The view from your window: Cabudare

Cabudare, Estado Lara, Venezuela. 8:30 AM.

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Only in Venezuela, part 58,271,943

Quico says: The thicket is everywhere:

It seemed like a minor bureaucratic change at the time: in March 2008, the government led by president Hugo Chávez downgraded the import status of books. Once listed as “essential goods”, all imported books would now require government certification, either demonstrating they were not produced domestically, or else not produced domestically in sufficient numbers. In practice, this means that for all titles they want to import, publishers or distributors have to submit an application describing the books in question and request that a share of foreign currency be allocated for their import. (In Venezuela, the government regulates the use of foreign currency for imports.) These applications are then reviewed by a government bureaucrat, who has the power to decide how many copies will be imported.

The decisions the government has made over the year that the law has been in force seems somewhat arbitrary. For example, the international bestseller The Secret could reasonably be expected to sell ten thousand copies or more, yet only several hundred were approved. What’s more, publishers must then wait six months to reapply to import additional copies — by which time demand may have dropped.

[Hat tip: CL.]

The View from Your Window: Concón

Concón, Chile: 6:45 p.m.

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An Oppo Fit For Primaries

Quico says: Throughout the day yesterday, Juan and I had a sprawling big fight about his Primaries post, all revolving around the question: is there any way the oppo leaders we have can be imagined signing on to an agreement like this?

After sleeping on it, here's my view: it's imaginable. Hard to imagine, but imaginable. But only, only, if there is very substantial pressure from below. In fact, it's going to take a virtual intra-opposition insurgency to get it done.

Right now, the calculus for the party bosses - Omar Barboza, Ramos Allup, Julio Borges and whomever-ends-up-least-maimed-by-the-COPEI-dust-up - is straightforward. Select candidates in a smoke-filled room - como toda la vida - and your own power, standing and status within the opposition is strengthened. Let grubby voters select them via primaries, and you start to become superfluous. Ergo, if possible, avoid primaries.

Simple stuff. These guys are weighing up costs and benefits and coming to their own conclusions. That what's best for them doesn't happen to coincide with what's best to the opposition (or the country) is neither here nor there. That's public choice for you.

So it's not enough to say you want primaries. You have to spell out what you're going to do to get them. Convincing us primaries are the best thing from your point of view or from the country's point of view isn't good enough, because it's not you or "the country" that's going to make this decision. This decision is going to be made the day Barboza, Ramos Allup, Borges and COPEI-survivor-man (plus assorted hangers on) sit up in bed, weigh up their costs and their benefits and conclude, "shit, if I don't support this primaries thing estoy jodido..."

How you do this, operationally, is an open question. I have no specific idea how it is that you create a climate where saying you're against primaries is seen as utterly unacceptable, tantamount to coming out against motherhood and apple pie. I guess making sure these guys get asked about it every single time a microphone is put in front of them is a good start.

The second consideration here - and I think this one is too easily dismissed - has to do with resources. To an extreme that I think most oppo supporters find difficult to comprehend, the oppo parties are just flat broke. I mean, really broke. Not-sure-how-I'm-going-to-pay-my-mobile-phone-bill broke. Can't-actually-afford-to-implement-any-of-the-thousands-of-good-ideas-people-come-to-me-with-every-day broke.

The natural base of donors you might expect them to go to for funds are tapped out: terrified of Disip finding out they finance the opposition and utterly certain that a bolivar given to the opposition is a bolivar wasted because these guys are just never going to come to power.

Now, campaigning costs money. The travel costs money, the ads cost money, the billboards cost money, the events cost money, everything costs money. The opposition doesn't have it. And organizing the actual primary costs money. Voting stations cost money. Ballots cost money. Counting infrastructure costs money. Information campaigns cost money. The opposition doesn't have it.

Now sure: when you're not the one having to write the checks that are going to bounce all over town like vulcanized little tokens of your pelabolismo, it's easy to sort of wave that away, to figure "well, c'mon, they just gotta do better," or even "hey, the excitement a primary campaign would create will be its own financing boom." Maybe. What's for sure is that, from the insiders' points of view, they've been working their butts off for years now trying to step up their fund-raising and have been finding an extraordinarily, unprecedentedly hostile atmosphere for it.

So the demand for primaries is, at this point, a little bit like shouting at a homeless man again and again at the top of your voice demanding that he go get a suite at the Ritz-Carleton and then rolling your eyes in disgust when he starts to tell you about the obstacles.

Which comes back to saying that what we need is not so much primaries as such. What we need first is something subtly different: an opposition political establishment able to hold primaries, in two senses. First, because its leaders are drawn to them as a result of their own, hard, cold cost-benefit analyses, and because the material resources are in place for candidates to actually compete and the event to actually be held.

But then, the debate needs to be different. The question isn't "primaries/no primaries." The question is "an opposition able to hold primaries/an opposition unable to hold primaries."

The indefatigable push for primaries

Juan Cristóbal says: - As most of you know, I've become a strong supporter of holding opposition primaries. In my view, they would be good for our chances of winning the upcoming Parliamentary Elections, good for the country, and good for the ultimate goal of stopping Chávez.

But the idea, first proposed by Leopoldo López and now supported by Yon Goicoechea, among others, is not getting a ton of traction.

Part of it has to do with the lack of details, but a big chunk of it has to do with the typical laziness in our political class, with their whiny attitudes and their disgraceful tendency to get discouraged at how haaaaaard it is to be the opposition to a dictatorship.

Their knee-jerk reaction to reject proposals that takes power away from them and puts it in the hand of their constituents is, in a way, totally understandable. If things keep going the way they are, the decision over the Assembly elections will likely evolve into a huge fight between those who want popular participation and those who want to preserve the power that the status quo gives them.

Still, it’s early enough in the process to believe a rational discussion can still take place.

An op-ed piece today by Eugenio G. Martínez goes a long way toward focusing the discussion. Martínez lashes out with abandon, listing a barrage of questions for this and other proposals. Are we going to have 167 primaries?, he asks. Who can vote in the primaries? Is a "consensus better"? Who will make the decision in this "consensus"? Who will make the ultimate decision?

And on he goes, circling around one basic question: do we have our s**t together?

Well, we don't. But one way to start getting it together is by asking the right questions, and that is what Martínez gets right.

The next step consists of knowing what we are discussing, bringing down our options from the terrain of the hypothetical to the realm of the concrete, and arguing about that.

It's easy to dismiss primaries as overly complicated, expensive, ill-defined behemoths when they have not been properly defined. It's much harder to do that when you're discussing a very specific, limited proposal.

So, in light of his fair questions, and in view of the fact that a lot of the opposition's traditional talking heads have proposed a vague and uninspired combination of primaries and consensus, I have the following proposal that tries to reach some sort of middle ground. Here goes.

1. We hold primaries by state.
   
2. Súmate is in charge of organizing the logistics.
   
3. Primaries are open to any and all voters.
   
4. Each voter chooses one political party.
   
5. Parties do not have to be restricted to official organizations recognized by the CNE and, in fact, can be open to anyone. For example, we can think of "Movimiento Estudiantil" as one of the options available.
   
