The Devil's Excrement

I am quite bothered by this article in today’s El Universal.  Essentially it says that the political parties that are part of the Coordinadora Democrática want to continue choosing candidates and blocking the path of true democracy in Venezuela. According to the article, some parties want to have the local parties discuss a unity candidate for all Governorships and Mayoral races and only if a consensus can not be reached then resort to primaries. I am strongly against this methodology; it should be exactly the opposite: We should have primaries for all races and only if only one candidate is presented will there be no primary.

The Coordinadora Democrática has the chance to truly establish democracy in Venezuela from the bottom up and it should not miss the chance to show what a true democracy should function like.  Sadly, in the 1998 Presidential election, NOT ONE candidate was chosen in a primary, all of them were either people who were candidates and then looked for parties to support them (Chavez, Irene, Salas Romer) or people selected in smoke-filled rooms by their parties. I still remember with fondness in 1993 when the Social Christian party COPEI decided to hold a primary to elect Eduardo Fernandez as its candidate. They opened the primary to everyone and lo and behold, Oswaldo Alvarez Paz won running away. (I never liked COPEI, but I voted in that primary because I thought Eduardo Fernandez should not be a candidate again) To me that was one of the few truly democratic processes of the last twenty years in Venezuela. If the Coordinadora decided to hold primaries, for example, on March 15^th. for all the races which will take place on July 25^th. it will be giving Venezuelans part of the democracy everyone has been promising, but nobody has delivered. Otherwise, it will be once again, more of the same. With this precedent, primaries will become a way of life and all parties (including MVR, Chavez had promised it, but has not even delivered it internally!) will be forced to use them in the future.

I am quite bothered by this article in today’s El Universal.  Essentially it says that the political parties that are part of the Coordinadora Democrática want to continue choosing candidates and blocking the path of true democracy in Venezuela. According to the article, some parties want to have the local parties discuss a unity candidate for all Governorships and Mayoral races and only if a consensus can not be reached then resort to primaries. I am strongly against this methodology; it should be exactly the opposite: We should have primaries for all races and only if only one candidate is presented will there be no primary.

The Coordinadora Democrática has the chance to truly establish democracy in Venezuela from the bottom up and it should not miss the chance to show what a true democracy should function like.  Sadly, in the 1998 Presidential election, NOT ONE candidate was chosen in a primary, all of them were either people who were candidates and then looked for parties to support them (Chavez, Irene, Salas Romer) or people selected in smoke-filled rooms by their parties. I still remember with fondness in 1993 when the Social Christian party COPEI decided to hold a primary to elect Eduardo Fernandez as its candidate. They opened the primary to everyone and lo and behold, Oswaldo Alvarez Paz won running away. (I never liked COPEI, but I voted in that primary because I thought Eduardo Fernandez should not be a candidate again) To me that was one of the few truly democratic processes of the last twenty years in Venezuela. If the Coordinadora decided to hold primaries, for example, on March 15^th. for all the races which will take place on July 25^th. it will be giving Venezuelans part of the democracy everyone has been promising, but nobody has delivered. Otherwise, it will be once again, more of the same. With this precedent, primaries will become a way of life and all parties (including MVR, Chavez had promised it, but has not even delivered it internally!) will be forced to use them in the future.

And another good article on the subject of the Millardito (little billion), this time by Gerver Torres in today’s El Universal:

A little billion of errors by Gerver Torres

The request by the President of Venezuela for the Central bank to give him “a little billion dollars” of the international reserves offers a privileged opportunity to evaluate the billion wrongs in which we are submerged.

In the first place is the topic of the autonomy of the Central Bank. At a moment in which countries make efforts to exhibit the largest possible independence from their monetary authorities, ours is under siege. The autonomy of central banks is offered as a guarantee of more price stability and thus it is good for generating confidence.

A country in which the monetary authority can match with authority and independence for the stability of prices is more attractive for investments and will thus enjoy more growth and employment. In this sense, the President’s request is a direct attack against the value of the Bolivar and aga9snt employment.

Second, is the mess of in which our public management finds itself. The Government has an instrument to define its priorities. That instrument is the national budget. The idea of a budget is that the Government propose in it its policies and priorities and they be discussed in the National Assembly. It thus happens that the President makes his request for the little billion soon after presenting and formulating the budget for this fiscal year. In this sense, the request by the President is an anthem to improvisation and disorganization.

Third, there is a total lack of knowledge about how the economy functions. Money is asked from the international reserves as if they were additional money that we had for eventual expenses. It so happens that the international reserves are an expression of the equivalence between dollars and the bolivars that are already circulating in the economy. Dollars and bolivars are sides of the same coin. We can not pretend to spend twice. It is as if someone that is told that it has two thousand five hundred bolivars wanted to spend amounts, the two thousand five hundred and the dollar. In this sense the President’s request is a demonstration of economic ignorance.

