"This can't last: it's too stupid."
Caracas can't be said to have the most vibrant intellectual life in Latin American, but at least we've got Ibsen Martinez. Witty, agoraphobic, shamelessly erudite, misanthropic and totally brilliant, Ibsen really has no peer in the intellectual life of the country. A theoretical mathematician by training, the guy made his name writing soap opera scripts, believe it or not...which says something about the intellectual climate around here, doesn't it - where else could a serious intellectual get his start writing soaps? He proved too unpredictable and prima donnaish to make a proper script-writer - he'd just get sick of them at some point and stop writing, but eventually found his niche in the newspaper and the world of the novel. His weekly screeds in El Nacional have a following, more than a readership, a following I'm proudly part of. Ibsen's writing is really in a class of his own as far as op/ed writing goes in this country: deeper, clearer, wittier, sharper, and more illuminating than anyone else writing in Caracas, and often by a long long ways. He's like our own little Garcia Marquez, but without the international acclaim, or the fidelismo.
His column today is one of the more sobering things I've read in a while: one of his better ones, which is really saying something. It's useless trying to gloss it, since it's so good, so I'm going to take the time to translate the whole thing. It really is that good. [The original in Spanish is here.]
He starts off by citing Camus' The Plague:
"Plagues, in fact, are quite common, but it's hard to believe in them when you see them fall on your head. There have been in the world as many plagues as wars, and yet, plagues and wars always catch people by surprised. When a war starts, people say "this can't last, it's too stupid." And, without a doubt, war is obviously too stupid, but that doesn't keep it from lasting. Stupidity always insists; one would realize that if one were not always thinking of oneself. Our countrymen, in this respect, were like everyone else. They were humanity. They didn't believe in plagues."
"The plague is not made on a human scale, and therefore men always say that the plague is unreal, a bad dream that must pass.
"But it doesn't always pass, and from one bad dream to the next, it's the men who pass, and the humanists first of all, because they haven't taken precautions.
"Our countrymen were no more guilty than others; they forgot their humility, that's all. And they thought everything was possible for them, which meant that as a matter of course that all plagues were impossible.
"And how could they have thought of the plague, which suppresses the future, their movements and their discussions? They thought themselves free and no one could be free so long as there were plagues.
leaving the quote, Ibsen writes,
On this Saturday, I want to call the reader's attention to a disquieting notion that Camus slides in front of us: that plagues and wars always catch people unaware. Especially civil wars, I'd add.
It bears stopping to reflect on Camus' words, right now, in the wake of a very justified protest work stoppage that some -very few, but very powerful- people would like to twist and stretch until turning it into the pretext for military intervention.
Camus, as is well-known, wasn't precisely the contemplative kind, nor a coward: he did for the French resistence what very few of his own intellectual establishment did, and with such daring and intelligence, during the nazi occupation. So Camus knew what he was talking about when he said that the first reflex you have towards the absurdity that war engenders is to tell yourself that "this can't last, it's too stupid."
"This can't last: it's too stupid," says the father in "The bicycles are for summer," the acclaimed Spanish film by Jaime Chavarri, based on a play by the great Fernando Fernán Gómez, with the whole family gathered at dinnertime, one night in July 1936, commenting on the news that had come over the radio that afternoon: in a remote overseas garrisons an obscure colonel named Francisco Franco had led an uprising against the Spanish Republic.
The head of the family shrugs his shoulders and, next to him, all the characters keep on living their petty bourgeois Madrid lives, neither too rich nor too poor, neither conservative nor leftist enough to feel that what had just started could have anything to do with them, much less that any of its consequences might reach them.
But things don't turn out the way they'd imagined - "how could they have thought of the pest, which suppresses the future, their movements and their discussions? They thought themselves free and no one could be free so long as there were plagues" - and the movie ends when only the viewers know that there will be no other summer with bicycles because that "which couldn't last, because it was too stupid" has become a frightful war that in three indelible years left a million dead and one of the most abhorrent and ignominious dictatorships of the last century.
It just happens that both sides made the same mistake: underestimating the other. The fascists thought it would be enough with a military coup, the republican government calculated that it could put the coup down easily.
It's taken almost sixty years for the philosopher Julián Marías - the father of Javier, the novelist - to come to grips with the decisive event for three generations of Spaniards. He does it in Being Spanish, a book that should be required reading for all of those - chavistas or not - who aspire to act constructively in Venezuela's XXI century politics.
They would then witness Marías elucidating how it was possible to reach war, and saying that, to our discomfort, the primordial cause of the catastrophe was not "the disagreements, or the confrontations, not even the struggle, but rather the will to not get along, the determination to see the 'other' as unacceptable, intolerable, unbearable."
It's inevitable to think of today's Venezuela when Marías carefully recreates as a gift to his reader, the mechanism whereby "groups were formed that would enter the category of the mutually irreconcileable." Or when he points out how that diabolical will to not get along brought about "the successive entry of parts of the social body in what one might call automatic opposition."
Slowly at first, but later on incredibly fast, the entire material and social life of Spain gave in to the primacy of the political, "such that every other aspect was obscured: the only thing you needed to know about a man, a woman, a book, a company, a proposal, was whether it was from 'the right' or 'the left' and your reaction was automatic. Politics eclipsed every other consideration."
These burning pages, written by a Spaniard on his own history, discuss something that many suppose cannot happen in Venezuela "because it's too stupid." What's interesting - and alarming - is that almost every paragraph seems to refer to the current political scene in Venezuela.
The similarities are laid bare when Marías discusses the way the intellectual life and the social production of meaning in Spain went up in smoke, in what he describes as "a collective retreat from intelligence, a frightful narrowing by way of simplification: the infinite variety of reality was, for many, reduced to mere stencils or labels, designed to unleash automatic reflexes, elementary, unnuanced reflexes. This led to a tendency towards abstraction, dehumanization, a necessary condition to generalized violence. And lazyness, especially, when it came to thinking, to looking for intelligent solutions to problems; to imagine the others, to imagine their point of view, to understand their reasons, their fears. And also to carry out with continuity the acts needed to solve or lessen those problems, to put in place an attractive alternative. Magic was easier, the verbal solutions that do away with thought.
"The war was a consequence of frivolity. This seems to me the key word. Spanish politicians, almost without exception, most of the church, a large number of those who thought of themselves as 'intellectuals' (and, of course, of the journalists), most of the economically powerful (bankers, businessmen, large landholders), the union leaders, gave themselves over to playing with the gravest matters, without the least sense of responsibility, without imagining the consequences of what they did, said, or failed to say.
I read Being Spanish on the urging of a friend who had found in it the same parallels with our current situation, which I comment on today. When I closed it, I realized that if we went and asked people like Hugo Chávez, or Carlos Ortega, or Diosdado Cabello or Andrés Velásquez, or Carlos Fernández, or William Lara or Cecilia Sosa or Iris Varela or Marta Colomina if they want a Civil War in Venezuela they would surely answer that of course not, what an idea! who would wish a thing like that?
But one can only consider with infinite sadness the clear-eyed wisdom of Julián Marías, poured into words that read as though composed for us: "They didn't want a civil war, but they wanted what turned out to be a civil war: A) Dividing the country in two bands. B) Identifying the 'other' with evil. C) Not taking them into account, not even as a real danger or an efficient adversary. D) To eliminate them, get them out of the way (politically; physically if necessary.)"
And then: "Stupidity always insists. One would realize it if one didn't always think like oneself." Will we Venezuelans know how to prove Camus wrong, just once? There may be less than a week to go to decide."
October 5, 2002
"Today, we aborted a coup..."
If Enrique Tejera-Paris is the best the opposition can come up with for a coupster, man, we're all in trouble here. Last night, in a comando raid broadcast live on the State-run TV channel, about 20 intelligence officers swept down on the home of Enrique Tejera-Paris, the octogenarian former foreign minister and slightly kooky intellectual. Slightly bewildered and still wearing his pajamas, Tejera-Paris went on to give a very strange interview to the Channel 8 reporter, who more or less accused him of plotting a coup. The avuncular alleged coupster put on a display of absolutely flawless manners, answering the questions as though he had been invited to a morning talk show, and endearingly referring to his tormentor as "joven."
The Channel 8 guy pointed his camera at a big map of Caracas with the words "Solucion Final" scribbled across the top, which supposedly spelled out the evil plan for staging some riots to serve as an excuse for a putsch. Tejera-Paris said they'd been planted by the DISIP agents. By the afternoon Chavez was giving another grandiloquent speech, boasting about how his intelligence services had aborted yet another fascist conspiracy.
It's hard to know what to make of the whole story. For one thing, Tejera-Paris really is a sort of walking incarnation of all that is most distasteful about the old regime: a kind of amoral insider said to be knee-deep in some very murky business in connection with the Las Cristinas mine development in Bolivar State. (Inside story is he was hired by the Canadian junior miner Crystallex to tamper with some local land registry records to bolster Crystallex's claim to the mine...unconfirmable (but then Crystallex is now in bed with the chavista CVG...it gets complicated).)
That doesn't change the fact that Tejera Paris is old. Very old. Retired. Out of the game. Mayyyyybe he's pulling all sorts of strings behind the scenes. Sounds a little fanciful to me, but it's not impossible.
On the other hand, the entire way the government has dealt with this is just another typical concatenation of abuses of power, violations of due process, and political-propagandeering. The presence of the Channel 8 camera crew stinks to high-heaven...suggesting a complex propaganda ploy rather than a standard law enforcement operation. The whole mess will need to be added to the long list of bizarre events in Venezuela's contemporary history.
October 4, 2002
"Gaviria Go Home!"
More coup rumors today. My colleague has gotten three different anguished phone calls from friends who've heard the show's gonna go down tonight, but at this point we've learned to discount calls like that. Not that they're not unsettling. It's more that it seems like a matter of commonsense that by the time a coup-plot's made its way to the cellphone circuit, it's pretty well doomed to failure. So it's the days when there are no rumors that I worry. That's when the coup's going to come.
The head of the Organization of American States, Cesar Gaviria, left town this morning. OAS is one of these organizations that most people in the US barely give a second though to, but which actually carries quite a bit of weight here. Gaviria cooked up a fantastically bland little "declaration of principles" to try to get the government and the opposition to sit down together and, y'know, agree to something. Even then it proved incredibly difficult to get them to agree. It was a motherhood-and-apple-pie affair, the kind of thing no one can really disagree with. But opposition figures dithered...it's too bland, some said, it lets the government off the hook! Others refused to sign on unless Chávez personally signed first, saying that if the VP or the Foreign Minister signed on the government's behalf the declaration would have no credibility because Chávez overrules them all the time. One suspects that what's really going on here is that the idea of co-signing a document with Hugo Chávez just makes the stomachs of too many opposition leaders turn. It would grant him a level of implied legitimacy they're just not willing to concede.
On the government's side it's much the same thing. They said they would sign, but then when it became clear they'd be putting their names to a document also signed by Carlos Ortega, they didn't like that one bit. Ortega, the head of the big Labor Union Federation (CTV), is just as unacceptable to the Chavistas as Chávez is to us: Two years after he was elected by the rank-and-file (in an admittedly horribly murky election) the government still refuses to acknowledge his leadership of the federation. Signing a document along with him would mean implicitly accepting his leadership, and that's a pill the government finds it very very hard to swallow.
My guess was that this declaration of principles was Gaviria's way of testing the waters, to try to get a feel for how likely a broader agreement might be. Signs are not encouraging. So long as the government and the opposition see each other as enemies rather than adversaries, the impetus for violence will still be there.
I don't know what the solution is, but I'm pretty sure mindless intransigence isn't part of it.
More coup rumors today. My colleague has gotten three different anguished phone calls from friends who've heard the show's gonna go down tonight, but at this point we've learned to discount calls like that. Not that they're not unsettling. It's more that it seems like a matter of commonsense that by the time a coup-plot's made its way to the cellphone circuit, it's pretty well doomed to failure. So it's the days when there are no rumors that I worry. That's when the coup's going to come.
The head of the Organization of American States, Cesar Gaviria, left town this morning. OAS is one of these organizations that most people in the US barely give a second though to, but which actually carries quite a bit of weight here. Gaviria cooked up a fantastically bland little "declaration of principles" to try to get the government and the opposition to sit down together and, y'know, agree to something. Even then it proved incredibly difficult to get them to agree. It was a motherhood-and-apple-pie affair, the kind of thing no one can really disagree with. But opposition figures dithered...it's too bland, some said, it lets the government off the hook! Others refused to sign on unless Chávez personally signed first, saying that if the VP or the Foreign Minister signed on the government's behalf the declaration would have no credibility because Chávez overrules them all the time. One suspects that what's really going on here is that the idea of co-signing a document with Hugo Chávez just makes the stomachs of too many opposition leaders turn. It would grant him a level of implied legitimacy they're just not willing to concede.
