The Devil's Excrement

All day in radio talk shows the news of the contents of the Carter-Baker report on
elections caused hilarity, anger and spite against the former US President. I
had read about it early this morning in PMBcomments, but
was surprised by its absence in any of the news media today. But radio talk
shows were having a ball at quoting straight from the report. This one
generated anger:

-Congress should pass a law requiring
that all voting machines be equipped with a voter-verifiable paper audit trail
and, consistent with HAVA, be fully accessible
to voters with disabilities. This is especially important for direct recording
electronic (DRE) machines for four reasons:(a) to increase citizens’ confidence
that their vote will be counted accurately, (b) to allow for a recount, (c) to
provide a backup in cases of loss of votes due to computer malfunction, and (d)
to test — through a random selection of machines — whether the paper result is
the same as the electronic result.

While this one generated
laughter:

-To undertake the new responsibilities recommended by this report and to build
confidence in the administration of elections, Congress and the states should
reconstitute election management institutions on a nonpartisan basis to make
them more independent and effective. U.S. Election Assistance Commission
members and each state’s chief elections officer should be selected and be expected to act in a nonpartisan manner,
and the institutions should have sufficient funding for research and training
and to conduct the best elections possible. We believe the time has come to
take politics as much as possible out of the institutions of election
administration and to make these institutions nonpartisan.

This one made people wonder if it was the same Jimmy Carter that came to Venezuela to
oversee the recall vote:

–States should adopt unambiguous procedures
to reconcile any disparity between the electronic ballot tally and the paper
ballot tally.The Commission strongly recommends that states determine well in
advance of elections which will be the ballot of record.

While this one led them to conclude it had to be a different guy:

-State and local election authorities should publicly
test all types of voting machines before, during, and after Election Day and
allow public observation of zero machine counts at the start of Election Day and
the machine certification process.

And how about this one, where was Carter last year in August 14th.? He
certainly did not have this access and neither did even the members of the
Electoral Board that were not pro-Chavez.

-All legitimate domestic and international election observers should be
granted unrestricted access to the election process, provided that they accept
election rules, do not interfere with the electoral process, and respect the
secrecy of the ballot. Such observers should apply for accreditation, which
should allow them to visit any polling station in any state and to view all
parts of the election process, including the testing of voting equipment, the
processing of absentee ballots, and the vote count.

It was indeed weird to hear all these
wise remarks from the same guy that certified the results of the Venezuela
recall last year, without any of the above conditions being met at all. In fact
NONE of the above was even closely satisfied.

But that’s Jimmy for you.

It
was a day of protests in Venezuela today, curiously none of it organized by
the so-called opposition, but by various groups with grievances against the
Government. Chavez was hit hard by the protests as three different groups blocked
the access to the headquarters of the Corporacion Venezolana de Guayana. Chavze
went there to “hand out” Government loans to the Venalum corporation, one of
the Government owned aluminum companies that is now under management by its
personnel. Chavez had to be taken by helicopter to the plant as the
roads around Ciudad Guayana collapsed.

There were
nominally four different groups protesting independently. Steel workers were
protesting that they have not been paid the dividends on the shares of Sidor
that they own, despite the promises by the Minister of Basic Industries that
they would be paid. Separately, workers of the aluminum industry who can not
work due to work related injuries also held a protest. The third group was
composed of Venalum and Alcasa’s retired personnel asking for speed in the decision
on an injunction they requested 40 days ago. Finally, there were protests over the
problems with water supply to the homes in the area.

Separately
there were protests in Caracas
by medical doctors against the health bill being considered by the National
Assembly and in Vargas state by street vendors who were protesting mistreatment
by the police.

