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”
Priceless…
The Devil's Excrement 
September 9, 2010 at 2:57 pm
I am talking about a world where the State is not able to tilt the table.
It is a minimum requirements’ world.
In most areas, I favor NO LAW and LITTLE TO NO LAW ENFORCEMENT.
Works like a charm in any market that the State has not deemed important and “strategic”. For example electronics and technology. Though recent extension of monopolies (like intellectual property and patents) threatens to stifle all innovation, if the “rights” holders have their way.
The world is not perfect and will never be.
Take for example the water rights in Cochabamba, Bolivia. The State sanctioned a ridiculous monopoly. And almost sparked a civil war. By violating the most basic rights of citizens. That of keeping resources literally falling on their own property.
Did you know? The classical liberals’ had most arduous struggles before there was people who did not believe in private property or enterprise. They were with people who believed in getting all kinds of advantages and enterprises for their own ends and enterprises via State power.
And I am not expecting people in Latin America to become suddenly completely honest. I want the burden of corruption to be lifted off their backs. Maybe, with that and a little discouragement, like facing the consequences of dishonesty (at the hands of defrauded customers too), they will have incentives to work and become honest. With the present systems in place, there is simply NO WAY!
And still, if we are not talking physics or mathematics, how come we insist on definite interventions by governments with aims they cannot if they can reach? Rules, and more neutral and simpler the better, will frame a system, good or bad. Monopolies and privileges, and shoehorning people into one way of doing things will only frame widespread corruption and misdirected entrepreneurship.
Here in Venezuela we have had literal copies of the French civil codes and French and Spanish bureaucracy. Shown not to work.
September 7, 2010 at 4:38 pm
[…] Other economists play down fears that Venezuela is on the threshold of communism, instead emphasising that the move is a tacit admission by the government that runaway inflation is eating away at salaries to such an extent that people don’t even earn enough to pay for their food outright. […]
September 7, 2010 at 12:43 pm
Loroferoz, we are not talking about physics or mathematics.
Please, give me one example where it has functioned the way you say.
The EU is everything but free trade. The same for the US or Japan.
They have very tied markets for anything but what they definitely do not produce. And they dictate everything because they have the technology, the capital. You are expecting the people in South America to become honest de la noche a la mañana? Look at Congo. It is a complete horrible mess.
Yes, a huge lot is because of its corrupt, selfish leaders. But an awful lot has to do with external powers promoting violence, division and much more just to get the Congo resources for peanuts. Read now above all France, but also China and the US.
They want us to produce the bananas and deliver the oil or provide for ecotourism…and they set the price because they can.
“Another important component in free markets is having some sort of long established rule of law and respect for everybody’s rights including property. ”
Like in Peru where a company from the North made the government prevent citizens to catch their own water in order for the company to sell them their water?
Sorry, I have no more time now, you really are talking about some ideal world. It has never ever functioned as you say. I don’t know why we should try it again like that.
September 7, 2010 at 12:33 pm
“I just don’t believe the system is transparent, I don’t believe markets are free,
I think that is just a target, I think we need to be weary about following simple solutions in complex models”
Maybe one of the reasons the system is so hard to predict and “chaotic” in the sense that apparently small changes have inordinate consequences is that markets are not “transparent”. Markets work because not everybody knows everybody and not everybody has everything they wish to have, and they have to find out where to get it. Asymmetry (of information, f.e.) they call it. They are not fair. But they tend to, with time, to produce the most welfare and the most efficient allocation of resources.
Another important component in free markets is having some sort of long established rule of law and respect for everybody’s rights including property. Even of a type you would call unfair or alien now.
When First-World leaders propose “free trade” to a developing nation, first, they are not about to propose rule of law to said nation (they cannot). Second, they are proposing something that is left after the action of special interests in their own country; most of these don’t want free trade or competition from abroad and will operate like a committee of clones of Dr. Moreau. Third, it is probable that at least one of both partners have nothing like a free market internally. So, it is either a turkey shoot (one is competitive, the other is not) or a game of seeing the biggest or best connected cartels win the game (no free market in either) or a combination of both.
But still, the gripe holds.
Confidence in long term behavior of the market is like confidence in long term weather forecasting. And that intervening the markets is like intervening weather. Dangerous and with uncertain results, which become more uncertain in the long term. Dumb intervention manages to throw away welfare, good allocation of resources, and whatever good aims it might have had intervening.
To me it is best to concentrate in producing an acceptable body of sufficiently neutral rules, and establishing rule of law, that is to be followed even by the government because it can be enforced against the government. That the government provides a few public services well and almost as efficiently as private providers. In so few words, that the government provide peace and stability so people can concentrate on living well. The economy will grow and entrepreneurship will bloom, and will be well directed to enterprises that succeed.
On the other hand, there’s getting inventive in patently immoral ways. Toying with currency exchange and interest rates, using Central Banks as tools for political ends, nationalizations, State sanctioned monopolies, populism and socialism, arbitrary trade tariffs and barriers, inconsistent immigration and foreign investment laws, State control of the labor market and/or pensions. Those produce results. Unintended and ironic results mostly.
Lastly. Somehow, it crept into our consciousness in the XXth. century that centralized State ownership, control and monopoly is “fair” because it is democratic in nature. It is NOT, not even of currency, not even of courts and arbitrage.
September 7, 2010 at 9:26 am
Kepler,
Free trade is only good for the side that is most efficient. Free trade is the same as merging two markets into one. Suddenly, the members of the market in the country in most need are head to head competitors with the members of the market in the other country. Clearly, they will lose without some kind of handicap. It’s not free trade that is at fault as a concept, it’s the proposal of free trade from an overpowered trade partner that is wrong.
Venezuela and other resource driven nations, however have an advantage. They have a resource handicap factor. They can compete with cheaper labor and cheaper energy costs. Our costs go up with inefficiencies and corruption. If you can do away with those two, we can compete, even with most first world nations.