On the government's side it's much the same thing. They said they would sign, but then when it became clear they'd be putting their names to a document also signed by Carlos Ortega, they didn't like that one bit. Ortega, the head of the big Labor Union Federation (CTV), is just as unacceptable to the Chavistas as Chávez is to us: Two years after he was elected by the rank-and-file (in an admittedly horribly murky election) the government still refuses to acknowledge his leadership of the federation. Signing a document along with him would mean implicitly accepting his leadership, and that's a pill the government finds it very very hard to swallow.
My guess was that this declaration of principles was Gaviria's way of testing the waters, to try to get a feel for how likely a broader agreement might be. Signs are not encouraging. So long as the government and the opposition see each other as enemies rather than adversaries, the impetus for violence will still be there.
I don't know what the solution is, but I'm pretty sure mindless intransigence isn't part of it.
October 3, 2002
Is the glass two-thirds full...
...or one-third empty? As Cesar Miguel Rondón - Venezuela's fat, balding version of Larry King - kept insisting on his Channel 10 show last night, the polling data has been remarkably steady over the last 10 months or so. Two out of three Venezuelans are broadly opposed to the government, one out of three supports it. According to Datanalisis' quarterly polls, the numbers haven't changed much, except for a short-lived "sympathy spike" right after The Restoration on April 14th. Whether you ask people whether they like or dislike Chávez or whether they'd vote to unseat him in a referendum, the two-to-one pattern holds up. Moreover, two-thirds of respondents consistently oppose the institutions that are most widely seen as controlled by Chávez (Congress, the Attorney General's Office, the Ombudsman's Office, etc.), and one-third supports them.
I'm sure most chavistas would dismiss Datanalisis' numbers as part of the giant conspiracy against the revolution, but then they think anything and everything that's the least bit out-of-synch with the guy's latest whim is part of the giant conspiracy against the revolution. Certainly, we heard no complaints from them between December 1998 and November 2001, when Datanalisis' polls had the Comandante in the 60-85% popularity range.
Interestingly, support for the Supreme Tribunal followed that same two-to-one pattern until August 14th, when the magistrates voted 12-8 to exonerate the army officers who'd shoved Chávez out of power in April, unleashing a storm of presidential condemnation. Chávez' could barely contain the bile he poured all over the Tribunal, repeatedly saying the decision had been bought, calling it "a turd" (una plasta) and at one point, ominously, vowing to publish a book with the photographs of the magistrates who'd voted against his wishes "so the people knew who was responsible for this outrage." It should probably worry the president's supporters that the Supreme Tribunal's standing in the polls shot up immediately after this particular tirade, with more and more people saying they see it as a genuinely independent institution, and fewer and fewer people calling for the magistrates' resignation. In fact, the Supreme Tribunal became the first institution to fall out of the two-thirds/one-third pattern. The change happened almost immediately after Chávez' set of bombastic condemnatory speeches. The Supreme Tribunal is now liked by a third and disliked by another third of the electorate, leaving the third third bewildered. I count myself in that third-third: we've heard lots of reports that the August "majority" against Chávez was a one time fluke, and that the magistrates are now falling back in line behind the president. If so, Chávez's attacks could imaginably have been a shrewd maneuver to bolster the tribunal's appearance of independence (and therefore its standing) through a single high-profile decision, only to then bring it back as a meek member of the presidential herd.
The other place where the two-to-one ratio falls apart is in the hypothetical presidential match-ups. When Datanalisis asks the open-ended question, Chávez wins of course. He gets thirtysomething percent, while the opposition vote is fractioned among like 15 challengers. But when Datanalisis limits the question to Chávez vs. this or that hypothetical challenger, his weakness becomes clear. His strongest challengers would be Enrique Salas-Römer and Enrique Mendoza: both would beat him 61%-39%. That's a landslide in my book, even if it's not the two-to-one majority you see in the popularity questions. Salas-Römer is the right-wing former governor of Carabobo State, who lost the '98 election against Chávez by...58-39% (with the remainder going to minor candidates, including the former beauty-queen I voted for.) Mendoza, on the other hand, is a far more moderate centrist who is now governor of Miranda State, which is the state where I live and where the Eastern half of Caracas sits. Other opposition figures also beat Chávez, but by smaller margins. Greater Caracas Mayor Alfredo Peña beats him 54%-46%, former Central Caracas Mayor Antonio Ledezma barely ekes by 51%-49%. That's too close for comfort, so the opposition would really do well to stick by one of the Enriques.
Yet, even if the opposition doesn't manage to agree on a single candidate, it's not necessarily the end of the world. Even in a worst-case-scenario where both the Enriques chose to run, chances are that the election would tend to get polarized between just one of them and Chávez. Getting an early poll-lead would be the key: once voters saw which way the wind was blowing, they'd almost certainly coalesce around whichever candidate they saw as having the best chance to beat Chávez. The other Enrique would be condemned to the fate of my beauty-queen, who saw her poll-numbers drop literally 60 points between May and December. My feeling then is that if the opposition can just force an election somehow, they take Chávez out. This seems to be Chávez's theory as well: he's doing everything imaginable to avoid one.
And it's critical that Chávez is replaced through an election. Aside from all the valid idealistic reasons for demanding democratic decision-making, the fact is that he does retain the support of a third of the population. Much more relevantly, he maintains the fervent support of about 20% of the electorate, the so-called chavistas duros (hard-core chavistas) who see him more as a mystical figure than a politician. If Chávez is pushed out of office unconstitutionally, by force, these people will never accept the outcome. At best, they'd be a constant thorn on the side of the next government, at worst they could start a civil war. It worries me that the most radicalized opposition figures out there don't seem to realize how much of a problem this is, and continue to push for extra-constitutional means of getting rid of the guy. Making sure that 20% feels included - or at least doesn't feel openly violated - by the transition to the post-chavista era will probably be the most important task of the next government. Let's hope they don't screw it up.
...or one-third empty? As Cesar Miguel Rondón - Venezuela's fat, balding version of Larry King - kept insisting on his Channel 10 show last night, the polling data has been remarkably steady over the last 10 months or so. Two out of three Venezuelans are broadly opposed to the government, one out of three supports it. According to Datanalisis' quarterly polls, the numbers haven't changed much, except for a short-lived "sympathy spike" right after The Restoration on April 14th. Whether you ask people whether they like or dislike Chávez or whether they'd vote to unseat him in a referendum, the two-to-one pattern holds up. Moreover, two-thirds of respondents consistently oppose the institutions that are most widely seen as controlled by Chávez (Congress, the Attorney General's Office, the Ombudsman's Office, etc.), and one-third supports them.
I'm sure most chavistas would dismiss Datanalisis' numbers as part of the giant conspiracy against the revolution, but then they think anything and everything that's the least bit out-of-synch with the guy's latest whim is part of the giant conspiracy against the revolution. Certainly, we heard no complaints from them between December 1998 and November 2001, when Datanalisis' polls had the Comandante in the 60-85% popularity range.
Interestingly, support for the Supreme Tribunal followed that same two-to-one pattern until August 14th, when the magistrates voted 12-8 to exonerate the army officers who'd shoved Chávez out of power in April, unleashing a storm of presidential condemnation. Chávez' could barely contain the bile he poured all over the Tribunal, repeatedly saying the decision had been bought, calling it "a turd" (una plasta) and at one point, ominously, vowing to publish a book with the photographs of the magistrates who'd voted against his wishes "so the people knew who was responsible for this outrage." It should probably worry the president's supporters that the Supreme Tribunal's standing in the polls shot up immediately after this particular tirade, with more and more people saying they see it as a genuinely independent institution, and fewer and fewer people calling for the magistrates' resignation. In fact, the Supreme Tribunal became the first institution to fall out of the two-thirds/one-third pattern. The change happened almost immediately after Chávez' set of bombastic condemnatory speeches. The Supreme Tribunal is now liked by a third and disliked by another third of the electorate, leaving the third third bewildered. I count myself in that third-third: we've heard lots of reports that the August "majority" against Chávez was a one time fluke, and that the magistrates are now falling back in line behind the president. If so, Chávez's attacks could imaginably have been a shrewd maneuver to bolster the tribunal's appearance of independence (and therefore its standing) through a single high-profile decision, only to then bring it back as a meek member of the presidential herd.
The other place where the two-to-one ratio falls apart is in the hypothetical presidential match-ups. When Datanalisis asks the open-ended question, Chávez wins of course. He gets thirtysomething percent, while the opposition vote is fractioned among like 15 challengers. But when Datanalisis limits the question to Chávez vs. this or that hypothetical challenger, his weakness becomes clear. His strongest challengers would be Enrique Salas-Römer and Enrique Mendoza: both would beat him 61%-39%. That's a landslide in my book, even if it's not the two-to-one majority you see in the popularity questions. Salas-Römer is the right-wing former governor of Carabobo State, who lost the '98 election against Chávez by...58-39% (with the remainder going to minor candidates, including the former beauty-queen I voted for.) Mendoza, on the other hand, is a far more moderate centrist who is now governor of Miranda State, which is the state where I live and where the Eastern half of Caracas sits. Other opposition figures also beat Chávez, but by smaller margins. Greater Caracas Mayor Alfredo Peña beats him 54%-46%, former Central Caracas Mayor Antonio Ledezma barely ekes by 51%-49%. That's too close for comfort, so the opposition would really do well to stick by one of the Enriques.
Yet, even if the opposition doesn't manage to agree on a single candidate, it's not necessarily the end of the world. Even in a worst-case-scenario where both the Enriques chose to run, chances are that the election would tend to get polarized between just one of them and Chávez. Getting an early poll-lead would be the key: once voters saw which way the wind was blowing, they'd almost certainly coalesce around whichever candidate they saw as having the best chance to beat Chávez. The other Enrique would be condemned to the fate of my beauty-queen, who saw her poll-numbers drop literally 60 points between May and December. My feeling then is that if the opposition can just force an election somehow, they take Chávez out. This seems to be Chávez's theory as well: he's doing everything imaginable to avoid one.
And it's critical that Chávez is replaced through an election. Aside from all the valid idealistic reasons for demanding democratic decision-making, the fact is that he does retain the support of a third of the population. Much more relevantly, he maintains the fervent support of about 20% of the electorate, the so-called chavistas duros (hard-core chavistas) who see him more as a mystical figure than a politician. If Chávez is pushed out of office unconstitutionally, by force, these people will never accept the outcome. At best, they'd be a constant thorn on the side of the next government, at worst they could start a civil war. It worries me that the most radicalized opposition figures out there don't seem to realize how much of a problem this is, and continue to push for extra-constitutional means of getting rid of the guy. Making sure that 20% feels included - or at least doesn't feel openly violated - by the transition to the post-chavista era will probably be the most important task of the next government. Let's hope they don't screw it up.
October 2, 2002
not sure how happy my boss will be if he sees I've posted VenEconomy's subscription-only editorial on this free website, but christ, Caracas Chronicles has like 15 readers at this point...
It’s the deficit, stupid...
How irresponsible is the government’s financial management? Look at it this way: in the first eight months of this year, the public sector’s current income averaged about Bs.1.66 trillion per month. That works out to just under Bs.20 trillion per year. Yet for 2003, the president has just announced that spending will total Bs.40 trillion. That’s twice this year’s current income, at a time when inflation is expected to run no higher than 40%.
Of course, Venezuelan budgets have always been exercises in creative accounting, legal formalities largely removed from reality. But traditionally they’ve erred on the side of understating spending. This time, it’s the opposite. Based on a hopeful 3-3.5% GDP growth projection, even the Onapre (national budget office) admits that current income won’t exceed Bs.28 trillion. That leaves the terrifying sum of Bs.12 trillion to be financed somehow (and that’s if the government’s growth estimate holds up; otherwise, it will be more.) And how is this gap to be bridged? By once again squeezing every last penny out of PDVSA, conjuring up some money out of thin air (they call it “exchange profits”) and then borrowing the rest – per Onapre estimates, a full Bs.10 trillion.
The simple conclusion is that the government just doesn’t learn. Already, the unreasonable chavista demands on PDVSA have caused a 25.5% drop in the corporation’s production capacity – with no money to spend on keeping up production, the country’s capacity has dropped from 3.5 million b/d four years ago to just 2.6 million b/d today (not including Orinoco Belt extra-heavy crudes), according to IEA estimates. This means that for the first time in history, Venezuela finds itself unable to cash in on the upside oil-shock caused by the looming US war in Iraq: there’s just no spare capacity to speak of.
The broader strategy is just as bad. By now, one might expect the chavista ruling clique to have caught on to how badly the public sector’s oversized thirst for borrowed cash has distorted the economy’s performance. By making massive deficit spending the norm irrespective of whether times are good or bad or whether oil prices are high or low, the government has already shut out the private sector from the credit market. The public sector’s snowballing demand for borrowed money keeps interest rates high, private investment rates low, and markets jittery.
