with Chavez unto death," and "Chavez is the people."

The military caudillo cannot accept doubts of any kind, and therefore demands total subservience, and if this stops happening that would be a dangerous signal of a crisis. It also explains why the caudillo prefers to set up a parallel state, to set up the bolivarian schools, the Bolivarian University, the adult education missions, and why he attacks private education and limits autonomous universities: to sow feelings of personal loyalty and loyalty to the revolution. It doesn't matter that the level at the Bolivarian University or Mision Sucre fall far short of quality standards. The problem isn't quality, it's loyalty. Loyalty is proof of love for the caudillo.

But then others say: my loyalty is money.

There's more to the shooting

Katy says: This news item from Unión Radio continues the story from my previous post. Laura Toro, the Dean of FACES College where the shooting took place, fears for her life on campus. She claims the shooters began calling for her after the incident.

Prof. Toro says she and a colleague have been recieving death threats for days, and she linked these happenings to the decision by Venezuela's Supreme Tribunal to suspend student body elections at ULA, where chavismo was expected to lose.

If one is to believe Prof. Toro and University Pres. Rodríguez, these shootings are not random, isolated incidents. Something is brewing at ULA, something probably not unrelated to

• chavismo constantly losing university elections;
• Pres. Chávez's announcement to eliminate nation-wide University standardized admittance tests;
• the surge in the amount of weapons on the street;
  
• the government's violation of university autonomy; and
• the impunity in our legal system.
  

The pretty-well-armed revolution

Katy says: This El Universal note sent shivers down my spine. While PSF chuggers comfortably spin about Venezuela from their First-World ivory towers or their VIO offices with a view of the Potomac, they should spare a thought for university students at one of Venezuela's oldest and most prestigious institutions trying to study while dodging bullets.

With FALs now in the hands of the civilian population, is this a preview of things to come?

"The President of the University of the Andes, Lester Rodríguez, reported that two of its students were wounded today in a gunfight. Nevertheless, he claimed that 'the situation at FACES College is under control ... there is a tense calm, of course, but the situation is under control.'

One of the wounded students was identified as Alfredo Contreras, who was taken to the Integral Medial Center of the Andes University after being hit by a bullet in the leg, presumably by another student who shot him with a 9 mm. weapon.

Several students were eyewitnesses to the incident and are currently giving their accounts at the Prosecutor's Office, the university's President said to Globovisión.

Rodríguez said that he had spoken this afternoon with Lt. Cegarra, general secretary of the Mérida Governor's office, to schedule a meeting tomorrow with Gov. Florencio Porras, so they can work on a disarmament plan.

The university President stated that 'regrettably we have students bearing arms on campus. This situation is no longer sustainable, it is out of control, so it's not only infiltrated individuals anymore, now we also have students aremd with 9 mm. weapons inside the ULA.'

According to the president, there is little the university's authorities can do to control the access and the use of firearms on campus."

Everything you ever wanted to know about Argentina v. Holland...

...but were afraid to ask...

The Unforgettable Bash

This is my Tio Pepe's column in today's Universal.

The unforgettable bash
by José Toro Hardy

We Venezuelans are enjoying one of the greatest bashes of our history. Taking advantage of our swollen oil revenues, which are not the outcome of anyone's effort but rather of oil prices higher than we'd ever dreamed, we have gone on a collective consumption binge, forgetting that no society can survive if it doesn't produce.

Far from sowing the oil, as Arturo Uslar Pietri so often recommended, it seems like the governing leadership has coined a marvelous new formula to consume it directly, chugging it from the well. There's no longer any question of taking on great investments or winning markets. There's no need to worry about the feasibility of any project. Who cares? We have more money than we know what to do with.

The old sing-song about the need to be efficient and productive was just the babble of the old PDVSA, that discredited oil meritocracy that wanted to swindle Venezuelans into believing that the hydrocarbon industry is a knowledge-intensive business. None of that seems to make sense anymore. Now PDVSA belongs to everyone and therefore we all have the right to take a swing at that piñata. And not just all Venezuelans. All revolutionaries all around the world as well.

A magical new formula seems to have sprung from the government's labs. It allows us to turn oil into a sort of fascinating elixir that can be consumed directly, causing a feeling of collective happiness.

Nobody can doubt the efficiency of this new formula. Its results are out in the open. For instance, last year, thanks to the effects of this portentous beverage, Venezuela's GDP grew by 9.5%. And yet, that amazing result was achieved creating just 38,000 new jobs. So we have a mechanism that demonstrates the very high productivity of these new economic policies. I'm convinced that those who designed them should be awarded the Nobel Prize in Economics and honorary doctorates from all the best universities.

Chugging our petroleum straight out of the well, as though we're drinking milk from a cow's udder, has considerable advantages. For instance, so far this year, public spending has risen 67% from a year earlier, and in the first quarter imports totaled almost $6 billion. What more could we want?

The instant gratification our society gets is indubitable. For example, so far this year, retail sales have risen 29.8% and wholesaling has grown 51.8%. Other numbers ratify the virtues of the new model. Just in January 2006, car sales grew 112.7% compared to the same month the previous year. And that's nothing. Home appliance sales rose 136%, while textile, clothing, footwear and leather items grew 40.4%. Again, what more could we want?

Venezuelans are swimming in money. Liquidity in the hands of the public exceeds Bs.80 trillion . Who the hell cares that the Central Bank lost Bs.300 billion ($140 million) on the sale of domestic bonds aimed at mopping up excess liquidity to slow down inflation.

This society is finally shaking off all of the economists' pedantries. When it comes down to it, how does it affect us that the government grabbed over $10 billion out of the international reserves and transferred them to Fonden? In fact, to show that you can do that and much more, the government has decided to withdraw another billion dollars out of reserves to send them to a social fund. So what? Haven't the BCV directors told us that Central Banks don't go bankrupt?

The government's detractors insist on scaring us telling us that investment (public and private) is insufficient. Who cares about investing if we're all consuming like never before? Isn't the point of investing to obtain profits so you can consume more later? Well, we're already consuming more, without having to invest. Why worry?

It reminds me of an old story about a fisherman from Margarita:

"Why would I work more?" asks the fisherman.

"So you have money later on and you can retire and rest," said the gringo he was talking to.

"But that's what I'm doing now," replied the fisherman.

And where does all this leave us? Well, tomorrow will take care of itself. For now we're having a hell of a bash; it's an election year. Later on we'll have to pick up the broken glass.

Totalitarian Tendency Watch: Arepita de manteca...

...pa'mamá que da la...

A press release sent out by the Ministry of Information and Communications this week reaches an absurd new low in terms of politicizing the eminently apolitical. A note on the government's commitment to encourage breastfeeding carried the headline: "The First Act of Food Sovereignty."

Apparently, breastfeeding is only considered praiseworthy if it can somehow be turned into another lego-piece in the government's indoctrination strategy.

ANTV and the Neutrality of Futbol

Long time readers know that I occassionally blow a gasket when lazy Opposition talking heads describe the government as "totalitarian." Following on Hannah Arendt's classic definition, I've argued that a Totalitarian government is one that seeks to control every aspect of social life - even the non-political aspects - whereas a mere dictatorship is happy just to control every aspect of political life. Chavez, for me, is an autocrat - not even a full on authoritarian yet - because it's controlling every aspect of the state that he has concentrated on.

For Arendt, the key to Totalitarianism is an irrational drive to control everything, even matters that are deeply apolitical. In a famous passage, she writes:

"If totalitarianism takes its own claim seriously, it must finish once and for all with 'the neutrality of chess,' that is, with the autonomous existence of any activity whatsoever. From the point of view of totalitarian rulers, a society devoted to chess for the sake of chess is only in degree different and less dangerous than a class of farmers for the sake of farming.

It always seemed to me like a crazy exaggeration to put Chavez in that league. But are there pressures in that direction? Well, read this Descifrado bit and you tell me:

Tha National Assembly's TV Channel, ANTV, shows World Cup highlights from Germany 2006 each night. But it's not a traditional highlight reel with goals and nice plays. The show has its ideological slant, and at this point it's just laughable. That's the revolution. For instance, last night dealing with Spain-Ukraine, the commentators explained that Ukraine was the victim of bad refereeing because it was a country that was part of the Soviet Union. The commentator recalled that in Soviet times, referees and FIFA had a conspiracy against Socialist Countries, which victimized the USSR, Czechoslovakia, Poland, etc. The idea, he said, was that no socialist country should ever win the World Cup to cover up how great their sports were. The funny thing is that today in 2006, Ukraine is a democracy, but for these commentators it is still socialist and a victim of FIFA's imperial power.

Sigh. This is so sad. Another shared social space where Venezuelans could come together irrespective of politics is extinguished. So much for the Neutrality of Futbol.

Czech your head...

We've now seen every team in the World Cup. Here's what I make of them.

"We've shown that we're not authoritarian..."

...so, hell, we've practically earned the right to make some authoritarian moves...

