Tag: chavez

Authoritarian Governments Use Old Smears to Tear Down Their Opponents

Anne Applebaum reports on how old smears are still used to support illiberal ideas and authoritarian government:

Halfway through an otherwise coherent conversation with a Georgian lawyer here — the topics included judges, the court system, the police — I was startled by a comment he made about his country’s former government, led by then-president Mikheil Saakashvili. “They were LGBT,” he said, conspiratorially.

What did that mean, I asked, surprised. Were they for lesbian, gay, bisexual and transgender rights? For gay marriage? Were they actually gay? He couldn’t really define it, though the conversation meandered in that direction for a few more minutes, also touching on the subject of the former president’s alleged marital infidelity, his promotion of female politicians, his lack of respect for the church.

Afterward, I worked it out. The lawyer meant to say that Saakashvili — who drove his country hard in the direction of Europe, pulled Georgia as close to NATO as possible and used rough tactics to fight the ­post-Soviet mafia that dominated his country — was “too Western.” Not conservative enough. Not traditional enough. Too much of a modernizer, a reformer, a European. In the past, such a critic might have called Saakashvili a “rootless cosmopolitan.” But today the insulting code word for that sort of person in the former Soviet space — regardless of what he or she thinks about homosexuals — is LGBT.

None of this is new, as Applebaum notes. We’ve seen it recently in Venezuela. In 2012, as soon as Henrique Capriles won a primary to become the candidate of the democratic opposition against Venezuelan strongman Hugo Chavez, the Wall Street Journal reported that he

was vilified in a campaign in Venezuela’s state-run media, which insinuated he was, among other things, a homosexual and a Zionist agent.

Homosexual and Jewish, I thought. When they attack him for being rich, they’ll have the trifecta of populist prejudices.

And sure enough, they did. Chavez himself declared:

The bourgeoisie have their candidate – the candidate of the anti-fatherland, of capitalism, of the Yankees. We are going to thrash that bourgeoisie.

Chavez, of course, also threw in “the candidate of the Yankees,” that is, the Americans. German democrats used to say that “anti-semitism is the socialism of fools.” Now in many countries we could say that anti-Americanism is the new anti-semitism. They’re often found in tandem.

The authoritarian government of Malaysia calls its chief opponent, Anwar Ibrahim, a homosexual and a gay propagandist, and has even prosecuted and jailed him on trumped-up sodomy charges.

All of these epithets – homosexual, Jewish, bourgeoisie, and more recently, “American” – have been staples of illiberal rhetoric for centuries. Liberals – advocates of democracy, free speech, religious freedom, and market freedoms – have been tarred as “cosmopolitan” and somehow alien to the people, the Volk, the faithful, the fatherland, the heartland.

Authoritarians such as Putin and Chavez’s successor Nicolas Maduro also like to denounce their opponents as “fascists,” even though they themselves fit most of the textbook definition of fascism – nationalism, anti-liberalism, a charismatic leader as the embodiment of the nation, and an economy controlled indirectly by the state, typically through nominally private owners

Liberals should denounce these sorts of vile and illiberal attacks, whether they stem from the American far right or far left, Vladimir Putin, the ruling party in Malaysia, or the Venezuelan socialists. 

Price Controls: A Troubling Trend in Latin America

Argentina, Venezuela, and now even Ecuador have all embraced an unfortunate, if familiar, economic craze currently sweeping the region – price controls. In a wrong-headed attempt to “suppress” inflation, the respective governments have attempted to fix prices at artificially low levels. As any economist worth his salt knows, this will ultimately lead to scarcity.

Consider Venezuela, where the government sets the price of a number of goods, including premium gasoline, which is fixed at only 5.8 U.S. cents per gallon. As the accompanying chart shows, 20.4% of goods are simply not available in stores.

While price controls ostensibly keep the prices of goods on official markets low, they ultimately lead to empty shelves, depriving many consumers access to essential goods (such as toilet paper). This, in turn, leads to “repressed” inflation – given the price controls that exist, the “true” rate of inflation is held down, or repressed through Soviet-style government intervention. As the accompanying chart shows, the implied annual inflation rate for Venezuela (using changes in the black-market VEF/USD exchange rate) puts the “repressed” inflation rate at 153%.