But none
of this seemed to affect Chavze who
gave a fiery speech, telling the Governors and Mayors to expropriate any
empty lots in the cities that are not being used. Chavez said that they should
stop the practice of buying urban land and letting it simply sit there in order
to sell it later at a higher price. Chávez also attacked the private sector
saying that those that don’t like his policies should “go to Miami” leaving their plants and machinery
behind. He backed the seizure of a farm which he claims is owned by the
Government while the owners claim otherwise and said he would hold his Sunday
program from that farm next Sunday. He also said he had until the year 2030 to
convince people of the advantages of socialism. Curiously, he suggested that he
was a “new” convert to the concept of socialism, which was not clarified.

For the
last two and a half years it has been very difficult to get a passport in Venezuela,
between inefficiency and the Tascon list, which banned everyone who signed the
recall petition from getting a passport via “regular” means to a shortage of
the precious books, getting a new passport has been essentially Hell. Add to
that the paranoia of Venezuelans who dislike Chavez and you had lots of people
applying, paying and otherwise doing any necessary pirouette to get a valid
Bolivarian passport.

This
created a virtuous corruption cyrcle that allowed anyone willing to pay up to
one million bolivars (US$ 465) to get a passport, although prices ranged
somewhere below that around Bs. 600 to 700 thousand. Some refused to pay;
others could not, creating a huge backlog.

Then the
scandal over the Tascon list hit the international political circle, Chavez
said bury the list and the ID office ordered what it thought were sufficient
passports to satisfy demand. Except that they misjudged the backlog and the
fears and some 400,000 Venezuelans applied to get the much coveted document.

The Head
of the ID office a while back blamed the problem on the people of course. Saying
that people were irresponsibly requesting passports which they did not need,
doing what has become commonplace in the Chávez administration: blame someone
else, but never take responsibility.

Then last
week, the same official announced that beginning this week, Venezuelans would
be able to apply for a passport via the Internet, but they would be penalized.Under
regular circumstances, this would have not raised any noise, but
nothing is
regular in this country these days, the announcement of a penalty was
seen as a
threat against freedom and a plan to limit the movements of
Venezuelans. Moreover, the penalty would not be a fine, but the
“deactivation”of your passport, suggesting some form of movement
control.

Is that
the intention? I don’t know. It is very difficult to tell. We have learned not
to trust this Government in the last seven years. My personal feeling is that
this is only idiocy at work, but I have been wrong and naïve before.

A
week or so ago, Ricardo Bello wrote an article entitled “XXIst. Century
Fascism” in which he described Britt’s “criteria” for fascism and
applied it to you know who. I was going to translate it, but once I
found the original Britt article on the web I decided to just give you
“food for thought” not only about the criteria but about the
similarities between right wing and left wong fasciscm. In any case,
here it is, I am sure we all have different opinions about the ones
that apply here or in the US. But this is a blog about Venezuela,
what’s your count (mine is 12) for our dear Government?

Fascism
Anyone? by Laurence
W. Britt

The
following article is from Free
Inquiry magazine, Volume 23, Number 2.

Free
Inquiry readers
may pause to read the “Affirmations of Humanism: A Statement of Principles” on
the inside cover of the magazine. To a secular humanist, these principles seem
so logical, so right, so crucial. Yet, there is one archetypal political
philosophy that is anathema to almost all of these principles. It is fascism.
And fascism’s principles are wafting in the air today, surreptitiously
masquerading as something else, challenging everything we stand for. The cliché
that people and nations learn from history is not only overused, but also
overestimated; often we fail to learn from history, or draw the wrong
conclusions. Sadly, historical amnesia is the norm.

We are
two-and-a-half generations removed from the horrors of Nazi Germany, although
constant reminders jog the consciousness. German and Italian fascism form the
historical models that define this twisted political worldview. Although they
no longer exist, this worldview and the characteristics of these models have
been imitated by protofascist regimes at various times in the twentieth
century. Both the original German and Italian models and the later protofascist
regimes show remarkably similar characteristics. Although many scholars
question any direct connection among these regimes, few can dispute their
visual similarities.

Beyond the
visual, even a cursory study of these fascist and protofascist regimes reveals
the absolutely striking convergence of their modus operandi. This, of
course, is not a revelation to the informed political observer, but it is
sometimes useful in the interests of perspective to restate obvious facts and
in so doing shed needed light on current circumstances.

