Dear Editor

Quico says: I was about to send this as an email to an editor who asked me to write something about Chávez's hypertrophied presidential office budget. But as the rant took shape, I found myself thinking... "hmmmm, did I just write a post without meaning to?"

Dear [Name withheld],

Thanks for getting in touch. It's always a bit funny getting to realize which kinds of stories about Venezuela pique a foreign editor's interests: if you'd asked me a week ago, I wouldn't have guessed that a largely bureaucratic story about the Presidential Office's budget allocation would get so many papers abroad interested, though in retrospect I guess I can sort of see why it's a resonant theme. My blog partner, Juan Nagel, sure got into it.

I don't think I can write it, though, for two reasons. The first is a bit technical and has to do with the way the budget process works in Venezuela, or rather, doesn't work. The second goes more to the heart of the issue...

First, the technical bit: Venezuelans who follow these things all know that the official budget the Finance Minister presents to our National Assembly each year is more like an opening gambit than a finalized statement of what the state expects to spend in the following fiscal year. For as long as anyone can remember, Venezuelan law has allowed the government to go back to parliament in the course of the fiscal year and ask them to top up whichever accounts have run dry earlier than expected, a handy little procedure known as an "additional credit" ("crédito adicional").

On some abstract plane, I guess having some mechanism in place to make sure the budget is flexible enough to adjust to changing realities is a good idea. But as with most good ideas in Venezuela's political system, this one has been abused out of any semblance of good sense over the years.

I'm not blaming Chávez here, this is one of those old-regime vices the revolution just sort of forgot to revolutionize. But the long and the short of it is that initial budget figures are an extremely misleading thermometer of how much a given government office in Venezuela will spend at any given time, because actual spending is often many multiples of the original figure, thanks to "additional credits."

In this case, in particular, the amount the government is budgeting for Chávez's office in 2010 is several multiples what they had budgeted for 2009, but I doubt very much it's what they actually spent this year: take the time to go through the additional credits and I bet the rise looks a lot less scandalous.

So it seems likely that what we have here is a kind of accounting mirage: the government deciding to ask for more of what Chávez will spend up front rather than returning to the parliamentary teat again and again over the course of next year. If you were so minded, you could even see this as an advance in terms of monetary transparency. (Though, of course, to make Venezuelan budgets genuinely useful as analytical and planning tools they would need much tighter controls over the "additional credit" mechanism overall, and the government sure isn't about to consider such a thing.)

I tried to think of a pithy way to explain all that in 3 sentences in a way that would make sense and wouldn't put your readers to sleep, but couldn't really think of one.

But beyond the accounting angle, there's this thing that's been gnawing away at me about the way the presidential budget is being reported abroad: when you're talking about a political system like the one we have, the whole notion of a "presidential office" budget that's somehow separate from the rest of the budget seems quaintly out of place. In Venezuela, every ministry and every agency's budget is at the president's unrestricted discretion...that's what petrostate autocracy boils down to!

You could multiply the examples here. I could tell you about Chávez's explicit threat to private shopping mall owners last week to get their own power generators or face power cuts from the public utility companies: a guy who micromanages the operations of even parastatal agencies like the utilities like that doesn't need a ringfenced private budget to spend as much as he wants on whatever he wants, he can just pick up a phone, call any agency head, issue a direct order and get his way, pre-existing budget commitments be damned.

I could go into the details of Fonden, the government's hyper-opaque "national development fund" which hasn't presented a balance sheet in public in over a year, whose actual holdings are a matter of simple-conjecture, but which by most accounts has at least several billion dollars and, according to some government spokesmen earlier this year, as many as $50 billion at its disposal: all money that's spent at Chávez's discretion, with simply no oversight, no previous budgeting, no form of outside accountability or control whatsoever.

I could go into the way the New PDVSA's management also spends money discretionally, on Chávez's orders, before handing that money over into the finance ministry's budgeting stream, such that that nearly endless money-stream is also, in effect, part of Chávez's no-oversight, no-controls budget.

When you think through the realities of the way money gets spent in a country like ours, where no public institution is ever able to put a check or a balance on the president's whim, getting upset over a $341,000 allocation for the president's clothing seems grotesquely out of place. I mean, what we're focusing on here is the fig leaf, the part they had the decency to declare, the equivalent of the profits Vito Corleone reported through Genco Olive Oil.

It's the millions upon millions of dollars they're spending off the books, to fund FARC or Iranian uranium exploration in Bolívar state, or extremist groupies' presidential campaigns in the rest of the hemisphere that I'm worried about. It's the unbudgeted, unreported, unaccounted for and officially non-existent billions flowing from PDVSA through various financial intermediaries and into the accounts of Ricardo Fernández Barrueco and Pedro Torres Ciliberto and Arné Chacón that I'm concerned about. It's the whole black underbelly of the parallel, off-the-book Chavista Second (and Third, and Fourth) Budget that we need to focus on, not the vanilla $1.4 billion they had the modesty to own up to!

In conditions like these, writing a story about the presidential office's official budget allocation is, in itself misleading. A first world reader looking into is bound to read the story and think, "so...they have budget debates, we have budget debates, they have controversies about particular budget items, we have controversies about particular budget items, they have venal politicians who make a grab for the sweet life while in office, and so do we!...hey, Venezuela seems like a pretty normal country!"

But it's not like that, my friend...it's just not like that at all...

cheers,
ft

Tell me how you budget and I'll tell you who you are

Juan Cristóbal says: - Hugo Chávez's administration introduced a draft 2010 budget a few days ago. The project promises a whopping $84 billion in spending that somehow manages to disappoint. It is lower than the 2009 budget in real terms, and assumes an optimistic 0.5% GDP growth and a frankly fantastical 22% inflation, in itself nothing to shout home about. But a few hidden gems are raising significant eyebrows.

