Love that rodent

Katy says: - My new favorite website. Sorry to those who don't speak Spanish - its content is both hilarious and untranslateable. Thanks to Daniel for the tip.

Your strong bolívars at work

Katy says: - I have the utmost respect for physical therapists. They are hard-working professionals who deserve to be compensated for their work just as much as the next person.

But do we really need a Physical Therapy Act in Venezuela?

According to our useless National Assembly, we do!

See, this is a Revolution. Every profession needs a law, and our "wise" lawmakers are there to grant professionals the right to "freely exercise their profession." Free, that is, except that the government sets wages, imports Cuban physios who unfairly compete with you and harrasses private health-care providers.

The Law conveniently says that Physical Therapists have to meet professional standards and guidelines set by academic institutions and competent administrative authorities. I wonder if they also included that, if they work for a government hospital, they have to don a red shirt and march whenever the fat man in the palace feels like it.

In a country with rampant inflation and corruption that knows no bound, where thousands of people die each year at the hands of crime - this is what our National Assembly chooses to discuss and (unanimously!) pass.

Next up on the Legislative agenda: a National Hairdressers and Manicurists Law. I've seen some awful haircuts on some of these lawmakers, and if there is a sector begging for regulation, that one's it.

There's no accountability without accounting

Quico says: A few days ago, Katy posted a link to this Rory Carroll piece in The Guardian, to mixed reactions. Personally, I thought it was a pretty good, up-to-date primer. But the bit that really caught my eye was this paragraph on Land Reform:

Nobody had a clue how much this was costing. Government agencies hum with young helpful staff in red T-shirts who consult maps of farmland with swooping arrows showing the next phase of "recovery". But queries about budgets are met with blank looks. In Barinas I visited the auditing agency Superintendencia Nacional de Cooperativas (Sunacoop), the National Land Institute, the credit agency Fondafa and the agriculture ministry. Not one could say how much money was being ploughed into the land. Was it $5m, $50m, $500m, $1bn? Shrugs. The lack of accountability is astonishing. Even petro-boom Venezuela has finite resources.

This kind of thing always baffles and fascinates me. There's a limitless pathos to this little anecdote: the inviability of the revolution condenced into a single paragraph.

It seems to me that behind all the anti-capitalist rhetoric, what lurks is a knee-jerk aversion to accounting. The revolution thinks it below its dignity to work through such grubby concerns as, y'know, whether its economic initiatives cost more than their product is worth.

"Capitalist values!" they'll scream. "The bourgeois fixation with profit!"

These people are revolted by the very thought that a cost and benefit calculus can ever be a basis for action. But, when you think about it, what is profit if not an accounting expression of what happens when the things you produce are worth more than the things you use to produce them with?

What can you expect from people who lionize the principle of indifference to profits other than unchecked waste?

I guess what I mean is that it's anything but a surprise that the revolution consistently uses up Bs.5 worth of lemons to make Bs.3 worth of lemonade. Just the opposite: that's more or less the cornerstone of its economic vision.

Care to explain, Mr. Gott?

Katy says: - Talk about old news: turns out the recent hubbub over Chávez's support of FARC was a given for Chavistas in-the-know even eight years ago. Hell, one-time KGB-junketeer Richard Gott even put it in print!

Well-known in PSF circles for his many laudatory books and articles on Hugo Chávez, Gott ("affectionately" known as Pol Gott for his longstanding support of loony left causes) published his first Chágiography all the way back in 2000. As he researched it, Gott had tremendous access to the President and his leading ideologues as early as 1999.

The book is called In the Shadow of the Liberator, but one has to wonder what the Liberator would think of Gott's startling admissions regarding Chávez and the FARC and his apparently dishonest backtracking.

On page 201 of the 2000 edition of his book, Gott writes:

"More significantly, the new emerging forces in Colombia, associated with the Revolutionary Armed Forces of Colombia (the Farc) and the National Liberation Army (the ELN) express similar Bolivarian views to those of Hugo Chavez. There is today an identity of attitude between the Venezuelan government and the 'Farc government' that controls perhaps a third of Colombia. Officially, this interest is disguised behind Venezuela's public desire, expressed to the 'official' government of President Andres Pastrana in Bogota, to assist in peace negotiations between the warring factions in Colombia. In reality, Hugo Chavez and his government are on the side of the Farc.

Chavez wants the Farc to win, or at any rate to be so successful in the peace negotiations that its incorporation into the government will entirely change the political complexion of Colombia. Were that to happen, Chavez's dream of recreating Gran Colombia - the old nineteenth-century alliance of Venezuela, Colombia and Ecuador, devised by Bolivar - would come true. The Bolivarian project that lies at the heart of his hopes for the continent would be well on its way."

(the emphasis is mine)

So here we have a guy with unparalleled access to Chávez writing back at a time when even Alfredo Peña was a chavista and finding it clear that Chávez was on FARC's side. The episode fits the classic definition of a gaffe: the accidental uttering of an unacceptable truth.