For the
purpose of this perspective, I will consider the following regimes: Nazi
Germany, Fascist Italy, Franco’s Spain,
Salazar’s Portugal,
Papadopoulos’s Greece,
Pinochet’s Chile, and
Suharto’s Indonesia.
To be sure, they constitute a mixed bag of national identities, cultures,
developmental levels, and history. But they all followed the fascist or
protofascist model in obtaining, expanding, and maintaining power. Further, all
these regimes have been overthrown, so a more or less complete picture of their
basic characteristics and abuses is possible.

Analysis
of these seven regimes reveals fourteen common threads that link them in
recognizable patterns of national behavior and abuse of power. These basic
characteristics are more prevalent and intense in some regimes than in others,
but they all share at least some level of similarity.

1. Powerful and continuing
expressions of nationalism.
From the prominent displays of flags and bunting to the ubiquitous lapel pins,
the fervor to show patriotic nationalism, both on the part of the regime itself
and of citizens caught up in its frenzy, was always obvious. Catchy slogans,
pride in the military, and demands for unity were common themes in expressing this
nationalism. It was usually coupled with a suspicion of things foreign that
often bordered on xenophobia.

2. Disdain for the importance of
human rights.
The regimes themselves viewed human rights as of little value and a hindrance
to realizing the objectives of the ruling elite. Through clever use of
propaganda, the population was brought to accept these human rights abuses by
marginalizing, even demonizing, those being targeted. When abuse was egregious,
the tactic was to use secrecy, denial, and disinformation.

3. Identification of
enemies/scapegoats as a unifying cause. The most significant common thread among these regimes was the use of
scapegoating as a means to divert the people’s attention from other problems,
to shift blame for failures, and to channel frustration in controlled
directions. The methods of choice—relentless propaganda and disinformation—were
usually effective. Often the regimes would incite “spontaneous” acts against
the target scapegoats, usually communists, socialists, liberals, Jews, ethnic
and racial minorities, traditional national enemies, members of other
religions, secularists, homosexuals, and “terrorists.” Active opponents of
these regimes were inevitably labeled as terrorists and dealt with accordingly.

4. The supremacy of the
military/avid militarism. Ruling elites always identified closely with the military
and the industrial infrastructure that supported it. A disproportionate share
of national resources was allocated to the military, even when domestic needs
were acute. The military was seen as an expression of nationalism, and was used
whenever possible to assert national goals, intimidate other nations, and
increase the power and prestige of the ruling elite.

5. Rampant sexism. Beyond the simple fact that the
political elite and the national culture were male-dominated, these regimes
inevitably viewed women as second-class citizens. They were adamantly
anti-abortion and also homophobic. These attitudes were usually codified in
Draconian laws that enjoyed strong support by the orthodox religion of the
country, thus lending the regime cover for its abuses.

6. A controlled mass media. Under some of the regimes, the mass media were
under strict direct control and could be relied upon never to stray from the
party line. Other regimes exercised more subtle power to ensure media
orthodoxy. Methods included the control of licensing and access to resources,
economic pressure, appeals to patriotism, and implied threats. The leaders of
the mass media were often politically compatible with the power elite. The
result was usually success in keeping the general public unaware of the
regimes’ excesses.

7. Obsession with national
security.
Inevitably, a national security apparatus was under direct control of the
ruling elite. It was usually an instrument of oppression, operating in secret
and beyond any constraints. Its actions were justified under the rubric of
protecting “national security,” and questioning its activities was portrayed as
unpatriotic or even treasonous.

8. Religion and ruling elite
tied together.
Unlike communist regimes, the fascist and protofascist regimes were never
proclaimed as godless by their opponents. In fact, most of the regimes attached
themselves to the predominant religion of the country and chose to portray
themselves as militant defenders of that religion. The fact that the ruling
elite’s behavior was incompatible with the precepts of the religion was
generally swept under the rug. Propaganda kept up the illusion that the ruling
elites were defenders of the faith and opponents of the “godless.” A perception
was manufactured that opposing the power elite was tantamount to an attack on
religion.