(This Bloomberg piece no tiene pérdida, so I'll reproduce the whole thing:)

June 14 (Bloomberg) -- Venezuelan President Hugo Chavez said he may shut down television stations for criticizing the government and broadcasting ``messages of hate.''

Chavez said the government has begun to review all television concessions, which expire in 2007. Chavez did not specify which stations may be shut down.

``We can't keep giving concessions to a group of people who use television stations against us,'' Chavez said in a televised speech in Caracas. ``Every day they broadcast messages of hate, of disrespect toward institutions, of doubt among us, rumors, psychological war to divide the nation.''

Chavez, 51, said some television stations helped plot a two-day coup he survived in 2002. The former army lieutenant colonel, who led a failed coup in 1992, is seeking a second six- year term in office in the December elections.

``They hide behind a supposed freedom of speech,'' said Chavez, who was wearing a green army uniform and red beret. ``I don't care what the oligarchs of the world say. We've shown that we aren't authoritarian or arbitrary.''

Chavez made his comments during a ceremony to receive the first 30,000 Russian Kalashnikov AK-103 rifles out of an eventual 100,000 Venezuela will buy this year.

Venezuela purchased the rifles to defend against a possible invasion by the U.S., Chavez said. The U.S. State Department has said the country has no plans to invade Venezuela.

Chavez also said today that Venezuela plans to buy Russian helicopters and build a factory to make rifles and bullets.

``We need a level of consciousness so we are willing to die for what we defend,'' Chavez said while holding one of the new rifles. ``Soldiers, this rifle is your new girlfriend. A real soldier loves his rifle.''

Hugo Chavez stroking his new girlfriend...

I am the fatherland

Katy says: These daily news summaries that I get can be eye-opening. Notice how different media outlets treat the same news item:

Globovisión: "Alan García se niega a disculparse ante Chávez"
(Alan García refuses to apologize to Chávez.)

El Universal: "Alan García descartó disculparse ante Chávez"
(Alan García rules out apologizing to Chávez)

Úlitmas Noticias: "Alan García no se disculpará con Chávez"
(Alan García will not apologize to Chávez.)

2001: "Alan García rechaza disculparse con Hugo Chávez"
(Alan García rejects apologizing to Hugo Chávez.)

State Television (VTV): "Alan García se negó a ofrecer disculpas a Venezuela"
(Alan García refused to apologize to Venezuela.)

Soon VTV will begin telling protesting chavistas to go and eat cake.

Spain's turn...

Well, Daniel's favorites, France, embarrassed themselves yesterday. Today it's my favorite team's turn. Will Spain play a decent World Cup for once? Read all about it over at the World Cup blog...

...and after that he's off to Siam, Tanganyika, Prussia and Eastern Slavonia...

...on yesterday's Aló, delincuente, Chavez announced plans for his Axis of Evil World Tour '06, with the obligatory stops in Iran and Russia but also a highly unusual visit to North Korea and a courtesy call in a country he referred to as "North Vietnam." I kid you not...

World Cup Blog...

Hey everybody...Daniel and I started a World Cup Blog...

Check it out...

Day 3: Holland v. Serbia & Montenegro - Montenegro

You've heard about the arroz-con-pollo-sin-pollo...today, we get to see a team that represents a country that no longer exists. Though the team qualified for the world cup as Serbia & Montenegro, the Montenegrins voted on a referendum to split the country in two last month - leaving us with Serbia-con-Montenegro-sin-Montenegro. I guess for the purposes of the World Cup, Montenegrin players will still play, but it's probably an unprecedented situation.

Won't matter much on the field - their two top players are both Serbs, both aging, both very good. Inter's Dejan Stankovic is a World Class central midfielder, and one of the most popular players in the Italian Serie A. Osasuna's Savo Milosevic (no relation) is a very talented goal scorer and could make problems for everyone. The rest of the team...well, don't know about them.

Holland shouldn't have a problem this afternoon. Robben and Van Nistelrooy are at the top of their game, Van Bronckhorst is still one of the best offense-minded defenders around, and Van der Sar is one of the greatest goalkeepers playing in Germany this year. Plus everyone says Van Basten has put an end to the prima-donnaish hissy-fits that have long hampered the Dutch national team. But then Sweden REALLY shouldn't have had a problem yesterday and bombed disastrously. So who can tell? Holland 1, Serbia 0.

Iran-Mexico and Angola-Portugal I neither know enough nor care enough to comment on...

Where in the world is Luis Velasquez Alvaray?!

Well, LVA was a no-show at his National Assembly hearing. Guy was promptly, unanimously sacked and the rumor going around over at Noticiero Digital is that he skipped the country. His right-hand guy, Antonio Barazate - the same guy who tried to do an end-run around the Maduro faction by buttering up Chavez's mom - shot himself in Barinas when it became clear LVA was throwing in the towel. Barinas faction chieftain Pedro Carreño conspicuously also failed to show up at LVA's hearing, suggesting his clique is quickly reaching an Ameliachesque level of disfavor.

How to read this? Well, my conjecture is that this signals the ascendancy of the Maduro faction. It's just imaginable - though staggering in its implications - that the barely literate former rabble-rousing bus driver is really succeeding in establishing his people as the dominant force in the chavista faction wars. Which is good news for midgets near and far - and for their white-powder dealing higher-ups. It's interesting thinking through this development alongside Jack Sweeney's piece on the changes in the State Department staff dealing with Venezuela. Jack notes that more and more counter-narcotics types are getting assigned to Foggy Bottom's Venezuela desk. Put that in your pipe and smoke it.

Day 2: England-Paraguay, Argentina-Ivory Coast

Three games today, including two good ones.

England-Paraguay: England is my pick to win the tournament, so I'm eager to see them playing a credible team right from the start. Paraguay has a history of advancing, but they'll have to get results against England and/or Sweden to get to the second round, which will be hard. England - and spare me the anglophobe comments - is flat out fantastic this year. Especially in mid-field - where futbol matches are won - the concentration of talent is frightening. Steven Gerard, Joe Cole, David Beckham and Frank Lampard are, all four of them, just show-stoppers. And their reputed striking difficulties are overblown - Owen is fit, and injured wunderkind Rooney's replacement Peter Crouch (all 6 feet and 7 inches of him - and as good with his feet as with his head) has been terrorizing defenses all year. (My pet theory is that Rooney will get fit by the second round and then have trouble earning a place back from Crouch.) I say England 2 - Paraguay 0.

Argentina-Ivory Coast: Play starts in the "group of death" tonight with Argentina taking on the best of the first-time participants. The BBC had an excellent report on World Cup fever in the war-torn Ivory Coast (click here and slide to 33:16) and, frankly, it's hard not to root for them. The Ivorians have at least three top-level players - Chelsea's intimidating striker Didier Drogba and Arsenal's on-form defensive duplet Eboué-Touré - whereas Argentina is still relying on Riquelme after all these years, and on the over-hyped teenager Messi. I say Argentina 1 - Ivory Coast 1. (Still, with Holland and Serbia-Montenegro - a talented team without a country - also in the group, the fight to qualify will be a cuchillo.)

There's also Sweden-Trinidad & Tobago, but that one's barely worth watching. The Trinidadians - who are only in the world cup cuz they're in the absurdly over-represented Concacaf qualifying group - will be aiming merely to prevent humiliation. I say they'll fail, and call it Sweden 3 - T&T 0.) Sweden, incidentally, could get pretty far in this tournament with a little luck. They have two of my favorite players (Lundberg and Zlatan - the class!) and Larsson to boot. It'll be important for them to try to actually win Group B (which also has England and Paraguay) because the second-place team in the group looks sure to end up playing Germany in the second round: not a pretty prospect.

Gangland stuff

Thinking about the way Venezuela is perceived abroad, perhaps what's hardest to convey is the way gangland tactics have colonized the regime. Europeans, used to thinking about politics as a struggle for control over the institutions that make and apply laws, can't begin to fathom the extent of their collapse in Venezuela. Their understanding of "politics" has no room for the aggressive pursuit of state loot we're seeing. And I'm not talking about mere corruption here. Because the opposition keeps framing the issue in corruption terms, but the word badly mischaracterizes the problem - if it was just corruption, it wouldn't be so bad.

It isn't, though: it's out and out gangsterism.

Corruption, in itself, need not be a social disaster. Italy, Greece, Brazil and even South Korea show that it's possible for an economy to grow consistently over decades, creating a massive middle class, even with a lot of corruption in the system. Once institutionalized in a stable way, corruption can be made compatible with long term growth and social development.

In Italy, the Christian Democrats institutionalized an elaborate system for distributing corruption rents between insiders - longstanding officials in key posts within the party acted as gate-keepers to the loot, harmonizing the interests of the various party factions and bringing a measure of order and predictability to the looting. Mexico's PRI institutionalized a system of 6-year "turns" for various factions to get their hands on the goodies, with the understanding that each new government would cover up for the last. Both systems lasted for decades, and both were compatible with growing incomes and rising living standards.

