“Star Spangled Scapegoat”

I just read a great op-ed by Tim Padgett called “Without The U.S. To Scapegoat, Latin America Discovers Its Inner Godzillas.” Padgett argues that President Maduro is running out of scapegoats to blame for the debacle that is currently the Venezuelan economy:

“When a U.S. president is eating ropa vieja in Havana and dancing tango in Buenos Aires, Latin American leaders can’t seem to find their handy Star-Spangled Scapegoat anywhere in their desk drawers. Instead, from the Río Grande to the Río de la Plata, Washington’s new and less imperialista engagement with Latin America has helped expose the region’s inner Godzillas.”

As for the region’s “inner Godzillas,” Padgett is referring to a recent meme about Venezuela’s electricity crisis.  Here is his description:

“A new Internet meme offers him a culprit: Godzilla! It shows the slimy monster destroying Venezuela’s power lines under a caption that reads: “Government Finds Out Who’s to Blame For Power Outages.” And in case you don’t believe this, it adds: ‘The National Guardsmen in charge of protecting power plants took this photo!'”

godzilla

Time to get a new electricity minister

How do you know when it’s time to replace your electricity minister?

Well if you are in Venezuela and you are facing terrible water shortages (in part because of a drought and in good part because of corruption and government mismanagement), your electricity minister probably shouldn’t be tweeting this:

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Yep, there’s the Electricity Minister himself (what a strange cabinet posting) pointing at the thunderstorm and proclaiming that God is on Venezuela’s side.  Interesting interpretation.  No comment about why God sent Venezuela a terrible drought in the first place and an even more terrible government!

h/t to a great article in the WSJ on the topic

 

 

 

Bolivars on a plane!

Actually, according to the WSJ, 36 cargo planes of the Venezuelan currency has been shipped to Venezeula in recent months.

See, when your inflation rate is somewhere between 300 and 700%, the domestic printing industry (like most other industries in Venezeula) cannot meet the government’s demands.

“The central bank’s own printing presses in the industrial city of Maracay don’t have enough security paper and metal to print more than a small portion of the country’s bills, the people familiar with the matter said. Their difficulties stem from the same dollar shortages that have plagued Venezuela’s centralized economy, as the Maduro administration struggles to pay for imports of everything”

And, as is customary in these Latin-American inflationary spirals, things are heating up even more.

“In December, the central bank began secret negotiations to order 10 billion more bills”

You may ask yourself, didn’t the opposition win a super-majority in the legislature? How come these Chavista shenanigans are still going on?

Well……

“The president in late December changed a law to give himself full control over the central bank, stripping congressional oversight just as his political opponents took control of the National Assembly for the first time in 17 years. “

Here is a snapshot from the WJS about the evolution of prices of consumer staples in Chavezlandia over the past year:

 

Screenshot 2016-02-04 07.27.41

People, repeat after Angus, “The rule of law is mighty #@$% thin reed”

 

 

 

 

How much is that coffee in the window? More than the government says it is

The IMF recently calculated Venezuela’s inflation to be 275%, the highest in the world.  And that isn’t the worst of it.  Researchers predict that inflation will reach 720% in 2016 and GDP will crash by almost 20%.

To get a better handle of what that means for Venezuelan life, I’d recommend following Nick Casey, a New York Times correspondent who is chronicling his first 30 days living in Caracas.  Here is a recent tweet of his:

Screenshot 2016-01-25 08.38.08.png

He also has a good blog post called “A Bank Robbery? Nope, Just Buying Coffee and Groceries in Caracas.” In it, he describes the daily joys of living in a country with hyperinflation.  Here he is writing about his trip to the coffee shop:

“According to the government, the official exchange rate is 6.3 bolivars to the dollar. But the market doesn’t accept that. On the streets, a money changer will be happy to buy your dollars for 700 bolivars a piece. Here is the magic realism of Caracas. Those coffees from Tuesday? They cost 2,200 bolivars. On the black market, that’s $3. At the official exchange, $349.”

