A Euro-Oil Peg?

Quico says: Chavez, Ahmadinejad & co. have made something of a hobby horse of it: Oil should be traded in Euros rather than sullied by association with the Grand Imperialist Greenback. But could it be that what they frame as a radical new departure is something markets are already doing on their own?

This chart from The Economist certainly suggests that, holding out the possibility that much of the recent oil boom is a kind of accounting mirage driven by the dollar free-fall. Or alternatively, the rising price of oil could be pushing the dollar down, since a depreciating dollar gives traders an incentive to horde dollar-denominated commodities.

For its part, The Economist blames the Fed, noting that lower US interest rates drive down interest rates world wide, stimulating consumption and fueling the oil boom. Which would be Exhibit Umpteen in the case that the empire unwittingly underwrites the revolution (and the mullahs as well.)

Either way, one suspects the Euro-Oil peg hits Iran harder than it hits Venezuela: they do most of their international trade in Euros, we do ours mostly in dollars. Still, it's worth bearing in mind: the barrels we sell earn more and more dollars, but the dollars we get buy less and less stuff.

PSUV loses London

Quico says: Yay!

No means no

Quico says: "No es no."

Three words, six letters, short, sharp, unambiguous, devastating.

The slogan is one of the most heartening developments in recent Venezuelan politics: it crystallizes the way the opposition has rediscovered its spine in the wake of its December Referendum victory.

Suddenly, the myriad presidential initiatives that amount to "smuggling constitutional reform through the back door" are meeting far more determined opposition: "no means no" has become a rallying cry for those of us convinced that if democracy it's too mean anything at all, the constitutional reform proposals defeated at the polls must not be resurrected through regular laws.

What a difference a year makes. In spring 2007, I was posting a lot about the distinction between the "hard constitution" (el hilo constitucional) and the "soft constitution": everything else. My argument then was that 95% of the reform proposal was filler, soft constitution stuff that Chávez didn't really need to change the constitution to implement - the evidence being that, in many cases, it was stuff he was already doing.

As I put it at the time at the time, "Supposing the reform proposal were defeated at referendum, do you really think the government would stop regulating pay-TV? Start funding FIEM? Disband the Guardia Territorial? Of course they wouldn't...but in that case, what exactly is the point of asking us to vote on it?" What difference could a vote make?

Every item in that little agenda was already being implemented before the December Referendum, and is still being implemented today. It's not any more unconstitutional today than it was a year ago.

But there is a difference: the referendum made the opposition as a whole much more conscious that the government has no legal basis to do much of what it's doing. December left us with a new awareness of the constitution's role as a bulwark against the abuse of power, and that awareness is becoming a focal point for resistance against further encroachment on our rights.

The government's climb down on the "Bolivarian" School Curriculum is the most visible example, but it goes further than that: the legitimacy of any move to implement Chávez's main agenda - all of which was contained in the reform proposal - has been badly undermined.

We should be clear: the opposition is still much weaker than it once was, hardly unified, still a minority, and only sporadically effective in holding the line against government encroachment. But the ability to say "No es no" has certainly bolstered its legitimacy, at least when it comes to rear-guard actions.

In a way, our referendum win ended up hardening up parts of the "soft constitution", strengthening our allegiance to it, even as the government systematically violates it. It's not much, but I call that progress.

Chávez, can you spare $20 million?

Katy says: Recently, I came upon a story about a cost-effective alternative to expensive mass-transit systems. It's called Aerobus and it has been in use in the city of Mannheim, Germany, as well as other places, for many years now.

The system is basically a train made up of several modules that are transported via cables connected by towers 500 meters apart. It is electrical, can reportedly transport up to 40 thousand people per hour and has a construction cost of about $20 million per mile (as opposed to $400 million for conventional subway systems).

I'm no engineer, but it seems that given Caracas' enormous traffic problems, we should be discussing practical, inexpensive solutions such as this one. The only solution can't be for Venezuelans to patiently wait in their colas until the Metro reaches Guarenas or El Hatillo.

Crazy Polar Bear Chronicles

[Note: My usual policy is to steer well clear of non-Venezuelan subjects...we'll be stretching that rule in this post.]

Quico says: There are local elections in Britain tomorrow. By far the highest profile race pits the treacly philochavista Red Ken Livingstone against the inimitable parliamentarian, classicist, columnist, author, magazine editor, television pundit and wit Boris Johnson for mayor of London. You can think of it as Chávez's first electoral test of the year.

Boris - a.k.a that guy who looks like a polar bear who just stuck his tongue in a power outlet - has to be the most entertaining politician I've ever seen: his foot constantly stuck in his mouth, his brilliant-if-diction-challenged mind, his frazzled but devastating sense of humor, his cantankerous reactionary proclivities and his constant, slightly deranged gaffes improbably adding up to an enormously likable figure.



Why should you care? Because Boris has made a stump speech attack line out of Ken Livingston's fuel-for-advice deal with Juan Barreto's Greater Caracas Municipality, calling the effective subsidization of the world's wealthiest city's transport by a third world country "crackers" (a Britishism meaning "nuts" that, if pronounced Britishly enough, sounds just like "Caracas"- and a play on words that Mario Silva once hilariously misheard as "crack ass".)

The polls have these two neck-and-neck, so keep your fingers crossed for Boris tomorrow night. Just watching that Paleoleftist Livingstone booted out of office would be worth it.

Binge and purge

Quico says: It's official: the inhabilitación binge will be matched by a PSUV purge. In a weird kind of political murder-suicide, chavismo is not just disqualifying key oppo figures from running in November's state and local elections, it's also throwing out the best and the brightest of PSUV's generación de relevo.

The Supreme Tribunal's decision putting the final nail in the coffin of Enrique Mendoza and Leopoldo López's aspirations wasn't much of a surprise. Disqualifying opponents you don't think you can beat at the polls is just the kind of Ahmadinejadesque/Putinian tactic chavismo has shown itself increasingly comfortable with. More surprising, though, is the kamikaze move to throw some of chavismo best prospects on the pyre of presidential vanity.

Yesterday, PSUV idiotically gave the opposition a fighting chance in Lara and Barinas - two governor's races that should've been chavista shoe-ins - by expelling their most promising candidates there. When they threw their hats into their respective rinks without permission, Wilmer Azuaje and Henri Falcón committed the gravest of chavista sins: contravening a direct, public order from the big chief. From that moment, expulsion from the party was a foregone conclusion.

Due process? Chance to put up a defense? Whatchootalkin' about, Willis? I mean, sure, they're autonomous, but jefe es jefe.

Azuaje's expulsion hardly came as a shock: from the moment he directly fingered Chávez's nuclear family for running some of the most blatant corruption scams in Hugoslavia, it was clear Azuaje was a marked man. Frankly, expulsion from PSUV is the least of his troubles at the moment: just the other day, two of his close collaborators were gunned down in Barinas. Llanero politics have none of the genteel, salon-bound quality of the Caracas scene.

Truth is, Barinas politics is something of an enigma: the most chavista of chavista states is one where everybody hates the Chávez Clan. If, as expected, Azuaje runs for governor on a minor party ticket, the chavista vote could split, imaginably making an opening for the opposition. It would be bizarre to have an oppo state government in this reddest of red states, but it's also clear that many loyal supporters of the president would balk at supporting another Chávez Clandidate.

