Tuesday, January 09, 2007

What Venezuelans voted for: socialism of the XXI century (a.k.a. rehashed communism)

The other day I was musing about how angry Chavez looked in spite of his 63% victory of December 3. That is, it seemed that for a third term victory he was rather upset at getting only 63% of the vote share. Well, today we learned that he meant business and that he is going to screw real good the 37% that did not vote for him (never mind those who did not vote at all).

The occasion was the swearing in of his new cabinet. It turned out to be a major overhaul of his cabinet, now much more "radical" than before, and also three more than before for a grand total of 27. Anyone remotely looking professional (that is, possibly slightly moderate or not nonsensical) has been removed. Now, more than ever, devotion to the beloved El Supremo is the norm. And never mind of course the now historical promise of cutting down bureaucracy by cutting down the number of cabinet positions to 12 max ... but more about this later in the post.

During the swearing-in ceremony (note, Chavez has not been sworn in yet for his new term but who cares...) Chavez gratified us with the specific announcements that indicate to us what that socialism of the XXI century is all about (remember, it was kept very vague during the campaign; tonight we know why). I will start with the executive resumé: it is more of the same failed socialo-communist models of the XX century; and as they were, totally doomed for failure. Except that the price of oil might slow down the collapse for a while.

I could give you the catalogue with abundant comments but that would be tiresome. Just three points that will make the situation clear and explicit for the patient reader. But before you read it is very important that you keep in mind that THE REAL REASON for everything is to create a power structure that will ensure that Chavez will say in power until kingdom comes, or he dies, whichever comes last. If you do not get this, then you will not understand what follows and only risk mental confusion.

The enabling law. This curious structure of Venezuelan legal procedure was a courtesy of sorts that was granted to any new incoming administration, EVEN if this one had not obtained a congressional majority. That special law granted the new president a limited amount of special powers that allowed him to emit a series of law-decrees. That is, certain laws were emitted by decree without parliamentary procedure on certain very specific topics. What is incomprehensible is that holding a 100% majority in the National Assembly who is now a mere rubber stamp for any law which is usually written by some governmental dependency, Chavez feels that it is important he gets a vast array of special powers to emit a series of decrees. Are the National Assembly appointed chavista (calling them elected strains intelligence) so lousy that Chavez has no patience with them? Is the country crisis so important that we cannot even consult with the people in this so called “participatory democracy”?

We now get the full measure of the man: no more participation not even from his very own parliament. Direct decrees and fuck this!

Why does he do that? Because he cannot help himself but also because the country is nearly bankrupt. After giving so much money away to buy his election, he needs to get back things under control to try, desperately, to erase the very highest inflation of the continent and to intervene all the economic factors that will allow him to moderate inflation (and purge more "enemies"). That is, any debate on certain economic regulations that might or might not be needed would risk to bring forth very inconvenient facts and data. Such as, say, the slow decline of oil price as Venezuelan oil production is also going down.

Nationalization of the Venezuelan telecom, CANTV.
This might be a little bit trickier to understand but stay with me and you will find it obvious.

CANTV used to be state owned. Then to obtain a phone you needed to get on a waiting list and it could take a year for you to get a phone number. If you knew someone and were willing to pay a significant bribe, well you could get it in 6 months. And of course long distance calls were near impossible, and multiple phone lines for business a dream. Some people would not move because they could not carry their phone with them and had to wait until their new home was connected. I remember that my first job had about 300 workers and only 4 phone lines. You had to write down your name on a list to get a phone call out and forget about getting emergency phone calls from home at work. Today the average wait is less than a week, and you can get as many phone lines as you are willing to pay for. Forget about that in a few years, once Chavez nationalizes CANTV.

