Next to Hugo, Sean Penn is Sane

In "Hugo Boss" Christopher Hitchens recounts his time with Hugo and Sean Penn. Same title as a good Foreign Policy piece (subscription only) from a couple of years back. Anyway the best part for me is glimpse into the mind of Hugo:

It did not take long for this hero-obsession to disclose itself in bizarre forms. One evening, as we were jetting through the skies, Brinkley mildly asked whether Chávez's large purchases of Russian warships might not be interpreted by Washington as a violation of the Monroe Doctrine. The boss's response was impressively immediate. He did not know for sure, he said, but he very much hoped so. "The United States was born with an imperialist impulse. There has been a long confrontation between Monroe and Bolívar. … It is necessary that the Monroe Doctrine be broken." As his tirade against evil America mounted, Penn broke in to say that surely Chávez would be happy to see the arrest of Osama Bin Laden.

I was hugely impressed by the way that the boss scorned this overture. He essentially doubted the existence of al-Qaida, let alone reports of its attacks on the enemy to the north. "I don't know anything about Osama Bin Laden that doesn't come to me through the filter of the West and its propaganda." To this, Penn replied that surely Bin Laden had provided quite a number of his very own broadcasts and videos. I was again impressed by the way that Chávez rejected this proffered lucid-interval lifeline. All of this so-called evidence, too, was a mere product of imperialist television. After all, "there is film of the Americans landing on the moon," he scoffed. "Does that mean the moon shot really happened? In the film, the Yanqui flag is flying straight out. So, is there wind on the moon?" As Chávez beamed with triumph at this logic, an awkwardness descended on my comrades, and on the conversation.

LA Quick Hits: Calderon Still Talking Security, Hugo Isn't, But He Should, Hugo Skipping Mercosur, Chincilla Wants to Cash In & More

• Calderon acknowledges the need to open a new chapter in the battle to provide security for Mexico.
• There is a security problem in Venezuela and the opposition promises to make it an issue. The only city in LatAm that has suffered more? Ciudad Juarez.
• Momentum for Honduran recognition continues. Mex and Chile give a thumbs up to the Lobo government. Don't hold your breath for the Legion of Doom following suit.
• Hugo is not going to make it to the next Mercosur summit in Argentina. Cites the tensions with Colombia.
• Chinchilla met with Red Chinese FM Yang Jiechi. The Ticos are trying to cash in on their switch from ROC to PRC recognition - they asked for a donation to finish a four-lane expressway.
• The Santiago exchange soared to a historical high of 4,418.66

LA Quick Hits: FARC in Venezuela, Hugo Gets Pissed, Santos Invites Neighbors, Car Bomb in Mex, Killing Labor, Bolivar is Dead, Peru "Slows" & More

• FARC and ELN leaders are chilling out in Venezuela. Colombians have pictures and film to prove it - the evidence goes back to 2002 and...
• Venezuela is SHOCKED by the allegations...Hugo pulls his ambassador from Colombia. That Ambassador must have some pretty awesome frequent flier miles.
• You're invited! Santos invites Hugo and Correa to his inauguration...good luck with that.
• First car bomb in Mexico's drug war goes off in Ciudad Juarez - four dead.
• Mexican drug cartels have US made grenades.
• Argentina oks same-sex unions - Cristina takes a swipe at the US, of course.
• Hugo's unions take on the old unions and 75 union leaders have died. How come we only hear about Colombia?
• Cuban Commie spy is sentenced for life. His wife gets off easy with only six and three quarter years.
• Not a parody - Hugo exhumes Simon Bolivar, speaks to the remains and relates it all to a national audience. The crazy thing is that if he ran tomorrow, Hugo would probably still get re-elected.
• Cardinal Ortega visited US in June - met someone, but Obama Admin is not confirming who.
• Peruvian economy continues to sizzle, growing 9.2% in May
• Happy Birthday Plan Colombia! $8 billion, 84% reduction in terrorist attacks, 88% reduction in kidnappings, 58% in coca production and 45% reduction in homicides.
• Correa gears up for war against crime.
• Ten candidates for Prez of Brazil, only Dilma and Serra matter.
• Twelve Candidates for Mayor of Lima, right and center right candidates leading.