The main one: Spain's El Pais, through the inimitable pen of Maye Primera, is reporting that Chávez's discretionary spending will rise by 638% in 2010, to an astonishing $1.5 billion. This is twice as high as the entire budget of the Energy and Oil Ministry, higher than the budgets of the Agriculture, Mining or Foreign Affairs Ministries.

Nevertheless, the more egregious comparison is with the funds assigned to our embattled judicial system. Chávez's personal budget is on par with the $1.7 billion allocated to all the country's courts, and several times larger than the miserly $474 million that go to Prosecutors. Both amounts are 16 and 9% lower, respectively, in nominal terms than they were in 2009.

But it's just as well. The budget instructs the "justice" "system" to work in advancing the government's socialist agenda. If the courts are ordered to defend a political project instead of the rule of law, then there must be some sort of silver lining in them getting the axe, right?

The numbers underlying Chávez's discretionary spending offer cynics a not inconsiderable serving of red meat. There is a paltry $9 million allocation for Chávez to give out freely to those pesky people asking for help at the front door of Miraflores Palace, while security for the President (presumably to guard him from those very people) gets $16 million. The President's trips overseas (to get away from those people) get another $9.1 million, while his weekly TV show Aló, Presidente (so those people can be entertained while keeping quiet) gets $2.6 million.

Chávez's appearance clearly shall not bear the brunt of budgetary restrictions. The president's clothing gets $361 thousand per year - three times what Sarah Palin scandalously got for the 2008 US Presidential elections. This amount is, according to Chile's La Tercera, the highest in South America, exceeding even Cristina Kirchner's gaudy, unseemly $350 thousand-a-year wardrobe (which, come to think of it, Venezuelan tax-payers also help pay for.)

But as any fashion consultant will tell you, it's not just the clothes, it's how you wear them. That's why dry-cleaning gets $92 thousand, while $84 thousand are earmarked for stocking the President's palaces with "personal care" products. Assuming the President spends three minutes in the shower each day, his grooming costs taxpayers $76 per minute. Quite literally, he is throwing our money down the drain.

As snicker-inducing as these numbers are, they are not the most astonishing part of the Miraflores budget. Chávez is a well-documented narcissist, so these figures fit the bill. Unless you were still under the delusion that Chávez was sincere in his zest for socialism and his constant decrying of consumerism, these numbers are "dog-bites-man."

What these figures point to is Chávez's increased reliance on discretionary spending for his own political survival. As poll numbers for the President go from red to very red, Chávez knows his fate cannot be left to the headless bureaucracy he has fed all these years. As in 2003, he is well aware that the key is to have the cash ready to spend on quick, easy fixes that will somehow dupe the population into thinking he's solving their problems.

So the real headline shouldn't be what Chávez spends on clothes. The real headline is Chávez's strategy to stay politically relevant. In a country with the highest crime rates in the world, where personal safety is by far people's top concern, the President cuts funding for the justice system to increase his own discretionary funding. He clearly believes his own political survival depends not on solving people's problems, but on having the cash to look like he's doing so.

Chávez thinks you suck; you agree

Quico says: As Chávez takes to blaming more and more of the nation's problems on you, the latest Datanalisis poll confirms it: 23.9% of respondents identify "la gente" (the people) as the main culprit for the nation's problems, just beating Chávez (23.2%) for top spot.

You suck, and you know it.

Killing capital

Quico says: Hernando de Soto's conception of "dead capital" is one of the genuinely intriguing ideas spawned by the development literature in recent years. For de Soto, the problem facing the third-world poor is not just that they own too little, but that the things they do own are economically "dead."

In the absence of clear titles, the shanty where you live or the buhonero stall you sell from can't be used as collateral, or rented, or even sold. Because it can't do any of those things, it doesn't earn you an "in" into the formal financial system like the capital of the middle class or the rich. It's yours only in the sense that you can use it, nothing more.

But capital is much more than just the right to use the things that belong to you: it's the right to leverage them as tools for your economic empowerment and advancement.

Dead capital is the capital of the unfree.

What de Soto is getting at is an old idea in economics: that property is about more than just possession. Capitalism can only work when ownership carries with it a set of rights that include your ability to transact what you own, to borrow against it, to rent it or subdivide it or otherwise leverage it into a tool for attaining your goals. A major reason that the poor find themselves trapped in poverty, in this analysis, is that their property rights are partial and tenuous: they exclude many of the key features that turn mere stuff into living, breathing capital.

The debate in Venezuela's public sphere has too often missed this distinction between "property" and "property rights." Earnest chavistas have often pilloried the opposition for scaremongering, putting down their 2007 referendum defeat to a successful opposition scare campaign to convince people that the government was going to literally disposses them: kick them out of their ranchos or move cubans into their apartments.

"Nationalization is about the means of production," they'll argue, "about factories and farms and banks...not about people's houses!"

And while fears of reds knocking down your door may indeed be overblown, what can no longer be doubted is that even if chavismo won't take away your property, it sure is eager to truncate your property rights. They may let you keep your stuff, but your ability to dispose of the things you own in the way you judge most likely to bring your family prosperity is being aggressively fenced in.

This is the real story of Official Gazette No. 39,272. Without having to expropriate anybody outright, the Gazette truncates hundreds of thousands of caraqueños' property rights, eroding their ability to leverage their belongings into tools for their own economic empowerment.