Finally, there are the contradictions in economic policy. These produce a general asphyxia of the economy when you bar rot from getting foreign currency via exchange controls, when you impose high interest rates, when you don’t promote investment. Then, using a single move, you want to revive a sector. In this sense the request by the President is an act of Government incongruence.

For all these reasons, the request for a billion dollars has to be seen with billions of reserve.

And another good article on the subject of the Millardito (little billion), this time by Gerver Torres in today’s El Universal:

A little billion of errors by Gerver Torres

The request by the President of Venezuela for the Central bank to give him “a little billion dollars” of the international reserves offers a privileged opportunity to evaluate the billion wrongs in which we are submerged.

In the first place is the topic of the autonomy of the Central Bank. At a moment in which countries make efforts to exhibit the largest possible independence from their monetary authorities, ours is under siege. The autonomy of central banks is offered as a guarantee of more price stability and thus it is good for generating confidence.

A country in which the monetary authority can match with authority and independence for the stability of prices is more attractive for investments and will thus enjoy more growth and employment. In this sense, the President’s request is a direct attack against the value of the Bolivar and aga9snt employment.

Second, is the mess of in which our public management finds itself. The Government has an instrument to define its priorities. That instrument is the national budget. The idea of a budget is that the Government propose in it its policies and priorities and they be discussed in the National Assembly. It thus happens that the President makes his request for the little billion soon after presenting and formulating the budget for this fiscal year. In this sense, the request by the President is an anthem to improvisation and disorganization.

Third, there is a total lack of knowledge about how the economy functions. Money is asked from the international reserves as if they were additional money that we had for eventual expenses. It so happens that the international reserves are an expression of the equivalence between dollars and the bolivars that are already circulating in the economy. Dollars and bolivars are sides of the same coin. We can not pretend to spend twice. It is as if someone that is told that it has two thousand five hundred bolivars wanted to spend amounts, the two thousand five hundred and the dollar. In this sense the President’s request is a demonstration of economic ignorance.

Finally, there are the contradictions in economic policy. These produce a general asphyxia of the economy when you bar rot from getting foreign currency via exchange controls, when you impose high interest rates, when you don’t promote investment. Then, using a single move, you want to revive a sector. In this sense the request by the President is an act of Government incongruence.

For all these reasons, the request for a billion dollars has to be seen with billions of reserve.

Central Bank Director Armando Leon gives a very simple explanation for how absurd (or is it stupid?) Chavez’ request to have the Central Bank give him US$ 1 billion  from the country’s international reserves for agriculture is:

“The difference between Venezuela and a game of Monopoly is that currencies have backing, thus using the reserves would imply that the bills in circulation would be similar to the bills in Monopoly”

At last someone explains it simply!

Central Bank Director Armando Leon gives a very simple explanation for how absurd (or is it stupid?) Chavez’ request to have the Central Bank give him US$ 1 billion  from the country’s international reserves for agriculture is:

“The difference between Venezuela and a game of Monopoly is that currencies have backing, thus using the reserves would imply that the bills in circulation would be similar to the bills in Monopoly”

At last someone explains it simply!

I was trying to ignore Danny Glover’s visit but succumbed yesterday with my post “Lethal Ignorance”, I do it again today, this article by Gustavo Coronel is too good not to post:

Danny Glover travels to Venezuela to show his support for Black Venezuelans
By Gustavo Coronel

Andres Izarra, spokesman of the Venezuelan Embassy in Washington and the son of one of Chavez’s most intimate friends, has informed us that actor Danny Glover is visiting Venezuela for nine days to “meet with Chávez and to study the situation of blacks in the country.” Welcome to Venezuela Danny! I hope they show you how the Venezuelan poor really live and that you tell the U.S. people about it when you return home. I hope you are honest about it.

However, on the basis of your public record, I doubt that you will make an honest report of the Venezuelan situation to your people. You are an admirer of Fidel Castro and signed a letter in his support in May 2003. Although Cuban black political dissidents like Angel Moya, Oscar Biscet, Ivan Hernandez and Jorge Olivera are in a  Cuban prison for 18 to 25 years only because they do not agree with the dictator, you have never said a word about this. Another Cuban black, Eusebio Penalver, spent 28 years in a Castro prison and you never said a word. In a seminar held in Stanford University on September 15th, 2003, you actually asked for the life of Osama Bin Laden to be spared! Since you said that you opposed the death penalty, you added that even Bin Laden should be protected, since everybody has human rights. This is an extreme position that would deserve respect if you were ethically coherent, but you are not.

You are not ethically coherent because, in your movies, you play a cop who kills everybody who moves, before giving them their day in court. In the “Lethal Weapon” series of movies, mentioned by Izarra with pride, you and your clearly psychopathic partner (Mel Gibson) really have a field day shooting and destroying the bad guys but do not think of reading them their rights. And yet, you claim that the life of Osama Bin Laden should be spared. Go and tell this to the relatives of the thousands of victims of September 11!