But is enough of the old AD machine still operative to make a move here?

Then there's Lara, where the popular mayor of Barquisimeto Henri Falcón launched his candidacy for state governor too early, hinting that he already knew he'd been out-maneuvered in the Smoke-Filled-Room primary in Caracas:

"It doesn't take much to understand the challenge that we now face. Many feel strong, feel invincible, feel they have the exclusive right to decide for others. That's the haughtiness that's so damaging to serious and honest politics...those who lack real leadership turn to intrigues, to rumors and to dirty tricks to try to climb a hill that gets ever steeper because they don't have the capacity to look after the people's needs."

It sure looks to me like he's referring to some local rival specifically, but knowing next to nothing about Lara politics, I can't tell who's hiding between the lines here. Can you?

One way or another, Katy tells me Falcón is a popular figure in Barquisimeto: one with real potential to split the pro-Chávez vote. If nothing else, he seems to be a pragmatist, which is a no-no within chavismo these days but a popular stance with regular folks more concerned with solutions than abstractions. And Lara is a more demographically promising state for the opposition: Barquisimeto is still the country's fourth city, and we always do better in urban areas.

It's all a bit of a reversal, this. It used to be the opposition that moronically purged itself from key state institutions (PDVSA, the Army, the National Assembly) leaving the way open for a chavista takeover. Maybe it's catching; now chavismo is doing it.

In a strange way, we've really got a good thing going here: the longer Chávez takes to make up his finger mind, the more chavista rising stars will be tempted to play off side and end up getting purged, giving us a shot to run against a divided government. And the Contraloría disqualifications, while they have certainly taken down some wheat, have washed out a lot of chaff too. It's early days, of course...but if you ask me, it's not looking too bad.

Update: A reader from Lara State helps round out the story:

[Luis] Reyes Reyes [the current chavista governor of Lara, who can't stand for re-election due to term limits] is in Chavez's inner circle. He took part in the 92 coup. Also they are compadres. His son, Jonas Reyes, is the president of the State Legislature, whose functions include overseeing the governor's administration. The governor has sabotaged almost every big initiative of Falcón. For example he took charge of his two biggest projects: transbarca (trolley bus) and the bus terminal. After he took away those projects claiming that he and central goverment were going to finish them, they were brought to a halt. Also Reyes Reyes's son promotes land squatting with the approval of his dad. Falcón has clearly stated his position against squatting. I think Falcón is a good mayor even though he faces some corruption allegations. Many people here in the Lara oppo were waiting for him to defect from Chavismo to vote for him.

The false promise of food security

Katy says: When Chávez first came to power, one of the things he asked to include in the Constitution was the concept of "food security." The country's ability to produce its own food was viewed, according to Article 305 of the Constitution, as "fundamental for the Nation's social and economic development."

After nine years and countless laws, policies and actions related to the ownership of land and the production of food, has the government delivered on this front?

A new paper by Ataman Aksoy and Francis Ng from the World Bank addresses this question, albeit indirectly. They set out to answer the question of which countries are net importers of food and which are net exporters.

The authors explore the many methodological issues involved in an international comparison of this sort, and questions like what constitutes food imports are addressed. More importantly, they track each country's net food trade balance over time, and compare it to their total imports.

Table 3 is the most interesting one. The findings for Venezuela confirm what we all know: during the Chávez years we have become more dependent on foreign food, not less. The following graph tracks net food imports (the difference between food exports and food imports) as a percentage of the country's total imports. It tells a clear story: an increasing percentage of the stuff we import is food.


And that's without including whiskey in "food imports".

During the same period, Latin American countries that were running a deficit like Bolivia decreased the weight of their deficit on their trade balance, and countries that have food surpluses (like Brazil) showed significant improvements.

We don't even have oil exports as an excuse. During the same period, Saudi Arabia's net food imports went from 6.5% of total imports to 6.1%; the UAE's went from 3.0% to 1.3% and neighboring Trinidad and Tobago went from 6.4% to 2.8%. These results are confirmed if you look at an alternative definition of net food imports, such as the one used in Table 4.

This is an additional piece of the puzzle that we need to arm in order to continue debunking the myth of Chávez's empty revolution, a revolution in name only that is really just a grand scheme to funnel Venezuela's wealth to the rich and the well-connected.

The issue of food scarcity is a pressing one the world over. We can only wish we had a government whose policies helped alleviate the problem instead of exacerbating it.

Rent-seeking as a Livelihood Strategy

Quico says: Thinking about the way the New Political Class has looted the proceeds from our current oil boom, it's hard to contain a certain moralistic rage. We see the extravagant lifestyles that the people at the very top of the petrostate game enjoy and, understandably, flip out. But I wonder if that doesn't obscure the more widespread reality of Bolibourgeois corruption, the way rent-seeking works as a livelihood strategy for thousands of Venezuelan families beset by economic insecurity. I'm sure if you bracket the top beneficiaries in the graft histogram and focus on the long tail instead, what you see is not so much rampant greed as a rational response to a given set of incentives.


The culprit here is economic insecurity. The Venezuelan middle class has never shaken the sense of precariousness Viernes Negro brought. With few exceptions, honest middle class professionals can't earn enough to sustain a stable, middle-class lifestyle. Typical salaries just will not cover the rent and the car payments and the supermarket bill and the DirecTV bill and the school fees and the occassional dinner-and-a-movie and the phone bill and...

These are not extravagant aspirations: just the basics any junior teacher might expect in a first world country. Most college-educated Venezuelans aspire to that lifestyle, but simply can't afford it.

Nor does their future look secure. With pension provision spotty, mortgages out of reach and savings facing negative real interest rates, Venezuelan professionals really don't have a lot of good options for securing a future for their families in the legal economy. The reality, for those aspiring to a middle class lifestyle, is that the "legit" route is a dead end.

The alternative is obvious: whether it's in the private sector (as, say, a Cadivi arbitrageur) or the public sector (as a corrupt official), you need a slice of the petrodollar pie. Given the low barriers to entry into the rent-seeking game, the low risk of detection, and the ubiquity of this kind of behavior, it's easy to see why the country's on course to a kind of Nash Equilibrium where everybody with half a chance is on the take. Where following the rules is for chumps, only chumps follow the rules.

Venezuelans have no time for the slow, patient build-up of mortgage equity and retirement savings you see in better-regulated societies: you don't really know how long your rent-grabbing opportunity will last, so basic caution dictates that when you see one, you take it. This may be your one chance to ensure yourself against the kind of hardship you've suffered in the past, your one go at differentiating yourself from all the economically insecure people all around you.

It's now or never. So your dominant strategy is to grab as much as you can as fast as you can. The few who manage to maneuver themselves into a position to grab a lot, grab a lot. The many who get into a position that allows them to grab only a little, grab only a little. But, in the end, everyone's grabbing as much as possible: when the chips are down, few Venezuelans will forgo the possibility to grab "their" share of the oil rents.

I'm no different: I'm typing this post on a computer Cadivi dollars bought. It may be a vanilla, by-the-book variant on rent-seeking, but rent-seeking it is.

