April 11th: Putting it all together

Listen to my interview with Brian Nelson, author of The Silence and The Scorpion, here.

Quico says: Seven years on, the events of April 11, 2002, haunt Venezuela as much as they ever did. The drive to mythologize the April Crisis began as soon as it ended, and the more time passes, the less we seem to know about what really happened. A government heavily - indeed, literally - invested in reinventing the coup as an epic struggle against imperialist aggression has enveloped the events of April in layer after layer of systematic forgetting, a carefully orchestrated campaign of deception that has been, in the grand scheme of things, brilliantly executed and shockingly effective.

Brian Nelson's remarkable new book, The Silence and The Scorpion: The Coup Against Chávez and the Making of Modern Venezuela (Nation Books, available for pre-order now, shipping from Amazon on May 4th) is the antidote to this corrosive form of engineered Alzheimer's. Easily the most complete version of the April Crisis available in print, The Silence and The Scorpion is a minutely (one is tempted to say "obsessively") researched account that brings together the stories of the coup's main movers and a number of its bit players as well.

Basically, Brian spent six years watching every bit of footage of the coup, examining every available photograph, going through every scrap of written testimony and interviewing as many key players as possible. Then he wrote it all up.

He shouldn't have had to. This ought to have been the Fiscalía's job, and the Defensoría's. But the chavista state's oversight bodies have steadfastly denied the country a reality-based account of what really happened that weekend. The organs of official memory have been turned into state rohypnol. Somebody had to fill the gap. And now, someone has.

The result is an enthralling read. Pitched at a general audience, the book is shot through with vivid details and strewn with telling and yet all-but-forgotten pieces of the April Puzzle.

This week, Brian was kind enough to answer some of my questions about his book. We talked about Luis Fernández - the Venevisión cameraman who got the key footage of the Llaguno Overpass gunmen - about the sequence of deaths on Avenida Baralt, about Lucas Rincon's role that evening and late night, about the use of lipstick as face-paint, and much else besides.

You can listen to the first half of our Skype-interview here:

You can also download the MP3 file (25 Megabyte) here. It's 36 minutes long.

The second half of this broad-ranging interview will be available tomorrow.

Petro-dictatorship chronicles

Juan Cristobal says: - The autocratic ruler of a petro-state has just been re-elected President for an unprecedented third term after Parliament removed term limits from the Constitution.

He won with 90% of the vote. The opposition has denounced the vote as "a charade."

Chavez makes a power grab

Juan Cristobal says: - That headline is ridiculous, isn't it?

Chavez is perhaps the most powerful man in the history of our nation, more powerful than Simon Bolivar in his prime and certainly more powerful than Juan Vicente Gomez. He controls the courts. He controls the considerable purse strings. He controls everything from who you hire to who you can fire, from what you pay for a dollar to what you pay for gas.

And yet, there is one thing he doesn't control: Caracas city hall.

Well, not any more. In an egregiously un-democratic move even for chavistas, Venezuela's National Assembly approved a new law that basically dismembers the Metropolitan Mayor's office they created and voters approved when the new Constitution passed in 1999. As of now, the Metropolitan Mayor's Office will mostly be a ceremonial post, a "coordinator" between the mayors of Caracas' five municipalities and with only a fraction of its resources.

Not that there's much to coordinate anyway - four of the five municipalities are run by the opposition, but the sole chavista mayor refuses to attend "coordinating" meetings and is unwilling to deal with any of his colleagues.

In its place, the National Assembly created legislation for a "Capital District," whose boundaries are exactly the same as those of the "Libertador" municipality that chavista Jorge Rodriguez presides over. In essence, the Capital District will have a Chavez-appointed "governor" and a chavista mayor, both working in the same jurisdiction.

(This is nothing new for chavistas - Vargas state "functions" in the exact same way: one mayor, one governor, same area)

Now, we've known for years this "Metropolitan Mayor" figure made little sense, that Caracas was a monstrosity, a dysfunctional city where local governments barely functioned. Even opposition people far more knowledgeable than me acknowledge the status quo was problematic, to say the least.

But this new law has nothing to do with that. Instead of dealing with these issues, it only exacerbates them by effectively killing the lone supra-municipal authority there was. Instead of sitting down with all parties (including the governors of Miranda and Vargas) and devising a workable proposal and timetable, it decides to reverse the outcome of an election.

In the past few weeks, the government has stepped up the persecution of opposition figureheads. It has gone to great lengths to ignore the will of the people by stripping many of the local governments they elected in November of their funding and their attributions. It has done so with no regard for the law and with nobody - least of all Venezuela's compliant courts - being able to stop it.

The government ignores the will of the people and submits the courts to its will. Remind me again ... why doesn't that qualify as a dictatorship?

Because, to me, we've crossed that threshold.

kombat karive

Juan Cristobal says: - The BBC has a video on indigenous Venezuelan martial arts. They don't mention the government, but surely this is something they have their hand on, although the academy's website says nothing of it.

So, is this ridiculous? Or is it a positive thing?

The Chavez administration has screwed up, neglected or made worse a lot of Venezuela's problems. Its policies have squandered a historic opportunity for development.

But its vindication of indigenous rights - although exaggerated, what with the "blessing of the chicha" and the knocking down of statues - is one of the few bright spots. Would you agree?

The "dictatorship" canard

Quico says: I'm always amazed by the kinds of debates that ensue when somebody in the anti-Chavez camp strays from oppo groupthink and declares something that, in the end, is only obvious: that chavismo does not meet many of the most salient defining features of dictatorship. The reaction is immediate, heartfelt, and insane...an adamant, MariaAlejandraLopezesque indignation that soon morphs into a way-beyond-the-need-for-evidence assertion that Chávez is obviously a dictator.

On few topics is writing from a distance, from outside the oppo resonance chamber, a bigger asset. In oppo circles inside Venezuela, the Chavez-is-a-dictator trope is so entrenched, it's somehow become beyond debate, its truth too evident to any longer call for evidence or argument to support it.

Trouble is that, when they hear the word "dictatorship", the vast majority of people around the world understands something that's very far removed from the way Chávez exercises power. Say "dictator", and the vast bulk of international public opinion has a clear idea of what you mean: an unelected leader who systematically uses state violence to crack down on any attempt to organize politically against him.

Say "dictatorship", and people hear "systematic censorship", they hear "comprehensive attempt to shut down all dissident media outlets", and "concerted attempts to jail, exile or murder every journalist and intellectual who produces an anti-government tract", and "widespread informant network that wreaks havoc on the lives of those who express dissent even in private". Dictatorship is what Fidel, Pérez Jiménez, Idi Amin, Pinochet and Trujillo did, what Kim Jong Il and Hu Jintao and the Burmese junta continue to do.

These understandings are not really controversial outside Venezuela. Everybody knows that's what the word implies. A dictatorship is a place where people need to go to extraordinary lengths to hide heterogenous thoughts because all those who dissent can reasonably expect to pay a heavy price. Nobody abroad is really confused about this. It's really pretty straightforward.