As the pressure to raise more and more money increases, the government has opted for more and more unorthodox means of financing itself. First, it instituted the Bank Debit Tax, which might be described as relatively benign even though it undoubtedly generates destructive market distortions. Then, as the pressure for new cash intensified, it adopted more serious self-destructive practices, from the accelerating merry-go-round of increasingly bigger and more expensive short-term bond issues to the frankly perverse tactic of declaring purely fictitious “exchange market” profits to bankroll the government. The results are all around, and plain to see: a virtual investment freeze, rising unemployment, galloping inflation, and an unremittingly bleak outlook for the future.
Of course, much of the excess spending next year is due to higher debt service payments: the chickens of the wrong-headed financing strategies of the past coming home to roost. But rather than trying to tackle this vicious circle, rather than trying to implement a plan to return the nation’s finances to relative health, the government looks set to exacerbate the problem. Its financing plans for 2003 are a paragon of amateurish irresponsibility: on top of massive new borrowing, the government has already announced it will issue Bs.1.5 trillion in printing-press monies. Sadly, there’s just no medium-to-long-term strategy to ever break out of the deficit-spending trap. In fact, there’s no indication that the government even understands it’s in a trap at all. Under such circumstances, the only reasonable forecast is steady, ongoing deterioration.
Four years into its mandate, the Chávez administration hasn’t learned even the bare-bones basics from the mistakes it has made to date. The broad outlines of the budget plans announced so far make it clear that the wild goose chase that is the government’s quest for fresh cash will only intensify next year. The outcome is sadly predictable, and as usual, those who will suffer most will be those the president claims to champion.
It’s the deficit, stupid...
How irresponsible is the government’s financial management? Look at it this way: in the first eight months of this year, the public sector’s current income averaged about Bs.1.66 trillion per month. That works out to just under Bs.20 trillion per year. Yet for 2003, the president has just announced that spending will total Bs.40 trillion. That’s twice this year’s current income, at a time when inflation is expected to run no higher than 40%.
Of course, Venezuelan budgets have always been exercises in creative accounting, legal formalities largely removed from reality. But traditionally they’ve erred on the side of understating spending. This time, it’s the opposite. Based on a hopeful 3-3.5% GDP growth projection, even the Onapre (national budget office) admits that current income won’t exceed Bs.28 trillion. That leaves the terrifying sum of Bs.12 trillion to be financed somehow (and that’s if the government’s growth estimate holds up; otherwise, it will be more.) And how is this gap to be bridged? By once again squeezing every last penny out of PDVSA, conjuring up some money out of thin air (they call it “exchange profits”) and then borrowing the rest – per Onapre estimates, a full Bs.10 trillion.
The simple conclusion is that the government just doesn’t learn. Already, the unreasonable chavista demands on PDVSA have caused a 25.5% drop in the corporation’s production capacity – with no money to spend on keeping up production, the country’s capacity has dropped from 3.5 million b/d four years ago to just 2.6 million b/d today (not including Orinoco Belt extra-heavy crudes), according to IEA estimates. This means that for the first time in history, Venezuela finds itself unable to cash in on the upside oil-shock caused by the looming US war in Iraq: there’s just no spare capacity to speak of.
The broader strategy is just as bad. By now, one might expect the chavista ruling clique to have caught on to how badly the public sector’s oversized thirst for borrowed cash has distorted the economy’s performance. By making massive deficit spending the norm irrespective of whether times are good or bad or whether oil prices are high or low, the government has already shut out the private sector from the credit market. The public sector’s snowballing demand for borrowed money keeps interest rates high, private investment rates low, and markets jittery.
As the pressure to raise more and more money increases, the government has opted for more and more unorthodox means of financing itself. First, it instituted the Bank Debit Tax, which might be described as relatively benign even though it undoubtedly generates destructive market distortions. Then, as the pressure for new cash intensified, it adopted more serious self-destructive practices, from the accelerating merry-go-round of increasingly bigger and more expensive short-term bond issues to the frankly perverse tactic of declaring purely fictitious “exchange market” profits to bankroll the government. The results are all around, and plain to see: a virtual investment freeze, rising unemployment, galloping inflation, and an unremittingly bleak outlook for the future.
Of course, much of the excess spending next year is due to higher debt service payments: the chickens of the wrong-headed financing strategies of the past coming home to roost. But rather than trying to tackle this vicious circle, rather than trying to implement a plan to return the nation’s finances to relative health, the government looks set to exacerbate the problem. Its financing plans for 2003 are a paragon of amateurish irresponsibility: on top of massive new borrowing, the government has already announced it will issue Bs.1.5 trillion in printing-press monies. Sadly, there’s just no medium-to-long-term strategy to ever break out of the deficit-spending trap. In fact, there’s no indication that the government even understands it’s in a trap at all. Under such circumstances, the only reasonable forecast is steady, ongoing deterioration.
Four years into its mandate, the Chávez administration hasn’t learned even the bare-bones basics from the mistakes it has made to date. The broad outlines of the budget plans announced so far make it clear that the wild goose chase that is the government’s quest for fresh cash will only intensify next year. The outcome is sadly predictable, and as usual, those who will suffer most will be those the president claims to champion.
October 1, 2002
“They’d told me what made Venezuela tick was oil…
…but now that I get here, I see that what the country really runs on is rumors.” It was the US ambassador who said that, talking to reporters last week. He’s obviously right: the twin Venezuelan love-affairs with gossip and the cell-phone leave the city awash in speculation. A constant stream of conjecture flashes across my inbox and my phone, and the topic is always the same: the near political future. Caraqueños are obsessed with the government’s overthrow…and it’s not just the opposition who talk about it constantly, even the government won’t shut up about it, denouncing coups and plots at every turn.
So what are the main theories going around these days?
Theory 1: The Crimes Against Humanity charge will do him in…
The lawyers who represent some of the victims of the April 11th shootings (that’s the day of the coup) went to the Supreme Tribunal to ask for the president’s impeachment several months ago. Though the Tribunal Members were originally handpicked by Chávez and his people, a bunch of them have bolted over the last two years as the comandante has gotten crazier and crazier. The tribunal appears to be on a knife edge: last August, for the first time, it handed down a ruling that went against the president’s wishes. That prompted a furious presidential outburst calling them a bunch of corrupt bastards, basically, and threatening to “publish their pictures in a book” so they can be picked out, one presumes.
Back then, Chávez warned that that was just the first step in a process designed to have him impeached and booted out of office, calling it a conspiracy to carry out an “institutional coup.” He said, flat out, that neither he nor the army would pay any attention to the Supreme Tribunal if they started impeachment procedures, (so what’s the point of having a judicial branch, then?)
A lot of opposition members still have their hopes riding on a court ruling on this one case. It’s not that they think that the court can really unseat him. It’s that they think that if the court rules against him and he refuses to abide by the ruling, he would be stepping so far outside the democratic norm that he would give the dissident officers in the armed forces all the cover they need to topple him. From this point of view, the dissident army officers are just itching for Chávez to screw up, so they can take action without eliciting too much international condemnation.
Problem is, it probably won’t happen. Most credible head-counts at the tribunal suggest the dissidents are still two or three votes shy of the majority they’d need to put the whole strategy in motion. Still, a ruling will be handed down in the next few days. The tribunal might just leave me looking silly by ruling against Chávez, and at that point we’d go through the looking glass: a major constitutional crisis is almost guaranteed.
[Those of you wondering about the actual legal merits for impeaching him on these grounds…come on! In this atmosphere every court decision is politically motivated!]
Theory 2: Chávez is trying to provoke a coup attempt.
This theory’s been going around a lot, but it reached its fullest development in an opinion piece written by Argelia Ríos in El Universal. Her point is that Chávez has everything to gain from a coup-attempt against him. It would allow him to finally smoke out and boot out all the dissidents in the armed forces. It would bolster his democratic credentials by painting him as a victim in international opinion. If it was violent, it would wash away the memories of the April 11th deaths. Even if it was succesful, it could play into his hands, turning him into a martyr, a victim, an unrealized promise, a dashed popular dream. A succesful coup might even see him end up taking to the hills and starting a guerrilla resistance, which is what he’s really cut out for.
This, according to Ríos, is the point of the systematic harrasment of dissident military officers (and their wives, and their daughters.) The more incitement there is, the more likely the coup will be rushed, leaked, and infiltrated – so given that a coup was likely, in any event, in the post-April atmosphere, inciting it only makes sense for the government: it multiplies the chances that it will fail. In a sense, though, inciting a coup is a desperate call for help, an acknowledgement on the part of the government that the current situation is unsustainable. Trying to strongarm the country into a post-failed-coup scenario is trying to accelerate a postdemocratic solution to the current stability crisis.
I actually think this is a generally reasonable interpretation, mostly because I think that Chávez really is that crazy, but I could be wrong. I can easily see it as a sort of semi-conscious strategy. I imagine Chávez understands the likely outcome of running roughshod over some of the best respected officers in the armed forces, as a former army officer, I’m sure he understands the intense dissent his decisions are causing within the ranks, and as a former coup-plotter himself I’m sure he understands the way that dissent is bound to lead to a coup attempt. I guess he’s calculated he can survive it and even be strengthened by it. But I also know that Chávez miscalculates all the damn time, and as Medina Gómez says, “nothing is improbable.”
Theory 3: The opposition needs to hold its breath until he goes away
Another seemingly crazy theory that more and more people are going for: this one’s championed by Cecilia Sosa, the far-right wing former chief justice of the Supreme Court. Her theory is that people should just lock themselves at home, “toss the key out the window”, and refuse to leave the house until Chávez gives up and resigns.
It’s that old leftist canard, the insurrectional General Strike, back from the grave and warmed over in a strange right-wing guise. Like the leftist precursors of this strategy, the people who actually think this could work appear to adhere to some sort of alternative system of rationality. In a country where 9 out of every 10 families live hand-to-mouth, this strategy is fairly fantastic: for most Venezuelans, if you don’t work you don’t eat, and it’s fairly hard for me to imagine that enough of them are willing to not eat for long enough to bring the government down.
But even if they were, the actual mechanism whereby a strike obligates the president to resign remains murky and shrouded in mystery. The most likely mechanism is the one we already saw in April: a last minute military push that brings matters to a head. But after the horrid experience of April, that’s something no one wants to go through again. Fact is, these people aren’t thinking: they’re just desperate, and desperation is about the worse adviser imaginable in a situation like this.
What’s worrying is that it’s not some small lunatic fringe that’s pressing for this crazy maximalist strategy. It’s CTV, the million+ member labor union federation. It’s Fedecamaras, the big employers’ federation. It’s Acción Democrática, still the biggest opposition party, which got 400,000 people out to vote in its last primary election. It’s large chunks of the opposition. It’s a testament to how polarized the country is that so many people are really thinking of a general strike as a viable option. I guess desperate times call for desperate measures, as the old saying goes…
That’s just a smattering, but this is a long enough post. More of these to come.
September 27, 2002
Tic tac tic tac tic tac…
Luis Alcalá was leaving his house to go pick up his eight year old kid from school. The man he’d seen scoping out his home several times in the last few days walked up to him, pulled out a 9 mm, shot him twice, and ran off. Two days ago, Luis Alcalá became the first victim of a targeted political assassination in Chávez era Venezuela.
Alcalá had been working with Army lieutenant colonel (ret.) Hidalgo Valero, at an antichavista NGO called Popular Defenders of the New Democracy. Valero announced that Alcalá had been investigating the financing of the Circulos Bolivarianos, chavista neighborhood groups that are widely seen as fronts for a paramilitary organization. Alcalá had received two death threats in the last few weeks. Lots of antichavista activists have. Two days ago, for the first time, they made good on those threats.
It’s hard to know what to do with the sinking sensation in the pit of my stomach as I write these lines. On the “you are here” map of political conflict, we are now where Colombia was in 1948, where El Salvador was in the mid-70s. You can see it starting to happen, you can actually see the polarization turning to threats and intimidation, and the intimidation turning to violence. But you can’t stop it. And you have no idea how far it will go, when it will stop, or when it’ll catch up with you, or your family.
Alcalá’s funeral was held yesterday. In a totally baffling decision, the chavista chief justice of the Supreme Tribunal, Iván Rincón, decided to attend. He was almost lynched by the mourners. They had to carry him off in the middle of a melée as people swung fists his way, hurling insults at him for protecting Chávez. At one point, before it got really bad, one of Alcalá’s relatives fell to her knees in front of him, crying and imploring him to do something to stop the spiral of violence.
Meanwhile, in Mérida (about 500 kilometers southwest of here), Monsignor Baltasar Porras, the head of the Catholic Bishops’ Conference, had a similar experience when he turned up to an event dominated by chavismo. The church is seen more and more as an apendage of the opposition, and Monsignor Porras barely managed to get away unscathed.