What we have here is a kind of capital massacre: the willy-nilly deadening of a massive store of previously living capital. The second your apartment is designated a "historically protected site" it takes a massive step from the category of capital to mere belonging.

When historic-site status is conferred on entire swathes of Caracas at one go, what we're seeing is the indiscriminate degradation of thousands upon thousands of families' rights to dispose of what belongs to them as they see fit, and all for the most tenuous of public-interest reasons. The government kills capital, apparently, for fun.

"Well, of course they do," you may be tempted to say, "they're communists: railing against capitalism is their whole thing."

But that's not right either. Marxism, for all its faults, at least offers a coherent response to the question of how to generate investment in a post-capitalist order. By socializing the ownership of the means of production, the workers' revolutionary state itself acquires the tools to leverage the society's material base into a (hoped-for) better standard of living for everyone. You don't have to agree that this is a good or even a feasible solution to recognize it as, at least, a solution: a serious, internally consistent stab at explaining how to bring prosperity in the absence of individual property rights.

The problem is that chavismo fails to rise to the threshold of intellectual seriousness Marxism sets out. In Venezuela the state is eroding individual citizens' rights to leverage their property into capital without proposing any coherent alternative.

Rather than nationalizing all industry and accepting responsibility for the management of society's productive processes, the state has created a thicket of stifling regulations instead. Those regulations keep a truncated version of ownership in private hands while at the same time preventing private owners from doing the things capitalists normally do for society's welfare: invest, produce, grow and generate jobs.

They wash not, and yet they refuse to lend out the wash basin.

In Venezuela, capital is not being socialized; it's being hunted for sport.

Our future at fire-sale prices

Juan Cristóbal says: - Not content with issuing debt to finance capital flight, as they did a few weeks ago, the Chávez administration recently announced a new round of debt to finance even more capital flight, this time backed by the third-world thrift store that is PDVSA. One small problem stood in its way: not enough buyers.

Investing in Venezuela is way too risky even if you earn an infinity rate of return.

So what does the government do? Why, sweeten the debt emission deal, of course!

Yesterday, PDVSA said they would not change the conditions. The Central Bank chief parroted that line. But since they have no credibility to save any more, today they did the exact opposite and announced a heavily edulcorated new set of incentives to get people to buy their bonds.

The new rules exempt the interest earned from holding the government's debt from taxes. With this measure, the government ups the ante: not only is it encouraging you to take you capital abroad, it's actually paying you to do so.

The rules also say that holdings of these Boli-delicious, guapo-doble-con-queso bonds will not count toward bank holdings of foreign currency. As you may recall, a few months ago the government decreed to place a limit on the percentage of their capital Venezuelan banks could keep in foreign currencies. This caused a lot of scrambling among bankers who, wouldn't you know, held a lot of foreign currency.

Well, in a reversal, banks can now hold these PDVSA dollar bonds and not have it count. And bankers who buy the bonds will be eligible for a free weekend at the Margarita Hilton ...

Apparently, the constant threat of nationalization wasn't enough to keep them on their toes. Now the government has to sweet-talk the banks into buying their debt.

But that's how it is. We've gone to this proverbial well so many times, nobody wants to lend to us any more. Cuz you know the government's finances are in desperate shape when it has trouble pimping its papers to the Victor Vargases and Arne Chacons of the world.

What El Sistema teaches us about social policy

Juan Cristóbal says: - The well-deserved, near-universal praise heaped on Venezuela's Youth Orchestra Program ("El Sistema") is a source of pride for all Venezuelans. And yet, reading the latest article to sing its praises, this time courtesy of The Toronto Star, I was left wondering: what is it about El Sistema that makes it so succesful?

Simple. It's José Antonio Abreu.

Of course, Abreu is mortal, and we would be selling the program short if we were to place its success on his shoulders, condemning it to oblivion once he is not there anymore. It's the parents, the musicians, the government - they all keep the train humming along.

But through it all, the fact is that Abreu has been persistent, leading the ship since the mid-70s.

It's hard to imagine El Sistema having this kind of impact without someone there, day in and day out, with a vision, navigating the perilous waters of political turmoil, oil-price shocks and a society that is, at times, at war with itself.

Abreu never set out to make this program for political gain. He doesn't appear to have wanted it as publicity, or to gain fame, or to boast in international forums. In his own words, "those of us who have been involved from the start were never really aware of what we were doing."

All he set out to do was create orchestras.

That concentrated focus has, almost miraculously, allowed him to gain the favor of governments left and right. He has sold his foundation as a Venezuelan institution, and has worked to resist being framed by either side in the current political squabbles. He has involved the communities, the parents and the local authorities, making them all have a stake in the outcome.

El Sistema could only work because of what it is not: a government program. Although the government supplies much of the funding, and the current administration has shamelessly tried to appropriate the fruits of their labor, El Sistema is not the product of the State.

It's the product of a single man's vision and the tireless work of hundreds of thousands of ordinary Venezuelans. It is not the fruit of some politician's imagination. It is not a three-headed bureaucracy run by a random army general who is replaced every six months. It's not a cash-distribution scheme concocted on the fly to help win an election.

This isn't to say that government social programs can't work. They can, and do. It's government programs run by the Venezuelan state which have proven to be ineffective and inefficient. They could be made to work, as long as they learn some lessons from successful experiences such as El Sistema.

Think about it:

• clarity of vision,
• persistence and permanence of its leadership,
• resistance to using the program as something it is not intended to be,
• positioning of the program above day-to-day politics,
• minimizing of direct State involvement,
• involvement of the community no matter what their political views.

All those things make El Sistema work. All those things are lacking in Venezuela's Misiones. Is it any wonder The Toronto Star is not raving about Misión Ribas?