It's only a slice of Venezuelan public opinion that tangles itself up in knots over this stuff. The Globo-watching opposition ends up backing itself into plainly indefensible territory, forcing itself to stand by the notion that Venezuela is a dictatorship where opposition political parties are legal, active and above ground, where opposition media is legal, active, and above ground, where middle class people openly, vociferously and adamantly oppose the government without really fearing they'll suffer retribution because their friends and associates might inform on them, where some of those same people host blogs written in their own names to express these opinions and others host TV shows and newspaper columns, and where the "dictatorial government" knows exactly who those opinion leaders are and where they live and where it could go capture them, but doesn't somehow...but that, nonetheless, that's a dictatorship.

I'm sorry but...nobody's buying that!

It just doesn't pass the most rudimentary of smell tests. And when you start passionately defending arguments that catastrophically fail the most rudimentary of smell tests, you only make yourself look ridiculous, not the people you're railing against.

The opposition's "dictator" charge is another of those Conventional Absurdities, a claim that is at once self-evidently false and is treated as self-evidently true.

What makes it most self-defeating is that it is, in fact, a self-refuting absurdity: if Marta Colomina were right and chavismo truly was a dictatorship, Marta Colomina would certainly be prevented from asserting it. Which makes the assertion itself its own best refutation, and drains the people who make it of all their credibility.

To me, the "dictatorship" accusations do nothing beyond demonstrating a galloping, frankly cringe-inducing lack of historical awareness on the part of people who really ought to know better. If you've lived through a real dictatorship, you couldn't possibly mistake Chávez's half-baked brand of tropical autocracy for it.

The whole subject sends into paroxisms of despair. The opposition really needs to grow up on this issue: if we cannot even see the way our adherence to such a conventional absurdity makes a mockery of our claim to represent "responsible opinion" on Venezuela, how can we claim to lead a country we plainly doesn't understand?

It's only pathetic.

A step towards dictatorship

Quico says: If you read this blog regularly, you know how the loose use of terms like "totalitarian", "dictator", "fascist", etc. drives me up a wall. After 10 years of overwrought denunciations, Venezuela has come down with a serious case of Superlative Fatigue: we've been throwing so many epithets at the government for so long, we've lost the ability to make distinctions between things that are different.

Superlative Fatigue makes it difficult to get a grip on real movement along the spectrum of authoritarian control, robbing us of the words we need to describe escalations when they do occur. And so this week, when the Chávez government took a series of real steps along the road from mere autocracy to dictatorship, commentators were left scrambling for words to describe what had happened without sounding like the little boy who cried wolf. (I'm lookin' right atcha, Miguel Octavio.)

Lets try for some definitional precision. To me, there's a clear difference between regimes that use violence selectively to repress dissent and those that try for comprehensive repression.

Regimes in the first group, which I call autocratic, generally allow dissent, while semi-randomly selecting a smattering of dissidents for harassment, persecution and violence. Autocratic regimes in this mold rely on intimidation: since dissidents have no way of knowing, a priori, if they'll be in the group selected for intimidation or not, they have compelling reasons to feel insecure, to fear the consequences from stepping over some invisible, indeed permanently changing, lines. Selective intimidation is designed to provoke self-censorship, and it works. Chavismo, until now, has been a classic autocratic regime.

Dictatorship is something different. Dictatorship is not about picking off a few dissidents now and again pour encourager les autres. Dictatorships set out to make repression comprehensive, to go after everyone who challenges the ruling elite's power. While autocracy whispers in your ear "if you dissent, you might end up being targetted for repression", dictatorship shouts out "if you dissent, you will end up a target for repression."

Autocracy is content to keep political dissent suppressed, enfeebled and marginalized. Dictatorship seeks to wipe it out altogether.

Even today, chavismo is very far from being a dictatorship - as people who lived through the Pérez Jiménez dictatorship know only too well. If you're reading this in Venezuela, and you haven't taken elaborate precautions to log on to Caracas Chronicles through a proxy server to conceal your tracks from Disip, you're living demonstration that chavismo is not a dictatorship: real dictatorships set out to punish not just those who write seditious material (like me) but also those who read them (like you).

What the last week has witnessed in Venezuela, however, is a move towards comprehensiveness. The state actions against Rosales, Baduel, the accusations against Teodoro and the stepping up of intimidation against Globovisión certainly suggest a move away from a strategy of selective intimidation and towards taking out all the leaders of the opposition in one go. These moves represent a clear step-change from the kind of selective repression we've seen until now.

The next few weeks will do much to clarify exactly where on the authoritarian control continuum Chávez wants to park his regime. If we see charges brought against the remaining high profile oppo leaders - Borges, Ledezma, Ocariz, Salas Feo, Pérez Vivas - we'll know for sure we've entered a new stage in Chávez's willingness to use his power to control the political life of the nation. If we see prosecution start to reach down systematically from those top leaders down towards the second tier of political activists who oppose the regime, we'll be able to talk about out and out dictatorship.

We're not there yet. But this week has certainly brought us closer.

How squeaky clean is Teodoro Petkoff?

Quico says: So squeaky clean that, after what was doubtlessly a detailed investigation into anything and everything the guy's been up to over a half century of public life, the best they could come up with to frame him was a 35 year old inherittance tax dispute!

I mean, Jesus! These charges are older than I am!

Criminalizing dissent

Quico says: Nobody could be surprised by Chávez's decision to jail the man who, more than any other, saved his skin in the 2002 coup. The arrest of retired general Raul Baduel marks just one more signpost along the road to the criminalization of dissent. Venezuelans now live under a government that, while it has not quite made it illegal to oppose it yet, is plainly determined to show that trying to lead the opposition to it is liable to land you in jail.

With Baduel behind bars and Rosales enconchao, would you want to be the next to stick out your neck and say "yes, I'll lead the movement against this nonsense"? Would you?!

Yeah...me neither...

Green with envy yet, Hugo?

Juan Cristobal says: - Check out who Barack Obama thinks is the "most popular politician on the planet." Hint: it's not Hugo Chavez.

The scarcity of scarcity

Juan Cristobal says: - Today's edition of El Universal carries an interview with Planning Minister Jorge Giordani, Chavez's economic pater-familias. Giordani is usually a bland, boring guy, but I found this interview fascinating because it showcases, in a nuthsell, the contradictions, twisted logic and reverse priorities of the chavista vision.

Giordani starts off by saying that the problem for the government is that "socialism has never been built on abundance, but rather on scarcity." He hints at the dilemma this poses for the government - on the one hand, its populist nature demands that it increase oil wealth at an ever-expanding pace, but on the other hand, reaching its ideological objectives hinges on the economy crashing, on feeding people's despair.

Giordani can't seem to make up his mind on whether the government actually wants prosperity or poverty.