There's an interesting contrast to be drawn here with the old Eastern Block. A good friend of mine from Hungary recalls growing up in an apolitical family in the 1980s. "We called it Sausage Socialism," she says. "As long as you kept your nose out of politics, you could be sure you'd always have a house, a job, and a nice sausage at the end of the day." Was there a small elite of very rich apparatchiks at the very top of Hungary's communist hierarchy? Of course! But was corruption a generalized practice, a widespread livelihood strategy? It really wasn't, because people didn't have this pervasive sense of economic insecurity. Sausage socialism made petty corruption not worth the risk.

Chavismo has failed to produce anything like the social safety net the old Eastern Block countries had. With economic insecurity rampant and rent-seeking opportunities plentiful, corruption comes to be seen less as a moral outrage and more as just "doing what's right by your family."

The cumulative outcome of all this is that long-tailed distribution: with a few very successful rent-seekers accumulating vast fortunes and a much greater number of small-timers trying to use the system not to get fantastically rich but just to ensure they can live the kind of stable middle class lifestyle they'd once thought their university degrees would guarantee them.

Beyond them, you'll find a bigger group of highly precarious aspiring middle class people who have no viable strategy for appropriating state rents, and then a huge mass of poor people entirely shut out of the system and squabbling over the crumbs that fall off of the petrostate banquet table, (mostly around election time, in the form of Misiones and other mass-based petro-rent handouts.)

Ressentment simmers within both groups. They'll tell you their anger is over the prevalence of corruption, but really what makes them mad is that they're out of the loop. They just don't have the connections it takes to really cash out. Because, in the petrostate game, it's the quantity and quality of your contacts with the petrostate elite that will determine where on that histogram you fall.

So long as the macroeconomy goes well and the oil boom keeps enough cash circulating, their exclusion from the baksheesh circuit will produce mostly latent discontent. But if there's one thing Venezuelan history shows conclusively it's that when the economy starts to sputter, the anger the Society of Accomplices generates becomes volcanic.

The calm before the storm

Katy says: Just how strong is Chávez these days?

The answer is not so obvious. If you judge by the opposition conventional wisdom, he's at the helm of a boat with no rudder, a President in name only. Yet our side has continually shown conventional folly instead of wisdom on these questions - our track record in sizing up the government's strengths and weaknesses is pretty dismal.

The government may have lost in December, but it still has a ton of money, as well as the support of a sizable chunk of the population. There is no sign that it is losing confidence. December's referendum drained a lot of Chavez's political capital, but Chávez acts as if he didn't get the memo.

Moreover, the government has that all important, barely-touched Enabling Law. Remember what happened the last time Chávez faced an over-confident opposition that had "forgotten" all about his enabling powers? It was late 2001, and what followed was not pretty.

The opposition's confident streak was made clear in my recent trip to Caracas. Six months ago, the general feeling in the opposition was one of high anxiety. The Constitutional Reform was viewed as inevitable, and much talk around town was devoted to ways of getting your money and your family out as quickly as possible.

Now, people seemed unusually relaxed. People still talked about the weather, the traffic or the scarcity, but Chávez was not major part of the conversation. It was as if December's referendum had made him irrelevant, a lame duck with five years to go.

The media reflects this mood to a point. Op-ed articles talk about Chávez's defeat last December as perhaps being a "definitive" one. Even the New York Times talks about Chávez's "political trouble" and suggests Venezuelans are "fed up" with him.

Stories abound that he is so depressed he is flying to Cuba every week for advice and that his popularity is almost in the single digits. Some people suggested that he wasn't in control of the army, or Congress, or both. Several hinted it was only a matter of months before a coup ends this collective nightmare.

This is all wrong, and believing it would be a crucial mistake.

We quickly forget Chávez controls his country's purse strings like few world leaders. His unending desire to milk the petro-cow and the unstoppable rise in the price of oil are a perfect match.

Chávez continues to control every institution that matters in the country, whether it's the National Assembly, the Armed Forces, the Supreme Tribunal or the Comptroller's and Prosecutor's Offices. Since December's referendum, there hasn't been a single, significant defection from chavismo's inner ranks.

Part of me thinks that the government itself is planting this idea of vulnerability in our heads as a way of testing the waters. Last month, for example, the Education Ministry pulled a highly controversial proposal to change the national educational curriculum. The excuse was that the country was not ready for it.

I don't really know the details of what was contained in it, but I do know that opposition educators were incensed with the proposal. Not only were they being forced to attend a 300-hour long course (without pay) to learn the new curriculum, its content was politically biased in favor of the Revolution.

And just as things were starting to heat up, just as families were getting organized and the street was "warming up," the government yanked the proposal in a unusual move.

You may think this is more evidence that the government is weak. I think it was a trial run for what's coming: the proclamation of new legislation contained in Chávez Enabling Law.

It's easy to forget, but 14 months ago the President was granted sweeping powers to change every significant law in the country. At the time, Quico called Chávez's power to rule by decree his definitive transformation into a dictator, in the Roman sense.

Yet something odd happened on the way to the Coliseum. It's hard to disagree with the idea that Chávez has underused his Enabling Powers. The only significant law he has passed has been the recent National Police Law. Judging by opposition criticism, the law is a muddled mess, ineffective at best, interventionist at worst.

This can only mean one thing: the government is going to pound the country with a coñazo of new legislation in the months to come. With three more months to go on his Enabling Power and with all the institutions at his command, I have the vague feeling that we won't be talking about Chávez's weaknesses in a few months time.

Things are relatively quiet right now. There are no major protests, economic crisis has been temporarily averted and even the government's rhetoric has toned down. But a major showdown is looming.

The opposition believes it mortally wounded the government last December. The government believes it still has a mandate to implement socialism, and it has the power and the resources to attempt it. A recipe for high drama if I ever saw one.

Compare and Contrast

Chávez says:

“My opinion has always been - and I still hold this - that the new National School Curriculum should not be called 'bolivarian' because that word has very strong political connotations."

Another one bites the dust

Quico says: Another guilty plea in the unending saga that is Illegally - Diverting - Venezuelan - Public - Money - to - Illegally - Fund - Cristina - Kirchner's - Election - Campaign - And - Then - Illegally - Covering - Up - The - Whole - Thing-gate, the tri-national trifecta of treachery more commonly known as El Maletinazo.

This time, it's Rodolfo Wanseele's turn to take the fall: the guy'll be spending more time with his jail cell after pleading guilty to acting as an unregistered DISIP agent in the US. The chump never suspected that Guido Antonini was wearing an FBI wire as he tried to buy his silence about his infamous suitcaseful'o'cash.

The thing that gets me here is that Wanseele's not going down for, you know, offering Antonini $2 million in hush money. He's going down for doing so without registering as a foreign agent first!

The FBI's message seems to be something like: "I don't know what y'all get up to in South America, but we have rules and procedures for bribing people around here, mister!"

As usual, though, it's Weil who best expresses what we've all been thinking:


(Also, notice the headline the New York Times slapped on the story they took off the wire. Granted, this whole affair is particularly resistant to snappy headlinization, but "Smuggling Case"!?? These guys don't have the foggiest what this is about!)

The Trouble with ALBA

Quico says: Turns out it's not only Venezuelans who are finding out that taking Hugo Chávez's promises at face value can be a problematic strategy going forward...

