By the end of this post you will know more about economics than the Venezuelan government...

Quico says: There's something vaguely embarrassing about the whole debate about food shortages taking place in Venezuela these days. Because, really, there's nothing to debate: the way price controls lead to shortages is one of the best understood phenomena in all of economics. This is stuff undergraduates learn within the first week of their first microeconomics course. All you need is a very basic grasp of supply and demand: concepts rooted in the sort of "well, duh!" economic common sense that you really can't refute.

If you haven't had the pleasure of a formal course in economics, no worries! I can show you in just six slides:







Now, this isn't really a line of reasoning you can refute. I mean, you could refute it, but you'd have to argue that the demand curve is upward sloping - that the higher the price of something, the more of it people will want to buy.

I'll buy that the minute you show me a store running a 1-for-the-price-of-2 sale.

It boggles the mind that we have a government that can't wrap its mind around these six slides. A government so primitive that it thinks it can legislate away scarcity is a government that has elevated its contempt for common sense to the level of official ideology.

Nor will this problem be alleviated by nationalizing the food sector. There's a reason why shortage management - whether through interminable lines or ration books - is a mainstay of controlled economies: the dynamics of supply and demand operate regardless of the ideological label you affix to the regime that flouts them. Even the Soviet Union - a fully state-controlled economy backed by the threat of deportation to the gulags - failed to bully sellers into supplying enough to meet demand at controlled prices.

It's not surprising - slapping the word "socialist" on a country doesn't magically make its people want to pay more for the things they buy.

For Chávez, though, such talk is just a defense of capitalist deviations like "individualism" and "greed" - moral failings the revolution means to stamp out. And so we get Utopian plans to forge a socialist "new man," which is just a fancy term for a sucker willing to plump for a pay-2-get-1 sale. A mythical being who enjoys his poverty and actively seeks to deepen it.

It breaks my heart to see such economic obscurantism empowered in Venezuela. Like the proverbial slow-motion train wreck, it's too easy to foresee where this is all heading. And it's just plain chilling that our country is run by people who refuse, as a matter of principle, to grasp it.

Lose money or lose your business!

Quico says: Want to know how to blame the retail sector for its own expropriation? Ask yourself this:























So, really, the choice is up to you. You can either:

1-Sell at the controlled price, lose money and go bankrupt.

or

2-Refuse to sell at the controlled price, be tarred a "hoarder," and get expropriated.

...and they say Chávez doesn't respect property rights!

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Al Qaeda scrambles chavismo's ideological circuits

Quico says: This Al Qaeda threat thing has thrown the Chávez government completely for a loop. This one was definitely not in their play-book, they seem to have no idea how to react. In the last 24 hours, we've seen four different, mutually incompatible official reactions, three of them totally loony. It's all great fun to watch.

Over at the National Assembly, Foreign Affairs Committee Chair Saúl Ortega is playing it safe: the whole thing, he says, is - wait for it - a giant gringo conspiracy. A psy-ops job designed to prepare the ground for upcoming CIA covert operations to destroy Venezuelan (and Mexican, and Canadian) oil installations. Because, as we know, nothing threatens US interestsdd quite so much as foreigners selling them oil...

Sounding slightly less deranged - but every bit as stupid - Navy Rear Admiral Luis Cabrera was genuinely confused that such a thing could happen. On state TV he came within a whisker of declaring Al Qaeda an ally, saying he thought it "sounds illogical" for Al Qaeda to threaten a country that's just as committed as they are to ending US hegemony merely because "we use different methods." To relieve this heavy burden of cognitive dissonance, he couldn't help but refloat the old 911-was-an-inside-job cannard. Classy stuff! (Note to Al Qaeda: if you attack by sea, this is the caliber of opposition you'll be facing.)

Moving on, Interior Minister Pedro Carreño preferred to play it cool. As far as he can see, Venezuela already has all the state security it needs - who's afraid of Al Qaeda? No need to change anything as far as he can see...obviously, those guys are no match for Disip.

Only Defense Minister Raúl Baduel had a relatively reasonable reaction, saying Venezuela would step up security around its oil instalations. On the upside, his shtick wasn't as batty as his colleagues'. On the downside, his reaction implicitly accepts that the threat is real...with all the implications such an acknowledgment carries. "Yes," Baduel implicitly admits, "the real enemies of the United States could well target us, just as they target all countries that help prop up American power." Undoubtedly, a true thing to say - undoubtedly, a dangerous thing to think.

Al Qaeda: Laying it bare...

Quico says: Imagine you are an enemy of the United States. I don't mean a rhetorical, fancy-speech giving, UN-podium hoggin', radical-chic faux-enemy, I mean a real enemy. A no-kidding, bullets-whizzing-around, bombs-going-off enemy of the United States. Imagine your beef with the gringos isn't primarily rhetorical, but military and strategic. Imagine your goal is to cripple the United States' capacity to project power over distance. If that's where your coming from, what would you do?

Today, Al Qaeda gave an answer you'd be hard pressed to disagree with: hit their oil supply, worldwide. US empire is a machine that runs on oil; if you want to degrade it, you hit it at source. Al Qaeda understands that, objectively speaking, supplying the US with oil makes you an ally of the United States. No amount of overheated rhetoric can change that.

And so, irony of ironies, Al Qaeda calls for attacks on Venezuelan oil installations. The gringos' real enemies want to attack their imaginary enemies. Will wonders never cease?

In the end, it's not surprising. Chávez's rhetorical endless antigringo bloviations are sustainable only because the confrontation is fake. Were it anything other than a monumental sham, a smokescreen to conceal his drive for ever more power over Venezuelan society, it would be suicidal to continue selling his biggest enemy precisely the commodity it needs to sustain its capacity to attack him. Sottovoce, though, the gringos are wise to the game: it may disconfit them to be constantly scapegoated, but they know as well as Chávez does that Venezuela is a key American ally, still. When all is said, nothing is done: the oil is still flowing, and a bit of vaudeville on the side is a small price to pay for that.