He seems to believe that only by subjecting the population to hardship and limiting their consumption will you be able to build the socialist state where the new man is born - and the head honchos all have Mercedes Benzes. But the only way to reach that point is by giving a needle to our petro-state junkies and creating a consumption binge that keeps people's minds off of things like marching, human rights and economic freedom. Nobody knows when that point is reached.

Confused yet? Never mind the factions in the chavista movement - I can't keep the factions in Giordani's brain straight.

Not only is the minister confused, he is also wrong about socialism. Socialist experiments have come about from political processes more than economic ones, and they have usually been accompanied by just a dash of force. Scarcity begets revolutions, perhaps, sometimes, but rarely socialist ones. More often than not, socialism is brought about by blood - just ask the Hungarians or the Czechs.

He then opens up about the government's plans to use the commercial banks' reserve requirements, which are kept at BCV, to finance spending. A few weeks ago we talked about this being a real possibility. The parallel swap market agreed.

Giordani basically leaves the door open for that possibility, saying that even though financing is taken care of thanks to our greedy, capitalist banks, the government may come back for more. This puts our banking sector at a real risk of defaulting.

As Quico said before,

"Reserve requirements everywhere act as a source of financial support for the banking system, a backstop against a bank run. Chávez's hint that the revolution might be making a grab for those funds is a sure-fire way to set off a crisis of confidence in the financial system, which may be part of the reason the parallel exchange market is freaking the hell out today, even more than it had been in recent days."

Perhaps Giordani is betting that if the banking sector goes down the toilet, we'll have enough scarcity to make socialism finally viable.

Giordani then talks about how unimportant inflation is. Lucky for him - I figure he wouldn't be sleeping much if he actually cared about it. He says the government cares more about "employment," and in a curious slip of the tongue, he equates "employment" with "social policy." But inflation? Why should that be a problem? If things cost more, you simply print more money and give it to people so they can buy the more expensive stuff.

But employment is trickier. You see, in the mind of the Planning Minister, no private sector employment is worth keeping. Or, to put it in preferred Marxist terms, private sector jobs are bad for society because they put workers' surplus value in the hands of capitalists. Only government jobs are deemed worthwhile because the government is the only one that can ensure that workers are paid the value of the goods they produce. Any surplus value from the fruits of labor goes back to the government who then mercifully distributes it in the form of, you guessed it, social policy.

Funny, these guys disagree with the government being the best employer. So do these guys.

Yet, unlike money, that you can actually print, there is a limit to the number of ghost jobs you can create. The number of government jobs cannot be completely disconnected from the government's financial capabilities.

The inherent contradiction here - there's that pesky word again, contradiction - is that for Giordani to provide employment, he needs oil rents which are, at the moment, scarce. Focusing on increasing the government's payroll is bound to be frustrating for him, since it's really hard to do that in the down part of the oil cycle. Funny how when the government faces scarcity, it's a problem, but when the rest of us do, it's an invitation to revolution.

This disappointing mish-mash of ideas - from our "Planning" Minister of all people - highlights chavismo's lack of coherent vision. Is it any wonder that Venezuela is a country in chaos and turmoil when our government can't decide whether it want prosperity or poverty, employment or unemployment, healthy banks or broken ones?

Perhaps Giordani's cognitive dissonance is just the safety net of a tired old man, the silver lining to the coming failure of his actions. All their policies hinge on an external factor, the price of oil, correcting itself. If it doesn't, whatever they do will surely fail. But hey, in that case, they'll have scarcity and chaos, the perfect breeding ground for socialism.

Then we'll be able to do what we really want to do.

PSF-ari

Juan Cristobal says: - Kudos to Alexander Cuadros of Slate. While in Caracas, he sought out the foreigners who make the Revolution their home to ask them - who are you people? Why are you here? What do you think?

It's a good read. Somewhere, Jane Goodall is smiling.

Danny's Move

Quico says: Now that Hugo Chávez has come out as a personal supporter of Omar Al Bashir, will Darfur genocide activist Danny Glover see fit to raise a peep? Now that his Chávez-financed $18 million dollar erm, black elephant on Toussant L'Ouverture has fallen apart, he has less of a direct financial stake in standing by Chávez...but which way will he break?

I guess it brings up a weirdly fascinating question: what happens when the two cockroaches inside a PSF's head (one labeled "pro-Chávez", the other "anti-DarfurGenocide") start fighting?!

[Hat Tip: You know who you are?]

Hugo and Omar, sitting on a tree...

...K-I-S-S-I-N-G...

Quico says: OK, ok...lets line up our ducks in a row here, Huguito. You got a beef with the politization of the International Criminal Court? You oppose the whole idea of worldwide jurisdiction in war crimes cases? Fine. We could have a debate about that. Non-barking-mad people can certainly disagree about such things.

But when you invite the genocidal nut in Khartoum to come hang out in Caracas? When you go out of your way to personally endorse a man who has mobilized the resources at the disposal of the state he leads for the purpose of physically eliminating a civilian population? That, sir, is when you decisively, unambiguously realign yourself fully with your natural allies: the Barking Mad people.

To deal with your slimy sophism of a rhetorical question directly: why Bashir and not Bush? "Why," in your words, "don't they order the arrest of Bush, who is a genocidal murderer?"

Because, Hugo, intention is a key ingredient in the definitional stew behind the word "genocide".

To illustrate: if I have a gun in my pocket and I punch you in the mouth, you can't very credibly accuse me of trying to kill you. If I intended to kill you, I'd just shoot you. The key here is the mismatch between my capabilities and my actions. On the other hand, if I have no gun in my pocket and I punch you in the face again and again until you're no longer moving, you can certainly sustain a charge of attempted murder.

If George W. Bush had intended to physically eliminate the whole or a portion of the population of Iraq, he had the means at his disposal to do so. If the carpet bombing hadn't worked, he had plenty of nukes in reserve. The glaring gap between what the US did - hamfisted, wrong, and illegal as it was - and what it had the capabilities to do makes the charge of genocide against Bush simple nonsense.

Bashir, while having far fewer resources at his disposal, has systematically deployed them in a way that's fully consistent with the intent to eliminate the entire non-arab population in Darfur. The bombing raids targeted against civilian populations. The systematic use of rape as a military tactic. The premeditated, patient campaign of village burning, each one followed with orders to murder everyone who stays behind. The whole apparatus of state fully mobilized to ensure that only arabs get to live in the region. That, Hugo, is genocide. And that's what you now support.



Enjoy your cafecito with the guy, Hugo...

Dear G20, Please Stop Buying Our Oil...

Quico says: My latest piece in the Guardian's Comment is Free site is now up. (Notice: 500 words, and not one of them is "Chávez"!)

The comments thread they've got going so far is too dreary for me to jump into, but maybe some of you are up for a bit of a rumble.

Also, they said they might translate it to German for Die Zeit's website, so those of you who read German...keep a look-out!