Sources tell me that, during 2000-2001, people close to Chávez's inner circle expressed concern with the above passage, and spoke to Gott about it. The paragraph was modified, apparently to appease those who thought the previous admission was, how to put it, politically incorrect. The fact that the Venezuelan government directly financed publication of the Spanish edition may have had something to do with Miraflores - ahem - editorial leverage here.

So in the 2005 edition of the same book, now called Hugo Chávez: The Bolivarian Revolution in Venezuela (obviously Gott didn't deem Chávez worthy of anyone's shadow at this point), the corresponding bit, on pages 192-93, reads:

"More significant, the new emerging forces in Colombia, associated with the Revolutionary Armed Forces of Colombia (the FARC) and the National Liberation Army (the ELN), express similar Bolivarian views to those of Hugo Chavez. Venezuela's public desire is to assist in peace negotiations between the warring factions. In private, Chavez leans towards the FARC. Chavez hopes that it will be so successful in the peace negotiations that its incorporation into the government will entirely change the political complexion of Colombia. Were that to happen, Chavez's dream of reuniting Gran Colombia - the old nineteenth-century alliance of Venezuela, Colombia and Ecuador, devised by Bolivar - would come true. The Bolivarian project that lies at the heart of his hopes for the continent would be well on its way."

See, before Chávez wanted the FARC to win, but now, oh no, he's simply leaning toward the FARC.

Perhaps Gott simply had a mistaken impression in the first version regarding Chávez wanting the FARC to win. Perhaps he then chose to correct himself in the second edition.

But it's unlikely, for two reasons. First, the paragraphs were cut instead of expanded - not the usual thing to do when you want to clarify a point or make it more nuanced. And second, Gott clearly admits that Chávez himself provided some of the opinions in his book when he writes in the acknowledgements to the first version:

"President Chavez took considerable interest in this book, and I was privileged to have a long interview with him in Caracas, as well as the opportunity to travel in his company into the Venezuelan countryside."

Seems to me Mr. Gott owes his readers an explanation.

Over the radar, under the radar

Katy says: - Lots is going on that we should probably touch upon. Some of it is happening over the radar - literally, as in the case of the US plane - but other issues are slipping by, and merit a closer look.

1. Ze plen, ze ple-e-e-e-en! A US plane apparently got lost and flew without permission over the island of La Orchila, a violation of Venezuelan airspace. The Venezuelan government had a fit, as was expected, but we haven't heard yet from the fat man in the palace. Expect more histrionics and little substance in the days to come. The Defense Minister (pictured right, in his uniform) immediately concluded it had been intentional.

Perhaps the US government was looking for more pictures of Hugo Chávez, Jr. and his friends livin' la vida güisky in La Orchila, courtesy of Venezuelan taxpayers. To paraphrase Daddy, if being rich is bad, then Hugo Jr. is baaaaaaad.

2. No spam zone. Prestigious Colombian weekly Semana had a summary of some of the emails contained in the Raúl Reyes laptop. Some of the highlights include a secret meeting between FARC bigwig Iván Márquez, Piedad Córdoba and Chávez. They discuss Márquez's testimony saying that Chávez wanted to set up mobile hospitals in the border to tend to the FARC's wounded. They also openly discuss Chávez's support for Piedad Córdoba's presidential run in 2010.

3. Sé cómo duele ... ser guerrillera. The Colombian government landed one of its biggest fish since the death of Iván Ríos earlier this year. Comandante Karina, the legendary head of the FARC's 47th front, who for years had kidnapped and harassed the entire western portion of Colombia, turned herself in. In dramatic testimony, Karina confessed that the FARC's western front was on its last leg. Apparently, she was almost starving and was simply exhausted from life in the jungle.

4. Blackmail? Moi? The Ecuadorean government said that the reestablishment of diplomatic relations with Colombia will depend on the Colombian government's willingness to stop disseminating false information about Ecuador. In other words, file the laptop and nothing has happened.

Funny how Ecuador has been saying that laptop was all lies and that the Colombian government had zero credibility, and now it is desperately trying to make it go away.

5. Guisocaribe. The Economist reports a scandal brewing in Belize. President Hugo Chávez sent former Belizean Prime Minister Said Musa $10 million as part of the Petrocaribe scheme where Venezuela exchanges millions of dollars for political support. The money apparently ended up in the Belize Bank, to whom Musa owed a significant amount of cash.

One of the ironies is that the chairman of Belize Bank is also the deputy chairman of Britain's Conservative Party.

6. That's quite a shopping list. The Associated Press reported recently on Chávez's current planned purchases of weapons. To estimate the cost to Venezuelan taxpayers, come up with an estimate of the value of this stuff and multiply by 2, to include the necessary commisions, fees and bribes.

