Does Martin Wolf’s “The tragedy of two failing superpowers” conform with FT’s beautiful motto of “without favour”?

Wolf opines about Donald Trump in terms of “a malevolent incompetent” and for this looks for the support of that totally unbiased Jeffrey Sachs who writes about “devastatingly of the ill will and ineffectiveness on display”. “The tragedy of two failing superpowers” April 1.

Sir, if this is what it comes down to, let me be clear that I much prefer the support of a highly incompetent but more principled Donald Trump, against our evidently thousand times more malevolent incompetents, like Hugo Chavez and Nicolas Maduro, than the support given to them by “extremely competent” Barack Obama and Jeffrey Sachs.

Wolf then writes: “For those of us who believe in liberal democracy” Really? Are we to believe that anyone who, for purposes of bank capital requirements, agrees with assigning a risk weight of 0% to his sovereign’s debt and 100% to fellow citizen’s debts, something which de facto implies that bureaucrats knows better what to do with credits for which’s repayment they're not personally responsible for than for example entrepreneurs, could be defined as a believer in a liberal democracy? I don’t think so, to me he would just be a disguised communist.

@PerKurowski

Any populism your populist can do mine can do better; mine can do populism much better than yours.

Sir, Gillian Tett, when discussing populism and populists writes, “Nor is it obvious that Mr Trump will lose in 2020. If you look at recent opinion polls, these offer as much reason for alarm as for cheer.” “Is the populist wave in the west here to stay?” September 14.

Clearly populism is in the eye of the beholder. For instance, if Hugo Chavez had hosted “The Populist Apprentice” he might very well have told President Donald Trump. “You’re fired!” 

As for me Sir, you know very well I opine that one of the worst and most destructive populism ever, was when the expert bank regulators in the Basel Committee told us that with their risk weighted bank capital requirements, our banks would be safer… not caring one iota about how that would distort the allocation of credit to the real economy and, to top it up, base these on that loony idea that what's perceived as risky is more dangerous to our bank system than what's perceived as safe 

@PerKurowski

“Any populism yours can do, mine can do better; mine can do populism better than yours” “No he can’t!” “Yes he can, yes he can, yes he can!!!!”

Sir, Simon Kuper ends his “Secrets from the populist playbook” March 16, with “Some new politicians, notably the new Democrat congresswoman Alexandria Ocasio-Cortez, can rival Trump for engagement. To some degree, we are all populists now.” “Secrets from the populist playbook”, March 16.

Indeed but the populists must also be measured with respect to the success they have when selling their populism.

For instance, our current bank regulators must be some of the most successful populists ever. Just think how they have managed to convince the world (most or all in FT included) that by imposing risk weighted capital requirements for banks, they are reducing the risks for our bank system. With that they have distorted the allocation of bank credit all over the world, weakening the economies and increasing the dangers of a systemic meltdown of our banks. 

Sir, I am from Venezuela, and so unfortunately I know too much about populists, but, when compared to the Basel Committee on Banking Supervision’s and the Financial Stability Board’s populism, Hugo Chavez was just a quite gifted amateur.

@PerKurowski

PS. My 2019 letter to the Financial Stability Board (FSB)

For social harmony, in our time, we need a big enough and a small enough universal basic income.

Sir, Chris Giles refers to a “1994 OECD study [which] contained a warning of the dangers in store for countries that failed to tackle problems in their labour markets. “It brings with it unravelling of the social fabric.” “Improve employment rates to tackle inequality” February 15.

Giles opines, “Flexibility and social protection is a winning combination for advanced economies. While it does not prevent all employment problems, whether you take a right-of-centre “work not welfare” attitude or a left-of-centre “a hand up not a handout” stance, in general the combination works.”

I agree! An unconditional universal basic income, large enough to allow many to reach up to whatever jobs are available, is “a hand up not a handout”.

And an unconditional universal basic income, small enough so as not allow many to stay in bed, is also “work not welfare”.

So what’s keeping an UBI from being implemented?

To begin there’s not sufficient recognition of the real conflicts, basically a class war, between those who having a job want better pay and those who want a job at any pay.

But, first and foremost, it is those who profit, politically and monetary, on imposing their conditionalties when redistributing tax revenues, who strongly oppose a UBI, since it, naturally, would negatively affect the value of their franchise.

PS. The Chavez/Maduro regimes are clearly outliers among the redistribution profiteers but just as an example I once calculated that the 40% poorest of Venezuela had received less than 15% from the Bolivarian Revolution than what should have been their allotment had Venezuela’s net oil revenues been shared out equally to all. On the other side many of the odious profiteers pocketed many thousand times what should have been their share.