Dear Nobel Prize for Economics Selection Committee: Your Search Ends Here

Quico says: In a feat of unparalleled economic mastery yesterday, Hugo Chávez proposed a new international currency to be backed by underground oil reserves: the Petro. Canadian Prime Minister Stephen Harper immediately countered with his own proposal - the Glacio - while Algeria, Mauritania, Burkina Faso, Lybia and Egypt joined forces to promote their preferred alternative: the Sandio. Reports suggest that, at this week's G20 meeting in London, Cristina Fernández de Kirchner, too, will propose a currency: the Ego.

A nice demonstration of her skills

Juan Cristobal says: - Everyone knows Venezuelan women are beautiful and win lots of pageants. Like populists and ball players, beauty queens are one of those things that we seem to produce excellent specimens of, our own "non-traditional exports."

However, with the latest news coming out of Cuba, it seems like we're gonna have to recall some of our exports and apologize to the world.

You see, our very own Dayana Mendoza, the lovely Miss Universe 2008, could not find a better use of her time than to drop by Guantánamo Bay military base for a little tour. This, in and of itself, would be a tricky PR-situation and would likely raise some eyebrows. However, it would not have been scandalous were it not for Dayana's blog entry about the trip.

Gitmo is "incredible." They "took a ride around the land" and it was "a looot of fun!" They got to meet the "Military dogs", who did a "very nice demonstration of their skills." Yeah. Them pooches sure are cute.

Apparently, Dayana disagrees with the Red Cross, Amnesty International, Human Rights Watch and a host of other human rights NGOs. Detainees have, according to Dayana, comfortable facilities, including "showers", and places where they "recreate themselves with movies, classes of art, books."

In the end she found the beach so "beautiful," she found Guantánamo "such a relaxing place," she didn't want to leave.

Just call her a Frenemy Combatant and put her in a cell. She'll love it.

Dayana's fanta-bulous Caribbean-vacation-cum-PR-disaster makes you long for the days when the biggest trouble our beauty queens got into was for being filmed while having sex.

PS.- Don't miss the incensed comments from NYT readers. One of them said, "Ought to send these beauty contest winners to Auschwitz and Hiroshima. Maybe killing fields in Cambodia as well. They’re sure to have a swell time bs’ing with local security, seeing the sights, swooning over the natural beauty. Think of the swell souvenirs they can bring home after a day of soooo much fun. In fact, they might not want to leave."

PS2- Huffington Post readers have their say too. My favorite comment: "(Huffington Post) has been orchestrating a sleek campaign against Venezuela for some time now. Don't know why. CIA funding, maybe?" No word yet on whether Quico met Dayana in their Langley training sessions.

UPDATE - Dayana's blog entry was deleted. Instead, there is a statement from the Miss Universe Organization. The New York Times has an update.

Ñapa Valley

Quico says: One source that's quickly becoming a must-read for me is Política de Ñapa: Hernán Lugo Galicia's PSUV gossip blog in El Nacional. Lets be clear here: the vast majority of of the gossip about the government in opposition media is woefully thinly sourced. Much of it is, I suspect, just plain made up on the spot. Hernán (better known as "Ñapa" due to his dimminutive stature) may well be the only exception: an actual reporter with actual chavista sources who actually, you know, talks to those sources before putting pen to paper. (Or, em, keystroke to liquid crystal.)

Last week, Ñapa - who you may remember as the guy behind the infamous "report of shit" after the 2D referendum in 2007 - had the skinny on chavismo's decision to go after Manuel Rosales, casting it as both a ploy to divide the opposition and, at the same time, to build up Rosales's stature. In his telling, AD will never fall into line behind Rosales, and Rosales is the oppo leader the government figures would be easiest to beat in the 2012 presidential election. So building up Rosales's street cred with the Maria Alejandra Lópezes of this world by persecuting him is win-win for chavistas. The report's too long to translate, but be sure to check it out.

[HT: Kep]

As an aside, I need to add that while Ñapi's reporting is great, the format El Nacional has chosen for him is Exhibit A for the oppo papers' abject failure to come to terms with New Media. Misnamed a "blog", it's actually just a weekly (Thursdays) column El Nacional decided to run on its website rather than the print edition. With no links, 10 or 12 topics per "post", stuck away in a submenu of a submenu where you would never find it if you weren't specifically looking for it, and with none of the immediacy and continuous updating that makes a blog a blog, El Nacional shows its total naïveté about the format and wastes the chance to host a truly, transcendentally awesome blog in the process.

Newsflash, Miguel Henrique: a "blog" is more than just a sneaky way to save on newsprint! Get a clue! Let Ñapa blog!

Rosemont

Quico says: OK, so here's my idea for a movie pitch: As we fade in, we see the old oil baron on his death bed, a picture of Comandante Chávez hanging sternly from the wall. As Ramirez struggles for breath, we hear him whisper his last word, two syllables that carry with them a lifetime of regret:

"Rosemont"

As he does, we see a snow-globe slip from his grasp and shatter on the floor. Rafael Ramírez is no more.

For the next two and a half hours, through an intricately constructed series of flashbacks, an enterprising reporter works feverishly to piece together the mystery of Ramírez's dying word, talking to everyone who was once close to the old man. What was Rosemont? A favorite Motel on the Panamericana? A brand of whiskey even more decadent than Blue Label? If only he could find out what Rosemont meant, it could be the final piece of the jigsaw, the key that unlocks the meaning of his life.

But every clue he follows is a dead end. In the final scene, after the reporter has given up the search, we see workmen in red, PDVSA overalls following orders to just burn the bitter old coot's every worldly possession. As they mindlessly toss his stuff into the incinerator, we see them throw in a stack of papers. As we zoom into the fire, we see the one on top is marked "Rosemont Corporation - Confidential Information." And beneath that, as the fire eats away at the document, we just manage to read:

Cotización del Dólar: Cliente PDVSA
Para la compra: BsF.2.15
Para la venta: BsF.6.45

Suddenly, it all falls into place. We grasp Rosemont as the lynchpin of the one truly happy period in Ramírez's life: those halcyon days when PDVSA could take one dollar worth of oil revenue, turn it into BsF.6.45 through Rosemont, then take those BsF.6.45 to Cadivi and turn them into $3 at the official rate...$3 that PDVSA could take back to Rosemont to buy BsF.19.35, which they could then go back to Cadivi and magically transmogrify into $9...and then $27...and $81...lather, rinse, repeat.

We see that, for Ramírez, Rosemont stood for a frolicking utopia of unlimited free money, when a simple phone call to a friendly broker in South Florida could create more and more dollars, instantly, risk free...and then we peer into his ocean of regret, that damn regret, at realizing it could have gone on forever if only those pesky DEA kids hadn't gone poking around into Rosemont's affairs.