Duplicity of this type is not for Al Qaeda. They're in a real war with the US, with real bombs and real bullets and real cassualties all around. Real wars have a way of focusing minds. Al Qaeda knows which countries, objectively speaking, are enabling the US's military efforts against them. And you can't fault their strategic vision in calling for strikes against those countries. There's no room for bullshit when you're in a serious fight. And there's no room for seriousness when you're in a bullshit fight...

Illiterate fly stew...

Quico says: By now, it's more hackneyed cliché than eye-opening parable: if you drop a frog in boiling water, the thing just jumps out, but if you put put a frog in cool water and heat it little by little...

That's pretty much how Chávez has decided to deal with the dissident press. It's clear by now that there will not be a single, dramatic move to mark the end of a plural media in Venezuela. Chávez's shtick has always been gradualism. The man is a frog stew masterchef.

This week, his cronies at the Children's Protection Council moved to add some illiterate flies to the stew. Tal Cual, the mordant opposition tabloid run by Teodoro Petkoff, was fined an as-yet-unspecified amount for running an impossibly vanilla article by Laureano Márquez that, allegedly, violated Chávez's daughter's privacy.

Tal Cual is a small and perenially cash-strapped paper. As you can imagine, they don't get much advertising business from the government, and other advertisers realize that they expose themselves to retaliation if they advertise there. Even a seemingly modest fine threatens the paper's financial viability. This, I guess, is how 21st Century Socialists silence dissent.

For once, though, there is something we can do about it.

Send a donation, big or small, to Tal Cual's parent company. If you're in Venezuela - or if you have Venezuelan internet banking - you can make a deposit directly into either of these accounts:

Banco Mercantil Account Number: 0105-0021-47-1021517364

Banesco Account Number: 0134-0184-59-184304271

Deposits should be made in favor of: "Editorial La Mosca Analfabeta C.A." What are you waiting for?  

On political common sense

Quico says: Political common sense is a bit like atmospheric pressure - omnipresent, terrifically important, but normally imperceptible to us. Political common sense is an implicit set of beliefs that sets the boundaries between views we need to defend and those so obvious they "go without saying." It structures the limits of what's politically conceivable to us, it defines what seems obviously right and obviously wrong. Its power is all the greater because it feels so natural, so self-evident to us that when we use it, we don't realize that we're using it.

After arguing in circles for eight years, I think it's pretty clear that what we have in Venezuela these days are two fundamentally opposed sets of political common senses; what critical theorists would call parallel discourses. For almost a decade, the two have been battling to establish themselves as the political common sense in Venezuela. "A symbolic struggle to re-signify democracy," was the way Oscar Schemel put it.

The funny thing about this struggle is that its taken place in a theoretical vacuum. We don't often wonder about underpinnings of our our own common sense, to say nothing of our opponents'. The outcome is a lot of confusion, and a fundamental misapprehension about what is at stake.

Constitutional Liberalism
The standard rap against chavismo is pretty straight-forward: chavismo is undemocratic. It's a charge we've repeated again and again in every forum available to us; it encapsulates what we find unacceptable about his way of government. It's also, on its face, absurd.

After all, Chavez has won election after election. According to a bare-bones, etymological understanding of democracy, it's just an oxymoron to call an elected leader undemocratic.

"Not so fast," we usually respond, "he might be a 'democrat' in some ridiculously reductionist sense of the word, but he doesn't respect the separation of powers, doesn't tolerate dissent, doesn't grasp that the republic's money is not his money, can't grasp that 'state' 'government' and 'Chavez' are not synonyms, violates the constitution every other day, etc. etc."

Turns out that what we mean when we charge chavismo of being undemocratic is a bit more complex than we realize. None of the objections we commonly level at chavismo points to a lack of democracy, understood as the legitimacy you get from winning an election. What we're really saying is that Chavez doesn't respect the arrangements we associate democracy.

When we say Chavez is undemocratic, what we really mean is that he doesn't practice Constitutional Liberalism, a specific institutional system that developed in a specific point in time in a specific part of the world. It's just that, in our common-sense usage, we see that system as synonymous with democracy. Our political discourse sees the two as self-evidently inseparable.

Now, the charge that Chavez doesn't practice constitutional liberalism shouldn't even controversial: after all, Chávez has explicitly distanced himself from constitutional liberalism ("representative democracy" as it's called in official phraseology) pretty much from day one. He threw a monumental hissy-fit at the Quebec City Summit of the Americas in 2001 when the rest of the hemisphere's leaders proposed to include a commitment to "representative democracy" in their declaration of principles. Rejections don't get much more explicit than that.

But what is constitutional liberalism? And what is it that rankles us so much about Chavez's rejection of it?

On one level, it's a system of institutions: a way of organizing the state and its relationship with society. On another level, it's the system of values necessary to make those institutions meaningful. But deep down, it's a view of humanity - or rather, human-ness. A political philosophy based on a given understanding of where human dignity resides.

The most basic institution of constitutional liberalism is the Constitution itself: an explicit set of rules that constitute and delimit the state, defining what it is and what it is not, what it can do and what it can't do.

The most basic value of constitutional liberalism is the commitment to the rule of law as such, the basic belief that, as Santos Luzardo puts it, "la ley obliga de por si" - "the law is binding in and of itself."

It's clear that, without a commitment to the principle of the rule of law, it doesn't do much good to have a liberal constitution. Surely, Venezuela's 1999 constitution is basically a liberal document, but chavismo's cavalier attitude towards the rule of law - its practice of behaving as though the constitution and the laws were compendia of helpful tips to be followed or ignored according to convenience - negates the values that make liberal institutions meaningful.

It's clear to us, and it's been repeated ad nauseam, that without a commitment to the rule of law, a formal constitution becomes "dead letter" - that evocative phrase, conjuring the helplessness of the written word in the face of the contempt of the powerful.

Beyond constitutional liberalism
So far, so banal: just a recapitulation of a thousand anti-Chavez screeds you've read here and elsewhere time and time and time again. Antichavista common-sense distilled. The relevant question is why does Chavez's contempt for the rule of law rankle so much?