@PerKurowski

Carrot: We will pay you $xxx for each Kalashnikov you hand over. Stick: If we find you one after x you’ll go to jail for ten years!

Sir, in your “Broad front needed to address Venezuela crisis” you opine that the “Diplomatic effort requires reasonable balance of carrot and stick” February 5.

Indeed! In 2007 the degenerated Hugo Chávez decided to weaponize his supporters, the “colectivos”, by importing 100.000 Kalashnikovs from a willing salesman, Russia.

For Venezuela to come out reasonably well from its current predicaments, those rifles must be collected.

If all those who oppose the possession of guns in their own country dedicated just three percent of their efforts to help Venezuela to collect those rifles so as to have these destroyed, they might provide more human assistance than shipping many tons of foods and medicines.

If that’s not done all food or medicines sent might not reach those unarmed Venezuelans who most need it.

@PerKurowski

A Universal Basic Income has much more to do with being able to say, “Yes, here I come!” than with a freedom to say, “No, I prefer to stay in bed”.

I refer to Tim Harford’s conversation with Rutger Bregman on the subject of a basic income, while bouldering. “Rutger Bregman: ‘Basic income is all about the freedom to say no’” March 20.

Sir, look at Venezuela. Believe me when I say that 40% of the poorest of my homeland received less than 15% of what they should have received the last fifteen years, had our net oil revenues just been shared out equally among all Venezuelans. And then you might beguine to understand my deep resentment with any redistribution profiteers. To bypass this kind of profiteers, in abundance all over the world, is in itself a reason more than enough to justify a Universal Basic Income.

That said, in 2012, before I was censored in Venezuela, and based on the lack of jobs I had begun visualizing in 2003, I also wrote an Op-Ed titled “We need decent and worthy unemployments”. That de facto calls out for a UBI, before it is too late and our social structures break down in favor of the many aspiring Hugo Chavez and Nicolas Maduro of this world.

But Bregman argues: “OK, so basic income is all about the freedom to say no. That’s a privilege for the rich right now. With a basic income, you can say no to a job you don’t want to do. You can say no to a city in which you no longer want to live. You can say no to an employer who harasses you at work . . . that’s what real freedom looks like.”

And there I have to say no! That sounds to me like a spoiled brat’s view about what a basic income should mean. Such a Universal Basic Income becomes, almost by definition, financially unsustainable. I argue instead for a UBI that provides you with an assistance to get out of bed in order to reach up to whatever the spreading Gig economy has to offer you; but not so large so as to allow you to stay in bed, because that will sure make others refuse to pay for what the UBI might take.

Sir, every time I hear someone offering more than what a UBI can sustainably offer, I feel I we could be in the presence of a redistribution profiteer out to sabotage it, all in order to defend the value of his franchise.

PS. The article has that “A basic income [could be handed out] through the tax system as a negative income tax.” Not so. A tax credit that you start losing the minute you step out of bed to work, is not an unconditional Universal Basic Income.

PS. When Rutger Bregman opines “What’s the biggest injustice in the world right now? It’s pretty easy to see. It’s borders: apartheid on a global scale.” I would have asked. If there are no borders, how much in UBI do you think your homeland would accept to pay to any immigrant?

http://myubi.blogspot.com/2017/01/my-universal-basic-income.html

@PerKurowski

Sadly Bolivar did not free Venezuela from its natural resource curse

Sir, Gideon Long writes about the immense significance Simon Bolívar has for all Venezuelans. “Bitter enemies invoke spirit of Bolívar as vote looms” July 27.

As a Venezuelan I can only agree with most of it but, unfortunately, in October of 1829, Bolivar ordered the continuance of what had been decreed in 1783 by Carlos III of Spain, namely that all precious metals and “juices of the earth” reserves belonged to the Republic.

With that Bolivar guaranteed the Venezuelan governments would not depend exclusively on the citizens and that, sooner or later, some would capture the government to steal it blind.

If we Venezuelans are to gain real independence all our net oil revenues have to be shared out entirely to the citizens.

Had that been achieved earlier, the current disaster would not have had a chance to happen.

It is a great tragedy that freeing Venezuela from the curse of centralized oil revenues is still not on the agenda of anyone the most important opposition leaders.

@PerKurowski

“Whut you goin' to do when a [lefty] gits starts to talk purty? I'm jist a [socialist] who cain't say no”

Sir, Janan Ganesh writes: “At some indistinct point in the recent past, the left lost its monopoly on rebellion. To rebel was to be conservative or libertarian. It was more transgressive to buck the sensitivities of the age on race, gender, sexual preference, climate change, civil liberties, mental health and religion than to walk on eggshells around them. This shift in what it meant to be a radical was the price of the left’s success in the culture wars. The more it policed language, the more it inadvertently glamorised anyone who gave voice to unreconstructed sentiments — even if… they almost never mean them.” “Counter-elite mentality” May 6.

