Denounce the hoarders by Teodoro Petkoff

February 27, 2007

Denounce the hoarders by Teodoro Petkoff in Tal Cual

Speaking about inflation, shortages and the measures announced by The Government, we heard Minister of Finance Cabezas refer to the responsibility of “previous Governments” in all of this. Has Cabezas perceived that the “previous Government” happens to be that of Chávez? If you can point someone as being responsible of the tribulations that we are living today, is to I, the Supreme, whose acts, were, on top of that, all validated by Cabezas himself from parliament

For eight full years, Chavez and his underlings have devoted themselves to sow the winds of these economic gales.

But in the same way as his colleagues before him, I, the Supreme is looking for dust in somebody else’s eyes, instead of looking at the beam him own eye has inside. Not for one moment do these Government officials consider their own faults. Faithful to their conspiratory vision of life and history, repeating the old adage of previous governments-as impotent and wrong as those of today- they have pointed to the scapegoat, that mysterious “bad guy”, with a mask over his face, who they call “speculator”

Inflation is then, blamed on small corner store owners. The only thing that this could produce as a result of this massive propaganda campaign-a Goebbelian feature for which this Government does have the copyrights to-is that some of those cheated could think of looting the small corner stores in the barrios or beyond.

The lack of effective anti-inflationary action is not casual. The reason is purely political. On the one hand, the Government is prisoner of its own fiscal excesses. It has been spending in such an exorbitant mode and acquiring and pledging such compromising obligations, that it cannot stop. Even worse, many of those expenditures that will have to be repeated each year are under the risk that medium term, the income to cover them will not be sufficient.

One of the roots of inflation is fiscal irresponsibility. The reason is purely political. The reduction of the VAT, just as an example, may lower prices but not inflation. It is not a paradox. Inflation is not the simple increase in prices, but the rhythm and speed at which it goes up. Inflation will continue to go up because for the Government a fiscally responsible policy is not part of its arsenal.

On the other hand, the exchange controls and the indefinite extension of the foreign exchange anchor, which also have a considerable inflationary potential, will also not be subjected to review because its persistence is also political. They exist because I, the Supreme uses them as a mechanism for political control. As long as Chávez is president we will have permanent exchange controls –even if they are not necessary-with its consequential and inevitable parallel market (and the corruption that the whole structure segregates) and with prices of consumption goods strongly determined by the not controlled exchange rate—black or gray, as you may like it.

All of this has a boring air of having seen it before. It is the repeat of the first CAP Government, it is Lusinchi part II.

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