7. PSFs of Seattle, drop your double-tall soy lattes and unite! Finally, the great Miguel sends me this link of a guy who probably has some major checks coming his way. Don't miss the platform of his political party. It advocates, among other things, the protection of the environment.

Now I've heard it all!

The nightmare that is INTI

Katy says: - I’m in Maracaibo, walking up 72nd street. Everything is flooded.

I'm with my aunt Isabel, only she's twenty years younger and considerably taller than me, odd 'cause she's five-foot-three. The sky is the color of plums. We're walking from one friend’s house to the next when we fall into a puddle, only it's not a puddle, it's an enormous pool of mud.

There is mud everywhere but my aunt Isabel is smiling and telling a charming story that I can't quite make out. I try and warn her that we're sinking, but she seems oblivious to the goo that surrounds us. All of the sudden, I grab her arm …

Beep-beep ... Beep-beep ...

I open my eyes and my cell phone light illuminates the corner of my bedroom with an artificial shade of blue. I slowly wake up. Beep-beep... Beep-beep... Is it time to get up? So soon? But no, it’s not my phone’s alarm.

Someone is texting me. Someone is texting me? What time is it?

I look at my phone and I can’t understand the number. I look at the clock and it’s 4:00. Yes, as in AM – I’ve gotten used to that obnoxious habit in this country where 4 PM is 16:00. My clock says 4:00, so it’s AM for sure.

I press the green button and read: “I’m stuck at Inti and I’ve been here since noon.”

My dream made more sense than this. I go back to sleep.

....

The following morning, I text the number back. “Who is this?” I write as soon as I wake up, not sure if the message had been part of my dream or not. I face the morning traffic, drive the girls to school, and as I plunk down on my computer, I see I have an email message from my friend Roger. It says "I just spent 16 hours at INTI, call me in the afternoon and I’ll tell you about it. I’m off to sleep now." It was sent at 4:45 in the morning.

Roger's wife is the daughter of a Puerto La Cruz restaurant owner. Fifty years ago, he bought 100 hectares between Puerto La Cruz and Cumaná. The land is made of cliffs and beaches and the sole reason for buying it was to, someday, take advantage of the area's unique natural beauty and open it up for tourism.

Forty-five years ago, the adecos fostered the invasion of the land. A group of thirty families settled in a small area of his property, and the town of Ocoa was born. Most of Ocoa's new residents lived off of subsistence agriculture and handouts from the government, since there were no other sources of income.

Luckily, Ocoa was not founded on the beach but rather on a steep valley about 3 kilometers away from the shore. This meant that most of the shoreline on the property was untouched by squatters and the ubiquitous piles of garbage that mysteriously appear any time our landscape and our citizens collide.

Thirty-five years ago, the government created Mochima National Park. When they created the park, the government did not compensate the owners of the land, nor did they establish clear property rights. Part of Roger's property fell within the boundaries of the park, but a large chunk of it (including Ocoa) did not. Ocoa’s population grew to 150 families and they cleared away even more of Roger's land for cattle grazing.

Five years ago, Roger’s father-in-law had a crazy idea: to take a piece of his seaside property and construct a group of cabins, a posada where tourists could come, relax, feel welcomed and enjoy the breathtaking scenery. He decided he would only employ Ocoans, something they welcomed with open arms since, after all these years, they still had no jobs. The posada began doing brisk business, and the townspeople were mostly grateful and excited to be part of a nascent project in their hometown.

One day Roger’s father-in-law walks in and asks Roger to help him: he wants to give the people of Ocoa the titles to their land. So off they go and set up a foundation that would receive the titles to the land, only to distribute them among the townspeople, according to the informal property rights that currently exist.

Townspeople were thrilled. 124 of the 150 families signed up, and attendance to town meetings generally exceeded 75%. Only one group wasn’t happy: communal councils.

Roger's father-in-law began to receive strange visits. One day, the Environment Ministry came and shut them down because they had no working sewer system, only a septic tank. The next week, construction of the pool was stopped per order of the state government. Finally, the maitre’d of the restaurant confided that communal councils were pissed because "his Foundation is spreading capitalist values on the population."

The day after this conversation, Roger’s father-in-law got a visit from INTI, Venezuela’s state regulator of land ownership. He was told he was being investigated for hoarding land, and that he had to prove ownership of the land going all the way back to the war of Independence if he had any chance of keeping it.

Luckily, the records were intact. With a bit of hard work and a side-order of bribes for local officials, Roger was able to prove ownership of the land going all the way back to 1796, a remarkable feat. He called INTI and set up an appointment in Caracas last Wednesday, at 12 noon.

Roger and his father-in-law met downtown and went together. They arrived at 12 sharp. They were told to wait. The hours went by. They did not move, for fear that a trip to go grab a bite would mean losing their hearing. Finally, at 3:30 in the morning, they were invited in.

The official, the same one who had visited him a few weeks earlier, looked remarkably alert given the time. "INTI is run by a shift of vampires during the evening hours," he told me, "in charge of harassing honest landowners and sucking them dry of their rights and their dreams."

