Chavez naked hatred: Afiuni and Empresas Polar

We got two examples today as to how Chavez hatred clouds his judgment.  One was how judge Afiuni was mistreated in  an unjust hearing and how he directly challenged in the most vulgar terms the president of Venezuela's largest food manufacturer, the one guy that is responsible the most for stocking the shelves of Venezuela with food accessible to the humble classes.  In both cases it was a macho demonstration of someone who does things just because he can do them without anyone stopping him, even if the consequences will be devastating for the country.

Chavez continues his steady transformation into a outright dictator: now he is a puritan for prohibition!

Today we got back on the attack mode against Polar.  Of course, we would.  The take over of Agroisleña is now clearly a fiasco, the one of Exito is becoming one in spite of retaining some of the French management.  And amen on having now to import cement from Cuba...  So Chavez needs new things to plunder until there is nothing left working in Venezuela.

Will the Venezuelan regime dare to put Polar on the scaffold? (or gallows, depending you local lingo)

I was on the road today and only tonight did I get the latest idiocies of the regime. This one must feel quite a lot of heat to consider taking over Polar, the largest private company in Venezuela, which today may represent about 4% of the GNP of Venezuela, a high number not because of any monopolistic intentions from Polar but because in a sea of bankruptcies and expropriations the Polar ship is somehow still afloat.

But first a little bit of background.

"Magical realism" in Venezuela, Chavez talks to his base, Arria talks to the world

Today we got examples of what is effective long term action and what is a mere silly rant.  Let's us start with the later.

Modern XXI century highway robbery in Venezuela

Thou shalt not steal

Ex.20:15

Se garantiza el derecho a la propiedad. [...] Solo por causa de utilidad pública o interes social, mediante sentencia firme y pago oportuno de justa indemnización, podrá ser declarada la expropriación de cualquier clase de bienes.
{The right of property is guaranteed. [...] Only for causes of public need or social interest, through a final [court] ruling and prompt payment of a fair indemnity, will it be possible to declare the expropriation of any type of property.}

Article 115 of the 1999 Venezuelan constitution!

Well, stealing is exactly what the bolivarian revolution has been doing, since its very beginning. However, after having spent years stealing the public coffers it seems that it is not enough and we are witnessing pure and simple expropriations of private citizens holdings.

Now, before I get into this it is important to point that most modern societies, even the empire of Capitalism, the good ole US of A, do preview expropriations for public interests with at least reasonable compensations. not even real market value but at least a value that does represent something. There is nothing wrong with that as collective interests on occasion goes above private interest, if duly compensated of course.

The constitution of 1999 does state this normal public policy, in a series of articles (113 through 116) which define the property rights and what to do when those are abused through monopolies for example. The article 115, cited above, is totally explicit on this subject. And it has been repeatedly violated since the constitution has been approved. It seems that lately these systematic violations are reaching a new level. A list follows, not necessarily in order of importance, though the first case is presented in detail for the reader to be able to understand the modus operandi of the regime.

A Polar/Remavenca plant in Barinas has been taken over

Polar is the largest private business in Venezuela and its family as a shareholder group (a la Walmart) are the wealthiest group of people in Venezuela (outside of the illegal fortunes that are being currently built on the public dole by the present administration). Polar is the number one brewery, the number one corn/maize flour provider and of many of other popular staple foods. And it is not a monopole even if it frequently occupies the principal share. It is oriented for mass production, and most of its items are price controlled anyway. It is also probably the company most closely followed tax wise.

However Polar has been suffering. It has been suffering because being a colossus it has a hard time to adapt to the fast changing conditions of Venezuela. It is suffering because of the missteps of the Venezuelan economic team which would have run the economy into the ground if it were not for oil at soon 60 USD the Venezuelan barrel. For those who do not agree with this blogger, I would like to remind them that when Chavez reached office the Venezuelan currency was around 550 for the USD. Now it is at 2150 officially and 2700 to the dollar on the parallel market. A 5 fold decrease in 6 years does not speak of economical mastery.

Thus Polar has been shifting its production centers in a more rational way, not only to face the normal economic cycles, but also to face the unfair competition offered by the government when it imports subsidized food at the expense of the Venezuelan worker who loses his/her job. One of these installations, a Remavenca subsidiary, is in Barinas state, where it was a collecting center for cereals and a processing center for oil and flour.

Polar in 2002 decided to stop production but still kept the center for storage and distribution, thus maintaining the agricultural importance of the area if not its productive capacity for processed product. Those did not have too far to come as the Chivacoa Remavenca center is located barely 5 hours drive and thus Barinas is fully provided with Polar products while its farmers can sell their crop, even though Barinas state is at the end of the road. I know all of this well as Polar is one of my clients and I have visited their installations more than once.

But that has not stopped the government, led by the minister of agriculture and lands, to seize last Monday the Barinas facilities. Antonio Albarran, a minister of limited capacity but whose loyalty to the regime cannot be questioned, lamely today stated that he was only following what the cues provided by the leader of the revolution on his Sunday comic hour. So we are expected to believe that a minister hears a talk show and acts, without even waiting for the cabinet meeting? We would be so luckily if Chavez ministers were so efficient on matters such as personal security or Vargas disaster rebuilding... Meanwhile Polar is trying to demonstrate the illegality of the move, if the High court pays attention.

The workers of Remavenca Barinas, on the left side, barred access to work by the Nazional Guard, are not amused since basically they are kicked out, as are their clients, to be replaced by pro Chavez workers and supposedly pro Chavez farmer providers who nobody knows quite well where they come from or what they can possibly provide. It would seem that this Remavenca facility was actually rented to some local producers that were discriminating against some other local producers. We could thus conceive the same picture but with pro Chavez folks protesting. That of course is not enough to justify the manu militari grabbing of the plant, as for the time being there has been no judicial papers showed by the governmental side.