6. Voting is manual, following the successful experience in Aragua last year.
   
7. Ahead of the vote parties make proposals to the voters, pointing out who their likely candidates and platforms will be.
   
8. Campaign are based on these personalities and proposals, with the understanding that by voting for these parties, people are really voting for these people.
   
9. Once results are in, the parties come together in state-wide "Mesas de Unidad."
10. Each party gets votes in the "Mesa" in proportion to the votes they got in the primary. So if, say, in Zulia, UNT gets 45%, Movimiento Estudiantil gets 30% and PJ gets 20%, then those would be the proportion of votes in the Mesa de Unidad for each party or group.
    
11. The Mesa then determines unity candidates for that state, with the "order" in which they are listed based on party negotiations, opinion polls and natural leadership.

If we did it this way, the rosters of candidates would broadly reflect the results obtained in the primaries, plus or minus a few "special cases."

Each party would decide who their eligible candidates are according to their own internal rules. The decision of which "tarjeta" to list the unity roster under would be based on a more detailed understanding of electoral rules, and acknowledging the fact that if a party does not register candidates, it may be deemed illegal.

The way I see it, this makes the process simpler and faster. You don't turn primary voting process into a complicated disquisition on the merits of individuals, and you get a mix of popular participation and political negotiations.

Most importantly, you weed out parties that don't really count for much.

You don't like this proposal? Fine - lay out your reasons.

Think Súmate is not capable of organizing this? Let's hear from them, or let's propose an alternative organization.

Do you think it's too expensive? Ok, give me a cost estimate. But keep in mind that opinion polls are expensive too, and the Scotch that will be served in those closed-door meetings where this mythical "consensus" will be reached ain't gonna come cheap either. If we're going to argue the merits of each proposal on the basis of costs, let's! But let's do it with actual figures. And be prepared to argue why we can have a potazo for Globovision but not have one for a more organized, better opposition.

The discussion should also center on the benefits. One of the main obstacles holding the opposition back is lack of organization. By allowing the electorate to decide who should get a seat at the table and, more importantly, who shouldn't, we would go a long way in streamlining the decision-making process while at the same time giving it some much-needed legitimacy.

Primaries aren't a panacea, but the lack of primaries will be our undoing. While some of the points against primaries (cost, complications) are valid, they are surmountable. Pushing the idea of primaries aside in favor of doing what we've been doing so far and which, frankly, simply has not worked - that's just suicidal.

Folks, this is not rocket science - if Colombia's opposition can have primary elections, there is simply no reason why we can't have ours. It's one thing to be a naysayer, it's quite another to propose real arguments.

A hunger for change

Juan Cristóbal says: - There is one news item we have neglected and we really shouldn't have: Venezuelan students and political prisoners held a massive, successful hunger strike during the past week.

The strike caught the attention of the opposition media, but more importantly, of the OAS. Secretary Insulza was sufficiently moved to oh-so-politely ask the Chávez administration to let the Interamerican Commision for Human Rights come to Venezuela for an inspection and see what all the fuss is about (pretty please). The strike also resulted in the liberation of Julio Rivas, a student leader, unjustly jailed for protesting a couple of weeks ago.

The Commission itself agreed to give the students a fair hearing and listen to their concerns. So far, Venezuela continues to refuse the Commission permission for a visit, and by doing so, bolsters the notion that it has something to hide.

I still have a problem understanding our side's love-hate relationship with the OAS. While some of us correctly decry the organism as an ineffective bureaucracy, devoid of moral authority and completely in the pocket of the hemisphere's neo-despots, others go to great lengths to get their attention.

Still, the students came across once again as committed, effective and untainted.

Doubts about their long-term staying power remain. The government's strange acquiescence to Rivas' freedom and their snickering glee in seeing the students take the spotlight away from politicians may signal they prefer them as potentially weaker, less experienced, less organized rivals.

Regardless, their hunger strike was a big hit and a PR bulls-eye, so hats off to them.

PS.- While we're on the topic of the young'uns - check out the newest member of the Venezuelan blogosphere, the student-centered No Goat and No Rope (in Spanish only). There's good stuff in there.

Any union you want, so long as it's mine

Quico says: There is one thing we can be sure about ahead of today’s oil-sector union elections: chavismo is going to win. Of the ten slates on the ballot, nine are broadly pro-Chávez. This should shock no one - virtually every anti-Chávez PDVSA worker was purged from the payroll following the 2002-03 oil strike.

So the question isn’t whether the opposition’s marginal Slate #5 or critical chavista slates like #1 and #9 are going to win. The question is which of the broadly pro-Chávez currents is going to take control of this key slice of the labor movement. And here things get murky right away, because there are chavista slates and then there are government-controlled slates, and the two are far from one and the same.

It's useful to recall that to be a pro-government aspiring PDVSA union leader is, in effect, to side with the boss. While broad ideological alignment with the government is the norm inside PDVSA, even the most ardently chavista of workers are understandably leery to vote for union representatives who are going to automatically side with the boss.

As it turns out, management appears to be spreading its money widely, trying to keep some financial links with whomever comes out on top. But management’s clear preference is for slate #7, (representing VOS, the "Socialist Workers' Vanguard") which has received aggressive, unembarrassed backing from management, helping out with money and logistics, threatening workers who don't toe the line, pulling down all other slate's advertising, stacking voting centers with VOS-friendly witnesses, working to "disqualify" 41 opposing slates' candidates, and even going so far as to enable a deliciously fake little sit-in by Slate #7 workers in PDVSA headquarters in La Campiña a couple of weeks ago.

The campaign has been full of mishaps. The actual election date has been pushed back no less than four times, as the government has struggled to define CNE’s specific role in the elections. In the event, the government’s gone so far as to activate a mini-Plan República, calling out military personnel to oversee the balloting and ensuring a National Guard presence is visible at every polling site.

The intimidatory edge of this kind of military presence is clear, and in a company that’s already established its willingness to throw the book at workers who prove insufficiently docile, it’ll take real bravery for workers to come out and support any slate other than Plancha 7.

It’s not easy for an outsider to get a read on the dynamics inside a campaign like this. Some labor watchers suggest an overwhelming win for Slate #7 would lack credibility inside the oil industry, and could set off the kind of acephalous labor unrest the government is keen to prevent. It may be more likely that a number of the most government-influenced slates will end up taking the cake. Or it may be that the independent chavista slates fight the government-controlled slates to a draw, thanks to the proportional representation system being used.

One way or another, oil-sector unions are a key asset for the government, and it’s easy to see Ramírez mobilizing the resources at his disposal to make sure he ends up with a labor movement that toes his line in contract negotiations.

One thing’s for sure: the vitality of independent labor within the oil industry is at stake today. So today’s elections are worth watching, even if there’s no proper way to forecast a result.

The view from your window: Lilongwe

Lilongwe, Malawi. 5:48 PM.

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The Shadow of Eligio Cedeño

Quico says: “Take Eligio Cedeño,” The Contact says, “to this day, I’ve never been able to figure out exactly how he fucked up.”

We’re sitting in one of these swank East Side restaurants whose ongoing existence don’t seem to jive at all with the extremist discourse coming out of Miraflores. After another sip of his diet coke, he goes on.

