Showing posts with label Socialism. Show all posts
Showing posts with label Socialism. Show all posts

Commie Corbyn: Better for UK’s EU Remainers?

♠ Posted by Emmanuel in , at 1/21/2019 04:22:00 PM
Comrade Corbyn is the opposition leader, yet he's reluctant to call for the second referendum other Labourites desire. Why?
Since we are starting a new academic semester, I am beginning with the basic theoretical perspectives grounding the study of international political economy--liberalism, mercantilism (economic realism) and Marxism. Arguably, few IPE topics loom larger nowadays than the United Kingdom's impending exit from the European Union: Why would such a wealthy country even think of leaving the world's most vaunted economic integration project? Alas, it seems even in the UK in 2019, us pro-European integration voices must deal with straight-up Marxists in the so-called "opposition" to Teresa May's Brexit plans. 

Recent ructions in British politics show how not much has changed from 2016. Hardline Brexiteers remain so, while Remainers have hardly changed their stripes. Most in the opposition party, Labour, are of the latter sort. Unfortunately for their lot, nobody has really stepped up to challenge the mantle of party leadership from Jeremy Corbyn. If Tony Blair represented New Labour's business-friendly liberal turn, I am afraid there is not much to be said about Corbyn. He is Ye Old[e] Labour--prehistoric almost--a remnant from a time when the party used to sing "The Red Flag" at the end of party conferences:
While a large majority of party members, according to polling, want Corbyn to actively seek a new referendum, the Labour leader has previously said it is more likely he would push to take the UK out of Europe with a different deal.
I am pretty sure Corbyn also knows lyrics to "The Internationale" by heart, but I digress...
Asked what he would want to deliver on Brexit if there were an election and he became prime minister, Corbyn said: ”At the very minimum, a customs arrangement with the European Union that gives us a say of what goes on but also avoids the whole issue of the problems of Northern Ireland, which this deal does.”

Corbyn said: “What I’m saying is we’re campaigning for a country that is brought together by investment,” adding that people were “very, very angry about the way they’ve been treated in their different communities around the country”. Pressed on whether he was campaigning to leave, Corbyn added: “We’re campaigning for a customs union.”

Asked later whether Labour would push for a second referendum in the absence of a general election, Corbyn said: “We’re then into that consideration at that point. My own view is that I would rather get a negotiated deal now if we can, to stop the danger of a no-deal exit from the EU on 29 March which would be catastrophic for industry, catastrophic for trade.”
My belief is that Corbyn makes some of the expected noises about jobs, investment and so on to at least appear mainstream That is, it's not really Brexit per se he's concerned about but its form in rhetoric. In his heart of hearts, though, I wouldn't be surprised if he's an orthodox Marxist: the EU is a neoliberal project usurping the sovereignty of European nations, not for the benefit of faceless Eurocrats like Brexiteers believe, but rather the interests of global capital.

There is only one real way to end this EU exploitation of the British for true Marxists, and so Corbyn is decidedly out of touch with his Labour colleagues pressing for a second referendum that would likely result in the UK remaining in the EU (which a true Communist would abhor). Ultimately, there is no better explanation for the evasions Corbyn makes as to why he isn't on board with calling for a second referendum like so many in Labour. Although his rationale may differ, like the Brexiteers he really does prefer the UK to be out of the EU.

How to work around the opposition leader being a barely concealed Brexiteer is no small problem for Remainers to solve.
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What China Gets From Giving Venezuela $45B

♠ Posted by Emmanuel in ,,,, at 10/05/2015 01:30:00 AM
The largest Venezuelan note is now worth 12 cents.
Next week, the IMF is holding meetings in Lima, Peru in the region that has suffered as much as any other from the global slump in commodities. It's not bound to be a happy occasion for many of those gathered. Despite everything, some commodity exports have managed to accumulate substantial foreign exchange reserves precisely in anticipation of these lean years. Others, meanwhile, have tried to lessen dependence on commodity exports to literally fuel growth.

As you would expect, Venezuela has done none of these things as it amassed very little in reserves--preferring to waste oil revenues on quite frankly idiotic attempts to show "global solidarity." Diversification away from oil? If nothing else, Venezuela has become more dependent on energy in the past few years...just as China-buoyed global demand has ebbed. Meanwhile, as the rest of the world combats deflation, Venezuela is confronting hyper(inflation) as the bolivar heads to oblivion. It has fallen by 88% in 2015:
Venezuela’s bolivar passed the physiological barrier of 800 bolivars per dollar Tuesday in black market trading as Venezuelans rushed to protect savings amid rising inflation. That means that the country’s biggest currency note of 100 bolivars is now worth about 12 U.S. cents.

The currency has declined 14.7 percent in the past month to 816 bolivars per dollar, according to dolartoday.com, a website that tracks trading in street markets where Venezuelans go to skirt limits on foreign-exchange purchases. The government maintains official rates of 6.3, 13.5 and about 200 bolivars per dollar for authorized purchases of items deemed essential.

Venezuela’s inflation, estimated by some to be nearing 200 percent, is the fastest in the world as President Nicolas Maduro’s administration prints more currency to pay budget expenses as the falling price of oil reduces foreign currency income. The amount of bolivars in circulation passed 3 trillion for the first time on Sept. 19, up 97 percent in the past year, according to data compiled by Bloomberg.
The only thing keeping Venezuela from economic oblivion is not the hated IMF, but rather the People's Republic of China. Ricardo Hausmann, the Venezuelan economist at Harvard, blames the worsening of Venezuela's worrisome situation to continued Chinese cash infusions which now amount to an astounding $45 billion. Who needs the IMF when you've got the PRC?
The billions of dollars China loans to Venezuela in exchange for oil are a “disgrace” and used for corrupt purposes that go undisclosed to the general public, said Harvard professor Ricardo Hausmann.

Venezuela, which has tapped China for more than $45 billion over the last decade, is increasingly reliant on the world’s second-biggest economy for cash because of its unwillingness to comply with the requirements of the International Monetary Fund, Hausmann wrote in a Sept. 28 opinion piece for Project Syndicate. Those loans have become more important than ever as the nation’s international reserves tumbled with oil prices to a near 12-year low.

“The Chinese have not required that Venezuela do anything to increase the likelihood that it regains creditworthiness,” wrote Hausmann, a former Venezuelan planning minister. “They merely demand more oil as collateral. Whatever the IMF’s faults,” China Development Bank “is a disgrace.” The loans have “built-in privileges for Chinese companies” in sectors including telecommunications, appliances, cars and oil drilling, Hausmann said. An e-mail to the bank seeking comment, sent after business hours, wasn’t immediately returned.
Think of tt as underdevelopment theory with a twist. Instead of the "imperialistic West" making its dictates known through the IMF, you have "third world champion" China. Remove the labels though and what you see happening is similar: ever-broader swathes of the Venezuelan economy falling into the hands of the Chinese. I hardly think the Chinese are doing this for altruistic reasons--would they extend so much credit to a resource-poor country? In China's calculations, $45 billion is a drop in the bucker compared to gaining leverage over the vast reserves Venezuela supposedly holds--especially in the form of unconventional reserves.

The question remains, though, of whether the Chavista leaders will continue to have warm relations with China into the future. Or, if these Chavista leaders will remain in place as they are quite unpopular for obvious reasons with the Venezuelan electorate. I guess China throwing billions and billions of dollars at them is one way of helping to guarantee that they do until such as time that China can be paid in full--and more.

