The Devil's Excrement

In a very revolutionary step, the National Assembly called today for investigating seven Justices of the Supreme Court, explicitly mentioning the name of Justice Cabrera, of the Constitutional Hall, because they are part of a “mafia” and they dared change an article of the income tax bill written by that Assembly.

According to the Deputies a crime was committed  they also asked the “Moral Power” to investigate the case, in order to determine whether there was a crime, which in turn could lead to the removal of these seven Justices. The Court is being accused of making an illegal interpretation of the Income Tax Bill, because President Chavez ordered a cap on civil service salaries, which affects the Justices. By interpreting the law this way, the Deputies suggested, the Justices were increasing their salaries, since they receive a number of bonuses and perks besides their salary, which will now become tax free.

The case arose form the recent interpretation by the Court of the Income Tax Bill, with regards to what is income or not. The Court did not rewrite the article, as suggested by the Deputies of the National Assembly, but simply interpreted one article based on the text of the new 2000 Constitution. Somehow it would seem difficult to argue that it is not the domain of the Supreme Court to interpret articles of Bills and that by doing so, they are “usurping” the role of the legislative branch, as the Deputies stated.

But this is another remarkable chapter in this bizarre revolution, which gives up its power to legislate to their almighty leader President Chávez on dozens of topics for 18 months, which are their domain, but gets irked by an interpretation by the Court of one article of a Bill they wrote.

The decision by the Court does create a problem in 2008 for the Central Government, as it would reduce income tax collection since bonuses and all “irregular” income will be exempt from income tax. As noted earlier by us, more importantly, it creates a possible huge loophole by which companies can create payments, which as long as they are irregular, would be exempt from income tax.

It is unclear why this conflict arises at this time, but an explanation may be that these Justices were the ones that are likely oppose some of the changes that would be introduced under the Enabling Bill by Chavez. Bills proposed under the Enabling Bill, need not be reviewed or approved by the national assembly, but they do need to reviewed by the Supreme Court to check on their Constitutionality. Thus, it may be that the judges to be investigated are the ones more “suspect” of not being absolutely loyal to the Lieutenant Colonel and may want to follow the law or some strange concept like that

Despite the fact that Chávez has single-handedly chosen all members of the current Court, there have been increasing conflicts with some of the Justices. The current Court has a very dubious origin from a legal point of view. When the new Constitution was approved, the old Court was simply eliminated. The problem was that there was no Congress until new elections took place. Chavismo invented then a new temporary legislative body, which was called the “Congresillo”, which had no legal basis or foundation on any known Venezuelan legislation, or on the old or the new Constitution. It was a small committee of twelve Chavistas, picked by Chavez himself, which ruled the country, approved budges and acted like a full Congress until the new National Assembly was elected six months later. This Congresillo nevertheless chose twenty new Justices for the Supreme Court, the Prosecutor General, the People’s Ombudsman and the Comptroller, in what is still considered by most experts as being completely illegal and began the usurpation of the rule of Law by the Chavez Government. But who could anyone appeal to? The new Court? Sure…

As if this were not enough, some of the Justices in this court quickly became unfriendly to the Government by committing the terrible crime of ruling against Chavez’ wishes. In the now infamous ruling on whether there was a coup or not in 2002, the Court ruled there wasn’t, as the definition of rebellion requires the use of military weapons, which was not the case. This led Chávez to call the Highest Court in the land “ A pile of shit” and then he began looking for a way of neutralizing it.

The first step was to begin questioning the credentials of some of the same Justices appointed by Chavez and his Congresillo, as indeed there were some who did not fulfill the requirements, which was widely publicized by the media when they were first appointed to no avail. But since this was too slow, some Chavista legal eagle came out with the brilliant idea that the Supreme Court Bill could be changed so that the National Assembly itself would increase the number of justices from 20 to 32 and twelve fresh and very loyal Chavistas could then be appointed to counterweight the not so loyal chavistas already on the Court. This was done by having the Court itself approve that the number of justices could be changed by a simple majority of the National Assembly.

But apparently there are now seven of these Justices who are too independent of the autocrat/Dictator and they need to be removed and/or changed and the wheels are apparently in motion to do so, using the income tax case as an excuse. Stay tuned by this new attempt at violating what little rule of law is left in the country by the autocrat and his cronies.

