What are the limits of mental gymnastics?

Apparently there are no limits to what a neocommunist mind can do in order to distort, trash and destroy the idea of free market capitalism. The most recent example comes courtesy of chavecista interior and justice minister Tarek el Aisammi, who stated yesterday on the government's TV station (VTV) that our police and jail system models were developed from a capitalist point of view.

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Lies, dammed lies, and statistics! Each piece of government statistics has to be suspected a priori. Firstly for being a statistic and secondly for coming from the government (from any government), for the state, being an institution based on lie (that security cannot be provided by private non-monopolist parties), is particularly inclined to lie.

Case in point: the Venezuelan government and its unemployment statistics. Unemployment has been supposedly on decline for several months. What government statistics don't say (or at least I haven't been able to find on the INE web page) is how many of those currently "employed" are working for the government. I know that perhaps with a little more effort I can find the numbers, but for the moment I will conform myself with suspecting that a large number of currently "employed" people is working directly or indirectly for the government and its numerous "missions" (social programs), as the government is happily celebrating the drop in unemployment. But what's the problem with this? That by definition government employment is not production but welfare, and therefore represents net consumption of resources.

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Journalist Marta Colomina thinks livestock farmers are heroes to whom statues shall be erected. But what "opposition" farmers want is for Venezuelan people to pay more for milk and cheese. That'd be no problem, since we all want our services to be paid as expensive as we can, but the methods chosen by Genaro Méndez (president of the Venezuelan Cattle Farmers Federation, FEDENAGA) are plainly immoral, since he wants to use the power of the government to curb imports of milk into the country.

As it usually is the case, big business can easily be capitalism's and free markets' worst enemy, but usually they are not as candid with their intentions as Mr Méndez is being here.

So, what are they asking the government to do? (this part was not quoted in the Venezuelanalysis' piece, so you have to go Cadena Global if you want to read in full)

We are asking the government to suspend immediately milk imports, at least during two weeks.

And why? Pretty simple indeed:

These white [hard] cheese has commercialization problems, because there is imported cheese which is of even better quality and cheaper [than Venezuelan cheese], due to [the overvaluation] of the preferential dollar and because they enter the country without paying any kind of tariffs.

You see, Venezuelan cattle farmers feel they cannot compete with cheaper and higher quality milk and cheese from abroad, so they decide they will force, at the point of a gun, the people into buying more expensive and lower quality Venezuelan milk and cheese. When the issue is about spoiling Venezuela's poorest FEDENAGA and Méndez can easily agree with the neocommunists in power, despite being allegedly from the "opposition".

And these are opposition heroes? What are they opposing? Certainly not socialism, nor banditry against the poor. But, Oh, well that's the sad state of Venezuelan politics at this point.

You can read Mr. Méndez's statements in full (in Spanish) via Venezuela es Noticia.

 Venezuela, Economics

Neocommunist commentators and pundits live their lives trying to convince Venezuelans and the world of two factoids about Venezuelan-Colombian relations:

1. Colombia and Álvaro Uribe are militarist and, therefore a menace to regional peace.
2. Venezuela and Hugo Chávez are peaceful and loving revolutionaries.

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Long time readers of my spanish blog know that former finance minister Rafael Isea is an ignorant of economics. There would be absolutely no problem with that (many people is ignorant about many things), except that Rafael Isea was Finance minister of Hugo Chávez for some months. So, no wonder the Venezuelan economy only grows because of monetary pumping and we're heading towards disaster.

But besides being an economic ignoramus, Rafael Isea is a big time hypocrite. Right now Isea is running for governor of Aragua state, and in the middle of the electoral fight he's criticizing current governor, Didalco Bolívar (another socialist from one of the coalition parties which used to support Hugo Chávez, PODEMOS) for using the regional police to provide security during the internal primary elections of his PODEMOS party. That's all well and dandy, public mony should not be used for private party events, but the problem is that Isea himself didn't complain when the National Electoral Council (CNE) put all its resources behind the primary elections of the Venezuelan Socialist United Party (PSUV), the president's and Isea's party.

Politician should be consistent and we should put pressure on them, so that they stop flip-flopping so blatantly. If Isea is against the use of public money for particular party events, then he should be against all use and not only of that his political opponents take advantage of.

Internal primary elections are an entirely private matter, and as such, they should be completely privately funded by the party members. The state should not intervene one way or the other.

But well, asking consistency from politicians might be a lost cause these days.