No compensation has been offered as the government seems to be figuring ways to put up trumped charges to get it cheap or free if possible (Polar did slow down work in the 2002 strike but never shut down completely, the few shutting due basically to the lack of gasoline for transport, so even such charges would not stand in a normal court of law, something that has ceased to exist in Venezuela; and Polar is still seen as an enemy of the regime, even if its president travelled with Chavez to Spain a few months ago). Thus the mystery remains as to the real motives of the minister. Is it to favor one group of producers above another? Is it to allow acces to all producers? Is it to force Polar to sell cheap? Is it to incur favor with Chavez whose home state is Barinas? Is this really a Chavez expressed wish (it would be really hard to think that such an important move which would affect the economical climate would not be attempted without Chavez approval)? Is it the coming moves of the revolution which is announcing clearly its march towards communism to a people that do not understand it and will ratify communism through the vote thanks to a gigantic abstention? All speculations are open, but one sure is certain, at the very least Chavez has decided to replace the present business class with one of its making (whose skill outside of government credits is far from been proven).

Expropriation or confiscation?

A Heinz tomato processing plant has been taken. This plant located in Monagas state operated briefly and was closed as the area proved itself unable to provide for the amount of tomato required to make the plant break even. Heinz reports that it tried to sell it but could not find any taker. One is left to suppose that since tomatoes are red they will probably grow spontaneously to support the regime.

A slaughter house in Barinas state was also taken.

Early this year a paper mill and an auto part and bearings plant were seized. As far as we know nothing was paid to the ex owners. And let's not start with Hato Piñero and other cattle ranches just invaded at will. And we will pass on sudden change of fiscal code, applied retroactively to foreign oil companies to milk them further. They did accept since oil is so high, but a precedent of tax code modification in a retroactive ways has been set and it could apply whenever politics justify it.

And the future is not very promising. The government as announced a survey of closed plants and partially closed ones to decide which ones it will just give to the ex employees (or more likely chavista ex employees, let's not kid ourselves). 700 facilities would be targeted. Whether they closed for economical reason or for speculative reasons is not the question. Actually the official line is that the owners closed the plants to piss off Chavez. How cutting one's nose to spite one's face has become a capitalist law market is of course not explained by these amateurs who take their lessons from outdated economic books and outdated Cuba. Reason has nothing to do with this whole affair.

Invest in Venezuela?

Obviously it is highly risky as your business can just be hijacked anytime by disgruntled opponents, envious workers, politicos seeking a cheap point, etc, etc... Venezuelans know that very well as all the money taken overseas for decades is not coming back, at all. Oscar Garcia Mendoza, a neo liberal but lucid opponent is certainly not encouraging investment by pronouncing these maneuvers as a direct attack on private property. He also stresses that there are other ways the government is limiting property by forcing for example banks to dedicate 10% of their total loans to popular housing projects even if the targeted people are simply unable to satisfy the conditions imposed by the government itself. But the government is only trying to pass the buck on its incompetence in building public housing.

That the government uses its oil resources for all sorts of political projects overseas that do not benefit Venezuela present and hard needs is not helping bring investor confidence (the UNPD has dropped Venezuela a few positions once again in its annual index of human development, thus restating that the bolibanana revolution is not improving Venezuelans' lot). The latest is yet another oil agreement with central America and the Caribbean where discounted oil, is basically given it away for some sugar and plantain that Venezuela could well produce. But Chavez is more preoccupied with OAS vote buying in his favor than the well being of his people. why invest in Venezuela when you can do Venezuelan deals outside of Venezuela? Still there are some investments that the regime brags about but which are very hollow investments when one looks at them. These investments are only in two areas.

One group, such as communications, are too complex for such an incompetent administration. Thus they will have time to get enough return to recover their investment before the government eventually decides to take them over. One of these particularly hollow investments is the purchase of Telcel, the largest cel-phone comapny in Venezuela, from Bell South by the Spanish communication giant Movistar. Well, where is all the cash received by Bell South? Still in Venezuela? You can bet that Venezuela overall has not acquired much from this transaction.

But even that media/communication sector is targeted and might see its profits dwindle fast. Just today the National Assembly lead by the ineffable Maduro, a servilest servant of Chavez, has pushed through a law that will force cable companies to give the government free of charge 8 channels. Voila! Too bad for the expenses of these companies for carrying channels that probably few people will want to see. This is just another form of expropriation (not to mention censorship and force feeding of the government propaganda drivel) .

The other group of business where investment is observed is in those ones that have a high risk perhaps but also a high return, in the 20 to 30% order or more. That is, oil industry. The price of oil is big enough that enough US companies are willing to take the risk, no matter how nasty to the US Chavez is. But in general there is very little local investment, just enough to keep established business running and any expansion is made on borrowed money, not on repatriation of capitals. We know better: even chavistas are careful to stash their gains outside, as reported for example by the Miami Herald.

But all private investment in long term business with moderate returns and employment creation is very limited. Unless, of course, you like to be despoiled by a rapacious administration who first sends after you the Seniat, Indecu, Work Ministry, and then, when there is nothing left in your account simply invades the premises and takes your property away.


PS: I have modified a little bit the Remavenca story as new information was sent to me. If it nuances it some it still does not change the basic point of illegal property grab. It is thus possible that I might add an additional PS as more info flows my way.

Workers against Chavez: neo-liberalism on the rise?

Polar workers do not want to become bureaucrats!

UPDATE: for those of you in Facebook you can join a support group. After all the beers you got from them in warm sunny days, it is the least you can do!

Alo Presidente is indeed the TV show that sets the agenda for the week.  Either because of the reactions to the ludicrous announcements that are now routine there, or because Chavez actually announces what will happen.

Yesterday Chavez attacked Polar, ordered the justice system to investigate Polar for hoarding corn flour (that is right, Chavez orders what is supposedly an independent power, one where you send a written request, not a a vulgar order through a talk show).  He also attacked the workers of Polar for siding with Polar and defend their jobs.  Video here. Article summary in English here.

When everything else fails try a little bit of class war

HOARDING!

Chavez's drugs must be working, at least good enough to give him the energy to remind us that he is the big honcho around.  But what to do?  No governmental plan is working, unless you believe the propaganda claims that 100,000 houses have been built and that the jobless rate of Venezuela dropped nothing less than 0,8%.  Take that capitalism!

Fortunately there is something that always tickles the lumpen hoi polloi: confiscate goods and give them away at "popular markets".  The hoi polloi does not care whether these are state stolen goods, they are now used to help themselves by ransacking trucks stopped in traffic jams.  The hoi polloi does not care whether these seized goods are a retribution to hoarders: the hoi polloi has learned long ago to pillage and hoard their loot to resell it at good price to their neighbors.  After all, we have no news of anyone looting a truck of goods being punished for that. Why should they not keep pillaging, or even better, applaud Chavez when he does that for them?