The vampire asked to see the papers. Proudly, trying to contain his urge to smack him over the head with the folders, he handed them over. The vampire looked at them, and brushed them aside.

"Tenemos un problema."

OK, here it comes. As it turns out, the vampire told them that during Venezuela’s Second Republic, the government issued land decrees that certified that land ownership acknowledged by the colonial authorities was going to be respected by the newly independent nation. Apparently, Roger and his father-in-law did not have this certificate.

Roger informed him that, yes, he had heard of that, but that was only in the case when land was transferred or sold during that period. Since the land had been in the same hands until its first sale in 1872, he was OK, right?

No. He had to come up with the certificate from the Second Republic, or else he runs the risk of losing his land on account that it is idle agricultural land. Never mind that it’s a nature preserve, 80% of which is cliffs and shoreline not apt for agriculture.

Roger’s father-in-law offered to grant the government part of the land in exchange for them leaving him the piece where the posada is. The vampire said they would consider that option, but that it was likely that if they could not find the paper from the Second Republic, they would lose it all. The piece of land Roger’s father-in-law offered the government is the part that lies within the National Park – the part that the government took forty years ago without compensation.

In the meantime, the posada continues to do well. The people of Ocoa are in legal limbo, and the Communal Council continues to pressure the government to take it all away.

....

I suddenly remember my aunt Isabel and my dream. If only someone had told Roger’s father-in-law not to invest. If only someone had shook his arm and warned him of the dangers of investing in Venezuela. Now, he’s sinking, and he still harbors hope that things will work themselves out. If only ...

(Note: the above is based on a true story. Names and places have been changed for obvious reasons)

Imperdible

Katy says: - Rory Carroll wrote a terrific article on Chávez for yesterday's edition of The Guardian. Thanks to Kepler for the heads up.

The fallout

Katy says: - A day after the Interpol report on Raul Reyes' laptops and President Chávez's predictably Orwellian reaction, it's worth analyzing the possible implications from this scandal. So put down your dulces de lechoza, get comfortable, and let's start speculating.

It's worth pointing out that much of the fallout will depend on the type of information the Colombian government chooses to make public. This is not to say that what we already know isn't serious. Don't get me wrong, what we know so far is cause enough for impeaching the President. But in a country with no institutions, that will not happen (por ahora) and the scandal, if left as is, may very well go away.

The Colombian government is likely to play this one by ear. It has already showed a willingness to practice real-politik with the laptop, as leverage to try to keep Chávez at bay. Its ability to do so will depend on the credibility of the evidence in the eyes of foreigners (we have already seen the EU's Javier Solana back the report's findings).

However, Colombia will not want to play this hand too heavily, for fear of incurring commercial sanctions on the part of Venezuela. The Colombian economy is significantly dependent on exports to Venezuela, paritcularly labor-intensive commodities such as food and textiles. And while the risk of losing the Venezuelan market is small (Chávez needs Colombian food staples to keep inflation and scarcity somewhat under control), Chávez hinted yesterday that commercial relations will suffer, and this should cause some concern in Bogotá.

With the Interpol report, Colombia gained credibility in a court of law. Bogotá daily El Tiempo reports that the head of Interpol confirmed that the material given back to Colombia includes sealed copies of the files. If Colombia were to find more incriminating evidence in the laptops, it could hand them over to a domestic or foreign court of law with Interpol's seal of approval. All you would need to verify is that the same file is contained in Interpol's sealed copy and the evidence would most likely be accepted.

Needless to say, Colombia's threats to haul Chávez to the International Court of Law, as amusing as that would be, are not really credible. In order for that to be viable, two things would need to happen: the price of oil would have to fall, and more incriminating evidence would need to surface. I'm not sure the evidence we have seen so far is enough to convict Chávez in a court of law (although, as a reader told me yesterday, the fact that chavismo is claiming the laptop's contents fall short of incriminating Chávez reinforces the files' accuracy - after all, if Colombia is making stuff up and putting it on the computer, why wouldn't they make the evidence even more incriminating?).

Furthermore, Venezuela has not yet reached a point where people would stand by while Chávez is dragged to The Hague. If we recall the instances when Presidents have either been impeached or completely lost their legitimacy, we can recognize periods when society as a whole reached a consensus regarding the person being questioned. In 1993, pretty much everyone in Venezuela accepted that Carlos Andrés Pérez was a crook. In 1998, everyone accepted that Caldera had been an awful President. We haven't reached that point yet.

The government's tenacious questioning of the authenticity of the documents stemming from Reyes' computer is sure to convince its most ardent followers just like the revelations so far have convinced moderate and strident opponents of the President. But unless new evidence surfaces, we will not reach a consensus in Venezuela as to Chavez's links to the FARC, with each side arguing their point to the death. It will all boil down to those in the middle (more on that later).

