Sobremesa Chronicles

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maluma--nicky-jam--farruko--j-balvin-954997Upon my arrival in Caracas, I expected to hear lots of stories about Leopoldo, or about scarcity, or about the lack of freedom in the press. Instead, the latest gossip revolved around a party.

The teenage son of a big-time chavista boligarch threw an unforgettable bash in a Caracas Country Club house last Friday: one thousand people, multiple video screens, three of the most famous reggaeton artists in the continent (Maluma, J Balvin, and Farruko), and the creme-de-la-creme of Caracas’ young set were in attendance. All the kids wanted to go to a party. Sure enough, it lasted into the wee hours of the morning.

While in Caracas, I kept hearing stories about parties such as this. One chavista bureaucrat apparently celebrated his daughter’s birthday with a piñata for 500 guests, complete with a cast of 24 actors doing a live-action performance of the movie Frozen. Another friend was astonished to find that, at a wedding of another boligarch, the glasses she was using were engraved with her name, thanking her for attending.

It seems that, when it comes to showing off newfound money, the sky’s the limit.

Now, I’m not one to bash parties, but when we fête with the ill-gotten gains of an oil boom that has gone bust, do we not bear a minimum of responsibility to show some restraint? Does partying with the boligarchs make us accomplices? To what extent is Venezuela’s true crisis … a moral one?

Something to chew on. Have a great weekend everyone.

1 COMMENT

  1. JC I agree with you. “La mujer del César no sólo debe serlo sino parecerlo” el que participa y disfruta de estos convites hechos con dinero mal habido es tan cómplice IMO como el bolichico que da la fiesta y su padre que se enriqueció a costillas del pueblo. Si no se piensa en el bie común primero en vez de nuestro propias prioridades, jamás avanzaremos. No están ostinados de ser los últimos en las listas de los primeros y viceversa? Los primeros países no andan retozando con el enemigo por muy tentador que sea. Yo no tengo esperanza. Ya…

    • If this id a teenage party, parents must agree to take their kids. Being a parent it is your duty to explain to your children why it’s wrong to participate in such a party. If I had teenage kids I would not let them go

    • En la epoca de AD y Copei era lo mismo. Este desmadre no empezo con los bolichicos. Lamentablemente es un mal q lleva 60 años sino mas. A Venezuela la tienen q parir de nuevo.

      • En eso estamos de acuerdo. Yo estaba en pañales durante la supuesta “cuarta República” (de hecho, ni siquiera estaba en el país), pero sé que desde siempre, al venezolano le ha encantado botar su plata por ahí cuando la tiene. Es un hecho con el que nos criamos.

  2. Exactly what I was thinking when I first started reading the post. Partying with the boligarchs make you an enabler, and clearly signals that you want to be part of that clique too. Sad. It would take many generations to start recovering from the long term damage that these people have done to my bankrupted (in every possible sense) country.

  3. No difference between the ill gotten, new money ‘elite’ of today and the Spanish pirates (aka converted Islam followers) who set about plundering a continent.

    • “converted Islam followers”: wao! So much hatred towards a religion and ethnic groups, so much ignorance about history…

      • Oh well, maybe I’m wrong. There is a good chance they came in the name of Christianity and to ‘create’ rather than ‘plunder’.
        There again some would say that such gullibility is a cornerstone of our ability to deny our predicament.
        And ‘so much hatred’? Where did that come from ? What an extreme assertion on your part. Now where have I heard that before ? Let me think

      • The subject has been studied , there are records from colonial times showing that the vast mayority of spaniards came mainly from Andalucia and to a lesser extent from Extremadura and Castille. Later some waves of inmigration were allowed to come from the Vasque Country and north eastern spain, Many of the latter settled in the central valleys of Chile were they became very influential . People suspected of having moorish or jewish ascentry were not allowed to come , If they did they came covertly , disguising their identity of origin . Catalonians and Aragonese were not encouraged to come to the Americas ( they came from a different Kingdom than Castille) . Contrary to popular belief many of those that came were not soldiers , but people seeking to strike fortune . 92% of the inmigrants were men and 8% were women , This explains why the mestizaje of the spaniards with the local indian women was so deep and pervasive. There is also the testimony of colonial chronicles which talk about how spaniards found the indian women from ‘costa firme’ ( Venezuela ) specially attractive and vice versa ( to the scandal of the good priests who wrote the chronicle) . Mitochondrial genetic studies point towards a Venezuelan genetic make up which is more european than appearances show , and that the origin of that make up involved the coupling of european males with indian females ( and some negro females) in colonial times. Of course the indian and negro slave concubines were not seen by their spanish partners as their social equals but as inferior. This may hae had something to do with the machismo we find so widely spread in our land.

    • Both your history and reasoning are head-shakingly wrong.

      (1) If you actually were to look at the history of the Spanish exploration, the a great many were dispossessed basques, and converso jews and muslims. You make it seem they were all muslim. The problem is that while Andalusian Spain was under islam, the people in Al Andalus had just as many jews and christians. Unlike the policies of the Catholic kings that followed, Al Andalus had a policy of tolerance towards all faiths.

      (2) Yours is the typical ‘ad tu quoque’ argument: e.g. “They all do it, so what’s the difference!” The wheel of history, blah, etc, and so on. Whats old is new again, so what’s the fuss after all?

      If that were so, then we can certainly declare that the new bums have spread far more misery than the old bums. And if you’re going to draw an equivalence like this, then perhaps the old bums weren’t so bad, were they? What is left to condemn, if anything?

      I disagree with both you, and this hypothesis. The fact remains, if you’re going to fly the flag of marxism while you trash an entire country, don’t represent the worst kind of creature to come from the very system you pretend to hate.

  4. Juan,

    Are these people getting more obstreperous since the Caudillo kicked the bucket or is there, in your opinion, another reason why they are becoming more so now?

    • Kepler I keep going back to the bolivar biography by the french fellow (Holstein something) you recommended to us and its description of the ‘caraquins’ because time and again I find that we havent changed a bit . The description in almost every respect fits us like a glove!!

    • “Are these people getting more obstreperous since the Caudillo kicked the bucket…? ”
      si y no miamol. La gota del mal gusto de antes se ha puesto un chorro.

