Archive for September 4th, 2010

In Venezuela, for anything to eat, there is the “Good Life” card, priceless

September 4, 2010

Hugo Chavez could sell a used car to even Richard Nixon, as he has been doing for the last eleven years. And now he is back at it with the most populist and dishonest campaign offer, the “Good Life” credit card, a credit card to buy food on credit in Government-owned supermarkets.

The offer is somewhat surreal, as Chavez is implicit admitting that after eleven years in power most employed Venezuelan can’t make ends meet and their money is insufficient even to buy all of the staples to feed themselves.

But the worst part is that Chavez seldom mentions one condition to get this new card: You have to be in the Government’s payroll. But most people don’t get this fine point. They think this is another Government giveaway of which they may be beneficiaries. Another morsel that will never reach them. Another gift from the Government that will captivate them, but which they will never see, like many other promises for the simple fact that they are not even supposed to get it.

And despite this, by now Chavez has become like a salesman for Banco de Venezuela, talking abut a commercial product of a Government bank all the time, somehow failing to note at all that that you need to be a Government employee to be a beneficiary. And if you are in a Government or private payroll, even if you make minimum salary, you surely can get a credit card anyway. And it helps, until you max the credit line out of it.

And I am definitely in favor of Government owned banks increasing lending to Government employees, their lending record falls consistently below that of private banks, but the first order of business will be to change the laws, as it is currently forbidden by the consumer protection law, for banks to issue credi or debit card that can only be used in certain establishments.

But there is something very perverse about offering a credit card so that people can buy food. It is an acknowledgment that after eleven years, even employed people, which represents a privileged group in Venezuela, don’t make enough to eat well or to earn sufficiently to pay for their food. Eleven long years that happened to include the biggest oil windfall in the country’s history. But the boom is over and the Government can’t afford to give away things any more, so now it wants to lend to them to eat and masking it as a campaign promise. By the time voters realize this will not be aimed at them, the upcoming elections will be past and another empty promise will have dazzled voters.

In other countries, banks actually target this particular group, people in payrolls, as they represent a very safe group to lend to, after all, their salary has to go through the payroll account first every month, allowing banks to deduct payment when workers are late in paying. And obviously, the President of a country never gets involved in offering these products in Government banks or are so dishonest to sell it as a giveaway for all, when it is only aimed at a single group, not to the population at large.

But this is Chavez and by now the card is a card “for the people” to “alleviate poverty”, all details left in the noise and an incredibly incompetent opposition has once again failed to counter act. Even if it could do a good job, it has meager resources to put up a good fight.

Chavez knows that offering something for nothing works well in Venezuela. This time, he is offering nothing for nothing and the people are likely to buy the promise. Someday they will get fed up with it, but it seems like they will buy it once again this time.

Imagine the ads:

“For anything to eat, there is the “Good Life” card”

“For anything else, you are screwed”