Every corrupt regime that stands the test of time realizes sooner or later that no amount of money is enough to satisfy every player's craving for state rents if everyone's scrambling for the loot at the same time, because it's never in a parasite's interest to kill the host organism. To make the system work, to make the system last, you need some informal institutionalization. You have to establish a stable set of unwritten "rules of the road" for corrupt officials and wannabes to bring a measure of predictability and stability to their actions. You need some widely-shared understandings of the Dos and Don'ts - if the standard kickback is going to be 10% of the contract's value, you need to apply that consistently, both to give the payers a measure of predictability and, more importantly, to make sure that no faction in the regime feels like it's getting a worse deal than any other.

Much of it is about regulating relations between top-level crooks and the class of aspiring bandits a step down from them on the organizational ladder. A stable corrupt system has to have a way to reassure second-tier thieves that, if they go along and get along, if they follow the implicit rules without raising a fuss or trying to jump the queue, they will, in time, get their shot at being first-tier pillos with access to the really big bucks. Without an implicit, stable seniority system, there's no way to control the competition for spoils between factions.

Even chickens understand that they need a pecking order.

What's new and scary about kleptobolivarianism is that there seems to be no stable pecking order, no institutionalized system for regulating and stabilizing the looting. Without it, the scramble for loot all too easily succumbs to gangland logic.

The Luis Velasquez Alvaray scandal provides a startling glimpse of chavismo's serious difficulties in institutionalizing corruption. Even in the upper echelons of the kleptocracy, you can never feel quite safe in your position. At any time, some other faction could make a play for your faction's racket. You may be getting obscenely rich, but you have to sleep with one eye open.

In such circumstances, your only insurance is to be more aggressive than the other guy. To steal more, faster in order to secure your position before you find yourself in trouble. To stash away enough compromising material on the other guy to make sure you can blackmail him in case he decides to go after you - (hell, LVA said explicitly that that was his game!) And, increasingly, to be willing to turn to violence if that's the only way your short-term interests can be secured.

Only problem is that if every faction starts following this logic at the same time, the result is pretty much anarchy. We end up with what we're seeing more and more: gangland stuff.

In this sense, the Danilo Anderson murder really was a watershed moment in Venezuela's recent history - an event whose full impact we are only now starting to appreciate. More and more, I think that the laughably amateurish cover-up was not merely a matter of incompetence. That somebody high up wanted to send a message - you can and will be killed if you cross me - and could only send it effectively if everyone in the country could SEE that the murder had been covered up. There's just no other explanation I can fathom for the opera buffa starring Giovanny Vasquez de Armas.

Because we can sit here and argue for months. But the reality is that the top, say, 3,000 people in the regime, they know. They know exactly who killed Danilo Anderson, and they more or less know why. They got the message. They understand that in the absence of any stable mechanism to institutionalize the looting, disputes will end up getting settled at the point of a gun. Just ask Luisa Coronel, Francisco Ameliach's assistant.

So this is what it's come to. The opposition keeps talking about corruption, but the reality is that corruption, in the old sense, is something for Venezuela to aspire to these days. It sounds morbid, but a system for looting state resources in an orderly fashion would be far preferable to what we're getting now.

The consumption boom and how he told it...

It's a challenge that every reporter assigned to cover the economy has to face: how to write about an irreducibly complex topic without either dumbing the story down or sending the reader into a boredom-induced catatonic comma. Jens Gould demonstrates how it can be done well in this piece in yesterday's New York Times:

With oil revenue flowing into its coffers, the government is spending like never before on social development programs that free up cash for the poor by providing free education and health care and cheap food. Wage increases and infrastructure projects also fill the economy with money that filters down to Venezuelans' pockets. As a result, consumers are buying more each year, helping Venezuela post growth that exceeded 9 percent last year and in the first quarter of 2006.

But economists here and abroad say that such rosy indicators are part of an artificial economic boom that could later hurt the country; the spending spree, they say, is masking the fundamental limitations of an economy propped up by spending, but failing to generate enough new private investment to sustain longer-term growth and job creation.

It's worth reading the whole thing. The only thing I would've done differently is that I would've leaned on the we've-been-here-before-angle more - cuz the current boomlet is such a 1975 redux it makes you weep. On the other hand, I my reporting probably wouldn't have been as good...

Teodoro Petkoff still hasn't understood what draws the poor to Chavez

Picking up where I left off yesterday, I wanted to comment on this bit from Teodoro's interview in El Mundo on Tuesday:

Q: At first, president Chavez also campaigned on the importance of work with dignity. Thousands of people ran to Miraflores to look for jobs. And what happened?

A: It's true. He took power with that goal in mind. He announced that his great enterprise would be to attack poverty. And I have to recognize that he succeeded in making the social question the great topic of national debate. Today, no one doubts that that's the issue...

Teodoro has been playing on variations of this riff for some time: Chavez's one merit is that he put poverty at the center of the national debate. I think that's wrong, in a subtle but deep way.

For as long as I can remember, the "social question" has been at the center of Venezuela's national debate. It's not like Luis Herrera beat Piñerúa in the 1978 election because Piñerúa didn't talk about poverty. It's not as if Lusinchi campaigned on a platform of abolishing inherittance taxes. No! Every government in the democratic era has come to power with a discourse about poverty. There's nothing innovative about that...

Chavez's discoursive innovation was something quite different: Chavez talked to the poor, not about them. While the old elite talked about the poor, using technocratic language that made sense within elite conceptual categories, Chavez talked to the poor in their language, using their conceptual categories, and saying things that made sense to them.

This, I think, it's the crux of his considerable success in engendering fierce loyalty among his poor supporters. Chavez's discourse treats them as subjects, not as the objects of the debate. Though I'm convinced this is a purely rhetorical ploy, the emotional impact of the strategy has been startling, and continues to be effective. Poor people feel included by Chavez's discourse - and, politically, that feeling is worth a thousand realities.

Teodoro doesn't seem to quite grasp the distinction. In his little riff, he always credits Chavez for having launched a debate about poverty. In his 30-second talking-head spots, he seems to think he's matching him. But he isn't - because he's subtly but badly misunderstood the nature of Chavez's discoursive innovation. Teodoro is trying to counter a guy who talks from the gut and to the poor with a discourse from the head about the poor. It won't work.

Like an over-caffeinated grandpa reading a bedtime story...

My unbridled enthusiasm for Teodoro Petkoff's politics is matched only by my dismay at the guy's abysmal electioneering skills. A little bird put this campaign ad and this other one in my inbox. It's stunning - after all these years, the guy still manages to come off as both condescending and over-intellectual when he panders.

I can't exactly put my finger on why I think these ads are so terrible. It's not the message; though it could be better phrased, it's what we've come to expect from him. Partly, it's that - bizarrely - he's dressed like a mortician.

Mostly, tough, it's the impression you're left with after watching them, the taste they leave in your mouth. There's something about his intonation that makes him sound like an over-caffeinated grandpa reading a bedtime story. It's terrible. You don't feel like you're watching a leader in waiting, you feel like you're watching a pundit, a fantastically entertaining insider maybe...but not a leader.

One thing actively horrified me: he uses that ghastly formulation - "los más pobres" - to refer to the poor, and so unwittingly ends up talking about them, rather than to them - a estas alturas del partido! Teodoro, pana, you're not at the Ateneo: you can't talk to people whose votes you desperately need as though they're not in the room!

My source isn't sure if these ads are already running on Venezuelan TV, or if they're just screen-tests. Note to Teodoro's people: Teo is a disaster reading into a camera. You'd do much better going for more produced, voice-overed ads like this one.

Want s'more free advice? Get it through your heads: you can't beat Chavez with brilliant analysis. You can sell a lot of newspapers that way, yes, but it won't win you an election. Teo needs to use his ads to establish an emotional connection with the audience - because elections are won in the gut, not the head. That's true not just in Venezuela, that's true everywhere.

So show the guy walking through the Sur del Lago town where he grew up, show him emoting as he sees the conditions there, show him talking to poor folks, not about them. That might get you somewhere. But these ads - especially the first two - are seriously off on the wrong track.

Makarem's Recadi Past

Delicious tidbit on North American Opinion Research Big Cheese Julio Makarem: according to the Diccionario de la Corrupción en Venezuela, Volume III, Makarem was indicted way back in 1989 for his role in a complicated scam to bilk millions of subsidized dollars out of Recadi.

(Recadi being the 1980s corruption sink-hole in charge of administering rationed, subsidized dollars under the Lusinchi-era Currency Controls.)

Makarem fled the country to avoid trial.

Garcia wins Peru by 10 points - NAOR poll off by 28

Heh...sorry, couldn't help the headline. Not a week ago, chavista briefcase-pollster North American Opinion Research was saying Humala would win in Perú by 18 points. In Lima, NAOR's "tracking poll" through May 31st had Ollanta beating Alan by ten points, but official results show Alan beat Ollanta by 62% to 38% in the capital.