Some people really have no shame: Chavez wants to close breweries

With all the negative imaging of last week Chavez decided to become a puritan stalinist. In the video you will see below you will hear how Chavez puts the blame for the ills of the country on Polar beer (apparently Brazilian beer Brama and the Cisneros Regional brand have no part in the alcoholism of the country) . He also attacks the workers of Polar for defending their jobs and not rallying to his proposal of take over.

Agroisleña is seized in Venezuela: the first real Communist measure of Chavez

With the announced take over of Agroisleña by the state, Hugo Chavez has made his first real communist "economic" move.  You might wince at this but bear with me a little bit longer.

The first thing to note is that all previous economic measures that the regime had taken were punctual, taking great care to pretend that private property was respected up to a point and pretending that expropriations were necessary, were designed for the betterment of the economic apparatus and, well, the owners would be duly compensated.  For example the attacks so far against the Polar group are to relieve it from some of its assets so housing can be built there.  Farms are taken over, we are told, because they were either too big or unproductive.  That the facts matched the tales was made in part irrelevant because, well, next door farm was left alone as if nothing.  Even PDVSA which is advertised as being "nationalized in 2003" by Chavez followers was not since it belonged to the state for already three decades and the only thing that happened there was a change in management to make plundering easier.

Rice and banks no more: Chavez electoral trophies?

Although in a funk, waiting to decide what future blogging should be, I still need to cover the direct consequences of the February 15 vote. This past few days there were two apparently unrelated events which are in fact very related.

Rice processing plants "intervenidas"

Whenever Chavez "wins" an election, he sorts of need to show who is the boss. This primitive to primal reflex, that gorilla chest thumping of him was seen three weeks after his 2006 reelection when he decided to close RCTV. Now he did not even wait three weeks to administratively take over two rice processing plants with a clear threat of their final nationalization (well, he did also take over Stamford bank but that is another story: it failed as a Ponzi scheme and rumor has that most of its depositors were chavista nouveau riche).

The excuse was very simple: apparently part of the rice elaborated there circumvented regulation prices by adding a flavor to the presentation. Considering that producing rice is no good business in Venezuela, these plants used this scheme to make sure that at least they did not lose money overall. A far as we can tell that "flavored rice" did not represent even 10% of what was manufactured in the country, and thus f little social impact as that flavored rice is sold in upscale groceries to people than can afford it. But the propaganda impact is big as rice is a basic staple (pabellón anyone?)

The real problem here is that the government has been trying for years to find ways to control Polar, harass the company that is perceived as a threat. Why is the Polar groups such a threat? Because it is a demonstration that agribusiness can work efficiently in Venezuela and as such it is a constant reminder of the failures of chavismo to get off the ground their own counter agribusiness. See, chavista "entrepreneurs" did not fail because of Polar unfair competition: Polar has been harassed and controlled and kept in check for half a decade already. These "entrepreneurs" (socialists cooperatives, individuals who cast their lot with chavismo and all sort of hanger one) failed because simply they are inefficient and are in the business for the quick buck, courtesy of chavismo grants. Not for them the long term commitment of a traditional group like Polar which is important to note is not even at the stock market. All that Polar did was with its own self investment (and beer money, true, but not state money granted to the chavista "entrepreneurs").

What we have seen this week is the first direct assault of a series from chavismo against Polar. Now chavismo is in more of a hurry because as oil prices are not going to recover anytime soon it needs to secure food supplies to at least feed part of that 54%. The obligations of populism, you know. The other 46% will have to figure out ways to eat, that is not chavismo problem. And of course, Polar as the legendary golden egg goose will soon lose all productivity and we will starve as we will have no money left to import rice. But that is OK with Chavez, he will have gained another couple of years in power and surely he will come up with something else to take over and destroy, until nothing is left, Cuba style. Did a starving Zimbabwe stopped Mugabe from lavishly celebrating his birthday?

One banker less

The other event is that a well trained commando like kidnapped one of the main banker/stock exchange guys in Venezuela. German Garcia Velutini was abducted as he was driving on his own by a commando like operation. Two things here:

The government inaction and even complacency with such crimes has been emboldening such terror groups. Venezuela is becoming fast one of the worst countries in the world for these type of actions. And they are not reserved only to Caracas: my own poor rural state is, per capita, one of the three worst states of Venezuela for abduction statistics (and not all are reported, by far).

The second thing is that Garcia Velutini is the member of a family who has one of the main critics of Chavez economic policies in its ranks. Oscar Garcia Mendoza (a half brother I assume) is the president of the Banco Venezolano de Credito. As such he presides one of the safest banks in Venezuela in that it is probably the one with the least exposure to unreliable Venezuelan state bonds. It pays little interests to your accounts but at least it has an advantage, you are pretty sure that it will be the last one to go bankrupt in Venezuela so you will find back your money. People found out that under the Caldera bank crisis of the mid 90ies. Garcia Mendoza has thus two advantages: he knows what he is talking about when he discusses the Venezuelan financial situation, and he has the credibility to sustain his positions.

Thus one cannot help but wonder if the kidnapping of Garcia Velutini is just that, a kidnapping for money. Or if there something way more sinister behind it.

On the road to crash

The consequences of these apparently two unrelated events are in fact quite simple to perceive once you understand how they are linked: a Chavez who thinks that his 54% is once again a blank check to pursue his policies is announcing that he does not care at all about private enterprise to help him navigate the shoals ahead. Truly, who is going to come an invest big time in Venezuela when your business can be taken away by the government at will, or your top executives can be abducted at will?

To add insult to injury Chavez even said that if he expropriates the rice mills, he will pay them with "papers" and not with hard cash. Which, if you think of it, as a confession by the president himself that Venezuelan bonds are worthless.

The big mistake Chavez is doing is to misread completely the new world scenario. The crisis is not the end of capitalism, it is its reinvention as it has taken place before. Obama might succeed or fail, but even if he fails there will be another guy to come after and succeed anyway. After all, pushing it a little bit, it took WW2 to finally make the New Deal a permanent success that lasted until the late 70ies. If the efforts to come back from the current recession bear fruit, the capitalism that will emerge will be a conservative one, a capitalism where accounting and legality and seriousness will be core values. How do you expect a rogue regime like Chavez will fare with the new order when irremediably he comes hat in hand to ask for help?