The other day I wrote a post about how I was starting to get worried about some statements by the new Minister of Finance Rodrigo Cabezas. Essentially he had made a number of statements that implied that the Minister either did not understand the magnitude of his problems managing the economy, or he was simply being cynical about it and trying to put a good face on a very difficult situation.

Well, today’s statements by Cabezas on poverty confirm my concerns, but also introduce the possibility that the Minister is simply incredibly ignorant. Cabezas said, while in Guatemala, that the Chavez Government had managed to lower poverty from 80.1% in 2003 to 39.4% in 2006. Now, so that there is no room for error or believe that he made a mistake, he expanded this by saying that in 2003 poverty was at 55.1% and critical poverty was at 25%, which adds up to 80.1%, while now poverty is at 30.3% and critical poverty stood at 9.1 for a total of 39.4%.

Well, these are either extremely ignorant statements, if I give the Minister of Finance the benefit of the doubt, or they represent a blatant attempt to tell a lie by him. Let’s review the facts:

1) Poverty in Venezuela has never reached 80%. President Hugo Chavez during his 1998 Presidential campaign popularized this number and at some point I found a couple of dozen links that propagated this lie. But the truth as measured by the National Institute for Statistics (INE) is nothing to be proud of either, as poverty levels did reach 70% in 93 and 96, but never as high as the 80% quoted by Chavez so often and which was repeated by Cabezas as shown in the following graph which I plotted earlier:

2) What the Minister seems to be confusing, and I give him the benefit of the doubt on this, is that the total poverty number includes critical poverty. Thus, the 55.1% he quotes includes the 25% of critical poverty in 2003 and does not get added to it as he stated as Cabezas did, poverty includes critical poverty, as shown clearly in the following graph, for data from another graph with official data and that of the Catholic University:

Now, there are two possible interpretations. One, Cabezas does not understand this, which is scary, given that a Minister should have an intimate knowledge of what I think is the country’s most important problem. The second one, is that he is trying to deceive the international media, since the statement was made during a trip to Guatemala. Obviously, neither of the two is satisfactory.

But even worse, the Minister seems to make a mistake with the 2003
number,, adding the two, but not with the data from 2006, a convenient “white lie” to say the
least. If he had “added” it wrongly in the same manner, he would have obtained 49% not 39.4%.

At the same time, and as discussed here, poverty experts, both pro and against Chavez have a hard time understanding the “magical” drop in official poverty levels in 2006, more so given that INE and the Social Studies Center at Catholic University have always differed quantitatively, but tracked each other rather well, since the only difference in the two is how the cost of living is taken into account in their methodology. In fact, the difference should have led to the INE poverty number being higher, rather than lower than that of Catholic University.

But the most remarkable thing is that even if it were true, bringing poverty down to 39.4% in 2006, simply brought poverty to roughly the same level found by Hugo Chavez when he became President in 1998, despite the biggest oil windfall in the country’s history. Some achievement no?

Not exactly a record to be proud of after eight years of Government.

Yesterday we saw one of those “robolutionary moments”, where you realize how those leading the revolution, particularly active or former military officers, have lost all perspective about what they are even supposed to stand for. None other than the retired burping General Acosta Carles, who retired so that he would become Governor of Carabobo state riding Chavez’ coattails, had the audacity to complain about those that criticize that Government officials are buying Hummers right and left. This is what he said:

“Are you telling me that us revolutionaries don’t have the right to have a Hummer or a car. If we make the dough, we can do it, or is that exclusive to only some?”

Well, let’s look at the issue. All of a sudden, in a few states around Venezuela, Hummers have sprouted around driven by Government officials. Barinas and Carabobo state have been particularly noted for being populated by an inordinate amount of privately owned Hummers, driven by Government officials.

The first problem is that Hummers are quite noticeable. They used to be uncommon in Venezuela as there is no formal distribution of them in the country and those that have them import them directly. The second problem is price.  A Hummer sells for some Bs. 250 million delivered in Caracas, due to the 40%  import duty and the 15% luxury tax and you have to add the VAT to all that. Bs. 250 million is US$ 116,000 at the official rate of exchange or US$ 66,000 at the parallel rate of exchange. Now, this represents 500 times the minimum monthly wage in Venezuela and 17 times the highest monthly salary that a Government worker can earn, according to the decree issued by Chavez in January. Thus, can Governor Acosta Carles explain to us how come one is beginning to see Hummers all over the place? Where are all these Government officials “making so much dough” to be able to afford them?