      • Syd, this parvenu mentality was there before, that is right. It actually precedes chavismo and can be traced back to the times our ancestors were sending pearls to Europe and wheat to the Caribbean…but this thing lately looks like that party from Der Untergang film

      • El nuevoriquismo siempre ha sido echón y superficial. Lo fue en los 70 y lo es ahora, solo los protagonistas han cambiado.

        • Y la cantidad de los protagonistas. El triple, por lo menos.

          Antes del Chavismo robaban mucho, y muchos, quizas un 40% de la poblacion tenia algun tipo de guiso. Quizas solo un 3% tenian los MegaGuisos on top.

          Ahora, por decir algo, 80% roba o esta guisando algo de alguna forma, bachaqueo, tigritos, sindicatos, nomina fantasma, como sea,, con un 10% de Ultra-Mega Guisos Galacticos.

          Por lo tanto debe haber muchas mas de estas fiesticas por ahi que en los 70.. y los Malls? Full.

  5. I disagree. What is holding this country together but for the moral fiber of its population? What is stopping Venezuela from becoming an absolute Hobbesian-style, Mad Max dystopia? When every incentive out there pushes you in the “wrong direction”, when honesty and decency are punished in more ways than one, whem impunity is almost 100%, when our government is filled with thugs, criminals, drug traffickers, when history is constantly re-written to erase the parts of our past that one could actually feel proud of, when arbitrage is just about the only way to make a living; when those that are erected as role models for society are scoundrels, murderers, rapists, coupsters, muggers, cheaters, or worse.

    In the midst of this situation, why do people go to work? why do most people yield for laws, why do people still feel outraged at injustice? why does almost everyone still strive to be decent and honest? it is not jealousy that makes most people feel disgust at chavista boligarchs, it is in the end a true sense that what these people are doing is simply wrong, unfair, un-just.

    Our moral fiber, so often trampled for so many years is exactly what is keeping us afloat. I may be a neurotic optimist, but I truly think that if every Venezuelan were a-moral and completely rational, we’d be living in a world not unlike that depicted in many cheap Hollywood dystopias. Think about it…

    • I don’t agree with you. I go back to Venezuela once a year and it is pretty much a dystopian society (and as bad as they can get). I don’t know why you need to see assless leather pants and mohawks a la Mad Max to conclude that Venezuela is dystopian. The country is gone. Un presidente patan (listen to me un presidente y un gobierno de patanes), no laws, no institutions, second most dangerous country in the world, no food, no medicines, no gasoline, sometimes no electricity or water. Did you know that there are pirates in el Lago de Maracaibo and they are killing fishermen to steal the motors of their boats? Tell me, in which other country in the world a lake has pirates? Even in Africa the pirates are in open sea. One of my friends gets robbed every other month in his business (always with a gun to his head). Every time they take his phone and the customers’ phones. Sometimes they take his car and then call for ransom and he pays. It has become a ritual for him. Is that not dystopian enough (to wake knowing that someone is gonna walk into your business and put a gun to your head, take your property and then call you for ransom? The government is ruled by patanes corrupted to the bone, the businessmen are patanes as well utilizing the distortions in the economy to make money at the expense of society, the poor people are either bachaqueando or are fully engaged in robbery, kidnapping and murder. What’s wrong with you? Moral fiber? Are kidding?

    • I fear that current venezuela HAS become a kind of hobssean society where far too many people use fraud or coercion, or violence or deceit to victimize their fellows while many others collaborate or tolerate its practice . Its very disheartening . Corruption is rife in part because there is a long standing culture tendency to engage in it but also because ordinary social controls have been dismantled . Important to note that not every one who participates in corruption does so from an act of free choice but because conditions force or pressure them to do so , Where corruption is so deeply embedded in every day life many are extorted to join in it simply to protect their livelihood and survive. !! Psychological studies show that many people are basically honest but will fall into dishonesty if the controls that keep it in check dissapear !! Fukuyama contends that inmature democracies are innately clientelistic and corupt and that it is very difficult to create conditions where it can be controlled because the incentives are there for the political class to allow it to continue .!!

      • Bill Bass, if it is so difficult to create conditions to control the clientelism and corruption in Venezuela, as Fukuyama would contend, why do you continue to espouse a petro-state model for Venezuela that is so unlikely to succeed?

        • Because precisely it is in time of political crisis that the political classes can be pressed by circumstances to take steps to stop the clientelar model and go for the development of a moderns weverian state , this is the best time to make it happen, Its difficult but not impossible and the rewards are inmense. !!

          • Bill Bass, care to explain how your proposed system provides the proper incentives within a petro-state model that provides only counter-to-proper incentives?

          • Bill Bass, I just looked up Weberian at wikipedia, and found that Weber was a key proponent of

            “Antipositivism (also known as interpretivism or negativism) is the belief within social science that the social realm may not be subject to the same methods of investigation as the natural world; that academics must reject empiricism and the scientific method in the conduct of social research.”

            If that’s what you support, then it would explain much of your lack of basis in logic and proper studies. Is it what you support?

    • In 1958, Larrazabal decided to palliate the ‘unemployment” of the time by ordering the govt to hand every person claiming to be unemployed a ‘ Fuerte’ per day (5 Bs) , this was the beggining of the flood of countryside people coming to caracas where they were assured 5 Bs daily without doing any work . Of course Larrazabal got high points for being so compassionate .!!. You give money away and you give people an inventive not to work as hard as they might .

      • Are now you suggesting we should handover to citizens some of their oil dividends, as long as they move out and stay out of Caracas? A sort of new conditional cash transfer program? 🙂

          • So you are in favor of prohibiting all dividends someone might have inherited, because these would serve as bad incentives. What about giving the citizens a chance to learn to become educated and serious rentiers? :-

          • Where you inherit money which your parents have earned through their own hard work and who have passed on to you their work ethos and sense of responsability is one thing , to recieve money which society has no use for and which you can put to productive use of is also OK . to recieve money you ve never earned and which can be better and more productively used if dedicated to worth while goals or programs is quite another . Context is important . In any event where oil royalty money is distributed in places like Alaska its because the economy can run without it , because the economy is so organized that you are really taking about distributing a surplus , more over a surplus which comes from a wind fall profit in oil prices , totally different where the money comes from an economy which is broke and cant even cover esssential needs!! Incredible that people of mature age should remain bessoted with the idea of insituting a pinata for adults !!

