More Fun with Price Controls

It was with astonishment that The Economist surveyed Hugo Chávez's first five years in office: "In the five years to 2003, Mr Chávez's performance was disastrous. The proportion of households below the poverty line increased by more than 11 percentage points...It was the first time since data were collected that poverty rose even as the oil price did too."

But in the past few years, the Venezuelan economy has undergone significant growth, with an influx of oil money resulting in 18 percent growth in 2004 and 10 percent in 2005 (though the economic expansion has tapered off in recent months). Back in 2006, Latin American studies Professor Michael Shifter, who is somewhat sympathetic to the Chavism, said that while the economy has improved, and "record oil profits...are funding social spending, [Chavez's] initiatives have yielded only very modest gains." In a previous piece on the caudillo of Caracas, I quoted former chief economist of the Venezuelan National Assembly Francisco Rodriguez on the much-heralded decrease in poverty: "It's normal for poverty to decline during economic expansions and that the decline under Chávez is not unprecedented—indeed, it is smaller than the decline observed during similar periods in the past."

And despite oil hovering at around $100 a barrel, the economic situation seems to be getting worse. This is what one must endure if one wants to buy "subsidized food" in the city of San Antonio de Tachir:

The New York Times' excellent Latin America correspondent Simon Romero has a must-read (well, for those interested in such things) on Chavez's eroding popularity. A sample:

While Mr. Chávez remains Venezuela's most powerful political figure, his once unquestionable authority is showing signs of erosion. Unthinkable a few months ago, graffiti began appearing here in the capital in January reading, "Diosdado Presidente," a show of support for a possible presidential bid by Diosdado Cabello, a Chávez supporter and governor of the populous Miranda State.

Outbreaks of dengue fever and Chagas disease have alarmed families living in the heart of this city. Fears of a devaluation of the new currency, called the "strong bolívar," are fueling capital flight. While the economy may grow 6 percent this year, lifted by high oil prices, production in oil fields controlled by the national oil company, Petróleos de Venezuela, has declined. Inflation soared by 3 percent in January, its highest monthly level in a decade.

Add to this Exxon's court-approved freezing of $12 billion in PdVSA (Venezuela's state oil company) assets and widespread food shortages (those pesky price controls again!) and it looks like Chavez's Bolivarian revolution is, at long last, in decline.

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  • ||

    Caption Contest!

    "Hey, anybody hungry? I've got half a sandwich in here, and I'm stuffed from the steak I had earlier."

  • ||

    Oh, thou calumnious pundit!

    Hugo is the best thing to happen to Venezuela since sliced bread. If they had bread to slice, that is.

  • ||

    From the NYT link -
    This fear is reflected in a statistic that is illegal to publish in Venezuela: the black-market value of the strong bolívar, or bolívar fuerte, put into circulation at the start of the year to replace the old bolívar. Its value hovers around 5.2 to the dollar according to currency traders here, less than half at the official rate, 2.15.

    I've traded currency on the "black market" in many nations over the years. The differential is Typically +5-15%. In Venezueala, it's grater than 100%. The implications are enormous. Would you put your bolívar fuertes in the bank under those circumstances?

  • ||

    Caption contest entry:

    "Play Freebird!"

  • anon||

    Let's get this over with:

    "at least he was democratically elected"

  • ||

    The proportion of households below the poverty line increased by more than 11 percentage points...It was the first time since data were collected that poverty rose even as the oil price did too."

    Wow. I never saw that coming.

  • ||

    Unthinkable a few months ago...

    Oh, I can think of somebody who was writing YEARS ago that Chavez's popularity was going to decline and threaten his political position.

    "Nobody could have foreseen" that Venezuelans would turn against Chavez when his policies didn't produce results.

  • Truth to Power||

    This is a replay of Cuba, where a revolution that promised to transform the lives of an oppressed people were crushed by pressure from US capitalists.

  • ||

    "at least he was democratically elected"

    ...and democratically re-elected. And democratically denied his desire to expand the power of his office.

    Sometimes democracies elect bad leaders. Then, after a little while, they elect different leaders.

  • ||

    Sometimes democracies elect bad leaders. Then, after a little while, they elect different leaders.

    Wait a minute, joe. Which country are you talking about? And, I would probably insert the word "bad" between "different" and "leaders" in your second sentence.

