The Devil's Excrement

It is getting a little tiring to write about Hugo Chavez and his Government. How irresponsible can he be? Today he said he would turn on the tanks and the Sukhoi jet fighters if Colombia violates Venezuela’s sovereignty and gave Coca Cola two weeks to give up some land it owns in the west of Caracas.

First of al, there is no need to threaten another country when all its Minister of Defense has said is to repeat that it will pursue guerrillas wherever they may be, without mentioning country’s names. Because in the end, Chavez is only bragging. Last time, he “turned on” the tanks, they went nowhere, as the deploprable state of Venezuela’s highways made it impossible to move them. Moreover, the military refused to move anything and the major highway of the country was blocked by protesters that same day.

But in the end, Colombia’s military is much better trained that Venezuela’s and has been engaged for years in its own war. Venezuela’s military has problems holding a parade, as uniforms come unglued and vehicles burn. So, Chavez is once again talking to the gallery, but should threa carefully should the Colombians take him as his word.

Coc Cola is on the other hand screwed. There are no private property rights in Venezuela anymore. Whatever whim Chavez may have, whether a legally built Mall or a parking lot, he decides what to take away and if the owner of Polar “se pone comico” (he gets funny, like going to Court or something like that) Chavez will also take it over and pay with worthless paper, in his own words.

Because Chavez has interpreted the recent referendum victory as carte blanche to carry forward his personal supposedly socialist project, despite the fact that the results of the Dec. 2nd. 2007, referendum should still stand. But Chavez is no democrat and he has long forgotten that the “people” rejected that same project at the time.

And to get an idea about the autocrat’s frame of mind, he no longer uses Bolivar, Zamora or other heroes of the Venezuelan independence. What for? Why use those references when you have him: Hugo Chavez, the hero (?) of so many epic episodes (?) of Venezuela’s history.

Thus, in his latest hair brained scheme, Chavez proposes a chain of Restaurant Chavez, Mac Chavez, so that Venezuelans can eat at a reasonable price with wine and candles (his words)

So, Chavez not only wants to intervene now in every facet of Venezuelan’s life, but he now wants to use his own name for the projects in a clear sign that we will see more and more traits of a cult of personalty as we go forward.

It is all about Chavez, not socialism or any other project.

But the worst part is the passivity of those that are against Chavez. Not of the so called opposition, but of the every day Venezuelan who watches this alarmed but feels powerless to do anything about it.

And expect more in the upcoming days, it is clear that pushing his project forward is more important for Chavez than implementing measures that would help alleviate the upcoming economic crisis that all Venezuelans, but mostly the poor, are going to feel.

(P.S. I am an avid Coca Cola drinker, I will take to the streets if I have to do without that!)

The new Minister of  Commerce announced today that the Government will review areperas, the popular fast food joints where you can buy the typical staple of Venezuelans. According to this genius of commerce, Eduardo Saman, he went into an arepa place and there was a pork arepa which cost Bs. 20. Then, he argued, from a package of regulated corn flour he says he can make 20 arepas with one kilo of pork, which costs him Bs. 16.

Where should I start?

First of all, a 50 gram pork arepa (20 from a kilo) sounds really small, I am not sure which arepera Mr. Saman went to, but the arepears I go to don’t make such small sizes. Second, the arepera I go to has prices which are about 25% cheaper (including VAT, which the Minister did not mention. Finally, maybe the people can buy pork at Bs. 16 per kilo in Mercal, but commercial establishments certainly can not and there you have to pay around Bs. 36 per kilo for pork, which always including some bone. Add to that the 10% VAT that is included in the price and Mr. Saman’s math certainly needs to be looked at.

But, in the end, Mr. Saman can not accuse areperas of usury as he suggested, because ussur only applies to interest charged on loans. There are no regulations on the price of arepas, but it sounds like we will see one in the near future.

This is actually quite sad for me. I still recall when I acme back from my studies abroad some time ago, how disappointed I was to find that most areperas had turned into hamburger joints, after the Carlos Andres Perez Government (I) regulated the price. One of the few things Luis Herrera did which was a positive was to deregulate arepas and immediately areperas sprouted all over the country.

But Chavismo is clearly set in ruining the country. After all, if it was so cheap to make an arepa, how come there are not hundreds of arepa carts around the city, selling them at half the price?