Last week, a chavista mini-mob went after one of the cars that carries around Globovisión’s crews – that’s the antichavista all-news TV station. One of the best known opposition figures, Henrique Salas Römer was harshly attacked as he tried to lay a floral wreath at Bolívar’s statue in downtown Caracas…some guy walked up behind him and hit him in the head twice, hard, with a rock he was holding. I’ve lost the count of how many opposition figures I’ve heard on the news saying they’re being threatened, imploring the police for protection, begging the government to call of its thugs. Doesn’t seem likely.
This is the nasty, ugly side of the situation here. Except for Alcalá’s murder, you could say it’s relatively minor stuff, more bluster than anything else. But what people are worried about is not so much what’s already happened but rather what seems to be on the verge of happening. There’s this hard-to-describe but unmistakable atmosphere of dread here, this sense that what we’ve seen so far is only the tip of the iceberg. The country hasn’t quite blown up so far, but it’s hard to shake the sense that that could happen any minute now. Luis Alcalá’s murder is a very, very bad sign.
Tic tac tic tac tic tac…
Luis Alcalá was leaving his house to go pick up his eight year old kid from school. The man he’d seen scoping out his home several times in the last few days walked up to him, pulled out a 9 mm, shot him twice, and ran off. Two days ago, Luis Alcalá became the first victim of a targeted political assassination in Chávez era Venezuela.
Alcalá had been working with Army lieutenant colonel (ret.) Hidalgo Valero, at an antichavista NGO called Popular Defenders of the New Democracy. Valero announced that Alcalá had been investigating the financing of the Circulos Bolivarianos, chavista neighborhood groups that are widely seen as fronts for a paramilitary organization. Alcalá had received two death threats in the last few weeks. Lots of antichavista activists have. Two days ago, for the first time, they made good on those threats.
It’s hard to know what to do with the sinking sensation in the pit of my stomach as I write these lines. On the “you are here” map of political conflict, we are now where Colombia was in 1948, where El Salvador was in the mid-70s. You can see it starting to happen, you can actually see the polarization turning to threats and intimidation, and the intimidation turning to violence. But you can’t stop it. And you have no idea how far it will go, when it will stop, or when it’ll catch up with you, or your family.
Alcalá’s funeral was held yesterday. In a totally baffling decision, the chavista chief justice of the Supreme Tribunal, Iván Rincón, decided to attend. He was almost lynched by the mourners. They had to carry him off in the middle of a melée as people swung fists his way, hurling insults at him for protecting Chávez. At one point, before it got really bad, one of Alcalá’s relatives fell to her knees in front of him, crying and imploring him to do something to stop the spiral of violence.
Meanwhile, in Mérida (about 500 kilometers southwest of here), Monsignor Baltasar Porras, the head of the Catholic Bishops’ Conference, had a similar experience when he turned up to an event dominated by chavismo. The church is seen more and more as an apendage of the opposition, and Monsignor Porras barely managed to get away unscathed.
Last week, a chavista mini-mob went after one of the cars that carries around Globovisión’s crews – that’s the antichavista all-news TV station. One of the best known opposition figures, Henrique Salas Römer was harshly attacked as he tried to lay a floral wreath at Bolívar’s statue in downtown Caracas…some guy walked up behind him and hit him in the head twice, hard, with a rock he was holding. I’ve lost the count of how many opposition figures I’ve heard on the news saying they’re being threatened, imploring the police for protection, begging the government to call of its thugs. Doesn’t seem likely.
This is the nasty, ugly side of the situation here. Except for Alcalá’s murder, you could say it’s relatively minor stuff, more bluster than anything else. But what people are worried about is not so much what’s already happened but rather what seems to be on the verge of happening. There’s this hard-to-describe but unmistakable atmosphere of dread here, this sense that what we’ve seen so far is only the tip of the iceberg. The country hasn’t quite blown up so far, but it’s hard to shake the sense that that could happen any minute now. Luis Alcalá’s murder is a very, very bad sign.
Tic tac tic tac tic tac…
September 26, 2002
"Please crush our movement, sir."
The thing about these "Security Zones" is that by decreeing them, the government set out an implicit dare. "You can`t come here," Chávez said, "off limits!" So, of course, following the 6-year-olds-at-the-playground mentality that dominates opposition strategizing these days, they obviously had to go and protest inside the security zone, didn't they? It was a dare! What do you think we are, a bunch of sissies?
Not to belittle the issue. The opposition's obviously justified in its anger at the security zones. It's obviously unacceptable for any government to try to tell me where I can and can't hold a political march, much less for this government to do so. But I do mean to point out how sadly predictable and slightly infantile the opposition's tactics are: there's no provocation they won't fall into, no waving red cape they won't charge.
So they went and called their rally. It's happening right now, and it looks like they got the typical, quite solid turnout...100,000 or so, I'd guess. My sisters are there, but I had to deal with a plumbing emergency so I didn't make it. From what's on the TV, it's the usual: standard noisemakers, standard waving Venezuelan flags, standard hysterically overhblown anti-chavista speeches ("This is the WORST, the most CORRUPT, the MOST CRIMINAL government Venezuela has EVER had!!!!" loud cheers "Mr. President, if you want to live in communism, go move to Cuba like you wanted to on April 11th!!!!" more loud cheers...and so on...these were thrilling 8 months ago when they were new, but at this point...sigh...]
The funny thing is that the government is normally quite savvy about not picking stupid fights like this one. Don't get me wrong, they pick about every other type of fight imaginable, but this type of fight they usually avoid. They've actually been really liberal about allowing protests and media dissent - though, yes, individual journalists are attacked by little chavista mobs with startling regularity. Still, the newspapers are still running, and absolutely chock-full of harsh antigovernment rhetoric, same for the magazines, radio stations and TV stations, all the media. Though the criticism clearly drives Chávez half insane, the government's been quite skillful about not giving the opposition any martyrs or symbols to rally around, either in terms of censored newspapers, jailed opponents or banned protests.
It's clearly the best way they could deal with it: trying to repress the huge opposition movement would blacken the government's international reputation badly, and it obviously wouldn't work because the opposition is just too large and too determined. Besides, when protest isn't banned, it's ever so much less sexy. Half the point of protesting is the transgressive thrill of challenging authority...witness the beaming pride of anti-globalization protesters everywhere as they're hauled off to jail.
Chávez hasn't fallen for it, which is what makes this latest goof with the security zones so odd. The opposition was obviously thrilled to finally get dared. The government, realizing that the likely, 100,000 strong crowd would be impossible to stop or tear-gas into submission, decided to backtrack. Chavez ordered the defense ministry to issue a permit for the march -- a permit which, incidentally, nobody had asked for.
It was a smart move, and really took the wind out of the sails out of a lot of opposition members. One disgruntled sister called me this morning saying, in a half-joking sort of tone "this damn government! I don't believe this! how dare they give us permission to march? Makes me not even want to go!" I suggested she organize a march to protest the government's decision to allow marches. Very silly, yes. But then farce is what Chávez era Venezuela is all about.
The broader point is that the opposition has an Alex Keaton problem: how do you rebel when you have a hippie dad who lets you do whatever you want? We're desperately itching to rebel, we want to so so much because we find this government so so deeply deplorable. But the more we push, the more the government digs in to its velvet-gloves policy, leaving us in a state of collective frustration.
It's vintage Chávez, come to think of it...guy's so useless he can't even repress our movement properly...
The thing about these "Security Zones" is that by decreeing them, the government set out an implicit dare. "You can`t come here," Chávez said, "off limits!" So, of course, following the 6-year-olds-at-the-playground mentality that dominates opposition strategizing these days, they obviously had to go and protest inside the security zone, didn't they? It was a dare! What do you think we are, a bunch of sissies?
Not to belittle the issue. The opposition's obviously justified in its anger at the security zones. It's obviously unacceptable for any government to try to tell me where I can and can't hold a political march, much less for this government to do so. But I do mean to point out how sadly predictable and slightly infantile the opposition's tactics are: there's no provocation they won't fall into, no waving red cape they won't charge.
So they went and called their rally. It's happening right now, and it looks like they got the typical, quite solid turnout...100,000 or so, I'd guess. My sisters are there, but I had to deal with a plumbing emergency so I didn't make it. From what's on the TV, it's the usual: standard noisemakers, standard waving Venezuelan flags, standard hysterically overhblown anti-chavista speeches ("This is the WORST, the most CORRUPT, the MOST CRIMINAL government Venezuela has EVER had!!!!" loud cheers "Mr. President, if you want to live in communism, go move to Cuba like you wanted to on April 11th!!!!" more loud cheers...and so on...these were thrilling 8 months ago when they were new, but at this point...sigh...]
The funny thing is that the government is normally quite savvy about not picking stupid fights like this one. Don't get me wrong, they pick about every other type of fight imaginable, but this type of fight they usually avoid. They've actually been really liberal about allowing protests and media dissent - though, yes, individual journalists are attacked by little chavista mobs with startling regularity. Still, the newspapers are still running, and absolutely chock-full of harsh antigovernment rhetoric, same for the magazines, radio stations and TV stations, all the media. Though the criticism clearly drives Chávez half insane, the government's been quite skillful about not giving the opposition any martyrs or symbols to rally around, either in terms of censored newspapers, jailed opponents or banned protests.
It's clearly the best way they could deal with it: trying to repress the huge opposition movement would blacken the government's international reputation badly, and it obviously wouldn't work because the opposition is just too large and too determined. Besides, when protest isn't banned, it's ever so much less sexy. Half the point of protesting is the transgressive thrill of challenging authority...witness the beaming pride of anti-globalization protesters everywhere as they're hauled off to jail.
Chávez hasn't fallen for it, which is what makes this latest goof with the security zones so odd. The opposition was obviously thrilled to finally get dared. The government, realizing that the likely, 100,000 strong crowd would be impossible to stop or tear-gas into submission, decided to backtrack. Chavez ordered the defense ministry to issue a permit for the march -- a permit which, incidentally, nobody had asked for.
It was a smart move, and really took the wind out of the sails out of a lot of opposition members. One disgruntled sister called me this morning saying, in a half-joking sort of tone "this damn government! I don't believe this! how dare they give us permission to march? Makes me not even want to go!" I suggested she organize a march to protest the government's decision to allow marches. Very silly, yes. But then farce is what Chávez era Venezuela is all about.
The broader point is that the opposition has an Alex Keaton problem: how do you rebel when you have a hippie dad who lets you do whatever you want? We're desperately itching to rebel, we want to so so much because we find this government so so deeply deplorable. But the more we push, the more the government digs in to its velvet-gloves policy, leaving us in a state of collective frustration.
It's vintage Chávez, come to think of it...guy's so useless he can't even repress our movement properly...
September 25, 2002
"We've reached the breaking point and nothing is improbable."
It's a scary thought. But it's much much scarier as a screaming headline leading the nation's most widely read newspaper. Especially when it's in the mouth not of some pundit, but of a Major General on active duty, one of the top ranked commanders in the armed forces. But Major General Enrique Medina Gómes statement yesterday didn't stop at that: "We're seeing an abuse of power on the part of the government, and if that's the case then there is no rule of law. A lot of people are playing with fire here. But every society has a limit to how much its willing to tolerate, it would seem that an eventuality is on the cusp of taking place."
Yikes.
Statements don't get very much more straight-forward than that.
Medina Gómez' role in the April coup remains unclear. He had been working as Venezuela's military attaché in Washington. Then, just a few days before the coup, he returned to Venezuela. As a barely concealed anti-chavista, it's little wonder that so many rumors and conjectures followed his judiciously timed return. Some people are convinced he served as a sort of secret liaison between the coup-plotters back home and the Pentagon, that when he returned right before the coup he was carrying all manner of military equipment, from weapons to communications encryption gadgets. It may be true, it may be just talk, but Medina Gómez has certainly come to be seen as the stand-in for old style Latin American military conservatism in today's Venezuela. The government must be watching him like a hawk: I doubt if he's uttered a word in the last six months that Military Intelligence and/or DISIP haven't recorded. Even then, lots of people are convinced he's actively working towards a hard-right coup...ahem...a hard-right "eventuality." Right. The right wing fringe sure is starting to see him as its knight in shining armor, a much hoped for Pinochet option. Then again, I bet Pinochet wasn't making bombastic statements to the Chilean press right before he toppled Allende.
It's a scary thought. But it's much much scarier as a screaming headline leading the nation's most widely read newspaper. Especially when it's in the mouth not of some pundit, but of a Major General on active duty, one of the top ranked commanders in the armed forces. But Major General Enrique Medina Gómes statement yesterday didn't stop at that: "We're seeing an abuse of power on the part of the government, and if that's the case then there is no rule of law. A lot of people are playing with fire here. But every society has a limit to how much its willing to tolerate, it would seem that an eventuality is on the cusp of taking place."
Yikes.
Statements don't get very much more straight-forward than that.