But more importantly, one would think that leadership by example should be of importance in a “revolution”. There seems to be something very cynical about preaching about the poor, XXIst. Century Socialism and solidarity and then driving around in a car that represents an “in your face” insult to the poor of Venezuela.

But once again, I would reiterate my question: How many Government officials can afford to buy a Hummer on their Government salaries? Moreover, a retired General like Acosta Carles gets a pension of about one third of the highest monthly salary allowed, which was set at Bs. 15 million. Thus, can Acosta  Carles or his friends afford one? How?

This is part of the cynicism of the revolution, particularly the military, who are becoming very rich and flaunting it, without regards to ethics and morals, like it has never been flaunted in this country’s history, while they claim to hurt for the poor at the same time. Of course, in the absence of checks and balances and the rule of law, they get away with it daily.

Lots of stuff happening, but so little time, but here and there in the revolution in the last few days:

—In a sign of increasing intolerance, daily protests on regular issues are being criminalized and the media does not even talk about it. Free speech, sure…

—And speaking of intolerance, Chavez tells Podemos, Patria para Todos (PPT) and the Communist Party that he does not want allies like them for his “Partido Unico” after all three have balked about joining it. Thus the single party (PUS) will be called Partido Unico, but it might as well be called Movimiento Quinta Republica. Once again Chavez’ democratic vocation is nowhere to be found…for the autocrat, either you are with him 100%, or you are his enemy.

—And how about this plan to give the poor…..military, more benefits and perks. Five funds to give them more perks that normal Venezuelans don’t have. Lifetime medical benefits. 100% pension after 20 years. If you rejoin the military by Presidential grace, you will get all these benefits retroactively, a sure way to make the revolutionary officers that were kicked out for violating the law in the 1992 coup get all of these new perks. Someone should make a movie entitled “How the military stole Venezuela”.

—And how about funn yman Jose Vicente Rangel denouncing corruption in the second episode of his Sunday interview program in TV station Televen! He gave us nicknames for the corrupt, not names. It’s a real pity he was never named to any important positions during the last eight years, where he could have fought corruption….What?… Really? ….It’s the same guy?… The former Minister of Defense? ….The former Vice-President? Well, I am sure he has some sort of explanation.

—In defense of the Government, it is not true that Chavez has spent billions abroad. Not all of it gets spent. Ask the Uruguayans who have yet to see a penny of the more than US$ 600 million promised by the autocrat almost a year ago. The “La Teja” refinery has not received a penny of the money promised to expand it, the cheap oil never arrived and the not so cheap oil turns out to be expensive.

—And how about the solidarity of the Government with the workers of Electricidad de Caracas? The soon to be taken over company had negotiated a new contract with the union and the Government stopped the signing of the contract.

—And how about that other funny man, the Governor of Aragua State Didalco Bolivar who all of a sudden has discovered the Electoral Board (CNE) does not play fair. Daniel has covered the issue extensively, but I have to wonder where Didalco was when the CNE played all the dirty tricks with the recall referendum petition and the CNE’s magnus opus of deceit on August 14th. 2004? What is he so surprised about?

—And how about the Government’s proposal to create an “OPEC of gas exporters”. Wasn’t that already created under the name Gas Exporters Forum in 2001 and Venezuela is a member of it? Did we not pay the dues? Or was it that we never went to a meeting? Or is it simply a matter of lack of institutional memory?

—And isn’t it nice that now that Chavismo has discovered that a recall vote against Manuel Rosales would not work, the National Assembly, in its democratic spirit, is asking the Prosecutor to investigate him for using resources for something different that what they were assigned to? If you investigated all Government officials for this, we would be left without any Government. Hey, that sounds so good all of a sudden!

—And how about architect Fruto Vivas elegantly blasting Chavez over and over in today’s El Nacional: Of the La Carlota project that Chavez said he had commission the project to him, Vivas says it never happened. Of his housing project for the poor he presented in 2000, Vivas says it was discarded when the Director of CONAVI was changed. On health care, Vivas says what is being done is “pretty” but hospitals have no medicines and sheets. Vivas closes by saying he does not believe in half of Venezuela trying to solve the country’s problems. Ouch!