LA Round Up: Vicky Cashes In, AMLO Again, Alvaro-n-Hugo & Peru Explodes

• Vicky Pelaez is going to get PAID by the Ruskies. Like she wasn't getting paid before.
• Because it wasn't fun enough the first time "El Mesias Tropical" is gearing up to do it again. Ebrard is playing nice for now, but no way he lets AMLO get the PRD nod without a fight.
• Camacho Solis coordinator of the lefty Mexicans (PRD, PT and Convergencia) says they need to stick to one candidate in 2012 - good luck if the consensus isn't el Peje.
• Year to year numbers for May show Peru exports to the Americas up 30%. All that and no Export Initiative? Amazing how that works.
• Venezuela blames Uribe for keeping relations testy - I'm SHOCKED!

The Hugo Dems

WSJ has an editorial on what it labels the "Chavez Democrats." WSJ correctly castigates the Dems for trying to slap down Colombia during its high stakes confrantation with Hugo. They also note that the "soft power" lovers of the left seem to have forgotten what soft power is about:

Even as Mr. Chávez was doing his war dance, Senate Finance Chairman Max Baucus was warning the White House not to send the Colombia deal to the Hill for a vote without the permission of Democratic leaders. He was seconded by Ways and Means Chairman Charlie Rangel, who told Congress Daily that "they don't have the votes for it, it's not going to come on the floor," adding that "what they [the White House] don't understand it's not the facts on the ground, it's the politics that's in the air."

Mr. Rangel is right about the politics. No matter what U.S. strategic interests may be in Colombia, this is an election year in America. And Democrats don't want to upset their union and anti-trade allies. The problem is that the time available to pass anything this year is growing short. The closer the election gets, the more leverage protectionists have to run out the clock on the Bush Presidency. The deal has the support of a bipartisan majority in the Senate, and probably also in the House. Sooner or later the White House will have to force the issue.

Unfortunately the ed. goes overboard bringing up the supposed fraud of the Hugo recall of 2004. Fraud or not he still had overwhelming support at the time. It was unlikely that he would have been defeated in that instance. WSJ singles out my personal favorites Delahunt and Dodd as being particularly close to Hugo:

These are the same Democrats who preach the virtues of "soft power" and diplomacy, while deriding Mr. Bush for being too quick to use military force. But trade is a classic form of soft power that would expand U.S. and Latin ties in a web of commercial interests. More than 8,000 U.S. companies currently export to Colombia, nearly 85% of which are small and medium-sized firms. Colombia is already the largest South American market for U.S. farm products, and the pact would open Colombia to new competition and entrepreneurship.

Which brings us back to Mr. Chávez and his many Democratic friends. Connecticut Senator Chris Dodd's early support helped the strongman consolidate his power. Former President Jimmy Carter blessed Mr. Chávez's August 2004 recall victory, despite evidence of fraud. And then there are the many House Democrats, current and former, who have accepted discount oil from Venezuela and then distributed it in the U.S. to boost their own political fortunes. Joseph P. Kennedy II and Massachusetts Congressman Bill Delahunt have been especially cozy with Venezuela's oil company. If Democrats spurn free trade with Colombia, these Democratic ties with Mr. Chávez will deserve more political scrutiny.

Senators Hillary Clinton and Barack Obama are both competing for union support. But if they wanted to demonstrate their own Presidential qualities, they'd be privately telling Ms. Pelosi to pass the Colombia pact while Mr. Bush is still in office. That would spare either one of them from having to spend political capital to pass it next year.Instead, both say they oppose the deal on grounds that Mr. Uribe has not done more to protect "trade unionists." In fact, Mr. Uribe has done more to reduce violence in Colombia than any modern leader in Bogotá. The real question for Democrats is
whether they're going to choose Colombia -- or Hugo Chávez.