Medina Gómez' role in the April coup remains unclear. He had been working as Venezuela's military attaché in Washington. Then, just a few days before the coup, he returned to Venezuela. As a barely concealed anti-chavista, it's little wonder that so many rumors and conjectures followed his judiciously timed return. Some people are convinced he served as a sort of secret liaison between the coup-plotters back home and the Pentagon, that when he returned right before the coup he was carrying all manner of military equipment, from weapons to communications encryption gadgets. It may be true, it may be just talk, but Medina Gómez has certainly come to be seen as the stand-in for old style Latin American military conservatism in today's Venezuela. The government must be watching him like a hawk: I doubt if he's uttered a word in the last six months that Military Intelligence and/or DISIP haven't recorded. Even then, lots of people are convinced he's actively working towards a hard-right coup...ahem...a hard-right "eventuality." Right. The right wing fringe sure is starting to see him as its knight in shining armor, a much hoped for Pinochet option. Then again, I bet Pinochet wasn't making bombastic statements to the Chilean press right before he toppled Allende.
September 24, 2002
Reinventing the hyperinflation wheel
Probably the hardest part of my job is writing about monetary and fiscal policy, impossibly technical topics that tend to make readers’ eyes glaze over. Inspired by the great and mighty Paul Krugman, I go to any lengths necessary to try to make these topics easily digestible. Not sure if I always succeed. In any case, today’s post is an attempt to write an interesting (or, at the very least, understandable) critique of the Venezuelan Central Bank’s monetary policy. Let me start with a bit of a story:
In 1941, a British officer by the name of R.A. Radford was captured by the Nazis and confined to a POW camp. At the camp, Radford and 2400 other inmates were forced to live on meager rations delivered by the Red Cross. The rations issued to each prisoner contained a bit of bread, some sugar, biscuits, jam, margarine, tea and chocolate bars, with small rations of canned meat sporadically made available. They also included 25 cigarrettes per prisoner per week. Radford, who had been trained in economics before the war, noticed how even in the extreme conditions of a Nazi prison camp, a rudimentary market system developed as prisoners traded with one another to maximize their satisfaction. The British army's Gurkahs, for instance were eager to trade their meat for other foods, since as Hindus they were strict vegetarians. Prisoners who didn’t smoke were eager to trade their cigarettes for food. At first, each of these trades was a simple barter. But soon enough, the inmates realized the need for a more sophisticated system of exchange. Lacking money, they started using cigarettes as prison currency. A ration of margarine might be bought for seven cigarrettes, which could then be used to buy one and a half chocolate bars, and so on.
Soon after his release, Radford described the system that developed in a classic paper entitled “The Economic Organization of a POW Camp,” a write-up that's much appreciated by undergraduates everywhere for its skill at explaining the mysteries of monetary systems. What interested Radford the most was the way that cigarrettes, as a means of exchange, were subject to all of the fluctuations of normal currency. So long as there was a roughly steady relationship between the number of cigarettes in circulation and the goods those cigarettes could be traded for, “prices” in terms of cigarettes remained more or less stable. But when a shipment of cigarrettes unexpectedly arrived, an inflationary spiral was set in motion. With the camp suddenly awash in “unbacked cigarettes” (additional cigarettes that circulated without a corresponding increase in the amount of other goods they could buy) prisoners would demand more and more of them in exchange for other goods. Alternatively, when cigarettes failed to arrive for one reason or another (an allied bombing raid, for instance,) a liquidity crunch took hold of the camp. These currency shortfalls would actually lead to recessions at the camp: with inmates eager to hang on to their scarce cigarettes, it became more and more difficult to find people to trade with.
If you want to understand why so many Venezuelan economists are alarmed by the Central Bank’s decision to monetize Bs.6.2 trillion worth of “exchange profits”, go read Radford’s piece. As Venezuelan analysts keep saying, but few people seem to quite grasp, exchange market profits are just unbacked money. The effect of financing a government deficit with unbacked money is just the same as the effect of sending a huge new shipment of cigarettes into Radford’s prison camp. The balance between the money supply and the goods available for purchase goes all out of whack, and prices begin to rise out of control.
“Exchange market profits” is one of those expressions that tends to baffle people. My boss likes to explain it with an example. Imagine you run a company whose only asset is an apartment. The company bought that apartment for $100,000 a few years back. But now, due to inflation, that apartment is worth $120,000. Would you say you’ve made a $20,000 profit? Well, not really. Not unless you’ve actually sold the thing, right? But what if, before selling the apartment, the company declares a $20,000 dividend and distributes it among its shareholders? Does that seem kosher to you? It's Enron-accounting, isn’t it?
Well, that’s precisely what the Venezuelan Central Bank is doing. Over the years, the Central Bank receives a certain stream of dollars, mostly from oil sales. It books each of those dollars at their bolivar cost at the time they’re bought. A year ago, for instance, they could get a dollar for about Bs.750. Now, that same dollar is worth Bs.1450…so what they’re doing is saying that they’ve made a Bs.700 profit on that dollar, booking it, and sending the profits to its only shareholder: the government. The government takes those bolivars and uses them to cover its budget spending commitments, paying wages, state contractors, past-due bills, etc. In short, they pump the resulting bolivars into the economy. Crucially, they do all of this before they’ve actually sold that dollar.
And how can they get away with it? Because they’re the central bank, and they get to print the money! Because our hypothetical private company can certainly book that fictitious $20,000 profit, but they can't make that profit materialize out of thin air. But the Central Bank can. It doesn’t matter to them that the profits are purely an accounting fiction because they can just order up a fresh batch of crisp new bolivar bills from the printers to cover their declared “profit.” Devious, huh?
Of course, the Chávez administration has been pumping such funny money into the Venezuelan economy for several years now. What sets this latest initiative apart is the scale of this year’s injection. In the past, the exchange gains injected never exceeded Bs.1.5 trillion. This year, following the Bolívar’s sharp devaluation, the Central Bank’s unrealized exchange profits amount to a whopping Bs.6.2 trillion. Printing that many new bolivars would boost the currency base by an eye-popping 38%. Put another way, for ever 100 cigarettes now circulating in the POW camp, the government wants to pump in another 38. The results can only be a very strong spike in inflation.
It’s difficult to overstate how wrong-headed this policy is. For years, academic economists have been investigating the effects of inflation on economic performance and social well-being and, for once, they agree: not only is economic growth impossible to sustain when inflation is out of control but, crucially, runaway inflation hurts the poor the most, impoverishing them farther and faster than almost any other economic phenomenon.
In fact, the inflationary effects of printing money and the effects of inflation on economic performance and on the poor are so well understood it’s just plain embarrassing that Venezuela is having to rehash this discussion well into the 21st century. The outcome of the policy the Chávez government is hawking was fully clear by the 1920s, when the German economy imploded in a flood unbacked marks, paving the way for the rise of the Nazis who eventually took R.A. Radford prisoner. They’ve been confirmed again and again by generations of Latin American populists, from Juan Perón to Alan García. The rest of Latin America has been clear on the disastrous effects of monetizing deficits for at least 20 years now, consigning these policies to the dustbin of history. Only Venezuela, it seems, continues to be determined to reinvent the hyperinflationary wheel.
Probably the hardest part of my job is writing about monetary and fiscal policy, impossibly technical topics that tend to make readers’ eyes glaze over. Inspired by the great and mighty Paul Krugman, I go to any lengths necessary to try to make these topics easily digestible. Not sure if I always succeed. In any case, today’s post is an attempt to write an interesting (or, at the very least, understandable) critique of the Venezuelan Central Bank’s monetary policy. Let me start with a bit of a story:
In 1941, a British officer by the name of R.A. Radford was captured by the Nazis and confined to a POW camp. At the camp, Radford and 2400 other inmates were forced to live on meager rations delivered by the Red Cross. The rations issued to each prisoner contained a bit of bread, some sugar, biscuits, jam, margarine, tea and chocolate bars, with small rations of canned meat sporadically made available. They also included 25 cigarrettes per prisoner per week. Radford, who had been trained in economics before the war, noticed how even in the extreme conditions of a Nazi prison camp, a rudimentary market system developed as prisoners traded with one another to maximize their satisfaction. The British army's Gurkahs, for instance were eager to trade their meat for other foods, since as Hindus they were strict vegetarians. Prisoners who didn’t smoke were eager to trade their cigarettes for food. At first, each of these trades was a simple barter. But soon enough, the inmates realized the need for a more sophisticated system of exchange. Lacking money, they started using cigarettes as prison currency. A ration of margarine might be bought for seven cigarrettes, which could then be used to buy one and a half chocolate bars, and so on.
Soon after his release, Radford described the system that developed in a classic paper entitled “The Economic Organization of a POW Camp,” a write-up that's much appreciated by undergraduates everywhere for its skill at explaining the mysteries of monetary systems. What interested Radford the most was the way that cigarrettes, as a means of exchange, were subject to all of the fluctuations of normal currency. So long as there was a roughly steady relationship between the number of cigarettes in circulation and the goods those cigarettes could be traded for, “prices” in terms of cigarettes remained more or less stable. But when a shipment of cigarrettes unexpectedly arrived, an inflationary spiral was set in motion. With the camp suddenly awash in “unbacked cigarettes” (additional cigarettes that circulated without a corresponding increase in the amount of other goods they could buy) prisoners would demand more and more of them in exchange for other goods. Alternatively, when cigarettes failed to arrive for one reason or another (an allied bombing raid, for instance,) a liquidity crunch took hold of the camp. These currency shortfalls would actually lead to recessions at the camp: with inmates eager to hang on to their scarce cigarettes, it became more and more difficult to find people to trade with.
If you want to understand why so many Venezuelan economists are alarmed by the Central Bank’s decision to monetize Bs.6.2 trillion worth of “exchange profits”, go read Radford’s piece. As Venezuelan analysts keep saying, but few people seem to quite grasp, exchange market profits are just unbacked money. The effect of financing a government deficit with unbacked money is just the same as the effect of sending a huge new shipment of cigarettes into Radford’s prison camp. The balance between the money supply and the goods available for purchase goes all out of whack, and prices begin to rise out of control.
“Exchange market profits” is one of those expressions that tends to baffle people. My boss likes to explain it with an example. Imagine you run a company whose only asset is an apartment. The company bought that apartment for $100,000 a few years back. But now, due to inflation, that apartment is worth $120,000. Would you say you’ve made a $20,000 profit? Well, not really. Not unless you’ve actually sold the thing, right? But what if, before selling the apartment, the company declares a $20,000 dividend and distributes it among its shareholders? Does that seem kosher to you? It's Enron-accounting, isn’t it?
Well, that’s precisely what the Venezuelan Central Bank is doing. Over the years, the Central Bank receives a certain stream of dollars, mostly from oil sales. It books each of those dollars at their bolivar cost at the time they’re bought. A year ago, for instance, they could get a dollar for about Bs.750. Now, that same dollar is worth Bs.1450…so what they’re doing is saying that they’ve made a Bs.700 profit on that dollar, booking it, and sending the profits to its only shareholder: the government. The government takes those bolivars and uses them to cover its budget spending commitments, paying wages, state contractors, past-due bills, etc. In short, they pump the resulting bolivars into the economy. Crucially, they do all of this before they’ve actually sold that dollar.
And how can they get away with it? Because they’re the central bank, and they get to print the money! Because our hypothetical private company can certainly book that fictitious $20,000 profit, but they can't make that profit materialize out of thin air. But the Central Bank can. It doesn’t matter to them that the profits are purely an accounting fiction because they can just order up a fresh batch of crisp new bolivar bills from the printers to cover their declared “profit.” Devious, huh?
Of course, the Chávez administration has been pumping such funny money into the Venezuelan economy for several years now. What sets this latest initiative apart is the scale of this year’s injection. In the past, the exchange gains injected never exceeded Bs.1.5 trillion. This year, following the Bolívar’s sharp devaluation, the Central Bank’s unrealized exchange profits amount to a whopping Bs.6.2 trillion. Printing that many new bolivars would boost the currency base by an eye-popping 38%. Put another way, for ever 100 cigarettes now circulating in the POW camp, the government wants to pump in another 38. The results can only be a very strong spike in inflation.
It’s difficult to overstate how wrong-headed this policy is. For years, academic economists have been investigating the effects of inflation on economic performance and social well-being and, for once, they agree: not only is economic growth impossible to sustain when inflation is out of control but, crucially, runaway inflation hurts the poor the most, impoverishing them farther and faster than almost any other economic phenomenon.
In fact, the inflationary effects of printing money and the effects of inflation on economic performance and on the poor are so well understood it’s just plain embarrassing that Venezuela is having to rehash this discussion well into the 21st century. The outcome of the policy the Chávez government is hawking was fully clear by the 1920s, when the German economy imploded in a flood unbacked marks, paving the way for the rise of the Nazis who eventually took R.A. Radford prisoner. They’ve been confirmed again and again by generations of Latin American populists, from Juan Perón to Alan García. The rest of Latin America has been clear on the disastrous effects of monetizing deficits for at least 20 years now, consigning these policies to the dustbin of history. Only Venezuela, it seems, continues to be determined to reinvent the hyperinflationary wheel.