9. Power of corporations
protected.
Although the personal life of ordinary citizens was under strict control, the ability
of large corporations to operate in relative freedom was not compromised. The
ruling elite saw the corporate structure as a way to not only ensure military
production (in developed states), but also as an additional means of social
control. Members of the economic elite were often pampered by the political
elite to ensure a continued mutuality of interests, especially in the
repression of “have-not” citizens.

10. Power of labor suppressed or
eliminated. Since organized labor was seen as
the one power center that could challenge the political hegemony of the ruling
elite and its corporate allies, it was inevitably crushed or made powerless.
The poor formed an underclass, viewed with suspicion or outright contempt.
Under some regimes, being poor was considered akin to a vice.

11. Disdain and suppression of
intellectuals and the arts.
Intellectuals and the inherent freedom of ideas and expression associated with
them were anathema to these regimes. Intellectual and academic freedom were
considered subversive to national security and the patriotic ideal.
Universities were tightly controlled; politically unreliable faculty harassed
or eliminated. Unorthodox ideas or expressions of dissent were strongly
attacked, silenced, or crushed. To these regimes, art and literature should
serve the national interest or they had no right to exist.

12. Obsession with crime and
punishment.
Most of these
regimes maintained Draconian systems of criminal justice with huge prison
populations. The police were often glorified and had almost unchecked power,
leading to rampant abuse. “Normal”
and political crime were often merged into trumped-up criminal charges and
sometimes used against political opponents of the regime. Fear, and hatred, of
criminals or “traitors” was often promoted among the population as an excuse
for more police power.

13. Rampant cronyism and
corruption.
Those in business
circles and close to the power elite often used their position to enrich
themselves. This corruption worked both ways; the power elite would receive
financial gifts and property from the economic elite, who in turn would gain
the benefit of government favoritism. Members of the power elite were in a
position to obtain vast wealth from other sources as well: for example, by
stealing national resources. With the national security apparatus under control
and the media muzzled, this corruption was largely unconstrained and not well
understood by the general population.

14. Fraudulent elections. Elections in the form of
plebiscites or public opinion polls were usually bogus. When actual elections
with candidates were held, they would usually be perverted by the power elite
to get the desired result. Common methods included maintaining control of the
election machinery, intimidating and disenfranchising opposition voters,
destroying or disallowing legal votes, and, as a last resort, turning to a
judiciary beholden to the power elite.

Does any
of this ring alarm bells? Of course not. After all, this is America,
officially a democracy with the rule of law, a constitution, a free press,
honest elections, and a well-informed public constantly being put on guard
against evils. Historical comparisons like these are just exercises in verbal
gymnastics. Maybe, maybe not.

(I have changed
the post, since someone pointed out in the comments that Borges
proposed giving Bs. 2 million per family, not per person as I believed)

Right
before I left last week, I called the proposal by Primero Justicia’s Presidential
candidate Julio Borges, to distribute 25% of the oil income directly to all
Venezuelans irresponsible. This generated a large number of comments, such that
the limit per post of the software of the blog was exceeded. Some people
actually liked the proposal, others agreed with me. But there was more to my
objection which required a full post and I was traveling (actually, I write
this as I fly back) and had no time to explain all of my objections in detail.

First of
all, I have always expressed here that I firmly believe that the highest
responsibility in the country is that of the those in Government. They are
supposed to be the protectors of the law and the rights of the people. Below
that level are the politicians who aspire to lead the country in the future or
question what the Government does. Borges is in such a position, he is the only
leader of an opposition party to have announced he is a candidate, as such, I
feel that he has a special responsibility to all of us or at least to those he
thinks may vote for him.

No
proposal exists in a vacuum. One of the toughest jobs of any Government
official is how to decide whether to spend money here instead of there. In
countries with more political accountability than in Venezuela, many times politicians that
propose programs have to say where the money will come from and are, in many
cases, forced to give explicit detail of how they plan to fund such programs
and their cost is. Unfortunately, this does not happen in Venezuela, does
not happen now and never happened before.