Kaplan's Kolkata and Kaplan's Colombia

Robert Kaplan has a new piece in the April issue of The Atlantic. I would love to post it but it's not up yet on their site. Kaplan is obviously still working on his new book, this article is about his visit to Kolkata (formerly Calcutta). Apparently the name was changed in 2001. I want to say more but today is our baby girl's baptism and my wife is going to beat me posterior if I don't start wrapping this up.

CSM pronounced The Atlantic's daily post The Current as one of its "Monitor Picks." This is what they said:

Struggling to find time to wade through a 5,000-word essay on global affairs? Go the easier route, and check out The Current, where Atlantic scribes offer their pithy takes on timely topics.

Kaplan was a recent contributer with his take on Colombia and Alvaro Uribe which I consider spot on:

Venezuelan megalomaniac Hugo Chavez's dispatch of troops to the Colombian border is meant not just as an affront to the Colombians but to Colombia's ally, the United States. Chavez must have deep sense of inferiority, because Colombian President Alvaro Uribe Velez is everything Chavez is not. Indeed, handicapped for size and importance of the country, Colombian President Uribe is the most impressive and successful ruler in the democratic world. A quiet, workaholic, he is the opposite of a demagogue. If Pakistan or Iraq had an Uribe, they would both be increasingly out-of-the-news success stories.

Hugo the FARC Lover

Hugo is making some noises and Correa is following his lead. Myles Frechette, a former ambassodor to Colombia, made the rounds in the papers. I don't want to read too much into it but it appears to me that the Frechette tailored his message to his audience. For the Herald Frechotte cited Hugo's motivation for his actions:

"You'll see a lot of [diplomatic] movement in the next few days,'' Frechette said, adding, "Chávez is playing to the cheap seats in Venezuela. His ratings are down. The economy is suffering, and the people know it. He's using this as a smoke screen. Note that Chávez has carefully not said he'll attack Colombia"

In the WaPost piece Frechette goes out of his way to say that Uribe is the one in dire straights:

"Uribe has got to go down there, meet with Correa, calm him down, and he's going to have Chávez fuming at the border," Frechette said. Uribe is "in a pickle, in the sense that diplomatically he's got to get himself out of this corner that he's got himself in."

Every piece even the one at NYTimes notes Chavez is gets along fine with the FARC. NYTimes article defined Chavez/FARC relations as warm and noted, just like WaPost, that Reyes and Hugo had met three times.

Chavez Exposed

Chavez takes a double barreled blast from Foreign Affairs and The Economist. The devastating take down in Foreign Affairs lays bare Hugo's "Empty Revolution." Francisco Rodriguez notes that much of what has been accepted by even Hugo's enemies, that he has generously invested resources on the impoverished, that he has improved health care and that he has attacked illiteracy is in fact all myth. Ironically The Economist is one of those cited as swallowing the Bolivarian lie. This week The Economist checks out the Rodriguez piece and sets the record straight on Hugo's failure on the literacy front:

The literacy scheme was one of a clutch of social “missions” organised by Mr Chávez in 2003, when he faced possible defeat in a recall referendum on his presidency. The government claims that by October 2005 it had all but eliminated illiteracy. That claim has become a centrepiece of the international propaganda effort on behalf of Mr Chávez's “revolution”. But there is no data to support it. Many educationalists doubt it. Even the government itself has retreated from its initial figure of “less than 1% illiteracy” to a figure of around 4%, though it is not clear whether this refers just to adults or to the total population.

It is notoriously difficult to obtain precise literacy figures from census data, which rely on self-assessment. But Francisco Rodríguez of Wesleyan University in Connecticut and Daniel Ortega of IESA, a Caracas business school, have used household surveys from the national statistical institute to assess the programme. In an article in the latest issue of Foreign Affairs, Mr Rodríguez says that they found “little evidence” of any “statistically distinguishable effect on Venezuelan illiteracy”. Where the government says it taught 1.5m, the study found that only 1.1m were illiterate to begin with, and that the fall over the 2003-05 period was less than 100,000. Even this improvement could largely be explained by a long-term demographic trend (many illiterate adults are elderly and die off).