The answer might seem obvious, but asking why things that seem obvious to us seem obvious to us is what this is about. Digging a bit deeper, what is it about chavista attitudes that so offends our political common sense, our notions of dignity and freedom and human-ness?

To answer this question, I think, you need to appreciate that constitutional liberalism is a political philosophy built on a particular moral philosophy, a specific understanding of human dignity.

Rooted in eighteenth century thinking, constitutional liberalism is the political expression of enlightenment rationalism. It's an attempt to give institutional form to an understanding of people as rational agents, beings who are free in the sense that we can apply reason to the problems of society.

It's not only that people can think; it's that we can also talk. Because we have the capacity to communicate as well as the capacity to reason, constitutional liberalism sees human beings as able to deliberate, to reason collectively, on the basis of arguments, as a means of reaching agreements on how to further our collective interest.

What happens when we deliberate? What happens when we argue about political matters?

Ideally, it goes something like this: one side puts forward a claim about the world, a view about how it works and how we can make it better. If the other side is not persuaded, he can challenge it logically, by noting contradictions between the claim and reality, for instance, or by exposing logical flaws in it. The other side takes these objections and, once again, subjects them to critical scrutiny. Both sides continue in this way, advancing towards a common understanding.

With each iteration, this process allows the sides to come to new understandings of what is true, of what is in their interests both individually and collectively, and of how best to further those interests. Ideally, deliberation leads to agreement. When it doesn't, the two sides can settle the matter by recourse to a previously agreed decision-making procedure - majority voting, for instance. The key is that, by deliberating, participants aggregate their capacity to reason through communication.

Now, for an argument to count as a real deliberation and not just a shouting match, some conditions are necessary. We have to agree to see debate as a confrontation of ideas, not of personalities. We have be equal, in the sense that anyone must be able to put forward a claim, or to rebut one, and that both proposals and rebuttals must be judged on their own merits, not on the merits of the person putting them forward. We have to seek to persuade the other side, but we must also be persuadable if we find, after critical scrutiny, that the other side has the better argument. We have to treat public engagement over political matters as a co-operative exercise where our common goal is to reach reasoned agreement on our response to our collective problems.

Of course, we all know that this is a highly idealized representation of what goes on in the real world. (In fact Jürgen Habermas, the German philosopher whose argument I'm following here, called it an "ideal speech situation.") We all know that parliamentarians, judges and voters have particular interests, we know people are often corruptible, pig-headed or just plain stupid. Still, when we argue, we implicitly act as if we believe these conditions hold. Arguing would be a meaningless pantomime if it didn't envisage, on some level, the possibility of an ideal speech situation, where claims are put forward and rebutted as if the only thing that matters is who has the better, clearer, more persuasive argument.

The political institutions of liberal constitutionalism make sense only in this context. Having a parliament only makes sense so long as we see its members as thinking agents, able to engage in reasoned deliberations as a means of arriving at reasoned outcomes. Elections make sense only insofar as voters are seen as thinking agents, able to engage in reasoned deliberation on their way to reasoned voting decisions. The decisions of juries are legitimate precisely they are the outcome of reasoned deliberation based on evidence, the decisions of judges are legitimate because they are the outcome of explicitly reasoned engagement with precedent and the law. It's people's capacity to reason collectively in this way that gives legitimacy to the outcomes of the institutional structures of liberal constitutionalism.

Here, I think, we start to get closer to the underlying reasons chavismo provokes such virulent rejection from its critics. On its own, chavismo's rejection of a liberal institutional order would not provoke the intense reactions it does. It's chavismo's rejection of liberal institutional values, and of the understanding of human-ness that they are built on, that so deeply offends us.

This is most visible, I think, in chavismo's principled rejection of deliberation as a method for reaching political decisions. As we have seen with the enabling law, Fonden's unwillingness to share its accounts with the Central Bank, or any of the dozens of little outrages detailed on this blog over the years, the problem is not merely that Chavez rejects deliberation with his opponents, it's that he will not even deliberate about the nation's future with his supporters. He refuses even to couch the decisions he makes unilaterally within the frame of reasoned argumentation, opting for emotive speech again and again. Since 1998, chavistas have systematically responded to criticisms by disqualifying those who make them (viudas del puntofijismo! oligarchs! escuálidos! Gringo imperialists! etc. etc.) rather than by reasoned engagement with the critical ideas. In fact, the refusal to engage with criticism on its merits is one of the discursive hallmarks of chavismo, a kind of ideological badge of honor government supporters use to bolster their revolutionary credentials.

Chavez plainly does not see deliberation as a reliable basis for political decision-making: another point that, when you think about it, shouldn't actually be controversial at all.

Our political common-sense can scarcely imagine a more ominous situation. From our point of view, deliberation and argument are the collective forms our individual capacity to reason takes, and our individual capacity to reason is the basis of our human dignity, the decisive dividing line between human beings and animals. But more than this argument or that argument, it's the practice of arguing itself that chavismo rejects. By systematically refusing to talk to us by reference to an ideal speech situation, by consistently attacking the messenger rather than refuting the message, chavismo strips us of what enlightenment rationalism takes as the basis of our humanity and our dignity.

This, I think, is the underlying reason for the sense of urgency many of us feel in speaking out against the government. Our passions would not be so roused if Chavez's was merely a bad government, or a corrupt government, or an incompetent government. What riles is that Chavez treats us like animals.

Dept. of Stuff You Couldn't Make Up if You Tried

Chavenomics in a single chart...

Quico says: Pretty much everything you need to know about Chávez's economic model you can learn from this chart. It's an economic model of crushing simplicity:

1. Pump oil out of the ground
2. Export it
3. Import everything else

Of all of Chávez's empty bluster, the most obnoxious may be his claim to be pioneering a new model of economic emancipation for the third world. Very clearly, only countries sitting on top of 70+ billion barrels of crude need apply.

The unsustainability of it all is too plain to merit much comment. My fear, though, is that when a crisis does come, it will be used as a pretext to ratchet authoritarianism up a notch. A government never short of enemies has every reason to manufacture some scapegoats. It won't be pretty.