One of my reasons for supporting the cash distribution is that it does away with the inefficiencies and corruption from the resource monies. The cash ends up where it is intended, 100%. It cannot get more efficient and uncorruptible than that. People convert the money to goods and services directly, thus receiving the *value* of the cash in the most efficient way possible. Everyone recieves the initial distribution, then it keeps changing hands as it flows upward to those who offer the best goods and services, instead of getting caught or drained somewhere by the inefficient or corrupt as it trickles down.
Free markets works, but the key is that they be competitive. The moment they are not competitive, their results get skewed, and they stop being fair game for everyone. Cash distribution keeps everyone in the game, but a government would still be needed to keep the market competitive, not by controlling the money, but by controlling the rules of the game.
—
September 7, 2010 at 4:55 am
” Most of our economic and social problems stem from State controlled oil.”
I agree.
” Our present authoritarian situation has everything to do with State controlled oil and on an insistence on determining the economy through that unearned clout.”
I agree. And there is also the lack of good education and teaching people to be inquisitive, not inquisitorial.
“It is also fine by me also if every Venezuelan is made a shareholder in oil. So long as the shares are really theirs to negotiate.”
I agree.
“But let’s answer: If that is so, that economics is not an exact science, let me utter the Austrians’ gripe: THEN why, in the name of all that is holy, do governments insist on IGNORANTLY CHANGING THE ECONOMY BY USE OF FORCE, intervening LIKE THEY KNEW WHAT THEY DID? If economy is not an exact science, if it’s nonlinear and chaotic, why do they insist on bonking their heads, from Keynesians to Social Democrats to Socialists, on the Law of Unintended Consequences?”
Don’t ask me. Ask them. I mean: I don’t believe it is completely chaotic.
I believe in market principles – believe it or not -. I am pro-capitalism. I just don’t believe the system is transparent, I don’t believe markets are free,
I think that is just a target, I think we need to be weary about following simple solutions in complex models,
I don’t believe it was all about free markets and hard work that brought prosperity, even if there is some part about it.
When a North American or European head of states goes to Africa or Latin America and says “it is all about free trade”, a mí me da ganas de pintarle una paloma because it is simply not true, because they are preaching a catechism they never really followed and because we should take any social “theory” with a grain of salt or two.
Japan firstly opened up in a naive way and in twenty years it was on its knees and riots were taking places on a daily basis. Then they found their model…a bit too strict for me and not one we can copy. But it was a model that involved pondering and trying without blind following the dictates of the others (compare Meiji period with the initial market opening of Japan).
September 6, 2010 at 10:55 pm
“and the borrower is servant to the lender.” Proverbs 22:7-b
September 6, 2010 at 4:05 pm
“I said, Loroferoz: economics is not really a science or at least a natural science. There are principles but markets are not perfect. Somehow people become greedy and markets are not that transparent, they have never ever been. We won’t change reality in Venezuela when nobody has ever done it.”
I don’t know why you direct this at me. I have repeatedly stated that the government providing services is fine by me, as long as it does not drag all the citizens’ down into poverty when it goes bankrupt, and that in any case it’s highly preferable that it does not go bankrupt, that it should be run according to basic principles of ACCOUNTING.
Maybe it’s my tirade that meddlesome (or simply incontinent) governments produce more lasting, deeper poverty than what any of their posterior policies might “alleviate” or rather cheat. Maybe it’s that. Most of our economic and social problems stem from State controlled oil. Our present authoritarian situation has everything to do with State controlled oil and on an insistence on determining the economy through that unearned clout.
It is also fine by me also if every Venezuelan is made a shareholder in oil. So long as the shares are really theirs to negotiate.
But let’s answer: If that is so, that economics is not an exact science, let me utter the Austrians’ gripe: THEN why, in the name of all that is holy, do governments insist on IGNORANTLY CHANGING THE ECONOMY BY USE OF FORCE, intervening LIKE THEY KNEW WHAT THEY DID? If economy is not an exact science, if it’s nonlinear and chaotic, why do they insist on bonking their heads, from Keynesians to Social Democrats to Socialists, on the Law of Unintended Consequences?
Do they believe that good intentions equal real knowledge? Do they believe that their ignorance is lesser than anybody else’s? To the point they can manipulate markets? Why do they choose to disregard even the most basic principles of accounting? Why do they go into Central Banking? Why do they drag countries into booms and busts? Why do they play with the savings and salaries of citizens?
If I were somehow the most powerful actor (or in charge, or able to enact measures by brute force) in a complex system I don’t understand too well, with significant dark areas in my knowledge, on which everyone’s lives depend, DARN ME if I get CREATIVE.
September 6, 2010 at 1:07 pm
I prefer choice B.
September 6, 2010 at 11:32 am
But out of curiosity, Kepler, leaving out all other choices, for a moment, are you saying you would prefer choice A to choice B?! Really?!
—
September 6, 2010 at 11:30 am
Evidence indicates that you are wrong about the thugs. Read the article in the links I provided.
Regarding Norway, I didn’t bring them up. If that’s not what we should be looking at, don’t point that way.
“I don’t see why I have to choose between two choices only.”
Because chavez is offering a credit card… That, plus a few other handouts and promise, will make him win, unless we counter it with something better cash distribution.
—
September 6, 2010 at 11:03 am
” that NO ONE is closer to the oil than anyone else. Everyone would live better by an equal amount because of the oil. So I can’t get through my head how you can put that forth as a criticism while supporting keeping a system that causes that very situation. ”
I am not saying I support the system. I am saying you are trying to attack the problem by attack right away a lot of vested interests.
See: if you do that in one go, Giovanni Giuseppi, importer of Italian food,
Juan Pedro Pérez, importer of whisky, Juana Rodríguez, of some magazine, would instantly stop getting most of their income. Someone in Venezuela would have to start producing some out of the blue that generates enough momentum for people to be able to buy more than harina pan.