Few
Governments in our modern history have acted responsibly in this sense. We have
a social security system that is not funded and currently costs US$ 1 billion a
year to pay minimum salary to all those that have retired, we have universities
that use half of their budget to pay retired professors and employees, some of
whom retire after only 25 years of work and we have new programs (Yes, I am
talking “misiones”) where nurses have not been paid in the last six months. But
it has never been the style of our Governments to calculate how something will
be funded or even if there is funding for it. Promise and you shall reap
political benefits and that seems like the only thing that matters.

Thus, a
candidate making a bold proposal should at least have thought it through.
Someone that aspires to become a President of Venezuela the least he or she
should do is to do the homework, ask basic questions and figure out some basic
numbers, before venturing a proposal. Obviously Julio Borges did not do it,
much like what Chavez does when he proposes something and has no clue as to
whether there are or not funds for it.

The proposal and its basic numbers

Let’s look
at what Borges proposed (El
Nacional, Friday September 9^th, page A6, by subscription only). He
stated that we should distribute 25% of oil income directly to all Venezuelans,
which would give each family Bs. 2,000,000 per year directly to their pocket.
Well, to begin with, the math is absolutely wrong. If I say, for the sake of
the argument, that we are talking about Bs. 2.1 million per person, just to
make it an even US$ 1,000 per person, then Borges is talking about distributing
US$ 5 billion per year to the people.

Budget US$
33 billion (from 2005 budget)
GDP US$
106 billion (Approximately)
GDP per
capita US$ 4,240 per inhabitant
Oil
Revenues US$ 49 billion
Oil Income US$ 23 billion

The proposal and its impact

But let’s
assume we could do it. If we could distribute 25% of oil income directly (25%
of US$ 23 billion), it would come out to US$ 230 per year per individual
according to my numbers. Assume a family of four on average; we are talking
$920 per year per family or US$ 77 per month per family. Given that the basic
“food basket” for a family of four is, according to the Government, US$ 200,
this would only provide 38% of the basic needs of a family each month. Thus,
the impact would be skewed, because you will be giving a small amount of money
to those in the higher strata of the population, which they don’t need, and not
giving enough to those that really need it.

But then,
you have to balance things, the Government is providing an important subsidy
already via the Mercal markets, so is this instead of or in addition to? We
just don’t know. By the way, since we are on the subject, to me Mercal is just
too inefficient and corrupt. Its prices should be lower given the fact that it
is non-profit, pays no custom duties and uses the military for transport and
storage. Thus, somebody is getting mighty rich indeed at our expense. I also
think that Mercal resorts to imports too often; it is just more expedient and
hides commissions better. It is the usual non transparent corrupt solution at
its best. I prefer direct subsidies like school meals and milk programs.

But
there
are no details on the proposal it was a shoot from the hip idea without
any
thought or understanding. Not very promising for a Presidential
candidate. Where would the US$ 5 billion come from? What budget item
would be cut? Venezuela’s budget is quite rigid. Inefficient, but
rigid.

The Proposal and its philosophy

Additionally,
the proposal perpetuates the long standing history of telling the people that the
state will provide for them, without knowing where the money will come from and
compromising the future of those Venezuelans that have not been born yet. It
represents demagoguery at its best. I can not support that. We need to elect
decent and responsible leaders if we are going to go anywhere in the future as
a country.

The
proposal is irresponsible because it is based on high oil prices and not on any
measure of importance or impact of the program. Suppose you approve it and
tomorrow the price of oil goes down? You will distribute 25% of oil income at
the expense of what? Where will you cut the budget? Some will suffer while
others get money they don’t need. Borges has said nothing about this. You could
propose something like: when oil income is above x you will distribute half of
what is above this level directly to the people and the other half will be
saved. But that was the same spirit of the Macroeconomic stabilization Fund
that Chavez completely spent in 2002 and has now been revived with total
discretion on the part of the National Assembly to decide on when to use it or
not. Some savings!