September 23, 2002
Correction...
The previous post wrongly reported that the La Carlota security zone includes Francisco de Miranda Avenue and the Plaza Altamira. It doesn't. It does include a big part of the East-side highway, and Chacaito's Plaza Brión.
In other late-breaking news, TalCual reports that the government is planning to take these security zones nationwide, with the next batch including military bases in Lara, Aragua and Carabobo states. Dear lord.
The previous post wrongly reported that the La Carlota security zone includes Francisco de Miranda Avenue and the Plaza Altamira. It doesn't. It does include a big part of the East-side highway, and Chacaito's Plaza Brión.
In other late-breaking news, TalCual reports that the government is planning to take these security zones nationwide, with the next batch including military bases in Lara, Aragua and Carabobo states. Dear lord.
Security zones? OK…but for whose security?
Another Monday, another feverish political row in Caracas. This week, the hot issue is the decree Chávez issued last week declaring eight “security zones” around key installations in Caracas: Four military bases, two presidential facilities and the state-owned TV and Radio stations. It will have escaped no one that these eight facilities are at the top of any coup plotter’s target list, making it none too hard to piece together what it is that the government is worried about. In essence, the decree sets out a sort of exclusion zone outside each of the eight installations where demonstrations are not allowed. It was this decree that the government invoked in repressing last week’s Fuerza Solidaria protest, saying it was too close to the La Carlota air-force base.
The opposition is up in arms about it, calling the decree a gross violation of fundamental citizenship rights to freely assemble and demonstrate peacefully. The government seems to be walking on thin-ice here, basing the decree on a law that was meant basically for border regions, and designed to give the state legal basis to keep foreigners from buying real estate too close to the borders. Caracas, of course, is nowhere near a border, and the decree is about anything but real estate. The opposition is approaching it as a civil rights issue, treating it as the thin end of the wedge of an attempt to militarize the whole city and ban protests altogether. An Interamerican Press Society spokesman says the next step will be to shut down an opposition newspaper. Not surprisingly, the injunctions to have the decree quashed as unconstitutional have started raining down on the Supreme Tribunal.
One concern is that the security zones are so big that they stray into areas of the city that aren’t really anywhere near the installations they’re supposed to protect. What’s worse, many of them are areas that have traditionally been used for political protests. For those of you who know Caracas, consider that the La Carlota security zone extends all the way to Chacaito in the west, which is a long bloody way from the Air Force base. Moreover, Plaza Brión in Chacaito has been the starting point to a lot of opposition marches. Not anymore, I guess. The zones would also take up big chunks of the Francisco de Miranda Avenue, including Plaza Altamira, big chunks of the East-side highway, and of course the square in front of PDVSA Chuao: all pretty-well established spots for opposition rallies. Will the National Guard start lobbing tear gas canisters at demonstrators in Plaza Altamira, then, because it’s “too close” to La Carlota? Seems like a recipe for chaos, if you ask me. Or, alternatively, like a recipe for ghettoizing opposition protests into smaller and more remote parts of the city.
But the broader, more important, point is that the government doesn’t have any right to tell me where I can or can’t hold a peaceful demonstration. This is a bedrock democratic right, a matter of principle, and the opposition seems fully justified to feel alarmed that the government is now undermining such fundamental political rights.
Together with the ongoing reports about the government persecuting dissident military officers, and even civilians, more and more actively, the security zone decree is just one more element poisoning the political atmosphere here. Some people are fully convinced that the government is trying to goad the dissident officers into another coup attempt, harassing them, pushing them and prodding them until they feel they have no choice but to act. Once they do, the government can crush them outright, issue a big I-told-you-so about ongoing conspiratorial activity, and go into serious-repression mode.
Maybe.
But then, if what they wanted was carte blanche to purge the military and crack down on civilian dissent, they could’ve done that in April right after the first failed coup. They didn’t back then. What’s changed now? The standard answer is that Chávez is far more desperate now, far more aware of how tenuous his hold on power has become, and has little choice but to take strong action soon. But the alternative explanation, the one that I tend to believe, is that the Chavista governing clique is so isolated from sound, independent advice that they’re once again miscalculating on a big scale. To my mind Chávez’ hold on reality is so tenuous that he really does think that six million people poured onto the streets on April 13th to demand his return. And with a narcissist leader who’s that cut-off from reality, political miscalculation is the order of the day.
In other words, it’s a tightrope act, except the guy on the tightrope is drunk, and mad with power.
Another Monday, another feverish political row in Caracas. This week, the hot issue is the decree Chávez issued last week declaring eight “security zones” around key installations in Caracas: Four military bases, two presidential facilities and the state-owned TV and Radio stations. It will have escaped no one that these eight facilities are at the top of any coup plotter’s target list, making it none too hard to piece together what it is that the government is worried about. In essence, the decree sets out a sort of exclusion zone outside each of the eight installations where demonstrations are not allowed. It was this decree that the government invoked in repressing last week’s Fuerza Solidaria protest, saying it was too close to the La Carlota air-force base.
The opposition is up in arms about it, calling the decree a gross violation of fundamental citizenship rights to freely assemble and demonstrate peacefully. The government seems to be walking on thin-ice here, basing the decree on a law that was meant basically for border regions, and designed to give the state legal basis to keep foreigners from buying real estate too close to the borders. Caracas, of course, is nowhere near a border, and the decree is about anything but real estate. The opposition is approaching it as a civil rights issue, treating it as the thin end of the wedge of an attempt to militarize the whole city and ban protests altogether. An Interamerican Press Society spokesman says the next step will be to shut down an opposition newspaper. Not surprisingly, the injunctions to have the decree quashed as unconstitutional have started raining down on the Supreme Tribunal.
One concern is that the security zones are so big that they stray into areas of the city that aren’t really anywhere near the installations they’re supposed to protect. What’s worse, many of them are areas that have traditionally been used for political protests. For those of you who know Caracas, consider that the La Carlota security zone extends all the way to Chacaito in the west, which is a long bloody way from the Air Force base. Moreover, Plaza Brión in Chacaito has been the starting point to a lot of opposition marches. Not anymore, I guess. The zones would also take up big chunks of the Francisco de Miranda Avenue, including Plaza Altamira, big chunks of the East-side highway, and of course the square in front of PDVSA Chuao: all pretty-well established spots for opposition rallies. Will the National Guard start lobbing tear gas canisters at demonstrators in Plaza Altamira, then, because it’s “too close” to La Carlota? Seems like a recipe for chaos, if you ask me. Or, alternatively, like a recipe for ghettoizing opposition protests into smaller and more remote parts of the city.
But the broader, more important, point is that the government doesn’t have any right to tell me where I can or can’t hold a peaceful demonstration. This is a bedrock democratic right, a matter of principle, and the opposition seems fully justified to feel alarmed that the government is now undermining such fundamental political rights.
Together with the ongoing reports about the government persecuting dissident military officers, and even civilians, more and more actively, the security zone decree is just one more element poisoning the political atmosphere here. Some people are fully convinced that the government is trying to goad the dissident officers into another coup attempt, harassing them, pushing them and prodding them until they feel they have no choice but to act. Once they do, the government can crush them outright, issue a big I-told-you-so about ongoing conspiratorial activity, and go into serious-repression mode.
Maybe.
But then, if what they wanted was carte blanche to purge the military and crack down on civilian dissent, they could’ve done that in April right after the first failed coup. They didn’t back then. What’s changed now? The standard answer is that Chávez is far more desperate now, far more aware of how tenuous his hold on power has become, and has little choice but to take strong action soon. But the alternative explanation, the one that I tend to believe, is that the Chavista governing clique is so isolated from sound, independent advice that they’re once again miscalculating on a big scale. To my mind Chávez’ hold on reality is so tenuous that he really does think that six million people poured onto the streets on April 13th to demand his return. And with a narcissist leader who’s that cut-off from reality, political miscalculation is the order of the day.
In other words, it’s a tightrope act, except the guy on the tightrope is drunk, and mad with power.
September 22, 2002
Notes on a civil war that may or may not happen...
How tense is Venezuela these days? It's an odd, difficult question. If you go by what's published in the newspapers, you'd think that a huge society-wide train-wreck is imminent. The tenor of political debate here is incredibly bellicose, far, far outside the bounds of the normal give and take of a lively democracy. Opposition leaders routinely and quite non-chalantly calling President Chávez a mad narcissist, a genocidal psychopath, a castrocommunist dictator's apprentice, and so on and so forth. The rhetoric coming the other way is hardly tamer - golpista being the preferred term of abuse. That translates literally but clunkily as "coupster", and yes, it's a delicious irony that Hugo Chavez, of all people, should be using it as an insult. More broadly, though, the government sees the "opposition" as a ruse for a plutocratic conspiracy, a well-organized, well-funded reactionary plot intent on driving the country back to a sort of quasi-feudal past when they could oppress the poor unhindered. The long and the short of it is that these people do not see each other as adversaries, they see each other as enemies.
It's little wonder the country's so damn tense. How tense? Well, according to a survey by Alfredo Keller, the best pollster in Caracas, 62% of Venezuelans think there's going to be a civil war here. Now, there are several remarkable things about that figure. Beyond the evident, incredibly alarming fact that 3 out of 5 people here think some sort of gory fratricidal bloodbath is on the way, there's the deeply weird fact that "do you think there's going to be a civil war?" has become a standard survey question! Y'know, just part of the work-a-day routine of public opinion research, "do you approve of the way the president does his job?" and "is the country on the right track?" and "do you think the streets will run red with the blood of the rancid oligarchs/godless communists?" And then the results get reported matter-of-factly on the front pages, just above a story about the Venezuelan team losing in the Davis Cup to Germany and an interview with a Caracas artists whose exhibit is opening in New York soon. Just a normal sunday paper...
But the 62% figure isn't even the worst of it. The worst it, if you ask me, is that 25% of respondents say they would be willing to fight for their beliefs in a hypothetical civil war. 12% of Venezuelans would take up guns to defend the president, while13% would fight to bring the government down. [Reading these figures, my boss snickers and says "great news! it's 13% to 12%, we win!"] It's enough to make me choke on my morning coffee.
Now, maybe I'm just naive, but it's impossible for me to really believe those figures. My take on this is that people are talking out of their asses here. Aside from the sporadic little scuffles at some political marches (magnified a million times by the media circus that inevitable results), the atmosphere on the streets just doesn't suggest an imminent war. Yes, yes, i've read the narratives from pre-war Sarajevo, and I'm aware that I'm echoing what people were saying there circa 1991. I understand that there are extremely radicalized, dangerous men on both extremes, but a civil war? Do these people even know what they're saying when they answer these poll questions? Are they aware of what civil war would actually mean for the country? I just don't think so.
Aside from a small little outburst of guerrilla fighting in the early 60s, Venezuela hasn't had a real out-and-out war in 150 years. People like to think that it's just not in our national character, and I want to believe that. No one in Venezuela has seen a real war here, which probably explains why they're so weirdly blase about the whole thing. But the flipside is that relative ignorance can be incredibly dangerous. People who haven't quite assimilated the scale of the disaster that a civil war could entail seem far more likely to carry out the provocative, confrontational acts that could, little-by-little, escalate towards a civil war. And with big-time civil conflicts, they're easy enough to start but there's just no telling how or when they end. After all, as some of the saner pundits keep reminding us, when the first shots were fired in Colombia in the 1940s, nobody could possibly have known that sixty years later the war would still be going on there. It scares the crap out of me to imagine that some day circa 2050 some grandchild will come up to me and ask what Caracas was like before the fighting started.
How tense is Venezuela these days? It's an odd, difficult question. If you go by what's published in the newspapers, you'd think that a huge society-wide train-wreck is imminent. The tenor of political debate here is incredibly bellicose, far, far outside the bounds of the normal give and take of a lively democracy. Opposition leaders routinely and quite non-chalantly calling President Chávez a mad narcissist, a genocidal psychopath, a castrocommunist dictator's apprentice, and so on and so forth. The rhetoric coming the other way is hardly tamer - golpista being the preferred term of abuse. That translates literally but clunkily as "coupster", and yes, it's a delicious irony that Hugo Chavez, of all people, should be using it as an insult. More broadly, though, the government sees the "opposition" as a ruse for a plutocratic conspiracy, a well-organized, well-funded reactionary plot intent on driving the country back to a sort of quasi-feudal past when they could oppress the poor unhindered. The long and the short of it is that these people do not see each other as adversaries, they see each other as enemies.