          • Per: Veo que sigues confundido sobre el role de la politica y el de la tecnocracia , para ayudarte sugiero leas el capitulo ‘Politica y Tecnocracia’ que Alberto Quiros incluyera en su libro ‘El Diagnostico de lo Imposible’. , Despues empieza a leer el ultimo libro de Fukuyama . Todavia tienes chance de aprender !!

          • And you Bill might benefit from reading William Easterly’s The Tyranny of Experts. By the way, have you always believed this blindly in the capacity of those who say they are superior to you? Are you by any chance a military?

          • By the way, Per, have you always believed this blindly in yourself that you post a “Like” to your own comment?

      • Bill Bass,

        Larrazábal’s Plan de Emergencia or Plan de Obras Extraordinarias was announced two months after Pérez Jiménez’s downfall to prevent revolt by the large group of unemployed in the cities, I’ve read of estimates ranging from 30k to 60k unemployed in Caracas. The Plan was supposed to last a few months but was extended through two coup de etats and even 7 months into Bentancourt’s presidency.

        In 1959, Hernández Ron, Ministro de Obras Públicas, talked about 22.5k workers having been employed by the Plan, of which about 20% were receiving money without working. He also mentioned a 1billion bolivar cost over a year, but that included much construction material since the employment was mostly in construction.

        The population growth of Venezuela in general, and Venezuelan cities in particular, had much less to do with the Plan than you imply. Venezuela’s population was exploding long before the Plan, especially in the cities, and kept exploding long after the Plan:

        population in cities of >100k
        1946: 405k
        1958: 1697k

        population in cities of >10k
        1946: 1036k
        1958: 3396k

        percentage population classified urban
        1941: 24.7
        1950: 42.0
        1961: 57.8

        The effects on population of the Plan pale in comparison to the effects of immigration and lower death rate. For example:

        foreign immigration:
        1941: 50k (i.e., 1.3% of the total population)
        1950: 207k (i.e., 4.1%)
        1961: 526k (i.e., 7%)

        life expectancy:
        1936: 38
        1941: 43.2
        1950: 53.9
        1961: 60.9

        I fail to see your logic reaching your conclusion from what you present before the conclusion.

        I also fail to see why you would bring up an example that is so far removed from the cash distribution systems being discussed in the link I provided to try to support your stance, especially when the link points to plenty more examples of much closer examples which completely contradict your stance.

        No hay peor ciego …

        • Ex: Thank you for the information , I see you take at face value the announcements of the Larrazabal govt justifying the distribution of free cash for those claiming to be unemployed , I had a relative inside the gabinet so maybe I know a bit about what went on inside the Larrazabal govt . When he wasnt spending time reading his favourite comic books or composing little musical ditties he certainly had a vision for the country.!!

          The migration to the cities preceded the adoption of the plan , this happened because of the opportunities for employment which presented themselves as MPJ executed his ambitious public works plans , after these ceased in 1958 , the govt by distributing free cash to those claiming unemployment encouraged people who should have returned home to stay and some who had not moved into the cities to come and collect their free cash. The Scheme was a perfect example of clientelism gone rampant , something which pernicious consequences we can now fully understand . Later all democratic govts adopted it in different ways as was to be expected.

          Am not clear why the inmigration of close to 1 million europeans mostly to the cities of Venezuela during the 50’s is counted as contributing little to the growth of Venezuelans urban population , the country had 5 million inhabitants and the coming of 1 million inmigrants was sure to have a strong impact on the numbers .and yet ……

          Regarding the unconditional cash distribution scheme you sponsor I have already explained extensively why they dont work and can only be justified in a very limited number of cases , the idea that if you take away from the govt 90% of its regular and largely irrepleceable revenues to distribute willy nilly to the general public to increase their consumption is going to work miracles is a piece of unmitigaged folly .

          Precisely the lesson of the Chavez regime is that even if you use public funds to increase public consumption to record levels that doesnt help the economy achieve sustainable growth is one which has been lost on you even if its been established by many serious economic studies .

          Right now the govt and the country are broke , there are structural changes affecting the Venezuelan and world oil industries that will make it much less the huge money maker that it was in the past , we have to think more seriously about what use to make of Venezuelas oil resources . In such situation the oil to cash scheme is just plain mad, !!

          • Bill Blass,

            MPJ used to have a cycle of construction for his “ambitious public works plans”. He would start them up mid-year and end them in December. From Decembers to Julys there was little public works employment. Since Larrazabal took over in January, unemployment, especially in construction was at its cyclical high. Because of the political instability, the chances for uprisings were also high, especially in the cities. And there was no way these unemployed were going to choose that period of time to leave the cities to where unemployment was even worse. Larrazabal and his cabinet had to make a decision: Plata o Plomo. They thus chose to implement the construction employment plan in the cities. It was not an economic proposal, nor a national vision; it was a way to prevent an uprising during a political transition. Even during the two coup de etats with which Larrazabal had to deal, the unemployed did not rise against him. In that unique sense, the Plan de Emergencia was a success.

            Given that the implementation of the employment plan was strictly as a political anesthetic, therefore very little concern was given to the prevention of leeching, it is almost a good sign that only 20% of those paid were considered to have been receiving money without working.

            The immigration of 1 million Europeans, mostly to cities, explains the growth of urban population greatly. That is why I brought it up. Next to this strong a factor, your attributing the urban growth to Larrazabal’s Plan is what is nonsensical.

            I agree: “the idea that if you take away from the govt 90% of its regular and largely irrepleceable revenues to distribute willy nilly to the general public to increase their consumption is going to work miracles is a piece of unmitigaged folly .”

            But that is not what the unconditional cash transfer is about. 1) The revenue is not taken away, just bottom-up rather than trickle down, 2) the distribution is not willy nilly, just equal and daily to all citizens, 3) no miracles, just economics, 4) no folly, just capitalism.