Venezuela's state oil company has failed to fulfill promises to make badly needed investments in Bolivia's natural gas fields. This has contributed to a lack of new production under Bolivian President Evo Morales, which in turn, has had huge ramifications throughout the Southern Cone. Brazil, Argentina and Chile, which all were depending on more gas from Bolivia for their growing economies, find themselves facing energy shortages that seem likely to pinch consumers, businesses and economic growth during South America's upcoming winter months.

What proportion of Chávez's investment commitments abroad actually get implemented? I really wonder.

Thanks to JRAY for the tip.

Piñata! Piñata!

Bloomberg says: Venezuela plans to sell $3 billion of dollar-denominated bonds to local investors, the latest move in a push to shore up the currency in the black market and rein in Latin America's highest inflation rate.

Quico notes: Another batch of bolivarian insta-millionaires, coming up!

Got five minutes?

Quico says: Write a review of Caracas Chronicles on Blogged.

Everything I know about Chavista geostrategic thinking I learned from a fat gringo neo-con

Quico says: If you're looking for some mind-broadening reading this weekend, I heartily recommend this New Republic piece by Iraq War-monger extraordinaire Robert Kagan. It's about the rising contours of 21st Century Geopolitics, and though it's long, I found it exceptionally enlightening. Actually, it did more to help me understand Chávez's geostrategic stance than a truckload of Centro Miranda policy papers could have...which is remarkable, considering the guy never once mentions Venezuela.

Kagan's piece is hard to summarize. It deals mostly with the global impact of the autocracies in China and Russia, their role in "the end of the end of history." For Kagan, we're heading neither towards some Fukuyamesque shangri-la of liberal hegemony nor towards some Huntingtonian clash of civilizations, but rather towards an international order that looks a lot like the 19th century's: democracies on one side, autocracies on the other, and a lot of conflict between the two.

Most of the piece is devoted to a dissection of the big autocracies' strategic outlook, and the way liberal universalism unwittingly pushes them into muscular defensive stances that often look downright paranoid from the outside. For Kagan, there's nothing irrational about Russia and China's rulers' deep distrust of the U.S.-led west; the West's whole understanding of the idea of sovereignty really does threaten their survival:

The presumption over the past decade has been that when Chinese and Russian leaders stopped believing in communism, they stopped believing in anything. They had become pragmatists, without ideology or belief, simply pursuing their own and their nation's interests. But the rulers of China and Russia, like the rulers of autocracies in the past, do possess a set of beliefs that guides them in both domestic and foreign policy. It is not an all-encompassing, systematic worldview like Marxism or liberalism. But it is a comprehensive set of beliefs about government and society and the proper relationship between rulers and their people.

The rulers of Russia and China believe in the virtues of a strong central government and disdain the weaknesses of the democratic system. They believe their large and fractious nations need order and stability to prosper. They believe that the vacillation and chaos of democracy would impoverish and shatter their nations, and in the case of Russia that it already did so. They believe that strong rule at home is necessary if their nations are to be powerful and respected in the world, capable of safeguarding and advancing their interests. Chinese rulers know from their nation's long and often turbulent history that political disruptions and divisions at home invite foreign interference and depredation. What the world applauded as a political opening in 1989, Chinese leaders regard as a near-fatal display of disagreement.

So the Chinese and Russian leaders are not simply autocrats. They believe in autocracy. The modern liberal mind at "the end of history" may not appreciate the attractions of this idea, or the enduring appeal of autocracy in this globalized world; but historically speaking, Russian and Chinese rulers are in illustrious company. The European monarchs of the seventeenth, eighteenth, and nineteenth centuries were thoroughly convinced, as a matter of political philosophy, of the superiority of their form of government. Along with Plato, Aristotle, and every other great thinker prior to the eighteenth century, they regarded democracy as the rule of the licentious, greedy, and ignorant mob. And in the first half of the twentieth century, for every democratic power like the United States, Great Britain, and France, there was an equally strong autocratic power, in Germany, Russia, and Japan. The many smaller nations around the world were at least as likely to model themselves on the autocracies as on the democracies. Only in the past half-century has democracy gained widespread popularity around the world, and only since the 1980s, really, has it become the most common form of government.

...

For all their growing wealth and influence, the twenty-first-century autocracies remain a minority in the world. As some Chinese scholars put it, democratic liberalism became dominant after the fall of Soviet communism and is sustained by an "international hierarchy dominated by the United States and its democratic allies," a "U.S.-centered great power group." The Chinese and Russians feel like outliers from this exclusive and powerful clique. "You western countries, you decide the rules, you give the grades, you say, 'you have been a bad boy,'" complained one Chinese official at Davos this year. Putin also complains that "we are constantly being taught about democracy."

The post-Cold War world looks very different when seen from autocratic Beijing and Moscow than it does from democratic Washington, London, Paris, Berlin, or Brussels. For the leaders in Beijing, it was not so long ago that the international democratic community, led by the United States, turned on China with a rare unity, imposing economic sanctions and even more painful diplomatic isolation after the crackdown at Tiananmen Square. The Chinese Communist Party, according to Fei-Ling Wang, has had a "persisting sense of political insecurity ever since," a "constant fear of being singled out and targeted by the leading powers, especially the United States," and a "profound concern for the regime's survival, bordering on a sense of being under siege."

In the 1990s, the democratic world, led by the United States, toppled autocratic governments in Panama and Haiti and twice made war against Milosevic's Serbia. International nongovernmental organizations (NGOs), well-funded by western governments, trained opposition parties and supported electoral reforms in Central and Eastern Europe and in Central Asia. In 2000, internationally financed opposition forces and international election monitors finally brought down Milosevic. Within a year he was shipped off to The Hague, and five years later he was dead in prison.

From 2003 to 2005, western democratic countries and NGOs provided pro-western and pro-democratic parties and politicians with the financing and organizational help that allowed them to topple other autocrats in Georgia, Kyrgyzstan, and Ukraine. Europeans and Americans celebrated these revolutions and saw in them the natural unfolding of humanity's destined political evolution toward liberal democracy. But leaders in Beijing and Moscow saw these events in geopolitical terms, as western-funded, CIA-inspired coups that furthered the hegemony of America and its European allies. The upheavals in Ukraine and Georgia, Dmitri Trenin notes, "further poisoned the Russian-Western relationship" and helped to persuade the Kremlin to "complete its turnaround in foreign policy."

The color revolutions worried Putin not only because they checked his regional ambitions, but also because he feared that the examples of Ukraine and Georgia could be repeated in Russia. They convinced him by 2006 to control, restrict, and in some cases close down the activities of international NGOs. Even today he warns against the "jackals" in Russia who "got a crash course from foreign experts, got trained in neighboring republics and will try here now." His worries may seem absurd or disingenuous, but they are not misplaced. In the post-Cold War era, a triumphant liberalism has sought to expand its triumph by establishing as an international principle the right of the "international community" to intervene against sovereign states that abuse the rights of their people. International NGOs interfere in domestic politics; international organizations like the Organization for Security and Cooperation in Europe monitor and pass judgment on elections; international legal experts talk about modifying international law to include such novel concepts as "the responsibility to protect" or a "voluntary sovereignty waiver."