With no electricity, nobody can hear your cadenas

Juan Cristóbal says: - The two short videos are fascinating. In a few short minutes, you can see Chávez the deranged (hiring "planes" to bomb the clouds and create rain), Chávez the amusing (telling people three minutes are more than enough for showering, saying that's what he does, "and I don't stink"), Chávez the authoritarian ("why do people need hot water? why do they need jacuzzis?"), and Chávez the loose-tongued, Freudian-slip communist ("what kind of communism are we building here?").

My apologies, but they are in Spanish only.





The stuff about the showers, in particular, is another manifestation of a tendency we don't talk about enough: for Chávez, Venezuela's problems are Venezuelans' fault. They have nothing to do with him.

No food in store shelves? You're all shopping too much. No electricity? You bunch of wasteful pricks. No water? Get out of your jacuzzis! No dollars? Stop drinking Scotch and we might come up with some.

It used to be his Ministers' fault, or the IVth Republic's, or the Empire's. But those scapegoats doesn't seem to be working anymore.

Now, it's all your fault ... yours, and the weather's!

Your apartment is their heritage

Quico says: Chavismo has surely entered its churrigueresque period when the government decrees a gas station as a protected historical site, an irreducible part of the nation's cultural and ethnic heritage. Yet there it is, in the official black and white of Official Gazette No. 39,272.

Mind you, Estación de Servicio Los Caobos is merely one item in a list of over 1,200 buildings, homes, parks, schools, churches, streets, highways and entire neighborhoods that figure in the Culture Ministry's new list of "protected historical sites" in Caracas' Libertador district.

The decree is a classic statement of dadaist tropical despotism. In one fell swoop, the government designates whole swathes of the city as protected heritage sites. El Nacional's headquarters is on the list, as is Banco Mercantil's. Not even the Distribuidor La Araña (pictured here), the crucial highway interchange that links up the Francisco Fajardo Highway with the one that goes to La Guaira, is saved from the mighty sword of cultural protection. Do you feel your ethnic heritage safer already?!

The slight bemusement this piece of bureaucratic protectionism stirs up quickly dissipates when you realize that, as protected heritage sites, all these areas come under a slew of new regulations. Suddenly, if you live anywhere in El Paraiso, Bella Vista, San Bernardino, La Florida or Los Caobos, you live in a protected historical site. Even if you manage to find someone willing to buy it, you can't just up and sell your house whenever you want. You can't even rent it, or get a mortgage loan against it.

No siree. Now, because your dilapidated, 50s-era, never-renovated San Bernardino apartment building is deemed part of the nation's "cultural heritage," you need special permission from MinPoPoCulture to do anything with it.

Another bit of paper, another chavista ideologue looking to screw with your life as long as you don't pony up and get off your mule. One more hoop, and one more layer of political control added to the mix of an already asphyxiated society.

The part that gets me most about this is that these people just don't have the courage of their convictions. If, as is clearly the case, they just plain don't believe in private property rights, why don't they come out and say it? Why all the sniveling, semi-covert, back-door, fine-print nationalizations? Why don't they make an honest woman out of their convictions? If they did, we may just be able to have a serious debate about it.

As things stand, we can at least take some comfort from knowing we can pump our massively subsidized gasoline from historically protected pumps.

Evita G. officially loses it...

Quico says: Read this and tell me Eva Golinger hasn't lost her marbles completely.

I can't even piece together what the specific offense she's accusing MM of was in the first place. Seriously!

No good, two-timin' SOB...

Quico says: OK, I admit it: I haven't been posting very much recently cuz I've been...gasp...two-timin' this blog!

The shame!

The other blog project is, erm...a lot different.

The final frontier

Juan Cristóbal says: - Loyal reader Kepler has a post on his blog about Amazonas state. It's well worth a read, if anything for the links and the work he has put in mapping demographic and political trends in the state (inasmuch as there can be "trends" in a crimson-red state such as this).

Iranian uranium turns Iranian centrifuges into silly putty

Quico says: For the longest time, the conventional wisdom was that it would be senseless for Iran to seek uranium supplies outside its own territory, because they could source plenty of the stuff domestically.

It now turns out that impurities in Iran's uranium supply may be wrecking their enrichment hardware.

Now, I'm no nuclear scientist...but isn't this precisely the kind of thing that might send you off looking for higher grade supplies elsewhere? Say, in a close ally's sparsely populated jungle regions?

Speaking truth to power, Cuba-style

Juan Cristóbal says: - Blogger extraordinaire Yoani Sanchez fights for her rights. In Spanish only...

Former communist guerrilla blasts state intervention in the economy

Juan Cristóbal says:

(With my apologies to Teodoro-groupie Quico, but that headline wrote itself.)

In today's Tal Cual, Teodoro Petkoff sensibly butchers the Chávez administration for involving itself directly in every last corner of the economy and making a mess wherever it pokes its nose. I was stratled by the tone of the piece, specially considering who the messenger is.

The Venezuelan government has a knack - the understatement of the day - for involving itself in the direct production of goods and services that could be supplied better and more cheaply by private industry. Every time, yes, every time it does so, the results are sub-par and all Venezuelans end up poorer for it. Teodoro echoes this idea more strongly than I recall him ever doing so, and for that he earns two thumbs up from me.

It's funny that a right-wing talking point like that could come from a man like Petkoff, no ifs, ands, or buts. It's not just that he's correctly framing Chávez as the anti-Midas that he is, it's that he does it so vehemently. It's as if he's channeling his inner Margaret Thatcher.