Colombia's real leverage comes, I think, from the evidence linking the FARC to some of the people in Chavez's government. The files point to deep financial, logistical, political and military links between the FARC and chavista apparatchiks, so Colombia may very well press on the issue of Chávez's subordinates even further without pressing on Chávez's direct role. The case of Lybia and its protection of the Lockerbie bombers comes to mind.

Under this scenario, the Chávez government would come under intense pressure to hand over some of its collaborators. This could prompt increased rivalries within chavismo itself, including the Armed Forces.

The political fallout, on the other hand, is likely to be small for now. Unfortunately, I have yet to see evidence that this scandal is hurting the government. Links to the FARC are an issue for people already in the opposition and for people living along the border, but the fabled Ni-ni voters are more worried about inflation, crime and scarcity.

Unfortunately, it doesn't seem like swing voters either care nor understand the implications. This is not to say that they couldn't be convinced to care. After all, a cover-up of the massacre of Venezuelans is something that anyone can understand and be apalled by. Continued scarcity due to Chávez's fights with Colombia will continue eroding the President's popular support. But it's going to take a lot of work, and the political benefit for the opposition from pressing the case is not evident.

The only immediate internal effect I see is an indirect one. Colombia's continued highlighting of this case will force Chávez to focus on defending himself to save face with international public opinion, something our resident megalomaniac deeply cares about. This will draw his attention to external affairs, which will mean taking his eye off the Regional Elections. As we saw in the second part of last year, the President finds it hard to walk and chew gum at the same time, so this could pave the way for big opposition gains in November.

Nine years of chavismo has left Venezuelan society somewhat immune to scandals. We saw it with Maleta-gate, and we will probably see it with laptop-gate. It's a real disgrace, and I hope I'm wrong, but the short-term fallout from all this is likely to be small.

They're real ... and they're spectacular

Katy says: - Well, Interpol confirmed what everyone already knew: that the three laptops, three USB drives and two portable hard drives the Colombian government claims belonged to the late Raúl Reyes are in fact his, and the files they contain have not been tampered with.

Interpol, a respected, impartial institution, is basically putting its reputation on the line. It said the Colombian government had not altered the information, and that the files they have already made public do indeed come from Reyes' computers. They have expressed a desire to talk to the Venezuelan and Ecuadorean governments and explain the technical work they did, but so far they have not been invited. You can access their report here.

The sheer size of the evidence is staggering: 37,872 text documents, 452 spreadsheets, 210,888 images, 10,537 multimedia files, 7,989 e-mail addresses and 22,481 webpages. All in all, a whopping 610 gigabytes of information.

Kind of makes you wish the Colombian government put all this stuff online. Could you imagine? Accessing Reyes' world-famous ajiaco recipe, or verifying whether Reyes ever read Caracas Chronicles? The possibilities are endless.

This should be an interesting summit coming up.

Obsessions make the man

Katy says: - The US, the Constitutional Reform, the FARC, Fidel - these are some of Chávez's well-known obsessions. His latest one is November's Regional Elections. Lately, not a day goes by without someone from the government reminding voters of the importance of the coming vote. But why? What is it about November that is so important to Chávez?

Chavistas talk non-stop about what they think is at stake in November. They say this election is crucial for the Revolution and they outlandishly suggest that an opposition win would risk breaking up the country and plunging us into a civil war.

Yet Chavez's infatuation with the Regional Elections is curiously overblown. It's as if nobody has bothered telling him to relax, because the reality is that a good outcome is much more important for the opposition than for the government.

The previous regional elections, held in 2004 on the heels of a Recall Referendum, left the opposition completely bewildered. Predictably, Chávez ran the table, winning 20 of the 22 state governorships up for grabs and all but a handful of the mayor's offices.

So in spite of record-high oil prices, there is little Chávez can do to prevent the opposition from doing better. Bouyed by last December's victory, and in spite of continuing internal struggles to define unity candidates, the opposition seems well-positioned to do much better than the last time. Their challenge is not to improve but to hold on to a key fact they established in the last Referendum: that the government is no longer backed by the majority.

The effect of likely opposition gains on chavismo is minimal. Chavista governors and mayors are serial underperformers, notoriously inefficient public servants that are more concerned with busing people to rallies in Caracas and driving around in expensive Hummers than delivering for their constituents. This is something Chávez himself has recognized on the numerous ocassions he has scolded mayors and governors on live TV. It's only natural that voters want to dish out a little dose of whoop-ass on their very red local leaders.

And if they do, so what? Most of the power of state and local governments is being diluted anyway, thanks to the government's unorthodox budgetary practices.

It works this way: the capacity of Venezuelan states and municipalities to raise their own taxes is extremely limited, if not inexistent. What little power they have to raise their own income is shrinking, as witnessed by the central government's recent moves to eliminate tolls from interstate highways and take away the administration of ports and airports from state governments.

State and local governments rely on a budget allocation called "Situado Constitucional." The law governing the Situado requires that a certain percentage of each year's budget go straight to the coffers of state and local governments, allocated according to their population.

