Venezuela

The autocrat of Caracas

Hugo Chávez tightens the state’s grip on politics and the economy

The man of many companies

FOR much of the past eight months, since suffering defeat in a referendum on changing the constitution, Hugo Chávez has seemed to be on the defensive. Abroad, he repaired strained relations with Colombia’s president and with Spain’s King Juan Carlos. At home, he backpedalled on unpopular measures, such as a new socialist educational curriculum and a draconian intelligence law. He met local businessmen in June and urged them to invest, in the hope that increased production would damp inflation of over 30%. But with Mr Chávez moderation rarely lasts, and he has now veered left again.

On July 31st he announced that the government would buy the country’s third-biggest bank, Banco de Venezuela, owned by Spain’s Grupo Santander. Days later, the government published 26 decrees, many of which mimic the constitutional changes rejected in the referendum. Some of them will further tighten the state’s stranglehold on the economy.

This has been growing stronger since Mr Chávez won a second six-year term in an election in December 2006. Since then he has taken over the telecoms and electricity companies, as well as other businesses (see table). In June he told the local businessmen that he had no more nationalisations in mind.

But Banco de Venezuela was on offer: Santander was reportedly close to completing its sale to a local private bank. The first the bank’s managers knew of Mr Chávez’s intention to purchase was when he announced it on live television during a speech about education. Spain’s government, which had hosted him in Madrid days previously, was also kept in the dark.

Bankers have done well from Mr Chávez’s “Bolivarian Revolution”. They have profited by arbitraging exchange controls, and from the government’s penchant for issuing debt (despite its record oil revenues). But banks face increasingly onerous regulations. These set interest rates, and require around half of loans to go at subsidised rates to favoured purposes, such as farmers and housing. Alí Rodríguez, the new finance minister, has ordered banks to cut their holdings of some government paper, on which they are likely to make a loss. On top of all this, growth is slowing. “What is it that Banco Santander is seeing that makes it want to leave Venezuela when it is making so much profit?” asked José Manuel González, the president of the employers’ confederation.

Mr Chávez has promised Santander a “friendly” deal. His oil wealth has allowed him to pay for the businesses he takes over, avoiding the friction that would be prompted by expropriation. As proliferating controls make doing business in Venezuela harder, more firms may fall into the government’s lap. “I don’t think this will be the last bank to end up in state hands, and it’s going to be happening in other sectors too,” says Gustavo García of IESA, a business school.

The takeover of Banco de Venezuela will make the state the biggest banker in the country. The president wants to turn his new acquisition, which has a big branch network, into a “socialist bank”, which will administer social security and welfare payments. This change of status may not be to the liking of the bank’s workers. The government often obliges state employees to attend political rallies, and regularly sacks those who show signs of political dissent. Some 2m of the 6.5m Venezuelans with formal jobs are now employed by the state.

The decrees will further increase the state’s powers, hobble opponents and limit the scope of private enterprise. Because the opposition boycotted the last legislative election, Mr Chávez’s supporters dominate the National Assembly. Nevertheless, after his re-election he obtained the power to pass laws on his own for a period of 18 months. The latest crop of decrees were issued on the day before this power was to expire, in such a rush that their full texts were not published until later.

Under one decree a chavista militia will become a new branch of the armed forces. Another tightens state control over food production and distribution, threatening those accused of hoarding with up to ten years in jail. A third makes it easier for the government to take over private companies in general. Another creates powerful new regional officials. They will rival state governors, who are due to be chosen in November in an election in which the opposition hopes to dent Mr Chávez’s near-monopoly of power.

Several of these measures violate the constitution of 1999, which Mr Chávez himself sponsored. “Here we have no constitution, no law and the president does exactly what he wants,” Luis Miquilena, a former ally who broke with the president, told the Wall Street Journal. Mr Chávez says anyone who disagrees with the new laws should complain to the supreme court. But the court is beholden to the president. This week it upheld a decision by the auditor-general to ban hundreds of candidates from standing in the state and municipal elections for alleged corruption, even though none has been convicted by the courts. The main apparent target is Leopoldo López, the opposition mayor of Chacao, a district in the capital. Opinion polls had given him a strong chance of being elected as mayor of Caracas.

Those polls suggest that a small majority of Venezuelans still support Mr Chávez. But voters showed in the referendum eight months ago that they do not want his autocratic socialism. They may have to show him that once again.

Bad "News"

by Thomas Sowell

We have forgotten so much about the immediate aftermath of the September 11, 2001 terrorist attacks that many people may not remember the deadly anthrax spores that were mailed to various prominent people in politics and in the media during that time.

None of the intended victims was killed by the anthrax but five other people were, including two postal workers, who apparently became victims because they handled the mail containing anthrax spores.

In the instant search for someone to blame, biologist Steven J. Hatfill was publicly named as "a person of interest" in the case by government officials. He became, in the media presentation, the villain du jour.

The government was eventually forced to issue a retraction and agreed to pay a settlement of more than $5 million. But retractions never catch up with the original charges, which will blight this man's life the longest day he lives.

More recently, a federal investigation has focused on someone else who worked in the same scientific laboratory as Hatfill. This time the new suspect was about to be indicted, as distinguished from being tried in the media-- and he committed suicide.

This may mark the end of the anthrax story but the reckless destruction of people's reputations and the disrupting and blighting of their lives in the media is continuing on.

There is much to be said for the British practice of limiting what can be reported in the media about someone on trial until after that trial is over.

