Friday, January 17, 2014

Maduro will do nothing, part 2

Every week that passes gives us a clear example that Maduro will do nothing to solve our problems. Last week he showed his incapacity coupled to his unwillingness and his "I do not give a damn about your security problem" by blaming crime and violence issued from 15 years of erroneous policies from chavismo to the governments before Chavez. That he blithely went there is enough to prove my case. I would stand down as the witness, but yesterday Maduro also proved that in economical matters he will do nothing, even if the house is on fire.

There is no need to elaborate on the state of the union ridiculous masquerade of yesterday. Besides I did not bother following it directly, live tweeting was enough. There is no need to elaborate on the "measures" announced which yielded as lone interesting result that 1) nothing will change for the time being and 2) the military keep amassing power.

To make you understand how grave is the indecisiveness of Maduro in doing what needs to get done, be it a communist outright coup or a neo-liberalism burst, let me tell you about the worries at work today.

I have several tons of varied stuff bought last year that customers are requesting and that I cannot sell or process. Why? Because after suffering a retroactive devaluation last year that wiped our earnings and then some more we are again owed by the regime hundred of thousand of dollars that we do not know whether this one will pay at 6.3 or 11.3 or any other number significantly above 6.3. Thus our decision is between serving our customers and risking bankruptcy, or holding what is left of our stock and risk losing our customer and bankruptcy anyway. Just a few weeks later than selling.

Fortunately our customers value our stuff, understand and suffer themselves the situation in full and do not want us to go belly up just as we do not want them to go belly up either.  So we are trying to figure out schemes such as shipping without a bill to be emitted at a later date, except that we could be victim of a sudden audit by the regime that knows this will happen and can use it as a way to put fines, extort us and what not.  Details on how do not matter, but trust me on that one, those are the options.

Now, tell me, how are we to produce when we cannot plan our costs? We are not talking here a small adjustment, say, 6.3 to 7.3, we are talking a 40% or larger "adjustment".  And this only about the devaluation but there is also the simmering issue of limiting what we can earn on a product regardless of its cost or turnover, of new taxes looming, of gas becoming again a cost once its price becomes more realistic, etc. Maduro's answer for these issues is all the same "we are studying, it will be a transition, we are evaluation, we will do it, we will etc." But he is not doing and except outright repression and robbery by forcing you to sell at unrealistic prices, nothing else is happening. 

Why?

Two reasons. Maduro has not enough cash, no matter what some say that there is enough cash to muddle for a year. I do think that the lack of cash is a true issue which extent we do not know as the debt and the corruption hide the real numbers, while it is clear that there is no possibility for increased revenue for the next year: how can you raise taxes if people are not going to be able to pay them? The other reasons is linked to this one: to keep all his constituencies happy there is not enough cash. Maduro is paralyzed because he does not know which part of his "coalition" he can toss overboard. If the military seem to be gaining the upper hand it is because they are the coalition part that you cannot keep saying NO all the time.

I suspect that Maduro is waiting for something to break to finally take true responsibility and make decisions. Except it may be too late for the economy when we are all bankrupt, including state economy.

19 comments:

  1. Boludo Tejano2:50 PM

    I suspect that Maduro is waiting for something to break to finally take true responsibility and make decisions.

    As it appears that Maduro is Havana's man in Caracas, the decisions will most likely be coming from Havana. Havana will be oriented towards more and more government control, which will only serve to make things worse. When things get worse, it will be because of the escualidos, which will necessitate more government controls. Not pretty.

    This whole scenario points towards further weakening of private enterprises in Venezuela. Private enterprises going belly up will mean there will be more people needing government money, when there is already less government money. Not pretty.

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    1. What I meant is that something that will break will affect him directly and then he will have to take a decision. that, of course, does not reflect at all as to the quality of the said decision, just that finally he may start edging towards a "solution". That Cuba will be involved si a given, but Cuba is not going to take the fall for Maduro, they will drop him whenever it is convenient for them. As such, it may well be possible that Maduro may make decisions, but they will be too late, that is not going to change.

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  2. Anonymous9:07 PM

    Nothing but crap will ever come from Marxist economic policies and there is NO TOILET PAPER!!!

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  3. Anonymous9:21 PM

    Overthinking it. At all costs the goal is to keep power. That will never change.

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  4. Perhaps the Headline should be Maduro Can't Do Anything

    The revolution has painted itself into a bright red corner. There is no flexibility available to them unless they become themselves the dread counter-revolutionaries. (which can be terminal).

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  5. Anonymous3:49 PM

    Maduro, like Chavez, is a classic example of an ideologue who cannot accept that there can be any flaws in his cherished ideology (Marxism in this case). In the face of obvious contradictions, he clings stubbornly to the infallibility of his policies, stupidly thinks that applying more of them will fix things (deepening the revolution as it was called by Chavez), and then flails wildly and savagely at any scapegoat he can find (won't be a US embargo, though). As the revolution fails, the chavistas will become increasingly vicious in maintaining their hold on power, as those who are profiting from the mess in high places (and in other countries) and the deluded fools in the street who still worship Chavez will see the opposition more and more as monsters who need to be killed (typical mass murder that follows communist takeover) and the government more and more as a Santa Claus who will shower them with looted goods. As people stand in line for three hours to get a loaf of bread and then scramble over each other like wild animals once the doors open, can they not perceive that something is badly wrong with their precious revolution?