Because by taking over rice mills and ignoring protection of bankers Chavez is only speeding up the time of his reckoning. You can trust me on that one.


-The end-

The current Venezuelan crisis for Dummies ®

With all that has been happening in Venezuela since September 26 the casual reader, as well as the informed reader, might have some trouble in figuring exactly what is going on.  Ever willing to help this blog will try to explain the core reasons and consequences of the current political crisis.  Yes, in case you have any doubts,  it is a political crisis that is taking place in Venezuela and the reaction of the regime in place is a not-so-slow motion coup d'état.

The basic reasons behind the regime actions

Regular readers and well informed people already know what is going on and why, but it never hurts to refresh memory and simplify the input.

Alimentos Polar replies to the lies of Chavez

The failed government of Chavez which has reached a pathological degree of chronic lies keeps attacking the Polar group. This one replies in an official communique which uses some of the points that I had mentioned earlier, obvious points for anyone in the field in Venezuela. Thus I thought that it would be worth translating it so people do understand better the unfounded attacks against the Polar Group, Alimentos Polar. I have included in brackets or notes some comments for readers to understand better. You can read the original here in Spanish.
-------------------------------

With the support of all employees (1)

Alimentos Polar rejects allegations and reaffirms that it will continue producing at maximum capacity and quality as always for all Venezuelans

Exactly what would it have accomplished to "engage in a debate" with Hitler?

The Wall Street Journal has a fascinating Op-Ed piece which is food for thought, Liberals or not alike. The question asked is whether Columbia receiving Hitler for a speech in 1939 would have made any difference? In other words, are there limits to dialogue and discussion?

The question is not an idle one as Columbia University, this hallowed bastion of New York Liberalism, is receiving Mahmoud Ahmadinejerk, oops!, Ahmadinejad for a speech while this one is coming to the UN conference as if he were your average head of state, Ground Zero visit included. Justly justifying, I think, the title of the piece is "Columbia's Conceit".

At the end of the article we can read the following:

In just a few years, some of these men [who would have received Hitler at Columbia in 1939] will be rushing a beach at Normandy or caught in a firefight in the Ardennes. And the fact that their ideas were finer and better than Hitler's will have done nothing to keep them and millions of their countrymen from harm, and nothing to get them out of its way.

To bring this into some context, for this Venezuelan blog at least, let's observe that Ahmadinejerk is a close ally of Chavez (not Venezuela, Chavez, extremely important distinction).

Serendipity wants that last night in a fit of idleness I watched La Hojilla, the worst political garbage of the state network VTV. Bad luck had it that Chavez linked to La Hojilla at 11:40 PM, from a big room where a U shaped system of tables showed plenty of bleary eyed folks still at work at some conference (we are in an electoral campaign and even if the country infrastructure is crumbling and the shelves are usually empty of milk, sugar and beans, there is a need to project an image of a president working 25 hours a day). While La Hojilla host, a pathetically semi orgasmic giggling Mario Silva, was shown on the little left corner square of the TV set, Chavez occupied most of the screen while explaining to us all the wonders of the Iranian collaboration, how they had to study hard to transform their mills designed for wheat into mills that could process corn and how now Venezuela would be buying plenty of mills from Iran to process the crops.

I cannot stress how wrong this is, how stupid and bad faith was Chavez last night. The problem in Venezuela is not the processing of Corn flour. We are the best at that, and we have even developed a spectacular infrastructure for the very specific needs of the type of corn flour that is needed for our Arepa, a very different quality than what is used in Mexico or elsewhere. Polar and other giant concerns in Venezuela have been perfectly able to supply for now decades enough corn flour to ALL Venezuelans at a very decent price, making it even often the only food item that poor Venezuelan could afford. That reality was even bad enough that Polar corn flour comes even supplemented with some trace elements to try to palliate some of the nutritional deficiencies that come with a diet based on corn flour bread alone.

No matter what Chavez says or said, corn floor production and supply in Venezuela was one of the greatest capitalist success story in that it provided a whole country with a cheap source of food that would allow to stop the hunger crisis of the past in a way no other government was able to do, including this one who can only avoid empty shelves through increasing imports of food, with all the irregularities, waste and corruption that come in a subsidized scheme. The problem in Venezuela today are the ill conceived agrarian policies which are ruining agricultural production. The problem is not processing and distribution of food stuff, the problem is their production, and this is the abject reality that Chavez is so desperate to hide.

But Chavez is willing to jettison what Venezuela does best in order to increase his control on all. Polar et al. must be broken and the Iranian alliance will be the tool, or so he hopes. Chavez will control the food supply to Venezuelans so that we will owe him everything and for this he is binding Venezuela to the most alien culture to the Venezuelan way of life where adultery, beer, string bikini and even gay sex flourish (there are enough repressed and not so repressed homosexuals in Chavez entourage). In Iran all these people risk from public lashing to outright death by stoning.

And Chavez also announced to us, after defending Iran's nuclear program, that one day Venezuela will start its own nuclear program. Until when for Columbia to receive Chavez?

I am not prepared to link Chavez to Hitler, not even Mussolini, and perhaps not even Peron. He is too much of a coward, of a tropical small time thug to manage to create a system that could really threaten the peace of the world (except for the continuous decrease of Venezuelan oil production). Besides, even if he is surrounded by sycophants (the presentation of Hector Navarro last night, the "Science" minister, was particularly pathetic), these ones are of such low quality that I wonder if they could run a concentration camp efficiently. Not that they would not try to do it, after all there is the Tascon list to show to the world that active discrimination is now an everyday occurrence in Venezuela. No, they are just too incompetent: the Chavez regime is held in place by corruption and hand outs through high oil prices while Cuban agents control things behind the scene.

But it cannot denied either that Chavez is a danger. A danger to Venezuelans to begin with. A danger to the world by supporting people like Saddam, Ahmadinejad and Castro, not to mention a discrete support for North Korea, the Taliban and other assorted terrorist groups and common criminals such as the FARC. All the evidence is there, nothing needs to be discussed anymore.

One wonders at Columbia receiving someone who has made the destruction of Israel his personal pet project. Is there any discussion, dialogue possible with such a person? I do not think so, and the Columbia board is looking mighty stupid in receiving someone who has been put on the shit list of even a country like France.