And even if that would be nice, you will have the whole middle and upper middle class, both Chavistas and non-Chavistas, against you. You cannot change things like that.
“millions of Venezuelans will just take that as a salary and become thugs to to sustain the one in power” I don’t get this either. Why do you assume people become thugs if their income is guaranteed?!
Because of Cuba. Not all of them, but half of them are precisely doing nothing but attacking anyone who protests against the Castro clan.
“Not if they are being imported from China. ” Wrong! EVEN if they are being imported from China. Given an efficient market system, someone will calculate how expensive it is to make and distribute combs, scissors, shampoo, etc to hair salons, and compare with what hair salons currently pay. If he can make a better offer of goods and services, hair salons will stop buying from China and start buying locally.”
I said, Loroferoz: economics is not really a science or at least a natural science. There are principles but markets are not perfect. Somehow people become greedy and markets are not that transparent, they have never ever been. We won’t change reality in Venezuela when nobody has ever done it.
“You mention Norway. You state education for free. It’s not free. Nothing is free. ”
You know what I mean. It is guaranteed for everyone. Never ever ever has a country become developed without the state efficiently providing for
good education. Even in the US: the vast majority of white settlers
arriving there could read and write, a process that evolved from the
efforts upon reformation and the need to read the Bible, once in the States
some societies not for profit dedicated themselves to providing education for all (at least for all whites).
After that they got usually well-educated people: from Norway, from Germany, from the Netherlands. And in all, absolutely all those countries
the governments had been doing more for quality education for ages than anything we saw in Venezuela.
Really, for me it is no brainer: private education can exist and fix its fees any way it wants, but FREE and good education must and can exist (you know what I mean: even if I pay for it with higher taxes, I want Yulibari Pacheco to get at least 11 years of free schooling with books)
There are two things I consider the state should provide for: good elementary schooling and basic health.
“So, do you want a Venezuela with 25% VAT, and controlling all oil revenues, and having
one of the highest income tax rates in the world, and one of the most controlled trade markets, and controlling the accumulated investment funds of oil revenues? ”
I am not saying that. I don’t. I am just responding to your saying “Norwegians should do this”. I don’t think they need that. Well, I am no Norwegian, but frankly: I think they are fine as they are or at least better off than what you propose.
“Let me put it this way: Between choices A) chavez wins but we don’t distribute cash, and B) chavez loses but we distribute cash, are you really preferring choice A?!”
I don’t see why I have to choose between two choices only.
September 6, 2010 at 10:51 am
Or here in PDF fromat:
Click to access BostonGlobe_2010-07-16.pdf
September 6, 2010 at 10:45 am
Previous link is now for subscribers, here’s a cached version:
http://blogs.monografias.com/sistema-limbico-neurociencias/2010/07/26/here%E2%80%99s-an-idea-for-foreign-aid-just-hand-over-the-cash/
September 6, 2010 at 10:34 am
Kepler,
I’m confused. sorry. What do you mean middle and upper classes won’t take it? Take what? By definition, if they were earing more than 2USD per day, they would be above the poverty line. The main part of what I’m proposing is that nobody –lower, middle, or upper– ever live below 2 USD.
When you state “because they are closer to the oil tit”, I get a little short circuit in my head because that is exactly the point to distribute cash, so that NO ONE is closer to the oil than anyone else. Everyone would live better by an equal amount because of the oil. So I can’t get through my head how you can put that forth as a criticism while supporting keeping a system that causes that very situation. Then I can’t get through my head how you criticize what I propose, which precisely does away with that problem! Please, explain.
“millions of Venezuelans will just take that as a salary and become thugs to to sustain the one in power” I don’t get this either. Why do you assume people become thugs if their income is guaranteed?! And if they are getting the cash distribution, guaranteed, for life, unconditionally, why would they sustain the guy in power who doesn’t have any power of that money? Then in your next statement about the mango trees you are describing an opposite type of person, one who would not become a thug at all, but who would relax and enjoy life. So which is it? Please, explain. Besides, you seem to have missed kolya’s link: http://www.boston.com/bostonglobe/ideas/articles/2010/07/18/free_money/?page=3
“Not if they are being imported from China. ” Wrong! EVEN if they are being imported from China. Given an efficient market system, someone will calculate how expensive it is to make and distribute combs, scissors, shampoo, etc to hair salons, and compare with what hair salons currently pay. If he can make a better offer of goods and services, hair salons will stop buying from China and start buying locally. If he can’t he’ll find something else where he can. The key is, that regardless of how long it takes him, or if he fails at any attempt, he would never go below the poverty line if he’s receiving his share of the cash distribution. As things stand now, he would find it harder to get the money, and what he risks if he fails is falling much lower. Are you suggesting it’s better to have an economy where Joe Schmoe finds it harder to start a business, and if he fails he falls harder? From what I understand, you’re suggesting that he has to wait for the Government to come around to help him. Do you think that is realistic?
You mention Norway. You state education for free. It’s not free. Nothing is free. Just because the user doesn’t pay it at the moment of use, doesn’t mean he doesn’t pay for it. Of course he does. Everyone does. His oil, his taxes, and all the money that is taken from him by the government is used to pay for all those things. And if the government spends more than it’s receiving, its economy goes into the red. And if it spends wisely and saves wisely it’s in the black. So, do you want a Venezuela with 25% VAT, and controlling all oil revenues, and having
one of the highest income tax rates in the world, and one of the most controlled trade markets, and controlling the accumulated investment funds of oil revenues? Really? I can see how that would be a nice thought, but Really?! Realistically? You think that’s a reasonable short term goal? I think Norway would be better off with a cash distribution system, but that’s another discussion.
Let me put it this way: Between choices A) chavez wins but we don’t distribute cash, and B) chavez loses but we distribute cash, are you really preferring choice A?!