The left also lost out when it was not able to resist the siren songs of false sirens like Venezuela’s Hugo Chavez and Nicolas Maduro. I am always reminded of Oklahoma’s Ado Annie singing “I Cain't Say No!”

“Whut you goin' to do when a [lefty] gits flirty

And starts to talk purty? whut you goin' to do?

Whut you goin' to do when he talks that way

Spit in his eye?

I'm jist a [socialist] who cain't say no”

Also, even though they understand that terms like “deplorable” do not serve any useful recruiting purpose, they just can’t resist going on and on, like with for instance their current “We and time will make you understand how truly dumb you were/are voting for Trump”, arguing every little minuscule happening into a Trump fault, losing perspective on things.

Frankly, a President who can drop an A-bomb basically at his will cannot fire an FBI director for whatever cause at his will?

@PerKurowski

Publishing what governments earn in natural resource income, is much more powerful than “publish what you pay” rules

Sir, David Pilling lashes out at the House of Representatives (at Trump) for voting to nullify a rule known informally as the “publish what you pay” rule, which obliges oil and mining companies to disclose payments they make to foreign states. “Trump, Tillerson and the African resource curse” February 23.

Pilling puts forward the case of Equatorial Guinea where, “Since oil was discovered, per capita income has rocketed to nearly $40,000 at purchasing power parity, the highest of any sub-Saharan African country. That comes as scant consolation to the three-quarters of the population who live in abject poverty on less than $2 a day.”

Does the population of Equatorial Guinea know that? Most probably they don’t have the slightest clue about it. Just like the poor in my homeland Venezuela do not have a clue that, from their beloved Chavez, they got less than 15% of what should have been their per capita share of the nations fabulous oil income. That is of course so because the redistribution profiteers, like everywhere else, do not want such information to be known.

If for instance a Voice of America (or any other media for that matter) would daily beam out to citizens in natural resource rich countries, how much their monthly per capita share of such income would be, that would produce more beneficial consequences than a hundred “publish what you pay” rules.

Why is it not a “publish what they earn” rule suggested? Probably because, among redistribution colleagues, that would not be considered comme-il-faut. Hey, someone could even begin reporting daily on how much were the overall monthly fiscal revenues on a per capita basis. Horror!

PS. David Pilling, many of your crocodiles are pussycats next to ours

PS. It is interesting to note that the “publish what you pay” rule was irrelevantly part of the Dodd-Frank Act; that which failed to even mention the Basel Committee for Banking Supervision. Here and here

PS. David Pilling thinks that since this rule applies to all, the playing field is now level. He should look into Venezuela and all the chinese natural resource investments. 

@PerKurowski

Is it opposition that weakens or loosens up support, or opposition that stiffens and compacts support?

Sir, many of us Venezuelans have lived trough many years thinking the fall of Chavez/Maduro just to be a question of few days. That it did not happen was in much the direct result of that the opposition, instead of loosening up the Chavez/Maduro support, by preaching excessively to the choir, only compacted it.

So when I now read opinions against Trump I ask myself, does it loosen or does it compact Trump’s support?

Sir, with respect to that what Edward Luce expresses in “Trump and the siege of Washington”, February 20, what would be your own gut feeling… loosening or compacting?

My own opinion is that the more you stick to the issues and the less with the person the better. Of course, as you well know, that is easier said than done.

@PerKurowski

As a Venezuelan, I would sure like to know who those financing those who are destroying my country are

Sir, Elaine Moore and Andres Schipani report “Venezuela keeps paying foreign lenders despite blackouts and food queue riots” May 10.

But, when considering all that is going on in Venezuela, why should its creditors be treated with such neutral anonymity? Who are they? Is it okay for them whatever the nation does, as long as they get their high interest rates?

I am not implying there is something similar horrible going on in Venezuela, but are these investors who could for instance finance cremation ovens in Auschwitz, without blinking their eyes, as long as the price was right?

If you finance someone who is committing human rights violations, does that not make you an accomplice? And don’t tell me these lenders, in today’s globalized world, are innocently unaware of what is happening in Venezuela,

As a Venezuelan I would sure like to know who those financing those who are destroying my land are. I am by no means saying they are all the same. Many of them might have lent money to the revolution when things though bad seemed more normal. But most of all I would like to know if among them are some of the vultures that already had by other means been eating of what soon seems to become a carcass of a nation… and now want to have another last bite.