Once a charge has been made and publicized from coast to coast-- if not internationally-- later exoneration will never get the same publicity, so the damage cannot be undone. You cannot unring the bell.

A major part of what is reported in the media-- especially the tabloid media, whether in print or broadcasts-- consists of leaks, speculation and innuendo, all repeated around the clock, day in and day out, whether or not anything is ever proved.

What someone thinks is going to happen is not news. After it happens it is news.

The 24-hour news cycle may require that somebody be saying something on the air all the time. But that is the media's problem-- and it should not be solved at the expense of ruining other people's lives.

The loss is not solely that of the particular individuals singled out for accusation or innuendo.

If an informed citizenry is the foundation of democratic government, then a misinformed citizenry is a danger.

Individuals who have never been smeared can also be affected. Highly qualified people, whose knowledge and judgment are much needed in high places, may turn down judicial nominations, for example, or decline other high-profile positions in government, if that means risking having outstanding reputations for integrity that they have built up over a lifetime be dragged through the mud in televised confirmation hearings conducted like Roman circuses.

Such top-level people can always be replaced by warm bodies, as Judge Robert Bork was replaced by Judge Anthony Kennedy, after the smearing of Judge Bork by the Senate Judiciary Committee defeated his nomination.

But the whole country continues to this day to pay dearly for having Anthony Kennedy on the Supreme Court, making intellectually foppish decisions.

One of the perennial crusades of the media has been to have more government business televised. Their self-interest in this is obvious. But the benefits of televising government proceedings-- if there are any benefits-- must be weighed against the enormous harm that this can do not only to individuals but to the country.

Television conveys false information as readily as it conveys the truth. Congressional hearings are not glimpses of truth. They are staged events to perpetuate some political spin.

Televising these political shows only impedes Congress' ability to get serious work done in private instead of spending time playing to the peanut gallery.

Both individuals and the country deserve more protection from publicity abuse than they usually get.

America's expatriate voters

Home thoughts from abroad

Could expatriate voters influence America's presidential election?

AMERICA'S presidential candidates have made a point of travelling far afield this year, in part to win over voters sceptical of their foreign-policy credentials. Barack Obama took his campaign on a tour of Europe and the Middle East; John McCain, to much less fanfare, travelled to Mexico, the Middle East and Latin America. Whatever the polls of opinion in other countries show—and they are usually highly favourable towards Mr Obama—the only votes that really matter are those of Americans. But not all of those voters are back at home.

American expatriates may have had only a small impact on the past few elections but they are keenly following this one. So far they have contributed much more money than in previous campaigns. And there are signs that by polling day in November, they may also turn that interest into power at the ballot box.

Roughly 6m Americans live abroad. This scattered diaspora, taken as a whole, wields a voting power larger than half of the states in the union. The overseas population includes well-heeled bankers in London and other financial centres around the world. But it is also composed of several hundred thousand soldiers in Iraq and Afghanistan, or stationed at other overseas military bases. In recent elections, though, these potential votes have not shown up in significant numbers on election day.

The 2006 election that saw Democrats sweep to power in Congress did not come close to drawing the kind of attention that this year's presidential race has seen—whether at home or abroad. The overseas vote two years ago was tiny. Of those 6m Americans overseas, not even 1m were registered to vote.

Technical problems, bureaucratic hoops (voters must register with the state where they last resided) and the difficulties of actually getting a vote to count all played a part in keeping turnout low. Two-thirds of the ballots fell foul of these problems. Another 10% missed the deadline altogether. All told, only 330,000 ballots (5.5% of American expats) actually wound up counting in a total of 82m ballots cast that year. That is roughly the same as the total population of just one mid-sized American city, such as Tampa, Florida.

Since then the campaign teams, as well as various pressure groups, have noticed the problems and the potential rewards of winning over Americans abroad. Mr Obama runs a blog for Americans abroad on his campaign website. The Democrats have a group that is attempting to organise supporters in foreign countries: the party held a “global primary” in February with a record turnout of more than 20,000. They favoured Mr Obama heavily. Overseas Democrats will send 22 delegates to the national convention in August. Gwyneth Paltrow, a Hollywood actress, has made an advert urging American expats to vote for Mr Obama. George Clooney will host a fundraising event for Mr Obama in Geneva, in September. The Republican Party has its own group that oversees chapters around the world and is helping to rally Mr McCain’s supporters.

The candidates are chasing money from abroad, too, either by turning up open-palmed themselves or by sending prominent advisers and friends to fundraising dinners abroad. Britain is by far the top fundraising destination. Rudy Giuliani—a failed candidate for the Republican nomination—led the way. He made headlines last September when he visited London to raise funds. Even Ron Paul, a libertarian and a long-shot for the Republican nomination, managed to raise more than $100,000 from overseas voters.

Though some candidates, such as John Edwards, struggled to prise cash from overseas Americans (only American citizens, not foreigners, can contribute money) the field as a whole set new records. By the end of April, they had raised a total of more than $2.6m, according to the Centre for Responsive Politics, a think-tank in Washington, DC.

Unsurprisingly, the charismatic Mr Obama has also done the best, raising more than $1.4m from expats. That is peanuts compared with total funds raised—Mr Obama raked in $52m in June alone—but the overseas tally has increased markedly this year. The total raised is more than double that of 2004 and five-times the figure from 2000. The candidates’ global search for supporters is yet another twist in a campaign for the presidency of a country sometimes reluctant to look beyond its own shores.