“It’s bizarre what happened to him. One day Eligio Cedeño is, as far as anyone can tell, a made guy, running his bank, you know, Bolívar Banco, doing business with the upper echelons of the bolibourgeoisie. Next thing you know he’s rotting away in a Disip cell, stuck there for years on end, with no formal charges, just sitting there. I mean, it’s been three years and they haven’t even charged him yet. I guess they’re talking about bringing down some bullshit ‘ilícito cambiario’ charge, but that’s after three years like that, detenido.

The place is quiet on a Monday night. We’ve finished eating now and are now waiting for the coffees we’ve ordered.

“So what happened? Common sense would suggest he screwed up big time with someone you just plain don’t mess with in this regime. But who? How? Nobody I know has a reasonable explanation...”

The Contact is driving at a larger point here. He’s just getting going, really.

“What I’m getting at is that it’s easy to overegg the parallels between this elite and previous ones. Everybody in the bolibourgeoisie these days is an Eligio Cedeño en potencia: one slip away from winding up behind bars, with no recourse, nobody to call on for help.

“And that’s the thing, these guys – the Fernández Barruecos and Arné Chacóns and Torres Cilibertos of the world – none of them can sleep easy at night. Sure, they’re making obscene amounts of money today. But...that’s today. Tomorrow? Nobody can guarantee them any kind of continuity. Nobody can tell them for sure that some internal enemy isn’t going to go and whisper a few bits of nastiness in Chávez’s ear and he’s going to get pissed off and the next thing they know they’re going to wind up across the hall from Eligio Cedeño at Disip.”

“That makes all the difference, because the kinds of agreements, the kinds of guarantees the bolibourgeoisie enjoys, they’re all tacit; shot through with insecurity. You hear these casual parallels drawn with Putin's Russia, but it’s really not like that.

“I mean, think about it. In Russia the cards were on the table. It was explicit. Putin sat down with a handful of favored businessmen and layed out the ground rules: ‘You’re going to stay out of politics, support me when I call you for a favor, and in return I’m going to stay out of your hair.’ See? Clarito.

"Those may not be formal property rights the way an academic thinks of them, but it comes to the same thing: they can rest assured. Which means they can plan for the future. Invest. Think about going abroad to invest, even. In a way they were more like the American robber barons at the turn of the last century: maybe they got to where they are through unspeakably coño’e’madre tactics, but once there, they could transition, become real businessmen, think strategically, invest, plan. Our new elite can’t do that, because none of them has a real guarantee that Chávez isn’t going to throw the book at them for one offense or another, or that some rival isn’t going to pull a Cedeño on them.

Our coffees come, but The Contact barely looks at his. He’s in full flow now.

“And in a way, it’s much worse this way. Because if you’re in a kind of Russian situation, if you started out as a gangster but you have some kind of stability, some kind of certainty to your property rights, self-interest propels you to start acting in ways that create value for society as a whole. So, there you have Lukoil: a product of plunder, no doubt, but also a proper multinational corporation now, a real, professionally run company that does R&D and surveys its investment opportunities and works purposefully to grow and develop and expand and create value and power for Russia.

“Our new elite never acts like that. Cuz it wouldn’t make any sense for them to act like that. They’re in a position to make money today, but next week, who knows? So their time horizons get compressed: the incentive structure they face is pushing them to try to make as much money as they can as fast as they can and two weeks from now is already the ‘long-term’ as far as they’re concerned. That’s the tragedy here, that’s why our brand of corruption tends to settle into all-out kleptocracy rather than mutating into a productive elite.

The Contact leans back and pauses to take a long breath.

"The entire bolibourgeoisie lives under the long, dark shadow Eligio Cedeño throws from his Helicoide cell. That’s the thing, man.

The view from your window: Stockholm

Stockholm, Sweden. 5:49 PM.

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Roy Chaderton: manipulative liar

Juan Cristóbal says: - These days, chavista diplomacy goes from one embarrassment to the next.

On the heels of giving Lybian dictator and major headcase Muammar Gaddafi our country's highest civilian honor, Venezuela's Ambassador to the OAS, Roy Chaderton, has falsely accused Venezuela's opposition of officially recognizing the Micheletti administration in Honduras.

Speaking in no less a venue that the OAS's Permanent Council, Chaderton claimed the Venezuelan opposition "had officially recognized the Micheletti administration through their shadow foreign Minister (Milos Alcalay)."

Chaderton is lying, and he knows it. Venezuela's opposition has been clear in rejecting the coup as well as Zelaya's illegal moves which prompted it. The Venezuelan opposition does not have a "shadow" foreign minister, and Alcalay does not speak for the opposition. Regardless of whether or not Alcalay was recognizing Micheletti (and even that is not clear) it's clearly a personal position.

If Roy Chaderton's staff did its work, it would not give him blatantly false information to spread in the halls of the Panamerican Union. Instead of slandering fellow Venezuelans and dragging us into a hemispheric fight that has nothing to do with the Venezuelan government's serious human rights violations, Ambassador Chaderton should do his work and stop playing politics in front of the hemisphere's diplomats.

Chaderton's objective is clear. By creating this straw man, he is trying to taint the Venezuelan opposition to Chávez just when opposition students wage a hunger strike in the OAS's offices in Caracas to call attention to the plight of Venezuela's political prisoners.

OAS diplomats would be fools to not see through this shameful ploy.

Cadiva Chronicles

Juan Cristóbal says: The government's multi-billion dollar subsidy to the upper-middle classes, in the form of artificially cheap dollars, is an ongoing focus of this blog. This twisted social program we like to think of as Misión Cadivi has made billionaires out of a handful of arbitrageurs and seeded distortions throughout our economy. But one point we've neglected is the way Cadivi degrades those who decide to play along, wasting their time while limiting their freedom and their ability to move about the globe.

Cadivi's new regulations highlight how far the government is willing to go to control just where you can travel and how much you can spend. According to El Nacional, starting January of 2010, here are some of the rules you will have to comply with in order to participate in this social program which, let it be said, is the only legal way to purchase foreign currency:

• You will be assigned a maximum of $2,500, but only if you are traveling to Europe, Asia and some cities in the US (says nothing about Canada or Australia). It's not clear what cities in the US this covers, but you can be sure none of them are in Florida. The banks are doubtful if there's a realistic way to implement this.
• You need to apply for dollars each time you travel.
  
• You will have to notify your bank and Cadivi of the dates of your trip, as well as the precise location(s) you're planning to visit.
  
• You will only be allowed to use your credit card abroad during the dates that your bank expects you to be abroad.
  
• If you receive approval for, say, a 10-day trip, and after the fourth day you have maxed out your allocation of cheap dollars, Cadivi will audit you and you can be charged with "exchange rate crimes."

Some of these rules may already be in place, some of them may indeed be an improvement. I honestly can't keep track of all the regulations. There just isn't enough space in my RAM for this stuff.

I should consider myself lucky, I guess. Venezuelans wanting a vacation abroad obsess about their Cadivi allocation. It starts with the mad process of getting your bank to even accept your application papers. People can (and do) get their applications rejected for placing the identifying sticker on the wrong place of the specified application file folder - the very center, say, instead of the upper third. No violation is niggling enough for a Bank to let slide. After all, processing your Cadivi app is nothing but cost to your bank. They have no incentive at all to be helpful.

