MedioMalo Presidente

9

There are many good reasons to post and repost this 2008 propaganda spot, where the government mocks “EvilMedia” for its doom and gloom over the “bolivar fuerte”. MedioMalo, it turns out, deja a Nostradamus pendejo:

Your life will be hard, everything will get more expensive, inflation, devaluation of the currency, there’ll be shortages, capital flight, you’ll go hungry, this dictatorship, there’ll be misery!

As a facebook friend put it, “chamo, we have to ask MedioMalo for some lotto numbers…”

But, as I think about it, what I love the most about this clip is that it’s just, oddly, laterally…wrong.

Nobody ever said that taking three zeroes off of the currency would have any of these consequences. Nobody sane, anyway, because that’s an economic non-sequitur.

Our point was always that unless you brought some minimal rationality to economic policy-making, got spending under control, gave the Central Bank its independence back and stopped printing up the money to cover your deficits, you’d eventually end up with macroeconomic chaos.

The “reconversión monetaria” didn’t actually do anything to address the structural problems that threatened the bolivar’s stability. Our point was that selling the bolivar fuerte as a mechanism to “stabilize the currency” was misleading and wrong: only fiscal and BCV reform could do that, not twiddling with the zeroes at the end of the bills.

Apparently, nobody at SiBCI understood the criticisms well enough to grasp that kind of nuance. From their point of view, the opposition media was just a random doom-and-gloom generator, a kind of downer bot. It’s hardly a surprise that our exact reasoning got subtly garbled in the propaganda backlash: that’s what happens when you mock what you don’t understand.

Still, though: MedioMalo. That guy knew what was what.

9 COMMENTS

  1. You do not need to actually stabilize the currency. Obviously a stable currency is a million times better than hyperinflation. In the absence of a stable currency, this is what you have to do:

    Daily index all monetary items (bank account balances and loans given and received) in the banking system and all money loans (bonds) in terms of the Daily CPI which will eliminate the EFFECT of hyperinflation in your economy. This is currently being done daily to USD 3 trillion ( I forgot the up to date value) in daily indexed inflation indexed bonds globally – all done in terms of the Daily CPI´s in all those countries issuing daily inflation indexed bonds. Doing it during hyperinflation is exactly the same thing.

    Daily indexing all constant real value non-monetary items (salaries, wages, taxes payable, taxes receivable, taxes, trade debtors, trade creditors, capital, retained profits, retained losses, etc) will eliminate the EFFECT of – not hyperinflation, since these are not monetary items – the stable measuring unit assumption under your Historical Cost Accounting model from these items when they are indexed daily in terms of the Daily CPI.

    Variable real value non-monetary items (eg stock, property, shares, etc) are generally fair valued in the market. Daily indexing their values in terms of the Daily CPI between fair valuing them in the market will keep their real value up to date with the daily changes in the general price level.

    Obviously you do not have the institutions to do this. But, it is not true that a stable currency is the only way to stabilize and grow the economy. Daily indexing will do it during inflation, hyperinflation and deflation.

    Brazil did it very successfully for a number of years before 1994. This is nothing new.

    Just a reminder of the cold economic facts about monetary items, constant real value non-monetary items and variable real value non-monetary items and daily indexing.

    I know you laugh at this. That does not negates its validity.

  2. If implemented the above will naturally lead to a stable currency in the short to medium term, depending on proper functioning institutions – which you do not have.

  3. “Nobody ever said that taking three zeroes off of the currency would have any of these consequences. Nobody sane, anyway, because that’s an economic non-sequitur.”

    Except for the millions of dollars uselessly wasted in printing new bills, coining new coins, the moronic ads requesting people to call it “strong bolívar” now, and all sorts of guiso chances that presented there.

    It was, for one part, yet another corruption scheme to suck off the public funds, another stripe to chavista tiger, pues.

    And, for another part, it was part of the convoluted propaganda machine that’s been brainwashing people during the last two decades, crafted to lessen the social impact of inflation and thus discintent with the regime among the people.

    Because people forgot that we had skyrocketing inflation since the creation of cadivi in 2003 when they were told everyday that we were paying just a couple hundreds of bolivars for stuff when they were actually paying HUNDREDS OF THOUSANDS for that product.

    • This is to emphasise your statement:
      part of the convoluted propaganda machine that’s been brainwashing people during the last two decades, crafted to lessen the social impact of inflation and thus discintent with the regime among the people.

      Young people can`t believe that with the 5000 bs-f , that they are paying for a kilo of meat today (may 2016) is a thousand times the price 12 years ago.

      without the brainwashing people/media should be aware of the 5 million bs / kilo, instead of the 5 thousand bs ( no one mentions fuerte anymore). This was designed: BS-fuerte bills were printed whithout the – fuerte -word , or sign !

      price of meat 2004 :
      chrome-extension://gbkeegbaiigmenfmjfclcdgdpimamgkj/views/app.html

  4. This video is a masterpiece. So sublime, so fresh.

    There are so many layers of irony in it that is nothing short of amazing.

    As an animator, I can tell you that it looks embarrasingly bad. Even for 2008, it looks horrendous and there’s the fact that from what I could gather, this was made by the goverment, public money was used to create this abortion.

    That part where the guy dodges the words like in The Matrix cracks me up everytime. For a political movement so opposed to “imperialist indoctrination through pop culture” they sure love to rip off hollywood movies.

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