Tightening the screws in Venezuela

Venezuelans lining up for groceries

Ever since this website got underway, we’ve been following the inexorable economic decline of the Bolivarian Republic of Venezuela under the rule of Hugo Chávez’s hapless yet ruthless protégé and successor, Nicolás Maduro. We’ve seen how Maduro’s stubborn devotion to socialist policies has led to shortages in basic goods and even – in a country that’s one of the world’s largest oil producers – to an inability to provide Venezuelan motorists with enough gasoline to keep their cars and trucks going.

Political prisoner Leopoldo Lopez

A year ago, the Venezuelan electorate dealt chavismo a huge blow by electing a National Assembly dominated by opponents of the Maduro regime. The vote was viewed as a potential game changer. Observers assumed there would be major changes in the offing. For example, it was widely believed that Maduro’s most high-profile political prisoner, the folk hero Leopoldo López, would soon be free.

Donald Trump, Liliana Tintori, Mike Pence, and Marco Rubio at the White House on February 15

Well, López is still behind bars. (His wife, Liliana Tintori, met  with President Trump in February, after which Trump called for Lopez’s immediate release.) And not much else has changed, either. At least not for the positive. On the contrary, Maduro has flexed his muscles more aggressively than ever – limiting the authority of the National Assembly, stepping up arrests of opposition leaders, imprisoning people without trial, canceling elections, violently crushing protests, closing down CNN en Español, and barring the New York Times’s Caracas correspondent from the country. In late March, according to the Times, “the United States, Canada and a dozen of Latin America’s largest nations called for Mr. Maduro to recognize the National Assembly’s powers, a rare joint statement that reflected deep impatience with his government.”

A Venezuelan protester holds up a flag bearing the slogan: “No dictatorship”

Alas, Maduro, instead of responding to this statement by developing a newfound respect for the National Assembly, did precisely the opposite. On March 29, Venezuela’s Supreme Court, which is dominated by Maduro loyalists, essentially dissolved the National Assembly and said that henceforth it, the Court, would be exercising legislative powers in its stead. In one fell swoop, this outrageous action effectively removed from the scene the major challenge to Maduro’s authority. As the Times noted, “In taking power from the National Assembly, the ruling removed what most consider to be the only remaining counterbalance to the president’s growing power in the country.”

Julio Borges protesting the Court’s action

Of course, there’s a word for this sort of thing: coup. Luis Almagro, Secretary General of the Organization of American States, did not hesitate to call it precisely that. The U.S., Mexico, and Colombia all officially denounced the Supreme Court’s action; Peru cut off diplomatic relations with Venezuela. Julio Borges, president of the National Assembly, denounced the Court’s ruling as “garbage,” stating: “They have kidnapped the Constitution, they have kidnapped our rights, they have kidnapped our liberty.”

Nicolas Maduro

The Miami Herald quoted Peter Schechter, director of the Adrienne Arsht Latin America Center, as saying that Venezuela should henceforth be treated as a “pariah state.” Stated Schechter: “If there was any doubt before, there should no longer be one: Venezuela is a dictatorship.” The Times echoed this view, noting that the Venezuelan government, which until recently had been described by many as “an authoritarian regime,” was now widely viewed as “an outright dictatorship.”

To anyone familiar with the dreadful, depressing history of institutionalized socialism, none of this should be terribly surprising. The implementation of socialist ideology inevitably leads, sooner or later, to economic crisis, food shortages, and the suppression of human rights; and this combination of disasters, in turn, almost invariably causes the tyrants in charge not to reverse their catastrophic policies but to tighten the screws and intensify their grasp on power.

Briefly put: this can’t end well.

Killing the messenger in Venezuela

This piece is illustrated with recent photos of Venezuelans lining up to buy groceries

While the economy of Venezuela circles the drain, the country’s valiant leaders are taking concerted action – not to fix the problem but to shift the blame.

It’s obvious to anyone with the slightest economic savvy, of course, where the fault lies: in chavista socialism, which demonized capitalism and expanded the Bolivarian Republic’s welfare system beyond all reason.

But the late Hugo Chávez and his successor, Nicolás Maduro, have never let the truth get in the way of disinformation. So it is now, when their finger-pointing reeks of unprecedentedly farcical levels of desperation. You see, this time around, as the Miami Herald reported the other day, the supposed culprit – the evil force that is responsible for bringing down the entire Venezuelan economy – is a website.

grocery3Yes, a website.

It’s called DolarToday. Based in the U.S., registed in Delaware, and founded by three Venezuelan exiles, the site – which is wildly popular – reports on black-market exchange rates between the Venezuelan bolivar, on the one hand, and the euro and U.S. dollar on the other. The site also tracks Venezuela’s sovereign debt (which keeps climbing), international reserves (which keep sinking), and inflation rate (which has been consistently sky-high for years). According to Venezuelan authorities, the information provided on the site has itself engendered that Weimar-style inflation and brought the bolivar’s value down to its current piteous levels.

groceryThe Venezuelan government has been trying to block the site since 2013. Maduro has publicly ranted about it, calling its proprietors bandits and economic terrorists. Most recently, Venezuela’s Central Bank filed papers with a Delaware district court accusing them of “racketeering, false advertising, and illicit enrichment” and demanding the site’s closure. “Defendants,” claimed the lawsuit, “are deliberately misrepresenting and effectively manufacturing a market — a phony, distorted market for the exchange of bolivares into dollars and vice-versa, with the aim of lining their pockets with ill-gotten gains.” The bank further charged that the site’s owners “conspired to use a form of cyber-terrorism to wreak, and in fact they have wreaked, economic and reputational harm on the Central Bank by impeding its ability to manage the Republic’s economy and foreign exchange system.”

grocery4In response, the defendants said that all they were doing was keeping tabs on the exchange rate being offered in Cúcuta, Colombia, a town on the Venezuelan border. The suit was dismissed on February 26, but the court gave the bank seven days to file an amended complaint. The bank did so pronto; the court has yet to respond. In any event, the site co-owner who spoke with the Miami Herald – and who insisted on being identified with a pseudonym, for fear the Maduro government would retaliate against his family in Venezuela – said, “We’re absolutely sure that the government will try to keep finding ways to wear us down.”