For the viewers, the realizations cascade one after the other. In a flash, the entire previous 150 minutes of movie-making are recast in a different light. All of a sudden, we can see that underneath all the revolutionary rhetoric, the grandiloquent promises, the visions of a New Society for a New Man, all along we were just looking at a little boy trapped inside a man's body, a little boy with the same dreams and aspirations as any little boy in Venezuela: the dream of something for nothing, of having a money-spigot nobody could turn off.

"Mr. Ramírez is a man who had everything he could want, and then lost it," the reporter says. And then adds, "anyway, I doubt that any man's life can be summed up in a single word."

By this point only we, the viewers, realize how wrong he is.

Deep thought

Quico says: Rama Vyasulu is the Gordo Antonini of 2009.

Update: Confused by this whole story? The Wall Street Journal explains it from start to finish.

Así! Así! Así es que se bloguea!

Quico says: You've heard of Bad Hair Days? Well Miguel Octavio had a Good Blog Day yesterday. A very Good Blog Day.

I love it when the blog tail wags the MSM dog. Yesterday was one of those days.

(I could re-hash what he wrote, but what would be the point? Go read it over there.)

Panic in the Swap Market

Quico says: I'll own up, I have no idea what the hell is happening in the bolivar swap market. Some prominent Caracas exchange operators have stopped trading altogether on reports that one or more key accounts in the US have been frozen by court order. We hear reports of an "omnibus" account involved, which carried transactions by as many as 49 separate Venezuelan swap market operators. Rumors are rife, nothing is confirmed as far as I can tell. Reuters seems to be cribbing mostly from Miguel's blog.

If you have any detail - or, hell, at this point, any good rumors - please write in.

No NPR for me...

Quico says: Sorry, false alarm.

Choices, choices, choices...

Quico says: Now that el jefe has announced that there isn't enough money to go around this year, it stands to reason that any spending increase has to be offset by cuts elsewhere. With that in mind, a simple question for Foreign Minister Nicolás Maduro: are you planning to take Venezuela's $2 billion contribution to the new Banco del Sur out of school teachers' pay settlements, the aluminum sector bailout, or Barrio Adentro's equipment budget?

The era of "real y medio" is over...has that penny even dropped for them yet?

The devil hates Prada

Juan Cristobal says: - Remember Chávez's prophetic speech about how Cuba and Venezuela were sailing together toward the same "sea of happiness"?

Funny, I doubt Havana Airport's Duty-Free stores are as empty as the ones in Maiquetía (pictured left).

Come to think of it, if the shelves for imported Scotch are as barren as the cosmetics and fancy purse shelves, there's no telling what the angry mobs will do. Caracazo? Maiquetíazo!

What a vision for departing tourists coming to visit our sea of happiness - all three of them.

Electrifying

Quico says: In the current New Republic, Enrique Krauze writes a remarkable essay grounding Chávez's authoritarianism in its historical context. Whether he's covering familiar ground or striking off into what is - to me - entirely new territory, Krauze's narrative always crackles with intelligence and insight. The elegance of his prose and the depth of his analysis are in a league of their own. Read it.

Definitely read it.

Alí, meet Bernie. Bernie, Alí.

Quico says: It's funny. Last year, when Bernie Madoff was caught fabricating reports designed to make it seem like he was still holding $50 billion worth of investors' money even though, in fact, the money had already been spent, he was called the biggest con artist in history. This year, when Venezuelan Finance Minister Alí Rodríguez fabricates stories designed to make it seem like Fonden, the Investment Fund his ministry oversees on behalf of the Venezuelan public, is still holding some $51 billion that have, in fact, already been spent, he's feted as an eminence grise of Socialist economic management.

All this year, Alí has kept repeating a line about how Fonden has accumulated some $57 billion over five years, and he's consistently portrayed those savings as a key safeguard against the global financial crisis. How can we be sure that this claim is a wild misrepresentation, at best, and a flat out lie, at worst? Because the Finance Ministry's own reports say so!

Fonden itself still hasn't published its balance sheet for the second half of 2008, but MinFinanzas's own 2008 Memoria y Cuenta - its yearly comprehensive financial report - has a whole chapter devoted to the fund. It is, as far as I know, the most complete and up-to-date official report on the state of Fonden's finances, and it includes this startling gem on page 171.

As of December 31st, 2008, Fonden's Investment Portfolio reached a sum of US$6.07 billion alongside 280 million euros and 169 million bolivars.

Which means that, unless the government has somehow scrounged up some $51 billion to put into the fund since January, Alí Rodríguez's repeated claim that the government has some $57 billion ferreted away in there is deception on a Madoffesque scale.

In fact, the government's $57 billion claim is based on a bit of book-keeping sleight of hand so clumsy, so crude, you really have to pinch yourself.

The 2008 Memoria y Cuenta shows, on page 170, that the accumulated inflows into Fonden, between 2005 and 2008, totaled some $45 billion. Throw in the $12 millarditos worth of BCV reserves the government dumped into Fonden this year, and the total inflows into Fonden, over its lifetime, have indeed totaled around $57 billion.

Trouble is, money flows out of Fonden as well as flowing in, and the same Memoria y Cuenta shows that out of the $45 billion that flowed into Fonden between 2005 and 2008, $33 billion had already been spent by the end of last year! And a further $6 billion had already been committed to various projects, which means they can't be considered "available" to face up to a new crisis.

What did Fonden's money pay for? In 2006 and 2007, it helped pay for social spending, as well as for those new Sukhoi fighter jets Chávez is into, and for the 100,000 Kalashnikovs he wanted, as well as that Chinese-made satellite. We don't know what the 2008 tranche went towards, exactly, because all the detail got taken out of this year's report.

The point, though, is that the money that bought those planes and those guns and all the other stuff Fonden's bought over the years, all that money keeps turning up in Alí's $57 billion boast, as though it hadn't already been spent!

And it's even worse than that, because part of the $57 billion he's double counting is the $12 billion transfer from BCV Reserves, which were themselves a clear instance of double-counting. So, in fact, some of the notional money in Alí's $57 billion figure has been triple counted! Strip away all the accounting gimmicks and, as best as I can tell, Fonden has maybe $6 billion in real savings - just over a month's worth of public spending.

What gets me is that Alí is not a stupid man. He's obviously aware of all this. If you look at his statements closely, he typically couches his claim in language about how "over five years, Fonden has accumulated some $57 billion." Which is clearly intended to leave you with the impression that that's how much money Fonden has on hand now, without him ever quite having to say so explicitly. And, of course, since he only talks to the grovelling parade of sycophants that pass for journalists on State-owned media, nobody ever presses him on it.

Bernie Madoff, you got nothin' on this guy.

[Hat tip: Miguel Octavio. Big thanks!]

Lies, damn lies, and Fonden

Quico says: One aspect of this whole Economic Adjustment story that isn't getting enough attention is "the development fund that didn't bark": Fonden. Sold to us for years as Venezuela's "rainy day fund" which would shield the country in case of a fall in oil prices, Chávez picked a very odd time to go all silent about it.

