Interview: Chavez or democracy?

Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

In this link, we appear in an interview for the Ukrainian magazine "Український Тиждень.” We talked about the changes Chavez has made in the Venezuelan political system, why the shift to the Cuban model, Chavez's great mistakes as president, the real results of the XXI century socialism and other issues related to Venezuela's current political situation.

At the end, we say that if Chavez wins again in 2012, he would enact all the reforms he needs to install a communist regime, so Venezuela would definitely lose its democracy. In this case, we think Venezuela would look like Cuba or Belarus.

Economically, the system would be fully nationalized, but with a small space for the micro-private property. And politically, we would have a lifetime president and a privatized bureaucracy in the hands of Chavistas.

The original interview is in Ukrainian, but there are an English version here.

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The probable relationship Santos-Chavez

Authors:
José Alberto López Rafaschieri and Luis Alberto López Rafaschieri
www.morochos.net

Juan Manuel Santos and Hugo Chavez are divided by ideology. The first is a democrat, the second a radical socialist.

They are divided by the FARC, because Santos is opposed to them, while Chavez has a very complacent attitude towards the socialist guerrillas. In this matter, by the way, they are also divided by the issue of the U.S. military in Colombia.

They are divided by the recent diplomatic tensions, which have caused the chronic stagnation that the two countries have been accepting as a habit.

They are divided by Brazil, because this has been one of the big winners of the fight between Chavez and Uribe. Venezuela now buys from Brazil what it previously imported from Colombia.

And they are also divided by Cuba, since trade between the Castro dictatorship and Colombia is relatively insignificant, which should be of paramount importance to explain the attitude of Chavez. Besides that Cuba does not share the Colombian government's interest of fighting terrorism.

For all this, although some people think that Santos and Chavez will suddenly be moved by a cold pragmatism, it seems very difficult for these presidents to improve the Colombian-Venezuelan relations to a level of warmth and understanding. They may have short-term goals, or statements that will try to dissolve the tension, but eventually, the elements described here should take things in another direction. Even we think Chavez will not lift his embargo against Colombia, he didn't during the worst of the Venezuelan electricity crisis, in spite that Colombians had the enough energy to mitigate the devastating shortages in Venezuela, then, why would he do it now?

Trade war and strong diplomatic tensions are the most likely scenario when the governments of Chavez and Santos begin to interact.

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Hyper-inflationary Statism

Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

Belarus is, in general terms, a nationalized economy, even so, prices there usually rise at hyper-inflationary rates (8.4% in 2007, 14.8% in 2008 and 13% in 2009).

Vietnam is also, in general terms, a nationalized economy, even so, prices there usually rise at hyper-inflationary rates (8.3% in 2007, 23.1% in 2008 and 7% in 2009).

And in Venezuela, the government has also almost always had the habit of owning many businesses, a trend that has increased during the 11-year rule of Hugo Chavez. Even so, prices in Venezuela usually rise at hyper-inflationary rates (18.7% in 2007, 30.4% in 2008 and 29.5% in 2009).

The point is, if the government in these countries supply an important part of the goods consumed by the people, why the big rise in prices? It is a reality that contradicts socialist theories. It was assumed that the fault was in the private sector, but while these nations have economies with strong Statist characteristics, in them, the goods increase in value at vertiginous rates. In fact, in these havens of nationalization, inflation is much higher than that of the capitalist countries, as can be seen if we compare their records with those of the United States, Canada, Japan or the European Union members. Where inflation has only rarely exceeded 3% in the last ten years.

Inflation is a monetary phenomenon that is given mainly by government spending and the amount of money it prints, so when a country is affected by hyper-inflation, the government is the main cause. Removing the private sector from the system is not a guarantee that the general level of prices will stabilize, as evidenced by the cases described above.

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Double-dip recession, Stiglitz's third mistake

Authors:
José Alberto López Rafaschieri and Luis Alberto López Rafaschieri
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A small country like Greece do not have enough influence to destabilize the global economy. Furthermore, fears in Greece are based on the economic fundamentals shown by this country, contrary to what happens outside Europe, where most developed countries are presenting better results.

Europe is currently a weakened economy, and we expect low GDP growth in this region for the rest of the year; however, the solitary strength of Europe should not be enough to stop the joint recovery of countries like USA, China, India, Japan, Russia, most of Africa and almost all Latin America. Just the opposite should be expected: an export economy, like Europe's, will be influenced by the recovery of the rest of the world, a fact that eventually would also improve conditions in the Eurozone.

In 2008, Joseph Stiglitz said the credit crisis would represent the end of capitalism, but he was wrong. In 2009, the same author stated that the global reserve system based on the US dollar was in the process of fraying, but he was wrong. And now, in 2010, the winner of the Nobel Prize for economics says that there are great chances of a global double-dip recession, but it appears Stiglitz will be wrong for third consecutive time, because as we have said, neither the macroeconomic performance outside Europe, nor the solitary influence of the Euro zone, support the thesis of a second global recession in 2010 or 2011.

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South of the Border, a win-win-lose film

Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

Hugo Chavez wins, because in the name of egotism he gets a Hollywood movie just for himself, obtaining colossal propagandistic benefits for his personal political project.

Oliver Stone also wins, even if we concede that the current Venezuelan president did not help to finance the film, because with a motion picture dedicated to Chavez, this movie tycoon and some Hollywood studios achieve an invaluable promotion. The publicity received by the film "South of the Border" in the Venezuelan government press is sensational, the national election results don't have the same attention from the Chavista media. These businessmen have now all the power of the Venezuelan State promoting for free their capitalist product -which is exchanged for money in order to attain capital gains-. Normally Stone and Hollywood studios would spend a fortune to advertise their merchandise, but not if they made a movie for the leader of the Venezuelan revolution, it is the XXI century socialism working for private U.S. interests.

Unfortunately Venezuela loses, because while these two satisfy their selfishness without caring about costs, the Venezuelan State is the one that pays the bills that run this society between Hollywood's capitalism and Chavez's socialism, in a country where a huge number of Venezuelans live in extreme poverty.

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Santos, as we said

Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

Juan Manuel Santos won the first round in Colombia, as we expected, despite the fact that Gallup, Ipsos and the major Colombian pollsters predicted that Antanas Mockus and Santos would end up technically tied in the first round election.

These large pollsters want to blame their methodological errors on the National Electoral Council's prohibition of not allowing the publication of last week's results, but it seems unreasonable to assume that the voting intention has changed so drastically in few days.

These polling firms also predicted that Mockus would win the second round, however, for the second part of this election, we continue to believe that Santos should dominate the race, probably getting more support than before because he is now the favorite.

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