Once they've gotten through all that and left the country, Venezuelans will talk to each other incessantly about whether or not their credit card "worked." They go to great lengths to find an ATM that will give them the permitted amount of cash per trip. Some of my relatives are experts at knowing the rules and maxing out their benefits. My sister in particular has become such a pro that we've begun calling her "Cadiva" - whatever your question about Cadivi, she has the answer.

For those of us who don't live in Venezuela and are lucky not to be in Cadivi's system, it's a sad sight: grown men and women reduced to having to account for their every moment abroad to Papá Gobierno, subjected to numerous restrictions, always fearful that if they step a tiny bit out of line, they will be plucked from the system and never allowed back in. It's kind of like a holiday version of Nineteen Eighty Four.

It's a stark reminder that no matter how much distance you try and put between yourself and Chávez, he is always there. Because no matter how far you go, there's really no escaping the Revolution.

The view from your window: Harare

Harare, Zimbabwe. 8:30 AM.

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Tightening the noose

Juan Cristóbal says: When the government's "Media Responsibility Law" forced all radio stations to allocate five and a half hours of broadcasting per day to programming made by "independent national producers," many decried the move as one more step toward the end of press freedom in Venezuela. Since this didn't pan out quite so dramatically, last Friday, the government upped the ante and announced plans to directly assign three and a half hours (of their choosing) on every radio station to the specific programs and specific producers they like.

In effect, the rule would turn Information Minister Blanca Eekhout into a kind of nationwide Programming Director, with complete control over what can be heard on any given station for hours every day.

The new regulations appear to relate only to the radio, but are fuzzily drafted enough to have TV stations worried.

This, together with the shutdown of dozens of radio stations, as well as the muzzling of prominent opposition journalists Nelson Bocaranda and Marta Colomina and the increasingly evident rash of self-censorship, points the way to the media landscape of the future. It's not just TV it's after. The government won't rest until the radio is as accommodating as Venevisión.

The government's target audience is clear: people in Venezuela's urban centers, who spend two to three hours a day stuck in traffic, and who have begun voting against them. Pretty soon, all those voices telling them the Revolution is a failure will be gone.

Think about this the next time you hear Chávez or his fact-free, for-hire apologists rave about freedom of expression in Venezuela.

Graduating Out of the Axis of Annoyance

Quico says: It's tempting to dismiss Rodrigo Sanz's revelation that Iran is collaborating with Venezuela in an effort to secure high grade Uranium in Santa Elena de Uairén as mere posturing, or even just a slip of the tongue. That would be a serious mistake.

I believe Friday's announcement will come to be remembered as a turning point in the history of the Chávez era. When the time comes to partition our recent past, it will be remembered as the moment when Venezuela graduated out of the Axis of Annoyance and entered a geostrategic space it's never held before.

Here's why. For the last five centuries, a kind of Iron Law of Geopolitics has dictated that what happened in Latin America only made it onto the Big Powers' radar screens when events here got enmeshed in broader geo-strategic concerns.

For example, our Wars of Independence would've been of little interest to the great powers if it hadn't been for the Napoleonic upheaval, followed by the post-Metternichtian shake-out in European great power politics.

In the same vein, what Guatemala chose to do with its government in 1954 or Chile with its affairs in 1973 would've been of no particular interest to the rest of the world, but seen through the prism of the Cold War, they became important. And, of course, Fidel Castro never would've been anything more than an also-ran in the region's long history of megalomaniacal caudillos if he hadn't immersed Cuba in the USSR's global strategy to confront the US.

In the absence such trans-oceanic entanglements, what happens in Latin America should matter to Latin Americans only. Sporadically, an idealistic American president or a plunder-happy US company might decide to dip its toes in the region's politics as a way to burnish his credentials or fatten its bottom line, but only in ways that matter little beyond the borders of the country involved. In the event, Latin America only graduates to the first tier of geo-strategic concerns when it gets sucked into fights cooked up in the other hemisphere.

Whether he realizes it or not, Mining Minister Rodolfo Sanz did exactly that. It injected Venezuela right into the pre-eminent security challenge of the era. For the last 10 years, Chávez has been shadow boxing with the US. On Friday, Sanz shoved him into the rink.

Because we shouldn't fool ourselves: a nuclear armed Iran under the control of an aggressively anti-semitic, proudly extremist Islamic theocracy led by a man known to favor apocalyptic fantasies is a scenario none of the Western Powers can begin to countenance. The potential for Tehran to effectively hold the entire Middle East hostage, dictating terms to the entire region under the implicit threat of nuclear attack is too grave for Europe and the US to accept.

Some might argue that, during the Cold War, having two nuclear armed adversaries facing off against each other served as a stabilizing factor, helping keep the war cold. But there's one fatal flaw in that analogy: the Soviets did not have a death wish, the Iranians do.

That may sound over-dramatic, but the cult of martyrdom is one of the central tenets of Shia Islam, and the absolutely extreme version of Shiism the Iranian mullahs espouse has already led them to send hundreds of thousands of their own citizens to certain violent death. (If you think I'm exaggerating, read this.)

For people genuinely convinced that death in jihad is how you get to heaven por la puerta grande, the possibility of massive nuclear retaliation could easily come to be seen as an opportunity rather than a threat. After all, if you were seriously convinced that you had the chance to guarantee everyone you rule over a privileged spot in Paradise, wouldn't you take it? Wouldn't you feel you had a responsibility to take it?

It's the kind of calculus Israel's military planners are having to weigh every night before they go to sleep.

In the wake of the brazenly stolen presidential elections earlier this year and the grave disclosure over the facility at Qom, the sense of urgency over the Iranian regime's intentions is considerably heightened. Couple that with an aggressively nationalistic government in power in Israel, and the Western Powers could well be drawn into a military confrontation with Iran through no decision of their own, merely as fall-out from a go-it-alone Israeli attack.

This is the scale of the international crisis that Rodolfo Sanz - of all people! - delivered us into with his announcement on Friday. Preventing an Iranian bomb is the number one policy goal of the United States today. That's two. Venezuela is actively helping Iran secure the most critical input needed for such a bomb. That's another two. Two and two make...?

What we have in our hands is a game changer. The west simply cannot laugh off Friday's announcement as just another of Chávez's folkloric eccentricities, and the Chávez administration lame attempts at backtracking ("oh no, he meant the Russians were helping us!") are not believable. Helping Iran get the bomb isn't on a par with helping FARC smuggle drugs to Europe or with financing Ollanta Humala's campaign. It's not an annoyance. It's a first-tier strategic threat.

Chávez knows it. The Israelis know it. The Iranians know it. The Pentagon certainly knows it.

We're sailing into uncharted waters here.

The view from your window: Austin

Austin, Texas, USA. 7:45 AM.

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Radioactive

Quico says: So, just one day after Presidents Obama, together with Nicolas Sarkozy and Gordon Brown, warned Iran that they've determined that "the size and configuration of this [their newly disclosed nuclear facility at Qom] is inconsistent with a peaceful program", the Venezuelan government drops a diplomatic bombshell, as Mining Minister Rodolfo Sanz confirms the longstanding rumors that Iran is also helping Venezuela prospect for Uranium in Southern Bolívar State.