September 6, 2010 at 8:43 am
It sounds like some unnatural cross of (in order of DNA content) credit card, food coupon card (like Cestaticket or Sodexho Pass) and rationing card.
And it also sounds like a con to make you think that you will receive freebies because! just before an election.
But that is not IT.
Hugo says “alleviate” poverty? Sounds like “cheating” poverty, in the very sense of “cheating” hunger (engañar el hambre en español) by chewing on anything at hand you can buy now.
Yes, buy some snack and maybe a soda with the money they give you. Costs more. You are hungry anyways. What can you do? You have no house, no way to go to a supermarket, and no fridge and certainly no bank account. YOU ARE POOR. You can also become a little predatory, though but have to watch for bigger predators.
The perversity of it all is that most Venezuelans, even the ones with education and salaries and businesses to our names, have been brought to similar situations of penury. The salary becomes nothing. So does every bank account in the (joke) money, you have medical insurance from the employer but it is not paid for. We live in fear of private and public predation.
Huguito is obliquely sincere on this, and makes a practical demonstration of a particularly revolting situation. They are put into action by people who cannot begin to see that the policies they support and implement produced the fiscal deficits, the inflation, the economic hopelessness and then the poverty and hunger they say they want to alleviate.
September 6, 2010 at 8:01 am
The more of the economy that the government owns, the worse things will get. It looks like Venezuela is heading toward a communist dictatorship, rather than socialism. Only the oil money will keep Venezuela from looking like Cuba in another ten years.
September 6, 2010 at 6:37 am
Now, initially the military had this pseudo-ideology called Bolivarianism that they have transformed more and more into “socialism of the XXI century”.
When you’re right you’re right.
September 6, 2010 at 4:24 am
Sid,
Thanks for the explanation. Olomouc?
When I was a child, in 1983 I wrote to Mladá Fronta asking about Czechoslovakia and got some pen pals. I followed a bit through their letters the fall of the old regime later on as well from newspapers, radio, books.
I remember a friend who sent me several pictures of her with her family in their own car when they first came to Austria. Now: a car was something a Czech would have, not a Bulgarian, not an average Russian
(in spite of many more decades of “socialism” or socialism, not a Romanian). They also had rather comfortable lives, all with food, good education, travel, lots of cultural activities…as long as it was nothing with politics.
Now, you should know there were differences. First of all: Czechoslovakia was already industrialized. As part of the Austria-Hungary it was one of the most developed regions of Europe with a highly educated population.
The same with Eastern Germany, although it initially paid heavily for the war with all the rest of its industry being literally taken on rails to the USSR.
“ŠKODA, Baťa etc.” were a part of a tradition. Living standards of the Czechs were better than that of most of the rest. Eastern Germans were also better off vis-a-vis Russians or Poles and definitely Bulgarians or Romanians and a reputation for their Jena factories and so on but they had to wait years to get that Trabi. When it came to electronics East German electronics was basically rubbish: the complexity required in such an industry could not be coped with through central planning and so little motivation for the big creators.
In 1992 I finally went to the Czech Republic. It had been a couple of years from the fall and yet it felt as I was going back to the past. You know: the Prague underground, although impressive and clean, had this Soviet taste, out of Prague I could feel like in the Old Times. There were children selling newspapers or cleaning shoes in the train stations, something they would never had to do in communist times. There were and I am sure there still are lots of elderly women offering rooms for tourists, something they did not have to do back in Czechoslovakia. There were Germans and US Americans looking for cheap prostitutes, something that made me angry. I saw countless people eager to learn English or brush up their German and full of hopes. I knew many would be disappointed.
I saw a poor country with extremely friendly and well educated people. I talked to quite some of them. Although it did not have the shanty towns Venezuela had and has, it looked poorer as a whole in 1992 than Venezuela.
I remember I thought for a moment to stay for a year or two as other foreigners did, to teach languages or something and travel around Czechia, as I found the place so interesting and exotic and although poorer than Venezuela I sensed it was going forward. I did not stay because I had a girlfriend in Venezuela.
I haven’t returned since then, but my sister has gone twice. She says the transformation has been huge and the place has definitely outpaced Venezuela.
We are in the 11th year of the so-called revolution but other than distributing pieces of papers telling you you are a “specialist” in medicine (without actually having studied anatomy) education hasn’t improved in Venezuela. Venezuela was dangerous in 1998 with a murder rate higher than that in Europe or the USA but still below Latin American average. Now the murder rate has tripled and it is much worse than anywhere else in South America, where violent crime has gone down (unlike Mexico, but that is North-Central America).
The Venezuelan system is more conked out than ever.
Why? This is above all a “revolution” of military, military who were always the rulers of Venezuela. They went to the background between 1958 and 1998 when we had democratic presidents but their generals were basically a special caste. They had and have special areas that are deemed “military terrain” but are more often than not hunting grounds, fincas or special beaches for military and their friends.
The extreme left started to work in infiltrating the military since the early sixties at least. They succeeded in the eighties when petrodollars became scarcer and scarcer due to the demographic boom and corruption
and simply waste.
A group of military led by Chávez tried to take power in 1992 and finally got elected in 98. They took power thanks to the workings of the old commies and, curiously, a lot of capitalists and middle class people who thought a military honcho would bring the times they had during the Pérez Jiménez period.
Now, initially the military had this pseudo-ideology called Bolivarianism that they have transformed more and more into “socialism of the XXI century”. But they are basically military and their families have privileges you would not see even among the great honchos in the GDR or USSR.
There is one additional problem to education: the upper classes had little national interests. They did indeed behave like compradores for the North. Disgracefully, our current “revolutionaries” are even worse on that, selling off the country just to anyone so as to get extra cash in spite of the biggest oil boom we have had in decades.