But on more subtantive grounds: God it was great to see Chavez's unhinged meddling in Peru backfire spectacularly. A couple of weeks ago, I talked about the internationalization of hemispheric politics in Latin America. Yesterday, for the first time possibly ever, a newly elected South American leader chose to portray his own election as a direct rebuff of another South American leader. Alan García is defining his presidency via its antichavismo, from the start.

LIMA, Peru, June 4 (Reuters) - Ex-President Alan Garcia, who leads Peru's runoff election, said on Sunday he had defeated plans by anti-U.S. Venezuelan leader Hugo Chavez to increase his influence in Latin America.

"Today, Peru has sent a message of national sovereignty and has defeated efforts by Hugo Chavez to incorporate us in the expansion strategy of his military and backward-looking model, which he's tried to implant in Latin America," Garcia told supporters after exit polls showed him winning the election.

Interesting stuff. I have this sense that, in 20 years, we could look back on the summer of 2006 as the time when the wheels fell off of Chavez's hemispheric project. But it's early days still...all eyes now have to go on the big prize: México.

Anatomy of a Scoundrel...

The more folks look into it, the longer Julio Makarem's "rabo'e'paja" looks. You know who I'm talking about...Mr. Makarem, chairman of that most respectable polling firm North American Opinion Research, he of the Humala-will-beat-Alan-Garcia-by-18-points poll, the very same two-bit would-be intimidator of Venezuela's English-language blogosphere, our ever-popular alleged Belkys Cedeño gopher and shady Petrotulsa/Vatramafia influence-peddler extraordinaire...well, according to the Diccionario de la Corrupción en Venezuela, Volume III, the guy was indicted way back in 1989 for his role in a complicated scam to bilk millions of subsidized dollars out of Recadi. He fled the country to avoid trial.

Una joyita, el tipo.

Light Summer Reading

A couple of months ago, Harvard's Center for International Development hosted the second conference on Venezuelan Economic Growth 1970-2005. I'm really sorry I didn't get to attend, but I've been reading the conference papers (all linked to from the conference web page) and many of them are really fascinating.

Everybody who is anybody in the inbred little world of Venezuelan political economy research seems to have presented. We're talking Ricardo Hausmann, Francisco Rodríguez, Osmel Manzano, Dan Levy, Roberto Rigobón, Jonathan DiJohn, Javier Corrales, Michael Penfold, Francisco Monaldi and a number of others who are maybe not so well known, but are doing really high level work on why the Venezuelan economy tanked from 1977 onward.

Many different points of view were put forward (it was the labor laws! no, it was the clientelism! actually, the crappy financial system! no, the oil policy!) and your head more or less spins after reading a few of the papers. I would really love to interview some of the authors for the podcast...actually, thinking about taking that on as a summer project.

Have a look!

Quotable Vegas

Thanks to Katy, I got my hands on a copy of Falke, Federico Vegas's remarkable novel about the ill-fated "invasion" of Venezuela by anti-Gomez exiles in 1929. I'm just starting it, but the book is so quotable you can hardly help yourself. I can't imagine Vegas is, erm, unaware of the contemporary overtones when he writes passages like:

No hay quien se salve del gomecismo...unos están a favor y otros en contra mientras nuestro verbo gira desde hace demasiado tiempo alrededor del mismo sátrapa. Es un caso de vampirismo. ¡Nos ha chupado hasta los sesos!...La palabra "Gomez" anula esos inesperados vericuetos que le permiten vagar a una imaginación libre, y por lo tanto, su persistente efecto acaba tarde o temprano con las buenas conversaciones.

Nobody's safe from gomecismo...some are in favor and others against while our words have been centered for too long around the same old fox. It's a case of vampirism...he has sucked us down to our brains!... The word "Gomez" annuls those unexpected byways that allow a free imagination to wander, and so its persistent effect puts an end, sooner or later, to good conversations.

The plant that ate the lake

Katy says: Once again, the rain season is upon us, and lemna has returned in full force to Lake Maracaibo. A year after an environmental disaster caused, in part, by the government's complete disregard for environmental conditions in South America's largest lake, the plant has made an encore appearance. Neighbors are already complaining about the disease and the smell.

If anyone can tell me what the government has been doing this past year to prevent another serious outbreak of the stuff, I sure would like to hear it.

Are you in Brighton? Know anyone in Brighton?

Come to watch this roundtable on Wednesday (day after tomorrow) at 4:00 pm:

Latin America in the Spotlight & 40th Anniversary of IDS

Roundtable

Politics in Latin America: deconstructing the meanings of the Left and the implications for the region’s development

Much has been said about the turn to the left in Latin America as a response to the unsatisfactory socio-economic situation that lasts for more than two decades. The neoliberal approach failed to revert the situation and a shift to the left was a hope for many countries. Left-wing elected leaders in Argentina, Bolivia, Uruguay, Brazil, Chile and Venezuela appear to enforce the impression that a homogenous Left block is being constituted in the region.

Nevertheless, the political projects of these countries are very diverse and constructed as a response to particular social, economical and political contexts. This roundtable aims to deconstruct this so called turn to the Left by debating:

• What does this Left in Latin America really mean?
  
• Is the turn to the Left in many Latin American countries a consolidation of democracy or a challenge to the current political system?
  
• Does the Left represent a real alternative to the demands of the societies for region’s development?

Date: May 31st 2006, 4pm
Venue: Lecture Theatre at the Brighton and Sussex Medical School, University of Sussex

*** Joe Foweraker
Director of the Centre for Mexican Studies, University of Essex

*** Laurence Whitehead
Senior Fellow of Nuffield College, University of Oxford

*** Francisco Toro
Former, journalist specialised in Venezuela. Publishes articles at The New York Times, The Economist, The Finantial Times, The Washington Post and several Venezuelan media

*** Sue Branford
Latin American Bureau, author and journalist of BBC, the Financial Times and Red Pepper among others

*** Mick Moore (Mediator) - Research Felow, Institute of Development Studies, Director of the Centre for the Future State

Podcast: The Velásquez Alvaray-Maria Alejandra Rivas-Julio Makarem-Anderson Case Nexus

In this seven minute podcast, I try to explain how the Velásquez Alvaray scandal fits in with the Anderson Case, and North American Opinion Research's Julio Makarem's role in the affair.

No hay escándalo que dure dos días...

I start looking through the opposition press this morning thinking, "hmmmmm, I wonder what else they have on the LVA meta-scandal?"

System boot.

Click, click.

Funny - it's off El Universal's front page.

Ok, maybe El Nacional...nope, tiny little refrito of Jesse Chacon's lame declaration.

Union Radio, then? Nope, just Chavez ranting about rivers of blood bla bla bla...

Ermmm...I know: Globo! Nope, it's the ULA riots there.

Harumph...maybe...Descifrado? Blimey, even they've lost interest...

I start to scrape the bottom of the barrel...Notitarde? Nope. El Carabobeño? Nope. Ultimas Noticias? Nope. (God, this is getting really desperate.) Correo del Caroni? Nope. El Mundo? Sidestory.

Jesus, only Venezuelanalysis is giving anything like high billing to the meta-scandal, with a hilariously naive, heavily sanitized, 48 hour old piece (storyline: corrupt magistrate gets his comeupance!)

I find it staggering, but the LVA incriminate-a-thon was a one-day story!

How is that possible? After years and years of speculation and allegations about government meddling in the judicial system, about Gangster Midgets and vicepresidential hairy hands in the Anderson case, after sooo much wondering about what was behind Nicolas Maduro's attacks on Judge María Alejandra Rivas, after all that finally we get an insider who comes out and just hands us the Roseta Stone to kleptobolivarianismo's methods and allignments and the papers lose interest after all of one news cycle?!?

I seriously don't get it. Where are the exposés on Julio Makarem and Pedro Torres Ciliberto? Where are the photo-essays documenting Arné Chacón's lifestyle? Where is the basic curiosity you'd think would push any normal journalist to look into Belkys Cedeño's influence? Are these guys just tarados? Are their editors THAT intimidated? Or has the level of scandal fatigue reached such an extreme that really nobody cares? That it really just isn't news? I can't piece it together...

Quinto Dia to the rescue
The only half-way serious reporting of the behind-the-scenes intrigues of the LVA meta-scandal comes in this Quinto Día piece attributed to a "J.L. Hernández." By his reckoning, the whole thing comes down to the ongoing fight within chavismo between Pedro Carreño's faction and Nicolas Maduro's.

Velásquez Alvaray, himself a Carreño man, had been struggling for control over the court system with Maduro's protegé, Belkys Cedeño, who heads the Caracas Court Circuit. You might remember Belkys Cedeño as the judge who infamously ordered the TSJ's press room shut down and had Judge María Mercedes Prado tossed out of the building to stop her making embarrassing declarations about the reasons she was fired. Prado, incidentally, had been in charge of the explosive (literally) case of the bombing of the Spanish and Colombian diplomatic missions in Caracas back in february 2003. (A signature Helmeyer/Del Nogal hit...but here I really digress...)

