The Devil's Excrement

This signs shows the effects of shortages in Venezuela: Not only is toilet paper scarce you can only buy one package

It has been Nicolas’ misfortune that the toilet paper crisis exploded in his face less than one month after assuming the Presidency. It is not the worst shortage under Chávez or in Nicolas’ short Presidency, but it is one that affects everyone, captures the imagination of the foreign press and is simply quite symbolic of the failures of the Bolivarian revolution.

Start with the supposed solution to the problem. Have the National Assembly approve an emergency allocation to have the Government import two weeks of toilet paper. When you need to involve the legislature to import something, you can tell the system is really screwed up. After all, why toilet paper and not antibiotics, which have been scarce since December?

The answer is simple, not everyone uses antibiotics, or high blood pressure medicines or insulin, but in Venezuela, most everyone expects to be able to buy a roll or two once in a while when it is needed. In some sense, it is the same reason why Chávez never cared too much about fighting crime. At least in the first few years of his Government, crime only affected a small segment of the population, but as it went off the charts, it became a significant problem as more people were or knew victims of crime.

And while the Venezuelan President blames the crisis on hoarding and conspiracies by the opposition, the head of the National Statistics office blames the fact that people are eating a lot. Which makes you wonder if the problem is that they are eating the wrong stuff and going to the bathroom a lot, because there are many shortages in the food sector too.

But in the end, the problem is precisely that the Government has to go and import the toilet paper, because of the simple fact that it controls everything:

-The price of the toilet paper is controlled

-The foreign currency used to buy paper pulp is controlled

-The ability to buy or import toilet paper is controlled

Beyond that, it gets even more complex, depending if you are on the importing or on the local manufacturing side.

If you are an importer, you compete with none other than the Government. First your dollars may not be approved, thus you bring nothing. But the friendly “Boliborgeois” who competes with you, gets the money to import good quality toilet paper from reliable suppliers, but ends up getting it from who knows where, making half the profit in the toilet paper and the other half on only using a fraction of the dollars allocated to buy the toilet paper. The remainder dollars can stay in dollars or you can sell them at the unmentionable rate, making a profit with them of 344% at today’s rate.

So, as an importer, you can’t compete with those “briefcase companies” mentioned by Mario Silva in his top hit recording.

But if you are crazy enough to still be a manufacturer you are in Bolivarian control hell.

Suppose you priced the roll of toilet paper at a dollar in January 2010, when the exchange rate (official) was at Bs. 2.6. Well, your raw material costs had gone up by 65% by Christmas 2012 and 142% by today, but your price increases have not reached 40%.

To say nothing about your labor costs, which I will simply adjust for inflation, ignoring the recent labor Bill. By last December, your local costs had gone up by 98% and 122% by today. This is more than double the price increases for toilet paper.

And if you needed a part for your rolling machine, the dollar the swap market that you bought at Bs. 6 in January 2010 is now worth close to four times more and that is an integral part of your cost.

That is why the manufacturer is a fool, the legal importer is trying to get lucky and the “Boliborgeois” with his “empresa de maletin” (Mario Siva dixit) is becoming a millionaire.

And that is also why the revolution has failed. It has replaced a productive system by a planned system full of controls and corruption, which favors the buddies that can get official dollars, sometimes benefits occasional importers who get lucky and screws those that are still trying to make and produce something in Venezuela.

Just think, if you were trying to get into the toilet paper business in Venezuela, which model would you want to follow?

Well, given that they hate productive capitalists and oligarchs, Chavismo and now Madurismo have also chosen the same path that any sane person like you would, it is the most profitable for those involved, but the most expensive for the country.

And yes, people are eating more food, but I am not going to get involved in a technical discussion about whether the length of the toilet paper you use is directly proportional or not to mow much or how often you eat. But the most important reason that people are eating more is the same reason why they are using more gasoline and more electricity: They are all heavily subsidized. Assign a fair price to food, gasoline and electricity and the overall economy of the country would be better off, even if individually people would be worse off. And before anyone makes the argument that I have it backwards, you could give away the food for free, the electricity for free and the gasoline for free and the country would be in deep …. and we would all need a lot of toilet paper.

And with shortages comes rationing, something Cubans have known for 50 years, but Venezuelans had very little exposure to. Something the sign in the picture above clearly depicts.

Oh! But ideology beats realism or the “people’s” well being.

And thus Chavismo/Madurismo is never going to accept that its centralized planning system full of controls, rules and corruption is to blame for any of these problems. They have a religious belief that what they call “socialism” should work, despite the fact that all historical evidence shows it has always been a failure. But like Nicolas says, he believes more in “popular” wisdom than in scientific and technical facts.

Which only shows how primitive and lost the revolution is. Maduro’s paper toilet crisis is simply a reflection of both this and his ignorance.