Adán Chávez, who is the education minister as well as the president's brother, has complained of statistical “manipulation” by the government's foes. But Mr Rodríguez, for one, is no reactionary; he was the chief economist of Venezuela's National Assembly in 2000-04, and was once a chavista sympathiser.

Last year the statistics institute launched its own study on the impact of the social missions. This was supposed to be ready by January. But delays in buying equipment mean it has yet to start, according to Irene Gurrea, the economist in charge. Asked if there were any reliable statistics on the impact of Misión Robinson, Ms Gurrea said: “As far as we know, no—that's why we're doing the study.”

Staff of an older literacy programme run by Fe y Alegría, a Catholic charity, say they continue to enroll students. In Machiques, near the Colombian border, 100 joined in the past semester. They say that up to 40% of the Warao Indians in the Orinoco delta are illiterate. In 2005 Mr Chávez told local officials to declare their towns officially “illiteracy free”. Knowing this to be untrue, the mayor of Machiques resisted, but gave in to pressure, according to Jesús Vilorio, who works for Fe y Alegría.

It is not hard to find individuals like Ms Silva who say their lives were changed by Misión Robinson. But the missions have gone hand-in-hand with neglect of schools and hospitals. Mr Rodríguez estimates that Robinson spent $1,000 for each of its literate graduates, compared with around $60 for other literacy schemes in Latin America. At the least, that money could have been better spent.

The Rodriguez case in Foreign Affairs does not stop with the withering attack on Hugo's literacy propaganda. First there is the failure of Hugo's antipoverty programs:

Soon after joining the National Assembly, I clashed with the administration over underfunding of the Consolidated Social Fund (known by its Spanish acronym FUS), which had been created by Chávez to coordinate the distribution of resources to antipoverty programs. The law establishing the fund included a special provision to ensure that it would benefit from rising oil revenues. But when oil revenues started to go up, the Finance Ministry ignored the provision, allocating to the fund in the 2001 budget only $295 million -- 15 percent less than the previous year and less than a third of the legally mandated $1.1 billion. When my office pointed out this inconsistency, the Finance Ministry came up with the creative accounting gimmick of rearranging the law so that programs not coordinated by the FUS would nevertheless appear to be receiving resources from it. The effect was to direct resources away from the poor even as oil profits were surging. (Hard-liners in the government, incensed by my office's criticisms, immediately called for my ouster. When the last moderates, who understood the need for an independent research team to evaluate policies, left the Chávez camp in 2004, the government finally disbanded our office.)

Rodriguez notes that income inequality has actually increased during Hugo's tenure:

One would expect such a consensus to be backed up by an impressive array of evidence. But in fact, there is remarkably little data supporting the claim that the Chávez administration has acted any differently from previous Venezuelan governments -- or, for that matter, from those of other developing and Latin American nations -- in redistributing the gains from economic growth to the poor. One oft-cited statistic is the decline in poverty from a peak of 54 percent at the height of the national strike in 2003 to 27.5 percent in the first half of 2007. Although this decline may appear impressive, it is also known that poverty reduction is strongly associated with economic growth and that Venezuela's per capita GDP grew by nearly 50 percent during the same time period -- thanks in great part to a tripling of oil prices. The real question is thus not whether poverty has fallen but whether the Chávez government has been particularly effective at converting this period of economic growth into poverty reduction. One way to evaluate this is by calculating the reduction in poverty for every percentage point increase in per capita income -- in economists' lingo, the income elasticity of poverty reduction. This calculation shows an average reduction of one percentage point in poverty for every percentage point in per capita GDP growth during this recovery, a ratio that compares unfavorably with those of many other developing countries, for which studies tend to put the figure at around two percentage points. Similarly, one would expect pro-poor growth to be accompanied by a marked decrease in income inequality. But according to the Venezuelan Central Bank, inequality has actually increased during the Chávez administration, with the Gini coefficient (a measure of economic inequality, with zero indicating perfect equality and one indicating perfect inequality) increasing from 0.44 to 0.48 between 2000 and 2005.