Hagamos dos, tres, ¡muchos bancos centrales!

Quico says: Another hat tip to Miguel for pointing out this hallucinatory interview with Central Bank director Domingo Maza Zavala in yesterday's El Universal.

The Maza Zavala we meet here is a man at the end of his tether. Plainly exasperated that the Central Bank has lost control of the nation's monetary policy, he sounds increasingly like chavismo's opposition critics: at once alarmed by and resigned to a looming crisis he can no longer prevent.

Particularly noteworthy is his lament that BCV simply doesn't know what Fonden - Chávez's private $18 billion "excess reserves" cash stack - does with its money. Turns out that, like the rest of us, BCV has been reduced to working from home-brewed "estimates" of Fonden's operations, because Fonden simply doesn't make its accounts available, not even to the Central Bank. All Maza Zavala can do is note that if BCV's estimates are roughly right, Fonden will soon hold more dollars than BCV does. A situation he sardonically describes as "quite interesting, or curious."

The interview is worth reading in its chilling, dadaist entirety. There's an unmistakable through-the-looking-glass feel to Maza Zavala's predicament. The currency he is legally obligated to defend is one his institution no longer really controls. The reserves that technically back it are more and more being sucked into a kind of bureaucratic black hole. More and more, Maza Zavala is a Central Banker in name only.

In a sense, his interview amounts to preemptive buck-passing. "Don't come crying to me when this crazy Rube Goldberg-contraption of a monetary policy seizes up completely," he's saying. "I might have been able to do something about it, once, but I can't anymore, I run only the tip of the Central Bank iceberg."

The amazing thing, to me, is that chavismo no longer seems to have even the elementary self-preservation instinct needed to realize the scale of the chaos they're sowing. That they won't let the public know what Fonden is doing - well, that's par for the course. But that they won't even tell the Central Bank? That's not a monetary policy, it's a mental illness.

Datanalisis Poll Highlights

Quico says: Datanalisis' January poll gives us some idea of the state of public opinion with Chávez on full steam ahead mode.

The results are confounding. On the one hand, the idea that we are "losing our freedom" due to the government's fear strategy is not very widely shared:





At the same time, Chávez's plan for indefinite re-election does not enjoy wide consensus. NiNis disagree by a 3-to-1 margin:


And some of the more radical measures the government has been pushing are badly out of step with public opinion, even on the chavista side:




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Oscar the brave

Katy says: This note from Spain's EFE news service is sure to make some waves. Costa Rican President and Nobel Peace Prize winner Oscar Arias made an unusually bold, scathing assessment of Chávez, chavismo and the hemisphere's current ideological battles.

Here is the translation:

Costa Rican President Oscar Arias said today that the new special powers given by the Venezuelan Congress (sic) to President Hugo Chavez constitute “a negation of democracy.”

“There is a simple difference between a dictator and a democrat: if the democrat has no opposition, it’s his job to create it, but the dream of the dictator is to eliminate all opposition”, said the Head of State and winner of the 1987 Nobel Peace Prize in an interview with Costa Rican radio station Columbia.

Arias criticized that Chavez can now rule by decree for the next 18 months.

For a dictator, he said, “the most important thing is not to have opposition but to have absolute power. A democrat believes only power stops power and, therefore, believes there has to be a division of powers, because society works better with those checks and balances.”

Arias said that “we’ve had a revolt in South America in the last few years” because the continent is in a period where “the strongman system, caudillismo, and populism, Latin American diseases inherent to our culture, our history and our essence,” are “back in vogue.”

“The fundamental difference in Latin America is between governments that believe in the need to insert their small economies into the world and those that do not; the latter group can afford to be protectionist and do not believe you need to look for markets, preferring alliances of another sort, such as the alliances between Venezuela and Cuba or Nicaragua and Cuba, that are certainly not commercial in nature,” said the Costa Rican President.

“What can Nicaragua sell to Cuba? Nicaragua can sell much more to the United States, to China or the European Union. I don’t know what this bolivarian alliance is about other than the wish to remain in power permanently, for life if possible ,” said the Costa Rican President.

Arias emphasized that Latin America should follow the road paved by Chile, which has signed more than 50 free trade agreements with countries all over the world, allowing it to become the most developed country in the region.

Mr. Arias said he was not in favor of either the policies of Mr. Chávez nor US President George W. Bush, because his political “preferences” in the US “lie with the Democratic Party.”

“Bush is too much of a warmonger for my taste,” said the President.

Chávez will surely unleash all his verbal and diplomatic demons on the Costa Rican president, but fear not, for mild-mannered Arias has tackled worse thugs before. Arias is the first Latin American head of state to call Chávez a dictator, and for that we applaud him.

Censor the Beeb

Katy says: This fawning BBC photo essay about a Chávez-sponsored organic farm in the middle of Caracas is not to be missed.

Like any good Islington lefty, reporter Nathalie Malinarich and photographer Emma Lynch are just tickled pink to see newly empowered swarthy latin peasant types making organic - organic! - vegetables right in the middle of a big city. It's just so exotic!

Of course, it only takes about ten seconds of actual reasoning to realize that putting an organic farm in the middle of a crowded, congested city may be the dumbest urban-planning idea this side of... well, building another monstrous statue in honor of Simón Bolívar. Ten seconds of actually reasoning, though, seems more than these Beeb PSFs were capable of.

Lets walk them through it: it may shock you to learn that urban land is many, many times more expensive than rural land. The revenue you get from farming on urban land is much less than what you get if you use it for buildings. Which is just a jargony way of saying that putting a farm in the middle of a city is like using $20 worth of cloth to make a $10 shirt: it consumes more resources than it produces.

This little factlet is the reason behind a phenomenon you may or may not have noticed: cities are full of buildings, while the countryside is full of farms. Coincidence? I think not!

Caught up in the revolutionary fervor, Malinarich and Lynch don't stop to puzzle these things through. They don't wonder how many more organic farms the government could finance if it sold this plot of land and invested the proceeds in the countryside. They don't seem to grasp that resources run out, that the resources you use up on absurd projects are resources you can't use for sensible ones, and that, therefore, their adorable little organic farm is creating poverty, not reducing it.

