Like so many Venezuela-watchers, I like to put up a hard-boiled, nothing-these-fuckers-can-say-can-surprise-me façade. Tengo mucho kilometraje, folksI’ve seen it all. But some things even I’m not prepared for — nobody is.  Most of all, the truly unexpected: a reasonable policy proposal.

One of our mistakes has been indirect subsidies, because we subsidize products, but later on those products often don’t reach the people who need that subsidy, because others exploit that government subsidy for the poor to traffic and make more money. We want to start switching from indirect to direct subsidies. That’s why we’ve now decided to give a consumption card to the truly poorest, to give the product its price, according to its cost structure —there’s a law for that— that people can go and pay with their card, so what we give people we’ll give it directly, not to the product. We hope to hand out some 500,000 cards.

Un error de nosotros ha sido el subsidio indirecto, porque los productos los subsidiamos, pero después esos productos muchas veces no les llegan a quien necesita ese subsidio,  porque se aprovecha el subsidio del gobierno  para los más pobres para traficar y ganar más, nosotros queremos ir sustituyendo el subsidio indirecto, por un subsidio directo.   Por eso ahora hemos decidido darle una tarjeta de consumo de misiones a los más pobres de verdad, y darle al producto el precio que tiene el producto, según la estructura de costos, para eso hay una ley, y la gente va y lo paga con su tarjeta, lo que le vamos a aportar a la gente, lo vamos a aportar directamente, y no al producto. Esperamos entregar unas 500 mil tarjetas.

And just like that, in the space of 100 words, we find out that the government does know what it has to do to end shortages, end the lines, and protect the consumption of the most vulnerable at the same time.

It’s not the first time that we hear about a possible targetted debit-card for the poor — the government’s been talking about that for some months. But it is the first time that I, at any rate, hear a government spokesman present direct subsidies as a replacement for indirect subsidies. Hell, he announced it as policy.

The real question here is where our new tutor-to-all-the-ministers, Vladimir Padrino López, is on this question. I don’t for a second imagine he understands the actual economics involved. But military tutelage over the cabinet was never about VPL’s hidden policy-making talents, it was —I think— about breaking the policymaking logjam brought on by Maduro’s near-catatonic inability to make a damn decision.

A wholesale move away from controlled prices and towards direct transfers may be exactly the kind of bold policy move the military had come to despair of Maduro ever taking on his own. It wouldn’t address all our macroeconomic problems: inflation, for one, may just go on as usual. But it would address the most destructive, chaos-generating distortions. And it would put an end to shortages and lines.

Reasons to doubt? There are about seven million. In the same speech, Istúriz doubled-down on CLAPs, which makes no sense at all since in the presence of this policy, CLAPs would have no reason to exist. Istúriz still stresses that it will be a law —the law on fair prices— that would rule price setting, not the market. And 17 years of experience with these bichitos teach plainly that their sane ideas are not just rarely expressed but virtually never implemented.

In fact, in the absence of VPL’s strange appointment this week, I’d be minded to ignore the whole thing. But there’s a new ingredient in the stew: military tutelage, at the hands of a military elite that is in no mood to go down with the ship. That changes things.

The old blocking coalition of far-leftists and Alfredoserranistas looks much weaker than it did. Maduro has already signalled that he’s ready to hand off responsibility for economic policy making. Sound crazy? Sure. But crazier things have happened. Daily. For 17 years.

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  1. “In the same speech, Istúriz senselessly doubled-down on CLAPs, which makes no sense… ” I imagine it takes some work to be able to climb down from that particular tree w.o. throwing the boss under the bus

  2. It sounds prettier, but in practice isn’t he basically talking about eliminating the dipro rate and replacing it with the fulana card? The same thing Maduro announced months ago.

  3. “…because others exploit that government subsidy for the poor to traffic and make more money.”

    No! Really??? (in voice dripping with sarcasm followed by exaggerated eye rolling)

  4. Sí, aristobulito sabe que jode lo que hay que hacer, seguro que sí:

    “Ellos si quieren se pueden regresar, pero esas plantas ni nada de lo que hay ahí sigue siendo de ellos, lo perdieron todo.”