  • ||

    "...and democratically re-elected. And democratically denied his desire to expand the power of his office.

    Sometimes democracies elect bad leaders. Then, after a little while, they elect different leaders."

    What Im not completely sure about is that Chavez will LEAVE office democratically. That remains to be seen. Five more years to go... a lot can happen until then.
    The truth is everything is going down the crapper here. And HAS been for a long time now- something the Chavistas and Chavez apologists are only NOW beginning to concede...

  • ||

    "I've traded currency on the "black market" in many nations over the years. The differential is Typically +5-15%. In Venezueala, it's grater than 100%."

    Before the Constitutional Referendum of December 2007, the black market US Dollar reached Bs 6,800 and the Euro almost reached Bs 10,000.

  • ||

    This is a replay of Cuba, where a revolution that promised to transform the lives of an oppressed people were crushed by pressure from US capitalists.



    I know that you are probably a sarcastic troll... but on the chance you aren't, I have a few questions:

    Just how did U.S. capitalists crush the Cuban revolution? Castro and the Communist have been in power for quite a long time now.

    If it is a matter of the embargo making Cuba poor, how does that work? Cuba trades with everyone but the United States, and what model of socialism requires free trade with capitalists exactly? Shouldn't Cuba be more wealthy because it doesn't engage in trade with an exploitive capitalist nation? And if the capitalists are so down to oppress Cuba, why are they the ones doing the most lobbying to end the embargo?

    Other than throwing out the accusation as a retort to people saying "Damn, Cuba kinda sucks", no one ever bothers to explain how exactly the U.S. is "opressing" Cuba.

    Sometimes democracies elect bad leaders. Then, after a little while, they elect different leaders.



    How do you carry out free elections without a free and independent press, and where government employees are required to vote for the party in power or lose their jobs?

    Do you believe that popular elections are the same as democracy, joe?

  • B||

    "...and democratically re-elected. And democratically denied his desire to expand the power of his office.

    Sometimes democracies elect bad leaders. Then, after a little while, they elect different leaders"

    Just goes to show you there is always at least one person per message board who is fucking dumb enough to believe that the elections in Venezuala pass the smell test. How much evidence has to be brought to light, how many people have to come forth and state for the record that shit is fixed, how many incidences of intimidation have to occur at the polling place, how many times does Chavez have to call his opponents traitors before some people keep quit trying to convince the rest of us, you know the people with IQs above fifty, that Venezuala is a democracy? I guess shutting down TV stations, silencing all other forms of critical media by making it illegal to criticize the president, remaking parliament into a one-party system for all intents and purposes, appropriating entire industries at gunpoint, etc. etc. are all hallmarks of a liberal democracy. Joe, you are a fucking moron, end of story.

  • ||

    I'm not completely sure about that either, rana, although the outcome of his referendum loss gives me reason for optimism.

    Either he acceptse electoral defeat and the loss of power gracefully, or the Venezuelan political system is strong enough to keep a power-hungry president from seizing dictatorial powers, or both.

    something the Chavistas and Chavez apologists are only NOW beginning to concede It's always that way. We had people in this country who were still declaring in the summer of 2007 that things were going swimmingly in Iraq, and that people only thought the opposite because of the media.

  • ||

    Rex,

    You do know that Hugo Chavez recently lost an election, right?

  • ||

    Aw, whattsamatter, "B," I kicked your ass too many times as "Chavez is a Thug" that you needed to invent a different screen name to live down the shame? I guess the ease of finding idiotic comments of yours from previous threads just made your trollery a self-refuting process, eh?

    And seriously, "B?" You came up with "B?" That's actually pretty smart, since a search on your handle is sure to return thousands of completely unrelated comments.

    Yeah, I'm so fucking dumb I was the only one who stated, before Chavez's lost election, that he didn't own the electoral system and Venezuela's democracy was strong enough to hand him a defeat.

    Maybe you should adopt a more accurate handle, like PWNED, because at this point, I've done the cyber-equivalent of stuffing your head and mounting it on my wall.

  • ||

    B, elections HERE don't even pass the smell test.

  • dhex||

    i don't really know why people get their panties stuffed over this. i mean it sucks for regular venezeulans in the street, but beds are made, people lie in them, then they change the sheets eventually.

    people are often more resilient than any top-down view of society gives them credit for.