Likewise, Argentina is facing a similar dilemma (see the accompanying chart).

In addition to scarcity and repressed inflation, price controls can lead to unintended political consequences down the road. Once price controls are implemented it is very difficult to remove them without generating popular unrest – just consider the 1989 riots in Venezuela when President Carlos Perez attempted to remove price controls. 

Hopefully, Ecuador – which, thanks to its dollarization, is experiencing an annual inflation rate of only 3% – will see this folly and abandon its expirement with price controls.

If countries like Venezuela are really interested in keeping inflation under control, they should follow Ecuador’s lead – simply junk their domestic currencies and “dollarize”.

Chavez: The Death of A Populist … and His Currency?

Although Hugo Chávez, the socialist presidente of Venezuela, has finally met his maker, the grim reaper is still lingering in Caracas. As it turns out, Chávez was not the only important Venezuelan whose health began to fail in recent weeks: the country’s currency, the Venezuelan bolivar fuerte (VEF) may soon need to be put on life support.

In the past month the bolivar has lost 21.72% percent of its value against the greenback on the black market (read: free market). As the accompanying chart shows, the bolivar has entered what could be a death spiral, which has only accelerated with news of Chávez’s death.

 

Shortly before his death, Chávez’s administration acknowledged that the bolivar was in trouble and devalued the currency by 32%, bringing the official VEF/USD rate to 6.29 (up from 4.29). But, at the official exchange rate, the bolivar is still “overvalued” by 74% versus the free-market exchange rate.

Venezuela Votes against Chavez

The Venezuelan opposition has won an important victory—for now. In Sunday’s parliamentary elections it managed to receive 52 percent of the popular vote, which translates into some 60 out of 165 seats in the legislature, thus depriving Chavez of the two-thirds majority he needs to pass some laws and make some major decisions such as naming Supreme Court justices.

The victory shows that a majority of Venezuelans are tired of the regime’s autocratic ways and its results; it has emboldened the up-until-now ineffective and disorganized opposition; and it undermines the legitimacy that Chavez has claimed to have in speaking for the people (it will be difficult for him to continue to dismiss serious criticisms of his government as the concerns of a small oligarchy).

So life may be a bit more difficult for Chavez in the future, but it would be naïve to think that Chavez will suddenly begin respecting democratic institutions and let the election results stand in the way of his socialist revolution. He’s used every dirty trick in the book to subvert and silence his opponents—technical disqualification of candidates, gerrymandering, intimidation, de-funding local governments led by the opposition, exiling or jailing critics on false charges, shutting down media outlets, etc.—and to gain autocratic control of every major institution in the country.

Chavez will surely try to circumvent the legislature if it suits him. He has set up parallel government structures that he controls, and has spoken of creating local “communes” throughout the country whose decisions would override those of the parliament. Chavez controls virtually all government spending in an opaque process that imposes no accountability. It will be a challenging task for a new parliament to make spending transparent and accountable. The lame duck congress that lasts for the next three months (and that Chavez fully controls) can still pass a law empowering Chavez to rule by decree for any period of time that it chooses. So Chavez still has the ability to get his way.

In the end, politics matter, but the factor that will determine whether Chavez will be able to hold on to power may very well be economics. The economy is the worst performing in Latin America, inflation is about 30 percent, the country suffers power outages and water shortages, there is a scarcity of basic foods and other goods, infrastructure is crumbling and the dramatic rise in crime has made Venezuela one of the most criminally violent places in the world. It is no surprise then that most Venezuelans are fed up with Chavez. The rise in discontent, including among his base, threatens Chavez’s hold on power. Thus, the autocrat’s need to move fast in consolidating his revolution a la Cuba, at which point popular discontent matters little. Venezuela is still very much in a race between a deteriorating domestic economy and the completion of Chavez’s totalitarian project.