I don't use the word "giving" instead of "lending" in the title for nothing.
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You Pretend to Work, Putin Pretends to Pay You

♠ Posted by Emmanuel in , at 8/25/2015 01:30:00 AM
The "resilient" Russian job market.
The self-deprecating joke among the lumpenproletariat in the USSR near its end was that they pretended to work, while the Soviet Union pretended to pay them. I suppose that not much has changed with the supposed end of the Communist era: as oil and commodities prices have fallen, so too have the fortunes of today's Russia. Then, as now, there remains an urge to put on a brave face in front of the [insert your choice of usually foreign villains here] who are blamed for its misfortunes.

Hence the curious case of rosy employment figures in today's Russia amid a commodities bust:
Soviet workers knew they got a raw deal, and they played along. “We pretend to work, and they pretend to pay us,” went a popular saying. About a million job gains into Russia’s recession, the bargain still holds, with salaries plunging at a pace unprecedented under President Vladimir Putin. Data set to be released this week will probably show unemployment holding at less than half the rate in the euro region, which has had nine consecutive quarters of growth. It’s a sign of a tacit deal that has ravaged productivity and limited economic flexibility.
The way to buoy Russian employment figures is to disguise underemployment, abetted by some of the toughest laws for letting workers go:
With Russia in the clutches of an economic crisis as domestic demand implodes after a currency collapse and sanctions over Ukraine, the jobless rate is less than it was before the neighboring country’s conflict erupted last year. Instead of easing the consumer plight, the stretched labor market betrays an economy geared toward ensuring social stability and ill-prepared to meet the challenges of an aging and shrinking workforce, content to punt the issue until the next crisis. “Choosing between radical reforms and stability, the government will favor stability,” said Vladimir Tikhomirov, chief economist at BCS Financial Group in Moscow. “That’s a Soviet-like choice--to conserve the current system with its problems, though to provide stability.”

During communism, unemployment was all but outlawed. What Putin has now are some of Europe’s most restrictive labor rules and employers still stinging from the dressing-down received for idling plants during the last recession six year ago. Protections against firing individual workers are among the strictest in Europe, according to the Organization for Economic Cooperation and Development.
The resulting resilience of the labor market is doing little to make up for a plunge in people’s spending power, reinforcing vulnerabilities that include the lowest productivity in Europe. Employers are opting for salary cuts, part-time work and unpaid vacations.

During the crisis in 2008-2009, unemployment peaked at 9.4 percent. While it has now risen from a record low of 4.8 percent a year ago, the effect is less dramatic. The rate grew to 5.5 percent in July from 5.4 percent a month earlier, according to the median of 18 estimates in a Bloomberg survey. The statistics office may report the data on Wednesday.
I guess old habits die hard. The hammer and sickle never really went away. 
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Death Wish 6: Tsipras, Greek Financial Suicide Co-Pilot

♠ Posted by Emmanuel in ,, at 6/30/2015 01:30:00 AM
Hitch a ride with the infantile Tsipras.
Andreas Lubitz, the suicidal Germanwings co-pilot who crashed an Airbus A320 into the French Alps, has understandably gone down in infamy for his actions. Suicide is bad enough from the perspective of any number of major world religions, but taking another 149 lives with you is much, much worse. I was reminded of the Lubitz episode when Greece's amateur-grade pinko of a "leader," Alexis Tsipras, engaged in financial suicide that took the entire Greek nation to an unknown, likely morbid, fate.

You see, like Lubitz practicing how to plunge a jetliner to its grave, Tsipras had premeditated financial suicide, taking 11 million people along for the ride to oblivion. Readers of my generation should be familiar with the Charles Bronson action franchise Death Wish that ran from the 1970s to the 1990s. Let's just say the latter sequels were not any good...but Death Wish 6: Tsipras, Greek Financial Suicide Co-Pilot would be the worst of the lot. In this 2015 remake, Tsipras plunges the Eurozone into turmoil out of his Narcissist-Leninist convictions to speed the demise of capitalism.

What evidence do I offer that Tsipras' suicide act--pretending a referendum was a "democratic" choice even it was to be held after financial lifelines are cut--was premeditated? I offer you two things. First, Greek negotiators thought they were talking in good faith with the nation's creditors when Tsipras pulled a "gotcha" on everyone--including them:
No one was more surprised by Greek Prime Minister Alexis Tsipras’s call for a referendum than his team of negotiators in Brussels. Shortly before midnight on Friday in the Belgian capital, the Greeks and representatives of the European Union and International Monetary Fund, tucked away in the EU Commission’s Charlemagne building, learned via Twitter that their efforts were in vain, according to an EU official. It was the first they’d heard about it. They soon left the room, their attempts to thrash out a compromise in tatters.
Second, Tsipras ignored his so-called "finance minister," self-styled erratic Marxist Yanis Varoufakis, over imposing capital controls on the Greek people. Said Varoufakis:
Capital controls within a monetary union are a contradiction in terms. The Greek government opposes the very concept.
Yeah, whatever. The upshot is that Tsipras had no intention of concluding an agreement with Greece's creditors anyway--the Greek negotiators were props. Even the leftist agitator Varoufakis was only there for show. While we don't know when Tsipras became convinced of his death wish any more than Lubitz did, that he had one is certain.

Reading the concluding text of the Communist Manifesto, Tsipras' methods are perfectly understandable in hindsight as he attempts to make the ruling classes tremble. He may not singlehandedly destroy the Eurozone, but he certainly will try his darndest to do so even if he damns the whole Greek nation to oblivion:
The Communists turn their attention chiefly to Germany, because that country is on the eve of a bourgeois revolution that is bound to be carried out under more advanced conditions of European civilisation, and with a much more developed proletariat, than that of England was in the seventeenth, and of France in the eighteenth century, and because the bourgeois revolution in Germany will be but the prelude to an immediately following proletarian revolution.

In short, the Communists [e.g., Syriza--ed.] everywhere support every revolutionary movement against the existing social and political order of things. In all these movements they bring to the front, as the leading question in each, the property question, no matter what its degree of development at the time. Finally, they labour everywhere for the union and agreement of the democratic parties of all countries.

The Communists disdain to conceal their views and aims. They openly declare that their ends can be attained only by the forcible overthrow of all existing social conditions. Let the ruling classes tremble at a Communistic revolution. The proletarians have nothing to lose but their chains. They have a world to win [my emphasis]. 
Proletariat of all countries, unite, and all that.

UPDATE 1: I obviously agree with Chris Giles of the FT that Tsipras is getting what he deserves.

UPDATE 2: Here is a more sympathetic view of Tsipras despite costing Greece billions with his antics.

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China's Enduring War on the Bourgeois Sport of Golf

♠ Posted by Emmanuel in ,, at 4/22/2015 01:30:00 AM
Seen an apparatchik thereabouts? Call 1-888-JAIL-CORRUPT-OFFICIALS.
It's good to know that some things never change: Despite China turning more capitalist than many Western nations in terms of the sheer rapaciousness tolerated and even encouraged by its leaders, there are unspeakable evils that remain...like, er, golf. Last year, an FT journalist Dan Washburn even wrote a well-regarded book on this very topic. By offering three vignettes on the grey area golfing entrepreneurs operate in, he provided fascinating insights into how the sport is still linked to vice despite the "anything goes" attitude that pervades Chinese society nowadays. Here is the book's blurb:
Statistically, zero percent of the Chinese population plays golf, a politically taboo topic still known as the “rich man’s game.” Yet China is in the midst of a golf boom – hundreds of new courses have opened in the past decade, despite it being illegal to build them.Award-winning journalist Dan Washburn charts a vivid path through this contradictory country by following the lives of three men intimately involved in China’s bizarre golf scene.