Opportunity cost? Reactionary rhetoric!

Perhaps it would be too pesky to suggest that having a public park for everyone to enjoy, or some badly needed extra housing, would be a better use of scarce city space. Thing is, none of these questions seem pertinent when your perspective is clouded by a first world rebel-wannabe's crush on the Latin Revolutionary du Jour. Crikey!

I think the BBC should have its license revoked for putting out such biased reporting.

The Complete Idiot's Guide to the Complete Idiot's Monetary Policy

Quico says: Miguel wrote an excellent post on why inflation pressures are mounting in Venezuela. I liked it a lot, but it's a bit technical. Since a picture really is worth a thousand words, I tried to illustrate what's happening here...

...don't worry, you're not alone: your fellow Americans were kind enough to send $34.5 billion to Venezuela in this way in 2006...

So far, so good...

...this is why the opposition insists that when Chávez says "hand over the excess reserves" that's really just code for "print more bolivars"...

...as the ratio of circulating-bolivars-to-reserve-dollars rises, BCV realizes it has to do something to counter the trend...

...remember, CDs are just loans people give to the Central Bank. BCV has to pay them back, with interest. When it does, all those extra bolivars go right back into circulation...

...so Venezuela's rising inflation is not surprising: we have more and more bolivars chasing the same number of goods...

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National icon gangbang update...

Quico says: First Chávez banged the name of the country, slapping his political movement's buzzword on our passports. Then he moved on to the flag and the coat of arms, turning what had been symbols of national unity into divisive, partisan irritants. Recently, he talked about freelancing some extra lyrics for the national anthem.

Surely, with a track record like that, it was only a matter of time until he made a grab for the last of our national icons:


It is un'friggin' believable, and all too believable at the same time: at Chávez's request, Carabobo governor Acosta Carlés is making a grab for control of the most popular team playing the most popular sport in the country. I know that reads like a send-up, but it's true.

You have to understand, Magallanes is to Venezuela what the Yankees are to the US - a National team with a passionate National fan base. It's just their luck that that fan base includes El Supremo. Guess Hugo didn't take it so well when the Tigres de Aragua kicked Magallanes's butt in the finals just the other day.

It might all be funny, if it wasn't so damn creepy. For years now, I've argued that it's wrong to describe chavismo as "totalitarian" because the hallmark of totalitarian regimes is seeking control over areas of social life that have nothing to do with politics. Things like, y'know, pro baseball teams.

Doesn't take much to paraphrase Hannah Arendt on this one:

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

Snapshot from Beirut

Quico says: Sadly Hugo has not yet presented me with the opportunity to add Nasrallah to my right hand column, but that isn't stopping Hizbullah supporters in Beirut from making the connection.

The impossibility of Scandal...

Quico says: Scandal is not possible in the Chávez Era. I don't mean that there's any shortage of scandalous behavior in the country - au contraire! - or of people eager to call attention to it. I mean that Scandal no longer operates as a mechanism for holding the powerful to account. Revelations of official misconduct no longer create a political problem for the government. Without Scandal, society loses its prime lever for holding the powerful to minimum standards of decency.

What does it take to make a Scandal? It takes scandalous behavior, sure, as well as someone to bring it into public view. That still happens in Venezuela, though as control over the media intensifies, it happens less and less. But there the process stops. No consequences of any kind seem to flow from revelations, large or small. And a scandal is only a Scandal if it forces the powerful to alter their behavior in some way.

The puzzle is that the social and political conveyor belts that once turned the disclosure of scandalous behavior into Scandal have broken down. And nothing has stepped in to replace Scandal's social function.

The opposition's last, best attempt to force a scandal - over the crass cover-up of Danilo Anderson's murder - floundered on the shores of official contempt. The closest we've come is the Chávez-approved purge-cum-manufactured-scandal over the CAAEZ affair. By now, even the opposition seems resigned to life in a Scandal-less polity.

A big part of the reason, no doubt, is down to the chokehold chavismo has over all of the country's oversight institutions. It's quite clear now that political loyalty to the regime buys you tacit immunity from legal sanctions for scandalous behavior. But can that really be the entire story?

I think there's more. Disclosures might generate scandals even without the separation of powers, so long as the powerful are capable of shame. Scandalous behavior would have to elicit some raised eye-brows among wrongdoers' own peers in the circles of power. Some things would have to be beyond the pale for Scandal to take root. Nothing, short of disloyalty to Chávez, seems to rise to that level.

Even more fundamentally, for Scandal to take root the clique in power must inhabit the same discursive universe as those who blow the whistle. They have to be ready to engage allegations on the evidence, or at least acknowledge that serious allegations have been made and call for an explanation, even when accusations are made by political opponents.

It's these two preconditions for Scandal that are missing in Venezuela these days. The powerful are no longer, in principle, shamable. And they long ago discarded the possibility that allegations coming from dissidents may, at least in theory, be true. As far as they're concerned, the fact that it is an opponent making an allegation is enough to demonstrate its falsehood. More often than not, allegations are simply ignored. When their existence is acknowledged, it is not to rebut them but to attack the oligarchs who leveled them. In fact, the principled refusal to engage with the substance of opponents' allegations has come to be seen as a sort of badge of revolutionary purity.

The outcome is a hermetically closed circle - a governing caste that is restrained neither by formal/legal sanctions nor by a diffuse, socially-enforced set of norms that make some actions beyond the pale.

Thing is, democratic societies need Scandal; it's the ultimate tool of accountability. Without at least a possibility that serious wrongdoing might debilitate the government, shorten their careers, cause them social embarrassment, or land them in jail, the powerful are liable to run amok.

I bring it up because I think the impossibility of Scandal in the Chávez Era gives us a way into a deeper discussion about the unravelling of the public sphere in the Chávez Era. It's a theme I'll keep coming back to in coming weeks.

One of my heroes passes...

Quico says: It's a sad day for me: Ryszard Kapuscinski passed away in Warsaw yesterday.