Maybe a cook in my audience could take the time to figure out how many arepas (arepera size) with pork filling (also arepera size) you can make with one kilo of pork and one package of Harina Pan and we can figure out what the margins are for the arepa, without talking into account overhead and the like.

Clearly in Venezuela, what is not illegal, maybe so under Chavismo criteria…

What’s next, the arepa decree?

And in another funky, groovy episode of the clueless revolution, Hugo Chavez announced tonight the expropriation of at least part of the Venezuelan operations of Cargill, the US based food producer. Even the announcement was unclear, as the President did not specify if this applied only to the rice facilities of the company.

And taking advantage of the moment, Chavez also threatened Venezuelan Grupo Polar with expropriation of all of its plants, because, imagine that, the company sent lawyers to challenge Chavez’ decisions. How could they challenge the natural law that says Chavez can take over anything he wants?We seem to be going from autocracy to Dictatorship fairly fast.

While I have not had time to talk about the “intervention” of the rice plants by Chavez, as well as a new decree which regulates what you can and can not produce, it is all based on the concept of “public utility” approved in the 26 laws withing the Enabling Bill. This same concept was voted as part of the 2007 Constitutional Reform referendum which was not approved, despite which Chavez issued laws that covered the same topics…

Thus, Hugo Chavez is once again violating the country’s laws and the Constitution but some fools abroad still will claim this is a democratic Government. As usual, they back, what they would consider outrageous and a violation of liberties in their own country.

So, please, go do a revolution in your own country and don’t come defending Chavez’s actions.

This revolution is becoming hilarious. Today the Minister of Communications announced on Nationwide TV, some changes in Ministers of the Cabinet, but most news reports (Bloomberg,  Reuters) went like this:

“…announced a changed in the Cabinet, but the Minister of Finance was ratified, so was the Minister of Energy and Oil, the Minister of Foreign Relations and the Vice-President”

Jeez, what were the changes?

Well, the Vice-President is now Minister of Defense. That does not seem much of a change, no? He gets both jobs at once!

The Minsiter of Commerce was changed, do you recall the previous one? The new one is Eduardo saman, formerly of consumer protection.

And the key positions?

Still in the hands of the incompetents, such as Rafael Ramirez, who said twice between yesterday and today that Fonden has US$ 57 billion, a quantum jump from the US$ 15 billion quoted by the Minsiter of Finance a month ago, and certainly over the last available financials of June 2008, where only US$ 13 billion was there. But you have to believe Ramirez he is the one that says we can live with no oil income and we need to “save”, because the country can’t have the “exhorbitant” expenditures of last year.

Diosdado Cabello, who people rejected for a second term as a Governor of Miranda was named Minister for Housing and Public Works, where he has failed before. Cabello has also been Minister of Telecommunications, Minister of the Interior and Vice-President. Not much change, no?

For Health the “new” Minsiter is Jose Maria Montilla, but hey, when did he leave the Cabinet, he was named to this post in May 2007, simultenously with being President of the Social Security system, I guess another super Captain from Chavez’ military year of which Cabello and Chacon are both members. Wonder what they were being fed in the army at the time to create these super-managers. Montilla was 113th. out of his class of 216, wonder where the other 100 are?

Nury Orihuela, Minister of Science, was named Minister of Science, Technology and Intermediate Industries and Erika farias, Minister for Social Participation and Protection was named Minister for Communes.

Maria Cristna Iglesias is back in the Ministry of Labor.

Oh yeah, I forgot, Jorge Giordani, who was Chavez’ Minister of Planning from 1998 to 2002 and from 2004 to 2005 is back at Planning! But we have known that since last weekend.

So, Chavez really changed the name of some Ministers, named failed ones to the same positions, or shuffled some around or gave some double duty with two Ministers.

So, nothing much changed, same Ministers different day, but there was a press conference swearing ins and the like. I guess they had nothing better to do. Remember, Venezuela is shielded from the crisis, wait, didn’t Ramirez say we have to save money? How come? He better talk to Giordani soon, so they can tell the same story without contradictions, or to Montilla, before his nose grows too much.

Gone a week, but it feels like eons. Despite the week having two days off for the non-existent Carnival holidays, Chavez managed in a day to “cash in” his referendum victory by “intervening” all rice processing factories and bringing back “The Monk” Jorge Giordani to the Ministry of Planning. The first one not significant in the sense that it continues the destructive path that Chavez has set. Not significant in the long run of things, but it certainly does matter because Chavista management will as, as usual, manage to destroy what’s there and there will be rice shortages in the end, more so now that money will become scarce.They are simply Atlas shrugging Venezuela.