  • ||

    You do know that Hugo Chavez recently lost an election, right?

    "referendum" you mean, right?

  • ||

    Yes, the election was a referendum on the extension of executive powers, and some other stuff thrown in to sugarcoat it.

    Right.

  • ||

    You do know that Hugo Chavez recently lost an election, right?



    Just because you lost an election, doesn't mean they were free or fair or democratic.

    What was a loss by a thin margin, would in a free and fair election be loss by a landslide.

  • ||

    Just because you lost an election, doesn't mean they were free or fair or democratic.

    It's pretty good evidence that the statement "Venezuela is a dictatorship, and Chavez a dictator" is false.

    What was a loss by a thin margin, would in a free and fair election be loss by a landslide. And this is based on your extensive polling in the Caracas suburbs?

    Yeah, they could have stolen the election, but they decided to lose by a narrow margin instead. That's exactly how "Potemkin democracies" work.

  • ||

    I was in Caracas at the end of 2007, and Maracaibo for New Year's. First visit since the end of 2006. One thing I noticed for the first time was on just about every sign or poster for Chavez, on almost every "Por Ahora", there was graffiti saying "NO" or "No es No" or especially "no no no no no no no no no". The pro Chavez posters were obviously professionally made, while the "no" was graffiti from whoever lived there.

    This was in the very poorest neighborhoods, once Chavez strongholds. It's like going to an evangelical church and seeing an anti Bush poster.

    So yes, Venezuela is still a democratic country, with an authoritarian nutcase trying to make it a non-democratic one. The fact that it remains so is solely due to the courage and convinction of the ordinary Venezuelan citizens, particularly the students who faced down armed thugs and went directly to the barrios and polling places with their message.

  • ed||

    Caption contest entry:

    "Whipping Post!"

  • ||

    I still say that Communism, in the 21st century, is a CIA program.

    You have a country like Venezuala, with lots of oil, and the capability to be a real powerful economic competitor to the United States in the 21st century.

    You fund Communists in that country until some stereotypical buffon rises to power. He then proceeds to waste oil revenues, destroy the economy, all while at the same time continuing to ship cheap oil to the United States. His anti-Americanism is also a bonus, because it gives a nasty easily identifable enemy that the CIA can point to when they want to drum up funding or support or hysteria.

    At the end, the U.S. still gets the oil, the Communist shuts down any sort of opposition, so that when the oil runs out then U.S. corporations can ruthlessly exploit the now improvished citizens without worrying about independent labor unions, or a free press, or anything like that.

    And the best part of it, is that the Left, who are typically the most paranoid about CIA plots and "American Imperialism", will defend the pseudo-Communist CIA puppet no-matter what he does (so long as he makes empty anti-American gestures every once in a while), so you really don't have to worry about any blow back. You have turned your CIA puppet into Che Guavara.

  • classwarrior||

    As if we never see such lines when stores are having major sales events.

  • ||

    Rex,

    You are joking right? (Its hard for me to detect sarcasm when reading some of these posts because a few are actually serious).

  • ||

    "As if we never see such lines when stores are having major sales events."

    Do you also see armed military at these sales events too?

  • ||

    I like Rex Rhino's theory. It's almost certainly not true, but it SHOULD be.

    It's just that good.

  • ||

    Rex's tin foil hat is just a wee bit too tight.

  • ||

    Tachira is right along the Colombian border. Notice the armed militia with the fetching red berets are all on the Venezuelan side.

  • ||

    "One thing I noticed for the first time was on just about every sign or poster for Chavez, on almost every "Por Ahora", there was graffiti saying "NO" or "No es No" or especially "no no no no no no no no no".

    This is true. What is worrisome is all the Pro-Chavez propaganda you still see. A banner about 50 feet wide and 10 feet tall hanging over a PDVSA oil refinery which reads: "Patria, Soliciasmo o Muerte", huge billboards that read : "Por ahora" (the biggest one you can see as you drive into Caracas, a few minutes from the airport, just to let the tourists know who is boss). And many more.

  • ||

    As if we never see such lines when stores are having major sales events.



    I have never seen such lines when stores are having major sales events. No.