According to Hernández, Chávez dithered over which side to back until one of LVA's underlings tried to shore up his own position by currying favor directly with Chávez's mom. This sent Chávez into a fury and sealed the maneouver to purge LVA and his people from the tribunal.

With LVA out of the way, Belkys Cedeño - who has some 60 official complaints lodged against her, and is now the odds on favorite to be the mysterious "La Donna" supposedly heading the Band of Midgets - consolidates the Maduro Faction's ascendancy over the judicial branch. Cedeño, who has a long and malodorous Google Trail, is one of these chavista judges who mysteriously keeps getting picked "by lottery" to rule on very high profile, politically sensitive cases.

Part of what's valuable about LVA's supercharged press conference is that it allows us to start piecing together the always-murky map of who's on whose "team" in the chavista faction wars. We start to get a sense that Maduro and Jesse Chacón head a faction with deep tentacles in the Caracas courts, including Cedeño and Maikel Moreno, the support of TSJ head Omar Mora Diaz, close money links with Jesse Chacón's brother and Pedro Torres Ciliberto, but also financed by Julio Makarem of the NAOR/Vatramafia fame.

Intriguing side-show: in the second recording LVA presented at his dynamite press conference, Judge Rivas says Makarem was actually the go-between sent by Belkys Cedeño to rope her into a conspiracy to implicate first Alberto Federico Ravell (for trying to bribe her) and then Luis Velásquez Alvaray himself. Rivas, who refused to play along, is now paying the price: she's been charged with corruption by the the Prosecutor General's Office.

Unfortunately, since defenestrated Maduro man Jesús Caldera Infante did not defend himself by spilling the beans on the Carreño faction, we don't have a comparable sense of the who's who in the "Barinas Group."

Admittedly the second chunk of this post is just a concatenation of rumors and more-or-less likely conjectures, and more than obviously a single damn blogger in Europe does not have the means to piece this whole complicated puzzle together. Now if Venezuelan journos could FOCUS on this story for more than one news cycle at a time, we might collaboratively figure out how this story whole thing hangs together.

The Meta-scandal that all the little scandals fit into...

Wow. Just wow. In the time it takes to give a single, nitro-charged press conference, the Luis Velásquez Alvaray Affaire has morphed into the Mother of All Scandals, the Meta-scandal that all the little scandals fit into. The LVA Affaire is to Chavez-era scandals what Ronaldinho is to football. You can blog for years waiting for a story like this to break. When it does, it's so rich, so multilayered, you barely know where to start digging into it. Just wow...

First off, it's now clear that, as head of the Judicial System's Managing Authority (DEM), Magistrate Velásquez Alvaray had access to a motherload of compromising information about regime higher ups. Much of it is in the form of audio tapes - the first two of which he played at the red hot press conference he called yesterday. It's also clear that he's willing to make a lot of the remaining tapes public if the regime keeps investigating him.

This situation provides a rare window into the inner workings of the bolikleptocracy. In the absence of working institutional mechanisms for accountability and transparency, big dust-ups between insiders become the only way we get a chance to peer into the opaque inner workings of the regime.

Among the minor jewels of yesterday's incendiary press conference, Velásquez Alvaray asked why there has been no investigation on the sudden wealth of a number of regime financiers, including Pedro Torres Ciliberto, Arné Chacón, Maikel Moreno and...wait for it...Julio Makarem. That's right, Mr. Makarem of North American Opinion Research fame, the guy who took out a giant full-page ad to threaten and intimidate Alek Boyd and the rest of us for writing about NAOR, is apparently one of the major regime money-men...and to think we doubted his polls!

But that's just one of the less explosive bits out yesterday's Superfly-Motherfuckin'-TNT of a press conference. LVA went on to confirm, again, that the court system is controlled by the "Band of Midgets" - or, erm, the height challenged - with strong links to drug trafficking and at the very least the tacit support of Vicepresident JVR, National Assembly Chair Nicolás Maduro, and Interior Minister Jesse Chacón. The official line, incidentally, is still that all this stuff about Midget Judges is a kind of urban legend.

I think the point-of-no-return was reached when Velásquez Alvaray took aim directly at Vicepresident José Vicente Rangel - the power behind Chávez's throne, and a guy who's increasingly looking like our little, home-raised Montesinos.

After playing a taped phone call where chavista convicted-murderer-turned-judge Maikel Moreno asks the head of the Supreme Tribunal's Penal Hall for a drug trafficker's release on behalf of "el vice," and another of Rangel himself trying to get a "loose canon" judge taken off of the Danilo Anderson murder "investigation", Velásquez Alvaray asked, "rhetorically," why it might be that Rangel is so single-mindedly concerned with the Anderson case.

He didn't quite say it, but a buen entendedor pocas palabras. Even at this late stage, LVA is still playing this sordid little game of implicit blackmail, mixing in serious allegations with broad hints at much worse stuff to come. At his Improvised Explosive Device of a press conference, the guy danced very close to the edge of a very deep precipice, signalling his willingness to incriminate the VP in the most sensational murder of Venezuela's recent history.

My sense is that he's already gone too far to pull back: Rangel just can't go easy on a guy who's said the things LVA's said, and anyone who's seen The Godfather understands why. But then, the gangland-calculus may not be all that clear for Rangel. Yesterday Velásquez Alvaray said he had "many more recordings" and added explicitly that even if he's killed the remaining audio tapes will come out. LVA has learned the lessons of the Anderson Case well - had he taken that basic precaution, Danilo might still be among us.

Rangel is in a difficult position: he can't be sure what's on the remaining tapes, how much damage they could do, or if they even exist. Maybe it's just a bluff, maybe LVA played his best tapes yesterday to try to psych them out into thinking there's worse to come. Or maybe LVA is sitting on some sort of a smoking-gun tape linking JVR directly with the Anderson Case. Who can tell?

Those are, of course, imponderables. What we do know is that the LVA Meta-scandal is becoming the Venezuelan equivalent of a Freedom of Information Act. All the information coming out is stuff we've presumed existed for years but had no way of accessing. Only when the internecine squabbling between chavista factions gets really really hairy does stuff like this see the light of day. And then, amid the fury of back-and-forth accusations, we get to cash in. Finally we get some sort of handle on the behind-the-scenes intrigues that are the bread-and-butter of intra-regime politics, but which are hidden from public scrutiny in the usual run of affairs.

Eva Golinger had FOIA, we have LVA...

TSJ Justice Velásquez turns up the heat in Bolivarian corruption scandal

Katy says: Supreme Tribunal justice and former chavista congressman Luis Velásquez Alvaray (LVA), who was one of the main architects of last year's Supreme Tribunal Law that gave the government the power to pack the courts, has been suspended pending an investigation into alleged corruption. Today, LVA shot back at the government in a press conference chock-full of incandescent allegations and promises of more to come. What follows is a translation of the Globovisión note on the press conference.

"Supreme Tribunal magistrate Luis Velásquez Alvaray shot back claims and allegations, following his suspension from the tribunal imposed by the Republican Moral Council. He regretted, he said, that "one of the watchdogs of the Constitution had violated it through and through, as I am about to show." He also accused Vice-president José Vicente Rangel, Interior Minister Jesse Chacón and National Assembly President Nicolás Maduro of plotting to install "chavismo without Chávez" and of wanting to exclude him from the Judicial Branch so they can "keep abusing their power."

He stated that the campaign against him began with the (murdered prosecutor Danilo) Anderson case, and that it is being orchestrated by Rangel, Chacón, Maduro, and judges Belkys Cedeño and Maikel Moreno.

"Why is Rangel so interested in the Anderson case? Why don't they investigate that more? Everything related to the Anderson case is being hidden from the public", said Velásquez. He said he did not know why they were so keen on hiding everything related to the case, "but Rangel is related to every instance that the Anderson case touches."

He did not wish to state that Rangel was the leader of the "band of midgets," but he did affirm that Rangel knows who its members are, and as proof he played an alleged recording of judge Maikel Moreno asking the president of the Penal Hall of the Supreme Tribunal to acquit a person "convicted of drug-smuggling felonies."

Velásquez also played a recording of judge Alejandra Rivas. Velásquez affirmed that Rangel told him she was partial and demanded Rivas be removed from her post, but Velásquez declined to do so after investigating her and concluding she was an honest judge. Velásquez also stated that he will continue making his allegations, saying "if they want to kill me, go right ahead," and claiming he had "many more recordings."

With the Constitution and a crucifix in his hand, he swore "to the country that I have never engaged in acts of corruption against the State. I have never allowed it, nor will I ever." He said Interior Minister Chacón's allegations against him were "moronic" and that the Republican Moral Council has been "blatantly lying" to the country.

Velásquez reproached the Moral Council for having given Chacón 10 days to clarify his allegations, while his own right to self-defense has been over-ridden. He says the Moral Council "makes up deadlines that do not exist, and I was given only eight days to defend myself." He said the Interior Minister "fabricated" evidence, and called his suspension, announced yesterday by the Prosecutor General, the Comptroller General and the People's Ombudsman, "the circus of the year."