It's little wonder the country's so damn tense. How tense? Well, according to a survey by Alfredo Keller, the best pollster in Caracas, 62% of Venezuelans think there's going to be a civil war here. Now, there are several remarkable things about that figure. Beyond the evident, incredibly alarming fact that 3 out of 5 people here think some sort of gory fratricidal bloodbath is on the way, there's the deeply weird fact that "do you think there's going to be a civil war?" has become a standard survey question! Y'know, just part of the work-a-day routine of public opinion research, "do you approve of the way the president does his job?" and "is the country on the right track?" and "do you think the streets will run red with the blood of the rancid oligarchs/godless communists?" And then the results get reported matter-of-factly on the front pages, just above a story about the Venezuelan team losing in the Davis Cup to Germany and an interview with a Caracas artists whose exhibit is opening in New York soon. Just a normal sunday paper...
But the 62% figure isn't even the worst of it. The worst it, if you ask me, is that 25% of respondents say they would be willing to fight for their beliefs in a hypothetical civil war. 12% of Venezuelans would take up guns to defend the president, while13% would fight to bring the government down. [Reading these figures, my boss snickers and says "great news! it's 13% to 12%, we win!"] It's enough to make me choke on my morning coffee.
Now, maybe I'm just naive, but it's impossible for me to really believe those figures. My take on this is that people are talking out of their asses here. Aside from the sporadic little scuffles at some political marches (magnified a million times by the media circus that inevitable results), the atmosphere on the streets just doesn't suggest an imminent war. Yes, yes, i've read the narratives from pre-war Sarajevo, and I'm aware that I'm echoing what people were saying there circa 1991. I understand that there are extremely radicalized, dangerous men on both extremes, but a civil war? Do these people even know what they're saying when they answer these poll questions? Are they aware of what civil war would actually mean for the country? I just don't think so.
Aside from a small little outburst of guerrilla fighting in the early 60s, Venezuela hasn't had a real out-and-out war in 150 years. People like to think that it's just not in our national character, and I want to believe that. No one in Venezuela has seen a real war here, which probably explains why they're so weirdly blase about the whole thing. But the flipside is that relative ignorance can be incredibly dangerous. People who haven't quite assimilated the scale of the disaster that a civil war could entail seem far more likely to carry out the provocative, confrontational acts that could, little-by-little, escalate towards a civil war. And with big-time civil conflicts, they're easy enough to start but there's just no telling how or when they end. After all, as some of the saner pundits keep reminding us, when the first shots were fired in Colombia in the 1940s, nobody could possibly have known that sixty years later the war would still be going on there. It scares the crap out of me to imagine that some day circa 2050 some grandchild will come up to me and ask what Caracas was like before the fighting started.
September 21, 2002
Billowing clouds of tear gas...
It hardly came as a surprise. After some not very fruitful attempts at on-site mediation, the National Guard went after the Fuerza Solidaria protest pretty heavy handedly. At about 5:30 the tear gas started, and I have to say that I've never seen that much tear gas used against such an innocuous demonstration. The Guardsmen, who already outnumbered the demonstrators by at least 2 to 1, fired canister after canister into the little crowd. There were some reports of rubber bullets being used as well. It seemed like an absurd overreaction: the demonstrators had been peaceful throughout. A couple of women just passed out under the thick cloud of gas. The guard prevented municipal ambulances from reaching the scene, which again seemed entirely out of hand. On the other hand, in the first world they might have gone in with batons swinging and arrested half the crowd. At least they stopped short of that.
Why?, is the obvious question. The crowd had its municipal permits in order, was unarmed, didn't threaten anyone. Some people think this was basically a show of force, the government putting other potential demonstrators on notice that the velvet gloves have come off. But the gorila-tactics seem more likely to embolden the opposition, who see it as another sign that the more-or-less benign phase of chavismo is ending and that an out-and-out police state is being instituted in stages. One way or another, it's a bad sign that the government is now declaring certain parts of Caracas no-go areas for opposition demonstrators. The rationale, that they were too close to the air-force base's newly declared "security zone" seems pretty weak. In any event, the government has no clear legal basis for declaring security zones in the first place, and a very clear and explicit constitutional obligation to let people demonstrate where and when they want, so long as they do so peacefully and with the proper permits.
Overall, yesterday's little to do outside La Carlota should've been page 17 news. Instead, the little media-circus that ensued generated huge front page headlines, and disturbing pictures of people getting hammered by the guard. How this helps the government's case is beyond me.
It hardly came as a surprise. After some not very fruitful attempts at on-site mediation, the National Guard went after the Fuerza Solidaria protest pretty heavy handedly. At about 5:30 the tear gas started, and I have to say that I've never seen that much tear gas used against such an innocuous demonstration. The Guardsmen, who already outnumbered the demonstrators by at least 2 to 1, fired canister after canister into the little crowd. There were some reports of rubber bullets being used as well. It seemed like an absurd overreaction: the demonstrators had been peaceful throughout. A couple of women just passed out under the thick cloud of gas. The guard prevented municipal ambulances from reaching the scene, which again seemed entirely out of hand. On the other hand, in the first world they might have gone in with batons swinging and arrested half the crowd. At least they stopped short of that.
Why?, is the obvious question. The crowd had its municipal permits in order, was unarmed, didn't threaten anyone. Some people think this was basically a show of force, the government putting other potential demonstrators on notice that the velvet gloves have come off. But the gorila-tactics seem more likely to embolden the opposition, who see it as another sign that the more-or-less benign phase of chavismo is ending and that an out-and-out police state is being instituted in stages. One way or another, it's a bad sign that the government is now declaring certain parts of Caracas no-go areas for opposition demonstrators. The rationale, that they were too close to the air-force base's newly declared "security zone" seems pretty weak. In any event, the government has no clear legal basis for declaring security zones in the first place, and a very clear and explicit constitutional obligation to let people demonstrate where and when they want, so long as they do so peacefully and with the proper permits.
Overall, yesterday's little to do outside La Carlota should've been page 17 news. Instead, the little media-circus that ensued generated huge front page headlines, and disturbing pictures of people getting hammered by the guard. How this helps the government's case is beyond me.
September 20, 2002
The morning traffic report, Caracas style...
Another fun day of rumors flying around cell-phones and inboxes. At about 8:50 am my favorite radio show was interrupted by a breathless reporter's "breaking news" item, where she told us that traffic was heavier than usual on Caracas main east-west highway, not due to an accident or anything like that, but because a convoy of National Guard Armored Personnel Carriers had decided to park in the middle of the eastbound lane. As per usual, there was no official explanation, but the move came after another bout of speculation about imminent coups and-or self-coups/counter-coups.
These little outbursts of worry have been happening so frequently in the last few months most people kind of dismiss them with a resigned shrug of the shoulders these days. If I had a nickel for every time somebody's called to tell me that they have it from "an inside source" and that "this time the coup really really is going to happen tonight, for sure, honest," I'd have, well, a bunch of nickels. But light tanks rolling alongside you on your morning commute, well, that's different.
Union Radio's little write-up (Spanish only) gives a good feel for today's zaniness. One of their reporters (a gutsy one, for sure) followed the tanks to their eventual destination, the La Carlota Air Force Base in the east of the city, and actually shoved a microphone in front of one of the commanding officers on the scene to ask him what on earth was going on. His answer, basically, is "we don't know either, we were just told to move these troops here." Great. Even the generals on the scene don't know why they're doing what they're doing.
The working guess is that they were moved there to counter a "vigil" that had been called by this right wing opposition grouplet called Fuerza Solidaria, for this afternoon right outside the Air Force base. Fuerza Solidaria is a fairly disreputable outfit, really: about as reactionary as reactionary gets and led by a Lyndon LaRouche followers. Seriously. This guy (Alejandro Peña Esclusa is his name) got arrested just last night by the secret police for trying to incite a coup. Frankly, as distasteful as the notion of a chavista secret police is, Peña Esclusa had it coming: he'd been very openly urging a rebellion in the last few days. All the mainstream/sane opposition leaders had been trying to distance themselves from the guy and the lunatic fringe he represents, saying Peña Esclusa was just giving Chávez the excuse he wanted to crack down on the opposition as a whole.
What's really troubling is why the government feels so damn threatened by this guy, who nobody in the opposition takes seriously. Either Chávez is getting seriously paranoid, or they know something we don't know. The sad thing is that by throwing him in jail they're turning him into a martyr, giving him a far, far higher profile than he's ever had before or, frankly, deserves. But maybe that's the point: by making him a cause celebre, the government can then liken the entire opposition with Fuerza Solidaria, painting us all as deranged reactionaries. Then they can crack down. That might sound far-fetched to you, but the political debate in this country has gone so far off the rails that slightly conspiratorial explanations like that pan out all the time.
And the strategy seems to have worked moderately well: on its own, Fuerza Solidaria couldn't have brought out more than 100 people or so to their little demo outside La Carlota. As it stands, it looks like they've turned out a few hundred. Nothing like the big marches the opposition has put together in the last few months, with literally hundreds of thousands of marchers. But still, enough for the government to continue its broad strategy of painting the opposition with a broad, radical-right-wing brush.
With any luck these guys will call it a day before night fall, go home, let the soldiers have a quiet night in. But the situation's so tense now, and so many people have a vested interest in courting a violent confrontation, it's impossible to tell.
Amanecerá y veremos...
Another fun day of rumors flying around cell-phones and inboxes. At about 8:50 am my favorite radio show was interrupted by a breathless reporter's "breaking news" item, where she told us that traffic was heavier than usual on Caracas main east-west highway, not due to an accident or anything like that, but because a convoy of National Guard Armored Personnel Carriers had decided to park in the middle of the eastbound lane. As per usual, there was no official explanation, but the move came after another bout of speculation about imminent coups and-or self-coups/counter-coups.
These little outbursts of worry have been happening so frequently in the last few months most people kind of dismiss them with a resigned shrug of the shoulders these days. If I had a nickel for every time somebody's called to tell me that they have it from "an inside source" and that "this time the coup really really is going to happen tonight, for sure, honest," I'd have, well, a bunch of nickels. But light tanks rolling alongside you on your morning commute, well, that's different.
Union Radio's little write-up (Spanish only) gives a good feel for today's zaniness. One of their reporters (a gutsy one, for sure) followed the tanks to their eventual destination, the La Carlota Air Force Base in the east of the city, and actually shoved a microphone in front of one of the commanding officers on the scene to ask him what on earth was going on. His answer, basically, is "we don't know either, we were just told to move these troops here." Great. Even the generals on the scene don't know why they're doing what they're doing.
The working guess is that they were moved there to counter a "vigil" that had been called by this right wing opposition grouplet called Fuerza Solidaria, for this afternoon right outside the Air Force base. Fuerza Solidaria is a fairly disreputable outfit, really: about as reactionary as reactionary gets and led by a Lyndon LaRouche followers. Seriously. This guy (Alejandro Peña Esclusa is his name) got arrested just last night by the secret police for trying to incite a coup. Frankly, as distasteful as the notion of a chavista secret police is, Peña Esclusa had it coming: he'd been very openly urging a rebellion in the last few days. All the mainstream/sane opposition leaders had been trying to distance themselves from the guy and the lunatic fringe he represents, saying Peña Esclusa was just giving Chávez the excuse he wanted to crack down on the opposition as a whole.
What's really troubling is why the government feels so damn threatened by this guy, who nobody in the opposition takes seriously. Either Chávez is getting seriously paranoid, or they know something we don't know. The sad thing is that by throwing him in jail they're turning him into a martyr, giving him a far, far higher profile than he's ever had before or, frankly, deserves. But maybe that's the point: by making him a cause celebre, the government can then liken the entire opposition with Fuerza Solidaria, painting us all as deranged reactionaries. Then they can crack down. That might sound far-fetched to you, but the political debate in this country has gone so far off the rails that slightly conspiratorial explanations like that pan out all the time.
And the strategy seems to have worked moderately well: on its own, Fuerza Solidaria couldn't have brought out more than 100 people or so to their little demo outside La Carlota. As it stands, it looks like they've turned out a few hundred. Nothing like the big marches the opposition has put together in the last few months, with literally hundreds of thousands of marchers. But still, enough for the government to continue its broad strategy of painting the opposition with a broad, radical-right-wing brush.
With any luck these guys will call it a day before night fall, go home, let the soldiers have a quiet night in. But the situation's so tense now, and so many people have a vested interest in courting a violent confrontation, it's impossible to tell.
Amanecerá y veremos...
Style conundrums
I'll admit I’ve been finding it more and more difficult to write about Venezuela without sounding either alarmist or flippant, (or even worse, an odd combination of the two.) It’s a sign of the times here, that’s for sure. These days, what I find it hardest to convey to my friends who live outside Venezuela is this strong undercurrent of farce that now permeates public life here. Of course, I’d love to pretend that events here are of the utmost gravity, a completely serious class/social struggle a la Chile in the Allende years. And certainly, some of what’s been happening here is about as serious as serious gets: for a country as close to Colombia as we are, the ongoing rumblings about people setting up paramilitary groups and training intensively out in the countryside are enough to make the hair on the back of your neck stand. But writing about it that way wouldn’t feel quite honest, because the slow-motion train-wreck that is Venezuela under Chávez is full of little, slightly absurd side-shows, newspaper stories that teeter on the border between alarming and just plain silly.