– oil dependency that makes us very subject to oil price cycles
– very low education standards for the average (although with a couple of excellent free universities as USB)
– a pervasive Dorado myth that went from gold to oil
– Bolivar as quasi-religion used by every president and military regime since Bolivar himself
– military as the dominating caste, sometimes pretending to be “civic-military governments as now and sometimes just on the background as between 58 and 98
– people that are very generous when they see someone in need, but extremely selfish and individualist when they think of an abstract thing as society or even community
September 6, 2010 at 4:17 am
“Yes, according to poverty experts. I would be living above the poverty line.”
Yes, you could, but you would not. That is not what I meant. What I meant is that most of the middle to upper class would not take it. The thing is that in Venezuela there are a lot of people who are living the way they do just because they are closer to the oil tit.
“Firstly, not buy, but rent yes. Secondly, it wouldn’t be a salary; it would be additional income to whatever they make by any other means.”
I tell what will happen: millions of Venezuelans will just take that as a salary and become thugs to to sustain the one in power. That is what half the Cuban population does. A friend of my dad, a Latvian, said decades ago: the problem with Venezuela is you can live from a mango tree…and if you happen to have two mango trees you are in paradise because you can hang up your hammock.” And Venezuelans still think like that, even if demographics does not make it possible any longer. But any lacking thing they would blame it – not all, but millions- on the others, on El Imperio or whatever.
“That is not, in a market economy, a bad thing because even they would still use electricity, water, scissors, combs, cleaners, cloths, razors,”
Not if they are being imported from China. Market economy is NOT a science. Economics is in reality not a science, or perhaps we can keep the term “social science”. Not for nothing I hear more and more German business people talking about not outsourcing so much as Chinese are just copying and replacing.
“Norwegians haven’t implemented the plan. They should. It would be more efficient if they did.”
As far as I understand Norwegians have another plan: they give excellent education for all, for free, they have an excellent health service (although they anyway pay for it via taxes, but it is obligatory), they save in the http://en.wikipedia.org/wiki/The_Government_Pension_Fund_of_Norway
September 6, 2010 at 2:18 am
to Kepler: sure 100km westwards of PRG. Well, however you criticize east trabis this was not important. Important was, that our factories smashed those from the west (unsatisfied with our guns?)with civil production- cars, pumps of all types, et.etc. This was the industrial hearth of Europe since 1815. Did you hear the brand ŠKODA, Baťa etc.?ˇMy classmates of basic went to agri oriented professional school, at 18 passed it with “matura” went into cooperative, and the first question of the boss was- do you intent to stay here for 10yrs? He went to military, returned and answered, yes. So, then he jumped into harvestor (class combine), and the cooperative started to build him the brick house 6+1 incl bath, WC in the nearby village or town. The coop paid all expenses, so, having 21 he received a new house for the family.Such stories are hundredthousand here…and the new era came, the coop ended as the breweries (yeah, you do not know Pilsner Urquell) did production shortages (import from west nearly free of charge), and the guy is jobless. With the family. I mean, socialism, as we were forced to live in was cruel, but the cruelty of capitalism now here? Well, ask our 0,5 mil unemployed persons and 150 thsds homeless…not me. That what presents Chavez and Castro (paid for decades by USSR) is not any type of socialism. But the west with regular crisis in economy will not save it.It has solution, but I come here to read on Ven.
September 6, 2010 at 1:13 am
GWEH, China is the MOST Capitalistic [read free market] country that I have ever lived in. (USA, Venezuela, Mexico, China and the Philippines – where I currently am.) They are running, as fast as they can, away from Communism and practically speaking, Socialism also.
I’m sure that you realize that the goal of Chavez is to control ALL the means of production, a la Cuba. When he accomplishes this, then, like Cuba, all – okay, that’s an exaggeration – employees will be government ones.
September 5, 2010 at 4:29 pm
“I can’t think of anything worse than this”
Smart chavistas will agree with you all the way to the winner’s circle the day of the elections.
—
September 5, 2010 at 3:30 pm
When people don’t have enough they will be tempted to use credit to make up for deficiencies, but will be mortgaging their incomes by becoming debtors.
Also those who have never had credit before might feel empowered and misuse the cards more easily.Instead of using them on emergency basis only they might regularly use them.Credit cards are only good for people who can pay them back and are disciplined enough to keep balances down.
I can’t think of anything worse than this
September 5, 2010 at 2:49 pm
Here a direct quote:
“El dignatario nacional indicó que se puede comenzar con los trabajadores que están en las instituciones del Estado o los que laboran en una empresa privada, que puedan asociarse a través de cajas de ahorro y otros mecanismos.”
Veneconomy:
Hugo Chávez anunció este martes otro despropósito producto del calentamiento electoral: Que el Gobierno pondrá en circulación una “cédula del buen vivir”.
Resulta que dicha “cédula del buen vivir”, no es otra cosa que una tarjeta de crédito que expedirá el ahora estatal Banco de Venezuela, destinada al uso de aquellos ciudadanos que tienen cuenta nómina en dicha entidad. Lo que es lo mismo que decir, que va destinada en su mayor parte a funcionarios de la administración pública.
La nueva “cédula” estará destinada exclusivamente a la compra a crédito de alimentos y otros productos de la cesta básica. Pero que, según el entender del mandatario, no promoverá el consumismo, sino que serviría para “comprar lo justo”. Llama la atención que el destino de la “cédula” sea la adquisición de bienes de consumo diario, ya que lo económicamente lógico es que el crédito se destine a la compra de bienes durables o se utilice en situaciones de emergencia.
Sadly, the oppo attacks it because they say it is a prototype ratining card.
September 5, 2010 at 2:43 pm
I am not mistaken, this is all it is, people just dont read the details.
It is credit to buy food for people on Government payrolls. Period. There is a vague promise to expand it, nothing more, nothing less.
If you dont have a card you can still use those markets. It is being sold like gold and is a meaningless program, watch Chaavez videos, it is very clear.
September 17, 2011 at 7:50 pm
It\’s about time somenoe wrote about this.