We meet Zhou, a peasant-turned-golf-pro who discovered the game after winning a job as a security guard at an exclusive golf club – and believes golf to be his ticket to joining China’s emerging middle class; Wang, a lychee farmer whose life is turned upside down when a massive top-secret golf complex moves in next door to his tiny ancient village; and Martin, a Western executive trying to navigate China’s byzantine and highly political business environment, ever watchful for Beijing’s “golf police.” 
Recently, Dan Washburn has noted that golf has come under increased scrutiny as of late. How so? Supposedly, the links are where corrupt officials conclude shady deals, thus connecting the ongoing crackdown on corrupt officials to activities connected with golf. Courses, therefore, are scenes of unspeakable crimes. Just for stepping on foot a golf course, one apparatchik has been put "under investigation" (i.e., branded a lawbreaker):
On March 30, Chinese authorities announced the closure of 66 "illegal" golf courses -- roughly 10% of all courses in the country -- in an apparent attempt to start enforcing a long-ignored ban on golf-related construction.  The following day, the Commerce Ministry announced that one of its senior officials was under investigation for "participating in a company's golf event," thus putting him on the wrong side of President Xi Jinping's "eight rules" against extravagance among government officials.

In Xi's China, being put "under investigation" is tantamount to being found guilty. Since embarking on his seemingly ceaseless anti-corruption campaign more than two years ago, hundreds of thousands of officials at all levels of government have been put in the crosshairs. The biggest names caught in the web are called "tigers." That's not a golf reference, but China's current crackdown on the sport does show how pervasive and unpredictable Xi's crusade has become.
Apparently, the jihad against golf traces back to Maoist times. That said, there are also ecological concerns about these courses' sucking up huge amounts of water in a country where it is scarce:
As I wrote in my book on the topic, China has long had a complicated relationship with golf. Mao Zedong banned it, denouncing golf as the "sport for millionaires." Even after China opened up and golf re-emerged in the mid-1980s, largely as a way to attract foreign investment, the sport was saddled with serious image problems.

It's not hard to see why. The construction and maintenance of golf courses is particularly resource intensive. China is home to 20% of the world's population, yet just 7% of its fresh water and 9% of its arable land, one-fifth of which is polluted. Golf also remains prohibitively expensive in China (this was one thing about which Mao was right) and it has earned a reputation as a self-indulgent, elitist pursuit. 
In a nation of 700 million peasant farmers, only a small sliver of the population can afford to play the game. That small sliver should not include anyone living off the salary of a public official, but it often has over the years. At best, the public would view these backswinging bureaucrats as out of touch. At worst, they are thought to be totally corrupt. In Guangdong province, the birthplace of golf in modern China, an investigative team has been formed to crack down on officials who took part in any of nine golf-related activities. There's even a public hotline for reporting suspected golf violations. 
The thing about golf is that it exists in this grey area where the caprices and whims of Communist Party leaders dictates whether the sport is permitted or not. As with many things in China, designation and enforcement of rules can be--how can I put it--selective. To illustrate, the author notes that China is busy training a golf squad since the 2016 Summer Olympics will feature the sport for the first time in over a century. Not that China is expected to medal having no world-class golfers precisely because of its naff image in the mainland, but if there's something to be won, the Chinese will try anyway:
This is a weird time in China. Xi's campaign against corruption has created a very tense and uncertain business and political climate. And yet, in some ways, things seem to be China as usual. Just days before the latest golf crackdown was announced, it was widely reported that Tiger Woods had signed a $16.5 million deal to redesign two courses in China. The week after The Masters, Bubba Watson, the No. 3 golfer in the world, is scheduled to compete in the $2.5 million Shenzhen Invitational, the latest international golf tournament to land on China's shores.

Meanwhile, the Chinese government quietly continues to funnel an unprecedented amount of money into its national golf team, all in pursuit of those all-important Olympic medals. So what does this all mean? And what does the future hold for golf in China? Every time I am asked that, I am reminded of a new take on an old joke: If you want to make China laugh, tell it about your predictions. 
The trouble is that Chinese officialdom does not adequately distinguish among three different sets of concerns: (1) the ideological permissibility of golf as a pastime in China; (2) the tendency for corrupt public officials to play golf; (3) whether these courses were acquired by land-grabbing or forced evictions; and (4) the environmental impact of the sport. Until these concerns are sorted out separately, you will have this head-scratching phenomenon of quickly-changing periods of permissiveness and prohibition. The only way I think these matters can be sorted in favor of golf is if a globally competitive Chinese golfing athlete emerges. Venezuela, communistic as it is in different ways, began providing state sponsorship for Pastor Maldonaldo given his (somewhat limited) successes in Formula One despite it having an elitist reputation.

Then again, you suspect that keeping golf in a grey area is actually intended. Asians are more used to living with such ambiguities. F-O-R-E!
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China's Corruption Crackdown & Selling Private Jets

♠ Posted by Emmanuel in , at 12/01/2014 01:30:00 AM
Of champagne wishes and caviar dreams interruptus.
 It is generally well-known that the ongoing Party-led purge--they have these sorts of campaigns in every generation or so--has negatively affected businesses aspiring to cater to high-living mainland Chinese noveau riche. Witness, for instance, the loss of gambling revenues in Macau. Rules ostensibly designed to limit officials taking public moneies to wager in the world's largest gambling destination have more broadly slowed mainland-sourced business as limits to the money that mainlanders can transfer to Macau have had an effect.

Once more demonstrating that you need not look far for IPE-relevant material, I saw this article in Yahoo! News: it turns out that the apparatchik purge is also slowing down the previously lucrative trade of selling private jets to Chinese billionaires. As you probably know, the PRC now has the second highest number of billionaires after the United States--which is fitting since it also has the world's second-largest economy. That said, similar concerns occur over inequality since the presence of many billionaires tends to skew the distribution of wealth. If such concentration of wealth arouses controversies over the fairness of modern economic systems--witness "Occupy" and other protest movements in the West--then it should be even more of concern in an ostensibly "socialist" country that by necessity styles itself as a "worker's paradise."

So these neo-Marxist-Leninist-Maoist busybodies keep interrupting marketers seeking to cater to the ultra-high net worth category described in the Hurun Rich List. Bah! Just as I was reading the flight test of the Bombardier Learjet 75...From Agence France-Presse:
Makers of the world's private jets are looking to promote their aircraft as business tools in China rather than luxury toys for the super-rich, as a corruption crackdown slows sales in the country.
Chinese leader Xi Jinping launched a drive against graft after he came to power in late 2012, accompanied by policies to enforce austerity among officials -- hitting sectors ranging from high-end liquor to luxury watches. The market for private jets is a small, albeit fast-growing aviation segment in China, but the corruption campaign has taken some heat out of the market, according to industry officials.
Instead of packing their bags and heading home, the makers of private jets have cleverly rethought their sales pitches. In place of the "Who's Who" and "Lifestyles of the Rich and Famous" marketing ploys of the past that are almost certain to get private jet buyers in hot water with state nannies, these jets are now being sold as essential business tools in concluding deals and whatnot. In other words, they've moved from having an aspirational to a more--how do I put this--utilitarian [!] aspect:
"Business jets should not be treated as a luxury product because it's considered a business tool to improve efficiency," said Christine Yan, Bombardier's China marketing manager for business aircraft and aerospace. "As long as this benefit can be recognised... in the long run it's still a very good outlook," she told AFP on the sidelines of the airshow.