The world’s governments might urgently need a Sovereign Debt Restructuring Mechanism… but we citizens, we only really need it, if it comes together with a clear definition of what are odious public credits and what are odious public borrowings.

PS. And it is not a new issue for me

@PerKurowski ©

Hugo Chavez did not empower the poor, he empowered himself with the poor… pas la même chose

Sir, John Paul Rathbone refers to Hugo Chávez of Venezuela as a “gifted politician who, however wasteful, empowered the poor” “Nicolás Maduro Venezuela’s leftist lord of misrule” May 21.

What? Chávez might have been a gifted populist, a gifted demagogue, but he did not empower the poor, he empowered himself with the poor... pas la même chose. Just look at photos of the poor in Venezuela… do they really seem empowered?

The poor of Venezuela never got more than about15 percent of what should have been their fair per-capita share of the fantastic oil revenues that drowned the country during the Chavez years. It was just that Chávez masterfully talked and walked the leftist discourse. Which caused so many in the world to drool in admiration.

If we are going to understand how nations develop, all research needs to control for how much of fiscal revenues are received directly from citizens, how much are received indirectly from citizens, and how many of those revenues have never ever passed through a citizens pocket. But why is such research not conducted? You tell me! I advance the possibility there are just too much profits to be made redistributing.

For instance for decades I have begged that the net oil revenues of Venezuela should be distributed directly to the citizens, a sort of variable universal basic income; but the opposition to such idea from those who want more than their fair share is immense.

As for Maduro, before I was censored in Venezuela, in May 2013 I wrote “3 years until the recall referendum… Mamma Mia!” It was crystal clear from the very start that Maduro would be an unqualified disaster.

@PerKurowski ©

For many of us Venezuelans it is no leap at all to think of Sean Penn as a loudmouth, limousine liberal… and worse.

Many of us Venezuelans know that some of Venezuela’s money was spent by the 21st Century Socialism sucking up to Sean Penn, because Sean Penn was sucking up to the 21st Century Socialism of Hugo Chavez and his gang.

And that is why when he tells Matthew Garrahan “It’s not a big leap to think of me as a loudmouth, limousine liberal”, that most of us Venezuelan would hold, fairly, that would be no leap at all. “Who among us is fairly thought of?” “Lunch with the FT” May 14.

@PerKurowski ©

As a Venezuelan, it is hard to see too much difference between the Basel Committee’s statism and that of Hugo Chavez’.

Sir, Shahin Vallée, from what I read a fanatic central planning convert (so presumably a communist) writes: “if central banks are trying to expand the monetary base permanently, their natural ally is fiscal policy, which can direct spending to where it would have the most powerful effect”, “Fiscal and monetary policy can be uneasy bedfellows” May 2.

The Basel Committee, for the purpose of defining the capital requirements for banks, set the risk weights for the "Infallible Sovereign" at zero percent, while defining the risk weights for citizens, SMEs and entrepreneurs as being 100%. That is the kind of mindset of those who believe that technocrats can direct other people’s money better, than other people their own. It is amazing how this mindset still survives.

Vallée now suggests a debate on how central banks and governments can cooperate better. Holy Moly! I want a debate on how we citizens can fight the cooperation between central banks, the governments and some of their cozy friends, like some too big to fail banks and members of the AAArisktocracy, all so that we can save our economies for our children.

And of course, if I have misread Shahin Vallée, I have no problems retracting my opinions. On the contrary, I would be very happy to do so.

PS. If you need an aide memoire about how idiotic that regulation concocted by the Basel Committee here is one:

@PerKurowski ©

Even though there is hunger, could Venezuela be servicing religiously its debt because of who the bondholders are?

Sir, even though Venezuela is suffering lack of food and medicines, it is doing all it can to pay its foreign bondholders. Andres Schipani quotes Bank of America’s Francisco Rodriguez in that “Venezuela could continue paying bondholders for longer than it keeps paying Maduro’s salary”, “Maduro’s Venezuela on the brink of default" February 12.

Could it be that all these bondholders are in fact the same usual local friends of the government and who in these bonds have just found another way to further exploit this poor-rich country? I mean it is hard to visualize any ordinary reasonably responsible investor, no matter how big the spreads, putting money in Venezuelan bonds while knowing without doubt that the resources raised by debt will be wasted just the same way as the greatest oil-boom in history has been wasted.

The world needs a sovereign debt restructuring mechanism (SDRM) but, for that to serve us citizens any useful purpose, and not even be counterproductive, it must begin by establishing clearly the differences between bona fide lending and odious credit.