            The chavez regime is a bad example of the unconditional cash distribution proposal because of the key word *unconditional*. The many serious economic studies not only point to this difference making it sustainable; they point to it being the most efficient and effective alternative.

            You really didn’t read the link, nor view the video, did you? Don’t worry, the world will adopt unconditional cash distribution, whether you like it or not, because there is no alternative, and will leave the paradigmatic dinosaurs like you behind. It’s like driverless, cars: you can argue all you like against them, but they’re coming. And that’ll put transportation personnel out of jobs. That will happen more and more, so you better have a world for them all to survive well enough without jobs, because there are more people than jobs, with the gap growing.

          • Whatever political justification was given for paying 5 bs per diem to whoever claimed to be unemployed a logical corollary was that it encouraged people to come to the cities (or remain in them) to get 5bs they wouldnt get in their rural hometowns . You could actually meet people who came in from the country and gave that as a reason . Probably not the only factor , but it certainly contributed to the urbanization phenomena. We dont know that the leeching only amounted to 20% , thats what the govt would naturally say to justify the clientelar measure. something that by sheer coincidence helped them get votes !!

            If people get nothing for free its a fact ( psychological studies show) that they dont value it the same way that they value what they earn thru their work or that of their parents , they tend to see it as a gift to be spent on superflous stuff. 5/6 winers pay big taxes but that doesnt make them any more careful about how they spend their wins , its a psychological thing.

            Recieving money Willi nilly for me is the same as for not doing nothing at all, the notion that taxes are going to compensate for the lost govt income depends on how much the govt needs to keep going , and what portion of the govt normal revenue you distribute . Initially you said that you would only distribute the royalty , then your calculations became hazy and contradictory , you were no longer talking about royalties but about a figure taken out of a hat for how much you wanted to give people for free. Remember you saying that whatever was taxable would not be distributed , but in Venezuela thats traditionally 67% of the income while royalties would be 16/17% which considering that Venezuela is currently getting arround 31 billion dollars for its oil exports and owes some 10/11 bln $ of debt service per year and spends at least 10 bln dollars to produce the 1.6 mbd it exports leaves a measly 12 bln dollars for all state needs including the import of essential goods . That means that your are going to have to shut down essential public services to give away the royalty money . Dont think thats feasible or covenient , once again do the math.

            Whats needed is to have the political class realize that to save the country from future disasters they have to create an effective modern state which works on meritocratic principles and is isolated from partisan political interference . bribing the populace to feel happy with corrupt govts is not going to settle anything . Trusting pure consumption without spending money on making people more economically capable to solve all economic problems is fanciful and delusional . Your policy is just a cometized version of what Chavez did with all the vices associated with that kind of scheme. !!

          • Bill Bass,

            From implying that the 5/diem was the beginning of urbanization to it not being the only factor still falls short. It was a negligible contribution considering the other factors involved. As to the 20% leeching, that is not what the government said to justify the clientelar measure, it was what the government of Caldera said to justify *removing* it, at the risk of *losing* voter support. Try again.

            Empirical studies (to which I’ve provided links) show that people spend unconditional cash distribution income very thriftily. This trumps your non empirical, psychological studies (to which you have yet to provide a single link). Try again.

            As to my proposal, I have not changed it, other than in wording, in decades:

            A) all money derived from natural resources goes to cash distribution,
            B) all money derived from taxation of people goes to government budget,
            C) the first line item of government budget is to top up the cash distribution to the poverty line.

            If you understood what I support as anything else in our past discussions, then you had it wrong. Try again.

            As to the math, it does not mean shutting anything but redundancy, corruption, and wastefulness down. It takes 22billion per year to accomplish the poverty line requirement. The government estimates that the gasoline subsidy, alone, is 15billion per year. Eliminate 5billion in programs that are redundant with a cash distribution and the government wouldn’t have to shut down anything in their spending. Try again.

            As to you proposal, how will the political class realize what you would like them to realize when all petro-state model incentives are counter to the very meritocratic, apolitical principles you require for your proposal’s success. Try again.

            Unconditional Cash Distribution, firstly, would not be a bribe, it would be a citizen’s right. Secondly, it would make the populace happy that the corrupt government would *at least* not be getting its hands on *this* money. This is the opposite of what chavez did, so it’s not the same “kind of scheme”. So, try again.

    • ayyy siiii, ahora somoj olandesej, pa ta comiendo de bolaj rojaj de queso. que divino seria conseguirlo, hajta sin cola. Y montando bicicleta por todoj ladoj. Menoj mal que tenemoj el rio guaire como nuestro canal. Polque la verdaj ej que entre ciudadej hay pocaj diferenciaj. Ademaj, por aca, cuantoj no tienen el pelo rubio, ah?

        • Oil income comes to the state three ways , by way of Dividends , if it owns the business (not very much because most of it is reinvested) , by way of Taxes ( traditionally 67% rate , whether it owns the business or not) and by way of Royalties ( as owner of the resource, normally 16-17%) . that means that your A, B C concepts overlap even if you treat them as if they were totally distinct and separate concepts . Assumming that you mean to distribute the royalties and that gasoline prices are raised to international market levels (a big if) and then tax 30% of the cash handouts, your disributable hand outs come to about 7.4 billion $ which falls some 14.6 billions $ short of your poverty line threshold .(and which divided between 30 million inhabitants results in what …20$ a month ??.

          Currently venezuela produces a bit under 2.4 MBD of which 750 kbd are sold to the domestic market and 1.6 mbd exported , exports average between 50 and 55 $ per bls which if you take out the per bl production cost , the 10 o 11 billion $ the yearly external financial debt service and the pinata cash distribution (7.4 Bln $ per year) leaves you with a very meager amount to cover all the country´s import needs and other expenses of running the govt. (schools , hospitals , police , replacing and maintaining ruined infrastructure , investments needed to maintain future oil operations etc) .