Now, the issue with this argument has always been how to sell it. How can we convince Venezuelans that state-owned enterprises are a waste of money, that when the chavista heads of the Venalums, the Banco Industriales and the Venirans of the world call for the government to "capitalize" their companies, we all end up paying? Where is the outrage when the government announces its foray into the hospitality industry? Where is the outcry when we hear our tax money will be used to sell cars?

After all, explaining this is just a matter of math: it's a whole lot easier to simply pay workers in these companies wages for doing nothing than have them be a part of a company where you also have to pay bribes, managers, distributors and foreign suppliers, with all the "surplus" pricing that comes with it.

It's also a lot less time consuming for government decision-makers who, instead of focusing on these empty shells, should be thinking about education, national security and crime. How much time does Chávez spend coming up with funky names for his new companies?

The fiscal and welfare consequences of a badly-run state-company are unequivocally sub-optimal relative to simply giving the workers cash.

This is an issue some Venezuelan politicians have meekly tried to sell, and time and again, they retreat. Ultimately, it always proves easier to just continue doing what we're used to and keep feeding the statist beast.

But how can we break this vicious cycle?

We may never find out.

The curious case of the missing panic

Juan Cristóbal says: As the government's authoritarian noose tightens, and next year's Legislative elections draw ever nearer with zero progress on a unity platform, it's fair to ask: is it time to panic yet?

Panic is underrated. It can be just the thing to get you going. As the great Billie Jean King puts it, "pressure is a privilege." But it can also shut you down. Deer, meet headlights.

Politicians who figure out how to turn their moments of panic into "the fierce urgency of now" are often the most successful. Frankly, in Venezuela, we could use some of that fierce urgency.

Surely, some opposition politicians are panicking, but none are panicking constructively. Come to think of it, it's our leadership's total inability to do constructive panic that's been spinning me into, well...a panic.

That's the first thing that crossed my mind when I read that the government is apparently considering bringing forward the Parliamentary elections currently scheduled for December 2010. According to El Nacional's sources in Miraflores, the government is seriously pondering holding the elections as early as March. Some deputies have admitted they have discussed the issue, and you know it's true when Darío Vivas says it ain't.

A move like this would catch the opposition with their pants down, and it wouldn't be the first time. All the talk about unity would have to give way to real results, and the shift would need to happen yesterday. A change in the schedule would dramatically compress the time available for selecting candidates and raising funds.

It shouldn't have to be like this. Here we are in October, and the progress on choosing unity candidates can be measured in millimeters. The alarm has been sounding for months, but our guys can't hear it.

We've been saying since at least February that the congressional elections are the central issue we face, that failure will seal our chances until at least 2018, that the work needs to begin right away. Nobody seems to understand this.

Leopoldo Lopez has brought up the idea of primaries, and I have enthusiastically boarded the bandwagon. But his failure to bring specifics to the table - in fact, his failure to even sit at the table - has all but doomed its chances. And while there has been much huffing and puffing about "reaching consensus" or "using opinion polls," so far, these debates have the air of a carrito-por-puesto discussion instead of the desperate urgency of a firefighters' huddle by the side of a blaze.

Tranquilo, chamo, we have all the time in the world, right?

Well, we don't. People may not remember, but Manuel Rosales didn't begin his Presidential campaign until the idea of primaries had fizzled (yes, we've been down this road before) and the World Cup had ended. In fact, the precise date of Rosales' selection was August 9, 2006, less than three months before the election.

With so little time to pick a team, settle on a message, and campaign, is it any wonder we got our asses handed to us? That's what "consensus" gets you - a weak candidate with an incoherent message selected way too late.

Regardless, the discussion of primaries vs. consensus vs. Pérez the Mouse deciding unity candidates would be completely beside the point if the schedule changed. The CNE throwing down the gauntlet should, in theory, force our politicians to zero in and focus on finding a solution, any solution, quickly.

Don't count on it. Instead, our Scotch-soaked, 360°-haunting geniuses are busy worrying about the OAS, visiting hunger strikers, collaborating on fluff pieces and, generally, avoiding jail. But where are the politicians telling people the truth - that unless we start playing as a team now, not only will we lose the 2010 elections badly, we will also have sealed our fate for 2012?

Some of our politicians are feeling the panic and acting on it, but it's not the good type of panic. Instead of running around like headless chickens or fleeing to Lima, they need to jujitsu that pressure into stamina. They need to do their job.

Catch My (Authoritarian) Drift?

Quico says: In the Guardian today, Rory Carroll manages the impossible: getting a major first world paper to buckle down and give detailed attention to Chávez's authoritarian drift. No cutesy hook hung around Miss Venezuela, no quirky angle with El Vergatario. Not even a clear news hook. No bullshit at all. Chávez's drift towards authoritarianism is the story.

Well halle-friggin'-lujah....

Listen, lets get real. Stories like this one are always going to be rare. When they appear, they're never going to generate the kind of torrent of click-throughs that you get whenever Chávez does that thing he does and starts decreeing that underwear must be changed every half hour and worn on the outside, so they can check.

Carroll's story isn't sexy. Its forlornly imprisoned generals and its exquisite neoscholastic distinctions between imperfect democracies and authoritarian regimes with democratic characteristics won't send you rushing to twitter the link. Like Venezuelan reality, the whole thing is just grim.

Nobody likes grim.

But, more and more, stories like this are vital.

The view from your window: Alexandria

Alexandria, Virginia, USA. 6:40 AM

Send us the View from Your Window: caracaschronicles at fastmail dot fm, or nageljuan at gmail dot com.

Please ensure the window frame is visible, and tell us the place and time the picture was taken. And don't try to "pretty it up" - just show us what you see when you look up from the seat where you typically read the blog. Files should be no bigger than 400 KB.