He was an inspiration for a generation of aspiring journalists, myself included: something about his writing made me want desperately to be a journalist. He made flawless writing look easy, and journalism itself seem incredibly romantic. His bravado, his insouciance in taking crazed risks, was exhilarating. But it wasn't all swashbuckle-and-dash: his reportage was also tender, suffused with understanding, even a kind of warmth, towards the people he wrote about, even - especially - the loathsome people he wrote about. The delicacy of his evocative passages could bring tears to your eyes, and how many journalists can claim to do that?

Kapuscinski brought something close to nobility to this sordid little profession of ours. In his hands, reporting became art. If you haven't had the pleasure yet, you owe it to yourself to have a look at his books. (Starting with The Emperor, of course.)

Killer fact!

Since 2005, Venezuela has spent more on weapons than China.

Oil, econophobia and the staggering intellectual bankrupcy of chavismo

Quico says: Miguel points to this lovely Chávez quote...

"A President shouldn't listen to economists."

A fine sentiment, no doubt, as long as you can get away with it. If 100,000,000 dollars just happen to gush out of the ground beneath you every day, say. Yes, I agree, economists are pretty superfluous then.

I've been thinking more and more about the lack of intellectual seriousness in chavismo, about its active hostility to specialist knowledge in general, and economic knowledge in particular.

More and more I think econophobia is at the heart of chavismo, of its popular appeal, its arrogance, its basic anti-rationalism and also its tendency to authoritarianism. Chávez holds specialist knowledge in deep, deep contempt - and the more power he amasses, the more contemptuous he gets.

And here, again, oil is a curse. Chávez can get away with it only because money is kind enough to ooze out of the ground in Venezuela. The basic resource constraints that end up persuading a Lula that, y'know, maybe it's not such a bad idea to talk to an economist now and then just don't come up in Venezuela...well, not during an oil boom, anyway.

Thanks to the petrodollar flood, chavismo can just skirt the questions that dog any normal, earthly government - left, right or center - on any normal day: how do we ensure we have a good enough revenue stream to fund public services? how can we sustain a decent living for our people? how can we generate more wealth using the limited resources at our disposal?

Nobody cares. Nobody has to.

Oil is our magical elixir...the solution to all economic conundrums, the guarantee of the irrelevance of economists and their dreary, dense theories and dehumanizing categories and soul-sapping concern with, y'know, work. Who would want any of that? The money's free...

It's easy to forget it now, but socialists used to have serious answers to the problems posed by economic life in industrial society. They were the wrong answers, sure, but they were serious.

Nationalization was supposed to reduce wasteful duplication of investments, lead to economies of scale, and cut out the bourgeois dead-wood from the production process. This would enable living standards to rise more quickly than was possible under capitalism. It didn't quite work out that way, but the proposals were the outcome of detailed analysis on the basis of meticulous reasoning. (Leaf through Das Kapital if you don't believe me.)

20th century socialism never shied away from intellectual engagement in economic debates. Socialists from Clement Atlee to Joseph Stalin understood that socialism had to outperform capitalism in solving the basic problems of economic life. When Khrushev banged his shoe on the podium at the UN, saying "we will bury you!" he meant that the superior Soviet economy would so decisively out-produce the west's that capitalism would wither and die. That was supposed to be the whole point, the reason socialism was supposed to be better than capitalism as a way of organizing society. If it was to take its own claims seriously, 20th century socialism had to have the better solution to the problem of production.

What I find remarkable, unprecedented really, is the way 21st century socialism simply dispenses with any kind of economic reasoning whatsoever. Nationalizations are announced without reference to any kind of abstract discourse setting out the logical links between means (nationalization) and ends (higher productivity, or lower costs, or better service, or anything really.)

It's not even that chavistas are wrong in the causal claims they make. It's that they don't feel the need to put forward causal arguments at all. In their place, we get denunciations of greed and glorifications of solidarity - gut-level appeals to raw emotion - as the sole basis for economic policy-making. Public good, private bad. Collective good, individual bad. That's as sophisticated as Chavonomic reasoning gets.

In the end, 21st Century Socialism is just the hollowed out husk of 20th Century Socialism. The headline grabbing moves - Nationalization! - haven't changed, but they've been completely stripped of the reasoning that once made them meaningful.

Where is the oil price red line?

Quico says: As chavista radicalism escalates, and with no institutional checks left on the guy's power, the only brakes left on the damage this government might inflict are factual. Chief among them, of course, is the dicey issue of revenue: oil prices have been behaving in distinctly counter-revolutionary fashion lately, no doubt as the result of a CIA plot.

It's hard to tell at what point the slide becomes a real problem for Chávez. One upshot of the government's zero-transparency, zero-oversight management style is that we don't really know much about the state of the State's finances. Oversight of the official budget is weak enough, but the point is that more and more spending is carried out off-budget, through direct PDVSA spending, Fonden, and who knows how many other utterly opaque, slush-fundy vehicles for presidential discretion.

Since we don't really know how much the government has been spending, we can't really tell where its red line lies. Below what oil price does the government find itself forced to start cutting on sensitive spending programs? One well-informed guess I heard is $45/barrel. If so, things could get interesting, because Venezuela's export basket dropped to $44.50/barrel last week. That's still a lot, but then the government has been spending a lot as well.

So we may be getting uncomfortably close to some red lines. Seems like the government is advancing on two fronts to counter this one. On the one hand, they're working with Iran to press for yet more OPEC production cuts. If that doesn't work, they're getting ready to borrow the difference. The real Enabling Law, (as opposed to the one they published) includes a clause that would empower Fonden to borrow money without anyone's approval but Chávez's, and with the usual standard of financial oversight (zilch.)

But is Wall Street really going to pony up the cash for a guy who's off rambling about mass nationalizations and the Socialist New Man?

Stranger things have happened, I guess...

Lessons in XXIst Century Socialism

Katy says: Ever since his convincing victory at the polls last December, President Lt. Crnel. Chávez has been claiming a mandate for implementing "XXIst Century Socialism." The main problem with this claim is that nobody can define it. The President did not explain this in the campaign, and there is certainly not a government program nor a platform where the details of this little "adventure" are laid out.