But the second, Giordani’s return, is in the end the most significant factor. This will be Giordani’s third tour at the Planning Ministry and never has such an ignorant man on economic matters had so much power over the country’s economy. And believe me, there has been a lot of ignorance in the ineffective halls of the country’s Planning Ministry.

Because in his first tour of duty, Giordani set up a time bomb with his strategy of holding the currency constant and issuing boatloads of Bolivar denominated debt at 20+% interest rates in one of the most idiotic combinations of policies ever. He kept talking about the country’s piggy bank (The FIEM) being full, but then he allowed Chavez to go through it in a few months setting up the 2002 economic crisis that your favorite PSD’s continue to blame on politics and not on the mediocre and frustrated geniuses like Giordani whose academic careers went bust (if they ever existed), but had the foresight to go visit Chavez in jail in 1992-1993, making them the oracles of Chavez’ economic failures.

But even worse, these brainiacs became the Venezuela’s Presidents economic mentors, teaching our President a potpourri of feelings, North Korean economic theory, Cuban Management techniques and Maoist Marxist models, which have led to nothing but failure in the last ten years.

So, Giordani is back, maybe to hold the currency constant for a while longer that even I expected, because it was he who taught Chavez how good things were in Venezuela in the 60’s when the currency was kept constant, but in his ignorance he did not tell the autocrat that monetary liquidity was also kept constant at that time.So Chavez understood part I, but never understood the second.

Expect little from the change in Ministry other than more exotic financial management, which will only lead to more poverty and wealth destruction.

And just to make sure this happens, Chavez takes over the rice processing companies, warning that this time he will not even pay for them in cash, but with “paper”, as if he had paid any of the recent nationalizations and expropriations with either of them.

And now he affects the interests of Venezuela’s largest private conglomerate, which has tried to stay low key, hoping things will turn out for the best, as well as the US’s largest private company, also a low key player as long as things were going well.

But you harvest what you sow, and a decade of silence and obedience from the Venezuelan private sector is coming home to roost. Tomorrow, most people will be asking what this all means, rather than questioning who will be next. Chavez followed his 2006 victory with some new “revolutionary” moves, what else could anyone have expected this time around?

As the money runs low, there will be similar “grandiose” moves, playing to the gallery of the 50+% that voted for Chavez two weeks ago. At that time Chavez said he had shielded Venezuela with his good economic policies from the world credit crisis. He now says get ready for the difficult times ahead. One hundred dollar per barrel oil is no longer a “fair” level, but an autocrat’s fantasy. And since Obama does not want to meet with him, he sent the newly elected President to Hell, using the well known local phrase of telling him to go clean his coat (Vaya a lavarse el palto…), not precisely a polite or diplomatic way to address the man you were fantasizing about meeting three months ago.

And then there was the kidnapping of “the good guy” that I just don’t want to mention, but have to. It’s meaning unclear, but the threat very real. Whether part of the daily Venezuelan reality or a Government message, there is simply no place to hide. There is no authority to appeal to. Much like those near the rice companies, or the daily Venezuelans in the barrios, those near him probably find themselves trapped in the anguish of a country gone absurd. No rule, no law, no order.

And this is what some people call a revolution.

There has been a controversy in the last few days surrounding TVES, the “public service” TV station that replaced RCTV when Chavez personally decided to cancel that station’s concession.

The controversy is about corruption and that is what those involved are bickering about, but to me the corruption is not the most significant issue, but once again the ability of Chavismo to destroy in the name of the revolution, only to replace it by something which in the end is more anti-revolutionary than what was there before.

Essentially, recall that RCTV was replaced by TVES under the argument that we needed more “socially responsible” television and that RCTV imported programming. The Supreme Court went as far as confiscationg, yes confisctaing, RCTV’s equipment, because the whole thing was so improvised that the Chavez Government had no way of starting a new TV station without stealing the equipment from its rightful owners in the name of the robolution. To this day, TVES has not even tried to buy its own equipment because it knows that the servile Supreme Court will not reverse the ruling.