    Generally though, you would expect long lines to occur when their are shortages. I have seen lines (of about 100 people, nothing like in Venezuala) for items like concert tickets, or for limited edition autographed CDs, etc. - Things that the supply is far smaller than the demand, yet things that can't be sold at an extremly high price because of bad publicity (if a rock band sells tickets for $1000.00, often times fans will get very upset and angry, even if $1000 should be the going market price... so rock bands often sell tickets far below fair market value. Or in the case of autographed CDs, the band will look like dicks if they charge for an autograph, even though the market value for an autographed CD is far greater)

    Lines generally mean that there isn't enough of something for everyone... so people line up to get it, first come first serve.

    If you see people lining up for basic food items, you would expect that means that there is an extreme shortage of basic food items. Otherwise, people would just come later when it is less crowded.

    You are joking right? (Its hard for me to detect sarcasm when reading some of these posts because a few are actually serious).



    If you mean that I am 100% certain that Chavez is a CIA puppet, then no, I am not 100% certain. I haven't seen any conclusive evidence, and so I can fully accept that I might be wrong.

    I am not being sarcastic, though. I believe it is very possible that Chavez is a puppet of the U.S. government. If I was betting money in Vegas on it, I would give it 3 to 1 odds that Chavez isn't a puppet.

    I do know 100% that the CIA has backed puppet Communists... I don't think that is really up for debate, is it? They just haven't been as high up the ladder as a national leader like Chavez.

  • robc||

    joe,

    I'm not completely sure about that either, rana, although the outcome of his referendum loss gives me reason for optimism.

    I know we've argued this too many times in the past and Im not interested in rehashing all of it, but this comment of yours leads me to an interesting distinction:

    I **KNOW** 100% that on Jan 21st of next year George Bush will not be president of the USA.

    That is a democracy.

    If you dont know for sure, but just have optimism, it aint a democracy. Yet. Its sort of like defining a recession. You cant call the recession until after 2 quarters of shrinking, but it started at the beginning of those 2 quarters.

  • ||

    OK, Congressman, we've narrowed down the list of campaign slogans to two.

    Let me hear them.

    OK. "Working for Change..."

    That's not too bad.

    or "...Fatherland, Socialism or Death."

    ...

    ...

    What was the first one again?

  • ||

    Another thing that this article forgot to mention is that food scarcity is particularly chronic in Tachira due to Chavez' feud with Colombia. He has ordered that shipments to Colombia be "inspected for food contraband" and confiscated. Also, some food being stored for subsequent distribution has been seized, claiming it was being hoarded. Of course, once this food is seized a good portion mysteriously disappears, while the remaining amount is sold by the government at regulated prices.

  • Episiarch||

    If I was betting money in Vegas on it, I would give it 3 to 1 odds that Chavez isn't a puppet.

    You really think there's a 75% chance the caudillo is a CIA puppet?

  • ||

    That is some scary s***!

  • ||

    Do you also see armed military at these sales events too?

    I saw armed police at the opening of a Salvadoran chargrilled chicken place here around a year or so ago.That many showed up, it was almost a riot.

    The difference is that these spanish-speaking peoples could have easily gone down the street to McDonald's. They were waiting in line for that extra bit of deliciousness. Also, several different spots of the same type have opened up here since. No lines now.

  • atrevete||

    Scary s*** because seizing "food contraband" because it's being "hoarded" is how nearly 30 million people starved to death in 1961 China.

  • ||

    You really think there's a 75% chance the caudillo is a CIA puppet?



    I think there is a 25% chance if I am putting money on it... I am not sure the proper grammer for expressing betting odds, I thought I was putting the 3 on Chavez not being a CIA puppet. But I am not being sarcastic. I easily give it a 1-in-4 chance that Chavez is controlled by the U.S. government. Easily.

    If I could get a 3:1 payout, I would put $100 on Chavez being a CIA puppet. Does it makes sense what I am trying to express?

    But, unlike most conspiracy theorists, I am fully willing to admit that the evidence just isn't there yet. Right now I am just trying to present it as an entirely plausable scenario, not that it is a 100% proven fact.

  • Episiarch||

    Rex, 3 to 1 odds is a 1/4 chance (the second number, over the first plus the second) of the particular outcome.

    So when you say now a 1 in 4 chance about Chavez being a puppet, you have changed it to an 80% chance that he is a puppet (4/5).

    What you originally meant to say was a 33% chance, which would be 2 to 1 odds.

    Here ends the bookmaking lesson.

    Now, to the real point: why would the CIA need to create morons like Chavez when they spring forth on their own all the time?