In fact by almost every measure things have managed to get worse for many Venezuelans:

...official statistics show no signs of a substantial improvement in the well-being of ordinary Venezuelans, and in many cases there have been worrying deteriorations. The percentage of underweight babies, for example, increased from 8.4 percent to 9.1 percent between 1999 and 2006. During the same period, the percentage of households without access to running water rose from 7.2 percent to 9.4 percent, and the percentage of families living in dwellings with earthen floors multiplied almost threefold, from 2.5 percent to 6.8 percent.

How about that largesse being diverted to the poor? Non-existent says Rodriguez, although he eschews raw numbers and goes by percentage of the budget:

Remarkably, given Chávez's rhetoric and reputation, official figures show no significant change in the priority given to social spending during his administration. The average share of the budget devoted to health, education, and housing under Chávez in his first eight years in office was 25.12 percent, essentially identical to the average share (25.08 percent) in the previous eight years. And it is lower today than it was in 1992, the last year in office of the "neoliberal" administration of Carlos Andrés Pérez -- the leader whom Chávez, then a lieutenant colonel in the Venezuelan army, tried to overthrow in a coup, purportedly on behalf of Venezuela's neglected poor majority.

Health stats are also quite bleek:

In a number of recent studies, I have worked with colleagues to look more systematically at the results of Chávez's health and education misiones. Our findings confirm that Chávez has in fact done little for the poor. For example, his government often claims that the influx of Cuban doctors under the Barrio Adentro health program is responsible for a decline in infant mortality in Venezuela. In fact, a careful analysis of trends in infant and neonatal mortality shows that the rate of decline is not significantly different from that of the pre-Chávez period, nor from the rate of decline in other Latin American countries. Since 1999, the infant mortality rate in Venezuela has declined at an annual rate of 3.4 percent, essentially identical to the 3.3 percent rate at which it had declined during the previous nine-year period and lower than the rates of decline for the same period in Argentina (5.5 percent), Chile (5.3 percent), and Mexico (5.2 percent).

Bills are coming due:

But by late 2007, Chávez's economic model had begun to unravel. For the first time since early 2004, a majority of voters claimed that both their personal situation and the country's situation had worsened during the preceding year. Scarcities in basic foodstuffs, such as milk, black beans, and sardines, were chronic, and the difference between the official and the black-market exchange rate reached 215 percent. When the Central Bank board received its November price report indicating that monthly inflation had risen to 4.4 percent (equivalent to an annual rate of 67.7 percent), it decided to delay publication of the report until after the vote on the constitutional reform was held.

This growing economic crisis is the predictable result of the gross mismanagement of the economy by Chávez's economic team. During the past five years, the Venezuelan government has pursued strongly expansionary fiscal and economic policies, increasing real spending by 137 percent and real liquidity by 218 percent. This splurge has outstripped even the expansion in oil revenues: the Chávez administration has managed the admirable feat of running a budget deficit in the midst of an oil boom.

But Rodriguez doubts Hugo can do what it takes to fix things:

A sensible solution to Venezuela's overexpansion would require reining in spending and the growth of the money supply. But such a solution is anathema to Chávez, who has repeatedly equated any call for spending reductions with neoliberal dogma. Instead, the government has tried to deal with inflation by expanding the supply of foreign currency to domestic firms and consumers and increasing government subsidies. The result is a highly distorted economy in which the government effectively subsidizes two-thirds of the cost of imports and foreign travel for the wealthy while the poor cannot find basic food items on store shelves. The astounding growth of imports, which have nearly tripled since 2002 (imports of such luxury items as Hummers and 15-year-old Scotch have grown even more dramatically), is now threatening to erase the nation's current account surplus.