Since our President is not the smartest guy in the room, we here at Caracas Chronicles thought that it would be a good idea to begin a series of posts explaining this vague concept, so crucial for our future. Think of it as our way of doing the mandatory, free public service now required of all Venezuelans.

Lesson #1: XXIst Century Socialism means that the PR needs of our Commander-in-Chief, Lieutenant Coronel Chávez, take precedence over the real needs of his people.

Example: Today, the Associated Press carries a story of how rural Alaskans are finally receiving the discounted heating oil from Citgo offered to them by the Venezuelan government. Alaskans were obviously thrilled to receive this gimme, as would be anyone braving it through the harsh rural Alaskan winter. At the same time, El Universal carries a story today about how only 2 of the 11 parishes in Vargas state, in the vicinity of Caracas, have enough doctors to provide reliable medical service. The source is none other than the regional Health director for that state.

Seeing that people in Vargas voted for Chávez overwhelmingly, one can only deduce that the people not being treated are either in the opposition, or simply prefer to sacrifice their health care so that Alaskans can keep warm during this winter. So for all you Alaskans out there, remember: while you are enjoying your hot cocoa and snuggling in your blankets while the thermometer outside hits 50 below, your comfort comes to you thanks to the sacrifice of a small child in rural Vargas who is probably bauling his eyes out because there is not a pediatrician in sight to treat his diarrhea.

There is no need to thank the boy in person. Just thank the Venezuelan Embassy and Chávez's minions at Citgo, proud banner-holders of this popular mandate.

Superfluous Authoritarianism

Quico says:

Rule by decree.

There's something irreducibly brutal about the phrase, something about it that makes the flavor of authoritarianism linger in your mouth.

Ruling by decree is what originally got Chávez in trouble back in 2001, when he first showed his disdain for pluralism by dictating 49 laws he'd discussed only with his pillow. That episode will likely seem mild, though, compared to the veritable orgy of rule by decree Venezuela is facing now that Chávez has asked the National Assembly to give him The Mother of All Enabling Laws.

An Enabling Laws is an authorization the National Assembly grants the president to legislate by decree for a fixed period of time. Time was when Enabling Laws could be used only as a last-resort, and only on financial matters. Under the old constitution, they allowed the president to move fast in situations where a long debate in congress risked deepening a financial crisis. Heading off a currency collapse, fighting a wave of bank failures, that sort of thing.

In came Chávez, and out went the safeguards. The 1999 Constitution removed the caveat that Enabling Laws could be used on financial matters only. Henceforth, the National Assembly could empower the president to go over its head on any matter, for any period of time. Sweet, sweet discretion.

Last week, Chávez asked the all-chavista National Assembly to give him the power, for 18 months, to dictate the following types of laws by decree:

1. Laws to accomplish the transformation of the institutions of the State.
2. Laws to establish mechanisms of popular participation.
3. Laws to establish the essential values that will guide public service.
4. Laws dealing with social and economic issues.
5. Laws dealing with financial and tax-related issues, including the Central Bank Law.
   
6. Laws dealing with the personal and judicial security of Venezuelans.
7. Laws dealing with science and technology issues.
8. Laws dealing with the way the country's territory is organized.
9. Laws dealing with the security and defense of the nation and the State.
10. Laws dealing with infrastructure, transportation and services.

Broad enough for ya? Hell, that's pretty much everything!

If approved, this Enabling Law will make Chávez a dictator. I don't mean that in some fuzzy, propagandistic way, I mean it in the original Roman sense of the term: an official legally empowered to do anything he wants without being accountable to anyone. Hell, at least the Romans were frank enough to call their dictators dictators, and had the common sense to give them unlimited powers for 6 months only. Chávez? He wants three times that.

However unprecedented, however broad, what's chilling is realizing that these new powers won't really make a difference.

After all, legislating by decree is a way of circumventing debate in the National Assembly...as if there was any! In the era of the all-Chavista Assembly, when Chávez barks "jump", all he hears in return is 167 voices in perfect unison asking: "how high?" You'd think that would be enough power for him...but you'd be wrong. No amount of power is enough for this guy.

What's shocking is how superfluous enabling powers have become. With or without them, there is no imaginable circumstance where the Assembly is likely to encumber or delay - much less alter or (gasp) reject - a presidential bill. What these guys do is read out the bill twice and vote it in unanimously, Mao style. Even so, the assembly's desultory, entirely pro-forma kind of authority turned out to be too great a check on his power for Chávez to accept.

But the tragedy goes even deeper than that. The notion of legislating at all has become weirdly senseless in Venezuela given the current climate. With all oversight institutions, all courts, all prosecutions, in fact, the entire state system run by Chávez yes-men, the government long ago lost any incentive to pay attention to laws in the first place. And they don't...

So it just makes you want to take these guys aside and ask them, why bother writing new ones? The ink won't be dry on the Gaceta by the time you start breaking them, and we already know there will be no consequences. What's the point?

Why bother amending the constitution to legalize things you've been doing for years, like raiding the Central Bank Reserves? Even as you tacitly admit that what you've been doing was unconstitutional - otherwise, why change the constitution to allow it? - we can all see that you don't actually care. If you did, you'd sanction the people responsible for past violations. (But, of course, that would include el máximo, so you don't.)

If you're so determined to flaunt your power to break the law without consequences, just do it and be done with it. One thing's good and clear by now: we can't stop you. But why waste everybody's time decreeing new laws you'll flout just as shamelessly as you flouted the old ones? What kind of sick game are we playing here? What's the point of this dadaist charade?

Rage against the machine

Katy says: One thing I learned during the past year is that writing regularly can be a chore. The best posts are the ones that combine insight, common sense and plain old human emotion. But it's not always easy to tap into that emotion, what with all those bills that need to be paid and diapers waiting to be to changed.