Venirán...pero, ¿será que después se devolvirán?

Quico says: So, in this era of participatory and protagonic democracy, what would happen to you if you flat out refused to discuss a labor contract with the workers you hired? How do you think LOPCYMAT inspectors would take it if you failed to supply them with adequate safety equipment and refused to even talk to them about breaks?

How do you figure the government would react if you just fired, willy-nilly, some two-dozen workers who were trying to organize a labor union in your non-union factory? How do you think Chávez would react if those fired workers filed a complaint against you at the local Labor Inspectorate, won, got a ruling ordering you to hire them back, but you still refused to put them back on the payroll, ignoring the Labor Ministry point blank?

You could never get away with stuff like that in the revolutionary workers' socialist paradise that is Chávez-era Venezuela, right? I mean, you'd get expropriated right away, wouldn't you?

Of course you would...unless you happen to be the government of Iran and your business is making knock-off 80s Peugeots, in which case Chávez would shower you with praise you and throw in a little unpaid advertising on the side.

The View from Your Window: Perth

Perth, Australia

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Merentes's line in the sand gets washed away by the very first wave

Quico says: There's one thing monetary authorities need more than anything else: credibility. When a Central Bank chief commits to a policy goal, he has to make sure he has the tools at his disposal to really make it happen. In a world of rational expectations, the general belief in a Central Bank's ability to make its policy commitments stick is one of the most powerful determinants of a Central Bank's actual ability to make its policy commitments stick.

So how credible did Central Bank of Venezuela chief Nelson Merentes's target to keep the parallel rate below BsF.3.45 per dollar turn out to be? Ermmm...not very.

As you know, I'm not actually allowed to tell you the parallel rate today, but between you and me and 27 million other people, it rhymes with thive dolivars firty cents per bollar. That's nearly three times the 60% gap Merentes says it's the most he'll allow.

In other words, the market had one look at his announcement, had a good chuckle, and went right on doing what it'd been doing.

It's easy to laugh it all off, but this stunning monetary own goal could really undermine Merentes's hold on the economy down the road. Once the market starts to discount the Central Bank's announcements, the bank's ability to actually keep a handle on the macroeconomy starts to evaporate: cuz Merentes can do what he want to the macroeconomic aggregates he control, but if people don't believe he's going to really do what it takes to achieve his goals, the market will just keep eating his announcements for breakfast.

Update: A reader retorts that, to be fair, Merentes only said the bolivar would rally to Bs.3.45 by early December, not right away. That's true, as far as it goes, but irrelevant. If Merentes had any credibility, the bolivar would've rallied today.

To see why, ask yourself this: if you truly believed that the bolivar would rally to 3.45 by December, what would you do? Simple: you would rustle up as many dollars as possible and run, not walk, to the permuta market to buy bolivars at 5.40 while you still have the chance.

Then you'd sit pretty.

Come early December, you would take your bolivars and use them to buy dollars at BsF.3.45 a pop. Do that and you turn each October dollar into $1.56 in December - a better than 50% profit margin in just a couple of months.

I believe the technical term for that is "a killing".

Now, you're not the only one able to do that calculus. Anyone can. If the market had taken Merentes seriously, tons of people would've followed that reasoning and tons of money would've rushed to get in on the deal, lining up to buy up bolivars in the permuta market ASAP.

Via normal supply and demand - i.e., lots of dollars chasing relatively few bolivars - the rush itself would have driven up the value of the bolivar in the parallel market. In other words, we would've seen a mad scramble for bolivars in the permuta market, and that scramble would have continued until the gap between the expected value of holding bolivars and the expected value of holding dollars had been erased.

Which means that, if investors collectively had any confidence in the government bringing the permuta market to heel by December, we'd already have the evidence: the bolivar would've rallied to (near) 3.45:$ today.

That's rational expectations.

The fact that the bolivar rally stalled at 5.40:$ tells you all you need to know about how seriously the markets took Merentes. They laughed off his announcement, man.

Off Target

Quico says: The imbecilities of Venezuela's Foreign Exchange Control Regime just keep piling up one on top of another, accumulating in layers that some future archeologist of macroeconomic incompetence will have to peel back one at a time. The latest is Central Bank chief Nelson Merentes's announcement that the gap between the official dollar exchange and the parallel market - which, mind you, doesn't officially exist - shouldn't exceed 60%.

In effect, Merentes is announcing an upper target for the permuta rate, committing the central bank to keep the parallel rate below BsF.:$ 3.45. Trouble is, the permuta rate has been well above that, trading at a gap that's more like 150%.

But that's just the start because, idiotically, it's actually against the law for me to tell you exactly what the permuta rate is. That means that the single most important number in the debate on Venezuelan macroeconomics today is strictly verboten, off-limits...what's the word I'm looking for? Censored.

Now, think this through for a minute. Venezuela now has an official exchange rate. And an official target for the unofficial exchange rate. But we can't mention what the actual unofficial rate is. Which, effectively, means we're not allowed to know if we're meeting Merentes's target or not because - stay with me now - we now have public targets for secret variables!

And, come to think of it, we're now committed to defending an exchange rate we don't admit exists!

Apples and Oranges: A Parable of Distorsiolandia

Quico says: OK, time for a thought experiment/parable.

Welcome to Distorsiolandia, a land of simple rural folk where everyone works in agriculture. Distorsiolandia's economy is so simple, in fact, that the country has no money. It's not really necessary, because Distorsiolanos produce only two goods: apples and oranges. It's a tropical place, mind you, so there are a lot more oranges around than apples.