September 5, 2010 at 2:29 pm
I don’t get it then, Miguel. If you are right, it means that people need credit to buy food?!?
Does it mean that those that do not have the card (those that are not civil servants) will not be able to purchase in the goverment stores?
From what you are telling, this is worse, much worse for the people than any other program. It means they are in need of credit, that they will buy only at the goverment store and that the goverment will know exactly what everybody’s buying and can even regulate it.
You must be mistaken Miguel. This cannot be such a lose-lose proposal and be sold like gold by Chavez and NONE complaining from the opposition. There must be some misunderstanding.
September 5, 2010 at 1:27 pm
Bruni, it is up to now a credit card for Government employees, nothing more nothing less, no give away, it will be cheap credit paid via your credit card, just like any other credit card, except you will only be able to use it in Government supermarkets.
Bob: It could be a trial run at a rationing card, it all gets confused in Chavez’ rhetoric, like him saying this will be used to buy a “just amount of food”, but the details described say it will be a Banco de Venezuela credit card for people on the Government payroll.
September 5, 2010 at 1:19 pm
Isabelle: They revolted in 1989 against a President who had been elected two months earlier by 55% of the vote because he increased gas prices. But it was a strange revolt, which began simultaneusly in three or four cities at 6 AM and grew as the Government did nothing. However, 8 years later, a very unpopular Government, managed to increase the price of gas without single protest. To me it is a myth that gas prices can not be increased. Venezuelans are in general quite passive and if anyone had the goodwill to increase the price of gas it was (is?) Chavez.
To me there is a difference today in that people did revolt against Chavez, but they were repressed over and over in 2000-2004, people got disheartened that they could do anything about it. Chavez control over the Army and also the media, means that protests many times dont even get reported, most visual media Government or against don’t show it.
As to your question, A good fraction of the population has an almost religious connection with Chavez, time is demystifying it, but things have to get much worse, in my personal opinion, for a revolt to take place. There is no comparable figure in the opposition either.
Hope this helps.
September 5, 2010 at 12:55 pm
Very good Antonio
September 5, 2010 at 12:49 pm
I have a question. From what I understand, the attitude of Venezuelans are a very important part of why Venezuela is how it is (obviously). But for example they revolted when the gas price went up. Meaning they revolt when things get “worse” from what they are used to. Has it not gotten worse with Chavez? What would have to happen for the Venezuelans to revolt against Chavez?
Maybe it’s a silly question, but I would really like somebody’s answer or thoughts.
September 5, 2010 at 11:49 am
Venezuela is a poor country. Oil is the Devil’s Excrement not only because it is easy money, but because it stops you from thinking about alternatives. In 1960 Venezuela’s GDP was larger than South Korea’s, today a single company in that country Samsung, announced that it will invest US$ 25.5 next year alone, that is almost Venezuela’s foreign reserves. While Chavez destroyed the knowledge base of the Venezuelan oil industry, Venezuelans who were fired are producing in Colombia almost 300,000 barrels a day of oil, all funded with private money, not one cent by that Government, while our own oil production goes down.
The Government in Venezuela has over controlled and over regulated the country for decades and it just gets worse and worse, with Governments with no vision of how to get everyone to prosper, not how to make everyone poor. In the 50’s, 600’s and 70’s people started productive businesses, this is no longer happening, we will all become poorer because of this.
September 5, 2010 at 11:49 am
This looks like an electronic ration card.
When the mother of a humble family goes with her card to the government shop to buy a chicken, the attendant will look at her file on a computer screen and will say “sorry, madam, but you bought a chicken three weeks ago: your next fowl allowance starts in May. However, I can do you a deal if you bring cash after closing time”. Cash? -she says. All I have is this card. Oh, I’m so sorry! says the attendant. Howeher, I see here that you bought a toaster last month. Would you like to trade it in for a chicken? No, she says: it broke; I thinkit was made in Iran. Oh. Well, I see here that the only thing left on your card are carrots. Carrots!, she says. My husband will kill me if I give him carrots again!
September 5, 2010 at 11:45 am
firepigette, chavez’s card is not cash distribution. He is handing out credit cards. People buy things on credit with these cards, and have to pay later. It’s not about money being given to them but about controlling the subsidies on the products they can opt to buy with these cards, but the people still have to pay.
The cash distribution proposal is about giving people money via debit cards. People can use the cards to pay for anything, even take cash out at an ATM. It is not a salary, since it is not in exchange for work, and it is not a handout, since it is merely their share of oil sales.
I totally agree with you about infrastructure priorities. Those are on what the government should be spending our taxes. Note: taxes. Your warnings about giving out free money exactly what has happened with government spending in Venezuela. Because the government is getting all this free money, they have no respect for it, so it gets wasted. I say make the government earn it through taxes.
—
September 5, 2010 at 11:32 am
Kepler,
“Can you live on 3 dollars a day?”
Yes, according to poverty experts. I would be living above the poverty line.
“can the child buy a house with an average salary of 10 dollars a day?”
Firstly, not buy, but rent yes. Secondly, it wouldn’t be a salary; it would be additional income to whatever they make by any other means.
“earn that money by producing nothing or by ‘cutting each other’s hair”
That is not, in a market economy, a bad thing because even they would still use electricity, water, scissors, combs, cleaners, cloths, razors, airconditioning, mops, shampoos, blowers, etc. And all those become products that the market provides. At first, imported, but soon enough, someone with enough money will see the profits in producing locally rather than importing, and will begin to do so. It doesn’t happen now because the money is in government hands, and unless the government decides to push for these minor products, it never becomes profitable to produce them locally. If the money is in the hairdressers’ hands, then it suddenly does become profitable. Market economy at its best.
“Even Norwegians are not living off their oil and they are less than 5 million.”
Norwegians haven’t implemented the plan. They should. It would be more efficient if they did.