“Iran has helped us on the aereal-geophysics fly-overs, and on geochemical analysis," the chavista minister said, adding that initial evaluations "have allowed us to detect radiometric anomalies that indicate that Uranium is present in the west of the country as well as in Santa Elena de Uairén”.

Honestly, the stories about Uranium-hunting Iranians in the jungle always seemed so far fetched to me I've been reluctant to run with that story. I always guessed, along with Robert Morgenthau, that the Iranian presence in Venezuela was basically about skirting US financial sanctions.

But no, this one's made the journey from urban legend to government confirmed fact in a big big hurry. And, together with the crisis brewing over Qom puts Venezuela in increasingly dicey geostrategic straits.

Verrrr...

The Thicket

Quico says: The fine landed like a bombshell in this well-appointed east-side building's condo board. The government was fining them for BsF.60,000 - some $10,700 at the no-joke exchange rate - for "workplace safety violations."

None of the residents was prepared for this. Sure, labor inspectors had been to the building some weeks before and made a big deal over the fact that the main electrical breaker boards were inside the caretaker's apartment - a workplace hazard in their book. But the condo board had already spent a considerable amount of money relocating all the electrical equipment to the common areas, so they thought that would be the end of it.

A couple of panicky phone calls to the building administrator later, they had their culprit.

"Oh yeah," the administrator said, sizing up the situation, "it's probably because you forgot to make the conserje sign her occupational hazard disclosure papers. They'll throw the book at you for that."

This only confused the condo board more. It was the first they had heard about occupational hazard disclosure documents. The administrator did what to he could to reassure them. "It's ok," she calmly reassured them, "we have some on file here, we'll fax them over."

The fax came bearing an official form that, it turns out, the condo board is now legally mandated to present to the caretaker for her to sign. It listed every kind of injury a conserje could imaginably suffer doing her job, asking her to certify that she'd been made aware that, for instance, the dust that she kicked up when sweeping the building's common areas could cause allergies, and that mopping the floors made them dangerously slippery and a potential accident hazard.

The condo-board head rushed to have her sign the statement, which the conserje did with some understandable bewilderment.

"Who doesn't know that wet floors are slippery?!" she mused as she signed the paper the doñita had just put in front of her.

It was slightly embarrassing for all involved; it all seemed too stupid for words. But getting that document signed was the first step in filing an appeal against the over-sized fine.

Turning up at the labor inspector's office, the condo-board head found herself at the far end of a queue that snaked up three flights of stairs, into the offices on the third floor. Hundreds of people, most of them fined for similar banalities, were camped out for a long, sweaty day of waiting, the bureaucratic obstacle course you're forced to navigate if you want to appeal a fine such as this.

They might as well put up a sign saying "Welcome to the insane world of LOPCYMAT". To you and me, that stands for Framework Law on Prevention, Work Conditions and Environmental Standards in the Workplace - chavismo's kafkaesque worker "health and safety" law.

Shielded by the unobjectionable aim of protecting workers' health and safety, LOPCYMAT has created a mad thicket of mostly superfluous regulations guaranteed to create a mass of mostly useless paperwork, all backed up by the threat of heavy, often crippling penalties.

In the event, our condo-board head wasn't even in that deep. For violations judged more severe, LOPCYMAT specifies draconian criminal penalties that can range up to four years in jail if a worker is temporarily disabled at work. Regardless, the bread and butter of the law's punitive regime is its system of hefty fines, liberally handed out for failing to comply with any of dozens of rules, whether substantive or procedural.

Predictably, the stench of corruption hangs over every LOPCYMAT enforcement measure. The long queue to file an appeal delivers you to the hands of a foul-tempered bureaucrat that, more often than not, resolves the labor dispute with a not-particularly-oblique request for a bribe, "y dejamos eso así"... literally, and we leave it at that.

In effect, the interminable line outside any given labor inspector's office these days is filled with people waiting patiently for their turn to be shaken down by a corrupt bureaucrat.

And yet, LOPCYMAT is merely the tip of the chavista regulatory iceberg, a regulatory amuse-bouche.

An even more punitive new anti-drug law threatens company managers with criminal penalties if their employees are found holding illegal drugs on the job. In other words, if somebody you hire turns up to work with a baggie, he goes to jail for one year; you go to jail for four.

Seniat - the government's tax collection agency - can rightly claim title to having started this trend. This famously penalty-happy agency can and will fine you for misspelling a supplier's name on a tax reporting form, and can shut you down temporarily or permanently for almost any violation, no matter how technical or banal, with little to no chance of appeal.

IVSS - the Social Security Administration - and Indepabis - the Consumer Protection agency - add in their own layers of regulatory harassment to the mix, each reserving the right to fine or shut down firms or jail their owners for a bewildering variety of violations. Even the fire department can shut you down if you fail to cross every t and dot every i in their rulebook.

The whole edifice of stifling regulations locks in on itself to create a kind of iron fence around the private sector. Create hundreds and hundreds of arbitrary rules and you can be sure that, at any given time, even the best, most conscientiously-run of businesses will be in violation of at least some of them.

Layer in the potential for heavy fines for every broken rule, and you get a private sector gripped by a justified paranoia, certain that at any time somebody from the government could turn up and flip their operation on its head.

Not surprisingly, regulatory compliance takes up an ever growing share of private firms' resources, with medium to large firms forced to set up their own in-house compliance departments to try to stay ahead of the ever-growing thicket of nuisance rules.

Assailed by a government that doesn't hide its contempt for them, private firms in Venezuela are merely in the business of keeping their heads above regulatory water. And new regulations come online all the time, with each new rule bringing its own compliance costs.

But if private firms are getting pinched on the production side, they're getting pinched on the marketing side as well. Each day, more industries find themselves in a market where the prices they can charge customers as well as the cost of their inputs are also set by the state. Not only does the government control costs via regulation, it controls the sales price as well. And so, as the cost of staying ahead of the regulatory thicket inevitably starts to exceed the revenue they can raise by selling at controlled prices, firms shut down, leaving the space to be filled by a public sector that, deep down, sees no good reason for the private sector to exist in the first place.

None of these rules apply in the public sector. This means that if you have the misfortune of working for a state-owned firm, none of these "protections" apply to you.

As more and more workers are injured or killed due to workplace accidents in the nationalized industries in Guayana, the labor inspectorates do nothing. When a chlorine gas tanker-truck overturns in Clarines setting off a chemical poisoning emergency that leaves twelve people dead and hundreds injured, the government blames the truck driver.

And if PDVSA decides to unilaterally cut your wages, or the Metro de Caracas openly announces its intentions not to abide by its collective bargaining agreement, you're shit out of luck. The thicket is to be applied against evil capitalists only. The virtuous public sector makes only innocent mistakes, it never commits crimes.

This unrelentingly hostile business climate has left Venezuela ranked as one of the world's hardest countries to do business in. Amid this chaos, chavismo is now proposing the coup de grace: a sprawling, antediluvian labor law reform that would force hundreds of firms that are now just barely getting by to shut down.