  • ||

    Yeah, I'm so fucking dumb I was the only one who stated, before Chavez's lost election, that he didn't own the electoral system and Venezuela's democracy was strong enough to hand him a defeat.

    Link or it didn't happen.

  • ||

    Oh, I can think of somebody who was writing YEARS ago that Chavez's popularity was going to decline and threaten his political position.

    link or it didn't happen.

  • ||

    Maybe you should adopt a more accurate handle, like PWNED, because at this point, I've done the cyber-equivalent of stuffing your head and mounting it on my wall.

    In the intertube you tend to have to provide a link to support your claim.

    Saying "Oh i disagree with you" then screaming "PWNOWNZ" does not a true trophy make.

  • ||

    Oh, I can think of somebody who was writing YEARS ago that Chavez's popularity was going to decline and threaten his political position.

    Why did you think his popularity would decline again?

    For your proper coronation as "coolest guy ever" joe we would like to see how you came to your superb conclusion. You know the logic as to why you would think Chavez support of the people would falter.

  • A Finnish reasonoid||

    They sure do get crowds like this at sales events in Paris. Mostly because the dates are government regulated (really, seriously, they are). Not the prices, though, just the use of the word 'soldes' is limited to certain time periods in January and July. Great deals tho, as designer gear from the previous season gets marked down 80% at times.

    Anyways, my kindest regards to the struggling people in Venezuela; I hope your government will legalize the sale of bread and other food staples.

  • ||

    In joe's defense, or maybe not, it doesn't take a genius to figure out that Chavez's popularity would decline. Of course, I live in Vz and we could see that coming a long time ago.

  • ||

    Funny, now joshua can't remember whether I've ever written anything on the subject.

    There's an archive link just up to the right, if you need one.

    I don't think anyone else has any trouble remembering. Once upon a time, it was oft-cited as solid evidence of my stupudity and depravity, and nobody had any trouble remembering it then.

    Why did you think his popularity would decline again? Because he's a ham-fisted goon whose economic polices are unwise and whose encroachments on civil liberties (such as freedom of the press) would create a backlash.

  • ||

    stupudity.

    I think we need a joes law court of appealz to rule on that one.

  • ||

    In joe's defense, or maybe not, it doesn't take a genius to figure out that Chavez's popularity would decline. Of course, I live in Vz and we could see that coming a long time ago.

    Rana don't...some train wreaks should be left to be enjoyed.

  • ||

    joe,
    all right then.

    Where you and I disagree, is that I don't put as much stock in the current state of Venezuelan democracy considering that Chavez is still as power-hungry and crazy as ever (perhaps now more so), he is still in control of the most important government entities (although there is strife among Chavistas) and even more important he has shown to be corrupt and not above using any measures necessary to remain in power.

  • ||

    Rana don't...some train wreaks should be left to be enjoyed.

    Now THAT'S joez law.

  • ||

    What are the communist puppets that the CIA has supported in the past? I'm not being sarcastic or doubtful of the claim, just basically curious. I'm a hundred and twenty pages (mid-Ike years) into "Legacy of Ashes" about the history of the CIA and so far all the news is about the right wing bastards they've supported (unless I didn't read close enough). Good history by the way. I've known the CIA had their fuck-ups, but I hadn't known just how thorough-going and regularly incompetent they've been. Also, the book suggests something about two libertarian themes: one, the hubris in the belief that human beings from a top down view can know very much with any accuracy, let alone control and manage that knowledge with any degree of competency. It's hard enough knowing what's going on in my own company - how much harder to know what's going on in a foreign country's government where the language and culture are so vastly different from our own. Also, the CIA is like any self-interested actors - mostly they were protecting their jobs rather than doing anything useful; so, they've fed the president just as much or more false information that didn't make them look bad as they have useful information.

    I wonder when the common folk will ever wake up and realize enmass that a political office does not confer any more wisdom on the person than any other sort of training, and that we'd mostly be better off with fewer *experts* wandering around trying to run things for we the allegedly helpless, dimwitted masses.

  • ||

    The economic growth is illusional if you compare it in terms of consumer goods. As the Venezuelan economy booms supermarket shelves are left empty, leaving me to wonder if this boom is caused by Soviet style statistics that ignore the importance of the ammount of available "stuff" into the growth equation.

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