But still, this would seem stupid. Why nationalize the basic landline company when there are 2 other private cell phone companies who are starting land lines projects, wireless internet project and what not? Not to mention cable TV... Well, the reason is to scare people, to bring a discrete terror. Everyone knows that in Venezuela landlines are currently monitored by the government at will. CANTV has enough employees and enough chavista employees within that the government can monitor whomever it wants without requiring a court order. True, you could avoid CANTV by subscribing to the other private concerns (as long as they remain private) but the fear factor will settle. Thus “conspiracies” as well as legitimate political activities or business will slow down. Who will discuss a juicy business deal if s/he thinks the government is listening too and could send you the IRS/SENIAT to your office a few weeks after the deal is concluded? No one will admit anything personal over the phone…CANTV or not…….

Nationalizing energy concerns. Whether companies were private (Caracas utilities from the very start, now AES owned) or were privatized or are mixed deals (the heavy oil of the Orinoco tar sands), they are all to become property of the state. Of course this will fail to produce more oil, will conduct to indirect privatization no matter what as Venezuelan oil production falls while budgetary needs increase.

As for electricity. Most electrical providers within Venezuela are state owned, and deficient in general. But the private Caracas service is good. So good compared to the other ones that it brings to mind an anecdote. About three years ago I wanted to buy an AC system multi split, that is, a single compressor but 2 separate chillers for two different rooms. I was in Caracas looking for prices at a reputed merchant. When the guy realized I wanted to buy it for my place in Yaracuy HE REFUSED TO SELL IT TO ME. He told me that the electronic controls of the multi split systems were too delicate for use outside of Caracas, that the amount of claims he had received had forced him to sell these devices only to the people who got their juice from AE&S. No comments.

So, why does Chavez wants to nationalize things that work well when all the country knows that the state owned utilities are woefully deficient? For one simple reason: patronage. How patronage works? At least at two levels. First, these industries are big employers. So he can fire all the workers that appear in the Tascon list and replace them with bona fide chavistas. After the “rojo, rojito” comment you know it will be like that. Then he can keep packing the joint with chavista faithful. Since service and efficiency will not be factors anymore, what is the problem with paying three guys instead of one? With an occasional devaluation you can afford these meager pay checks for that sector, who in addition would be so scared to lose that flimsy job that they will vote for Chavez gratefully for ever and ever.

But it also works in another form of patronage. AE&S is always complaining that the barrios are stealing electricity from Caracas grid. The Caracas regular housing of course must foot that bill by being overcharged for the stolen electricity that the government refuse to force barrios to pay. Now the barrios will be able to steal all what they want, and be happy and vote for Chavez, while the middle class might get a lousy service but will pay less at least. In the culture of chavista mediocrity, this is thought as getting votes for Chavez from the Middle Class.

Socialism? Indeed!!!! What we are promised is the inefficient form of socialism. No social democracy here, pure inefficient socialism, the one who paradoxically make the people ever more dependent from the state. Exactly what Chavez needs to stay in power for ever. Oh! And they were other announcements but the smart reader of this blog got the point.

I thus hope it as all clear now. We are waiting for the sigh of relief of the 63% jerks who voted for Chavez as reality is about to bite them in the ass. Half of the "novelas" (soap operas) in Venezuela are about to go, public utilities already a mess are about to get worse, oil income will go down. But Chavez has mounted a great show, sure to give him a lot of front pages around the world tomorrow, and while people start theorizing uselessly about this vapid socialism of the XXI century nobody will look at the financial mess of Venezuela and how Chavez is preparing a lot of controls to avoid facing the hole he dug himself.

Footnote (on purpose). The OAS secretary was also deeply and disturbingly insulted by Chavez, but for once I agree with Chavez. Insulza has been taken for a ride and now he knows what Venezuelans have been telling him all along. Chavez has used him well, got extreme leniency for all his electoral truancies and now that Insulza is of no more use for him he is discarded, just as Chavez discards anything on his way. Let's see if there is some spine in the OAS, or it might as well close as an all but useless institution that has accomplished very little in its undistinguished history. Good riddance of Insulza (who can probably forget a run for the Chilean presidency) and the OAS.

But Insulza could find a way to redeem himself soon: after all, there is more to come as the Bolivar governor is already openly calling for newspapers take over. Even the Guardian of London is noticing.

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