It's not just that chavismo is pushing a paleolithic Severance Pay regime that creates massive disincentives to hiring and will wreak havoc with company balance sheets by creating, out of the blue, huge new labor liabilities. It's that they're pushing for an even shorter workweek coupled with a tripling of statutory paid vacation time, from 15 days to 45. It's that, on top of that, they are adding in worker co-management statutes that will strip entrepreneurs of what last remaining shards of control they once had over the companies they've created. All this in a country where two-thirds of formally employed workers are in the private sector.

Chavismo's war on the private sector is all-encompasing and unrelenting, organized around an unambiguous objective. The government has set out to create a system where private industry doesn't need to be expropriated to disappear over time, because the regulatory thicket itself guarantees its inviability.

Think of it as collectivization via bureaucratic hassle.

The View from Your Window: Virginia Water

Virginia Water, Surrey, England.

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Non-Traditional Exports

[In a provocative journal article on Chávez's strategy to project power abroad...]

Javier Corrales says:

If a foreign government or politician accepts Venezuelan aid, what follows is more than just clinics. Recipients are free to use the money as they see fit. Rarely can politicians receive this amount of aid unconditionally. Venezuelan aid, therefore, often functions as a blank check for any type of domestic spending, not necessarily pro-poor spending.

Venezuela has thus developed a new export model. It is not so much the export of war, as Cuba did during the Cold War, or the export of weapons, as Russia still does. It is certainly not the export of technological know-how as OECD countries do or the export of inexpensive manufactures as China does. It’s the export of corruption. Venezuelan aid is billed as investment in social services, but in fact it consists mostly of unaccountable financing of campaigns, unelected social movements, business deals, and even political patronage by state officials. In this era in which elections are fiercely competitive almost everywhere in Latin America, Venezuelan-type aid is irresistible.

Clarifications on Bocarandagate

Quico says: Oh, I do enjoy riling you all up once in a while. But since the general level of up-rilery appears to be a bit higher than usual this time, I thought I would clarify.

I condemn any move by any government to silence media voices merely for reasons of political expediency. I mean, of course I do. Among minimally liberal, half-way modern people, that just goes without saying. (Which, incidentally, is why I didn't say it.)

Moreover, I have no doubt whatsoever that that's the reason Nelson Bocaranda is being silenced. I think the government's campaign to bully the media in general - and the radio in particular - into a bobalicón silence is utterly contemptible, as is this instance of it.

What I cannot abide and will not accept is that extra-step, the cry-me-a-river session where the opposition mono-neuron automatically jumps straight from the premise "the government is repressing this man" to the conclusion that "this man must be an ardent champion of truth, justice and the Venezuelan way."

Ni es lo mismo ni es igual.

Nelson Bocaranda was an embarrassment to Venezuelan journalism before his show was canceled and he remains an embarrassment to Venezuelan journalism now that his show's been canceled. Merely being repressed by a brutish, authoritarian government does not magically earn you a halo, Nelson. Nor does it turn you into a minimally respectable journalist.

It just makes you an appalling hack who happened to step on some powerful toes within a brutish, authoritarian government. That's all.

The View from Your Window: Paris

Paris, France.

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He can run run, but he can't hide...

Quico says: So we're all supposed to be sad now that oppo radio-broadcaster Onda la Superestación has canceled Nelson Bocaranda's long-running political gossip show, "Los Runrunes de Nelson Bocaranda".

Sorry, but count me out. With Bocaranda's Freedom of Speech martyrdom, the very worst in the opposition's victim complex is coming to the fore.

All of a sudden, we're supposed to overlook the fact that Nelson Bocaranda has made a career out of pissing all over the code of professional ethics that makes up the backbone of journalism as a profession and rush to celebrate him as a brave voice speaking truth to power.

A guy who took a perverse pride in publishing rumor, speculation and innuendo as fact, who never ever made any discernible effort to confirm any of the hundreds of tidbits he put in the air, who ruined any number of reputations over decades of publishing stuff he'd just sort of heard somewhere is, suddenly, elevated to the role of brave, persecuted dissident simply because a few of the hundreds of people he blithely slandered on the air happened to be extremely powerful chavista insiders who made up their minds to silence him once and for all.

Gah. There's something about this story I can't beging to stomach.

Something nausea-inducing about the head-on collision between the opposition's outsized sense of its own virtue and its underlying willingness to tolerate any level of mediocrity so long as it flies under an anti-Chávez banner.

Something about the sheer polarized blindness with which people rush to the defense of our indefensibles in the same knee-jerk fashion as the other side rushes to the defense of their indefensibles...about the sheer malodorous parallelism between their stupidity and ours.

Sorry, but count me out.

The view from your window: San Antonio

San Antonio, Texas, USA. 11:20 AM.

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Contempt of Vote

Quico says: If the Chávez regime retains some patina of legitimacy in international circles beyond the know-nothing lefty fringe, that sense arises almost exclusively from one source: its electoral mandate. In our era, the vote is sacred: simply noting that Chávez governs by the will of the people is a powerful legitimating discourse.

But, last Sunday, Chávez showed once again just how shallow his commitment to the electorate's will really is by naming six of his usual-suspect cabinet ministers to the totally made-up office of "vice-president". In effect, each vice-president becomes a kind of super-minister with ill-specified new powers over broad areas of policy-making like "territorial development" (Ramírez) and "economic-financial affairs" (Giordani.)

You might mistake this for a bit of (relatively harmless) semantic chicanery until you remember that, in fact, the proposal to create these kinds of vice-presidencies was first put forward in 2007 as part of Chávez's proposal to reform the constitution (specifically, article 225.) And that proposal was rejected by the electorate via referendum.

So it's not just that there's no constitutional basis whatsoever for these appointments, it's that they're being carried out in the face of the electorate's explicit rejection of the idea, expressed through the ballot box less than two years ago.

So much for electoral legitimacy.

In fact, if you follow these things closely, you already know all about Chávez's only-if-they-vote-right attitude to the electorate's decisions. The right to elect Caracas's Metropolitan Mayor belongs to the soberano...but only if they vote for his guy. The voters' decision on whether we should have vice-presidents is sacred...unless they get it wrong. In that case, Chávez gets to decide.

Which comes down to the same thing. Cuz, after all,

Of drunks, fights and empty bottles

Quico says: I've been in a bit of a funk, lately. What can I say? Caracas got me down this time. There's something about life in this incredibly hostile, constantly on-the-brink city that wears away at you. I'm sure it would, even without all the political BS. But it's the layering of BS on top of BS, the kind of bovine-scatology milhojas, that really wears you down.

The thing that's been weighing on me lately is the disconnect within the political opposition. It's something else, our oppo political class. After ten years facing a government that openly wants to repress their movement out of existence, you would think these guys might have re-thought their way of doing politics, if nothing else, out of the sheer need to survive.

If the threat of Chavista repression was not enough to jolt them into some semblance of life, you'd think the sneering contempt in which most anti-chavistas hold their putative leaders would serve as a final safeguard, some kind of reason for them to get their act together, subsume personal ambitions for the greater good, act the way their natural supporters are begging them to act.

No such luck.