Notes added: To add to the craziness, El Mundo reports today that the Government imports meat from Brazil at twice the price it pays Venezuelan producers. And people who are lucky enough to find toilet paper, put it into black bags to avoid being mugged, according to today’s El Nacional.

Such a pretty revolution!

Mario Silva with Chávez in happier days

Back from vacation in time to read the transcript of the purported conversation between Mario Silva and the Cuban intelligence General, in which Silva spews out a dense amount of gossip about a wide variety of Chavista/Madurista figures.

The first question one needs to ask is whether the tape is true or not. My impression is that it is a bit long and complex to be made up and the fact that Silva is the only one to deny its authenticity suggests it is real. In fact, Diosdado Cabello called it just gossip, which it is, but seems to be saying it is very realistic gossip coming from Silva’s mouth. The fact that Silva all of a sudden plans to leave his program “La Hojilla” also makes me suspect the tape is very real.

It is obvious that someone leaked the tape to damage someone’s credibility, what is not clear is who was the main target. While many think that it was Cabello, as he is blasted repeatedly, most of what Silva says about Cabello comes as no surprise to anyone that has been following this somewhat sinister figure of the revolution. Suffice to say that since Chávez left for Cuba in December, all of Cabello’s buddies that had been jailed by the former President have now been freed.

In fact, the most novel aspect of Silva’s gossip to me was the part about Maduro being looney and thinking that he had seen Chávez (again) in the military museum and claiming he even had a tape. I guess Maduro’s spiritual experience with Sai Baba has made him quite sensitive to having weird supernatural experiences.

Beyond that, the most significant thing about Silva’s tape is simply the fact that he is talking to the top Cuban General on intelligence matters. This alone should induce an investigation by the General Prosecutor and the National Assembly. While the opposition despises Silva, he is a mayor figure of Chavismo, whether Chavista/Maduristas like it or not. Silva rose from relative obscurity from aporrea and Chávez catapulted him to stardom by calling in to his daily program where Silva trashed just about anyone in the opposition, the same way he trashed Chavismo/Madurismo in this tape. Chávez would not only call in late at night to make announcements via La Hojilla, but Silva was the PSUV’s-Chávez backed-candidate for Governor of Carabobo, a race that fortunately he lost.

Beyond that, the main effect of the tape will be on Chavismo itself. Those that supported Chávez or his anointed heir have heard most of these accusations before, but always believed that they were opposition fabrications, now they will think twice about many of them. And that is the most important point of leaking the tape, it is not aimed at the opposition but at Chavismo/Madurismo. Its goal is to discredit the leaders of the Government, without it being clear who it was mainly aimed at. Cabello seems to be the main target, but there are very few stones left unturned.

In fact, Silva seems to defend only two people in the tape: Jorge Giordani and Admiral Molero. That’s it. He blasts the Vice President harshly, even suggesting that he may be the source of Bocaranda’s leaks about Chávez. He blasts Nicolas Maduro, Jose Vicente Rangel, Diosdado Cabello, Rafael Ramirez, Cabello’s brother, the former head of Cadivi Barroso, the Alcala Cordones brothers, Maduro’s wife Cilia Flores, Maduro’s confidant Temir Porras and the CNE ladies. So, its unclear what the objective of being divisive is, but the tape is very divisive for Chavismo.

For the opposition, nothing new in the tape. Maybe some juicy and explicit details of what we all know and knew has been happening in Chavismo. But nothing that surprises anyone reading this blog for the last few years. Just a very explicit confirmation from a very Chavista source.

Very divisive for Chavismo and another contribution to the erosion of the credibility of the Maduro Government and those near him.

Nothing less and nothing more.

In this video, a lady blasts Maduro for not including the people in decisions, suggesting they are actually bypassed. The lady says that if elections were held for Mayor, Chavismo would lose “totally” . The people are organized, but they are not included:

Note the lady behind with the fake Maduro mustache. Maduro comes back and says he will not approve the project and asks how come the “right wing, bla, bla, bs, local Government” is not criticized but we are so autocritical of the revolution. The people present disagree with his decision and express it.Express it very clearly.

Not a good “mesa de trabajo” for Nicolas. Not a good day for the new President. A rough day for him in fact.

We have had “new” Ministers for ten days, but very few announcements of new programs and policies. This is due in part to the repetitiousness of names in the Cabinet, most of which have already been there and have no new ideas. Others are simply not very qualified, as their expertise, if they have any, is seldom in the Ministry they hold.