And what about Chavez and his supporters here? As is the case for Ahmadinejad, Chavez becomes everyday more difficult to defend for those who are willing to dig a little bit below the show that Chavez masterfully puts up 24/24. There are certain things that free aspirin distribution cannot hide and even less compensate. Venezuela today is more vulnerable than ever. Besides oil there is nothing we produce in enough quantity to export and trade to compensate for a continued decline in oil production. And with the constitutional changes coming among an already fraudulent electoral campaign, human rights violations will become soon more frequent than even in Iran.

The question that is asked here is how long will dialogue be an option with Chavez and his supporters. Is it even an option today? Already Chavez refuses to answer questions from the press and treats them badly, saying that their questions are stupid and he thus does not need to reply to them. Will in the next future the press even get close enough to ask him how come there is blood on his hands? Will Columbia students treated as stupid if they dare to ask him real questions that even a true blue Liberal would ask? As for Chavez supporters, well, they are now a waste of time and judging to what happens in Internet pages such as this one or in newspapers such as EL Universal, they have stopped making sense and are easily exposed. So, when Ahmadinejerk or Chavez are invited to Columbia, who is there to blame? When are these trouble makers going to be taken for what they really are, even if their people were stupid and ignorant enough to vote for them? When will the likes of John Coatsworth realize that sometimes conflict cannot be avoided and early confrontation and containemt is the only way to avoid further damage?

But I suppose that Coatsworth, some in the Columbia faculty, Chavez and Ahmadinejerk all share something: they are incurable narcissists, those that have long ago adopted the saying that there is no such thing as bad publicity.

--- --- --- --- --- --- --- --- --- --- --- --- --- ---
Since I do not know how long the WSJ keeps up its pieces, I am posting the whole thing below.

Columbia's Conceit
Exactly what would it have accomplished to "engage in a debate" with Hitler?

BY BRET STEPHENS
Tuesday, September 25, 2007

On Saturday John Coatsworth, acting dean of Columbia University's School of International and Public Affairs, made the remark that "if Hitler were in the United States and . . . if he were willing to engage in a debate and a discussion to be challenged by Columbia students and faculty, we would certainly invite him." This was by way of defending the university's decision to host a speech yesterday by Iranian President Mahmoud Ahmadinejad.

An old rule of thumb in debate tournaments is that the first one to say "Hitler" loses. But say what you will about Mr. Coatsworth's comment, it is, at bottom, a philosophical claim: about the purposes of education; about the uses of dialogue; about the obligations of academia; about the boundaries (or absence of boundaries) of modern liberalism and about its conceits. So rather than dismiss the claim out of hand, let's address it in the same philosophical spirit in which it was offered.

A few preliminaries: When Mr. Coatsworth postulated Hitler's visit, he specified the year 1939, just prior to Germany's invasion of Poland and the beginning of World War II. This, then, is not yet the Hitler of Auschwitz, though it is the Hitler of Dachau, the Nuremberg Laws, Guernica and Kristallnacht. Mr. Coatsworth takes the optimistic view that "an appearance by Hitler at Columbia could have led him to appreciate what a great power the U.S. had already become," and thus, presumably, kept America from war.

Less clear is whether Mr. Coatsworth issued his invitation in the name of Columbia's current faculty or on behalf the faculty of the 1930s or '40s. We'll assume the answer is the current faculty, since it's unlikely that a committee led by Jacques Barzun, Mark van Doren, Lionel Trilling or other Columbia luminaries of the day would have had much use for "discussion" with the Führer (though it seems Columbia hosted a speech by Hans Luther, Hitler's U.S. ambassador, in 1933).

What, then, would be the purpose of such an invitation? Columbia's president, Lee Bollinger, offered a clue in a statement issued last week: "Columbia, as a community dedicated to learning and scholarship, is committed to confronting ideas--to understand the world as it is and as it might be," he said. "Necessarily, on occasion this will bring us into contact with beliefs many, most or even all of us will find offensive and even odious. We trust our community, including our students, to be fully capable of dealing with these occasions, through dialogue and reason."

That's an interesting thought, coming from a man who won't countenance an ROTC program on campus. But leave that aside. What's more important is the question of how Columbia defines the set of ideas it believes are worth "confronting," whether its confidence in "dialogue and reason" is well placed and, finally, whether confronting ideas is a sufficient condition for understanding the world.

In a March 1952 essay in Commentary magazine on "George Orwell and the Politics of Truth," Trilling observed that "the gist of Orwell's criticism of the liberal intelligentsia was that they refused to understand the conditioned way of life." Orwell, he wrote, really knew what it was like to live under a totalitarian regime--unlike, say, George Bernard Shaw, who had "insisted upon remaining sublimely unaware of the Russian actuality," or H.G. Wells, who had "pooh-poohed the threat of Hitler." By contrast, Orwell "had the simple courage to point out that the pacifists preached their doctrine under condition of the protection of the British navy, and that, against Germany and Russia, Gandhi's passive resistance would have been to no avail."

Trilling took the point a step further, assailing the intelligentsia's habit of treating politics as a "nightmare abstraction" and "pointing to the fearfulness of the nightmare as evidence of their sense of reality." To put this in the context of Mr. Coatsworth's hypothetical, Trilling might have said that in hosting and perhaps debating Hitler, Columbia's faculty and students would not have been "confronting" him, much as they might have gulled themselves into believing they were. Hitler at Columbia would merely have been a man at a podium, offering his "ideas" on this or that, and not the master of a huge terror apparatus bearing down on you. To suggest that such an event amounts to a confrontation, or offers a perspective on reality, is a bit like suggesting that one "confronts" a wild animal by staring at it through its cage at a zoo.

There is also the question of just what ideas would be presented by Hitler at Mr. Coatsworth's hypothetical conference, and whether they would be an accurate reflection of his beliefs and intentions. In his 1933 speech, Ambassador Luther made the case for Hitler's "peaceful intentions" in Europe, according to historian Rafael Medoff. Millions of Europeans believed this right up to September 1939, just as millions of Americans did right up to December 1941.