Manufacturers remain positive about the longer-term outlook for the China market, citing steady economic growth and Chinese companies heading abroad to do business. "For a long time, it's been wealthy individuals buying a jet because they needed somewhere to put their money. It was cool to have a business jet," said Greer of Honeywell. "There's starting to be a recognition that this is a tool that you can utilise to be more efficient," he said.
While the rhetorical reformulation reminds me of folks selling beachfront property in Montana, you certainly can't fault them for trying anyway. Nor are the movers and shakers of Chinese capitalism dissuaded by the current crackdown as most imagine purchasing these trink--I mean, serious tools for conducting business in the near future:
In a survey this year, independent wealth publisher the Hurun Report estimated 40 percent of China's "super-rich" -- defined as those with fortunes of at least $16 million -- plan to use private jets in future. The Hurun Report's founder Rupert Hoogewerf said Chinese buyers typically pay $20 million to $80 million for a private jet, but some individuals are now renting for a one-off trip or time-sharing with others. "It's the evolution of the market," he said.
Elsewhere in the article, it is also discussed how the authorities are actually facilitating the opening of airports and landing strips to cater to private jet owners. So, smart money would say that beyond the facade of a "crackdown," seeds are being sown for the evolution of this market segment. Ultimately, nobody really buys this commie BS--least of all the Communist Party of China. 
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Redefining 'White Elephant': N Korea's New Int'l Airport

♠ Posted by Emmanuel in at 11/21/2014 01:30:00 AM
Hoping for a less lonely planet than this, they're building a new international airport.
The term "white elephant denotes massive investment into something which ultimately has little or no practical value. In the developing world, these usually refer to infrastructure projects. Think of Greece hosting the Summer Olympics in 2004. Not only was the country saddled with massive debts for the Olympian spending spree on new stadiums and the like, but these sports facilities are mostly unused nowadays. However, even the Greek tragedy has no answer to what promises to be a tragicomedy of massive proportions as the hermit kingdom of North Korea is building a new international airport. Where the guests will come from is a different question altogether.

All the same, you read that right: the country that has tried its darndest to stay away from everyone else by applying Sartre's idea that hell is other people is building an international airport. Why the hell is the reliably xenophobic North Korea seeking tourists--albeit of a "right" kind to be determined at a future date? With only a few thousand tourists a year according to media accounts, let's just say this country isn't high on the to-do list of travelers. Then again, there is all kinds of tourism nowadays, so I suppose "gulag tourism" has a unique gallows humor to it: 
Pyongyang isn't exactly an international travel hub. But attracting more tourists is one of North Korea's top agenda items to generate badly-needed foreign exchange, so thousands of soldier-builders are working feverishly these days to give the capital a fancy new airport.

The new airport, which is now in its final stages, is the latest of North Korea's "speed campaigns," mass mobilizations of labor shock brigades aimed at finishing top-priority projects in record time. Dressed in hard hats and brown or olive green uniforms, impressive swarms of workers toil under huge signs calling on them to carry out their tasks with "Korea Speed." From some corners of the site, patriotic music blares from loudspeakers to provide further motivation.
And make no mistake, it's hard labor fit for a gulag that's going on at the work site. Once completed, the "airport" is meant to replace the shack that's been the official airport of Pyongyang for a couple of years now:
With most of the construction finished, their work is now focused on flattening out a new tarmac area, digging tunnels for drainage and putting the finishing touches on the main terminal building. Most of the work appears to be done the old way, by hand or with simple tools.

Though Pyongyang is the gateway to the reclusive country by air, it is currently served by an airport building that consists of a small, temporary terminal the size of a large warehouse, with only one baggage carousel, a tiny duty free shop and a makeshift book/souvenir store. The airport receives, at most, only a few international flights a day, almost all from China, with some from Russia.

But, in search of a badly needed source of foreign currency, North Korean officials have embarked on an ambitious campaign to significantly boost the country's appeal to international tourists in the years ahead, which has made building a more impressive airport facility a top item on the government's to-do list. The date of the opening has not yet been officially announced.
There is this notion popular even in the developed world that "shovel ready" projects can provide construction jobs to the unemployed masses during economic slowdowns. North Korea has been in a decades-long economic slowdown, so I doubt whether this project is going to do any good other than serve as comic fodder for bloggers and the like. Nor do I see how this effort fits with the country's juche principle of self-reliance since building an airport represents tacit recognition that, hey, foreigners have something to offer after all.

There are only so many visits Dennis Rodman can make. On the official DPRK website, most of the attractions are communist agitprop, so I don't think there's much of interest for those seeking a good time--unless you have different ideas about what constitutes a "good time." Some have characterized the entire nation as a "Stalinist theme park." As such, being sentenced to years of hard labor for unnamed infractions cannot be entirely dismissed. So, in this case, they can build it, but I am really uncertain who will come save for dyed-in-wool masochists and true believers in Marxism-Leninism.

In the finest white elephant tradition, it is built for a purpose no sane person can fully ascertain. 
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25 Years Later, are Post-Communist Europeans Better Off?

♠ Posted by Emmanuel in , at 11/13/2014 01:30:00 AM
Did 1989 really matter all that much economics-wise?
9 November 1989 is the date when the historians consider the Berlin Wall to have gone down. Festivities in Germany have marked the twenty-fifth anniversary of this momentous occasion. For Francis Fukuyama, this event symbolized the End of History in which all political economies would converge on democratic capitalist systems in the absence of other viable alternatives. Alas, such has not been the case with the persistence of other systems--especially those of China and Vietnam which have successfully combined elements of an authoritarian state, central planning, and capitalist institutions on the margin. However, that counterexample pales in comparison to an even greater blast from the past: are "post-Soviet" states actually better off economically?