A simpler alternative

Thus, I
see nothing but an irresponsible and very ill conceived proposal by Julio
Borges which changes little in the way the country has been and is being run. I
still think that creating a trust for all Venezuelans which will borrow to
invest in all new oil projects is the best way to go. Ownership will be for
life, can not be sold, transferred or given away. All profits from the fund
will be distributed yearly to all the owners. People will be able to borrow
from the trust at prevailing interest rates up to their equity. Each year the
number of owners would go up as more people are born than die. Ownership may be
converted to an annuity after sixty years of age by returning ownership to the
trust itself.

Or
something like that…but hey! I am not running.

On September 14, 2005, Chavez presented the candidates of his party for
the next National Assembly. The election will take place in December of
this year. The National Assembly is currently slightly dominated by the
Chavistas so that they can pass the laws as they wish (remember the
“porque nos da la gana” of Iris Varela? (El Nacional, June 22, 2005,
A2)). However, a much more important majority is necessary to reform
the 1999 Bolivarian Constitution. According to article 343, 2/3 of the
votes of the National Assembly are needed . That is why the December
election for the members of the National Assembly is so critical.

In his speech, Chavez told his candidates that he wanted that, by January 5, 2006, right after the December elections, they start working on major Constitutional changes.

Why? And which changes are needed?

Moreover, how come the government official page (the MINCI) does not mention Chavez constitutional request to his candidates when reporting the same event?

Given that the December election is so critical, why not openly discuss the changes before the election? What is Chavez hiding?

Over the years, Venezuela has had many Constitutions.
Typically every “caudillo” aiming to stay in power, would modify the
Constitution accordingly and pass it as his own to tailor-made his
political needs while providing a veneer of legitimacy. Notably among
them, was Juan Vicente Gomez, a tough dictator that stayed in power from 1908 until his death in 1935 . He ordered at least seven changes to the Constitution and was quite successful in his quest for absolute power.

The
first Constitution of the Democratic era was passed in 1961. It defined
presidential terms of 5 years. To reinforce the democratic rule and to
make sure that the classical Venezuelan “caudillos” would not eternize
themselves in power, the writers of the 1961 Constitution stated that a
president could not run for re-election right away. At least ten years
had to elapse from the end of a presidential term before that president
would be allowed to run again. That rule, so necessary in a country
that had lived through dozens of takeovers, was systematically
respected by all the leaders of the democratic era.

Then came
Chavez. First, on February 4, 1992, after years of conspiring, he tried
to overturn by force the Constitutional mandate of Carlos Andres Perez.

Later,
when he was elected president in 1998, he was swore in on what he
called the “moribunda” (the dying Constitution). He immediately started
a campaign to create a Constitutional Assembly to be able to pass a new
Constitution tailor-made according to his wishes. The Constitutional
Assembly, whose mandate was only to write the new Constitution,
illegally took over all the legislative powers of the Congress, that
had an opposition majority.

In the end, all Chavez’s wishes were
included in the Constitution proposed by the Constitutional Assembly
that was to be approved by Referendum on December 15, 1999.

There
was one particular wish that was very important for Chavez. Instead of
the non-renewable 5 year term stated in the 1961 Constitution, the new
president would have a 6 year term, renewable for one more term. This
would give Chavez 12 years. But, the deal was even better! The Chavez
controlled Constitutional Assembly illegally dissolved the elected
Congress and did not respect the transitory period that had to take
place before the new Supreme Court judges and government figures could
be nominated.

Therefore, right after winning the 1999
Constitutional referendum and in the midst of the confusion and sadness
created by the 1999 Vargas tragedy, Chavez was able to change the Court
and all the government figures without any wait, giving him more power
than any other President before him in modern Venezuela history.

A sweet deal.