Paying for everyday items is even more of a pain because the government has refused to print bills greater than 50s and 100s, which “trade for nickels and dimes.” (note: what is up with the dude’s glasses on the 50 bolivar note? I wonder if he bemoaned the fact that his glasses didn’t help his eyesight at all)

 

 

 

 

Everybody’s crazy about a sharp dressed man

I watched a video yesterday of Nicolas Maduro, President of Venezuela, looking markedly (and typically) unpresidential.  He was essentially threatening the people of Venezuela that he would not respect the outcome if they dared to vote in the opposition.  And he did it in his usual Adidas track suit (I wonder what Adidas thinks of this–have they considered paying him not to wear their clothes?)

Here’s a still from the video:

tracksuit_recentI particularly like the Nicolas M. embroidered on the suit.  Are his track suits regularly stolen from his presidential suite.  One would think so given the amount of times he wears such gear with his name clearly spelled out.  Here is another and it gets very specific, just in case some other Nicolas Maduro fellow tries to claim it for his own:

tracksuit_4

Here’s one that helpfully provides the name of his country, as if anyone could forget:

Venezuela's President Nicolas Maduro greets supporters during a visit to inspect the progress of a subway construction in Guatire

Venezuela’s President Nicolas Maduro greets supporters during a visit to inspect the progress of a subway construction in Guatir November 14, 2015. REUTERS/Marco Bello

 

And a track suit is de rigueur when attending a communist summit:

tracksuit_cuba

And surprisingly, Maduro is not the man wearing the red track suit in this photo!  No wonder he doesn’t want to go anywhere without the suit!  He gets attacked by fellow fashionistas when he doesn’t:

tracksuit_attack

OK, enough snark for the day, or at least the morning.  Maduro is an easy target to poke fun at but it would be a lot funnier of course if he wasn’t also inciting violence and destroying the country.

 

“Un Nuevo Sabor que te Encantará” / markets in everything fail

Earlier this month, McDonalds of Venezuela re-introduced the French fry to its menus after a lengthy absence where only yucca fries were available (Jeez I would LOVE for USA Mickey D to have yucca fries. They are the bomb).

CS02OgPXAAAKfSu

Or I guess to be more accurate, the Venezuela Fry (“100% made in Venezuela). Yes this is Chavismo’s version of the US Congress’s “freedom fries”.

Early reviews are not good.

And there appears to be a slight gap between the ad and the actual product:

sad

As Raul puts it, “I guess these are like your mother’s french fries, if your mother was a lazy cook and she really, really hated you”.

The socialist sneaker, or how not to prioritize correctly

Unfortunately it seems like economists know a lot more about how not to bring about development rather than the opposite.  We know that economic growth is harmed by things like political instability (civil wars, coups d’etat), random expropriation of profitable investments, uncertain and inconsistent policies in general.  We are much less certain how to bring about economic growth though.

I am tempted to point to Nicolas Maduro as a perfect example of how to destroy an economy, although Chavez was well on his way to accomplishing that himself, so Maduro had a head start.  I would recommend all policymakers look at Maduro and do the opposite.

Case in point.  As the Venezuelan economy sadly goes even further into the crapper, here is what Maduro has been championing:  socialist sneakers!  In a humorous article, Fusion asks whether Venezuela is launching a new “Air Chavez”:

“Looking like an ’80s rapper in a retro Adidas jacket, Maduro this week unveiled a new Hugo Chávez-inspired ‘socialist sneaker,’ which looks suspiciously similar to a red Converse All Star classic. ‘These are the Chávez boots, look at them, these are the boots of Bolivarian youth socialism,’ Maduro bellowed.

air_chavez

It’s not clear whether the government is planning on producing these socialist sneakers or whether they are just being held up as some kind of ideal.  But Fusion makes my point exactly (about priorities) when it notes that “the new shoes look like they’d be comfortable to wear for long waits standing in lines for shampoo, toilet paper, milk and other basic items that are becoming increasingly hard to find in Venezuela as the nation’s oil-dependent economy tanks.”

n.b. Adidas actually makes a shoe called the Maduro, but I doubt it was named after the yahoo in red above (although he is wearing an adidas jacket, so who knows!?)