Nothing beats the Government’s own numbers in monitoring the progress of the “revolution” and in the pen of Teodoro Petkoff, they also make for entertaining reading

Open the gap, partner by Teodoro Petkoff in Tal Cual

The government of the “revolution”, in spite of all its diatribes and beyond the “missions”, has clearly underprivileged the popular sectors. With an economic policy that has destroyed hundreds of thousands of jobs – more than half of the manufacturing plants of the country have closed between 1999 and 2006-, it has not only created unemployment and maintained and reinforced the informal sector, whose remuneration is precarious and lacks the rights consecrated in labor legislation, but it so happens that the proportion in which the annual Gross Domestic Product is distributed (GDP) (that is the value what is produced sold in the country in a year) between companies – both Government and private, and the workers, has been made more and more unfavorable for the last few years. In other words, during the years of Chavismo the gap of inequality has widened.

The numbers do not lie. In any case, they come from the Central Bank, still not forced to lie, that is to say, to fabricate statistics for use of the Emperor. The excess of Explotation (EE) – a concept that the BCV uses to denominate the income of the companies, both Government as well as private, was in 1999, 34% of the GDP, whereas the remunerations of employees and workers (REO) reached 36% of the GDP that year. Indirect taxes (II) amounted to 10% of the GDP. In 2006, the EE was 46% of the GDP, this is, 12 points more than in 1999; whereas the REO went down to 28% of the GDP, that is to say, 8 points less than in 1999. The indirect taxes stayed at 10% of the GDP. In other words, during “the process”, the status of workers went down atrociously. The breach that separates the income of those “that have” from those “that do not have” has widened during the government of I the Supreme..

Like in so many other aspects of “the socialist” management, the distance between what is said and fact are as wide as the big mouth of its Maximum Leader. But, there is more. On the matter of inflation, which, as is already known, constitutes the most regressive of all “taxes” that the population pays, because the rise of the prices punishes with greater force the poorest, the situation of our humble people is horrible. In comparison with the richest layers, the poorest have supported an inflation, between February of 2003 and he same month in 2007, 14% higher than that of the first group. In that period, always according to the BCV, the accumulated inflation for the poorest was 104%, while for the richest they data shows an accumulated inflation, for the same period, of 89.7%. Comtrast this data with the equivalent one for the period February-1999 to February 2003, when the accumulated inflation struck evenly to all layers of the population.

That is that as went from humanist Bolivarianism to anti-Capitalism and “socialism”, the cost of living showed no mercy and was much more cruel with the poorest Venezuelans.

When the car of good intentions (supposing that they really exist) is driven by an inept novice, it inevitably ends up in Hell.

So, am I supposed to get excited because Barbara Walters was charmed by the Autocrat/Dictator in that interview tonight? Please give me a break. The Chavez she saw was the snake charmer of the “love campaign” ast Fall, but we have seen what he means by love then and now with his renewed threats to friends and foe alike after he was reelected.

As proof, I saw a clip today in which Chavez claims to “respect” Condoleezza Rice.

Ummm, very interesting, wasn’t she the woman he called “illiterate”, despite the fact that she has a Ph.D. was a professot at Stanford University and is an accomplished classical musician?. And wasn’t she the woman that Chavez suggested needed to be provided with sexual favors, but he would not do that even for his fatherland and then started asking for volunteers among his cronies?

Is that respect? No, that was disgusting, shameful, sexist and gross behavior by anyone, more so a Head of State. So, maybe some Americans including Ms. Walters can be charmed by the lies and gross behavior of Hugo Chavez, but they should not waste their time believing that he is more conciliatory, he is just a great actor. Just pure Bush-bashing cynical propaganda aimed at fooling naive Americans who dislike their President.

If Ms. Walters was a true reporter, she would show the videos of Chavez doing and saying exactly the opposite. Or asking him how he can wear that watch and suit while people die o malnutrition or hunger. Or how come after the oil windfall, all numbers on health, poverty, education have barely budged. But I am sure she wouldn’t. It doesn’t sell…