—
September 5, 2010 at 11:28 am
The Miami Herald is saying that the card might turn into a ration card sometime in the future.
http://www.miamiherald.com/2010/09/04/1807508/venezuela-introduces-cuba-like.html
September 5, 2010 at 11:14 am
This is starting to look like a Voter Rebate Card with the clever Bribe Now Pay Later Plan seeing as the government has no money to pay things like Early Christmas Bonuses common in past elections. Gone are the days when he could put the robolution on his Amex card!
September 5, 2010 at 10:58 am
Looks to me like Chavez thinks he will win out because as it stands there is not enough money to subsidize food due to shrinking State revenues.This way people are obligated to buy food in government stores which will help finance them.
Also pitiful and evil that in order to eat, poor Venezuelans will be mortgaging their incomes and inconceivable that debts will occur in order for people to buy the food they need.
September 5, 2010 at 10:23 am
I have the same questions as Bruni
September 5, 2010 at 9:18 am
Lim, you are correct in your assessment. Chavez walks a very fine line. He’s certainly one of the best tightrope walkers in history but a lot due to much luck and sheer incompetence on part of his detractors. What you say is true, they are setting themselves up for life and there’s little anyone can do. Even suspicions of WMD proliferation will not cause Washington to move. Times have changed and the 21st century so far belongs to Chavez who today enjoys the backing of the Russians and Chinese (despite the fuck-ups). It certainly is all about oil.
September 5, 2010 at 9:03 am
I don’t quite get it Miguel. Is this a credit card or a “cash card”? Are the holders going to pay their card statement at the end of the month, or it is simply a give away?
If it is a give away, has the goverment stated an upper limit for the salary of those that can use the card? Or would the President of the TSJ, and other higher payed officials been able to get it?
September 5, 2010 at 8:56 am
Deananash, for someone living in China I’m suprised you think everyone will work for the government in Venezuela one day. That is not possible. Private sector is holding the country together… Chavez can swallow little more.
September 5, 2010 at 8:33 am
I agree with Firepigette here. I am afraid it is worse.
“When the price of oil goes up the public will expect increasing amounts of money to be handed out.”
No. The public will expect the same amount of money being handed out EVEN IF OIL PRICES GO DOWN THE DRAIN. And that is the bad part. They did not understand why social programmes were so battered in 1989, they did not grasp why petrol prices had to go up. What is sad is that no one in Venezuela has the cojones or ovarios to tell Venezuelans some truths (like petrol does not come from Heaven and the petrol we consume in Venezuela is the oil we cannot export).
September 5, 2010 at 8:24 am
The greatest corrupter of all occurs when it is made unnecessary for a person to produce and learn to care for himself.Dependence on government handouts will only increase the poor level of production Venezuela already has and decrease the feeling of self empowerment and esteem among the poor.Among the rich it would be a waste and a travesty.The whole concept of this cash distribution is similar in its psychological underpinnings to the ‘cedula del buen vivir’ in the fact that it hooks people too much to the government which ultimately leads to less freedom for the people.
This whole cash distribution will be the Devil’s Excrement 11, only in a different way.
It stimulates the idea that Venezuelans are somehow exempt from working that much because they own the oil wealth.This is just the same old same old attitude that has gotten us into so much trouble up till now.
When the price of oil goes up the public will expect increasing amounts of money to be handed out.Will government folks just steal the surplus?If it goes down will government decrease funds? How will poor people react to that when they have become so dependent on a certain sueldo ?
I think we know the answer that, at least those who can remember the gas price riots in Caracas.
Economic priorities should be placed on hospitals, and general infrastructure.The State at this point cannot even meet its basic obligations.
September 5, 2010 at 7:57 am
Torres:
“The only reason such money has seemed like so little in the past is because it is mispent, mismanaged, or misappropriated. And then it leaves the nation. Where does it go? Simple. To a nation with a market economy…”
Priceless and almost perfectly stated. I may have used “stolen” in place of “misappropriated.” You are being too kind. Still, well said.
September 5, 2010 at 6:55 am
Torres,
Can you live on 3 dollars a day? If your cousin in Venezuela has a child: can the child buy a house with an average salary of 10 dollars a day?
It is true most of the money has been wasted, stolen. And yet it is not just about redistribution. The problem is that most of those people who earn right now 30 or 300 or 3000 a day in Venezuela earn that money by producing nothing or by ‘cutting each other’s hair’, but basically they would not be able to keep up with their standard of living unless someone starts to export scissors or produce mixers and tyres and bloomers for the internal market.
Even Norwegians are not living off their oil and they are less than 5 million.
By the way: it was not true Norwegians were ‘poor’ before oil. They were just less rich and poorer than neighbours, all things being equal.
September 5, 2010 at 6:43 am
“…there is enough oil for all Venezuelans to live in crappy houses, get some meal and go to the beach. Not more.”
There is enough for much, much more. If we take the total money from oil of the last decade and divide it up equally between all Venezuelans, it comes to about 10USD per person per day. That’s 5 times the poverty line. The people who already have a house and meals will spend it on something else, which will make the market boom, expanding the job market, increasing production, exports, etc.. Market economies rule! And a nation with such an economy can be lifted up much higher than just crappy houses and some meals.
The only reason such money has seemed like so little in the past is because it is mispent, mismanaged, or misappropriated. And then it leaves the nation. Where does it go? Simple. To a nation with a market economy…
—
September 5, 2010 at 5:10 am
Sid, where in Europe are you writing about? Not Eastern Germany, I suppose. Hungary? Former Czechoslovakia? I wonder, because in Eastern Germany you really had to give a lot to buy -after many years- a crappy
Trabi. In the Soviet Union (well, not Central Europe) it was very hard and you were on a list for years.
Chavismo will never ever ever be like the socialist dictatorships you had in Eastern and central Europe. The Caribbean is not Europe.