          Your calculations need revising , they evidently dont work , moreover if the govt is so corrupt then theyll find a way of lowering the collection of royalties and raising taxes and take things back to normal again. The way forward is to reform the states as has been done many times in history ( once again read Fukuyama) and create a state that institutionally functions meritocratically and where partisan politics are no allowed to interfere with the running of thngs . Once again giving people money to spend so they increase their rates of compsumption without capacitating them to contribute to a modern productive economy leads to nothing as has been demonstrated again and again . What you propose is pretty close to what Chavez did and it lead no where but to disaster!!

          I am not as besotted with the unconditional cash ideas as you are and am not interested in explaining to you again and again very basic stuff that you should already know !! So….with all respect due please stop pestering me with arguments to support your favourite pipedream .

          • Bill Bass,

            You really have a difficult time seeing things from perspectives other than your navel. I’ll try your way. You say dividends, taxes, and royalties.

            Let’s start with dividends. The way I propose it, the government sells its shares, so it will derive a one time income from the sale of the shares and the dividends will drop to zero. This also implies no further internal oil business decisions by the government.

            Next, taxation. I support a single, flat, national, capital tax. The percentage of the tax would be upper-limited by the economic progress of the nation, and lower limited by the cost of budgetary necessities. If a bare-bones budget is of 20billion, then the people in charge of determining the tax rate would choose a value that would collect *at least* 20billion. If it’s more, then more. You don’t have to give me a number, nor I to you. It’s a variable and I’ve just explained how to reach its minimum value. Of course, the incentive is for a government to tax more than the bare bones minimum, because they want a budget with some meat on the bones. Raise the amount too high and it will begin to hurt the nation’s economy. Have it too low and other nations may develop faster. Determining the optimal amount of taxation above the bare minimum is what would become the main debate for these people.

            Finally, Royalties. I won’t quibble with your choice of the word royalties. To me, it’s a simple transaction: Oil in exchange for payment. The payment amount needs to be continuously reached within the context of a free, competitive global market. If that comes to the 16-17% that you keep bringing up, great. If more, greater. If less, bummer. It will be what it will be. The people in charge of determining the amount of payment that is to be accepted in exchange for any oil or other natural resource would maximize revenues from the ongoing transactions. Raise the price too high or go too low, and there will be forgone revenues, or possibly ending up with unsold resources or without any when there is still a good market for it. Determining the optimal payment amount is what would become the main debate for these people.

            Note that in the above model the two groups of people have nothing to do with each other. The taxation people transfer collected taxes towards the budget, guaranteeing that *at least* all essentials are covered, while the natural resources people transfer collected payments to the cash distribution smoothing account.

            Your math is wrong. In an earlier comment I pointed out that the gasoline subsidy is estimated by the government at 15billion. There are more than 7billion more being spent on other subsidies. Eliminating those subsidies is enough to cover the 22billion of the poverty line threshold.

            Your implication that the money is somehow lost is also wrong. Those 22billion will get spent in the market. If the rate of taxation is 10%, then 2.2billion will go right back to government hands, the first year. The second year, 10% of those 22billion plus 10% of the 22billion of the second year would give 4.4billion. The third year, 6.6billion. After the tenth year it would stabilize to 22billion per year.

            All the money ends back in the government’s hands, in the budget, just as you requested, only that with lag, and zero poverty, which saves the government from many line items in the budget. So, try again with your math.

            Also note that the petro state model counter incentives are eliminated.

            You keep talking about thinks having been repeatedly demonstrated, but you never provide links. Liar. Besides chavez did nothing that was *unconditional*. Your continued description of Unconditional Cash Transfers as chavista shows intellectual dishonesty on your part, which is ironically very chavista.

            As to pestering, it’s not my fault if the truth bothers you. Allow me to point out that my comment was not to you.

          • uuuuyyy, que bonito tu paraiso. Sera veldá? Polque no veo ningun comprobante. Y eso del fisco, cobrando impuestos, mirame la eficiencia, como si jueramos del primel mundo, cuando si apenas lllegan los reales se los meten el en bolsillo. nooo, que va, aqui como que hay chavista encerrao, pintando el mundo de lo lindo.

          • DSMR, Fíjate tus dos argumentos:
            1) cobrar con eficiencia
            2) robo de lo cobrado

            1) Si no cobran con eficiencia, no van a tener dinero para el robar. El incentivo que tendrían es de cobrar con la mayor eficiencia posible.

            2) Si se meten en el bolsillo lo cobrado, no van a tener dinero para el presupuesto. El incentivo que tendrían es de que llegue lo suficiente al presupuesto.

            Si no llega el dinero de los impuestos al presupuesto, los que van a sufrir son los del mismo gobierno, no tanto la gente, porque a la gente ya se les repartió su parte.

          • que lindo su sueño, donde hay para el presupuesto de los impuestos cobrados, donde no hay corrupción. Bello. siga usted con su cuento, Y vuelvo a repetir: usted me huele a chavista encerrao, el propio soñador.