FARC Leader F***ed

Sort of intellectually lazy to resort to profanities but how else to characterize the elimination of Raul Reyes by Colombian forces? I have to give a hat-tip to Boz where I first happened upon the good news. He also has some good analysis and links - so good that anything on my part would be superfluous.

The only new news Boz has not put up is Venezuela's reaction which is to man up along the border to protect FARC guerillas residing in his country...Oh gosh...did I say that out loud? I meant that Chavez put troops along the border to protect the sovereignty of Venezuela. Chavez is also shutting down the embassy in Bogota. Since the Colombians did not touch Venezuelan territory this strikes me as a tad hysterical, assuming that he is not associated with the FARC. Chavez is doing his saber-rattling routine to see if he can boost popularity at home - it worked for Fidel so why not him? At least that seems to be his thinking.

LA Quick Hits: Evo is Loved, Hugo Beats China, Ecuador Kicks US Out, Lula's Package, Calderon Fights and Fights, Harleys in Havana & More

• One year in and Evo is still popular but divisive. What helps is the increased revenue from his nationalization program and that the economy is still growing. Evo marked the anniversary with a Fidel-esque 4 1/2 hour speech.
  
• The biggest customer in the arms market since 2005? Would you believe Hugo? Venezuela chipped in $4.3 billion to buy weapons and other military hardware (en esp.) while the China Reds ponied up $3.4 billion.
• Ecuador made clear that it is booting the US from the base in Manta (en esp.) in 2009, when the pact with US expires. Ecuador also looks to get into the LA arms race. (en esp.)
• CSM's excellent series on Calderon continues. Now the discussion focuses on his economic policy particularly the difficulty of dealing with monopolies. Ironically FT has a story on Calderon's planned assault on monopolies.
• Lula unveiled his growth package and it was bigger than expected.
• Calderon unveiled an 8-point plan to fight the drug war. He plans to rely more on local police in the future.
• Speaking of the police in Mex another cop was killed in Monterrey and...
• ...police in Tijuana are using slingshots, while they wait for their guns back.
• Miami (and Hugo) has given us a new pressure group Independent Venezuelan-America Citizens. They seem to be following the CANF model except that they will try to reach out to middle America by speaking English.
• Danny sliced his salary and those of his cabinet. (en esp.)
• Having a Harley in Cuba isn't easy.
  

Solving Iran and Venezuela

CSM is feeling pretty confident that if we leave Iran and Venezuela to their own devices that they will collapse just like the Soviet Union did and Cuba is doing. Sorry, but some of the logic in their case is blown by bringing up one regime that lasted over 70 years and one that is 47 years strong. Nor does CSM mention anything about contesting the two headed monster of Iran and Venezuela indirectly in other theaters. Do they think that we should allow Hugo to pile up buddies all over LA and allow him to sink them to the ground too? Anyway here are the highlights:

The more their socialist populism falters, the more Chávez and Ahmadinejad try to divert the attention of their poor majorities into believing the US is a threat. "Imperialism [meaning Washington] won't rest in its effort to weaken us, and one of the strategies is to weaken the price of oil," Chávez said during the visit of Iran's president.

Indeed, falling oil prices have reduced the money available for both governments to continue social handouts or makeshift jobs. For Chávez, who now wants to alter the Constitution to stay in power for a very long time, the solution is to grab added wealth by gaining more control of the means of production, Cuban style. He plans to nationalize the electricity company EDC and the telecom company CANTV. He also will end the central bank's autonomy and demand more revenue from foreign oil producers.

Such steps are a throwback to the failed policies of nationalized industries in Latin America during the 1970s. They are based on the false assumption that primary causes of poverty are wealth disparity and elitist politics, rather than a widespread culture of corruption and lack of education and smallscale capital.

Venezuela now ranks as the second most corrupt Latin American nation, and Chávez's socialism has produced rampant crime, high inflation, and slowing oil production. Unless he starts to buy Iranian know-how to make bomb-grade nuclear materials, the best the US can do is let his economic experiment fall of its own weight, as the Soviet Union's did, and as Cuba's is still doing.