In fact, there are three times as many oranges as apples in Distorsiolandia. So its GDP looks something like:

Remember, we said there's no money in Distorsiolandia, but there is trade. As people barter apples for oranges, they soon settle on the terms of trade between them: one apple is worth three oranges.

In other words, the price of an apple is three oranges, and the price of an orange is one-third of an apple. Not having discovered money, Distorsiolanos have to quote the price of each product in terms of the other.

And those price, of course, match the relative scarcity between them.

One day, a radical revolutionary people's government comes to power in our fictional little country on the back of a radical redistributive discourse.

The revolutionaries rail against the way a parasitic elite has hoarded all the oranges, making them far too expensive for regular people to afford. So they decree that, from now on, the price of an orange will be controlled: for an orange, you can charge no more than one-quarter of an apple.

Which means that, instead of three oranges, an apple will buy you four.


People love oranges, so this decree makes the government very popular indeed. Lots of people who were happy to hold apples - back when an apple would only buy three oranges - now come forward to trade those apples for four oranges a pop.

But notice what the decree doesn't do: it doesn't change the underlying distribution of apples and oranges in the economy. You still have just three oranges around for every apple.

The relative scarcity of the two products hasn't changed: apples are still 3 times more scarce than oranges.

That means that, at the new price, the total stock of apples in the economy can buy more than the total stock of oranges. If everybody who has an apple tries to trade it for four oranges, you soon realize there are too many apples around chasing too few oranges. Soon enough, every orange has been sold off, but you still have people holding apples, wanting oranges, and finding nowhere to buy them.


What you end up with, in other words, is Orange Scarcity. At the government set price, there are simply too many apples chasing around too few oranges.

Now, notice what's happening here. There are oranges around. And there are apples around. There are people with apples who want oranges. And there are people with oranges who want apples. The only thing that's keeping the two apart is the government set price. Orange holders just sit there, holding their oranges, because they realize that, at that price, selling an orange only makes you poorer.

The revolutionary people's socialist government sees this and is outraged!

"Hoarding!" it cries, "speculators!"

Soon, the government is sending off soldiers with Kalashnikovs to round up people who are holding oranges and refusing to sell them for the controlled price. It makes them do a perp walk, holds them up to public contempt, blaming them in front of the cameras for the fact that people can't find any oranges in the shops! It never for one moment occurs to them that, at the price they've set, there simply aren't enough oranges to satisfy all the apple-holders in the system!

What happens next is also clear enough. If sellers aren't allowed to hold oranges and buyers can't find anyone to sell to them at 0.25 apples, soon enough somebody will decide to sell oranges on the down-low, for 0.33 apples a piece.

Of course, you're not allowed to do this openly, so you have to sneak around. A black market for oranges crops up. Soon, the government cracks down, threatening permuta orange sellers with jail and - here's the precious part - actually blaming them for the rise in the price of oranges!

So the government faces down the distortions created by one policy intervention - fixing the price of oranges - with another intervention: jailing black-market orange-mongers. But that second intervention itself creates a distortion. By making orange-selling riskier, it ensures black-market oranges will sell at an even more inflated price, since orange-mongers will now demand a risk-premium for participating in this dangerous illegal activity. So instead of 0.33 apples, they may demand 0.4, or even half an apple for an orange. By now, orange-buyers are out of options: they're bound to pony up.

And how will the government face up to the distortions created by the policy it implemented to confront the distortions created by the previous policy it had implemented?

You guessed it! By implementing yet another policy that brings with it yet another distortion!

Will they take over the Orange processing and distribution system? Will they threaten orange farmers with jails if they don't plant enough oranges? Who can tell? The sky is the limit!

Welcome to Distorsiolandia, where the solution to the problems created by one distortion is always...another distortion!

Lost in the thicket of laws and regulations that this kind of thinking generates is a simple insight: no bureaucratic dictate can change the fact that if there are three oranges out there for every apple and you force people to hand-over four oranges for an apple, oranges are gonna run out as sure as night follows day.

What's scary is that that thought, simple as it is, will cause a chavista's head to implode. When these people say they're against capitalism, what they really mean is that they're against arithmetic.

[Hat-tip for the "distorsiolandia" thing: AA, which, come to think of it, I'm not even sure if she reads the blog...]

The view from your window: Olanthe

Olanthe, Kansas, USA. 6:25 PM.

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"I'll have a second serving of crazy please"

Juan Cristóbal says: - We've discussed the insanity of the government's recent bond extravaganza here and here. The great Miguel summarizes the whole carnival here.

What does the government do?

Why, announce there will be more bonds to come!

Yup, that's right. More debt, more arbitrage, more corruption. Just what the doctor ordered.

I guess this proves Alí Rodríguez does not read this blog...

(Hat tip: Capablanca)

This socialism thing is hard!

Juan Cristóbal says: -

"It's hard to build socialism in this country."

Wise words coming from the mouth of chavista apparatchik Aristóbulo Istúriz.

Socialism is hard, he claims, because "state employees" want to be "shareholders." Instead of building socialism, they are prey to their old habits, fighting for personal vindication, focused on trying to get a bigger share of the state-owned-enterprise pie.

Istúriz then comes to a fateful conclusion: "If we don't change consciences, there will be no revolution."

Sigh. Ten years on and they are still wondering where their revolution is.

Of course consciences haven't changed. The government's model to sustaining power has been to enhance the expected value of rent-seeking while endlessly repeating that rent-seeking is bad.

Bad, that is, for everyone else except the guys on top. With this logic, is it surprising people aren't buying this "Bolivarian socialism" gimmick?