          • 1. Demonstrations dont depend on links but on the reasoning used and the factual observations that support them , If you cant follow the reasoning its not because you need links but because you need to improve your reasoning skills and perhaps widen your knowledge of reality .
            2. The way you talk about taxes its as if your talking about the sex of the angels , all very abstract and neat , nothing to do with the actual way in which public isntitutions and people historically and politically determine the taxes that they pay , and which can vary widely depending on inumerable factors . You make it appear as if the world has to follow some formula in your head because thats the way you figure it . Please stop playing god , its delusional !!
            3. Before oil was nationalized in Venezuela , the state controlled 90% of the private oil revenue , 67% through taxes and 17% thru royalties (dividends were relatively modest), the national budget did not discriminate from whence the income came , it just added all public income up. This is the way its done everywhere in the world, snce always . Only two places apply some variation , Norway and Alaska , Why ?? because in these two places the oil income provides a windfall profit , above that which the budget needs and they figure they can distribute the surplus in ways that benefit the population more directly ,Thats never been the case in Venezuela nor anywhere else. Royalties are just another form of public income which is needed to cover the budget which is approved by the institutions entrusted with the task, these tasks in turn are usually decided thru the selection of public officials by means of an electoral system .
            4.As to the math , I am assumming that Venezuelas production is a bit under 2.4 kbd of which 1.6 kbd are exported at a price of 55$ per bl and 750 kbd sold for peanuts in the local market .. This results in a gross oil income of about 32 Billion $ per year , if to that we subtract the cost of producing the oil , the investment needed to keep it flowing in the future and the cost of restoring its ruined facilities , plus the ordinary costs of the state , its need for example of repairing and adding to the countrys run down and dysfunctional infrastructure and services , the cost of schools and hospitals etc , plus the payment of 10.3to 10.7 billion $ of of debt service per year there is no money left to distribute to the general population. We also have the problem that because local agro industrial and manufacturing capacity has been destroyed in 15 years of persecution and destructive policies our import necessities at least for several years will be large , if only to cover the basic life necessities of our population .
            Of course to the extent the subsidies are slowly reduced to rational propportions and ultimately elliminated there will be additional public funds for the State to use in the performance of its tasks , my fear is that to restore the country so many funds will be needed which private enterprise will be slow or unreluctant to put up that even if those subsidies are reduced there will be little left to distribute unconditionally as you propose .
            5. Do remember that gasoline subsidies predated the nationalization of the oil industry , that the State has always had the power to control prices even when the oil companies were private , and that getting rid of the subsidies is not an easy matter and must be done with great care so as not to end up causing more harm than good. The 15 billion dollar you quote the govt as mentioning , is really a number that needs reviewing now that prices are much lower and that the cost of producing refined products has gone higher because of the change in our crude diet from conventional crudes to extra heavy crudes.
            6. The money which you say will be spent by the army of merry consumers to help the growth of the economy may be spent more productively if given to the right hands and made to serve more noble and practical purposes. Maybe if your idea had been adopted during the 60’s now there would be no Guri , no central university because people might have preferred to use the money in other more frivolous pursuits.
            I have abstained from other corrective observations to save you further embarrasments and frankly because I find answering your arguments increasingly tedious ,
            Do take note that we both simpathyze with the idea that govt as now constituted results in great injury to our economic and political life and that partisan and sectarian politics should not be allowed to interfere in the handling of public funds or the running of most public institutions ,except in a very general way.

            Where we differ is in that you would prefer that money to be given to the populace directly for them to spend on their whims while I believe that we must reform our state institutions so that the running of public agencies is done on a meritocratic modern functional basis . I have no wish to offend you and would appreciate it if you used those good manners Im sure where taught to you to extend to me the same courtesy.

            Again I have no futher wish to communicat with you concerning this to you so vexing issue.

          • Bill Bass,

            1. Empirical studies that are designed to measure the thriftiness of spending of poor people when given unconditional cash transfers trump any non empirical studies that are general or theoretical. If you don’t provide links, nor reasoning, nor factual observations regarding these latter ones, then we can’t even judge how far off the mark they are from that of which you are trying to convince us.

            2. Taxes: by printing 1/365th of the yearly budget every day, a government would, in effect, be taxing its population via devaluation, inevasibly. It is very neat, but not abstract at all. It also eliminates the overhead of the SENIAT, businesses, and people, related to taxation. All those people would be available for productive jobs, rather than overhead jobs. More importantly, by reestablishing the independence of the BCV, it also eliminates most of the corruption and loopholes in the current taxation systems.

            3. What I am proposing is a *new* way of doing things. You keep responding with descriptions of *old* ways of doing things. That things have always been done differently does not point to any flaws in the new proposal. Pinpoint a flaw.

            4. Your logic is wrong. Just the money going to the subsidies is money that can stop going to the subsidies and start going to cash distribution. Together with the other policies suggested in the proposal, this is a way to kickstart the economy without the poor suffering the brunt of the economic adjustments.

            5. The easiest way to eliminate the gasoline subsidy is through a cash distribution of that money (as seen in Iran). If the value is 15billion, or more, or less, then that is the value I propose. The same goes with any other subsidy. whatever the values, those are the values that can be used as the starting unconditional cash distribution values.

            6. In theory you are right that the same money could be spent more productively in the right hands. In practice history teaches us how unlikely it is to get the money to the right hands. With cash distribution, the Guri and the university would still have been built because the government would have still gotten the money for them, or did you skip that part in my earlier comment? Remember taxation gets 100% of the cash distribution back to the government, over time.

            7. Where we differ is in that I believe that money getting to the people leads to the meritocratic, functional reform of state institutions, and that the reverse does not work, whereas you believe the opposite: that the institutional reform is what in the end will lead to money getting to the people. Supporting my position are decades of Venezuelan history, and countless, direct empirical studies. You have circumstantial, non empirical theory, at best.

            8. This issue is not vexing at all to me. Don’t project.

  6. “To what extent is Venezuela’s true crisis … a moral one?”

    To a very large extent. As usual, the 2 main criteria when talking about Kleptozuela are here:

    Under-education/lack of moral values and Massive, Galactic Corruption.

    Some call it the Resource Curse, whatever, but anytime you mix too much oil with lack of education, and a decaying family structure with no father in town and rotten “values”, you get Mega Disasters like Cubazuela.

    Every time. The best case scenarios are when a right-wing Dictatorship of sorts grabs the power, and you get Saudi Arabia.. In Vzla, although people won’t admit it, I strongly suspect that 80% or 70%, or whatever, of the people still left in the country are Corrupt, one way or another. Much more than we like to admit. It’s been a pervasive disease that has permeated every level of society, every fiber of the “fabric”, like a metastasized cancer by now.

    From the rotten-to-the-core Cargo people working at Ports customs that Juan talked about, to the airport employees and their powerful Unions, to the taxi drivers that also steal on the way to CCS, to construction workers, office workers, even at low levels, to ALL contractors, (not ONE is honest, impossible to get contracts), to the 3 Million Regime direct employees, to all that go to these parties and most people you still see on fancy crowded Malls.

    Rotten to the core. 70, 80%, ? One way or another, yes. Putrid.

    In that sense, because we didn’t educate our people and chose to STEAL everything since memory serves, even before the Adecos/Copeyanos, we are getting what we deserve.

  7. Really?…? Morality??

    Ok father, you’re right. There is no reason to see this as a reason for faith in a venezuela that doesnt rip itself apart apres chavismo.

    For fuck’s sake, sanctimonius politics really does cause more damage than all the economic missunderstandings in the world.