 Venezuela, Politics

On July 17th, Hugo Chávez appeared once again on national television (the so called "cadenas" by which every open radio and TV station is obliged to broadcast his messages) and this time he directed his anger against the idea of decentralization and federalism. As usual the argument Chávez used was flawed on several counts.

Chávez said (and I'm paraphrasing here) that decentralization of health services was an evil idea, since mayors don't have the power of the budgetary resources to properly take care of such services. Therefore, Chávez continued, if hospitals were to be transferred to the municipal jurisdiction they would be all closed in less than six months. And this is the rationalization from the neocommunist leader for the massive power transfer in the centralist direction that we have witnessed during his almost 10 years in the presidency.

Such an argument is, of course, a logical fallacy, a circular argument. Mayors don't have budgetary resources to take care of local health systems, since the central government sucks like a leech every last bit of wealth produced in the provinces and then returns a meager amount to the mayors and governors (which is called situado constitucional).

Under a federalist system, the individual states would be in charge of tax collection in order to take care of health services, and only then would pay the central government its "share" of the revenue, to maintain the general and common services, such as national defense. Every municipality or state would presumably have differing systems, providing a variety of services, better tailored to the local needs and customs of the inhabitants, who are paying the taxes.

Of course, this doesn't mean a federalist public health system should be our final goal and ideal, since being still public it would suffer from the chronic problems of economic calculation when private property is not allowed to exists. This would still be a suboptimal system. The difference would be that under this federalist and decentralized system, the actual damage a bad administration or individual could cause would be strictly limited as compared to the damage the same person can cause at the helm of an oversize central government.

 Venezuela, Politics, Economics

When wealth producers have to ask permission from and wait for parasites in order to produce, it is to be expected that little wealth will be produced.

Venezuelan builders have to wait for up to one year for building permit from the environment minister, according to a report by daily Últimas Noticias.

Consider the following: the home builder already has the capital available, it has the land where the building will take place, it has the workers to do the job and it has the raw materials (although according to the same report, building materials are becoming more difficult to find and secure, due to widespread price controls), but it cannot start building because it has to satisfy the whims of numerous parasites in the environment minister.

A system like this, which cripples production and is prone to be exploited by corrupt officials has to be abolished as soon as possible. Yes, abolished, neither reformed, nor substituted, but completely and forever abolished from the face of the Earth. Or at least from Venezuela.

 Venezuela, Economics

General Baduel appeared several days ago on national television trying to alarm everybody and to convince the gullible that there's an urgent need to get rid of Hugo Chávez. Furthermore, of course, Baduel took advantage of the opportunity to promote his book Mi Solución (My solution) and to denounce the ruthless persecution he has been put under by the chavecista government, since his memorable speech at the Military Academy in last July (where he denounced the path towards socialism).

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Someday somebody should compile a Venezuelan Dictionary of Economic Idiocy. One of the first entries should go to the idiocy spouted by Agriculture and Land minister, Elías Jaua, in regards to one of the possible solutions to the inflation problem.

Jaua tells us that one way to fight inflation is haggling over prices:

Venezuelan Agriculture Minister Elias Jaua asked consumers to start bargaining over prices with retailers to try to curb inflation.

The most important help that people can give us (in fighting inflation) is that they defend their income. We can’t get used to buying everything at any price, Jaua told reporters . If we all start haggling over prices, speculators are going to start feeling pressured, Jaua said.

He also said that

If they sell me tomatoes at 6 BsF today and at 12 BsF tomorrow, the fault does not lie with the government, no, the government is not at fault, because it's doing all the effort in order to have more production (...)

But Mr. Jaua, the fault does lie with the government. Inflation is always an entirely monetary phenomenon and it doesn't matter how much people haggle over prices, so long as the streets continue being inundated with "monetary liquidity", prices will kee going up. And the only one with the legal power to create money is the government through its central bank.

Of course, I will not deny that you can get better relative prices if you haggle a little bit, but this is irrelevant when the absolute level of prices is rising. Any gains from haggling will be overshadowed by loses through monetary inflation.

 Venezuela, Economics

If you believe, as many others, that on the wake of the Dollar debacle, the Euro might be some sort of safe haven, think twice. As the Dollar, the Euro lacks any tangible backing and any limitation in the amount that can be created ot uf thin air.

In its race to avoid a disorderly Dollar collapse, the European Central Bank is devaluing the Euro at an increasing rate, under the illusion that if both currencies lose value at similar speeds nobody will notice.

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