This is my first post of the new year. It's been a long time coming, but my problem during the last few days has not been lack of inspiration, but rather an inability to channel the state of mind that I equate with good writing: one leading to reasoning, patience, tolerance. I'm filled with rage, and usually I don't like coming across as angry.

The expression of rage is usually identified with animal behavior, but it is also deeply human. We're taught us to shun and repress rage, but a total lack of rage can be dehumanizing. At times, it's best to just let it rip, and there's certainly lots to be angry about lately.

The incompetents at the top have made a decided shift into stupidity, and we are all along for the ride. While the memories of CANTV's horrible service during the 70s and 80s are still fresh in my mind, the government ignores this and decides to purchase the telecoms industry from private investors that had, with caveats, done a fine job in bringing it into the XXIst Century. The argument? "Strategic" reasons, whatever that may mean in the "minds" of the failed soldiers that govern us.

I mean, think about it. Thirty years ago, you could've made a reasonable case that Telecoms was a strategic sector. Old style telecoms were a "natural monopoly" - there was no sense in laying out more than one expensive national network of wires connecting every home and office in the country. And if you wanted to communicate electronically, the phone was your first and your last option.

That was then. Today, we have four national mobile telephony operators, satellite phones, voice-over-IP, internet, internet-via-satellite, internet-via-cable-TV, Cable-TV-via-internet, Skype, etc. etc. etc. CANTV long ago ceased to be a monopolist, long ago ceased to be strategic. These days, it is just the biggest company in a crowded, fiercely competitive market. Head firmly planted in the sand, the government just ignores all that and waves its hands around shouting "strategic! strategic!" End of the argument.

There are even fewer reasons to privatize the electricity sector. While most of it is state-owned, the government has never really had a beef with allowing Electricidad de Caracas to operate as a private business. The only conceivable calculus behind these secret strategic reasons - which include the nationalization of all the extraction and refining activities in the Orinoco Tar Belt - has to do with the strategic interests the government's cronies have in lining their pockets.

Perhaps Jorge Rodríguez strategically wants more expensive cars, more houses in Margarita or yet another condo in Caracas' poshest neighborhood. Perhaps Oil Minister Ramírez and his family - including his brother-in-law, who is rumoured to have become somewhat of a "toll booth" in Venezuela's gas "business", an industry where millions of dollars are traded but not a single dollar of export revenue is produced - strategically need even more discretionary control over the oil and gas industry.

Meanwhile, Lieutenant Coronel Chávez insults our intelligence by claiming that nobody in the opposition is worth talking to because we don't reason, because we don't provide constructive criticism. If Chávez had enjoyed the benefits of formal university education, if he were anything more than a stupid "cadetico", this wouldn't ring so hollow. What "argument" can be made when Telecoms Minister Chacón (another "cadetico") says that the reason behind CANTV's nationalization is to make sure rural areas get more phone coverage?

This point is so dimwitted it's not even worth debating. Apparently, the Military "Academy" didn't teach "Tenientico" that there are any number of ways of regulating an industry to get it to do what you want. If it's rural services you need, there are plenty of incentives you can provide a company so that it does just that, if it doesn't, there are plenty of ways you can sanction it. However, there is some doubt about rural areas even needing fixed-line service, given how widespread wireless technology has become. Fixed-line telephony has been leap-frogged in rural Venezuela.

The CANTV nationalization scheme (where fat-cat corporate America will be paid handsomely for their shares while small Venezuelan shareholders are fleeced) is part of an ideological drive to turn us into another Cuba, something that is now looking more certain than ever. And while Tenientico Chávez would have certainly preferred to raid CANTV and tear-gas its executives, he decided to "buy them off" for fear of reprisals, lest a US Court confiscate Hugo's assets in the U.S. such as Citgo and the refineries on the Gulf Coast. The same story goes with AES, foreign owners of a big chunk of Electricidad de Caracas, who will probably be paid off handsomely while thousands of small Venezuelan investors lose their money as share prices plunge.

The RCTV case is even more pathetic. Chávez claims that he doesn't hear intelligent arguments from the other side of the aisle, but how can you provide an intelligent argument against a decision that has no logic? Whatever RCTV's sins may or may not have been, the proper place to vent those is a court of law. The RCTV case is pure censorship. Anybody supporting this move is supporting censorship and is therefore not a democrat - end of story, end of argument.

The opposition has also been showing signs of being comprised of stupid, short-sighted politicians. While Manuel Rosales went for a holiday in Miami (crikey!), the Primero Justicia gang is engaged in a fratricidal war that leaves nobody unscathed. While the country makes a decided turn towards radicalism, opposition leaders play into the hands of the government by taking their eyes off the ball. Instead of focusing on Venezuelans' many needs - housing, personal safety, jobs, economic stability - they're letting the government set the agenda...again!

So while Mr. Chávez bemoans the fact that nobody in the country is on par with his enormous intellect (the lieutenant-colonel has no clothes indeed), he proposes half-brained, stupid ideas such as setting up a common South American currency, building 200,000 homes in Nicaragua or giving Constitutional status to his regular raids on the Central Bank's vaults (Mobutu Sese Seko would have had trouble topping that last one). And while Venezuelans in the slums die by the thousands in a virtual civil war, the government does nothing and names its most cerebrally-challenged "cadetico" to the post of Minister of Interior.

In the meantime, The Guardian profile foreign sandalistas who visit Venezuela's barrios in propaganda tours and come back singing the praises of Chavez because in the slums, one hears Bach on the streets. Perhaps Bach is the best music to drown down the sounds of gunshots...

Arguing with the dim-witted can be exhausting, but I guess it should be done, and we will probably come back to our reasonable selves and try to make some sense of this mess in a purely logical, measured fashion. "El año viejo" didn't leave me an old jenny nor a white mare, but it did open my eyes to just how stupid Chávez is. Oh, don't get me wrong, I am not under-estimating him: he is shrewd, calculating, malicious and has a great tactical mind. He is also very popular and a great communicator. But he is dumb as a rock. He is basically an electoral machine with nothing in his head, and today, against that, I don't have reason, I have rage.

The "Godzilla" Chávez cartoon courtesy of www.coxandforkum.com.