    Porque salir a decir que básicamente si no pegas las nalgas a una pared es SEGURO que te las van a agarrar, es una forma excelente de atraer inversionistas a que traigan “sus propios dólares” como se la pasan diciendo los orates Jesús Faría y Pérez Abad.

    La susodicha tarjeta no es más que el plagio de la tarjeta negra de Rosales, de paso; que de hecho, ya sería el segundo plagio de esa, porque los mismos chavistas ya habían sacado otra tarjeta supuestamente de subsidios a la que le llamaron “buen vivir”:

    No, hijo, ese carajo está es vuelto loco porque Padrino le serruchó el puesto durísimo.

  5. it would be more than enough to double or triple the “cesta tickets” for people who make less than XX and that should be enough

    • Actually, no, because food tickets are paid by the employer and thus are costs that impact in the price of products and services, the very reason the price controls have been useful only to contribute to the maddening scarcity today.

      The supossed subsidy would be paid directly “from the oil rent”, which is, IN THEORY, “giving people their oil drop” so they can spend it in “whatever they need to”.

      The system would allow, again, in theory, to lift the price controls on the goods since there wouldn’t exist a cause for the whole “protecting the poor’s income” as they would be able to buy the stuff at normal, actual prices.

      Again, all of this is in theory, which is very much like communism: A beautiful thing, IN THEORY.

  6. This is the same guy who has defended the largest and most disruptive of all indirect subsidies: the freaking exchange controls which subsidises imports. The big bad monster of the economy. Cognitive dissonance rules the day.

    Maybe he thought that since saying stupid shit got him nowhere, and even demoted, he might say something true for once? Shake things up a bit?

  7. A través de la red social Twitter el periodista Miguel Salazar, informó que el vicepresidente Ejecutivo de la República, Aristóbulo Istúriz, se siente decepcionado ya que considera que su función como vicepresidente se ha desvalorizado.

    “Ha manifestado su descontento porque considera que su función se ha devaluado”, indicó Salazar.

    Asimismo, el periodista publicó que debido a su descontento, el Ejecutivo “prepara su salida” de la vicepresidencia.

  8. Are the Chavistas capable of making any decision without consulting the idiot in Havana? This is their first problem, among many- relying on the advice of a senile communist egomaniac who lives in the 1950s.

  9. “Reasonable proposal”?! Subsidize products and use some “card” for the poor?!

    The premise is wrong to begin with. A good, reasonable economy policy does not subsidize anything or give out any cards, period.

    A reasonal proposal would be get rid of fake subsidies, get rid of bogus cards, and let the free market take its course. Get rid of price controls, or “precio justo”, get rid of all 3 dollar exchange controls, Cadivi and all that crap.

    Let business import their merchandises freely, with free dollars, and start producing locally. No subsidies, no cards, no controls, as they do in every successful economy worldwide.

    “Reasonable proposal”? You’ve gotta be kidding.

    • Except Norwat hasn’t known extreme structural poverty since electricity.

      I find it troubling, this “I just want to be a normal country like everybody else” mentality. “Everybody else” also had to figure it out at one point.

      You don’t cure a broken bone with a healthy diet.

    • The World Bank, the IMF, FAO, OECD, everyone with an awesome team of researchers, thinks the direct subsidies are the best shit ever. Better than The Beatles. If you don’t believe me, check their websites. Not only do they write hundreds of papers about it, they also actively support these programs. And they LOVE these programs because they work within the free markets structure. They don’t alter markets. You just give people money (or goods), and they go to the free markets with that money. Indirect subsidies, on the other had, modify market’s structures. Thus, they suck.

      They hate indirect subsidies, like subsidies to gasoline or imports (the exchange control is one big import subsidy)

      Sorry to burst your bubble.

      (From the World Bank website: Social safety nets– non-contributory transfers in cash or in kind targeted to the poor and vulnerable – have an immediate impact on reducing poverty and on boosting prosperity, by putting resources in the hands of the poorest and most vulnerable members of society. Safety nets facilitate access to health and education services, help households manage risk better, and encourage the poorest people to feel more confident in taking risks that could lead to higher incomes.)

  10. Llegaron al punto donde prefieren perder un poco de poder y control sobre la sociedad, bajarle presión al descontento y asi quizá salirse con la suya y hacer el referendo después de enero. Creo que VPL esta pensando a largo plazo. Amanecerá y veremos…


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