Let's assume, however, that Hitler had used the occasion of his speech not just to dissimulate but to really air his mind, to give vent not just to Germany's historical grievances but to his own apocalyptic ambitions. In "Terror and Liberalism" (2003), Columbia alumnus Paul Berman observes the way in which prewar French socialists--keenly aware and totally opposed to Hitler's platform--nonetheless took the view that Germany had to be accommodated and that the real threat to peace came from their own "warmongers and arms manufacturers." This notion, Mr. Berman writes, rested in turn on a philosophical belief that "even the enemies of reason cannot be the enemies of reason. Even the unreasonable must be, in some fashion, reasonable."

So there is Adolf Hitler on our imagined stage, ranting about the soon-to-be-fulfilled destiny of the Aryan race. And his audience of outstanding Columbia men are mostly appalled, as they should be. But they are also engrossed, and curious, and if it occurs to some of them that the man should be arrested on the spot they don't say it. Nor do they ask, "How will we come to terms with his world?" Instead, they wonder how to make him see "reason," as reasonable people do.

In just a few years, some of these men will be rushing a beach at Normandy or caught in a firefight in the Ardennes. And the fact that their ideas were finer and better than Hitler's will have done nothing to keep them and millions of their countrymen from harm, and nothing to get them out of its way.

Mr. Stephens is a member of The Wall Street Journal's editorial board. His column appears in the Journal Tuesdays.

-The end-

The Venezuelan banking crisis made simple (plus Chacon departure)

[UPDATED with Chacon exit]

I should be writing extensive posts about the current Venezuelan so called banking crisis, but I think that 1) Miguel does a much better job than anyone in covering the events (including relevant links to his information such as the priceless Caracas Gringo) and 2) I have been writing so much about corruption that an "I told you so" post is just demeaning; thus I prefer to cover more positive news such as the Honduras vote and the formation of Lopez new political movement.

But still, I should write something, kind of a follow up of a previous post where I was discussing the Venezuelan triumvirate that rules over us and how at some point it had to come down crashing, as all triumvirates did through history. Power is not something easy to share: you got it or you do not. As a decent compromise a very brief summary of all that this mean:

Lula is still at it, screwing up Venezuelans

What is one to think about the recent trip of Brazil's ex president Lula da Silva to Venezuela and Cuba?

Chavez's Spanish most excellent adventure!

Or the kind of thing that you will be allowed to see on Venezuelan TV once the gag law passes.

President Chavez by now must have ended his state visit in Spain. I am not too sure how good that visit was for Spain as it left quite a wake there. But I am sure that the inner trouble maker in Chavez must feel quite satisfied. All in all, at least on political grounds, Chavez had scored a few points, on domestic or foreign matters. At what price? Too early to say.

The big news was the political scandal that erupted in Spain. Foreign minister Moratinos declared on a TV show that former premier Aznar actively supported the 2002 April coup. This alleged intervention is far from being proved, but Chavez knows an opportunity when he sees one and he could not resist marking a few points at the expense of the Spanish political establishment. Getting out of some meeting he declared that the involvement of Aznar government was indeed true, but he added, very magnanimously, that it was a turned page now. Yeah, right...

Which aggravated the political problem within Spain. The PP former ruling party until March of this year demanded that Moratinos either put up or shut up (meaning resigns). Indeed Mariano Rajoy the PP leader demanded that the government clarified the declarations of Moratinos in the strongest term (while using the term "coronel Chavez" to address a Chavez who was in a state visit and blithely intervened in Spanish internal affairs). As usual Chavez can meddle but no one can meddle in Venezuela. An autocrat is an autocrat, everywhere.

Meanwhile Madrid has announced that Moratinos himself will go to the Cortes to account for his declarations. That will be quite interesting... Let's see:

• Aznar government lost its credibility when it tried desperately to pin down on ETA the March 11 bombing. That cost it the election.

• Rodriguez Zapatero himself has a rather weak foreign minister that has been pushing Spain to go against a European decision to block Cuba for its multiple violations of human rights. Of course what is going on in here is Chavez trying to push a wedge between Spain and Europe to help himself and his mentor in the famed prison island. In other words Zapatero is "el tonto util" of Chavez (Chavez's fool).

But why would Zapatero bend backward to accommodate Chavez? Because he offered him to create a Revolutionary Internationale to replace the Socialist Internationale of the social democrats? Because Chavez is so media savvy and full of life compared to the rather lifeless Zapatero? Because of the contracts held carrot like in front of Spain business?

That business section of the trip by the way brought a few cheap points for Chavez. He was received by the Cortes, the Senate, and a session was previewed where Chavez was going to be asked on the coming "gag law". But imagine that, the session was suspended at the last minute! Could have that anything to do with the promise of ordering a few boats to Spain? Postponing for a while the highly inefficient shipyards closure that is a big problem for Zapatero. After all, Chavez can afford a few overpriced ships if it helps his friend Castro back in Europe.

Unexpectedly Chavez got a second bonus. Lorenzo Mendoza, the young looking president of Polar, perhaps the main private concern of Venezuela, and a known opponent of Chavez, was in Spain. Well, it seems that times have changed and now Mr. Mendoza is very happily in Spain doing business traveling along with Chavez. And he declared so on Venevision, the first network to have preempted the "gag law" by installing self censorship in its studios. Venevision, property of Gustavo Cisneros who came for a private visit to Chavez on the hand of Carter before the Recall Election, has removed all politically contentious material from its programming. And went a step further by showing the declarations of Mr. Mendoza, while in the background one could see a broadly smiling, if not mocking, Minister Izarra, certainly appreciating the moment. Sic transit gloria mundi.

Meanwhile back at the ranch...

The Spanish adventure certainly was a godsend to distract from the worrying news that hit us. A shooting took place today, some lawyer got killed, some searches made, a car seized and all supposedly to clarify the Anderson assassination. But already many questions are been raised on what is really happening. From the new found efficiency in investigation and prosecution when so many other violent death are still not "clarified" to whether today shooting was not a mistake.

All of this is more fodder for the governrment to speed up the approval of the "gag law" and initiate discussion of an anti terrorist law that will make the US Patriot Rules child's play. I recommend reading (in English) Mike Rowan article today to see what is heading toward our most unfortunate country while suckers like Zapatero debate how much dictatorial practices Europe should accept.

The Venezuelan 2008 election: update 17 - The chavista llanos

Now we move into pro Chavez territory. But we also move into areas where Chavez feels so sure of himself that some of his abuses are the clearest to see. If normally most of these states should remain safely into chavismo hands, surprises are possible and highly interesting.



