April 5, 2008

Now they're making me mad!

Quico says: Some bits of rampant revolutionary idiocy hit closer to home than others, and for me, few hit closer than this one: chavismo wants to drive The Simpsons off of Venezuela's airwaives.

Conatel, Chávez's telecoms regulator, is demanding that Televen stop running the show during children's viewing hours, as the revolution's crack squad of semiologists and culture critics (¡¡que el que te conté nos agarré confesados!!) has determined that the gang from Evergreen Terrace is a clear and present danger to Venezuelan family values.

And what do the moral guardians of Venezuela's tender youth want to replace all that Simpson degeneracy with?

Baywatch Hawaii.

I. Shit. You. Not.

Yeah, I know, in the grand scheme of things, nationalizing the cement industry is probably a bigger deal that this...but....but...it's The Simpsons!

April 4, 2008

Those evil exporters

Katy says: Venezuelan President Hugo Chávez announced yesterday that he was nationalizing the cement industry, "no matter the cost." With no previous warning, he gave the order on national television that factories should be expropriated and that he would foot the bill - with our money, of course.

The reasons he gave are that cement companies are allegedly exporting the country's cement and therefore making it difficult for his government to build houses. Instead of blaming his abysmal record in housing construction on his highly deficient administrative style, he blames a made-up enemy - in this case, evil cement companies.

As we take a breath and try to make some sense of this latest idiocy, a few facts about the cement industry are in order.

Cement is a perishable product - after thirty days, either you give it away or you throw it away. Cement is also notoriously expensive to transport. It is highly unlikely that a significant portion of Venezuela's cement production is being exported, because cement markets tend to be regional or local and plants tend to be located close to where demand is.

Furthermore, there have been few reports of cement shortages. The ones I have seen, such as this one and this one, are from early to mid 2007, at the peak of the government's infrastructure spending boom. Let's recall that the new Viaducto was not yet finished and the government was in a rush to finish a bunch of new stadiums and subways in time for the election.

I have no doubt that cement companies are exporting cement. Given how Venezuela's demand for cement is largely driven by the government, and given how government spending on large infrastructure projects has decreased considerably, I'm sure they have a lot of excess inventory. I'm also sure they have the incentive to export their products given how prices inside the country are controlled.

But instead of congratulating them for exporting or finding other ways of dealing with the problem of producers preferring external markets to internal ones - and here, a quick call to his employee Cristinita K would help - the President goes nuts.

Buy off all the plants, nationalize the industry, my way or the highway - that's his approach. In East Asia, exporters are rewarded. In Venezuela, they are punished. Such is the screwed-up mentality of the chavista military regime.

Furthermore, the government already has a cement factory - it's a pharaoh-like joint venture with Iran. Last I heard this project was going to have an installed capacity of a million tons and was going to cost Venezuelan taxpayers 250 million dollars. Whatever happend to that?

Venezuela's cement industry has a long history behind it. The first cement factories were founded by pioneering businessman Eugenio Mendoza, and large multinationals such as Mexico's Cemex and Switzerland's Holcim have invested heavily in the local industry. The Mexican government is not amused.

It's not clear if the President will follow through with this. While he is obviously looking for a scapegoat, he has threatened before to nationalize companies only to back down and get them to do what he wants - the Sidor example comes to mind. But he has also nationalized companies that did not need to be nationalized - the Electricidad de Caracas example comes to mind.

The cement industry has always been entangled with politics. After all, military strongmen and construction go together like cement and water. Here's hoping the industry survives this latest chapter and that we don't find ourselves importing cement five years from now because our factories have been sacked or gone bankrupt.

April 3, 2008

Cadivi Hassles at Maiquetía

Quico says: So there's a rumor going around that people are getting asked to produce receipts and stuff at Maiquetía when they fly back into the country after taking Cadivi junkets abroad. Anybody else heard of this? Know of anyone who's been checked?