An interesting article in Businessweek suggests "not always" as many newly-formed countries are actually falling behind in the global economic league tables:
According to World Bank figures, the low and middle-income countries of Eastern Europe and Central Asia as a region have increased their average GDP per capita 43 percent since 1990. That’s slightly better than Sub-Saharan Africa but worse than South and East Asia, Latin America, or the Middle East and North Africa. For 25 countries in the former Eastern bloc, the per-capita GDPs of 13 (containing most of the region’s population) have expanded more slowly since 1990 than the global average. Of the 165 countries for which the World Bank has data, Russia’s GDP per capita (measured in purchasing power parity) was 33rd highest in 1990 and 42nd highest in 2013. Ukraine dropped from 55th to 93rd. Bulgaria and Latvia dropped one spot, Romania four, and Hungary eight. Poland did manage to climb 16 spots, to 45th richest, but it was very much in the minority. While Albania, Poland, Belarus, and Armenia have more than doubled their income per capita since 1990, six countries in the region are poorer than they were that year, including Ukraine and Georgia.
More alarming yet is the notion that these countries actually did better during the Soviet era:
It isn’t just compared with countries in the rest of the world that growth rates across much of the former communist bloc are disappointing—it’s compared with their performance under communism. The Maddison project has historical data for 46 economies covering 1939, 1989, and 2010. That includes Bulgaria, Hungary, the former Yugoslavia and its successor states, and the former USSR and its successor states. In 1939, Bulgaria was the 36th richest of the 46 countries. It climbed to 31st richest by 1989 and reached 30th richest by 2010. The USSR was in 27th place in 1939. It reached 26th place by 1989, before the successor states as a group fell back to 34th by 2010.
Having mentioned China and Vietnam, it all brings to mind the common accusation that Western one-size-fits-all prescriptions of deregulation, liberalization and privatization do not necessarily promote growth:
The trouble for such theories is that as a group, post-Communist countries have performed badly—and some of the countries that have adopted the most liberal policies have seen the weakest growth. It’s true that Poland introduced stronger reforms than nearly all other former communist states and has since fared much better in economic performance. But Georgia has also been a darling of the international community for the strength of its reform program; the World Bank’s Doing Business report, which purports to measure the quality of regulation surrounding starting and operating a business, suggests Georgia’s regulatory environment is better than Canada’s, Taiwan’s, or that of the Netherlands. Yet the country (wracked by Russian interventionism) remains poorer than it was at independence.
As it so happens, the IMF which made many post-Communist states implement such reforms via conditionalities for liberalization, privatization and deregulation has also just released another report entitled 25 Years of Transition: Post-Communist Europe and the IMF. The IMF is more sanguine on the fate of these states, and unsurprisingly suggests that incomplete reform is to blame for certain cases of underperformance:
The past 25 years have seen a dramatic transformation in Europe’s former communist countries, resulting in their reintegration into the global economy, and, in most cases, major improvements in living standards. But the task of building full market economies has been difficult and protracted. Liberalization of trade and prices came quickly, but institutional reforms in areas such as governance, competition policy, labor markets, privatization and enterprise restructuring often faced opposition from vested interests. 
For some strange reason, the IMF does not include Georgia in its survey. Another thing it does is compare the performance of post-Communist states solely in terms of their rankings relative to other European states (Western ones included). Is this a fairer comparison to look at pan-European performance instead of on a global basis? Also, they do not compare Soviet-era performance with post-Soviet era performance. For what it's worth, they offer the illustration below and its accompanying description:
The macroeconomic ranking is based on a weighted average of seven macroeconomic indicators (current account balance, inflation, unemployment, government balance and debt, GDP per capita at PPP and real GDP growth). Weights were generated by principal components analysis [factor analysis] of EU14 countries (EU15 excl. Luxembourg) using 2000–14 averages, which yielded results fairly close to equal weighting across the seven variables (with all taking the expected signs). The variables were normalized against 2000-14 EU14 benchmarks. 
While it may be fair to point out that European countries' economic performance has lagged that of other regions (and therefore excuses the measured performance of certain post-Communist European states), the IMF skirts the issues of comparing post-Communist European states' performance on a global basis and over time--especially the Communist era. Granted, the accuracy of economic record-keeping during Communist times is somewhat suspect, but unless the relevant comparisons are made, there will always be doubters. 
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Adios, Yanqui: Argentina Kicks Out Procter & Gamble

♠ Posted by Emmanuel in , at 11/03/2014 03:23:00 AM
Argentina sends P&G back to Cincy.
Talk about an odd fixation. There is something about the Latin left and diapers. In Venezuela nappies are a scarce luxury item which you cannot find in most stores. Apparently, the Argentinians wish to replicate this state of affairs in envy of their self-styled socialist neighbors. Even if the market for these items is not very large due to communistic excesses you are well aware of, P&G dominates--make that used to dominate--this market. Like Venezuela, Argentina has implemented draconian foreign exchange controls to stem the outflow of foreign exchange from the country. With such controls in place, multinationals have a difficult time operating.

Well, for Procter & Gamble, finding ways of serving the Argentinian market is no longer a problem from this day forward since P&G has now been accused of tax fraud and has been told to suspend operations in the country:
Argentina has accused the world's No. 1 household products maker, Procter & Gamble, of tax fraud and suspended its operations in the South American country, according to a statement issued on Sunday by the AFIP tax authority.

The accusation is that the company over-billed $138 million in imports to get money out of the country, according to the statement, which was published on Argentina's presidential website (www.prensa.argentina.ar)."P&G funneled currency abroad and hid income that was subject to tax in Argentina," it said. "We have to put an end to these tricks used by international companies," the statement added.
For a trip down the memory lane of the Latin left demonizing foreign MNCs, read the presidential office's announcement (in Spanish, of course). I would not be surprised to find out that P&G attempted to circumvent currency controls in a way Argentinian officials take offense to. Then again, I would not be surprised to find that the bulk of MNCs operating in Argentina are doing the same in using their international structures to minimize the impact of such controls. P&G, however, has the misfortune of being an American giant. In order to "set an example," who better to go after than these guys? The potential ramifications are much wider: if MNCs get the message they are not welcome and start leaving en masse, it will take both a change in administration and some time to reestablish operations in the country as its autarkic delusions take hold.

Venezuela, Argentina, Bolivia, Ecuador...the list of Latin left countries aspiring to North Korea-like isolation is astounding. Did they not get the message that the modern corporation is dying anyway and are not worth persecuting anymore? Even now, scapegoating foreigners for largely homegrown failings is still in fashion with these folks as they party like it's 1979. That is, if they are still in a mood to get down as their economies go to heck.

UPDATE: Barbie, watch out--you may be next on the hit list.
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How Venezuela Gives Socialism a Bad Name

♠ Posted by Emmanuel in , at 10/30/2014 01:30:00 AM
Living the socialist dream? Shortages of basic goods abound.
 It is hard to dislike the aim of socialism--egalitarianism in resource distribution among the plenty. However, years and years of experience with these regimes from the Soviet Union and all sorts of Marxist-Leninist offshoots demonstrates that, in practice, the opposite holds true. In China, for instance, the Communist Party elite--ostensibly the vanguard of the proletariat--hardly paved the way for more equitable distribution of wealth but merely concentrate political-economic power in the hands of a few.  It's the same story nearly everywhere you go.

The most notable current experiment in mounting a holy war against all things capitalist is Venezuela where the same rhetoric is evident: self-styled "champions of the people" expropriate all and sundry businesses by accusing them of hoarding and manipulating. A few months ago we had the tragicomic example of toilet paper making the country the butt of jokes internationally On a related note, we now have baby's diapers:
The falling oil prices that are providing relief to drivers around the world threaten to bring more misery to the life of Milagro Alvarez and millions of other Venezuelans, whose country depends almost exclusively on oil revenue. The math teacher has been getting up before dawn each day and rushing out to hunt for disposable diapers, one of scores of products that have been in short supply due to price restrictions and currency controls put in place by the socialist government long before the slide in petroleum prices.

"The government says we're a rich country, so why do we have to stand in line and beg to buy diapers?" said Alvarez, standing under a pink umbrella to protect herself and her 5-month-old daughter Annabeth from the blazing sun after three hours queued up in front of a Farmatodo store. Now Venezuela is suddenly a lot less rich, and many fear those lines will just get longer.
It is perhaps the ultimate indignity to have to scour stores for dipeys, but that's what's happening in the country that ostensibly has the world's largest petroleum reserves. As things get worse as fuel prices drop, Venezuela is trying to prove running dogs of capitalism wrong that default is inevitable. (This strikes me as odd since the whole point of waging global class warfare is to expropriate the expropriators as per Marx's famous dictum.) Anyway...
The government has called for an emergency summit of the Organization of Petroleum Exporting Countries to discuss cutting production to raise prices — a position that could face opposition by other cartel members. But it has given no hint of how it will make up for the revenue loss in the meantime. President Nicolas Maduro has assured Wall Street that the country won't default on its debt and has told poor Venezuelans that their social benefits are safe. "There'll be no catastrophe or collapse," Maduro said last week. "Venezuela has guaranteed all the resources it needs to keep prospering."
There is also the accusation that, price and currency controls aside, hard up officials and military men are actually among those responsible for creating these shortages:
President Nicolas Maduro's government said on Thursday it had taken over warehouses around Venezuela crammed with medical goods and food that "bourgeois criminals" were hoarding for speculation and contraband. The socialist government says businessmen and wealthy opponents are trying to sabotage the economy to bring Maduro down, while also seeking to make profits from hoarding, price-gouging and smuggling across the border to Colombia.