Venezuela has oil, which would enable people to live from some crumbles as now but not for all to live to levels of wealth fare there was in the GDR or Czechoslovakia. Venezuela has the worst primary schools of South America by far. Chavismo does not care about quality but about giving people pieces of papers stating they have a university degree now.
One of the problems in Venezuela is that people are not aware Venezuela is not rich and cannot be while Venezuelans have the mentality they have. Venezuela is simply not rich because Venezuelans are not productive. Of course, there is a lot of social injustice, many unproductive people are earning much more than the rest, etc, but basically Venezuela produces nothing.
The system Hugo is proposing is even worse than what people had in Eastern Europe because he is not tackling the problems Venezuelans really have and he does not have to, there is enough oil for all Venezuelans to live in crappy houses, get some meal and go to the beach.
Not more.
September 5, 2010 at 4:05 am
As stated above, it’s a trap. That Great American, Tennessee Ernie Chrysler put it this way:
Saint Peter don’t you call me ’cause I can’t go
I owe my soul to the company store
BTW Richard Nixon would have bought the used car from Hugo, put some spinners on the wheels and sold it back to him for 30% profit and carried the note at 18%.
September 5, 2010 at 3:40 am
sid,
What Chavez et al. are building here is the same ugly old thing you had in Europe: the way to stay in power for many, many years. It worked in Europe for a bunch of dictators, why shouldn’t it work here? The proof that it works this side of the Atlantic is the Castro brothers in Cuba. The real challenge for these bastards is to make it to the grave without being overthrown (Ceauşescu didn’t quite make it, but others did).
Did you help the communists in your country the way you are trying to “help” us now? Thanks. But no, thanks.
September 5, 2010 at 2:15 am
well, as here in middle Europe was so called socialism from 1948-1989, I can say, that the very basis of socialism is equality. This mean, that some surplusses have only jobs like butchers (good meat) or so, that can “save” the better for themselves. Well, in my country there were such people arrested for frauding for an equivalent of 100 USD. Absolute equality was here, as minimum people worked abroad. But, no one was unemployed, no one was without the access to the hospital and M.D. specialists, no one was living on the street, everybody watch color TV, had three hot meals a day, families had villas, haciendas and cars, schooling up to Uni was free.The people looks like happy (low criminality rate). This changed, but, the aim of Chavez to be marxista-leninista is gone away. He is not able enough to borrow some old commis that lived here, to accept explaining, how this socialism is being built. I write this not for moctavio and us, but for other readers, that follow this blog. Without the fluence in marxist theory, Chavez is making Ven a Charles Fourier absurd and chaos utopia, where the roots of market economy are burried by not well done but real concrete.
September 5, 2010 at 2:09 am
It won’t work because the cards will not be accepted in Miami.
Ta barato?
September 5, 2010 at 12:22 am
Don’t have to wait and see…we already know. We’ve 11 years worth of knowing….
September 4, 2010 at 11:13 pm
As expected, inducements, freebies, bribes before the election.
As any fool can forecast, the credit card loans will be forgiven, 100 %. Every sane card owner will immediately charge their card up to the maximum; the govt will not risk angering its employees by demanding repayment.
Thus, what we have is a one time bonus payment, to all govt employees, to remind them, just before voting, who the boss is, and how important it is to keep the boss going.
And the bribe is way cheaper than a wage increase, though, when the cards are not being paid off, the boss may use that as an excuse for a general govt wage raise, with the extra wages then deducted to pay down the cards.
Guess we’ll have to wait and see if the people have been fooled once more, or have they acquired a better understanding of what’s truly happening to Venezuela.
September 4, 2010 at 11:12 pm
This is funny. Chavez has found another way of borrowing to pay public sector workers. The twist is — Instead of paying them a wage to keep up with inflation — he lets the workers borrow directly and in their names. They are now on the hook for the debt.
Some people may remember the chorus to an old “Tennessee Ernie Ford” song about impoverished Appalachian coalminers: “Sixteen Tons.”
You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don’t you call me ’cause I can’t go
I owe my soul to the company store
Now all of Venezuela’s government workers will owe their souls to the company store — actually in this case — company card.
September 4, 2010 at 10:52 pm
metodex: then the black market will be thriving big time for those wants. US dollars and Euros will the currency in Venezuela’s economy…for those who have access to such currencies.
September 4, 2010 at 10:14 pm
FAIL for the Good Life card.Im sorry but this kind of system will not work. What is the point of taking options away from people? Soon there will be no currency in venezuela,only credits and good life kind of bullshit. So you won’t be able to buy anything you want,but only what you “need”. i hate whats going on here so much.
September 4, 2010 at 9:21 pm
In the future, EVERYONE will work for the government – there won’t be any private enterprise left. Which part of socialism don’t you understand?
And while this truly is a stroke of genius by Chavez, exploiting the poor’s lack of education has been his modus operandi all along.
September 4, 2010 at 9:04 pm
Well, so to use the card, you have to work with the government and you have to buy in government locals. Ok, the logical is you have to be rojo, rojito to work with the government (remember PDVSA), maybe in the future all imported food products that Venezuela do and will not produce, will be only assessable in locals government and only can be buy by people that have this card, so I find this credit car a very democratic one.
Also, it have some resembles to “Mi Negra” card.
And, the post you completed is fine. but, I find very original, in first place, only to find a title that say it all.
September 4, 2010 at 8:52 pm
The saddest thing is we’re going to let chavez get away with it even if we could trump him with a debit card that is for everyone and for anything and for an amount that would take people out of poverty without putting them in debt.
—
September 4, 2010 at 8:12 pm
Sorry A?Antonio, pressed the wrong button and did not notice, now it’s complete, maybe no text would have been better.
September 4, 2010 at 7:11 pm
Carro normal: 200.000 BsF.
Small house: 800.00 BsF.
Food from our Emperor: Priceless
September 4, 2010 at 7:10 pm
MO, This is a post masterpiece. Say much all with few words, and only use the title of the post to say it all.