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  6. Anon 3:49 couple quick comments for you. First with minor adjustement your comments could describe today's US situation. Second, NO, people will not "perceive" things are wrong. I lived through similar situation in the 70s in my country and the people just voted the same political party into office again. There must be a simbiotic relationship between leftist and idiots...they keep going back to their "vomit" over and over. To think that there is people in the world who still believe the left is hard to believe, I can promisse you that if by a miracle Vzla problems were solved today, tomorrow many people in this blog, including the author would be hoping, asking, dreaming of a left regime for the country....because you know socialism is the only way to nirvana.

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    Replies
    1. Oh good! It has been a long time I had not heard an oversimplification of the left, all in the same bag if you are left of GOP.

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    2. Anonymous12:06 PM

      This is the danger of ideologies. People follow them blindly and refuse to think outside of them. If Marx says the sky is purple polka dot, then it is purple polka dot and if you disagree you are a dangerous radical. If Allah says the Christians and Jews must die, then they must die. If you ask why, then you die. If a man is drowning, throwing a bucket of water on him is not a solution unless you are a chavista. Then it makes sense.

      Delete
  7. In a perverse way, I almost feel sorry for Maduro. He is in the storied predicament of having a tiger by the tail. He cannot let go, because the tiger would eat him. Each decision he makes is based on surviving in power just one more month. Soon, it will be one more week, and so on. He has nowhere to go. I suspect that, deep down, he understands that he is driving the country towards a precipice. How hard must he and the other Chavistas work to deny the reality that they can all plainly see? Yet, they do deny it and continue buying themselves more time in smaller and smaller increments.

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    1. Roy,
      I am surprised you think so well of Maduro.
      I really pity him not.
      I don't think he is aware of the damage Chavismo has done.
      Not even Chávez in Hell knew or would admit.
      Maduro is rather thick. He is a thug. He only knows a few things
      about how to hang to power, but it's mostly his councilors who tell him what to do.
      But he has no mercy for you or for Daniel or for me.

      The regime is only recurring to meetings with Capriles and the rest of the MUD because they want to transfer part of the blame to the opposition for the hardships the country will go through now.
      But they don't care a fig about us.
      And they live in their world.
      Perhaps some guys like Diosdado might see a little bit of what is really going on with the economy but: would you feel pity for him?

      Delete
  8. Nothing?
    This is not nothing! This is action!

    Venezuela, worried by murder rate, takes aim at TV soap operas
    http://uk.reuters.com/article/2014/01/20/us-venezuela-media-idUKBREA0J13C20140120

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    Replies
    1. Boludo Tejano4:21 PM

      Classic. Shooting the messenger.

      Delete
    2. Got robbed by police on the Highway (at a checkpoint) about 2 hrs from Caracas, not sure where exactly. La "multa" on the same day that the famous beauty queen (Monica) was getting murdered by thugs. Police? too busy scamming tourists, of course. They made up some rubbish about me not having a Vaccination Card, told me I had to pay a fine of "about 4 or 5 mil" and get a vaccination and report back. (This was 8pm and I had to get a flight leaving in the morning), I managed to get him down to 1 thousand Bsf, cash obviously, no receipt (after he offered to 'make it all go away for a "donation"') but it still left a pretty unpleasant taste...
      I still love the country though, just feel despair sometimes....
      And now Ma-Burro is blaming the telenovelas??? Wonder how Monica's family feel now? This is a pretty sick stunt by those in power.....

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    3. Just to follow on; I am not some virgintourist. I have spent (in total) many years of the past 15 in Venezuela, mostly in Merida, travelled globally and am BA Hons in LatAm Studies from a well-respected European University (and ULA-Merida also). I remember when Merida was an international,culturally vibrant and mostly safe city. This time I was forced to take a taxi from Merida to Caracas that day due to no internal flights and no overnight buses from Merida.
      600Km by taxi anyone? No, not great... At least I wasn't the one driving...

      Delete
  9. Hey thar Daniel don't be dissin on the GOP. I am a card carrying member of the Knuckle Dragging Party. We have our odd ones, like every party,but we also have PJ O'Rouke so we have that going for us. Also MoDo hating on us, so we got that going for us too. :)

    tl;dr Unless Uncle Sams Misguided Children gather off Puerto Cabello the US is only at best marginal player. So who cares about Faux News, CNBC et. al. let it go.

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    Replies
    1. Hey! PJ O'Rourke - Holidays in Hell, Chapter "Third-World Driving Tips" (or sumtin' similiar), one of the funniest and most true observations I have ever read. A classic - highly recommend!
      Thanks for reminding me HalfEmpty

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  10. Anonymous7:16 AM

    You're way to kind to Maduro. He's not waiting for something to break, he's doing the very best he can manage - that is to say, nothing. The country is being pillaged day by day and this suits Cubans and the military fine. Once something breaks they violently seize power and that's that for the time being. They have the military and the militias on their side, who's going to resist?

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  11. IMO Ma-Burro has not a clue how to get out of this mess and will let it get to such an extreme point he will (willing) defer to the military. In fact I believe he wants this option, to hand-over to the military. If you look carefully at the number of (ex)military in Government now the transition is already taking place.
    Also, and I would laugh, if it wasn't true... FANB-TV anyone? really? new show to be called 'Cooking with the Troops' arepas con frijoles anyone? Like to see what the Generals eat? oops can't show that because the people might revolt!
    This is tragi-comedy on a grand scale.......

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