As recently as yesterday, Finance Minister Alí Rodríguez was still adamant that the government has $57 billion ferretted away in Fonden. Not, mind you, that he's willing to actually show us Fonden's balance sheet. Apparently, asking for details about where exactly the public's money - our money - is kept, in what form, is an outrageous provocation. But I digress.

Of course, the degree to which the money in Fonden could really be considered "savings" was always open to question. Still, considering the way it's been described to us for all these years, I was amazed that Chávez could spend hours and hours talking about the financial crisis on Saturday and never once mentioned Fonden!

In effect, the official position is something like,

Rest assured, we have $57 billion stashed away in Fonden: it's insurance in case oil prices fall. Of course, oil prices have fallen by some 66% since their peak last year. On second thought, though, we've decided that instead of using the money we'd set aside for exactly this contingency, we'd rather borrow astronomical figures from the banks (even though that fuels inflation and risks a financial crisis) and raise taxes while we cut public spending (even though we're headed into a recession, and that'll make unemployment worse) because...well, y'know, just because.

Makes perfect sense...and it shows with crystal clarity why only a patria-sellin', CIA-conspirin' imperialist ne'erdowell would think to demand transparency over Fonden's finances. The money's not there!

Chávez Brain-Mouth Malfunction du Jour

Chávez says:

"We're going to face down the separatist intentions of the regional governments in Zulia, Táchira, Miranda, Nueva Esparta and the mafias that stand behind them."

...Zulia...ok, Táchira, I guess...Nueva esparta, maybe...MIRANDA?!!? WTF!

Is this really what they figure Capriles Radonski's secret evil plan is? An international border between Sabana Grande and El Rosal?!

What exactly happened on Saturday?

Quico says: In response to my insta-analysis of last night's economic announcements, a reader who, ahem, actually understands macroeconomics pipes in to say:

I really think you are missing the key point here, I have to say. First of all, we are talking about the budget, so the relevant benchmark for the amount budgeted for 2009 is the amount they had budgeted for 2008 - which was well below the BsF. 197 billion they actually ended up spending.

What makes you think there won't be any "creditos adicionales" and off-the-books spending this time around? What do you think the 12 millarditos taken away from the central bank are for? Or whatever is left over in Fonden, for that matter?

The real issue here is the new borrowing. Remember, the original 2009 budget already implied a deficit worth 2.5% of GDP. So basically what we're looking at is an additional fiscal gap to be filled, this one worth 8% of GDP. The tax increase will contribute 1.5% of GDP at most, the spending cuts are good for maybe 2% of GDP. So we're left with a hole of around 4.5% of GDP, over and above the original budget's deficit forecast, that they say they're going to fill with domestic debt.

Now, remember they had already planned to place 2.5% of GDP worth of domestic debt in the original budget. So, the “adjustment” brings the amount of new domestic borrowing needed this year to 7% of GDP.

That's huge.

How huge? Look at it this way: the total amount the private banks had on hand and available for lending, as of last Friday, was just BsF.2.1 billion. That's not even 10% of the additional BsF. 22 billion Chávez announced the government will borrow this year!

How on earth are they going to pull off this conjuring trick? There are two ways.

The first is to force the banking system to swallow a huge amount of new bonds, which would dramatically increase the financial sector's vulnerability, shattering what remains of the public's confidence in the banking system, as well as implying a significant contraction in credit to the private sector that could severely affect the payments system.

The other is to implicitly force the BCV to lend the money. If the encaje legal is used for that purpose, this will be exactly equivalent to an increase in high-powered money: the monetary base. In that case, we'd be looking at a very, very sharp spike in inflation.

This move, together with the monetization of the international reserves they've already grabbed, would result in a very significant increase in liquidity, precisely at a time when the slow down of the economy and the reduction in confidence are leading to a collapse in the demand for money.

So, people want less bolivares in their portfolio, but they're forced to hold more. As a result they will try to get rid of the excess, and the way they'll get rid of it will be to go to the parallel market and bid for all those dollars PDVSA is placing there. The foreseeable consequence? A sharp depreciation of the bolivar in the parallel market and a very significant spike in prices.

For all of you that are disappointed thinking that yesterday's announcements were dull, brace yourself for the very bumpy road ahead.

This was a hell of an announcement! Or should I say…hellish?

Rei

The Package that Dare Not Speak Its Name

Quico says: Chávez's message today, in a nutshell, was that he plans to raise Value Added Tax and cut overall central government spending from BsF.197 billion in 2008 to BsF.156 billion this year. So his bright idea is to fight the looming recession with a tax hike and a 21% cut in public spending. But remember, inflation is running at 30% so, in real terms, that's more like a 39% budget cut, year-on-year.

And this bit of Hooverian economics is dressed up in socialist rhetoric and trumpeted as a masterstroke of counter-cyclical fiscal mangement. Ooooooookay....

Never fear, we're told: everyday hard working Venezuelans will hardly notice the difference because the entirety of the cut will come from capping high-ranking public servants' salaries and cutting the fat from the budget: official advertising, cocktail parties (agazajos), official cars, office redecorations, that sort of thing.

...ummmm, even if you take this claim at its own, insane, face value, doesn't that amount to a roundabout way of admitting that 39% of last year's budget was wasted on exorbitant salaries, needless ad campaigns, extravagant hors d'oeuvres, fancy cars and Thainesque office makeovers?!?

There is no such thing as a pain-free retrenchment on this scale. It's clear to me that the real cuts won't be announced. They'll just be made.

Chávez's Idea of Austerity

Quico says: Is a 20% hike in the minimum wage!

Parallel exchange market freaks out on fears Chávez is about to move on banks

Quico says: A reliably AAA, gold-plated source chips in with a theory that's just crazy enough to be plausible. Apparently, on VTV yesterday, Chávez launched into a lunatic rant about the evils of the "encaje legal" - the commercial banks' legal reserve requirements, which they're bound by law to hold at the Central Bank.

The Fat Man in the Palace railed against the iniquity of "bankers" earning interest for simply parking their money in the Central bank without mentioning the fact that they are obligated to do so by law. Tantalizingly, he pointed out that there's "a huge wad of cash there, more than the entire government budget."

In fact, there's $22.5 billion, according to our source, and Chávez being Chávez, he can't understand why he can't go out and spend it. After all, the Central Bank is his bank!

The rest of the rant was enough to give any Venezuelan saver nightmares:

I have the banking report right here, what they have, bank by bank, the reserve requirements in the Central Bank, monetary liquidity, all that...a total X-ray of the resources of the private national banking system

Reserve requirements everywhere act as a source of financial support for the banking system, a backstop against a bank run. Chávez's hint that the revolution might be making a grab for those funds is a sure-fire way to set off a crisis of confidence in the financial system, which may be part of the reason the parallel exchange market is freaking the hell out today, even more than it had been in recent days.