He stated that he will not leave the country and that he will prove his innocence. "We will fight to the end because it is not about me, it is about the constitutionality [sic]. The government has to think about what its Interior Minister, and now the Republican Moral Council, did. They are attempting a political murder."

Podcast: Fecal Matter-Ventilation Equipment Collision Chronicles...

The "Republican" (ha!) "Moral" (guffaw!) Council has suspended Luis Velásquez Alvaray from the Supreme Tribunal...incrimination counteroffensive imminent...kick back and enjoy the show...

Shoe on the Other Foot Chronicles

After years and years of broadly sympathetic coverage, the New York Times' Juan Forero writes a mildly critical piece on Chavez amazing backfiring hemispheric strategy and guess who doesn't like it one bit...

Then, the opposition wins a couple of mayoral by-elections in Miranda State and guess who starts calling for a manual count...

"Rumours that I am directing a film about the 2002 coup in Venezuela are untrue and unfounded."

The other day, when Chavez announced Oliver Stone would direct a film about the 2002 April Crisis, my first reaction "well, the guy is the perfect choice - Hollywoodizing a jumble fact and fiction for obscure political purposes is what he's all about...Chavez'll love it..."

But then, Stone has been moving towards the more conventional gringo-jingoistic pap that sells at the box office, so maybe this one's not so surprising after all:

Oliver Stone has denied been linked with a movie depicting the 2002 coup in Venezuela, in spite of an announcement by President Hugo Chavez.

Sheesh...where does he get this stuff?

The Messiah Thing

In London, Chávez told assorted PSFs that he intended the Bolivarian Revolution to "save the world." Yesterday, on his return, he said "the world has more and more hope in the Bolivarian Revolution." Little by little, the rhetorical field of endeavour for chavismo has shifted up a notch, from merely Latin America to the world as a whole.

Now, for years it's been clear that the guy had a bit of Messianic complex, but I'd never thought to take that literally. Alas, that's what we're dealing with now - the salvation of humanity is what he thinks this is all about.

The sheer hubris in this kind of declaration is pretty stunning...as is the utter collapse in common sense it takes to fail to see it. Y'know, if alarm bells aren't going off in your head when the guy in front of you tells you he intends to save the world, you've got some growing up to do (I'm looking straight at ya, Ken...)

I mean, there's overreaching, and then there's overreaching. I think we're pretty obviously in overreaching territory here.

Everybody's doing it...

Criticisms of Chávez's amazing, morphing strategic association contracts just got a whole lot harder to sustain:

Oil producers fume at ‘third world’ profits grab
The US oil industry charged the government with behaving like a third world despot after the House of Representatives voted to punish companies if they refused to change contracts to give the government a bigger share of rising oil profits.

“We live in a nation of laws,” said John Felmy, chief economist at the American Petroleum Institute, which represents US oil producers. “This is not Caracas or Moscow.”

The House of Representatives voted late on Thursday to eliminate billions of dollars of royalty incentives for oil and gas producers operating in the resource-rich Gulf of Mexico. The measure, which lawmakers approved by a vote of 252 to 165 as part of a broader domestic spending bill, would also compel energy companies to renegotiate the contracts that govern their drilling operations in publicly owned waters off the Gulf coast.

The House has generally been more protective of oil industry interests than the Senate, making it likely the provision will become law.

In order to encourage oil and gas production in the deep waters of the Gulf of Mexico, the Clinton administration in the late 1990s signed roughly 1,000 contracts with producers that exempted them from paying the usual 12-16 per cent royalties to the federal government on sales of hydrocarbons extracted from the Gulf. With oil prices hovering at $70 per barrel and natural gas prices at roughly $6 per thousand cubic feet, the Government Accountability Office earlier this year estimated that these royalty exemptions could cost Washington $20bn (€16bn, £11bn) over the next 25 years.

Two Podcasts in One Day

Caldera Infante and The Incredible, Vanishing Luis Velasquez Alvaray Scandal

(This one's a direct link - just one click should get the audio playing.)

Podcast, anyone?

Right, well - having worked out (I think) the technical bits - here's the first Caracas Chronicles Podcast...

Cry me a river...

Here's one to turn your stomach: Jesús Caldera Infante, the former head of Fogade who was so corrupt his own staff rebelled rather than continue covering up for him, now says he's a victim of "political persecution." Responding to Assemblymember Pedro Carreño's investigation into his misdeeds, the guy says Carreño is only out to get him to forestall his intended run for the Táchira State governorship.

[Which, for all I know, could be true: a fight between Pedro Carreño and Caldera Infante is more or less a fight between Al Capone and Bugsy Siegel as far as I'm concerned.]

What's galls me is the way kleptochavistas who, exceptionally, get into trouble immediately turn around and cynically co-opt the language used by the scores of real victims of chavista political persecution. Nevermind that the guy is STILL the top bureaucrat in the Carabobo State Government - nevermind that he's never been tried, or even indicted, or even faced more than parliamentary censure. Nevermind that he's still living high on the hog off the money he embezzled. Barf.

What's serious, though, is that Caldera Infante's preposterous gripe muddies the semantic waters, tending to raise questions about ulterior motives when real persecuted dissidents cry foul. Which isn't just infuriating, it's dangerous.

Bolivarianism and the (Re-)Birth of Hemispheric Politics

Over the last year or so, something new has happened in Latin America. For the first time since the heyday of Fidelista aggitation in the 1960s and early 70s, politics is now occurring on a hemispheric basis. Decisions taken in one country have consequences throughout the region; leaders increasingly find themselves operating on a Latin America-wide context.

Needless to say, I'm not much given to acknowledging Chavez's 'achievements' - but on this one, well, there's no getting around it: the re-birth of politics on a Latin American basis is clearly down to the decisions he's taken.

Evo Morales, more than any leader in recent hemispheric memory, owes his election to decisions taken by foreigners: now Bolivia's energy policy is made in a pétit committé with Fidel and Chavez. Lula, more than any other Brazilian leader in recent memory, finds himself caught managing a hemispheric crisis: now his poll numbers hinge on Evo's decisions. Peruvians and Mexicans, more than at any time in the past, find themselves in an internationalized election campaign: these days, the attack ads they see on TV take aim at a foreign head of state.

Chavez is at the root of this regionalization of political life - which more and more configures a genuinely hemispheric political sphere.

Maybe those of you who are a bit older find all this a bit less strange. Me? I was born in 1975, so I've only read about the last period of real hemispheric politics from history books. It feels very new to me - this sense that the rules of the game in Latin American politics are changing before our eyes, that the politics of any one country are no longer understandable without reference to what is happening in the rest of the region, in a process that tends to reconfigure Latin American politics more and more into a transnational game.

And here, for the first time, I start to get a sense of what Chavez means by Bolivarianism.

In purely domestic terms, the tag makes very little sense: Bolivar, the classic 19th century liberal, had a political vision that shares almost nothing with Chavez's grab-bag statism. For a long time, my sense had been that Chavez had simply co-opted the Libertador's name to exploit Venezuelans' deep-seated emotional link with his figure. But as we see Chavez's vision of a hemisphere-wide politics increasingly turn into a reality, we get a sense of what he actually means by bolivarianism: a disruptive transnational politics.

It's easy to see that his is a kind of impoverished Bolivarianism - one stripped of Bolivar's obsessive concern with establishing a formal legal basis for authority in the nascent Latin American state, one that's actually opposed to the enlightenment tradition of reverence for republican virtue that permeates Bolivar's thought. From Daniel O'Leary and Antonio José de Sucre we've passed into the hands of José Vicente Rangel and Ramiro Helmeyer. In Chavez's hands, Bolivarianism keeps its hemispheric ambition and its disruptive radicalism, but loses the liberal-republican heart of Bolivar's vision. As an ideology, it's a bit of an arroz-con-pollo sin pollo.

But in terms of internationalizing the political life of the hemisphere, you gotta hand it to him.

Rayma strikes the right note

Katy says: With all due respect to Weil, this cartoon by El Universal cartoonist Rayma Suprani is rather brilliant. How best to sum up the petro-dollar carnival that is Chávez's European trip?

(Note: The third sign clockwise reads "Pay up to the SENIAT", our local tax collection agency).

Perhaps next year Chávez will get lucky and be crowned Carnival Queen of Gualeguaychú.

"Thank you, my foolish friends in the West"

Ian Buruma, a prolific Anglo-Dutch intellectual, nails Chavez in yesterday's Sunday Times. His little screed must be one of the most clear-headed, digestable-to-foreigners anti-Chavez polemics I've seen in print. [Nod to Alek for the link.]

Google sez...

Behold Google Trends - the net toy that tells you how many people are searching Google for what.

Fun fact number one: more people are searching for "Castro" than for "Chavez" on any given day.




Fun fact number two: only in Venezuela do more people search for "Chavez."



Fun fact number three: Castro isn't the only barbudo who gets more searches than Chavez.



Make of it what you will...

Trust Harry Hutton to point me to cool new net gadgets in the silliest of possible contexts.