Just in the last couple of weeks, we've had a public row between what remains of MAS and Acción Democrática over how to select candidates for next year's National Assembly elections. We've had Leopoldo López tossed out of UNT by a party leadership clique that felt threatened by his popularity. And now, we have a kind of sotto voce civil war inside what remains of Copei as different factions - one lead by Secretary General Luis Ignacio Planas, the other by Roberto Henríquez, Enrique Naime and Carlos Melo - play all kinds of dirty tricks on one another, with each trying to seat only its own supporters ahead of a National Party Convention to secure leadership of the party (TalCual dixit, but behind their subscription wall.)

The only positive thing we can extract from this fight is that at least Copei still has enough members for them to split off into factions and fight one another. One suspects that some other opposition parties (I'm lookin' right at you, ABP) could only fracture if their caudillo developed a sudden-onset of Multiple Personality Disorder.

It's not hard to see the way this is going to go. One faction will keep control of Copei, the other will whimper off and form their own rump party, and the bizarre political disease of never-ending fragmentation within Venezuela's political opposition will continue until we reach the inevitable logical outcome. Because my theory is that, one day, Venezuela will simply have as many oppo political parties as it has oppo voters. 4,302,173 oppo votes for 4,302,173 oppo parties. It can happen no other way.

There's a lovely criollo saying for the kind of political fight we're seeing in Copei: two drunks fighting over an empty bottle. The sheer, visceral disgust that political fights like the one in Copei set off in the people the party needs as supporters is enough to totally vitiate the supposed "prize" of securing a leadership spot. And the layers and layers of disgust - the mille-feuilles de nausea - that the accumulation of such internal fights sets off in the opposition's natural supporters explains what I see as perhaps the most startling aspect of Venezuela's political life today: the utter and complete collapse in confidence that the political opposition can mount a credible challenge to chavismo.

It's, of course, a self-reinforcing belief. When nobody at all believes you have even the slightest chance of one day unseating the government, nobody at all will take a chance on you. No radio station will sell you advertising space, because why risk angering the government to help out people who will never be in government? And even if you could find a radio station to sell you time, you couldn't afford to pay for it because nobody at all wants to contribute money to a party that has zero chance of forming a government. And with no money, you can hire no staff, and run no campaigns, or do any of the other things you might need to do to start to turn around the perception that you have zero chance of one day forming a government, which, as a result, becomes more and more entrenched every day.

Faced with this absolutely bleak panorama, opposition political leaders choose instead to aim for more manageable goals: secure a spot or two in the National Assembly, which at least come with a salary and a chance to get a bit of free media coverage now and then. But to secure the nomination you need to obtain that spot in the National Assembly, you absolutely need control of a party, which is why the fight for party leaderships becomes an knives-drawn affair, a deplorable spectacle that further entrenches the absolute certainty people feel that this opposition will never ever mount a credible challenge to the government.

This is the closed loop the opposition political class is locked into: a vicious circle that would guarantee Chávez's continuation in power for many years to come even without the openly authoritarian repression his government is deploying.

The view from your window: Maputo

Maputo, Mozambique. 11 am.

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Neither here nor there

Juan Cristóbal says: - The soap opera continues.

Hugo Chávez announced today that Manuel Zelaya was back in Honduras. In reality, he is hiding in the Brazilian Embassy in Tegucigalpa which, if I'm not mistaken, is Brazilian territory. So he's not really in Honduras, but he's not really out of the country either.

Furthermore, he has now illegally entered the country, giving more ammunition to his opposition.

So ... now what?

Saved by the Gong

Quico says: This one is straight from the Annals of News Whose Relevance To Us is Downright Depressing. TNR, in an article about the weird confluence of interests between Chinese hippie cultists and Iranian liberals, notes that,

When dissident Iranians chatted with each other and the outside world [after Ahmadinejad's fishy re-election], they likely had no idea that many of their missives were being guided and guarded by 50 Falun Gong programmers spread out across the United States. These programmers, who almost all have day jobs, have created programs called Freegate and Ultrasurf that allow users to fake out Internet censors. Freegate disguises the browsing of its users, rerouting traffic using proxy servers. To prevent the Iranian authorities from cracking their system, the programmers must constantly switch the servers, a painstaking process.

The Falun Gong has proselytized its software with more fervor than its spiritual practices. It distributes its programs for free through an organization called the Global Internet Freedom Consortium (GIFC), sending a downloadable version of the software in millions of e-mails and instant messages. In July 2008, it introduced a Farsi version of its circumvention tool.

While it is hardly the only group to offer such devices, the Falun Gong’s program is particularly popular thanks to its simplicity and relative speed. In fact, according to Shiyu Zhou, the deputy director of GIFC, the Farsi software was initially so popular that the group shut it down soon after introducing it. Iranians had simply swamped their servers, even outnumbering Freegate’s Chinese users.

It terrifies me to realize that, in the coming years, these kinds of technologies are likely to go from novelty to necessity for Venezuelan liberals.

But with Henry Rangel Silva taking charge of CANTV, it's a reality we all need to start getting used to.

The view from your window: Haarlem

Haarlem, The Netherlands. September 18, 6.30 pm

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A photographer captures Venezuela's descent

Juan Cristóbal says: - The New York Times has an excellent review of the new book of photography, "Capitolio," by Christopher Anderson. The images are haunting, and the review itself is not to be missed.

Kudos to the great Lucía for finding this.

Different fortunes of two chavistas

Juan Cristóbal says: - Few things thrill Hugo Chávez more than seeing a leftist win an election. Whether it's in El Salvador, Ecuador, Bolivia or Spain, he can't help gushing over any victory for his anti-imperialist "side."

And can you blame him? When your international status is that of a quasi-pariah and you have to resort to making deals with these people, well, you too would be thrilled at any chance you get of "expanding" your list of allies. Never mind the fact that his new "allies" are, more often than not, sensible politicians. For Chávez, any win counts.

But does it?

In the next few months, both Uruguay and Chile will hold Presidential elections. Uruguay is currently headed by the sensible leftist President Tabaré Vasquez. Term limits prevent him from running again and cashing on his considerable popularity, which is why I wasn't surprised when I heard the government's candidate was the favorite. But when I heard he was a former guerrilla fighter, my eyebrows rose.

And yet, reading this interview, I can understand why he's leading the polls. Uruguayans are, if anything, a serious people, not prone to fall for the showmanship, anti-business, anti-imperialist rhetoric that bellows from Chávez's mouth. (Well, sometimes they're not so serious.)

Mujica presents himself well here. He is an unassuming man of the people, that's for sure, and his leftist credentials, gained by fourteen years in prison, are impeccable.

But he is quick to say that his will not be a government where the state gobbles everything up. He says he needs businessmen to create jobs, and shies away from radical proposals like a "Constitutional Assembly" that has been used by Chávez, Correa and Morales to concentrate power. In a very explicit way, he comes across as a Lula-like figure. And at 74 years of age, I wouldn't expect him to change the Constitution so he can stay in power.

When the topic turns to Chávez, Mujica's common sense and wit shine through. He criticizes Chávez for talking too much, but recognizes that Uruguayans like the fact that Chávez sends them cheap oil. Still, that doesn't prevent him from being honest, like when he recalls telling Chávez that he's not building socialism, but rather an enormous bureaucracy that will gobble him up.