A former manager of TVES under the new revolutionary management, made a bunch of accusations of what was happening while he was there under the leadership of Lil Rodriguez from May 2007 to November 2008. According to him, contracts were signed paying huge overcharges, even using official exchange foreign currency rate to pay back PDVSA and the President of the TV station having a permanent hotel room at a fancy hotel in Caracas, despite the fact that she lives in a house in Urbanizacion Miranda at the edge of the East of the city (Of course, she argues it is in Guarenas, further East, to distract attention). This arrangement alone cost some US$ 90,000 for a year and a half.

But what is really incredible is how little “social responsability” there was at TVES while Trapiello was there. He said that while the regulators went after the other private TV stations for violations of all sorts of rues and regulations, at TVES they did what they wanted. This includes the fact that this “sociallly responsible” revolutionary broadcast ony 20% of programs produced in Venezuela with the balance imported from Argetina, Mexico and the US. Among the main shows at TVES was none other than Ally McBeal, a show I like, but has very little to do with the revolution, as far as I know.

Trapiello also said TVES did not fulfill the quota of programs produced by independet producers, as well as censorship and discrimination. As an example he said TVES does not show Venezuelan basketball because one of the teams belongs to a relative of opposition Governor Henrique Capriles, but it does show NBA games. He also noted that he was asked to remove from a documentary on Venezuelan cinema all references to a TV personality, Orlando Urdaneta, who supposedly participated in the 2002 events which led to Chavez briefly leaving the Government.

Incredibly none of the pro-Chavez or Government TV stations carried the press conference or the news of what Trapiello was accusing TVES of, but carried the response by the current President of TVES, who only talked about corruption and ignored the other charges.

Thus, another case of destroying something just to satisfy Chavez’ whims. RCTV used to produce and export soap operas and produce Venezuelan made programs which TVES fails to do. Moreover, almost two years have gone by and TVES is as unprepared as ever to do its job.

BTW TVES ratings are low, below 1%, without a single one of its programs havng a rating larger than 1%

You’ve got to love the revolution!

If you think that some people lost money by being greedy buying CD’s of Stanford International bank, it turns out that others were actually hit twice by setting up what is called a back-to-back, in which someone would ask Stanford in Caracas to lend you Bolívars and that bank would ask you for a guarantee in US$ which, of course, would be placed at the Antigua Bank until you paid the loan.

Thus, your dollars are now trapped in SIB Antigua (and likely lost in the pyramid) and you owe the Bolívars. Apparently this is one of the main reasons why the Venezuelan Government decided to step in and intervene the bank after saying on Wednesday that everything was fine at the local bank. As much as half of Stanford’s Bs. 500 million credit portfolio was tied to such loans.

Thus, if you were involved in such a transaction you lost your US$, or most of them at SIB and you owe the money here in Bs., a true double whammy.

Even worse, I am sure some people actually took out the loan to buy US$ and speculate that the Venezuelan currency would devalue further this year, leaving the US dollars at SIB as a guarantee. Now they owe the money and they don’t have the foreign currency they thought they would make money with.

A true double whammy!

(Some people say if the contract was written correctly and the Venezuelan Banking Superintedency knew about it, the person does not have to pay it back.)

Yesterday I posted a picture of a guy voting under a cross at a local Catholic School. From today’s El Nacional the Chavista version of that, with a guy voting under the image of Che. When a local school has that symbol in a class room, there is a lot for all of us to understand about what is going on here in Venezuela.

With 94.2%  of the vote counted the Electoral Board announces that the Si vote, in favor of the amendment that allows the indefinite reelection of all elected positions was approved with 54.3% beat the No option with 45.3 %. The opposition gets more than five million votes. Chavez can run again in 2012. Wish him luck given the economy.

Venezuelans are spending a non-alcoholic Valentine’s day (as required by the electoral law) prior to tomorrows wholly illegal referendum to amend the Venezuelan Constitution, so that Chavez can run for President again in 2012. (And again and again!)

Illegal for too many reasons. From the fact that this was already voted on (Is he a democrat when he does not abide by the voter’s desires?), that a referendum can not take place until after two years after the last one (which was on Dec. 2nd. 2007), or because the question is worded in such a fashion that it deceives voters and finally, because the whole State and its money has been manipulated to promote Chavez’ SI vote.

But Chavez’ revolution is showing increasing signs that it has by now lost all of its scruples, as it lies, intimidates and even twist facts to fit Chavez’ views and needs.