April 2, 2008

Felipito says:

April 1, 2008

Godzilla vs. Bambi

Quico says: So, not long ago, the revolution's favorite "economist", Mark Weisbrot, published a rebuttal of all the main points in Francisco Rodríguez's by-now famous Foreign Affairs piece evaluating the data on the revolution's poverty reduction record. This week, Rodríguez ruthlessly picks apart Weisbrot's rebuttal. As you can imagine, it gets pretty brutal:
[First], there is no evidence that the Chávez administration is devoting a higher share of resources to pro-poor spending. Second, inequality increased between 1999 and 2006, unless by inequality one means inequality among everyone except those who earn no income. Third, the Venezuelan government did not teach 1.5 million persons how to read and write – at most the magnitude of the program was 1/30th of what was claimed. Fourth, however one calculates it, Venezuela’s income elasticity of poverty reduction is below typical values for developing countries. Fifth, the majority of human development indicators do not show striking improvements under Chávez, and some show deteriorations.

Weisbrot has not produced a convincing counterargument to any of these claims. He has argued that social spending has increased by using series that are distorted by the inclusion of regressive pensions, large infrastructure projects, and even military spending. He has argued that inequality has declined on the basis of a series that excludes the poorest families from the sample. He has argued that the Venezuelan government put more than a million persons in literacy courses while presenting regression estimates that indicate that at most forty thousand persons were enrolled in these courses. He has misinterpreted the concept of elasticity, and furthermore argued that the reason why government statistics do not show an improvement in the health of newborns is that the monitoring system has collapsed. To top this all off, he has presented an incredible conspiracy theory of the 2001 Venezuelan balance of payments crisis according to which the private sector withdrew funds from the domestic system during more than a year in order to provoke a political crisis.
My take? Weisbrot has one genuine "gotcha" moment in his rebuttal: Francisco pretty blatantly cherry-picked the two data points for his original GINI coefficient comparison (2000 and 2005) to make the government look bad, something even Francisco's retort shows clearly. Surely this kind of data massaging gets us no closer to the serious academic debate he claims to favor. Having been caught with his hands in this particular data-manipulation cookie jar, Francisco should just have waved a white flag on this point: the data do not show a steady trend towards increased inequality throughout the Chávez era, which is what his original piece clearly implied.

(Having cited him on this point, I feel particularly burned here.)

On every other point, though, it's a bloodfest. Francisco's deconstruction of Weisbrot's stunningly dishonest claims on adult literacy is especially noteworthy for showing in stark terms Weisbrot's Goebbelsian tendency to accuse his opponent of precisely what he's doing: cherry-picking outliers in the data and using them to back up claims even the outliers cannot support.

But it's in the discussions of government spending priorities and of the efficiency of poverty reduction that what remained of Weisbrot's intellectual reputation curls up into a little ball and dies. Here is a man with a Ph.D in economics who gives every sign of not understanding what elasticity means! (The magnitude of the incompetence this flub reveals may not be immediately evident if you haven't studied economics...to get a sense, picture an MD confusing your aorta with your placenta.)

Worse yet, here is a native speaker of English who appears not to understand what the word priority means: Weisbrot "rebuts" Francisco's argument about the sectoral distribution of government spending with claims about the absolute magnitudes of government spending. At one point, Francisco is reduced to babbling homespun anecdotes about rich uncles and poodles in a (futile) attempt to elicit some sign of comprehension from the guy. It's painful.

Lets be clear, here: Weisbrot's rebuttal is crammed full of the kind of rookie mistakes that typically get undergraduates an F in Econ 101. How this guy worked up the nerve to challenge Francisco Rodríguez to a mano-a-mano totally defeats me. It's just pathetic that this is the best spin all the government's millions can buy.

Update: Speaking of "statements not backed up by the data cited to support them," Francisco Rodríguez just wrote in to point out that:
...if you take the correctly calculated Gini series (including zero-income households) and fits a post-1999 trend through it, you find a statistically significant increase of .001685 points/semester, or .0253 points since the first semester of 1999. This is statistically significant at 1.8% (not a bad fit for 23 observations). One can get hung up on particular semester-to-semester changes here, but you also have to remember that there can be significant measurement error in this series, so you want to be able to identify general trends. In any case, it seems to me that the correctly calculated series does indicate (at least in a statistical sense) a significant trend of increase after 1999.

March 31, 2008

The Looking Glass Revolution

Quico says: For such a familiar object, there’s something quite bizarre about a mirror, that strange device that seems to represent reality “as it really is” while quietly reversing it, making your right side your left side and your left side your right. The effect is at once familiar and, when you think about it, weirdly counterintuitive…not unlike the profoundly mystifying political contraption that now rules Venezuela by subtly, almost imperceptibly, turning left into right and right into left all the while leaving everything precisely as it was.