A pawn of chavismo, he is not.

In Chile, chavismo's luck is taking a turn for the worse. The young, dynamic "Trojan horse" candidate Marco Enríquez-Ominami has been rising in the polls. Having lived in Chile for five years, I've been following him for a while and I can honestly say he is a hard-core chavista - no "Lula-type," "chavismo-light" analogies are appropriate here. This is, after all, a guy that was invited by the CNE to observe elections. But don't take my words for it - take his.

Sure, he is trying to shy away from this, a must in a country where Chávez is slightly less popular than getting food poisoning from homemade mayonnaise, a surprisingly frequent occurrence in Chile. So Enríquez-Ominami, in his best I'm-a-good-boy-let-me-move-to-the-center voice, is trying to present himself as a modern, moderate leftist.

Although he was and is a long shot to win, for a while I thought his shtick would work and Chileans would fall for it to some extent. My fear was that a strong showing in this election would lay the groundwork for a win in a future one. And then...

Out of the blue comes an interview he gave in 2003, where he said that, for him, being Chilean "was a tragedy," and that he would have preferred to be an Italian. His lame attempts at damage control were, perhaps, even worse. After this, his candidacy, and perhaps his entire political future, are effectively dead.

Chavismo will boast, and they will win more elections in the future. But don't buy the hype. Both Uruguayans and Chileans are going to be fine.

The view from your window: Lusaka

Lusaka, Zambia. 2:00PM.

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Finding the link

Juan Cristóbal says: - "Mi Comandante, I would like you to meet my friend Michael Moore..."

The View from your Window: Berlin

Ernst Reuter Platz, Berlin, Germany - 10:00 A.M.

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Elite Permutations

Quico says: Fly into Venezuela and you come face-to-face with the single most important element reshaping Venezuelan society literally as soon as you've entered the country.

I'm not talking about the giant posters of Chávez you see in Maiquetía's baggage claim area. I'm talking about the the thing that happens the moment you leave customs, cross that symbolic portal into the country as such: you find yourself face-to-face with some hustler saying "bolivars? change dollars...good rate..."

In a way, it's a uniquely honest introduction. That guy at the airport is the tip of a massive socio-economic iceberg. Because currency arbitrage is much more than just one aspect of the chavista model of political economy: it's its heart and soul.

The distortions introduced by Venezuela's permuta-dependent, de-facto dual currency exchange system are remaking Venezuelan society from the ground up. Until you've grasped its dynamics, you've grasped nothing of the way the chavista stranglehold on Venezuelan society actually operates.

And yet even as I'm writing it I realize that that phrase - "permuta-dependent, de-facto dual currency exchange system" - is obtuse enough, impenetrably technical enough to send most sane people's interest's waning.

And that, in a way, is why it works: in the permuta system, we have a virtuoso feat of misdirection. While we all focus on what the government is doing with the one hand, it's off remaking society with the other.

Because, make no mistake about it: just beneath the surface, just beyond the heavily propagandized mountains of socialist paja, the government really is upending Venezuelan society. It's just that the reinvention is happening by stealth, through a mechanism too obscure for most observers to quite grasp, let alone pay any attention to.

When you get past the economist's mumbo-jumbo, the permuta system is the vehicle for a 21st century montonera, a mechanism for replacing one elite with another.

The dual-rate exchange market is, at its nub, an instrument of financial alchemy, a way of turning $1 into $3 instantaneously, with no risk, but only so long as you have the right connections.

Administrative permission from Cadivi is your golden ticket to this incalculable manguangua. Needless to say, if you can create $3 out of $1, you can create $9 out of $3, and $27 out of $9. Which amounts to saying that, in Venezuela, the amount of the nation's oil rents you can appropriate, risk free, is entirely dependent on your connections.

The dual exchange system's genius lays in the way it makes participation in the go-go world of risk-free bolibourgeois oil rent appropriation entirely dependent on your political loyalty. With control over a key part of the arbitrage mechanism, the government keeps a tight rein on who is able to participate in the windfall and who is not.

In this way, the Permuta System allows the real agenda of chavismo to be achieved: not the hopeful bla-bla-bla about the abolition of the class structure, but rather the recycling of elites. It's a process as old as Venezuelan nationhood, repeated a dozen times in the 19th century and another four times since Juan Vicente Gómez's death three-quarters of a century ago.

Any number of otherwise incomprehensible puzzles start to make sense when you understand the Permuta System's absolute centrality to Venezuela's political economy these days. Everything from the fact that a batido de guanábana costs $4.50 in an arepera if you put it on a foreign credit card but just $1.50 if you buy it like a sane person, to the fact that Wilmer Ruperti sails around in a vintage yacht that once belonged to Henry Ford.

International Capital's softly-softly approach to the Chávez regime only makes sense when you realize that any number of multinational firms have literally billions of dollars in profits whose value depends entirely on Cadivi's willingness to honor their official dollar requests.

Witness this Wall Street Journal article on Telefónica of Spain's perilous position with regard to its profits from Movistar's Venezuelan operation: whether Telefónica walks away with over $2 billion in profits from its Venezuelan operations since 2006, or with a third of that depends entirely on a single administrative decision in the hands of a handful of bureaucrats and advisors close to president Chávez. Can we really believe that the Spanish government's benevolent line towards the Venezuelan regime is uninfluenced by that?

And the supposedly "technical" policy debate inside the government on what to do with the exchange rate can be reinterpreted as a fight over who will end up appropriating the nearly limitless arbitrage opportunities arising from dual exchange rates: whether it will be Nelson Merentes' cronies inside BCV (who, unsurprisingly, are pushing for the Bank to adopt a daily auction of dollars that would leave their hands right next to the till), Alí Rodríguez's at Finance (who want rather a "tax" on foreign exchange transactions whose proceeds would end up - you guessed it - in the Finance Ministry's hands) or Rafael Ramírez's syndicate at PDVSA, which wants to keep the current system because the status quo leaves massive sums of cash flowing from PDVSA directly to the Permuta market, allowing them to appropriate part of the arbitrage margin.

Which faction succeeds is of mostly academic interest to outsiders, because each is locked in a bitter battle with the others over control of a natural resource rent stream whose existence is entirely independent of their efforts to control it. What we have, in other words, is a near-dictionary definition of rent-seeking (rentismo): an economic system where the prevailing incentive structure drives people to focus their efforts on activities that create no value for society as a whole.

The faction that exploits the rent-seeking opportunities around them most effectively will, inevitably, become the country's new economic elite. Venezuela will inevitably become the property of people well-connected enough to persuade Cadivi to trade them $20,000 for Bs.43,000, and then manage to use those $20,000 to buy a car in the US, ship it back here, and sell it for Bs.70,000. Or to those who manage to do the same with medicines, or clothes, or toothpaste, or any other product. The country is being turfed out to the Arbitrageurs.

The skills needed to ride this particular gravy train - politicking, bureaucratic empire-building, scheming and intriguing - are skills that do precisely nothing to advance the welfare of Venezuelan society as a whole. This is the system Chávez has reinvented. This is the receptacle into which all that drool pouring out of Oliver Stone's slack jaw must eventually be collected. This is the revolution, people. The rest is bread and circus.