Critics say 15 years of failed policies of state intervention are to blame for the OPEC nation's widespread shortages, high inflation and apparently recessionary economy. They accuse nouveau riche officials and military officers of illegal business practices...Critics say Venezuela's security forces have been at the heart of the trade for years, and contend contraband will not go away as long as state subsidies and exchange controls create price disparities offering tempting opportunities.
I foresee a violent reprisal against Maduro and his fellow nutters, but I am less certain that they will succeed. In the end, you create your own hell voting for such riffraff in the first place. Once entrenched, well, they're pretty hard to remove.
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Forex Fantasyland: Venezuela's 'Official' Rate

♠ Posted by Emmanuel in ,, at 10/06/2014 01:30:00 AM
Would you like some truth with that?
Latin America's current state-of-the-art in economic mismanagement is exemplified by Venezuela, but that's not really saying much for it's arguably been the regional leader for several years now. Galloping inflation, shortages of basic commodities, runaway crime rates...everything bad is happening there, and any half-wit can see through their leaders' deception that "it's all the fault of the West." Life is what you make it, and I'm afraid the econo-comedians who actually buy into all that socialist stupidity get what they deserve.

A few months ago, I discussed the four-tiered exchange rate system in Venezuela, beginning with that from forex fantasyand, the "official" rate, to that which actually prevails in the streets of Caracas which is many times higher. If it's hard to imagine this abstraction, the good folks at Reuters have now produced a photo essay illustrating how ludicrously expensive different items would be if we believed the "official" exchange rate and nasty things like galloping inflation did not exist. With a nod to the Economist's Big Mac Index, I took the example of the burger whose price has risen much in recent weeks:
Venezuela's economic crisis has led to some shocking and surreal price distortions that hit people's buying power dramatically.

While the government of President Nicolas Maduro calls the country's minimum wage of Bs. 4,252 the highest in the region when converted to $675 using the official exchange rate [Bs. 6.3 to 1 USD], the galloping black market for currency considers it as just $42.50 when converted at the street rate of Bs. 100 per US dollar, the rate which many importers and retail outlets must use to acquire hard currency.

Venezuela's annual inflation rate of more than 63 percent is the highest in the Americas, according to official statistics. 
Now you understand what misery truly is--although I expect it to things to get even worse there. 
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World Cup: Spain Loses 5-1, 'Socialist Football' Ends?

♠ Posted by Emmanuel in , at 6/14/2014 02:45:00 PM
Spain's old guard looked, well, old.
The rematch of the World Cup 2010 finalists Spain and the Netherlands was highly anticipated since they were paired in the group stages this year. Spain was thought to be in the ascendant, having two of its teams contest the Champions League final and another win the Europa League. The Dutch fans stayed home in droves as they didn't expect much from their aging attackers and young defenders. It was thus a shock to most that the defending champions were throttled 5-1 by the Dutch, who could hardly believe their luck. It was really ugly for Spain fans. As the world looked on stunned, Spain, winners of the last World Cup and the last two European championships, are wondering just what happened.

One of the points requiring reassessment is possession-based football popularized by Spain's most dominant team of the past few years, Barcelona, and adopted by the national team coach Vincent de Bosque. Despite Barcelona being an exceedingly rich football club--the second most valuable after Real Madrid, there is a political philosophy of unselfishness that traces its roots oddly enough to the Netherlands' "total football:"
It took the basic tenets of total football to previously unimagined extremes – in part because of an exceptional generation of players many of whom had been schooled in a particularly idiosyncratic style at La Masia [FC Barcelona's youth academy], in part because of a visionary coach in Guardiola, and in part because of the changes in the offside law that increased the size of the effective playing area and so permitted smaller, more technical players to flourish.

When totaalvoetbal emerged as a term in the Netherlands in the early 70s, the totaal aspect of it was part of a wider movement in Dutch culture, particularly architecture. JB Bakema, one of the theory's prime exponents, argued that all buildings should have individual characteristics but should be designed with their place in the overall environment in mind. The application of the term to football made sense in terms of Bakema – the whole point of it was that players were aware of their positions within the system and were constantly renegotiating it for themselves; but there was also, at least outside of the Netherlands, a more popular resonance. This was total football because everybody, it seems, could do everything: defenders could attack and attackers could defend.
Some football commentators describe it as sporting socialism, with the aging superstar Xavi Hernandez as its guru:
And if tiki-taka [shorthand for passing and possession-based football] is Marxist, then Xavi is its Trotsky. He is tiki-taka's idealistic radical. He simply can't conceive of why any team wouldn't play possession-based football. But like Trotsky, he is being exiled. Whether he starts or not is one of the major issues in Spain at the moment. His level has dropped significantly in the past two years, as he is no longer able to provide the obsessive defensive pressure that he used to.
The opposite, of course, is the Jose Mourinho brand some have dubbed "anti-football" perversely designed to give the other team possession. Being in possession according to Mourinho makes it more likely they will make mistakes you can capitalize on. Oddly enough, these extremes of total possession and giving the opponent most of it are unliked by fans:
That's a natural part of evolution. A thesis (radical possession) arises, an antithesis (radical non-possession) arises to combat it and at some point a synthesis is achieved that will govern the consensus of how the vast majority of clubs will play for the next few years. That the two extremes are so seemingly unpopular is revealing, less in the preference it suggests on the part of the majority of fans for football with a more traditional narrative of cut and thrust, than in the depth of the hostility.
The funny thing is that the current Spanish team has the players it needs to overhaul the aging Barcelona backbone of the national squad. Atletico Madrid's forward Diego Costa featured but did not really play as well as he could in a tiki-taka-esque style alien to him. There were also the midfielder Koke--anointed by no less than Xavi as his successor--and right back Juanfran on the bench from Atletico Madrid, a team on a shoestring budget that unexpectedly beat the world's two richest clubs to the Spanish championship and came within three minutes of besting Real Madrid in the Champions League final.

Bottom line: teamwork still wins games, but tenacious team defending Atletico Madrid style instead of superfluous team passing Barcelona style is probably the way forward for Spain. It's too bad del Bosque chooses to dwell in past glories with his team selections since football has moved on and its golden generation is not young anymore. It is fitting that Holland, the home of total football that gave rise to tiki-taka, brings the message to Spain so graphically that there are different ways of playing the game. Evolve or die, and Spain looks to be doing more of the latter given its coach's druthers.
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A Guide to Venezuela's Now Four-Tiered FX Rates

♠ Posted by Emmanuel in ,, at 2/14/2014 03:54:00 PM
Just count 'em! How many bolivars do you need to exchange for 1 USD? Here's the handy-dandy IPE Zone guide for understanding the economic wasteland that is modern day Venezuela:

6.3 bolivars - official rate for "preferential" goods (read: largely for show; few can avail of it save for the well-connected).

11.36 bolivars - rate at the last weekly auction held for greenbacks known as "Sicad" (read: still not everyone can get into this auction).

??? bolivars - rate to be set at yet another round of auctions just announced that commentators dub 'Sicad 2.' Expectations are for the rate to be rather higher since only the Venezuelan government espouses that it has greenbacks left on an appreciable scale:
Maduro, who said that the new system would be known as “Sicad 2,” has blamed inflation and shortages on an “economic war” waged by the “parasitic bourgeoisie.” He gave businesses until Feb. 10 to cut prices to “fair” levels and reduce their profit margins to a maximum of 30 percent.