The problem for the states is that the budget is based on unrealistic assumptions. Each year, the budget assumes an average price of oil that is much lower than the market price, thereby underestimating the level of income that has to be shared with state and local governments.

Furthermore, the central government is increasingly relying on extraordinary income that is not part of the budget such as excess oil royalties, and less on traditional (or "ordinary") sources of income like the VAT tax. All this extra money goes to a parallel budget institution called Fonden, directly managed by the President and generally not available to state and local governments. Revenues distributed to state and local governments are much lower than they should be - independent estimates I have seen reckon they are receiving 30% less than what they should be getting.

Chávez has never been a fan of decentralization. Ever since reaching office he has been promoting parallel forms of community organizations - from "Bolivarian Circles" to "Communal Councils" to "Socialist Cities" - which share one thing in common: they are all heavily dependent on Miraflores. This makes his obsession with state and local governments, institutions he has never cared for and he has actively undermined, dumbfounding to say the least.

His attitude seems to be the response of a wounded narcissist, someone who woke up one December morning and found to his dismay that the majority of the country doesn't approve of him. His posturing is to prove to himself, his followers and the world that his is not a movement in decline.

Due to his extremely competitive nature, he needs a victory. He is a soldier, and for the military it's all about winning battles. It's been a year and a half since he's had a victory at the ballot box, and few egos the size of Chavez's can withstand that.

The crazy is strong

Quico says: Seriously, these people are nuts.

SSOT? Maybe. Criminal conspirator? Definitely.

Quico says: What would it take to get Mark Weisbrot, Larry Birns & co. genuinely cheesed off at the Venezuelan government? Would documentary evidence that Chávez had actively conspired with foreign gunmen to cover up the killing of Venezuelan soldiers do the trick? We'll find out soon...

Lets connect some dots. In their recent communiqué questioning Colombia's interpretation of the Reyes laptops, Birns, Weisbrot and their motley crew of groovy ñángara academics credit Adam Isacson of the Center for International Policy with conducting "the most extensive evaluation of the available documents."

Isacson, in his latest post, notes that:

There is little doubt that the documents are real and untampered with. Interpol is very likely to conclude that, and it stands to reason - it would be hugely embarrassing for Colombia to be discovered to have been tampering with the computer files. We have to proceed on the assumption that these guerrilla communications are real. Venezuela’s denials of their authenticity constitute a weak defense.

Nonetheless, Isacson concludes that the material on the laptops, while troubling, is probably not enough on its own for the US to label Venezuela a state sponsor of terrorism. Fair enough: if your main concern is the US policy implications of the Reyes files, that's sound advice. Given the massive economic and geostrategic consequences of such a move, erring on the side of caution seems like the only sane course for a US policy maker.

But notice what's happened here: in the context of a debate about US policy, Larry Birns and Mark Weisbrot have basically told us that their go-to-guy on the Reyes Files thinks the files are authentic, and that Interpol will say as much.

Question is, what else was on those laptops that Birns and Weisbrot's favorite expert thinks are for real? Lots and lots of stuff...much of which has no direct bearing on SSOT status, but raises very troubling questions about the regime they have been working so assiduously to bolster for so long.

A button for show: Colombian weekly Semana reports that the Reyes Files contain a detailed e-mail volley about a massacre perpetrated by FARC inside Venezuela, in Apure State on September 23, 2004. (Excerpts in English here.)

The emails, between Iván Márquez, 'Mono Jojoy', Rodrigo Granda and the late Raúl Reyes, reveal that FARC mistakenly ambushed a group of PDVSA engineers and their Venezuelan military escorts near La Charca that day. It was all a big case of mistaken identity, but when the dust settled six Venezuelans were dead: five soldiers and one woman working as a PDVSA engineer.

As soon as he hears this, Reyes sends a message to his brothers in arms noting that the Venezuelans would have no trouble realizing FARC was responsible for the killings. He says FARC should immediately own up to its mistake and apologize to the Venezuelan government, stressing the need to keep the whole thing quiet. Later emails from Granda note Chávez's anger at the killings, but also his determination to give the mishap a 'prudent and political' response.

The files detail the close collaboration between FARC and the head of Venezuelan military intelligence, General Hugo Carvajal, their determination to improve coordination in future, and their shared interest in not allowing "the right wing" to exploit the fracas.

Sure enough, within days, then Venezuelan defense minister Jorge García Carneiro was in front of the TV cameras in Caracas blaming the Apure Massacre on Colombian paramilitaries who had "acted in cold blood." The perpetrators were never caught, much less tried. The murders remain unsolved.

So if I'm keeping score right here, Weisbrot and Birns' more or less accept the authenticity of documents detailing Chávez's involvement in a criminal conspiracy with foreign insurgents to pervert the course of justice in the mass murder of five Venezuelan soldiers and one Venezuelan public employee. We'll be expecting a strongly worded communiqué from them denouncing this chicanery any time now.

