Colombia, Venezuela and economism

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

As easy as when Paul the octopus chooses his oyster: “economic interests will prevail,” says almost everyone who has an opinion on the current Colombia-Venezuela border spat.

They do not take into account the ideological factor, because, apparently, some experts believe that modern man is born without the brain's right hemisphere, which makes him a perfectly rational being who does not know of emotions, superstition, prejudice, or imagination.

They also do not consider the position of other sectors in both countries, because, according to them, the only ones that count in this matter are certain Colombian exporters who are apparently lobbying to recover the Venezuelan market. What about the Armed Forces, the electorate, the media, politicians and businessmen that do not trade with Venezuela? All this is out of their speculations. The division of Venezuelan society is neither mentioned in their analysis, nor the position of other interested countries, such as Cuba, Brazil or the U.S., for example.

Everyone that analyzes the diplomatic tensions between Colombia and Venezuela is based, mostly, on economicist hypothesis to predict that conflicts between Chavez and Colombia will disappear with the arrival of Santos. Unfortunately, we suspect they will soon realize that homo economicus existed only in the imagination of John Stuart Mill.

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Poll for Brazil's presidential election

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

Some Brazilian polling firms said, first, that Jose Serra was the favorite to win the presidency with a 10 point lead. Afterwards, they said Dilma Rousseff was ahead by a small margin, and they say now that there is a technical tie between the two main candidates in Brazil.

Initially, Serra was favored not so much for his work, but because of the economic downturn and the ruling party's time in government. Notwithstanding, economic conditions have improved significantly in the last months and Rousseff has managed to launch a more attractive proposition than simply being the Lula's candidate. While we note a weaker effort by Serra, currently.

Also, Brazil's electoral system has several deficiencies that compromise its transparency -fully automated and without manual audits of votes- which is an extra advantage that favors the ruling party, in this case, the coalition that supports Rousseff.

The pollsters expect a close fight and surely they will be jumping from one candidate to another when asking for the favorite in the remainder of the campaign. However, from our perspective, we don't see good possibilities for Jose Serra, so we think that Dilma Rousseff will be the next president of Brazil.

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Venezuela: Estimate of 2010-II GDP growth

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

According to our calculations, Venezuela's GDP should have dropped by 5,4% in the second quarter of 2010 over the same period last year.

This would mean the fifth consecutive quarter of economic contraction, while most other Latin American countries recovered growth since months ago.

Unemployment showed a slight decline during this period, but this was not enough to counter the electricity crisis and the fall in private investment. In addition, in this quarter the inflation rate had the largest increase so far this year and two extraordinary factors were added to the Chavez's recessive cocktail: There was an intense monetary trauma due to the insertion of the dollar-SITME in the exchange rate system, and the prosecution of almost all stock broker firms and “Banco Federal”, which caused a financial nervousness that did not do any good to the economy.

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- Venezuela 2010: Estimate of GDP and inflation

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