I
hope that the occasional reader now understands why Chavez was so keen
to ask the poor people of Venezuela to get out and vote in the
Referendum to ratify his Constitutional project on December 15, 1999
instead of declaring right away the State of Emergency. (please refer to my post).

You may also wonder why Chavez has been in power since 1998 if the new
Constitution was passed in 1999 and, according to the last one, there
was no immediate re-election. In fact, even though Chavez was elected
under the old rule, a complacent Supreme Court allowed him to run for
President in 2000 for a 6 year renewable period. Therefore, Venezuela
has been under the rule of Chavez for seven years. This is more than
any other president in modern Venezuela history….except, of course,
Juan Vicente Gomez, the good old dictator that stayed in power more
than 27 years thanks, among other things, to his changes in the
Constitution.

Now, after 7 years of unprecedented concentration
of powers and total control, Chavez has started again a campaign to
change the Constitution. A Constitution that was tailor-made for him
and that reflected every one of his wishes.

Why is he pushing now for a Constitutional reform? Why is his 1999 Constitution not good enough?

And more importantly, What are the changes that you want to make, Mr. Chavez?

Why haven’t you told us yet?

We
can guess. We can guess that Chavez, as a military man and a good ol’
Venezuelan caudillo is thirsty for even more power and control.

So now Venezuelans have two clear paths in front of them. To let go, or to fight back.

This time there are no excuses. They have been clearly warned by Chavez himself.

Jorge Arena.

The Venezuelan National Assembly completed the approval on its second
discussion of the Credit card, debit card, prepaid card and other
Electronic Instruments Bill. The Bill as proposed represents another
significant intervention in the activities of the financial sector
which will simply elevate costs and decrease the quality of service.
While the intent is to protect the consumer, the articles approved so
far indicate that it is likely the consumer who will be most affected
by it.

To begin with, the bill as proposed, will ban banks from
charging commission for ATM withdrawals and services. This will clearly
reduce the scope of the current networks which are for profit systems
shared by many banks. Banks will likely being dismantling these
networks if they can not charge for services.

One of the most
difficult and complex parts of the Bill is that it requires banks to
charge a different interest rate for goods which are part of the so
called “basic basket” of goods. The rate for these goods would be 50%
of the prevailing credit card rate. It is unknown how the banks will be
able to distinguish the different types of goods purchased, as well as
the complexity introduced in separating these two types of items in the
Bill.

The Bill also would require banks to install cameras and
fingerprint grabbing machines at all ATM’s in order to reduce fraud and
protect consumers. This has an absurd cost, more so in a country with
average deposits per account which are much lower than international
standards and most of these machines are imported. Clearly, the
consumer will end up paying for this in the form of higher interest
rates for credit. Additionally all ATM’s will have to have Braille
characters on them for the blind.

The bill also prohibits banks
from charging interest on interest, which was expected after the
Government, has prohibited this for a number of financial instruments.
The Bill includes penalties for violations, including fines and jail
time in the case of interest charges above those mandated by law.

The
part about the interest on basic goods being half of the usual interest
is not only absurd because of its difficult implementation, but also
because credit card penetration in Venezuela is very low. There are
some 800,000 Venezuelans with credit cards or only 3.2 % of the
population, so this type of implied subsidy simply makes no sense.
Moreover, I can already see people lining up to buy liquor and have it
billed as meat, so that it gets half the interest. What’s next, the
interest rate discount police to stop that?

Imagine this story in revolutionary Venezuela:

Someone starts a
newspaper with a US$ 3 million investment. According to Venezuelan law,
if a company has more than a certain number of workers they can form a
union. This paper exceeds that number. In the case of newspapers, they
join the umbrella union called the “Sindicato Nacional de Trabajadores
de la Prensa”, which may mediate between the workers and the owners.
But in this case, the owners refuse to negotiate a collective
bargaining agreement.

The workers go to the Ministry of Labor,
which issues an order for the owner to sit down and negotiate with the
workers and the umbrella union. The owner refuses to sit down and
pressures workers into signing a contract written by the owner (after
the order was issued) or they will be fired. Some are actually fired.
The union refuses to recognize the contract, so does the Minister of
Labor and the owner continues to refuse to recognize the order by the
Ministry.