The self-isolation of Iran and Venezuela comes out of a faulty vision in economics and a heavy hand in reducing democracy down to autocracy. The more they try to use oil wealth to win other nations over to an anti-US axis, the more they put their weak policies on display. Some revolutions aren't very revolutionary.

Why Hugo Wins

FP has a Web Exclusive on Hugo's winning ways. First they lay to waste some of his outlandish claims concerning poverty eradication:

The most commonly cited statistic in defense of the Chávez-helps-the-poor hypothesis is the decrease in poverty rates, from 42.8 percent when he took office in 1999 to 33.9 percent in 2006. But this decrease is neither unprecedented nor surprising, given that the Venezuelan economy is in the midst of an economic expansion fueled by a five-fold increase in global oil prices since his first term began. Historically, drastic declines in poverty in Venezuela are associated with periods of substantial real exchange appreciation similar to the current one. The last such episode, which lasted from 1996 to 1998, coincided with an even larger decline in the poverty rate, from 64.3 percent to 43.9 percent. The fact that Venezuela is presently running a fiscal deficit despite unprecedented global oil prices signals that the current improvement, just like previous ones, will sooner or later be reversed.

A full reading of Venezuela’s health and education statistics shows no signs of the dramatic turnaround in well-being often claimed by the Chávez government and its supporters. For instance, the percentage of newborns who are underweight actually increased from 8.4 to 8.8 percent between 1999 and 2004. The infant mortality rate has declined, but it has been declining steadily since the 1940s. There isn’t even much evidence that the government is trying to do more for the poor. The average share of social spending, excluding social security, has actually decreased during the Chávez administration (29.3 percent for the period from 1999 to 2004, in contrast to 31.5 percent for period from 1990 to 1998 before Chávez was in office).

So why did he win? Easy, it's the economy stupid:

But if Chávez’s social policies are not working, why did he win such a clear victory in the December elections? The explanation lies largely in Venezuela’s economic growth. The country has experienced three straight years of near-double-digit growth, partly because of the recovery from the 2003 national strike and partly because of the dramatic increase in worldwide oil prices. If there is one universal rule of voting behavior, it is that incumbents do well when the economy is growing.

That high economic growth would obviously be a point in favor of Chávez if it weren’t so clearly unsustainable. Despite a five-fold expansion in oil prices, Venezuela is currently running a fiscal deficit projected at 2.3 percent for 2006. A decline in oil prices, or perhaps even something less dramatic, will make this house of cards come tumbling down. When it does, it will be the Venezuelan poor who will pay the heaviest price.

And when that time comes, Venezuelans of all stripes may have no choice but to accept Chávez’s continued rule. He has used his time in office, and his country’s ample resources, to consolidate a formidable political machinery whose power is based not only on its ability to hand out rewards to supporters, but also to punish its opponents by systematically denying them access to employment and public services. Every arm of the state, from the tax collection agency to the judicial system, is being used to ensure that Chávez’s opponents pay a high cost for their political opinions.

LA Quick Hits: The Hugo Edition - 21st Century Trotskyism, Orinoco Flow or Lack Thereof, How to Say "Mother F' Idiot in Spanish & More

We're splitting Quick Hits in two today because Hugo made too much news yesterday:

• Hugo's 21st Century Socialism looks a lot like 20th century communism to me. Hugo swore in his 27 cabinet ministers yesterday and then Hugo announced plans to nationalize the country's electrical and telecommunications industries, end the independence of the central bank and expand his powers. WaPost reports that AES Corp. of Virginia, which holds and 86% stake in the largest private utility in the country is going to take a massive hit. In 2005 the firm made $613 million from Venezuela and lists the value of its assets in the country at $1.85 billion. WaPost also notes the importance of the ousting of Rangel, who had his own power base independent of Hugo. As I mentioned previously this move is reminiscent of Fidel purging the Cuban gov't as he concentrated his power. The ousting of Huber Matos, disappearance of Camilo and the exporting of Che were just the most obvious examples of his quest for undiluted power.
• HoustonChron highlights Hugo's threat to become more involved in the heavy oil Orinoco projects. The Chron notes that "Since the late 1990s, Houston-based ConocoPhillips, Exxon Mobil, Chevron Texaco and other firms have invested more than $17 billion into four major ventures in the vital Orinoco basin of eastern Venezuela." The Chron notices the Fidel parallel.
• LAT reports that 1/5 of Venezuela's oil production comes from Orinoco.
• All this talk of Orinoco has me thinking of Enya.
• The Herald points out that Hugo referred to himself as Trotskyist in a sense and that he closed his speech by using Fidel's tired closing, "Patria o muerte!," (The Fatherland or death!). Not mentioned is that he mixed it with a line from Che which everyone in LA would recognize.
• NYT predicatably downplays Hugo's moves in the headline but the story is comprehensive and good. Hugo's second most memorable quote of the day, "All that was privatized, let it be nationalized." is mentioned as is a very polite translation of the most popular quote of the day, which I will get into later.
• FT does a good job covering the business angle of the moves. They also analyze how the moves will affect petrol companies and the telecoms, specifically Verizon . FT also explains why this was a surprise (the incoming Fin. Minister didn't give a hint) and again another explanation of the booting of Rangel.
• As for the most memorable quote Hugo referred to OAS head Insulza as a "pendejo" and asked him to resign. (en esp.) No for the non-Spanish speaking audience out there it is impossible for any translation to English to do this word justice. The beauty of Spanish is the crudity implicit in most of its insults. Trust me that ripping someone in Spanish is a great deal more satisfying than in English. As for Hugo's choice of words, NYT noted that it can be translated to "idiot" but it is more honest to say that it means "stupid mother f****** idiot." or just use the crude word associated with the part of the female anatomy located below the waist.

Lies, Damned Lies and Bolivarian Lies

Francisco Rodriguez from the libertarian Independent Institute throws cold water on the idea that Chavez's social programs are actually helping the poor:

Despite these realities, government officials routinely make sweeping claims about the success of their social programs—claims that are commonly taken at face value by international public opinion. Consider, for example, the government’s official declaration of Venezuela as an “illiteracy-free territory” on October 28, 2005, when it announced that the Cuban-designed Misión Robinson literacy program had succeeded in teaching 1.5 million Venezuelans how to read and write in just over two years. Some of the highest-ranking representatives of international bodies and foreign governments, including Spanish president José Luis Rodríguez Zapatero and UNESCO director general Koichiro Matsuura, voiced their recognition and approval of this supposed achievement.

Given the extensive academic literature documenting the very low success rates of large-scale literacy programs, one would have expected a little more skepticism. Even a cursory look at the government’s figures will reveal deep inconsistencies in the official story. For starters, it seems awfully difficult to teach 1.5 million people how to read and write given that, according to the 2001 census, there were only 1.08 million illiterate persons in Venezuela. Indeed, the number of illiterate Venezuelans has never exceeded 1.5 million adults since the nation started collecting statistics in 1936. The government also claimed to have mobilized 1.8 percent of the country’s labor force as paid trainers in the program. The problem is that official employment statistics show no evidence that these trainers were ever employed and official budget figures show no evidence that they were ever paid.

In a recent paper I co-authored with Daniel Ortega and Edward Miguel, I used the raw data files of the Venezuelan National Institute of Statistics’ Household Surveys to estimate literacy rates in Venezuela during the period that the Robinson program was implemented. Our results show no evidence of the dramatic reduction in illiteracy claimed by the Venezuelan government. According to our estimates, in the second half of 2005—the first period after the government declaration regarding the eradication of illiteracy—there were still 1,014,441 illiterate Venezuelans over age 15, only slightly less than the 1,107,793 illiterate people registered during the first half of 2003 (before Robinson began). The statistical analysis carried out in our paper shows that most of this absolute decline in the number of illiterate Venezuelans can be traced to changes in the age structure rather than to any effect of the government’s literacy program.