The Maisto Doctrine (“watch what he does, not what he says”) makes for a good starting point as we try to understand the deep conceptual reversal chavismo operates. It primes us for an awareness that, when it comes to chavismo, the discursive and the factual have a troubling propensity to diverge.

Back in 1999, nobody could have guessed the bizarre extremes this divergence would reach. Today, the “what he does” and the “what he says” are not merely "in tension with one another" but, rather, diametrical opposites, with the discursive rushing headlong to the left while the factual gallops triumphantly rightward.

In today's Venezuela, that split is the story. The smooth cohabitation between a radical leftwing discourse and a basically regressive policy posture based on de facto trickle-down economics is the essence of what chavismo has become.

On a discursive level – but only on a discursive level – chavismo really does fall squarely into the tradition of leftist totalitarianism. There’s really no other word for it. The revolution’s discourse is proudly, self-consciously totalizing. Chávez proposes a highly simplified explanation for the whole of social experience, the whole of political life and the whole of Latin America's history. At its core is a totalizing dualism, a clean split between pure Good (a conceptual nexus you could characterize as Chavez - emancipation - socialism - left- pueblo - solidarity - revolution) and pure Evil (Bush - empire - capitalism - right - oligarchy - greed - reaction.)

What rounds out chavismo's discursive totalitarianism is that this uncompromising dualism is coupled to a Redemption Narrative, the mythic story line of the revolution, which systematizes and explains historical experience by subsuming all events under the totalizing categories of Good and Evil. The story is short enough and simple enough to summarize in just one sentence:
Bolivar had a dream that was cruelly betrayed by the mantuano elite and lay dormant in the hearts of the pueblo for a long time until it re-awakened on February 27th 1989 and was instantiated and tempered by the joint heroism of Chavez and the pueblo in a series of heroic trials: the coups of 1992 and 2002, the oil strike, and the ongoing imperialist-mantuano aggressions against the revolution.
Every episode in this history is expressed in terms of a struggle of good vs. evil. Every day-to-day development is similarly characterized. Whether it’s the Battle of Carabobo or the Milk Shortage, the toppling of Arbenz or a dengue outbreak in Carora, when bad things happen Evil is to blame and when good things happen, Good deserves the credit. Nothing escapes the totalizing perspective of chavista manicheism.

The state, with its growing communicative might, has been fully mobilized to support this World View. The most striking feature of Venezuelan television these days the simultaneous proliferation of official media outlets and their soul crushing repetitiveness. Chávez’s discursive totalitarianism is now hawked aggressively, around the clock, in a whole bunch of new radio stations and TV channels, from VIVE to TVES to ANTV to Telesur to a bunch of smaller, regional channels.

Yet the growth in the number of channels of distribution has resulted in no more variety of points of view on offer: the content in all the government media is essentially, drearily predictable.

The station logos and anchor people are different, the typeface on the screen graphics is different, but the content itself amounts to a virtual, neverending cadena: it’s the same stuff, the same endless variations on the very simple themes repeated ad nauseam. Watch this stuff for just a couple of hours and you can tell exactly the way each story, each agit-prop video, each 30-second spot is going to go from the second it comes on screen.

There’s a mind-deadening predictability to it. You can taste the producers’ fear of breaking the script. Little by little, the essential, tutelaged sameness overwhelms you until you either switch off or turn into a zombie. Nothing surprising ever happens on state TV, and won’t, no matter how many new channels they ad. Nothing even remotely like a real debate, a non-choreographed exchange of views or a contrarian perspective has the faintest chance of being heard.

So we really do have all the characteristics of leftist totalitarian communications here: the dualism, the unthinking sameness, the siege mentality, the systematic demonization of opponents, the none-too-subtle denunciation of dissidents as enemies of the state and, above all, the repetition, the dreary, obdurate repetition, the drip-drip-drip of the same messages packaged and repackaged again and again and again, at every chance and on every space available.

Venezuela is witnessing every element of a communicative practice that, in other times and other places, has typically gone hand in hand with the massive use of state violence to intimidate, marginalize and, ultimately, physically eliminate dissidents.

And yet…where are the concentration camps? The secret police torture rooms? The death marches? Where is the reality to back up all that talk? It just isn’t there…and, nine years into all of this, I really don’t think it’s coming.