The Apure Massacre and its cover up have very little bearing on the SSOT status debate. If your main concern about the Reyes Files is what the US should do about them, you can see why you might not pay much attention to these sordid events.

But if your worry is focused more on the moral sensibility of the Chávez regime and its foreign boosters, the massacre and its cover up take on a whole different hue. Larry, Mark, the time to take a principled stand is now. Here's your chance.

Lets step back and think through what we're really dealing with here. Imagine, for one fleeting second, what would happen if Larry Birns and Mark Weisbrot got their hands on authenticated documents detailing George W. Bush's personal involvement in a conspiracy to cover up a multiple murder of US servicemen carried out by foreign insurgents.

Just picture it.

Chávez and Correa give the game away

Quico says: I'd been planning to wait until Thursday's Interpol report on the authenticity of the Reyes laptops to join this particularly sordid fray, but really there's no need to hold off. In parallel, weirdly unhinged damage limitation speeches, Hugo Chávez and Rafael Correa pretty much gave the game away yesterday, with Correa insisting that whatever Interpol hasn't said yet is not worth listening to and Chávez charging that Interpol is - wait for it - a CIA puppet.

After all that, wouldn't it be fun if Interpol came out and said the computers were faketie-fake fake!?

It's a fun thought, but unlikely: even the Birns-Weisbrot Axis - in a masterpiece of misplaced outrage - implicitly own up that the laptops are for real and obliquely accepts that the Chávez-FARC relationship has been cordial all along and close since the fall of 2007.

No such nuance was forthcoming from Chavez or Correa, entrenched as they are in deny everything-accept nothing-make counter-accusations mode.

Correa's prenial was bizarrely childish - the diplomatic equivalent of sticking your fingers in your ears and saying "nyaaa nyaaa-I'm not listening to you-nyaaaa nyaaaa..." Chávez's was characteristically more non-sequitur oriented: demanding "evidence, not documents!" despite the fact that some of the information in the computers has led directly to real-world busts, like the $480,000 in recovered cash in Costa Rica. (To say nothing of the fake distinction between "documents" and "real evidence.")

It's hard to beat Chávez for sheer lunacy when he shifts into full-rant mode but, to be fair, there were some real head-scratchers in Correa's speech as well. I especially enjoyed his contention that anyone who believes what FARC's commanders say to one another in private emails is, somehow, duty-bound to also believe their anti-Uribe propaganda. Credibility is credibility, ¿o no?

[and this, mind you, is how they talk when they're trying to distance themselves from FARC!]

These guys are running around like chickens with their heads cut off; they know the other shoe is about to drop. There's something grimly amusing about the whole scene but, like so much else, it's a sideshow.

Beyond the public posturing, beyond the denials and prenials and smoke-screens and obfuscations, the camera-ready histrionics and the tsunami of insults pointed at the Casa de Nariño, one thing is becoming clear here: Venezuela under Chávez is a state that sponsors terrorism.

Whether, in some bureaucratic/legalistic/diplomatic sense that's grounds for labelling Chávez's regime a state sponsor of terrorism, I don't know. But, in ordinary language, a state that mobilizes its resources to help arm a group that relies on murder and kidnapping is a state that sponsors of terrorism.

That's what Venezuela's been doing. Colombia knows that, Ecuador knows that, the US knows that, and of course Chávez knows that.

Since Colombia started sharing the Reyes files on a government-to-government basis, Ecuador and Venezuela have known that Colombia and the US know that, and Colombia and the US have known that Ecuador and Venezuela know that Colombia and the US know (and so on and so forth.)

From Thursday (but, really, since yesterday) it's out in the open: everybody knows that everybody knows.

A desperate cancillería
official goes to Plan B.

Gather around, kiddies: grandpa's a gonna tell a story!

Quico says: In the latest Letras Libres (in Spanish), Alberto Barrera Tyszka and Ibsen Martínez sit down for a long chat with old man Petkoff. Turns out Teodoro's just as lucid about the world around him as he ever was.

Key chunk:

Chávez is not a social activist, a leader shaped by social struggles or the academy. Chávez is a lucky conspirator, just a man of great daring and, it's true, a man with great political instincts. Unfortunately for us, he reaches power without knowing what to do with it: without a program, without life experience, without real knowledge of the country and its problems. Later, when he starts to try out solutions, his Utopian side starts to come out, though fortunately his is not a bloodthirsty utopianism, at least not so far. He's a Utopian who doesn't think it's necessary to chop off the girl's toes to make them fit into cindarella's glass slipper. Instead, he goes about applying his ideas - which almost always fail - without jailing his adversaries.

Now, why can we have a non-bloodthirsty utopian? Because he has a hell of a lot of money. Our non-bloodthirsty utopian can afford these kinds of experiments in Venezuela because he has the kind of money nobody else has. We're a country of 27 million that's set, this year, to take in $70 billion from oil exports. Man, who gets to live like that?! Chávez can't think up ways to spend the money fast enough: he can feed all of his fantasies.