@PerKurowski ©

Redistribution profiteers who committed economic crimes against humanity sequestered Venezuela

Sir, I refer to Ricardo Hausmann’s sadly true “It could be too late to avoid catastrophe in Venezuela” February 4.

These days when so much is said about fighting inequality, Venezuela is a tragic example of what happens when a country falls into the hands of shameless redistribution profiteers. All countries need to develop more transparent government accounts that allows us them to measure the real costs of redistributing wealth.

For instance in the case of Venezuela the fact that the prices of petrol (gas) have not increased once since Chavez came to power 17 years ago has signified that just in free petrol the country has over the last years given away more than in all their other social programs put together… if that is not an economic crime against humanity (and environment) what is. I have tried to denounce it to the Organization of American States but they are more interested in conventional and traditional crimes against humanities.

Over the last 15 years the poor of Venezuela might not have received even 10 percent of the oil wealth that was redistributed… which would indicate a redistribution commission of 90 percent.

Clearly if other methods like direct oil revenue sharing with citizens had been used, the 10-90% figures here could have been 98-2%. And of course, had the oil revenues belonged to the citizens, the government could not have “used it to quadruple the foreign debt.”

Set into this context it is obvious that all should closely study experiments like Finland’s substituting with a basic monthly income for all the bureaucrats’ management of benefits.

PS. One of the most sad events in my lifetime has been when the US did not follow through on the idea of promoting oil revenue sharing in Iraq. Had it done so the whole middle east, and of course Venezuela, if following the example, could have been facing much better realities.

@PerKurowski ©

Former Executive Director at the World Bank, for Venezuela, 2002-04

While Venezuela does not share out oil revenues directly to its citizens it is doomed to fail, over and over again.

Sir, I refer to your “Venezuela’s threatened December election” November 19.

You write: “Chavismo once saw itself as a global revolutionary force.” Absolutely but there were way too many around the world that supported that view.

You write: “Today, incompetence and corruption have revealed it to be merely a cynical charade.” Absolutely, but it is also a cynical charade to believe that a country, in which its government receives 97 percent of all abundant exports will not, sooner or later, embrace incompetence and corruption.

@PerKurowski ©

http://theoilcurse.blogspot.com

Surprisingly many of those who could observe it from a distance, still fell for Chavez’ Banana 21st Century Socialism.

Sir, I refer to Andres Schipani’s “FT Big Read: New oil order: We are terrorized by the drop in oil prices”, August 10 2015. It is a good report but I must make two points.

First it sort of supposes that a country, during an incredible oil boom with prices over ten times those which the previous government faced, and where these oil revenues represents over 96 percent of all exports, and these all go into government coffers, is a system that has a chance to function in a sustainable way. It cannot!

Second, it mentions “the world’s cheapest petrol” and it talks about “hundreds of million dollars invested on social programmes. Less than 1 US$ cent per liter is not “cheap”, it is a giveaway… and the cost of that giveaway, when calculated at the international market price of petrol, is higher than all Chavez’ and Maduro’s social programs put together.

When Schipani mentions “The ruling Socialist party”, I hear most European Socialist parties trying to make the case of that brand of socialism having nothing to do with theirs. It would have been more helpful for the Venezuelans, if they had argued so fifteen years ago.

@PerKurowski

When does a subsidy become an outright gift? Hugo Chavez committed an odious economic-policy crime against humanity.

Sir I refer to Andres Schipani’s and John Paul Rathbone’s “Oil’s slide forces Venezuela to rethink subsidies agreed in Chávez glory days” January 15.

The article refers to “About 600,000 bpd of subsidized oil are consumed locally” but, since the local price of gas (petrol) is much less than 1-euro cent per liter, I would consider that to be much more of an outright gift than a subsidy.

The fact that Hugo Chavez gave away more value in gas (petrol) to those who drove cars, than what he spent on all his social programs put together, might be embarrassing for all those on the left for whom Chavez was a hero… but the truth is that, doing so, he committed an odious economic-policy crime against humanity.

“Capitalism for hyenas” might be a more accurate description than “capitalism for friends”

Sir, I refer to Chrystia Freeland’s “Puttin’s populist bluster belies the loneliness of the cynic” December 29.

If for instance Andres Schipani would like to write an up to date report on Venezuela and Maduro, he would have to change almost nothing except for some names and regional references… especially now when even Cuba, as was to be expected, has also turned out to be a fair-weather ally.

But, when referring to the crony capitalists that flock around the leaders, I would perhaps disagree with the term “capitalism for friends”. In Venezuela at least, it is really not friends who are sharing those oil revenues which now represent 97 percent of all this nation's exports… it is much more something like “capitalism for hyenas”