In theory, these innovations apply to everyone. In practice, they chiefly provide democratic nations the right to intervene in the affairs of non-democratic nations. Unfortunately for China, Russia, and other autocracies, this is one area where there is no great transatlantic divide. The United States, though traditionally jealous of its own sovereignty, has always been ready to interfere in the internal affairs of other nations. The nations of Europe, once the great proponents (in theory) of the Westphalian order of inviolable state sovereignty, have now reversed course and produced a system, as Robert Cooper has observed, of constant "mutual interference in each other's domestic affairs, right down to beer and sausages." This has become one of the great schisms in the international system dividing the democratic world and the autocracies. For three centuries, international law, with its strictures against interference in the internal affairs of nations, has tended to protect autocracies. Now the democratic world is in the process of removing that protection, while the autocrats rush to defend the principle of sovereign inviolability.

I found myself nodding in amazement at all this: for the first time I was able to discern a smidgen of rational thought hiding behind the seemingly pure paranoia that defines Chávez's ranting anti-Americanism. But only a smidgen because (did I mention?) the entire looooong piece makes all of one passing reference to "Latin America" and none at all to Venezuela itself.

Which, I think, is pretty indicative of just how small the hemisphere looms in US geostrategic thinking: autocrats in the areas of actual interest to the US probably should freak out if a Sumate pops up in their countries...but in South America? The continent and the folkloric strongmen it sprouts are a footnote, an afterthought in gringo strategic thinking, if that.

Even the mighty US has finite resources at its disposal: is it really going to malversarlos on Chávez?

It doesn't hang together.

Red goes the neighborhood

Katy says: Victor Vargas, remember him? BOD President, father-in-law to royalty, polo-playing socialist, poster boy for the Revolution of the Rich and the Well-connected?

Well, turns out Mr. Vargas landed a sweet deal on a modest Palm Beach home. The sticker price? $70 million, according to the Wall Street Journal. Ah, your nota estructurada bolívars at work! According to this other article, it is not Mr. Vargs' first home in Palm Beach. The article also notes that Vargas' business interests "range from banking to oil holdings, and he oversees 6,500 employees in several countries."

Which begs the question: oil holdings?

(thanks to Lucía for the heads-up).

Expropriation by any other name...

Quico says: People tend to think of nationalization as a black-and-white thing: either you're in the private sector or you're in the public sector. But I think it's better to picture property rights in the Chávez era as running along a continuum.

The state has lots of ways to expropriate you under the radar screen: from tax and regulatory schemes that hem you in to the point where you have no real say in the way your business is run to the latest innovation in the dark arts of softly-softly expropriation: nationalizing your profits rather than your shares. As my super secret sources explained to me:

The other day the Assembly passed a new tax on oil that will kick in when Brent crude hits $70, and then escalates at $100 a barrel. So when low-grade Venezuelan crude hits about $55 a barrel, companies will pay a marginal tax rate of 92 percent. 97 percent at about $85 a barrel.

Chavez demanded that this money go to Fonden. But it's illegal in Venezuela to earmark the destination of a tax.

Deputy Luis Tascon demanded that the tax go into effect immediately on publication, likely in the next few days. But (as I understand it) it's illegal in Venezuela to impose a tax at any time other than the beginning of the month.

How to avoid these legal strictures? Magical language, as usual. This isn't a "tax," oil-and-all-things-related minister Rafael Ramirez said. It is a "special contribution."

So if someone objects to the destination of the tax, they'll have a tough one in their hands. They'll have to argue in court that an obligatory payment to the government is a tax. That if I kill someone, I can't say, "that wasn't homicide, it was a special life-termination event." That words have meanings. A challenging case to make these days!

Classy!

Of course, the effective-immediately thing also underlines how bad the government's cash flow problems must be getting. They really can't forgo two weeks worth of revenue? How desperate is that?

Six degrees of Hugo Chávez

Katy says: How many people separate Barack Obama from Hugo Chávez? Yesterday's debate between Obama and Hillary Clinton gives us the answer: two!

Barack Obama ... sat on the board of the non-profit Woods Fund of Chicago with '60s radical and University of Illinois professor Bill Ayers, a friend of the Bolivarian Revolution and father of...

Chesa Boudin, a Rhodes scholar, one of the founders of chavista think-tank and PSF echo chamber Centro Internacional Miranda, who has an office in Miraflores Palace and is a key advisor of...

Hugo Chávez, autocrat extraordinaire.

In fact, if Ayers himself has a personal relationship with Hugo Chávez, then that's one degree of separation.

Everybody Already Knows Everything About the Anderson Case

Quico thinks: Oh, man, I should write something about the Anderson case. It's getting really, really over the top, this one. I mean, sure, I know, everything else in the newspapers is really, really over the top too, but this one! This one is really, really, really over the top. With a cherry on top.

The conspiracy's out in the open now. They thought they could cover it up, but it's gone as pear shape as pear shape could go. And it's not a joke, man, it's no laughing matter. They've exiled people over this sham...they've put people in jail for it. Hell, they even killed people over this. Over a lie. Over a pack of lies told by a nutsoid liar who everyone knows is a nutsoid liar. And now their defense is...that he's a liar!

You should definitely write something about this. Yeah, ok, but what, exactly? That Isaías Rodríguez is a gutter rat? Stop the presses! That the Venezuelan legal system is a sham wrapped inside a joke locked into a farce covered up in a circus side show? Ah, the revelation!

It's just so soul draining, the Anderson case. You want to write about it, but the prospect is so dreary. It's like excavating a barrel of shit...you can dig all day and all night, but all you're going to find is more shit. The story is so ridiculously convoluted by now, how do you even begin to explain it to someone who hasn't been following it?

That's the thing...you can't. There's no 30-second version of the Anderson case. Homer vs. CJ it ain't. Those two get on 290 newspapers worldwide, but nobody runs with Danilogate, cuz nobody can figure out a way to explain it succinctly. The AP put a single story on the wire about it. Six days ago. Nobody picked it up.

Which is just the way the perps wanted it, I guess.

What's weird about it is that nothing is really hidden in the Anderson case. Not really. The lies are all out in the open. The guilt of the guilty is 20% more visible now than it was a month ago...but then, it was already 130% visible a month ago, so what have we really added? Confirmation on top of what was already blindingly evident? I guess...

Man, I should really write something about the Anderson case. It's the kind of case bloggers exist to ferret out. It's some kind of indictment of my abilities as a blogger that I can't think of anything fresh to say about it.

But I can't. I really can't.

They killed him, they got away with it, that's it.

Everybody already knows everything about the Anderson case. That's the thing, man. That's the thing.

Confessions of a dangerous mind

Katy says:

"Por allí se nos fueron miles de millones de dólares el año pasado (en compras de Internet), he ordenado ajustar al vicepresidente y que más nunca ocurra eso, cualquier decisión debe ser consultada conmigo aun cuando el BCV es autónomo, pero yo soy el jefe del Estado y jefe es jefe"
- Hugo Chavez, yesterday.

Translation: "Billions of dollars vanished last year on Internet purchases, and I have ordered the Vice-president to adjust that so that it never happens again. Any decision has to be run by me because, although the Central Bank of Venezuela is autonomous, I'm the Head of State, and the boss is the boss."

For all his flaws, Hugo Chávez is an unparalleled communicator. Still, there are moments when his oratory transcends humdrum communication goals and enters into the realm of legend.

Yesterday was such a day. The amount of truth encapsulated in this little nugget of a quote is so complete, so all-encompassing, it more or less defines chavismo itself.