Venezuela will release $42.5 billion of foreign currency to the economy this year, including $11.4 billion through auctions in the Sicad system, as it tries to ameliorate dollar shortages that are causing irregular supply of imported goods ranging from shaving blades to milk. Maduro said yesterday that the country has sufficient foreign currency to meet its needs.

“There will be four exchange rates,” Asdrubal Oliveros, director of Caracas-based consultancy Ecoanalitica, said in a telephone interview. “When I hear Maduro say that Sicad 2 will be directed by the state, it makes me think that they are not going to let the rate float and that it will be at a weaker rate than Sicad 1, maybe around 25 bolivars per dollar.” 
86.92 bolivars - black market rate quoted (read: for the unlucky punters who fall into our category, which is everyone else.

Call me a lousy "parasitic bourgeoisie" even if I have no intention of holding bolivars, but why do I think 86.92 bolivars to the dollar is the only FX rate not plucked here from economic fantasyland? While we may be entertained by the utter folly of this four-tiered FX rate system, save a prayer for the people of Venezuela who are suffering considerable hardships from ruinous economic mismanagement.
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Venezuela's Bolivarian Revolution is Dead, Long Live F1!

♠ Posted by Emmanuel in ,, at 12/06/2013 02:11:00 PM
Sorry 21st century socialist sympathizers, but the economic and moral bankruptcy of Hugo Chavez's Bolivarian Revolution is becoming more apparent with each passing day as his successor finishes off the job. Even rose-tinted glasses cannot obscure the damage done. First, "oil diplomacy" is sagging as the US ups its domestic production of petroleum care of fracking and a slower world economy has limited Venezuela's ability to fund (costly) PR stunts:
The late President Hugo Chavez's dream of leveraging Venezuela's oil wealth to spread revolution across Latin America is crumbling under the weight of an economic crisis that is forcing his hand-picked successor to cut back on generous foreign aid.

Signs of the country's waning influence are becoming more apparent. In early November, Guatemala withdrew from the Petrocaribe oil alliance launched by Chavez, saying it didn't receive the ultra-low financing rates it had been promised by Venezuela when it first sought to join the 18-nation pact in 2008. Also in recent weeks, representatives of Brazil and Colombia have held meetings with their Venezuelan counterparts to collect overdue payment for food, manufactured goods and other imports. 
As some wiseguy said, the world's largest holder of crude reserves has Egypt-like FX reserves due to spectacular mismanagement aimed at generating publicity for Venezuela as some sort of alt-globalization hero and not at competence in managing a resource-rich economy.  Second, we now receive word that Venezuela is upping its police-state-like characteristics in attempting to ban public access to websites that list black market exchange rates for US dollars instead of taking scarcely believable "official" rates at face value which next to no dealers will sell you greenbacks at in exchange for the local currency (bolivars). These guys even outdo the Chinese in cyber-supression:
Venezuelans have been scrambling for dollars for weeks, taking refuge in the greenback as their own currency is in free fall. Rather than address the economic imbalances behind the bolivar's plunge, the government is going after the bearers of the bad news — it's blocking websites people use to track exchange rates on the black market.

Cyber-activists say the crackdown goes to absurd lengths, even targeting Bitly, the popular site for shortening Web addresses to make it easier to send them as links via Twitter and other social media. For more than two weeks, access to the service has been partially censored by several Internet service providers in Venezuela, apparently because Bitly was being used to evade blocks put on currency-tracking websites.

The New York company says such restrictions have only previously been seen in China, which has one of the worst records for Internet freedom, and even then not for such an extended period. Opponents of Venezuela's socialist government say the controls are designed to obscure reporting of the nation's mounting economic woes.
Can you say "police state"? Despite the country's ongoing descent into socioeconomic hell, what's notable is that state-sponsored F1 driver Pastor Maldonaldo has actually upgraded his ride next season from Williams (which scored exactly zero points this year) to Lotus (which finished fourth in the constructor's tables). How did this happen? Maldonaldo did not get his Lotus ride on merit; rather, the hard-up team is banking on Venezuelan state cash Maldonaldo will bring. In contrast to its former driver, world champion Kimi Raikkonen who the team still owes money, Maldonaldo will presumably bring in cold hard cash for his paid ride:
Lotus’ financial predicament was recently laid bare by their Ferrari-bound Finn Kimi Raikkonen, who revealed in Abu Dhabi that he had been paid “zero euros” by the team all year. It is thought that he is owed around £15 million. PDVSA paid just under £30 million a year for the quick but extremely erratic Maldonado to drive at Williams where he was responsible for the team’s first win in eight years, in Barcelona last year, along with numerous collisions. 
It's odd that Venezuela will plump big cash on this bourgeois sport as one of the last few PR stunts it can still afford even if many folks back home live lives of not-so-quiet desperation. Like in Thailand, this is democracy in action for you for better or (much) worse.
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The Day Venezuela is Fully Nationalized Approaches

♠ Posted by Emmanuel in , at 11/12/2013 10:44:00 AM
The economic implosion of Venezuela is interesting insofar as the voters have repeatedly chosen Hugo Chavez and his anointed successor Nicolas Maduro despite them consigning the country to economic oblivion. Populist policies may have won votes as redistribution continues, but we are fast approaching a point when there is nothing left to nationalize or place under state watch. What then?
Venezuelan President Nicolas Maduro says he plans to extend price controls to all consumer goods, if he is given powers to govern by decree. In a televised address, Mr Maduro said that he wanted to set legal limits on businesses' profit margins. His announcement followed the seizure on Saturday of shops accused of selling electronic goods at inflated prices.

The National Assembly is expected to vote this week on his request to govern temporarily by decree. The president demanded there be "zero tolerance with speculators" in his speech broadcast on Sunday. "This is beyond usury, this is theft," he added...[t]he president announced that he would next turn his attention to stores selling toys, cars, food items, textiles and shoes. 
When all production comes under government control--as things will be at this rate--there will be no one left to blame other than the government. It will be at that point when the full extent of the government's mismanagement--galloping inflation, pathetic reserves despite being one of Latin America's leading energy exporters, and the evisceration of a functional economy--becomes apparent even to Chavez/Maduro voters:
Opposition leader Henrique Capriles said the move proved that the president "is a failed puppet of the Cuban government". "Every time he opens his mouth, he scares away the investments that create employment, and he worsens the crisis," said Mr Capriles, who narrowly lost to Mr Maduro in April's presidential election.

Official figures suggest inflation is running at more than 50%. Price hikes have become an important issue in next month's local elections.
For now, Maduro's perverse strategy involves creating artificial shortages by persecuting all forms of private industry as "speculators." Faced with a steadily deteriorating business environment, the rational thing to do would be to cut production (or flee the country if you're a foreign investor). The resulting government-induced shortage is then blamed on your "hoarding" ways, and the government then claims to "act" by slapping price controls on everything to hopefully win elections.