Dissociated Opposition Chronicles

Nothing is quite so obnoxious as seeing the Opposition confirm, through its behavior, bits of overheated chavista rhetorical vilification. The classic one here is the charge of "dissociation" - of a deep disconnect with the new sociopolitical realities of the country. The charge has always been part truth, part overheated rhetoric. Now and then, though, an Opposition figure makes a move so aggressively ill-conceived, so psychotically detatched from political realities clearly visible even from an ocean away, that I can only shake my head in staggered disbelief.

Yesterday, former Táchira governor Sergio Omar Calderón - perhaps best described as a second-tier provincial ancien regime dinosaur with a quadruple common-sense bypass and the electoral appeal of a neutered chihuahua - threw his hat into the presidential ring representing - wait for it - COPEI, a political party that Calderón - alarmingly - seems to believe still exists.

That Calderón - or, indeed, the skeletal remains of COPEI - could be so fantastically cut-off from political reality to think the guy could actually make a credible candidate (let alone have a chance of actually beating Chavez) demonstrates such awesome inanity, such an aggressively warped misunderstanding of contemporary Venezuelan politics you can only hang your head in despair.

And here we come back to a fundamental, festering, unaddressed problem with the entire Opposition political class - one I've mentioned before: there is no mechanism to induce a Venezuelan politician to retire, to change occupations, to just plain stop hanging around fouling up the public sphere once they're past their sell-by date.

For the love of christ, RAFAEL CALDERA (who was already graying when he met Allende) is still writing newspaper columns - SEVENTY FOUR YEARS into his political career. (Watch for him to launch his campaign on the Convergencia ticket any time now - la propia generación de relevo.)

Pardon my exasperation, but it's maddening. They simply don't stop. They stay in the public sphere for years or decades after they've become a liability. There's no getting rid of them.

OK, just wanted to get that off my chest...

[/rant]

ConTradeIctions

The more you think about the revolution's trade policy, the less sense it makes. On the one hand, we hear Chavez attack any country that considers a Free Trade Agreement with the US in the crudest of terms. On the other, we see Venezuela's bilateral trade with the US skyrocketing. Why? Because our one big export product already has tariff-free access to the US market...

In fact, Venezuela already has a kind of de facto, rough and ready FTA with the US. Our major export product faces no market access issues up north. Under those circumstances, it's enormously fresh for Chavez to go aggro on any country that seeks to secure similar market access for its main export products via negotiations. No matter - petty political advantage is to be had, and Chavez is not minded to pass up any opportunity in that regard.

In fact, the La Paz-Caracas-Havana Juggernut's discourse on trade is as confused as confused can be. Think of the Cuba angle. For 45 years Fidel has been blaming any and every problem on the island on the US trade embargo. In official, fidelista discourse, then, it's the absence of trade with the US that makes countries poor. Ummmm...shouldn't Fidel be the hemisphere's number 1 fan of bilateral FTAs with the gringos, then!?

Nah, the cookie doesn't quite crumble that way. The Axis of Evo's guiding political principle is far cruder than that: whatever the US wants must be bad, whatever the US doesn't want must be good. They don't like free trade with Cuba? Free trade with Cuba must be wonderful! They do like free trade with Colombia? Free trade with Colombia must be the road to perdition!

The Un-Trade Agreement...

Well, thanks to Virginia I now have the text of the People's Trade Agreement Venezuela, Cuba and Bolivia signed last month, and the thing is so amateur hour it's unreal.

Just for starters, the thing assumes you can just decree non-tariff barriers away - without the complex process of regulatory harmonization the process entails in the real world. For another, it just has no rules of origin. At all. All it says is "The governments of the Bolivarian Republic of Venezuela and the Republic of Cuba will immediately proceed to remove tariffs and other non-tariff barriers that apply to all imports within the tariff universe of Cuba and Venezuela whenever they apply to products originating in the Republic of Bolivia." It simply fails to address the question of what products, specifically, count as "originating in the Republic of Bolivia."

This is a dicier issue than you may think. Say Venezuela has a 30% tariff on widgets. Goods "originating" in Bolivia are now excempt from that tariff in the Venezuelan market. Now say Bolivia has only a 1% tariff on widgets. What's keeping an Argentine widget producer from exporting its widgets to Bolivia, paying the 1% tariff, and then selling on the widgets to Venezuela tariff free?

Nothing at all in this agreement, since the drafters just olympically skipped the definition of "originating in" - which is one of the most basic negotiating points in a Free Trade Agreement these days.

(For a taste of what a contemporary Rules of Origin agreement can look like, click here.)

If you sign a free trade agreement with no mechanisms at all to prevent transshipment, you're effectively handing over control of your tariff policies to your trade agreement partner: whenever his tariff is lower than yours, importers will just ship the goods into your partner's territory, pay the lower duty, then transship the stuff into your country duty-free.

This is really Trade Diplomacy 101 - it's staggering how they just "missed" this little detail.

(On the other hand, there will be some handsome arbitrage opportunities out there for importers who figure out how to exploit this latest chambonada.)

Help

Can someone find me a text of the Tratado de Libre Comercio de los Pueblos? Google isn't helping me here...

Gringo dough makes Chavez go...

It's a shameless rip-off, but just for those of you who haven't seen it, I'm reproducing this graph of Venezuelan imports from and exports to the US, from Miguel's blog.


Just something to keep in mind as you read the piles of newspaper reports about how cash flush Chavez is. Hmmmmm...where are all these mountains of dollars coming from, anyway? From gringo drivers!

"No me ayude, compadre..."

Just a few weeks ago, it looked like the Castro-Chavez left was on a roll in its struggle for hemispheric supremacy against the Lula-Bachelet left. With Ollanta Humala on a roll in Peru and Lopez Obrador holding on to his longstanding lead in Mexico, the Anachronistic Left looked primed to add two big countries.

Things haven't quite gone as planned. First off, Humala and Lopez Obrador's challengers started making Chavez's meddling an issue in the campaign. And the mudslinging has been effective. Humala seems stuck about 10 points behind Alan Garcia in the peruvian polls, and even more startlingly, Lopez Obrador's lead has evaporated. It's early day yet, no question, but it sure looks like Humala and Lopez Obrador would be doing much better if Chavez had just sat on his hands during the campaign...

Cassandra Chronicles

Just to prove that there's nothing creepier than a delusional paranoid with a long track-record of being right, here's Alberto Garrido's latest column:

Real Time
by Alberto Garrido

Though it hasn't come to a head yet, the continental polarization between Bush and Chavez has accelerated. On the one hand, the Chavez-Castro-Morales block decided to launch the socialist revolutionary triangle through pressure tactics on the energy front. Its space (for now) is the Americas, without national exceptions. The polarization pressed by Cuba, Venezuela and Bolivia puts an end to the interamerican institutional transition stage, because it clashes with its strategic interests, which are geared to establishing socialism on a continental scale.

The Andean Community is not necessary, because it helps the US on the road to FTAA, via the bilateral free trade agreements. By the same token there's no need for the Group of Three, Colombia-Mexico-Venezuela, because Mexico and Colombia have deals with the US.

Uruguay, disenchanted with "this" Mercosur run by Brasil and Argentina and edging to sign its FTA with Washington; Ecuador, which feels tempted to sign an FTA, like other countries that find themselves in similar situations, have gotten the message. Even Brazil and Argentina, which tried to use Chavez and Venezuela's oil as a way to softening up Washington and getting an FTAA Lite (i.e., one that solved their trade disagreements with the US), have to choose between what they understand their trade interests to be and their future energy needs.

Chavez's radical behavior goes far beyond the electoral - whether domestically or internationally. Humala didn't understand that. Much less have Lula and Kirchner digested it. The great continental polarizer is Chavez. This is the time of the States, but the time of the peoples is nearing, represented by parties or movements, even if those peoples have the petro-states as strategic weapons.

This is why the deal signed in Havana is the Free Trade Treaty of the Peoples. This is why Chavez says that the concept of "integragion" has to be changed in favor of "union", which comes closer to the bolivarian ideal of the greater fatherland. It's just that this union shall have to come about in the context of a socialist Latin America and Caribbean, and that strategy goes through a number of stages, among which the crucial one is the asymmetric resistance war against the US.

Without fully understanding what they're facing, the White House keeps, meanwhile, working on a hypothesis of "multiple wars" within the framework of a global war. This explains why Porter Goss has been jettisoned from the CIA, leaving room for Michael Hayden, a general from John Negroponte's team and one of the most hard-line hawks in the Reagan and Bush II administrations.

The Pentagon already controls almost 80% of the spying and intelligence budgets in the US.

Meanwhile, according to the Washington Post, Donald Rumsfeld has given the green light to setting up Special Forces in Latin America with "absolute freedom to act," as the Pentagon will not have to ask for permission from the State Department of those countries where they are stationed.

Let those who have eyes use their common sense.

Arroz con leche, te quiero proteger...

Con un subsidito de la capital...

One last go at the WTO, and then I promise to get back to, um, writing things you all want to read about.