Not only does Chávez brilliantly exploit the fact that the term "Head of State" uses the word for "boss" in spanish (jefe), he leaves no room for doubt that he is personally in charge of everything and anything related to the State. Autonomous institutions? Pish posh...the boss is the boss...

It's so naked, this one, so unwittingly honest, you almost have to tip your hat to its accidental candor. It's a philosophy that takes care of everything.

The Constitution may say that courts are autonomous, but, hey, the boss is the boss.

The Constitution may say the Prosecutor General is autonomous, but, don't you forget it, jefe es jefe.

Venezuelans may think we have a right to private property, but jefe es jefe.

The Constitution may say that Chavez must leave office in 2013, but he's the head of state and jefe es jefe.

Jefe es jefe, sin derecho a pataleo.

This is a government that makes satire superfluous.

Newsweek's Credibility Tanks

Quico says: With sources like these, can you believe a word Newsweek says?

Right-hand Column overhaul

Quico says: In a fit of procrastination, I just checked, updated and re-organized the entire right-hand column. All the links have been checked and all of them work now. Some no-longer-active sites were dropped, and some newly active ones added: welcome Vicente and Julio to the blog roll.

I'm especially eager to bulk up the "Blogs in Spanish" section. Am I missing your favorite? Don't be shy with comments and suggestions.

Six years on: Usón's April 11th

Quico says: On my trip to Caracas, I picked up a copy of "Opinion Prisoner: General Usón Speaks". It's a book of interviews with former Finance Minister and jailbird Francisco Usón by Agustín Blanco Muñoz. What follows is drawn from Usón's recollections of the evening of April 11th, 2002.

There was a gun on Chávez's office table. A pack of cigarettes and a lighter, an ashtray with some stubs in it, an empty cup of coffee, and a gun. That's the detail that sticks out in General Francisco Usón's memories of going to Miraflores to resign his post as Finance Minister. It was about 8:30 p.m. on April 11th, 2002.

It's not the only detail, of course. He remembers people crying in the halls of Miraflores, army officers running from one place to the other like chickens with their heads cut off. He remembers José Vicente Rangel hanging about the scene like a sleepwalker, muttering to himself again and again that Chávez must not resign, that handing over power was unthinkable, that it had to be avoided at all cost, in a kind of loop, like a drunk you meet on an El Silencio sidewalk late at night. And he remembers Chávez's vacant, disoriented expression, how nervous he seemed, how it was impossible to tell if he was actually listening to you as you talked, the way his own speech bordered on the incoherent. The Chávez Usón saw that evening was despondent, defeated.

Mostly, though, he remembers that gun.

It couldn't have been for self-defense. When you keep a gun for protection you keep it in a holster, on your body. Usón, like Chávez, is an army man: it's not the kind of detail either of them would miss. A gun sitting on top of a table like that...it was only ever going to be used for one thing.

The thought alarmed Usón. He was seriously worried that if something happened to Chávez that night the country would careen towards civil war. He was concerned enough to consign his own handgun to one of the president's bodyguard before going in to see him. He even raised the importance of keeping Chávez safe as he resigned and, on his way out, went as far as to have a quiet word with one of Chávez's bodyguards to plead with him to hide that gun when he got a chance because "nothing must happen to Chávez."

That glimpse of a suicidal Chávez is not one Usón would forget. At 8:30 p.m. on April 11th 2002, Hugo Chávez genuinely thought his gig was up.

From Miraflores, Usón headed straight to the fifth floor of the Army General Command Center in Fuerte Tiuna, where he ran into the chaotic conspiratorial verbena so many others have also described. The collapse of the chain of command was obvious to him right away. In the middle of the biggest military crisis Venezuela had seen in half a century, some of the assembled generals were drinking whisky.

General Efraín Vásquez Velasco, whom everyone looked to for leadership, was way out of his depth. He was the army's highest ranking officer, and the hierarchy-minded military men all around him were naturally waiting for his orders. But Vásquez Velasco hadn't thought things through. He hadn't planned ahead, hadn't conspired. Needless to say, planning is critical to the success of a coup, and the guy everyone was looking to for leadership just hadn't done any.

Worse yet, the guys who had planned were pushing a disastrous scheme to impose Pedro Carmona as president. In fact, Carmona's presence at Army headquarters that night was one of the first anomalies Usón noticed. The officers backing him - led by General Medina Gómez and Vice-admiral Ramírez Pérez - commanded no troops. No mandaban ni en su casa, is how Usón puts it. And they weren't senior enough in the military hierarchy to tell Generals Vásquez Velasco and Alfonso Martínez what to do.

The real "power vacuum" that night wasn't in Miraflores, it was in Fuerte Tiuna. The army leadership was making it up as they went along, trying to run a coup "by consensus." In those circumstances, it wasn't hard for the real plotters to outmaneuver the hapless top brass.

Well before midnight, General Rosendo (who'd just resigned as head of the Armed Forces Unified Command) and General Hurtado Sucre (then Infrastructure Minister) go to Miraflores to negotiate a handover of power directly with Chávez. Very quickly, Chávez agrees to resign, but only if safe passage to Cuba is guaranteed for himself and his family. It's his only condition. Rosendo and Hurtado Sucre make the deal.

But the situation is fluid back in Fuerte Tiuna. Alliances shift by the minute and Vásquez Velasco completely fails to stamp his authority and impose a single course of action. So, as they try to work out the details, Rosendo and Hurtado Sucre find themselves negotiating under a mandate that changes again and again. They keep having to call Fuerte Tiuna to get instructions, but the instructions keep changing.

This provides Chávez with the first hint that he may not be as screwed as he'd figured. He asks to speak to Vásquez Velasco directly. They speak on the phone several times throughout the night. When Vásquez Velasco speaks to the president he goes into a small office by himself, so nobody can overhear what he's saying. The conversations follow on throughout the night.

Little by little Chávez starts to put 2 and 2 together. At 12:30, he calls Usón directly on his mobile and asks what's taking so long, why he isn't on a plane to Cuba yet. It's the first of six conversations between the two that night. Gradually, Chávez comes to understand it's all a bit of a bluff. Years later, in his prison cell, General Usón will have plenty of time to wonder whether he inadvertently tipped off Chávez. Maybe it was those phone calls that made Chávez realize that nobody was in overall command in Fuerte Tiuna.

Back in Fuerte Tiuna, one faction has gotten it into its head that sending Chávez off to Cuba would be a disaster. The guy would destabilize any new government from a distance, and besides, the blood that flowed down Baralt Avenue that afternoon was on his hands and he should be held accountable. Another faction argues that it's lunacy to think you can jail a guy passionately supported by 40 to 50% of the population. Characteristically, Vásquez Velasco fails to step in to resolve the dispute.

As the early morning wears on, General Rommel Fuenmayor calls Chávez and threatens to order some tanks and Air Force planes to bomb Miraflores palace if he doesn't leave power within 10 minutes. But Fuenmayor is an army officer - and one without troops under his command at the time (the guy was running CAVIM, the army munitions manufacturer). Fuenmayor had no authority over the Air Force or over any tanks. In the end, his threat only underscores the extent to which the military chain of command has gone to all hell.

By the early morning hours of April 12th, the dazed, suicidal Chávez of the previous evening is just a memory. Sensing the weakness in the generals' position, he's well and truly snapped out of it and gone on Full Survival Mode. After all, if there's one subject he genuinely is a bit of an expert on it's military conspiracies...and how to survive them when they go wrong.