You have also expressed your support of Bertrand Aristide in Haiti, although he also leaves a lot to be desired in the realm of human rights. Predictably you are a rabid anti-Bush activist and call him “racist.” Of course you are entitled to your political views but you have to pay the price for your unwise preferences. You cannot claim to be a human rights activist and defend Castro, Bin Laden, Aristide and now, Chávez.

This is why I have little hopes that you will return to your country really enlightened about the sad situation of the Venezuelan people under the government of Chávez. Although you have more than the money required to pay for your own fact finding trip to Venezuela, the briefing from the Venezuelan Embassy, at the service of Chávez, suggests that you are a guest of the government, not a guest of the Venezuelan people.

The pretended purpose of the trip is, in itself, an indication of the distorted nature of your visit. You are coming to Venezuela to “study” the situation of the Venezuelan blacks. Sir, you are being a racist. You would be hard put to find “blacks” in Venezuela, except in villages such as Curiepe. In Venezuela almost everybody is dark. We are a mestizo country, Sir. We have no black oppressed minority in Venezuela, but a great mass of mestizos and mulattos lacking running water, decent schools and hospitals, running like rabbits to get home before sunset arrives, together with murderers and robbers; lacking decent employment and the required amount of daily calories. Are you telling me that, in the middle of this social chaos produced by the most inefficient and corrupt government we have had in modern Venezuelan history, you are coming to “study” the situation of blacks in the country? As they say in your native San Francisco: Give me a break.

On the strength of your frequent visits to Cuba and of your friendship with Aristide, it would seem that your visit to Venezuela is just one more propaganda trip, paid by Venezuelans, black and white alike. The government spends a lot of money inviting fellow travelers to Venezuela: Ignacio Ramonet, Greg Palast, Michael Lebowitz, an Argentinean lady who wears a handkerchief over her head and rejoices in the destruction of the twin towers and other assorted members of the intellectual lower Pliocene. Now they have recruited you.

I think I understand. You are running out of worthy crusades to embrace and you feel that, next to a worthy crusade, your best choice is an unworthy crusade.

I have been extremely busy this week. A lot has happened that should be posted about, but I had little time to do it. Thus, a short wrap up of important news this week:

-Chavez shakes up military authorities. President Chavez changed the Minister of Defense, removing retired General Prieto and replacing him with his buddy, classmate and soul mate General Garcia Carneiro. Garcia Carneiro’s position as Chiefs of Staff will be filled by General Raul Baduell. Baduell is the General that single-handedly forced the return of Hugo Chavez in April 2002. there have been many interpretations as to the meaning of the move. Some think Baduell was weakened by going to an administrative post. Others think Baduell is outright pro-Chavez and it is irrelevant. My understanding is that Baduell not only feels that the Constitution has to be followed by Chavez, but that he has told the President so. Baduell has political ambitions of his own and Chavez knows it. To me Baduell is dangerous because in any conflict he could come out on top and forget about the law if he can grab power. For the same reason he will not allow Chavez to grab absolute power if he tries. He thinks he is much better.

-While Chavez keeps complaining about the fact that banks don’t lend to the agricultural sector the amounts required by law and prefer to pay fines, Banco Industrial de Venezuela, the largest state-run bank, has the smallest agricultural portfolio in the banking system.

-All major and minor political parties, except Primero Justicia and Proyecto Venezuela, have informally told the Coordinadora Democrática that they will join the movement to field single unity candidates for all Governorships and Mayoral races. Primero Justicia is likely to join the effort putting the pressure on Proyecto Venezuela to join. This effort, if successful, would according to polls win most Governorships in the country.

-Despite the fact that it is illegal to declare candidacies until February 25^th. now that the date for regional elections ahs been set for July 25^th., Chavez’ MVR party announced its fourth candidate for Governor. This time Ramon Machuca declared his candidacy for Governor of Bolivar state.

–Venezuela issued a 30 years bond at a yield to maturity of 10.25%. The US$ 1 billion issue was oversubscribed by a factor of four. With this issue the country has a very well defined yield curve for the first time in its history. The Minister of Finance, who knows what he is doing, said that the funds would be used to pay Bolivar denominated debt. If true this is positive, but I suspect that political pressure will in the end prevail and new local debt will be issued anyway.

-Both Colin Powell and Condoleezza Rice, separately called on the Chavez administration to stop throwing stumbling blocks in the path of the recall referendum and allow the process to continue.

-The Caracas Stock Exchange rose 15% in the first five days of the year. A combination of cheap valuations, expectations of change and a strong devaluation of the currency in the last two weeks of 2003 were the main reasons.

-A report from Chavez MVR party to the President leaked to the press. In it, it is recognized that the opposition gathered more than three million signatures but 400,000 less than it claimed (just over three million according to the report). The report continues by saying that 30% of them “can” be invalidated, which would stop the referendum.