When Stalin and Hitler and Pol Pot and the Interahamwe mobilized the state media to systematically demonize their opponents, the real world cost of those discursive practices was measured in millions of lives. When Chávez does it, the cost is measured in tons of bullshit, because in his hands the discursive somehow never quite bleeds through to the factual.

It's when we come to understand the dynamics of the political economy of chavismo, the real channels through which money and influence flow through society in the Chávez era that we start to grasp the scale of the disconnect between the world of meanings state TV creates and the orgy of clientelist rent seeking the real revolution has slowly morphed into.

Again, it pays to think Maisto here. What would the revolution look like if we watched it "on mute,” as it were: tuning out the discourse entirely and focusing exclusively on the way money, power and influence flows through society. What would we see then?

Well, we'd see a tiny elite, well connected to the centers of state decision-making that control petrodollar flows, exploiting its access to grow enormously rich and live extravagant lifestyles.

We'd see a much broader middle class benefiting handsomely from petrostate largesse in the form of deeply subsidized travel, imports, internet transactions and energy.

We'd notice that the truly weighty macroeconomic policies, the ones that move sums large enough to alter the overall distribution of national income, channel resources resolutely up the economic scale.

And we'd see some mass based social programs that are unsustainable, lack systematic evaluation mechanisms and are funded mostly in the run-up to elections and designed to benefit only politically docile clients, such that their portion of oil rents becomes the price they’re paid for their votes.

What we'd see, in other words, is the political economy of puntofijismo. Petrostate clientelism, plain and simple.

Discourse and reality, moving in opposite directions along parallel plains. Never touching, never penetrating one another, never clashing with one another, never encumbering each other in their onward march. As estranged as though they belonged to radically different realities rather than to a single country.

What explains this impermeability? To my mind, it's the totalitarian features of the state discourse itself that ensures that no aspect of "real" reality can ever bubble up through into the revolution's discursive awareness. Having committed completely to a discourse that automatically dismisses any critical thought as "media terrorism" or "CIA psy ops" geared at planting destabilizing "opinion matrixes", Chávez supporters effectively ban themselves from engaging critically with the mass of contradictions the revolution daily generates.

The revolution can't "see" the connections between the issue of Notas Estructuradas and Victor Vargas's lifestyle, it can't join the dots from the operation of Cadivi to the transfer of wealth from the state to the wealthy, it never notices any of these and a thousand similar anomalies because such matters are systematically blacked out from the state media. And they're systematically blacked out from the state media because the lament they carry, their implicit political message, is embarrassing to the government and therefore, a priori, deemed suspicious, likely part of some gringo plot to undermine the regime, of some ploy by absolute Evil to undermine absolute Good.

The cronies at the top of the bolibourgeois game understand this dynamic plenty clearly enough and daily manipulate it to their advantage, tarring any one who seeks to hold them up to public scrutiny as agents of evil, deploying the revolution's deeply warped discursive standards to protect their particular positions in the rent seeking game.

Locked in this watertight discursive bubble, unable any longer to distinguish truth from fantasy, the revolution has destroyed its own ability to process reality reasonably and fatally undermined its own capacity to integrate "what it says" with "what it does", to harmonize the two, or at least ensure a minimum of coherence between them.

As far as I know, there really is no precedent for what we’re seeing here. Some people compare it to the Mexican PRI’s brand of rhetorically incandescent clientelism but, as far as I know, no Mexican government ever even approached the extremes of discursive totalitarianism we’re seeing here. Because what we’re witnessing is no garden variety political hypocrisy, no run-of-the-mill opportunism. What we’re seeing is a kind of political schizophrenia, an incapacity to integrate what is said with what is done that strikes me as closer to a mental illness than to a political ideology.

The paradoxes that this divorce engenders are almost endless. The government we have is passionately hated by the people it benefits the most, and passionately upheld by many it treats as an afterthought. Its preponderant social policies, its costliest, most far reaching and radical redistributive policies (the gas and foreign exchange subsidies) are unarguably regressive, redistributing income from its supporters to its detractors, and are almost never discussed by the official media.

Like a looking glass, the revolution has made the right into the left and the left into the right, but the effect is so subtle and the outcome come to seem so “normal” we don’t quite spot it, can’t quite process it, can’t quite see just how bizarre it all is.

After all, what could be more normal than a mirror?