A case of exploitation by oligarchs? A case that
proves why the revolution is needed? A violation of the rights of the
workers? Human rights abuses by the wealthy?

Well, the
confrontation described above is taking place at Diario Vea, a
pro-Chávez newspaper, led and owned by the former leader of the
Venezuelan Communist Party Guillermo Garcia Ponce, who held the post of
Director of the Revolutionary Political Command for Chávez’ MVR party.

Amazing,
no? These are the revolutionary leaders. The ones who care for the
people, the poor, blah, blah, blah and etc, etc, etc.

And
please, don’t even ask where the former President of the Venezuelan
Communist Party and Director of the MVR’s political command got the US$
3 million to start the pro-Chávez paper. You don’t ask such questions
in the revolution.

I will be gone for a few days to go to a sort of family reunion, you
could call it the mother of all Mother’s Days. I will probably have a
connection to Internet, but my mind will be elsewhere, so expect
posting to be light. I have asked Jorge Arena to give a hand on things
that may happen while I am away. In the mean time I leave you with three
thoughts, unrelated:

–More irresponsible politicians: Primero Justicia candidate Julio
Borges, joined the ranks of the irresponible politicians in Venezuela
when he suggested that the Government should distribute 25% of all oil
income directly to the population. This comes out to Bs. 2 million per
inhabitant per year (about US$ 900). This is populism and demagoguery
of the worst kind. He should read Uslar’s writings. In fact, I would
ask him: Why 25%, why not all? Hey! Let’s eliminate Government and we
will all simply collect at the beginning of the year and see what
happens! Sad, very sad…

–Funny article in the papers today. Some guy wrote that if one
applied the criteria for expropriation that the Minister of
Agriculture is applying to companies, basically that they are not
operating at the peak of its potential and they are of social interest,
then the Ministry itself should be expropriated since it has a huge
cost, has a horrible track record and it is full of workers that do
very little. In fact, the article says the Ministry has yet to generate
a single idea to reduce hunger in Venezuela. The Ministry is so
incompentent and useless that Chavez created a Ministry of Foodstuffs.
Well said!

–Good News, bad news department: PDVSA auctioned off gas fields
yesterday. One was won by Chevron, the other by Russia’s Gazprom in
what will hopefully become the first important foreign investment since
Chavez became President in 1998. The Bad news? Five fields were
auctioned off, all bidders withdrew from the other three.

It’s sort of hard to know what to make of this story. This morning, roughly 70 skeletons were seen hanging around Caracas,
as a form of protest over the Government. The police immediately
suggested that this was a terrorist act and the skeletons contained
some form of toxic substance that intoxicated two cops. Well, a group
calling itself “Cambio” (Change) took responsibility this afternoon for
it, saying this was a non-violent protest and that the charges of a
toxic substance being present “could only be understood as the attempt,
typical of Cuban intelligence of neutralizing, taking legitimacy out of
a form of democratic struggle, which is non-violent and original
against the tyranny and as another episode in the strategy to seed fear
and shut up any voice of protest

The
group claims represent the young and be protesting against the way the
Government treats young people. They say that young people between 15
and 24 are the most affected by shootings with handguns. They point out
official Government statistic saying that 2,500 people have been killed
by security forces since Chavze took over, but there are more than
3,550 cases denounced to the Prosecutor’s office. The group argues that
the Government says that this ahs always happened in Venezuela,
but they note that in the four years prior to Chavez’ election there
were only 540 such cases. “These skeletons that we plant all over Caracas today are only a reflection of what the policies of the regimen have done to Venezuelans. We experience death and misery. Venezuela requests a change”

Well, it is hard to tell if the skeletons were toxic or not, but the
police have not explained how come only two cops acting together
suffered from this. If they were not toxic, this form of protest
represents an interesting and novel form of protest against some very
valid and relevant issues.