Much of the piece riffs on the theme of Chávez-as-atypical-latin-lefty. The whole thing is worth a read.

"Broader and deeper"

Quico says: Hats off to José de Córdoba and Jay Solomon: their front-page investigative piece on the real extent of the Chávez-FARC nexus revealed by Raúl Reyes's laptops caused enough of a stir to actually move the bond market today, which has to be the ultimate measure of journalistic impact.

After studying over 100 documents from the laptops, they conclude that the Chávez-FARC relationship is broader and deeper than was previously known, and extended to micro-level operational cooperation over things like weapons procurement and training. The piece anonymously quotes a US official saying that "there is complete agreement in the intelligence community that these documents are what they purport to be." It's probably a good idea to read the whole thing.

A couple of things caught my eye here.

First off, the venue. Page A1 of the Wall Street Journal is widely considered the most intensively edited, fact-checked and coveted piece of journalistic real estate in the English language. Investigative pieces for the WSJ front page are especially serious business: often months in the making and obsessively checked and re-checked for accuracy. Think what you will of their lunatic OpEd page, but when it comes to investigative stuff, especially on the front page, these people don't fool around.

The second thing is a lovely little detail that goes by almost unnoticed in the piece: how does FARC go about publishing its comuniqués denying they cooperate with the Venezuelan government? They post them on the Venezuelan government's Ministry of Information's Website, bien sûr!

A debate about nothing

Quico says: There's a desperate, clawing pathos to it: the painfully fake debate Chávez made the A.N. hold over "Zulia secessionism" ended with parliamentarians approving a strongly worded motion against a movement that's so shadowy, so covert, that it has no known spokesmen, no advocates, no organization, no message, no ideology, no history, no funding, no platform and no plan.

They really are cunning, these CIA guys. They've found the ultimate way of making a movement literally impossible to root out: not existing. What will they think of next?

I think Chávez is really losing his touch here. He used to appreciate that for a smoke-screen to be effective it had to have at least some possibility of being believed, some baseline credibility that, once blown way out of proportion, retained some nub of potential to freak people out.

But Zulian separatism has always existed in the same Dave Barryesque space for dadaist humor as Vermont separatism. It's an expression of Springfield vs. Shelbyville style hometown chauvinism that manifests itself mostly in things like the visual gag in that "Zona en Reclamación" map. Good for guffaws, sure, and great for maracucho bonding...but an actual political project? It's just silly...

In my experience, Zulianos are some of the most patriotic Venezuelans out there. Granted, I've never lived out there (boy, that's one bullet dodged) but I've met a good number of them and I can honestly say I've never even heard of anyone who took the idea of Zulia secession as anything more than a punchline.

Dept. of Magical Language

Quico says: So speaking to reporters the other day, Planning Minister Haiman "Orwelito" El Troudi accepted that the last few rounds of sovereign bond issues have created an "implicit price" for the dollar that's above the official rate.

(Why? Simple...now you can buy Bs.F 3.3(ish) worth of bonds and immediately resell them for $1. Every part of the transaction is legal. So, in effect, there's a second legal price for the bolivar that's higher than the official Bs.F2.15/$.)

"But," El Troudi quickly added, "that flexibilization will never derive into a differential system in any of its forms, such as a dual exchange rate. There shall be one exchange rate."

Which is a lot like saying that yes, admittedly, your sister does trade sex for money, but that will never derive into prostitution in any of its forms...

New template

Quico says: After a morning wasted fiddling around with the blog's software, I've now upgraded to one of Google's new style Blogger templates. It looks pretty much like the old template, but has all kinds of new little features - most of which, alas, make more of a difference to Katy and me than to readers.

Regrettably, I was unable to make the new template get along with the old commenting software, so all the old comments have been flushed down some cyberspatial memory hole. R.I.P.

Dept. of Luz Pa'la Calle

Quico says: Joy was uncontained in Venezuela today as the government announced that, thanks to the millions of dollars it has invested in the electric industry, there will no longer be any blackouts in.....Nicaragua!

In Venezuela, it's not so bad living under a bridge

A Euro-Oil Peg?

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

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

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

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

PSUV loses London

Quico says: Yay!

No means no

Quico says: "No es no."

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

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

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

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

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

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

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

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

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

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

Chávez, can you spare $20 million?

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

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

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

Crazy Polar Bear Chronicles

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

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

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



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

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

Binge and purge

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The false promise of food security

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

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

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

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

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


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

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

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

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

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

Rent-seeking as a Livelihood Strategy

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


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

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

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

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

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

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

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

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

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

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

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

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

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

The calm before the storm

Katy says: Just how strong is Chávez these days?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Compare and Contrast

Chávez says:

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

Another one bites the dust

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

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

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

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

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


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