The Government has carried out an overwhelming campaign on all fronts, outspending the opposition by a factor of 7 to 8 (even on the Internet!), using all of the Government’s resources and yes, intimidating and lying to the people about the meaning of the outcome tomorrow.

To me, the most significant impact of this vote may be that for the last two months, the Venezuelan Government has ignored the crisis that is about to hit us in the face, devoting itself completely to the promotion of the Si vote to perpetuate Chavez in power. Because not only have no decisions been made, but the last two months have been spent insuring that the voters don’t feel any sign of the crisis.

But in the end tomorrow’s outcome may not be that relevant anyway. If oil prices continue at current levels and Chavez continues managing the economy with amateurs, his popularity may drop to such low levels that 2012 may seem far away even to the autocrat himself when things get really bad and much higher inflation and shortages hit the people. And  no matter which side wins, Chavez’ international reputation, or what was left of it, has been further damaged by his obsessive abuse of power and his undemocratic ways. Today’s New York Times Editorial is a clear sign that Chavez can no longer fool people into thinking he is a democrat or is even trying to do the best for the people. How times change! And how Daniel says, I certainly feel bloggers have contributed to changing international minds and beating Chavez’ huge resources on international lobbying just with our time and dedication.

And we are now here, ready to vote and sober, and I am sure you all want me to say what I think may happen.

Polls have been rather confusing in the last two months. As Chavez proposed the referendum, all major and reliable pollsters indicated the NO was way ahead. However, withing four weeks and without anything major happening, the SI had recovered significantly, closing the gap in most polls. This has been due mostly the the intense pro-SI campaign by the Government and its focus on the undecided, painting the race between Chavez and a faceless opposition that is about to take everything away from them.

At that point, after the gap narrowed, pollsters that have been rather consistent in prior elections, began to diverge. As of today, of what I consider to be the reliable pollsters, there are differences of as much as 12 percentage points in their final predictions.

Pollsters themselves indicate that there are some strange things in the data. All of them register levels of commitment by the voters that have never been seen in any Venezuelan election and least of all on a referendum, which typically turn off the voters on both sides. Running at 15% on average, abstention may be the key into understanding the final result.

Because in the end, it was Chavista abstention that gave the opposition its victory in the 2007 Constitutional referendum, as three million voters that had cast their ballot for the President in 2006, decided to stay home. The intense campaign of the last two months and the organization of tomorrow’s vote is all focused in guaranteeing that this may not happen again.

Opposition optimists want to interpret the differences in the polls on fear, but pollsters think that this fear may be reflected in who is going to vote rather than how they will vote.

And the Government has loaded the dice to insure abstention is as low as possible. Despite the fact that the law says that voting should end at 4 PM if nobody is in line, the CNE unilaterally decided to bypass it, changing it to 6 PM. This guarantees that if exit polls indicate the pro-Si vote is on the low side of things, the Chavista machinery can go and get the voters at their homes and bring them in.

Up to about ten days ago, I was thinking that the No would win, believing that the violence and intimidation would work against Chavez in the last few days. But after seeing the internal numbers of some of the polls, I have changed my mind. In 2007, Chavez approval rating was down, it is up between 8 to 10 points from that level among voters, even if they say they will vote No tomorrow. That number, combined with the resources of the Government and my belief that there is no major  “hidden” or “fear” vote lead me to conclude that the Si is going to win. Only huge abstention levels or Chavismo blowing the drive to get voters out (like it blew the Si march on Thursday) could turn the tide against Chavez.

Sorry to rain on your parade, that’s the way I see it, even if my “feelings” tell me otherwise.

I will, of course, be reporting during the day, will make my usual spin through the city as soon as I finish voting. I will visit the same centers I did in 2006, 2007 and 2008 which will give us some sense of abstention levels to see if I blew my prediction (Hope I did!). I do hope that lines will be smaller than in the regional elections when it took me all day to take my mother to vote and return for my own. I will update both blogs, but the new version (wordpress) appears much faster than the old version (Radio Userland or Salon.com).

But in the end, this all may be a waste of time even for Chavez. If running the country absorbed his time and effort like elections and referenda do, maybe he will actually have some more accomplishments to show in the last ten years and would not even have to waste so much money and effort on promoting his indefinite reelection.