    MORALITY: Who needs democracy when you leader is so pure?

  8. Actually, the Economic fabric, Institutional fabric and Social fabric are so profoundly damaged and rotten by now, that many think the only way to “fix” Kleptozuela in a relatively short term would be through a right-wing type of Dictatorship, as opposed to a Populist Turd like we have.

    I’m talking about a Pinochet type of abominable regime, look at Chile now, or look at Singapore and that tough, horrible, yet effective regime, look at Qatar and what every citizen now has, or Jordan.. Heck, I even miss the despicable Perez Jimenez, who build about 3/4 of ALL the infrastructure you now see in Vzla in about 5 years. And without killing 25,000 people every year, not – even – close. Heck, many more people were killed and abused even during AD/Copey, some historians now say. Same horrific guy that left instead of fighting, saying “yo no mato cadetes”.

    Yes. Bring a Perez Jimenez, a Pinochet, a Singapore General.. who would at least spend some of the money in infrastructure, and control CRIME. At least the country would quickly become very, very rich in a hurry, despite all the terrible right-wing dictators would want to steal, they never could steal everything, as Chavismo does, while killing 25,000 per year and repressing or jailing or expelling opponents almost as much. Not even close.

    That, or in the best case scenario, after a few more stolen elections, the MUDcrap eventually regains power, in a deeply corrupted country with putrid Economic, Institutional and Social bowels, where people have zero morals, zero family values, zero work ethics and are addicted to leeching from the corrupt government. Good luck. In that best scenario, it would take Decades to go back to the utter Mess AD/Copey way, to that incompetent level, nothing built, .. decades. With high crime too.

    Worst case scenario? What we have now continues, and we follow Cuba, on a third decade of decadence, massive death and ultimate brain-drain, poverty corrosion and corruption. Cubazuela 2, year 2050. Given the choices, I would pick Singapore, Qatar, Chile or Jordan over Murderzuela, or even a slow return, in 3 decades to an Ad/copey or Nicaragua-Nigeria type disaster.

    • . Heck, I even miss the despicable Perez Jimenez, who build about 3/4 of ALL the infrastructure you now see in Vzla in about 5 years. And without killing 25,000 people every year, not – even – close. Heck, many more people were killed and abused even during AD/Copey, some historians now say. Same horrific guy that left instead of fighting, saying “yo no mato cadetes”.

      Hugo Chavez invited Perez Jimenez to his 1999 inauguration. This invitation was an indication of Hugo’s milico, undemocratic roots, and thus seen by many as a bad thing. As you in point out, 16 years of Chavismo makes Perez Jimenez’s governance look good in comparison.

      • Worse even is that MPJ declined to come.

        “Palante: Don’t take this the wrong way, but what you just espoused is the kind of thinking prevalent in Venezuela right after Chavez uttered : ” Por ahora…….”

    • Well that needed saying , somehow this whole mess can be read as an indictment of certain inmature forms of democracy which makes some people wonder why a civilized form of authoritarism (a la Singaore) might not be preferrable in certain circumstances.
      Aside: 5 stories from the manager of a big consummer product business in Venezuela :
      – 5 containers are unloaded at a port , all the paperwork done , when they go to pick them up , two have dissapeared altogether , no explanation .
      – 7 truckloads of products leave Valencia for Caracas, 5 arrive , 3 dissapear, the GNB is asked to look for them , they find the three trucks after a week, empty of all contents, no explanation.
      – Big Psuv meeting at one of Caracas main throughfares , gob orders some trucks which are ready to be sent to ertain in the interior instead to be sent to where the meeting is being held , the contents are distributed among the people there for free . Explanation : the company had to contribute to celebrating the the patriotic event which was being held.
      – Companies must advise the govt agency in advance the name of the driver of the truck which is taking products to xwz destination . The assigned day the driver doesnt show up for work and another one has to be appointed , the agencys portal is shut down or otherwise inaccesible , on its way the truck is stopped by the GNB who impound the contents because the actual name of the driver is different from that advised before.
      – Hour or arrival of the truck to its destination must also be advised in advance , on its way to caracas the truck spends serveral hours stuck in a queue because of a roadway accident . the truck is stopped by the GNB and sent back because it hasnt met the prequisite schedule .

      This is the revolution protecting the people from experiencing shortages because of the business fault.

      There are unknonw chains of companies now inporting all kind of stapples from far of destinations ( southafrica) , companies like Farmatodo are ordered to buy the stapples from these companies , no questions asked .

      Definitely this is a regime of gangsters and squoundrels , we could do better. !!

      • Will we really content ourselves with better? Maybe lenin was better than the zars. Most people in venezuela think chavez was better than the IV.

        Maybe best is an issue of reconciliation and sober appraisal.

        I like to think a venezuelan will take scoundrelism over slavery any day.

  9. Nothing new here.
    This kind of socialism normally has 10% who live like the people stated in the post and 90% who are the down trodden.

  10. There’s nothing new under the sun. Do you remember, that Cisnero’s wedding in 1989, who was the origin of World Famous Caracazo in february 1989?… Well, this theory (and the wedding) was published by El Diario de Caracas, the theory was strongly supported on TV by RCTV’s Marcel Granier and El Observador and was widespread broadcasted in Radio Caracas Radio 750 AM (92.9 FM was born some years later)… Was that wedding a real justification for February 1989 Caracazo?… The L.A. Times published a brief note about that wedding: “1 million US$ wedding, with guests coming from Tahiti, Italy and the U.S.”

    But the point that I want to underscore is this: How can you blame a very specific party of anything that happens in Vzla? As in the wedding in 1989, and the long list of partys over there, I think that parties reflect something in Vzlans’ DNA: the need to exhibit oneself. And is a need, because when you’ve filled your life with acomplishments, you don’t need to being exhibit. The parties in Vzla’s social life are something like the “end of the road” in public acceptance. When you have a party that everybody wants to be in, you’re someone. And when yoy are in the party, then you’re someone, too. “I was there bud… You can’t imagine it… I have no words to describe it…”… It looks to me like having a roundtrip to the moon… But in Vzla is something about a party. Such an accomplishment.