Just before 4:00 a.m. Chávez decides to go to Fuerte Tiuna to negotiate directly with the army brass. This is a detail that's been lost to history: Chávez doesn't submit to an army order to go to Fuerte Tiuna, Chávez decides to go there. He needs to be there to confirm his suspicions about the coupsters' disorganization. He goes flanked by his head of security and his head of Casa Militar, (the presidential protection garrison.) Both are armed and still loyal to him. Amid the confusion, nobody finds anything strange about that.

Once he gets there, Chávez quickly confirms what he'd suspected. Rather than being met by a single officer with a single negotiating position, Chávez is faced with a petit committée of militares alzados.

They demand that he sign a resignation letter. He asks about safe passage to Cuba. They start backsliding. Suddenly, they won't guarantee that he can get out of the country right away. Chávez notes that this is not the deal he'd agreed to. He realizes his choice now is between being a head of state who's illegally detained and being a former head of state who's legally detained. So he refuses, point blank, to sign the letter.

And the generals don't have the first fucking clue what to do next.

For General Usón, what follows was a turning point in the crisis. Faced with Chávez's refusal, the assembled generals make a decision that lays bare all their weakness: they excuse themselves and go off to the room next door and start arguing about what to do next. Any pretense of being an organized force executing a carefully considered plan collapsed right then and there, and right in front of Chávez's eyes.

That was the instant when Chávez's fight back began in earnest. Chavez sensed that if they didn't obtain a signed resignation letter, they wouldn't be able to count on the support of the Maracay garrison or of junior officers nationwide, who are the ones in direct contact with the troops. A bit of bravado at a key moment completely threw the generals off their game and exposed how ramshackle their entire operation was. With his own eyes, he realized that they had no Plan B.

Within minutes, the generals were back merely to re-iterate their demand that he sign, trying to intimidate him into complying. Which only confirmed how precarious their position was, how dependent on his co-operation.

Even Usón, who spent years in jail due to a presidential whim and hates the guy's guts, is forced to recognize Chávez's courage and cunning at that critical moment.

Over the following 24 hours, plenty of other mistakes would greatly aid his fight back - the Carmonada obviously being the biggest one. But it was that one moment, that instantaneous realization that he could send all their plans into a tailspin just by refusing to play along, that made his fight back viable in the first place.

The real irony, considering the turn official rhetoric would take in the months and years to follow, is that it was only because April 11th wasn't the product of a well planned, carefully orchestrated conspiracy that Chávez was able to beat the coup.

Mark & Doug's excellent Venezuelan adventure

Katy says:

"Exit poll results show major defeat for Chávez"

Caracas Chronicles headline, August 17th, 2004, citing a press release from Penn, Schoen & Berland.

The long anticipated departure of pollster, best-selling author and political guru Mark Penn from Sen. Hillary Clinton's campaign brought back some unkind memories. While the gringo press obsesses about the myriad ways Penn screwed up Hillary's presidential run, we Venezuelans let our minds wander back to his tour of our country between 2004 and 2006, when Penn's firm played a critical role in launching the opposition into three years of self destruction by our misguided abstention strategy.

Mark Penn is a larger-than-life figure. Having worked - sometimes succesfully, other times not so much - with the Clintons, Al Gore and Tony Blair, he is admired and despised in roughly equal measures in First-World political circles. A formidable intellectect with an even more formidable ego, he's apparently the kind of person who never doubts himself.

In a keen new piece, New Republic writer Michelle Cottle describes him as:

"rough, arrogant, antisocial, controlling, manipulative, brutally ambitious, and occasionally downright abusive--a hurler of cell phones, pagers, and Chinese food."

I know that what follows will probably get me an eggroll, hurled straight at my noggin', but here goes anyway. The story goes like this.

Mr. Penn, along with his partner Doug Schoen, worked with Venezuelan opposition NGO Súmate during the Chávez Recall Referendum of 2004. Their firm advised the opposition in the run-up to the referendum and was supposedly in charge of organizing the all-important exit poll on the day of the vote. The evening of the Referendum, PSB announced that Chávez had been handily defeated, and the rest is history.

That poll was the original bit of evidence that convinced everyone that something was dodgy about the referendum. How could it be dismissed out of hand? It was Bill Clinton's pollster! To a remarkable extent, the strategy of the opposition in the coming months and years was shaped by what happened that night.

So, what was the real story behind the exit poll? We'll probably never know, but I can tell you my version of the story, which is shared by Quico and Lucía and has been corroborated by two independent sources close to important opposition players. It goes something like this.

In the months leading up to the Recall Referendum, the polls began to change dramatically. The government had played the clock brilliantly, all the while launching the popular misiones social programs. Opposition elites - with few exceptions - were very slow and/or unwilling to believe Chávez's rise in the polls. They failed to understand the power of the misiones and Chávez's message and put their decline in the polls down to a mythical "fear factor" not supported by the evidence.

The opposition's umbrella group, the Coordinadora Democrática, failed to offer a compelling, competing message. An amalgamation of disparate political groups and NGOs, the Coordinadora failed to act effectively and its leadership was notoriously slow, disorganized and ineffective. All this is common knowledge, right?

Enter Penn, Schoen & Berland. After taking Súmate's hard-earned money, PSB told them that they simply did not have the time to design the exit poll themselves. Instead, they said Súmate should do it and kindly offered to let Súmate put the PSB stamp of approval on the results.

Súmate, an electoral NGO with no experience in polling, probably did their diligent, engineer-like best. It was probably not enough.

Exit polls are tricky to design and run under the best of circumstances. This was a well-intentioned amateur effort, from start to finish.

In the aftermath, Súmate had a lot of accomplices. There should have been tough questions asked about the reach and scope of the exit poll results. Very rural areas and unsafe urban areas, both Chávez strongholds, appeared curiously under-represented. Amid all the anger over the CNE's screwed up "hot audit", it's remarkable that nobody stopped to audit Sumate's PSB endorsed exit poll at all.

Nobody that night asked those questions with anything resembling academic rigor. The wider opposition community, including some very smart people, kept their skepticism to themselves and failed to ask the obvious questions about the exit poll. Instead, academic papers were produced at heart-stopping rates using the exit poll as the major data source, treating it like something it was not: a random sample representative of the population at large.

Opposition leaders had been treated to weeks of bad poll numbers preceding the referendum. Some of them were simply unwilling to believe the bad news. Some of them honestly believed, and still do, that the exit poll is accurate. It is not.

This period marked the beginning of the great "fear factor" myth, through which it wasn't that voters liked the new misiones, it was that they were afraid of pollsters! Most of the opposition leadership, including Coordinadora leader Enrique Mendoza, didn't buy this. They did understand that Chávez's numbers were rising steadily in the weeks before the vote. One has to wonder what would have happened if our leadership had adopted a more skeptical approach that night.

The belief that the exit poll had been correct was shared by the international media. Chavista media outlets were incensed that their man's victory was not being universally recognized. PSB put their reputation on the line with their exit poll, and a lot of people believed it.