Chavez is a llanero president. But so was Luis Herrera Campins (1978-1983). From these two presidents out of the Llanos as a people we are justified to remain weary of any future candidate coming from the area: both administrations have been economic disasters.

The Llanos are the great plains of Venezuela, a wide expanse that got its own qualifying name such as the Pampas or the Chaco did. If we share them with Colombia, the Llanos remain mostly a Venezuelan affair. Politics in the Llano are not held like elsewhere: this is the land of the caudillo by excellence even though few reached ultimate power. See, the llanero is interested in controlling his habitat but not much beyond it. However whenever the llanero decided to spread outside of its lands, consequences were to be paid for Venezuela.

Historically the Llanos have only figured heavily in Venezuelan history during the independence wars, first a civil war and second as the decisive factor in the revolutionary armies. The Venezuelan Second Republic was destroyed by a Spaniard, Boves, who somehow managed to rally to him the rough llaneros, most still riding these days without a saddle. His early and fortunate death gave its chance to Paez to gain control of the llaneros and bring them on the side of the revolution. But when Paez and others did not like the life presidency intentions of Bolivar, nor the increasing influence of the Bogota gentry, Paez by then was powerful enough to allow Venezuela to split and become a separate nation in 1830. Then the few surviving llanero went back to their great plains. Since then the Llanos strove to perpetuate its legend of roughness, where democracy did matter little. This culture gave us the “great Venezuelan novel”, Doña Barbara or Romulo Gallegos who narrates how border line civilization barely held until the XX century. Even today as Polar and Direct TV have reached small corners of the Llanos, it still has a feeling of remoteness and legend that contribute in part to the aura of Chavez. Well, at least the barbarous side so much in display during this campaign.

Chavez is a pure product of the Llanos, from his speech cadenzas to his value set. But he is of the Doña Barbara school, not of the Santos Luzardo. That is, his creed is the rough caudillo who imposes his will. Passing through army barracks did not do a thing to tame his autocratic temper. But the llanero responds to that and Chavez has been getting some of his best percentages in the Llanos state, his home state of Barinas, the low land FARC infested Apure, small Cojedes, and the agricultural power houses of Guarico and Portuguesa. Today this still holds and the only trouble Chavez faces is from dissidence, not from a real civilized opposition as in other Venezuelan places: what we see is the local caudillo facing the Caracas one. That two of thee local caudillos are women does not change a thing: we are in Doña Barbara territory.

Apure

This state which is half under water at rainy season is also a state where the FARC roams free with the complicity of the Venezuelan army. Corruption, traffic of influence, violence and blackmail are the rule. The sitting governor, Jesus Aguilarte, running for reelection is a Chavez faithful and seems set to win again. Opposing him there is a woman, Miriam de Montilla, who used to be a Venezuelan senator before Chavez and whose husband was also an ex-governor. But to add to their troubles an ex governor, Lippa, who was barred from running by Clodosvaldo is not happy with the situation and was running his won man. This division also appears at town hall levels. Safe in the Chavez column.

We can note that it is a state were the agrarian vote goes heavily to chavez: the SI took 61.2%. And yet, the only serious town, San Fernando, gave the SI only 53.5%. Thus even in deep chavista states, the following is not as blind as one would think.

Cojedes

Here amazingly an ex governor, beaten twice, is trying to make yet another comeback. Galindez is helped by the fact that the outgoing governor, reaching term limits, is quite a scoundrel. Not only Yanez Rangel is rarely seen in the state since his reelection, but he is involved in many of the scandals surrounding the maletagate of the 800,000 USD. Apparently that does not seem to be a problem for local chavistas who are happy supporting the candidate that Chavez picked up from the primaries as no one managed a clear victory. Teodoro Bolivar is the name. Early in the campaign Galindez seemed to be ready for a comeback but it seems that misiones and paybacks are stronger and lately the race has been close. I suspect that too many people who depend too much from the state after a spat of rural invasions in 2004 (El Charcote was in Cojedes) will vote for Chavez appointee anyway. Not even the collapse of the Olympic villa at San Carlos barely two years after completion seem to upset the local chavistas. Like Apure, Cojedes is a rather spineless state where people might be getting what they deserve after all. Though like Apure we can also observe that the state cpaital and only city of sorts voted ten points less for the SI than the state average.

Although some polls still give Galindez the edge I just do not see it. Chavez does not even bother visiting the state. Maybe the polls reflect more the situation of San Carlos who could well go to the opposition.

Guarico

We now start discussing three interesting states where the main challenge to chavismo does not come from the opposition but from a dissidence. Guarico was held by the PPT governor Manuitt. He certainly was no prize, accused of covering up a violent police who might have killed more than just criminals. A National Assembly was even called to investigate but apparently Chavez himself ordered to stop the proceedings. As such Manuitt escaped what seemed to be a sure expulsion. But that was not enough to garner his gratitude. When Manuitt announced that he wanted Guarico to remain PPT, preferably through a relative of his, Chavez said no and send as PSUV candidate the ineffable William Lara, ex communication minister, a big failure in his own right. This was a mistake as the PPT and MVR almost got the same amount of votes in 2004 (PODEMOS got much less votes in Aragua and Sucre than the MVR in 2004).

See, Lara might have been born in El Sombrero of Guarico, but all his life took place in Caracas. He even run in 2000 for Miranda governor, and was elected Miranda representative! In Guarico the llanero mentality does not forgive easily such transgressions, even if they come from the hand of Chavez. That he was a lousy communication minister has not helped much his credits in the area. Yet, Chavez has spent enough time campaigning in Guarico with Lara in his shadows that polls are now too close to call in the state.

The Manuitt camp was of course unwilling to accept such a poor candidate as Lara who discovered Guarico as he campaigned. So since Manuitt was subject to term limits he decided to run his daughter in the PSUV primaries. She barely lost, called fraud and decided to run on her own. All smiled but the girl did manage a decent campaign and now we do not know who will win the contest (though she was leading for a while). I saw Lenny Manuitt on TV. I must say that I was favorably impressed: her father might be a crook and an uncouth character but he educated his daughter, a young, articulate, appealing candidate. She has raised above the PPT ideology and has managed to present herself as the true local candidate with the required pragmatism, which might have hurt her among the PPT voter who is more attached to Chavez rhetoric of class warfare.