It will likely take Venezuela taking a turn for even worse before the Bolivarian socialists are ejected. Oftentimes, it takes things to deteriorate before they get better to get the attention of those who have been deluded for quite some time.
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Venezuela Nationalizes Toilet Paper Factory

♠ Posted by Emmanuel in ,, at 9/23/2013 12:50:00 PM

"I am the Great MADURO", etc., etc.
[NOTE: For those unfamiliar with the "Beavis and Butt-head" reference, see here and here.] If this is an example of socialists taking over the "commanding heights" of the economy, I am at a complete loss for words. To me at least, toilet paper manufacturing as a strategic sector bog-gles the mind, but it may make sense in Venezuela. It is no big secret that the Chavistas have nationalized broad swathes of the Venezuelan economy. Supply problems? Central planning will solve them, free market be damned. From Economics 101, I was taught that price controls and import controls create rather than alleviate goods shortages. Apparently this stupid bourgeois logic holds no water in modern-day Venezuela. Silly me. Instead of relenting on government controls to remedy the supply situation for various goods including toilet paper, the ultimate solution apparently involves nationalizing these enterprises lock, stock and barrel. You got it--TP users of Venezuela, unite!
On Saturday, Vice President Jorge Arreaza announced the "temporary occupation" of the Paper Manufacturing Company's plant in the state of Aragua. The aim, he explained, is to review the "production, marketing and distribution (of) toilet paper [...] The People's Defense from the Economy will not allow hoarding or failures in the production and distribution of essential commodities," the vice president said. 

By the "People's Defense," Arreaza was referring to a government agency created on September 13 by President Nicolas Maduro to "defeat the economic war that has been declared in the country," according to a report from state-run ATV. This group is charged with looking at inefficiencies across various industries in the nation, including foods and other products, and taking action presumably in the South American nation's best interests.
For what it's worth, Venezuela's leaders see a conspiracy to hoard toilet paper--presumably to, ah, dump them when prices have risen sufficiently:
But the government has said private companies aren't doing their part, accusing them of hoarding their products in hopes of selling it later at a higher price. They've also suggested the problem is tied to a broader conspiracy. "There is no deficiency in production," Commerce Minister Alejandro Fleming said in May according to ATV, "but an excessive demand generating purchases by a nervous population because of a media campaign."
Be afraid. Be very, very afraid. To paraphrase Marx, the TP expropriators have been expropriated (or something like that).
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MEDSploitation: Pol Eco of Cuban Doctor Exports

♠ Posted by Emmanuel in ,, at 9/04/2013 01:29:00 PM
A longstanding fixture of Cuba's outreach has been sending physicians to fellow Latin American nations. Witness the still-ongoing Venezuela-Cuba oil-for-doctors scheme: 90,000 barrels per day for 30,000 doctors. Despite its proto-communist economy being in shambles for decades now, Cuba still retains a reputation for training physicians--in quantity if not necessarily in quality. With a surplus of them at home and a perpetual shortage of foreign exchange, it was perhaps inevitable that they became one of the island nation's top exports. TIME talks about the current controversies over Cuban doctor exports to Brazil and the differentials in terms of physicians to population:
According to the World Health Organization (WHO), Brazil — despite its recent economic boom and constitutional guarantee of universal health care — has only 1.8 doctors per 1,000 people. (Cuba, despite its endless economic bust, has 6.7.) Almost two-thirds of all health care spending in Brazil is private, even though three-fourths of the population depends on public medical services.
Coming from a self-styled worker's paradise, what exactly is in it for the Cuban physicians working in Brazil? Unfortunately, it appears the ratio of wages paid to these doctors relative to Cuba's remuneration from host states is very low:
But Cuba’s medical-diplomacy mission, which currently has 40,000 doctors serving abroad and brings the Cuban government some $6 billion a year (of which the doctors themselves get only a tiny fraction), is a fixture in the third world, and was generally praised for its work in Haiti after the 2010 earthquake. And it points up the fact that Brazil’s problems are hardly unique. In fact, six of Latin America’s seven largest economies have two or fewer doctors per 1,000 people. (The exception is Argentina, which has 3.2.)
The Havana Times complains about this opaqueness over how much Cuba receives relative to what the physicians do:
In different comments, we read of “new slaves”, that the Cuban State is a kind of “foreman” and that Cuban doctors are “sheep” denied the right to demand their rights, individuals subjected to that which Jose Marti, when writing of a certain form of socialism much spoken of in his time, called “modern slavery.” Unfortunately, I do not know how much money will be paid directly to the doctors under the agreement entered into with the pertinent agencies of Cuba’s Ministry of Public Health. Our local and biased press has not published this detail, and we will have to find out from the doctors themselves [...]

It is both just and necessary for the Cuban State to take in a reasonable part of the money paid by Brazil, in order to re-invest it in Cuba’s public health programs. This money represents investments in many areas, including the country’s educational system, capable of creating a highly qualified labor force. It is also both just and necessary to respect the individual rights of our medical professionals, to pay them a percentage of the earnings that will guarantee their professional and personal dignity, as well as that of their families (without which they will not be able to practice their profession adequately).

What we need is transparency, on the basis of broader democratic, socialist concepts, throughout the selection, hiring and other processes related to the work of our professionals beyond Cuban borders. If Cuban doctors working in Brazil, for instance, were entitled to openly discuss their payment conditions and to arrive at an agreement with public health authorities that isn’t simply imposed on them, then we would be wrong to speak of any kind of slavery.
Call it Transparency, ah, Internationale. I too would love to know exactly what these Cuban physicians earn relative to the amount of treatment they give to better calculate the rate of exploitation, but alas, the Cuban government is perhaps not the best model of public transparency [!?] Rest assured though that economic necessity drives this increasingly controversial trade.
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The Argentine Isolationist Grinch Who Stole Xmas

♠ Posted by Emmanuel in , at 12/24/2012 06:20:00 AM
In addition to cooking the books, Argentina appears stuck in an import substitution industrialization [ISI] time warp. I sure would love to sell bell-bottom pants there for the full retro flavour, but they are of course throwing impediments to all sorts of imports. As the blog's subtitle goes, I affected an attitude of elegant desperation at an Associated Press article that discussed the growing unavailability of bicycles in Argentina despite its self-styled populist government promoting their use.

Now Americans are known for their mind-boggling levels of mega-obesity and hyperpollution. Rightly identifying more with progressive Europeans than Americans, Argentinians have taken up the cause of bicycling in urban centres. Doing so doubly makes sense: not only do you get much-needed exercise, but you also cut down on carbon emissions getting stuck in interminable traffic. Or so the reasoning would go since the government's neo-ISI policies have created [surprise!] a shortage of bicycles together with a burgeoning grey market for them:
Civic leaders have tried to make Buenos Aires a bicycle-friendly city, but that's been stymied by another government initiative — protectionist import bans designed to spur domestic production that have instead strangled supplies of everything from bananas to prescription drugs...

A record 1.8 million bicycles were sold in Argentina in 2011, and the industry had predicted sales would surpass 2 million bikes in 2012, producing an estimated $510 million in revenue. Now, the Argentine Bicycle Chamber of Commerce and Industry [!] estimates some 1.6 million bikes will be sold in 2012. And that number would have been lower but for a Buenos Aires city program that offered loans of up to $600 per bike purchase, the group says. In its first week, the financing program drew 4,000 requests at the 21 bike shops taking part. 
As with most of these retro-protectionist measures, the ultimate loser is the consumer:
If anything, Argentines have learned how to be creative, as President Cristina Fernandez imposes tight currency controls and other economic measures designed to fight high inflation and stop the flight of dollars...

Argentina's bike sector, however, wasn't prepared to export or otherwise meet local demand, which meant the price of bikes and bike parts has shot up and stock is dwindling, says the bicycle chamber's president, Claudio Canaglia. At Nodari, a Mongoose bicycle that retails for $150 in the United States now costs the equivalent of $700 in Argentina.
Once again, all this demonstrates that economic mismanagement tends to compound elsewhere since it is so difficult to sort out all the cascading effects of ill-though policies. Meanwhile, it's no-go for Shimano as cyclists must make do without during this "festive" season. 
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