(I could tell you exactly how much, but then I'd go to jail.)

The possibility of the government seizing the banks' reserve requirements fits in with the perverse logic of the Revolution. A traditional adjustment package - even a severe one - wouldn't come close to filling the truly massive hole in the public sector finances this year. Devaluing to Bs.3.50/$, quadrupling the price of gas and hiking VAT from 9% to 12%, for instance, would have a massive impact on people's pocketbooks, but might cover less than half the fiscal shortfall the government can expect if oil prices don't rise sharply this year. But the banks' reserves requirements would handily cover the shortfall, and then some.

In effect, a grab like this works just like printing money, since bank's reserve requirements don't actually circulate, they just sit in a BCV account. If they're taken over and spent, they would enter the money supply, end up as deposits in a bank and end up in the BCV, right where they started. In the process, the government multiplies the money in circulation, and more money supply means more inflation.

Aside from the inflation hit, the additional "minor" drawback is that the move would set off an immediate set of bank runs. Knowing that your deposit insurance is being spent by the government and, worse, that the government is printing money like this immediately makes you want to take your money out and convert it into dollars.

This would make some kind of broad-based intervention unavoidable in the banking sector which, as far as chavismo is concerned, is a feature, not a bug. It's a golden opportunity to nationalize not this bank, or that, but the entire sector.

But nationalization alone won't prevent people from wanting to withdraw their money, which may be an invitation for further restrictions on the banking sector. What's the Barinas term for "corralito"?

Granted, this is all just a case of Rumint - kremlinologically-based speculation and very possibly a red herring. The government could simply be floating these stories to manipulate the parallel exchange market, which is increasingly PDVSA's preferred venue for turning petrodollars into bolívars.

Still, Chávez's decision-making process has been getting weirder and weirder. Apparently, Banco de Venezuela's people found out that their on-and-off nationalization was on again from the TV yesterday! So it no longer seems safe to dismiss any idea, crazy though it might seem.

Which explains why Caracas' financial people are incredibly jittery in anticipation of tomorrow's announcement. And if its centerpiece does turn out to be a Reserve Requirement grab ... remember where you read it first ... or second, if in fact Jose Guerra was talking about it this morning.

But then, if it doesn't, kindly forget this whole post!

Paging Leopoldo Carnevali

Quico says: So Chávez's announcement that, tomorrow, he will unveil a series of "economic measures" (socialistese for "paquete", apparently) sent me scrambling back to this thread from last October, when Juan Cristobal encouraged y'all to place your bets on the exact date of the looming devaluation.

Almost everybody placed the devaluation way too early (with most predictions clumping around late December or January) but sporadic commenter Leopoldo Carnevali placed his bet on March 20th. Mr. Carnevali, please come forth to claim your prize.

Pondering whether to cut that anchor loose

Juan Cristobal says: - Today, Venezuela's Prosecutor General indicted former presidential candidate Manuel Rosales on corruption charges, and asked for him to be tried in prison. This is no surprise, as Chavez has been threatening to put Rosales in jail for months now.

What can we make of this?

The first reaction is to point out the unfairness of it all. A completely partial prosecutor's office indicts a political leader and a popular, recently-elected mayor of Venezuela's second-largest city, in front of a judicial system that has zero independence - if we were to leave it at that, the post would write itself.

And yet - what can we make of the stories of Rosales' many business ventures? What can we make of the anecdotes of the friends of Rosales's kids getting university scholarships through the state government? Why have opposition people in Maracaibo been talking about Rosales's farms for years now? Does he really own a real-estate company in Florida?

Because all of this has been circulating in Maracaibo - among opposition circles, mind you - for years.

On the one hand, Rosales may well be the victim of political lynching. There is rich hypocrisy in this government of kleptocrats, of the Cabellos and DiMartinos and Adan Chavezes of the world, indicting Rosales.

But on the other hand, must we show automatic solidarity toward a politician who may very well have his hands dirty? Should the opposition movement be distracted from the important tasks ahead and mobilize in order to "save Rosales"?

I, for one, am not in the opposition to support corrupt politicians.

Sad, we may never learn the truth because there is no chance Rosales will get a fair trial. But I can't be bothered enough by this to make it my cause, specially when he may very well be guilty.

The case against Rosales is a clear provocation, and while we should not be forced to accept the political persecution of the opposition, we can't simply assume he's innocent, not when he has this much baggage.

For years, Rosales has seemed like a half-glass-full politician, talented enough to deliver a key constituency (Zulia), but icky enough to render him intragable to the broad center that we need to conquer.

At times, he and his right-hand man, Omar Barboza, a man with deep ties to Jaime Lusinchi of all people, have felt like an anchor, weighing the opposition down.

So now - do we support him? Or should we cut that anchor loose? 'Cause I honestly don't know.

Collapse of Constitutional Government Chronicles, Part 17,348

The 1999 Venezuelan Constitution, Article 13, says:

Venezuelan geographic space is a Peace Zone. Foreign military bases, or installations that in some way have military purposes, shall not be established by any foreign power or coalition of powers.

Reuter's says:

Venezuelan President Hugo Chavez on Sunday said he would allow Russian planes to use one of his nation's islands on long-range flights, boosting ties between two countries at odds with Washington.

There is, to be sure, a bit more wiggle-room to this one than to the Ports thing, as they'll presumably claim that the military bases the Russians will use will technically be Venezuelan, not Russian. Still, the intent of article 13 is unmistakable, and its subversion by Chávez's decision evident.

The constitution as subversive pamphlet

Quico says: As Chávez orders the military to take over all the nation's ports, I have to ask myself, where is the wiggle room in this?

Artículo 164. Es de la competencia exclusiva de los estados la conservación (10) administración y aprovechamiento de carreteras y autopistas nacionales, así como de puertos y aeropuertos de uso comercial, en coordinación con el Ejecutivo Nacional.

Article 164. State governments have exclusive jurisdiction over (10) the administration and enjoyment of national roads and highways, as well as commercial ports and airports, in coordination with the National Executive.

It's important to note that in Venezuelan jurisprudence, "Competencia Exclusiva" is a term-of-art, a term with a specific, well defined, widely understood legal meaning: if entity A has Competencia Exclusiva over area B, only A gets to make decisions about B.

It changes nothing. It adds nothing to the debate. It gets drearily repetitive. And yet it feels like it needs to be said:

The collapse of constitutional government in Venezuela is now complete.

Chávez: "As soon as I take power, I'm a'gonna shake things up around here!"

Quico says: Sunday's Aló, Presidente brought one of those classic Chávez moments that leave me somewhere between utterly dumbfounded and grimly awe-struck at the sheer, galactic scale of El Comandante's cojones.

Discussing the coming economic adjustment measures, Chávez railed against Venezuela's gasoline subsidies on social justice grounds.