The opposition without anyone to field thought it was pulling a fast one by running Reynaldo Armas, a local folk singer. But his candidature floundered fast and no poll gives him more than 20% of the vote. In fact a case has been made that if he were to withdraw Lenny Manuitt would win without trouble. That Armas candidacy will be in fact a major set back for the opposition who proves that in the Llanos it cannot even find suitable candidates. Guarico will remain chavista or PPT for at least another 8 years before the opposition can mount a viable challenge.

There are two urban centers of interest in Guarico: the state capital San Juan de los Morros who the opposition barely missed in 2004, and Valle de La Pascua one fo the few cities truly deep in the Llanos (San Juan de Los Morros, as the name indicates is on the hilly edge of the Llanos). As it is now a routine observation, these two cities gave less to the SI than the rural areas of the state. Could one be won by the opposition? A must if it wants in 8 years form now mount any challenge. The odds are not clear. The opposition might have managed unity in more than half of the districts which should give it an edge against a deeply divided chavismo. But that same divide might encourage people not to waste their vote and chose Lenny Manuitt allies as a lesser evil. By the same token the opposition might be wept away at the local legislature. Truly, Guarico is one of those text books cases on how not to opposer the chavista machine.

Portuguesa

Portuguesa used to be the breadbasket of Venezuela. But it is not that prominent anymore. Once controlled by the MAS, Portuguesa was an easy pick for chavismo even if it had to rally first Antonia Muñoz who run for the constituent assembly as an independent and got elected. Chavismo decided wisely to recruit her instead of fighting her then and she has served as governor for 8 years. But her succession by a personal appointee of Chavez, Wilmar Castro Soteldo, is far from certain. Not to mention that the second term of la "negra" Muñoz was less than stellar.

The story here is that the PPT is also running a dissident candidature through Bella Petrizzo. Early in the campaign she run quite well and was ahead in the polls. Portuguesa was in fact the state where Chavez started getting personally involved in the campaign and attacked savagely the PPT and the Communist Party who also support Petrizzo. It seems to have made an effect: the imposed candidate of Chavez has overcome Petrizzo in polls, and yet he is not certain of success. The division between pro Chavez rank is deep enough that the opposition candidate, Jobito Villegas, who was not given a chance three months ago could squeak by in what would become a major upset of the campaign since Portuguesa is considered perhaps the most chavista area of Venezuela.

At this time Portuguesa is perhaps the most unpredictable state. Even if the Chavez man is ahead in the polls, he is not comfortably ahead and a sudden shift of voters towards Petrizzo o Jobito could well create a surprise. Interestingly it seems tha tthe divisions are carried at municpal level making the race all over the state very voaltile. Still, in the end I think that Wilamr Castro will prevail, though I am not so sure for Guanare and Acarigua.

Barinas

I saved this one for last because it has the highest drama content: Chavez own brother is in trouble by a dissident chavista who has made his name by denouncing how the Chavez family got rich in Barinas. The struggle has become so deep, the participation of Hugo himself so marked that the opposition candidate who was thought to have a chance at the beginning had been relegated to a distant third.

Chavez decided that his father should be succeeded by his brother Adan, an academic ideologue who is credited with having brought to Hugo Fidel ideas. Maybe, but Adan is a dour bureaucrat totally lacking charisma. Still, compared to his other brothers deeply involved in “business” Adan was somewhat more presentable. Unfortunately in Barinas everybody knows that the Chavez had nothing a decade ago and that now through “prete noms” (testaferros) they have become among the biggest landowners of Barinas. The rest of Venezuela might not care but in Barinas they do.

The dissident Julio Cesar Reyes comes from a group of folks deeply attached to chavismo as a way to change things. But not like the Chavez getting rich, and thus the split. Amazingly through the campaign his name has grown and now he is reported as leading in some polls. This should not be a surprise anyway, he is the outgoing mayor of Barinas, a district that contains more than 30% of the state population and which reflected him in 2004 with 90% of the vote. Needless to say that a defeat of Adan in Barinas would be the major news of the election outside of Venezuela.


Conclusion

Either through chavismo or dissidence the Llanos are no hunting grounds for the opposition except for the occasional town hall (though a couple of important ones could fall). This is not really surprising as Chavez misiones and “business” have favored that region more than any other. However what is interesting to observe is that Chavez has taken this region so much for granted that he imposed three candidates that had no real roots with the area except form being born there: William Lara, Adan Chavez and Wilmar Castro. His act of arrogance could end up costing him much because even if he wins in the three states he would have created a powerful dissident movement that could become the root to a new opposition branch that would be more united and organized than the current crop. To be continued for sure.


-The end-

Demagoguery in Aragua: another day of economy wrecking for Chavez

Chavez needs to show that he is cured, that he is in charge.  What better than to go to next door state Aragua (short ride in copter) to expropriate a few farms and make job promises that cannot possibly held, not here, not in Brussels, not in D.C.

14.000 hectares (35.000 acres) of farmland expropriated, and Agroflora

The naked Emperor: when a leftist icon is abandoned by the working class

Richard Prieto, head of a major Polar Union

Last night I kept reading the rather fascinating tale of Domingo Alberto Rangel.  The very aged leftist, subversive of the 50ies and 60ies, one of the founder of the Venezuelan MIR, is now settling accounts by doing among other things a short book in the form of a lengthy interview by Ramon Hernandez.  I am not going into the details of this book which deserves a full post when I am done with it.  Suffice to say that for Rangel Chavez has been a fraud and that in his opinion he represents the fascist wing of the army.

The point is that this morning El Nacional right on cue brings us the fascinating interview with the president of the Ceveceria Polar Union, that is, the main beer maker of Venezuela and as such one of the main Unions within the Polar group, which has the largest Unions of the Venezuelan private sector.  In this interview we can see how far has progressed the waking up of the working class of Venezuela as to the fraud that chavismo has been all along.  Better late than never we could add.

Chavismo inner trouble might be major than expected: rats abandoning ships or democracy revival?

The day surprised me with the announcement that Henri Falcon, Lara State governor, decided to abandon Chavez party, the PSUV.  But he did not go to the opposition, he requested to enter to the PPT, a Chavez/PSUV junior coalition member, giving them a rather poisoned gift.  Timeo danaos et dona ferentes...