Today’s far side news story concerns an active-duty Army General, Rommel Fuenmayor, who decided to show up at the Supreme Tribunal in full military regalia to introduce a writ for the impeachment of President Chávez. General Fuenmayor was involved in the April coup attempt, but like a lot of the generals involved he still hasn’t been kicked out of the army. So you sit there, remote control in hand, watching one of the army’s top-ranked officers standing outside a courthouse ranting and raving about the crimes committed by his commander in chief. OK! Of course, I agree that Chávez should be
impeached, but that does nothing to abate the Alice in Wonderland feel of the whole episode.
Yesterday, the surreal story du jour concerned the Banks Superintendent, who gave a press conference to denounce the nation’s bankers for being unwilling to keep lending money to the government. Now, you might think the banks’ unwillingness to keep bankrolling the government has something to do with the fact that Chávez has been calling the bankers counterrevolutionary swine each time he gets close to a microphone recently, accussing them of plotting an “economic coup”, of conspiring to bring down his government by shutting down the economy (and committing lemming-like commercial suicide in the process, of course.) Now, by now we’re used to this kind of shrill nonsense coming out of Chávez, but the Bank’s Superintendent? The head of the regulatory agency that’s supposed to look after the stability and viability of the financial system? Grrreat!
Actually, the government’s money problems have been the source of a lot of the recent barely believable news. The government is basically brokeat this point: its income is about 2/3rds of its expenditures, which presents a pretty obvious problem. Public sector workers get paid months behind schedule, schools get their electricity cut off cuz the ministry is late paying the electric utility. The finance minister lives in a frantic scrap to figure out how to keep the whole aparatus running, but it’s a losing battle.
For the last three years they’d dealt with these chronic deficits by asking for loans…more and more new loans at higher and higher interest rates. In three years they’ve quintupled the Internal Debt, to the point that almost 2/3rds of the loans in Venezuelan banks’ portfolios right now are loans to the government. This is a problem, since that means that those 2/3rds can’t go to finance businesses, or farmers, or people who want to buy cars or apartments or use credit cards. As the government gobbles up more and more of the available credit, the rest of the economy finds it harder and harder to get affordable credit, which has led to a huge increase in bankruptcies, big hikes in unemployment, and a recession that will see the economy shrink by about 7% this year alone. Ouch.
But the Banks Superintendent sees things differently. If only two thirds of bank lending is going to the government, he reasons, then that means that a WHOLE THIRD of it is NOT going to the government, doesn’t it? Outrageous!, he says. How dare banks claim that they’re all tapped out when they still have a whole third of their portfolios lent out to piddling things like, y’know, farmers or companies or home buyers?! Must be a conspiracy to undermine the glorious people’sgovernment. Economic coup, for sure. So this guy’s idea, it seems, is that until 100% of the banks’ loan PDVSA portfolios are in government debt, they have no valid reason not to keep buying government bonds. Oh dear. This is the head of the Banking regulatory agency we’re talking about. Oh dear.
So, y’know, you read news like that and you just sort of shake your head slowly and wonder, well how do I write seriously about this man’s incredible, rampant idiocy? Wouldn’t that just give his argument an aura of seriousness that it obviously doesn’t deserve? How do I deal with that, as a reporter? A lot of the public agenda here ends up putting me into that same broad conundrum.
The government’s mostly given up on trying to cover its deficit with loans. It didn’t help that at the same time his ministers were going around frantically trying to get new loans, Chávez was giving fire-breathing speeches pledging to turn over to their workers any companies that close down to participate in a protest lock-out against his government. As everyone knows, nothing boosts market confidence like the threat of massive expropriations.
No, by now the government’s made its peace with the idea that nobody will lend them any more money. Instead, they’re turning now to that tried-and-true method of deficit financing: the printing press. It worked so well in Weimar Germany and 1980s Argentina, why not try it here? The new plan is to print about 6 trillion new bolivars. For the economics-minded in the audience, that’s about 38% of current M2. For the non-economics minded, that means that they’re planning to print 38 new bolivars for every 100 currently in circulation. Depending which economist you ask, this is either the end of the world, or merely a complete disaster. The only possible outcome is massive inflation. They’ll cry us the standard river about how they can’t cut their revolutionary programs for poverty abatement just because they can’t raise the money to pay for them. And they’ll ignore the bulging heaps of studies and data showing how spikes in inflation screw the poor first and worst. It’s such an anachronism, really, it’s just embarrassing. The rest of Latin America tried this shit 20 years ago, crashed and burned 15 years ago, and has long since gotten over it. But Chávez is just determined to re-invent the hyperinflation wheel. Who can stop him?
Of course, in a brief little write-up like this I can barely scratch the surface of the proliferation of really strange we’ve been reading in the newspapers here. I can’t really go into the story of the guy who claimed he used to be the chauffeur for a well-known chavista congressman and now says his boss used to take him to paramilitary training sessions where army instructors taught die hard chavistas how to shoot it out with any opposition group that tries to topple Chávez, nor about how the congressman in question claims he’s never met his supposed driver. I don’t have the room to dissect Chávez’s new theory that plotting a coup is tantamount to international terrorism and that the April coupsters are on a moral par with Osama Bin Laden (an odd position for the guy who led two failed coups in 1992, and who was staging public celebrations of the of the coup attempt anniversaries just 8 months ago.) And I can’t even start to tell you about the completely public appeals some opposition members have started making in the radio, TV, and newspapers, basically calling the army wusses for taking so damn long to just topple “el loco.”
All I can say for now is that the newspapers here read more and more as though they were written by Gabriel García Márquez: a series of utterly fantastical stories bordering on simple nonsense, made credible only by the fact that they’re written in a totally deadpan style. Reporters here are really good at that. With the best of them you’re almost fooled into forgetting that lurking just behind that just-the-facts-ma’am style, a hack is laughing his head off about the utter silliness of the news he has to report.
I'll admit I’ve been finding it more and more difficult to write about Venezuela without sounding either alarmist or flippant, (or even worse, an odd combination of the two.) It’s a sign of the times here, that’s for sure. These days, what I find it hardest to convey to my friends who live outside Venezuela is this strong undercurrent of farce that now permeates public life here. Of course, I’d love to pretend that events here are of the utmost gravity, a completely serious class/social struggle a la Chile in the Allende years. And certainly, some of what’s been happening here is about as serious as serious gets: for a country as close to Colombia as we are, the ongoing rumblings about people setting up paramilitary groups and training intensively out in the countryside are enough to make the hair on the back of your neck stand. But writing about it that way wouldn’t feel quite honest, because the slow-motion train-wreck that is Venezuela under Chávez is full of little, slightly absurd side-shows, newspaper stories that teeter on the border between alarming and just plain silly.
Today’s far side news story concerns an active-duty Army General, Rommel Fuenmayor, who decided to show up at the Supreme Tribunal in full military regalia to introduce a writ for the impeachment of President Chávez. General Fuenmayor was involved in the April coup attempt, but like a lot of the generals involved he still hasn’t been kicked out of the army. So you sit there, remote control in hand, watching one of the army’s top-ranked officers standing outside a courthouse ranting and raving about the crimes committed by his commander in chief. OK! Of course, I agree that Chávez should be
impeached, but that does nothing to abate the Alice in Wonderland feel of the whole episode.
Yesterday, the surreal story du jour concerned the Banks Superintendent, who gave a press conference to denounce the nation’s bankers for being unwilling to keep lending money to the government. Now, you might think the banks’ unwillingness to keep bankrolling the government has something to do with the fact that Chávez has been calling the bankers counterrevolutionary swine each time he gets close to a microphone recently, accussing them of plotting an “economic coup”, of conspiring to bring down his government by shutting down the economy (and committing lemming-like commercial suicide in the process, of course.) Now, by now we’re used to this kind of shrill nonsense coming out of Chávez, but the Bank’s Superintendent? The head of the regulatory agency that’s supposed to look after the stability and viability of the financial system? Grrreat!
Actually, the government’s money problems have been the source of a lot of the recent barely believable news. The government is basically brokeat this point: its income is about 2/3rds of its expenditures, which presents a pretty obvious problem. Public sector workers get paid months behind schedule, schools get their electricity cut off cuz the ministry is late paying the electric utility. The finance minister lives in a frantic scrap to figure out how to keep the whole aparatus running, but it’s a losing battle.
For the last three years they’d dealt with these chronic deficits by asking for loans…more and more new loans at higher and higher interest rates. In three years they’ve quintupled the Internal Debt, to the point that almost 2/3rds of the loans in Venezuelan banks’ portfolios right now are loans to the government. This is a problem, since that means that those 2/3rds can’t go to finance businesses, or farmers, or people who want to buy cars or apartments or use credit cards. As the government gobbles up more and more of the available credit, the rest of the economy finds it harder and harder to get affordable credit, which has led to a huge increase in bankruptcies, big hikes in unemployment, and a recession that will see the economy shrink by about 7% this year alone. Ouch.
But the Banks Superintendent sees things differently. If only two thirds of bank lending is going to the government, he reasons, then that means that a WHOLE THIRD of it is NOT going to the government, doesn’t it? Outrageous!, he says. How dare banks claim that they’re all tapped out when they still have a whole third of their portfolios lent out to piddling things like, y’know, farmers or companies or home buyers?! Must be a conspiracy to undermine the glorious people’sgovernment. Economic coup, for sure. So this guy’s idea, it seems, is that until 100% of the banks’ loan PDVSA portfolios are in government debt, they have no valid reason not to keep buying government bonds. Oh dear. This is the head of the Banking regulatory agency we’re talking about. Oh dear.
So, y’know, you read news like that and you just sort of shake your head slowly and wonder, well how do I write seriously about this man’s incredible, rampant idiocy? Wouldn’t that just give his argument an aura of seriousness that it obviously doesn’t deserve? How do I deal with that, as a reporter? A lot of the public agenda here ends up putting me into that same broad conundrum.
The government’s mostly given up on trying to cover its deficit with loans. It didn’t help that at the same time his ministers were going around frantically trying to get new loans, Chávez was giving fire-breathing speeches pledging to turn over to their workers any companies that close down to participate in a protest lock-out against his government. As everyone knows, nothing boosts market confidence like the threat of massive expropriations.
No, by now the government’s made its peace with the idea that nobody will lend them any more money. Instead, they’re turning now to that tried-and-true method of deficit financing: the printing press. It worked so well in Weimar Germany and 1980s Argentina, why not try it here? The new plan is to print about 6 trillion new bolivars. For the economics-minded in the audience, that’s about 38% of current M2. For the non-economics minded, that means that they’re planning to print 38 new bolivars for every 100 currently in circulation. Depending which economist you ask, this is either the end of the world, or merely a complete disaster. The only possible outcome is massive inflation. They’ll cry us the standard river about how they can’t cut their revolutionary programs for poverty abatement just because they can’t raise the money to pay for them. And they’ll ignore the bulging heaps of studies and data showing how spikes in inflation screw the poor first and worst. It’s such an anachronism, really, it’s just embarrassing. The rest of Latin America tried this shit 20 years ago, crashed and burned 15 years ago, and has long since gotten over it. But Chávez is just determined to re-invent the hyperinflation wheel. Who can stop him?
Of course, in a brief little write-up like this I can barely scratch the surface of the proliferation of really strange we’ve been reading in the newspapers here. I can’t really go into the story of the guy who claimed he used to be the chauffeur for a well-known chavista congressman and now says his boss used to take him to paramilitary training sessions where army instructors taught die hard chavistas how to shoot it out with any opposition group that tries to topple Chávez, nor about how the congressman in question claims he’s never met his supposed driver. I don’t have the room to dissect Chávez’s new theory that plotting a coup is tantamount to international terrorism and that the April coupsters are on a moral par with Osama Bin Laden (an odd position for the guy who led two failed coups in 1992, and who was staging public celebrations of the of the coup attempt anniversaries just 8 months ago.) And I can’t even start to tell you about the completely public appeals some opposition members have started making in the radio, TV, and newspapers, basically calling the army wusses for taking so damn long to just topple “el loco.”
All I can say for now is that the newspapers here read more and more as though they were written by Gabriel García Márquez: a series of utterly fantastical stories bordering on simple nonsense, made credible only by the fact that they’re written in a totally deadpan style. Reporters here are really good at that. With the best of them you’re almost fooled into forgetting that lurking just behind that just-the-facts-ma’am style, a hack is laughing his head off about the utter silliness of the news he has to report.
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