Take health care. The government's health system is a disaster, and all they can think of is "re-launching" what hasn't worked in the first place. The crisis has reached such proportions that Chávez himself acknowledges up to 50% of Barrio Adentro modules are abandoned. Is it any wonder the government's allies are worried about next year's elections?

Earth to Aristóbulo: if you really want state employees earning less than half the cost of the basic food basket to stop squabbling over oil rents, why don't you start by sending a team of auditors to go ask some real questions about how exactly it is that Ricardo Fernández Barruecos got to be worth $1.6 billion dollars even before he got control of Banco Canarias, BanPro, Bolívar Banco and Banco Confederado? Or ask Wilmer Ruperti to take you on that big yacht of his and ask him, in between sips of '78 Romanée Conti, to tell you where he thinks the Revolution went off the rails.

These whopping internal contradictions are one of the reasons why they're finding it so hard to control the working class, one that refuses to be brainwashed when the evidence of the regime's corruption is all around them.

People aren't stupid. They were sold "socialism" but once the petro-feast dried up, all they were left with was crime, official apathy, a stalling economy and the unmitigated rise of a new crony-capitalist class. Even the few things they accomplished ended up in the trash heap of negligence amidst an orgy of rent-grabbing. Before creating the Ministry of Popular Power for Conscience Modification, can we clarify whose conscience it is that needs reprogramming?

Come to think of it, Istúriz's words are not all that wise. It's not socialism that's hard - what's hard is getting people not to notice the hare the government is handing them ... is meowing.

The Bonos Soberanos Scam for Dummies

Quico says: Oh goody...an excellent excuse to make some powerpoint slides!













































And just keep in mind, while this is happening, the government is shutting down panaderías and auto parts store for - I shit you not - "excessive profits".

Plop!

Chavista porn

Juan Cristóbal says: - Our chavista readers complain that all our blog does is talk smack about the government nonstop. That's a fair criticism, so I decided to throw them a bone.

Here is a video of your revolution in action. A farm is being taken over, no ifs, ands or buts. The pristine procedures and the group of red-shirted "facilitators" should make your heart flutter. And Willian Lara's supporting role should get him a nomination. Asi... asi... asi es que se gobierna.

Selling bonds, selling our future

Juan Cristóbal says: In what the government is hailing as a positive development, the Chávez administration has just "sold" $5 billion worth of bonds in order to ease pressure on the black market exchange rate. The auction was hailed as a huge success - reports indicate demand for the papers was more than twice what was available, the black market rate is going down, and everyone is happy.

Funny, because when you really think about it, the only thing the government was "selling" was our future.

It's all in the wording. By framing this as a "sale," the government makes it appear as if it's just doing a bit of business.

"Sale" is a word filled with positive connotations. When you have a "yard sale", you're being frugal, getting rid of some excess knick-knacks and bringing in some extra cash. When a business "sells" more, it's doing well. Sales are good - good for buyers, good for sellers.

Except selling bonds isn't like selling stuff at a garage sale. When you "sell" a bond, you're really issuing an IOU. All you're selling is a claim on the government's future revenues, a share of everyone's future taxes, a right of ownership on future oil revenue streams - yours, and your kids'.

Now, I'm not opposed to new debt in principle. New debt can be good - if you use it for things that create value in the long term, like improve our roads, building schools or advancing technology. Those are all assets that will presumably lift the country's potential GDP and raise productivity, and all of them may justify going into debt.

But that's not what is going on here. Most of this money will go to pay for current government spending, things like salaries, subsidies, and military purchases. The money will end up in the hands of people who will, sooner or later, want to convert it into dollars and take it out of the country - either through the permuta market, or indirectly, by buying imported stuff that does not help the country's productivity, and has to be financed with dollars. And the bonds themselves are convertible into US dollars, which means the buyers will sell them in New York for cold, hard greenbacks.

This supposed "sale" is, in reality, a massive uptake of debt for the sake of the powerful. The government is borrowing so the rich, the almost-rich and the well-connected can buy cheaper dollars, hold on to them, and perhaps sell them in the domestic market when the economy deteriorates further. The government is taking on debt to appease speculators, most of whom are in the upper classes, and not a few of which are in the Chávez-spawned parasitic crony-capitalist cohort popularly known as the Boli-bourgeoisie.

This being Venezuela, the bond "sale" was about as transparent as a burqa. The government's attempt to explain the details was a disaster and resulted in brokers illegally creating money supply in order to get in on the game. The allocation of the bonds was anything but transparent.

Instead of hailing the government's latest "sale of bonds," we should call things what they are. The government didn't sell anything. Chávez is borrowing in the name of all to pay for capital flight by a few.

I don't think it sounds so pretty when you frame it that way.

Chávez numbers tank just when it matters the least

Quico says: Teodoro Petkoff spills the beans today on Chávez's god-awful poll numbers these days. In the latest IVAD (Seijas) poll, Chávez gets whooped by two-to-one margins on all kinds of domestic issues (the electoral law, private property, whether he's a threat to democracy) and by closer to three-to-one margins on most foreign policy questions (how he's dealing with Colombia, with the US, etc.)

All this from a Seijas poll, mind you - we're talking about the government's in-house "serious" pollster, who's had a pronounced pro-government lean in the past.

The August poll even has Chávez losing in the generic "would you vote for Chávez or for another candidate?" question, which - forget about 50% - now puts Chávez below 40%.

Read all about it here

What's ironic is that all this happens as Venezuela enters a period when poll numbers really don't matter any more. Back in the "hybrid regime" days, when our authoritarianism was at least competitive, these poll numbers would've been a real problem for the government.

These days? Hell, the guy just got through telling us how Gaddafi is to Libya as Bolívar was to Venezuela! He's well past caring.

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.