Accounts of the WTO invariably stress the comprehensive, global nature of the institution. Mentions of a "global trade deal" and the body's "149 member countries" pepper newspaper accounts. The WTO itself likes to stress its encompassing nature, which tends to give rise to some grandiloquent, sometimes apocalyptic rhetoric in favor or against the organization.

This whole discourse, while technically accurate, is actually quite misleading. It is true that, in some formal legal sense, WTO negotiations cover all trade topics for all 149 member countries. But, in practice, the impasse is over a quite limited number of highly protected products. In most markets, tariffs are already too low to have a really serious impact on the pattern or volume of trade.

This is especially true of industrial products: manufacturing tariffs average less than 3% worldwide. Only in textiles and clothing are there a significant number of "tariff peaks" that seriously distort trade. Elsewhere, tariffs are so low they barely register in producers' or consumers' decisions.

Even in agriculture, which is far more heavily protected than industry, tariffs and subsidies are far from evenly distributed. What you see is just a few products protected by very high tariffs - reaching up to 200% for milk imports into the EU and over 700% for rice imports into Japan - while most food trades much more freely:

[The current situation is represented by the top (light blue) line. The dark blue line represents the EU's current proposal for dropping its tariffs.]

The really bitter disputes, the ones leading to deadlock, are over the treatment of a handful of coddled products. Tariffs on rice, milk, and sugar make up a startlingly large chunk of the impasse. In a way, the unending deadlock is over rice pudding - arroz con leche - the world's most distorted dessert. The three things you need to make yourself a nice arroz con leche, together with a handful of other products (bananas, cotton, beef, chicken meat, and tobacco) make up a very small proportion of world trade, but account for a very large proportion of the rents generated by protectionist trade policies.

This explains why economic models simulating the impact of a new WTO deal usually predict relatively small welfare gains - around 0.15 to 0.4% of global GDP. In fact, most markets are already liberalized in most countries, so the additional impact from liberalizing the handful of holdouts is not very big.

The concentration of tariff peaks around just a few products also explains why agreement has been so hard to reach. The current system concentrates the benefits from protection on a tiny, cohesive group of farmers who find it highly profitable to organize themselves into lobbies in order to defend their rents. Those lobbies, lavishly funded and very well organized, come to dominate their countries' trade policy stances. In effect, the less you negotiate about, the harder it is to agree.

So don't be fooled by the headlines about "deadlock in global trade talks." What they're really deadlocked about is arroz con leche...

Creative Diplo-bureacrats and their Little Boxes

One obvious feature of the Multilateral Trade Regime is its mind-numbing, technocratic, outsider-baffling complexity.

It's ironic, actually, because when the worldwide trade regime was launched in 1947, one of its big selling points was supposed to be its simplicity. At the time, economists blamed the severity (if not the onset) of the Great Depression on the self-defeating trade policies of the 1930s, when countries tried to gain an edge on their neighbors through competitive devaluations and increased tariffs. Without a single, straightforward, universal set of rules for trade, there was no mechanism to stop that process. Rather than replicating the baffling jumble of overlapping bilateral and regional trade treaties of the 30s, John Maynard Keynes and the architects of the Bretton Woods system thought it would be much better to have just a single, general agreement on tariffs and trade to cover trade between all countries.

Sixty years later, the system we have is, if anything, way more complex than anything the world saw in the 1930s. It's not just that the jumble of bilateral and multilateral treaties is back (the so-called "Spaghetti Bowl" of Free Trade Agreements), it's that the WTO regime itself has grown incredibly complicated.

So what happened?! Well, six decades of letting trade creative diplo-bureaucrats swarm over the fine print of the original agreement, that's what happened. As the trade regime has grown to include more and more countries and deal with more and more issues, the agreements have inevitably gotten more and more complicated.

As more and thornier issues got thrown onto the WTO's plate, agreement became harder and harder to reach. Rather than accept deadlock, negotiators worked to finesse their differences creatively, by making finer and finer bureaucratic differentiations that allowed them to split the difference somehow. As the salami got sliced thinner and thinner, agreement became possible, but only at the cost of more or less giving up on the WTO's founding vision as a simple, straightforward, understandable set of rules for trade.

Archaeology of the Agriculture Deadlock
The clearest case of diplo-bureaucratic salami slicing is the whole, byzantine world of Agricultural Subsidy talks. The current, weirdly convoluted system dates back to the 1970s. It was already clear to trade negotiators back then that you couldn't liberalize trade in food just by lowering agricultural tariffs, because farm subsidies also played a major role in distorting markets. In fact, you can trace the heritage of the current deadlock in agricultural negotiations back at least 30 years. It all started in the Tokyo Round, the first time negotiators tried to strike a deal on farm tariffs and subsidies and failed.

Why? Well, at that time the point was fairly straightforward and understandable: rich countries subsidize farmers, the subsidies distort markets, therefore rich countries should stop subsidizing farmers. Only problem was, there was no way in hell rich countries would agree to that. So then the debate moved on to reducing farm subsidies, but that negotiation led to a deadlock as well. Discouraged, negotiators decided to focus on less controversial issues (industrial tariffs, mainly) and the Tokyo Round ended in 1978 with no agreement on agriculture at all.

By the time the next round of negotiations was launched in Uruguay in 1986, the debate on agricultural subsidies had been stagnating for eight years. This time, though, half the organization wouldn't agree to an overall deal unless there was some progress in agriculture, so pretty soon the diplo-bureaucrats realized they needed to get creative.

"Hmmmm," somebody thought, "this is a tough one. It's true that there are a lot of farm subsidies out there, but not all subsidies are created equal. Some farm subsidies really distort trade a lot - for instance, the ones that are paid on the basis of total output, and so create an incentive for farmers to overproduce outrageously. Those are bad, we want to get rid of those. But there are other ways countries subsidize farmers, for instance by paying them to maintain habitats for native wildlife. That doesn't distort trade! Maybe if we split subsidies into 'good' subsidies and 'bad' subsidies we can reach an accomodation where you limit the bad ones but leave the good ones alone."

Out comes the salami slicer, and in comes the first new classification. So they go back and negotiate on that basis for a while, and eventually realize it's still not leading to an agreement. So then another diplo-bureaucrat gets creative.

"Hmmmm, well, even the trade distorting subsidies aren't really all alike. Some are really trade distorting, and some are only kind of trade distorting. Maybe if we differentiate between those, you'd have a basis for agreement. Hey, we could 'color code' them like a traffic light: red for really bad subsidies, amber (which is what Brits call a yellow light) for kinda bad subsidies, and green for good subsidies."

Thinking inside the box
Thus the baffling-to-all-but-insiders WTO Subsidy "Box" system was born. Good subsidies would go in the "Green Box" and would not have to be cut. So-so subsidies would go in the "Amber Box" and would be limited but not eliminated. Bad subsidies would go in the "Red Box" and would be banned.

So then they go back into a little room and negotiate on that basis for a while. And, guess what, they still can't come to an agreement. Nobody likes the concept of a banned box, so the whole idea of a "Red Box" ends up getting tossed aside. The "Amber Box" comes to include all the highly trade distorting trade subsidies.

At the same time, all countries think they should have a minimal level of subsidies they can give without anyone being able to challenge them. Thus, the De Minimis Box is created.

So they go back and negotiate on that basis for a while. But pretty soon the gringos realize they spend so much on trade distorting agricultural subsidies that they can't accept an Amber Box/Green Box/De Minimis Box classification either.

So - you can already guess where this is going - they whip out the salami slicer again. This time they decide that maybe if they can create a new box to put some of the US subsidies into, then maybe they can reach an agreement.

Next thing you know, you have a Blue Box, notionally housing subsidies that are worse than Green Box subsidies but not as bad as Amber Box subsidies. Everybody can see that the Blue Box is a trick - the subsidies the US wants to put in the Blue Box are just about as bad as Amber Box subsidies. But, politically, there can be no overall agreement without this one last slice of the salami. So, grudgingly, they agree to that.

And so, finally, eight years after the Uruguay Round started, they get an agreement...except the deal is based on an Amber Box/Blue Box/De Minimis Box/Green Box classification that just makes no sense at all outside the context of the negotiating history of the Uruguay Round.

The current box scheme is just plain meaningless in economic terms, baffling to non trade diplo-bureaucrats, and miles and miles away from the principle of simplicity that the multilateral regime was founded on. Hell, even the original traffic light analogy has gotten all screwed up: who's ever come up to a stoplight with a yellow light, a green light, a blue light and a de minimis light? Just screwy.

What interests me is the way the nature of the negotiations inexorably generates complexity in the system. The WTO is a consensus based organization: all members have to agree for a trade deal to become binding. So when there's deadlock, your only alternatives are creative solution making or giving up on the whole crazy Rube Goldberg machine.

Time and again, the creative solution makers win, and some new category is made up to allow countries to finesse their differences. The cumulative outcome, however, is a multilateral regime that only adds one layer of complexity after another with each new set of negotiations. John Maynard Keynes is rolling in his grave...