One of the lone exceptions is Minister for Electric Energy Jesse Chacon who has made daily announcements about plans, programs and ideas. Chacon is not that qualified for the position, his expertise is in telecom, but he has been around and held a half a dozen positions, most of them Ministries, where he has learned how slow things move in Government and how things only move from the top. He showed that when he was Minister of the Interior and Justice, where he tried to understand the security problem, brought advisers from abroad (Even from the US! Fin de Mundo!) and was removed by Chavez when he had begun to formulate plans and understand things.

In his new Ministry, Chacon has been candid at times. He does not blame the power problems on opposition sabotage, a laughable position when power plants have been militarized since 2006 and those not loyal to the revolution were fired (and are still being fired) in various purges from important positions.

He has told us that the main problem is how the twelve companies that were integrated into Corpoelec don’t work together (Some have been “integrated” for ten years!) Well, this is a blunt criticism of Chavez’ brother Argenis, who learned of the appointment of his new boss watching TV and resigned immediately. He has also said projects are delayed, consumption is high and rates are behind. (Behind? Last rate increase was in 2000, the CPI is up about 900% since then. So behind is a mild word)

But so far, he has said little about specific projects, other than increase rates and force people to buy energy saving lightbulbs (At 4 times the price) He also gave himself an ultimatum of 100 days. Good luck!

But Chacon has also been less than honest in what he has said. He said that Caracas’ power is unstable because when AES took over Electricidad de Caracas (EDC), it stopped investing. What he fails to say is that AES owned EDC for only seven years, the Government nationalized and ran it for almost that same amount of time. EDC was taken over by AES in July 2000, Chavez took it over in April 2007, so it has been six years, not much of a difference. What did the Chávez Government invest in six years? Zilch. And the company now loses money. Way to go!

He also fails to say that at a time that Venezuela has power problems, the IDB (Interamerican Development Bank) has yet to disburse the US$ 700 million approved in 2010 for Guri and other power plants. Why? Venezuela has not complied with the requirements yet. The money is there, earmarked, approved, ready to go, but…

Chavista management…the biggest oxymoronic concept in Venezuela.

But Chacon is definitely better than Chave’z son in law Jorge Arreaza. He said the other day something like: ” We are trying to deal with the mess in the (State) productive sector. The State has yet to figure out (nail) how to leverage some industries”

Well Jorge, it’s very easy, you need people who know what they are doing, work hard and know what management is all about. Let me give you an example: Remember the satellite you purchased from the Chinese? The one bought to survey the country and called VRSS? When you made all the noise and it went into operation in Chinese hands, you yourself said that in three months it would no longer be in Chinese hands, but would be operated by Venezuela.

But shucks, you remembered to pay US$ 170 million for the satellite four years ago (easy money that could have been used in sooo many productive things!!!), but you forgot that to control the satellite from Venezuela, you had to install the antennas to control the satellite and to receive the images. The result is that the satellite “sees” Venezuela a few times a day, but its useless. Besides the pictures you asked the Chinese to take for show, the return has been exactly zero. (To say nothing of the fact that with US$ 170 million you can buy all of the images of Venezuela of France’s SPOT satellite since of all its satellites were launched and in all frequencies available, but that is another matter)

And you call this “technology”…I call it turnkey waste.

The problem is that to “figure out” or “nail” the productive sector, you need people that know the business, you need planners and you need managers. When the criteria for hiring people are political, nepotistic or cronyism, things can’t work.

You also have to care, understand what is wasting time or money, plan every day, have the know-how. All your Marxist ideas don’t work, because you are trying to adapt an ideology to the wrong type of people, led by the wrong leaders. Yes, you also need leadership. Like you screwed up in the satellite project, if you had not been your father in law’s son in law, you would have been fired.

But Maduro promoted you to Vice-President.

Think about it and you will figure it out Jorge, but you will not nail it!

Tonight seven Deputies, including a female, were injured in Venezuela’s National Assembly. One is hospitalized. While this happened, the President of the National Assembly Diosdado Cabello smiled. Funny thing is, only opposition Deputies were injured. They were not allowed to speak in the Assembly. They were told, they would not be allowed to speak in the Assembly where they are the legal and elected representatives of the “people”. Except for Chavismo, the “people” are only those aligned with them. Here is the video:

This is the outright fascism that Diosdado Cabello has been promoting in the National Assembly since Chavez died. Diosdado thinks Chavez should have named him. Instead he named whimpy Nicolas. Maduro may say what he wants, but it is his fascist hordes that are acting and he clearly can not control them. Diosdado is undermining Maduro by being very radical, while he just watches. Diosdado is claiming the ground of the radicals, because he knows Maduro is unsure of himself. Thus, Maduro may not want this to repeat, but he either stops it or he sinks under then wave of fascism of his buddies. Maduro’s peaceful overtures to Capriles of the day before, were erased by Diosdado in a few minutes today.

Facism is, Fascism does.