    Vzla isn’t in a moral crisis. Vzla is morally and ethically broken. Completely. Totally. And, as the history repeat itself, I’d be waiting for the next Caracazo to happen. After all, is just one of the modern Vzla’s traditions. And is a subject everybody will have something to said and talk about.

    • ” I’d be waiting for the next caracazo to happen…”

      The plunderings of the 89 were a plan made by castro to topple and overthrow CAP’s government, sending weapons to arm the criminal gangs from Caracas hills in order to create widespread chaos and destruction across the city.

      The right “peo” to wait for will be #LaSalidaParte2:AhoraSiEstanCentenaresDeMilesVolviendoMierdaALasFuerzasRepresivas

  11. Restregarle la plata malhabida en la cara a los demás se llama ser marginal.

    Esos carajos son marginales desde que nacieron, y ni que tengan billones en sus cuentas dejarán de ser marginales zarrapastrosos.

  12. Two comments to the book of Mr Easterly which Per suggests we read with reverence: “Publishers Weekly , ” This loose, sometimes incoherent collection of high-minded notes does not add up to a convincing thesis or argument. Easterly tries to craft global solutions, but fails to come up with practical proposals that will work in the messy world beyond his neighborhood.”

    Writing in the Wall Street Journal, Sarah Chayes was also critical: “Mr. Easterly calls for a profound overhaul of the way powerful nations conceive of and implement aid—and, more important, of the broader foreign-policy decision-making of which aid is a component. That change is needed. It’s just not clear this book is crisp or cogent enough to help advance it .”

        • Read his four other books , and find out . People always simplify what deep thinkers say to suit their narrow intellectual capacity and then go after the straw man of the idea they misunderstood.

          He says that today the free market and liberal democracy model is still the only believable model in town , history may allow for other ad hoc systems to surface but no one sees them as ideal or desirable outside the country where they surface. Who nowadays sees communism as a final model for society ( even castro said that it doesnt work) , which country in the world wants to inmitate Iran. ??

          He does point out that the Chinese have a model , which they dont make any effort to export , the desspotic mandarinate meritocratic model from way back in their history which theyve bought back , which apparently suits them fine but which few countries can hope to inmmitate sucesfully.

          He does recognize that the market economy liberal democratic model while desirable and making progress does encounter set backs and might never be totally accomplished in the whole of the word , but to him this does not mean that in the hegelian sense history does not see it as the best model accomplishable , which is the point he wanted to make .

  13. “Well that needed saying , somehow this whole mess can be read as an indictment of certain immature forms of democracy which makes some people wonder why a civilized form of authoritarianism (a la Singapore) might not be preferable in certain circumstances.”

    I am convinced by now that some form of Right-Wing type of authoritarian Regime would be the best thing that could happen to the deeply corrupted Kleptozuela. Just imagine where we would be if we had had 16 years of Perez Jimenez, a tyrant and a thug, sure,, instead of the 16 years of Chavismo.

    – Over a Quarter of a Million people would not have been violently murdered. Yes, over 250,000 dead or more with Chavismo, if you count death due to lack of medicine, etc. A ruthless dictator like MPJ would not have allowed a infinitesimal fraction of that Tragedy to occur.

    – Venezuela would look like Dubai, with some European flavor plus colloquial touches. Or like Singapore. The best infrastructure in Latin America, by far, better roads than the aging roads in the USA. PDVSA would be producing 3 times as much, plus gas, etc. The construction industry only would employ millions, plus a revival in agriculture, mining and all. In a few years, Huge budget surplus, the currency as strong as ever. For sure. Just look at what happened in just 5 years, back in the 50’s, with oil at 2.30/barrel.

    – No colas, no electricity outages, no floods, Zero inflation. Isn’t that what Venezuelan’s complain about so much? Escasez? Zero. Queues? None. Medicine? avalable. Inflacion? Zero. Crime? Zero. Economy? Through the roof.

    Yes, it’s a despicable option. Yes, we would loose most freedoms, even more than with today’s Regime, certainly more than with a MUD-crap system like ad/copey was. Yes, there would be political prisoners, some terrible deaths or assassinations, didn’t we have thousands of that even with Ad/Copey and especially under Chavismo, anyway. A few hundred political prisoners, forced exiles, nothing new.

    Most importantly, while paying that terrible price, a Singapore-type of regime would allow to get our country back: Build a Moral fabric, a strong, healthy Work Ethic, as opposed to this government dependency disease, this rotten populism where only mediocrity and ignorance are rewarded. To rebuild the infrastructure, the entire Economy, reserves, everything from scratch. To teach people how to WORK, and to stop stealing and stealing, getting everything for free, to stop Killing, to rebuilt a Justice freaking system where people are punished when they break the LAW. To teach people how to pay Taxes.

    They will be thankful later. Think Chile, think Singapore. After that, some well-grounded Democracy can finally be installed in Venezuela, as opposed to this Murderous Kleptocracy.

    Option 2: More Chavismo, more stolen elections,.. more Cubazuela, 25000 deda per year, colas, escasez, economy even worse, nothing is built. People getting more more stupid, lazy, brain-washed and corrupt everyday.

    Option 3: People finally get sick&tired after more stolen elections and all the crap, take the streets, the MUD takes power. Yeaaahhhhh!!! you’d think.. but noooooooo, the country is a War Zone. Destroyed economy. People don’t even know how to work. Huge debt. More corruption, of course, or you think the MUD are Angelitos??, like Ad/Copey… It would take Decades to go back to what Vzla was in the 90’s, which was a MESS, anyway.

    Given such tough choices, I’d rather live in Singapore for a while, instead of Murderzuela or Nicaragua-Nigeria (options 2 and 3)

  14. It absolutely makes you an accomplice and by extension, an ass.
    I know a family that ran a respectable company before Chavez, but they really started to hit the jackpot when the bolibourgeoisie came into the picture. They certainly didn’t create this mess but they have helped maintain it and they benefit much more from the situation as it is…So they’re very much guilty by association.
    They throw some pretty massive parties where the very worst of the Venezuelan peacock archetype comes out. Going to one of those parties would make me a fellow debaucher….Anyone who attends those parties is a debaucher.

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