The belief that they had uncovered massive fraud thanks to their polls, along with historical ties to major AD figures, paved the way for Doug Schoen to be hired by the Manuel Rosales campaign in 2006. Rosales ran an energetic campaign to unseat Hugo Chávez, yet it failed to show in the vote tallies. Rosales's defeat was somewhat of a foregone conclusion, given how a majority of the opinion polls released prior to the election predicted it.

Again, there were a couple of outliers. Only one high-profile DC poollster showed the race getting tighter, though. Who ran it? If you guessed PSB, you guessed right.

After going against the tide and predicting a few weeks before the poll that the race was tightening, Schoen was mysteriously replaced by Penn the weekend before the election.

You know what happened next: we got trounced, and Rosales accepted defeat gallantly. But if you went by what Penn and Schoen had predicted, you would believe we were robbed all over again.

For the past few months, Quico, Lucía and I have been talking to some of the people involved, and after confirming the story with different sources, this is what we believed happened: a hack-job of an exit-poll conducted by the opposition itself and rubber-stamped by a prestigious polling firm resulted in a collective belief that differed from reality and led to disastrous political decisions for the opposition in the following years.

You may choose to believe something else, but we call it like we see it. I believe there was some vote tampering the night of the Recall Referendum, but it did not make a difference overall. I also believe the exit poll was garbage.

The impact of releasing an exit poll like that at a time like that cannot be underestimated. Has this been tagged as a Súmate exit poll - which is what it was - rather than a PSB exit poll, we probably wouldn't be having this conversation. The fact that it came out at a moment of maximum tension, where it was the only piece of information available, only helped build up the myth.

Social phenomena are sometimes marked by instances where the momentum for change and for the establishment of an idea is unstoppable, a "tipping point" if you will. This concept has been been recently popularized by writer Malcolm Gladwell.

Penn, Schoen and Berland's faulty exit poll may have been our tipping point - the moment when we decided that we were the majority and that anyone who said differently was lying. We've been paying the price ever since.

Media Terrorism Chronicles...

Quico says: Turns out that Simpsons/Baywatch story has legs:


...hey, 290 editors can't all be wrong.

Update: Wow. Homer vs. CJ made it onto the BBC News front page!



Does Conatel grasp they're an international laughing stock now?

Also In The News, we salute you.

What do you do when you don't have time to post original stuff?

You pimp your blog out to YouTube, of course! Today's theme is crazy stuff we saw on TV in 1998:

Reality and Discourse

Weil says:I liked this image a lot in simply because it shines a spotlight on the key to understanding Venezuela's current reality: the delirious, rampant mismatch between official discourse and reality.

If I'm going to get really picky about it, though, I guess what I don't like is the implication that some big dust-up is imminent, that the incompatibility between a discourse careening forever leftward and a reality on an unstoppable rightward trajectory is somehow unsustainable.

Venezuela's tragedy is, precisely, that it is sustainable, because there's always enough oil money around to paper over the incoherences the mismatch engenders and prevent an ultimate crash. So I think the cartoon would've been even better if he'd drawn the two trains running along parallel tracks, or along the same track, but pulling away from one another.

Still, in Venezuela today, the discourse-reality mismatch is the story. Anything that helps focus attention on it is all to the good.

The Economics of Quítate Tú Pa'Ponerme Yo

Quico says: Francisco Rodríguez has become something of a force of nature in the field of Chávez scholarship. While most of us bullshit at excruciating length, FR brings creativity and rigor to the task of documenting the effect chavismo is having on Venezuela's economy and society.

His latest, a paper entitled The Price of Political Opposition: Evidence from Venezuela’s Maisanta co-authored with Chang-Tai Hsieh, Daniel Ortega (of IESA, not that other one) and Edward Miguel, sets out to measure a phenomenon we all "already" knew about but hadn't been able to prove: the impact of political discrimination on personal and corporate income in the Chávez era.

At the heart of this paper is some startlingly innovative research design. Turning the government's main tool for political discrimination - the Maisanta Database - on its head, the research team crossed its data with income data from the Venezuelan Household Survey by "exploiting the fact that most individuals in both datasets are uniquely identified by their gender, date of birth, and parroquia of residence."

This allowed them to isolate the specific impact of signing for or against the government on individuals' incomes, and lo and behold, they found statistically significant and robust evidence that signing against Chávez cost the average opposition supporter 3.8% of his or her income and massively increased their risk of unemployment.

Among other results, the team documented big shifts in sectoral employment, with a 6.1% reduction in government supporters' propensity to work in the private sector and a 5.7% reduction in government opponents' propensity to work in the public sector.

For firms, the research design was even more ingenious. They sent a small army of flunkies research assistants to pour through public registries in Caracas, Maracaibo, Maracay and Valencia so they could assemble a little database of company board members. They then matched that with the Maisanta Database to construct an index of how pro- or anti-Chávez each corporate board was. That allowed them to regress various indicators of firm performance against their board's scores on the pro- or anti-Chávez scale.

The results were pretty clear: pro-government firms have far easier access to Cadivi dollars than pro-opposition firms. Output and profits grew faster in pro-government firms, but labor productivity fell, indicating that pro-Chávez firms are more politically favored but less efficient than anti-Chávez ones. And oppo firms were paying 40% more in taxes than pro-government firms, suggesting that Tax Enforcement is politically selective.

Though fiendishly clever, this research design does have its limitations. Neither the personal nor the corporate analysis can account for the Arias Cardenas Effect: people who signed against Chávez but then saw the way the wind was blowing and made amends. Anecdotal evidence suggests that Chávez is quite willing to forgive these folks, with Gustavo Cisneros and Omar Camero being the paradigmatic examples. There's no data to differentiate the round-trippers from the hasta las últimas consecuencias oppositionists: one suspects the effects found would be even larger if there were.

The final section of the paper estimates that political polarization itself made the Venezuelan economy as a whole substantially less efficient, with Total Factor Productivity declining 5% in response to political discrimination. (If I'm reading this right, that means that for the same level of total capital, labor and natural resource inputs, the economy generated 5% less in output after the Maisanta List than before.)

On one level, you could say these results are prime candidates for publication in the "Well Duh Journal of International Economics", or perhaps the "Annals of Painfully Obvious Results". But in a country where everybody bullshits and nobody researches, there's something satisfying about having the actual figures.

For Venezuelan newpaper readers, there's nothing new here, but in broader theoretical perspective, this is crucial work. Rodríguez, Hsieh, Miguel and Ortega document a key process I keep trying to write about: the way the petrostate mobilizes its resources to create a socio-economic elite in its own image. And, academically speaking at least, the more detail we can get on the precise mechanics of this elite-generation process, the better.

Now they're making me mad!

Quico says: Some bits of rampant revolutionary idiocy hit closer to home than others, and for me, few hit closer than this one: chavismo wants to drive The Simpsons off of Venezuela's airwaives.

Conatel, Chávez's telecoms regulator, is demanding that Televen stop running the show during children's viewing hours, as the revolution's crack squad of semiologists and culture critics (¡¡que el que te conté nos agarré confesados!!) has determined that the gang from Evergreen Terrace is a clear and present danger to Venezuelan family values.

And what do the moral guardians of Venezuela's tender youth want to replace all that Simpson degeneracy with?

Baywatch Hawaii.

I. Shit. You. Not.

Yeah, I know, in the grand scheme of things, nationalizing the cement industry is probably a bigger deal that this...but....but...it's The Simpsons!