"We practically give away gasoline!" he said in a tone of high moral indignation, "the people who use lots of gas in those luxury cars - it's not fair that the rich pay almost nothing for gas!"

Why he's telling us this now, why gas subsidies are any less fair today than they were last year, or the year before that, why he's doggedly hung on to this unjust policy, through thick and thin, for over a decade...these are questions no sane chavista asks.

Episodes like this leave me reeling, confused by feelings that mix deep disgust with something bordering on admiration for the man. Ten years on, he still manages to put himself across as, in effect, leader of the opposition: a redemptive figure riding in to right wrongs he had no part in making. It really is remarkable. When he skewers his own policies, he uses the same tone of noble purpose he normally reserves to slamming his enemies, and does it all in a performance so seamless, so natural that as you're watching, you can't help but get swept up in it, losing sight for a second of the absurdity of it all.

How does he do that?!

Talk is cheap

Quico says: Probably the most debilitating aspect of Venezuela's political crisis is the conviction that there is no serious alternative to chavismo.

As the government careens from one insane policy to the next, on the other side we find an utterly unconvincing opposition political elite. Stumbling from one haplessly misconceived photo op to the next, the Ramos-Borges-Barboza-Rosales axis can't seem to get any traction can't seem to put across a coherent program and can't seem to convince even its natural base of support that they can lead a credible challenge to chavismo.

In fairness, the oppo party leaders are well aware of it.

Their reaction? To talk. To say all the right things and do very little. Because make no mistake, when Julio Borges says "we must build a solid unity, a movement that transitions from opposition to alternative, and commits itself to representing a jump to the future, not the past," or when Ramos Allup says that "it's not right that [the main party leaders] sit inside four walls to discuss and solve problems because the image that sends out is that of a closed group," they are absolutely right.

But it doesn't matter. Right as the words might be, the signal is all wrong. And it's wrong for a simple reason: talk is cheap.

That's more than just an aphorism. Believe it or not, there's a cottage industry within the economics profession dedicated to teasing out its implications. Beginning with this classic 1973 paper by Michael Spence, economists have been busy working out the farthest implications of "costless signalling" (a.k.a. cheap talk) in strategic interactions.

It all gets incredibly abstract very quickly, but the basic intuition is simple enough.

Imagine you go to a used-car lot. The salesman comes out all smiles and wide lapels and polyester pants, quickly points you to a grubby old 1984 Chevy Impala and launches into his sales pitch. "She's a beaut!" he enthuses, "only 20,000 miles, and just one owner: a little old lady who only used it to drive to the store. It's in mint condition! Really...you can't do better than a good ole chevy!"

You know in your gut that you should disregard a sales pitch like that. What signalling theory does is provide a theoretical framework to explain precisely why you should disregard it.

The short answer is information asymmetry. The salesman knows more about the car than you do, but his underlying interest - selling the car - is different from your underlying interest - buying a good car. It costs him nothing to make extravagant claims about the Impala. Even if the car's a crumbling hunk of junk, he has every reason to try to convey the impression that it's a great car because after the car is out the door, he won't see you again - what does he care if it breaks down at the first traffic light?

But you're not stupid. You realize that the signal he's sending is information-poor. So you disregard it.

If you want an information-rich signal about the car's quality, you'll ask about the warranty. Warranties are costly. If the car breaks down, it's the salesman who's out of pocket. Talk is cheap; warranties aren't. That's why warranties reveal more about a car's quality than sales pitches.

In general, people have no problem grasping that costly signals carry much more information than costless ones. Proposing to your sweetheart with a two-carat diamond sends her a much stronger signal about your commitment than proposing with a cheap knock-off. Showing up to a job interview with a bachelor's degree carries a lot more information about your willingness to buckle down and work than any number of promises about how you "learn fast" and "are very dedicated". Graduating college has a cost - in terms of time, money and effort - that making promises just doesn't have. And Victor Kiam's famous sales pitch for Remington electric razors - "I liked the shaver so much, I bought the company" - was effective because the signal it conveyed was costly. Kiam had shelled out cold hard cash for Remington. His talk was anything but cheap.

This is a lesson Venezuela's opposition party leaders seem unable to learn. It's been years since they've given us a costly signal, since they've shown themselves willing to make real sacrifices in order to help get rid of Chávez. It's no wonder that so many of the opposition's radical supporters increasingly assume people like Borges, Rosales and Petkoff are on Chávez's payroll.

These days, those of us who stand against Chávez are coming to the morale-sapping conviction that our party leaders are about as trustworthy as used car salesmen. We intuit that their interests - staying at the head of their parties - diverge from our interests - replacing Chávez with something better. We sense they have strong incentives to lie to us. And under those conditions, we're not minded to believe them, even when they're telling the truth!

Our opposition leaders may in fact be telling the truth, just like in our example it could be that the salesman is telling the truth and the Chevy really is a great car. But the structure of the interaction makes it impossible for you to take his word for it. Without a warranty, you'd be a fool to believe him.

I think we anti-chavistas should ask for a warranty from our party leaders, too. If opposition party leaders want us to take them seriously, they need to understand that costless signaling just won't cut it anymore. Nobody's going to take them seriously until they start sending out costly signals about their commitment to the cause.

In recent weeks, this blog has called for the resignation of the main "inamovible" party leaders: Barboza, Ramos Allup, and Borges. In politics, resignation is the quintessential costly signal. There's no real tradition in Venezuela of asking for, or expecting, the resignation of failed political leaders: a fact that, in itself, speaks volumes about our political culture, about its structural inability to do accountability.

My preferred option - merging the opposition chiripero into a single Political Party with true national reach - would be even costlier than a spate of resignations. It would reduce the number of coveted Party Leader posts by 75%. But just imagine the signal it would send, the Seriousness of Purpose it would convey, if the Big Four oppo parties stopped fooling around and merged!

Less dramatic but still costly signals could also start to change anti-chavistas' perceptions of our party leaders' commitment in the fight against chavismo. They could completely distance themselves from the 2002 coup (costly in terms of social awkwardness) or just tell us the unvarnished truth about how many voting tables actually had opposition witnesses in the last two elections (costly in embarrassment). They could make a concerted effort to move party organizers out of the middle class enclaves in the big cities and get them to organize the countryside and small cities where we always get creamed at election time.

Such moves would not be as immediately effective as costlier, more dramatic signals, but they would at least prove that not everything that comes out of oppo party leaders' mouths is weightless paja. They would send out a credible signal that the opposition parties are serious, something too many of their "natural followers" don't accept right now.

Venezuela is in a lot of trouble right now. It is lead by a psychotropic-al leader, its economy on the verge of an epic collapse, and generally we're very far up a creek with no paddle in sight. In times like these, the country desperately needs a credible sign that the opposition...gets it. An information-rich signal that they've turned a corner, que se enseriaron, chico, that they're serious about the fight against chavismo.

But talk is cheap. For that signal to be credible, it has to be costly.