Caracas Chronicles Summit in Guaroristan

Would you buy a used washing machine from these men?

Finally had a chance to meet Gustavo Hernández Acevedo, our Barquisimeto Bureau Chief, in person. We went off on a bit of an appliance bargain hunt, looking for Mi Casa Bien Equipada washing machines.

They’re still around, even with the election over, but we finally understood the catch.

You can buy them cash, of course, and they’re a little bit cheaper than you could get at the Calle de los Arabes, who stereotypically own almost all the appliance shops downtown. In the private sector, we saw a Samsung 7 kg. for Bs.2,590, a Whirlpool Bs.3,000, and a 7.5 kg. Electrolux went for Bs.2,970. Inside Bicentenario itself, a non-Mi Casa Bien Equipada 6 kg. MagicQueen Bs.2,600. And the subsidized Haier branded 6.5 kg. washer went for Bs.1,472, cash.

Not bad! But to really get a bargain what you need is to a subsidized Mi Casa Bien Equipada credit, with interest fixed at 15%, well under the rate of inflation. And to get that credit, you need to have a Cuenta Nómina – a payroll account where your boss deposits your salary each month – at one of the two big state banks, Banco de Venezuela and Banco Bicentenario.

Of course most people who get their salaries paid directly to an account at one of these two banks are public employees! In fact, then, Mi Casa Bien Equipada works amounts to a fringe benefit for public sector workers – one more reason to worry about losing your job and the benefits that come with it.

Gustavo added one other thing I found extremely perceptive. When you think back to the misiones in 2004-2006, they focused on things like health (Barrio Adentro) and education (Misión Ribas, Misión Robinson, etc.) – core state functions with strong positive externalities.

Fast-forward to 2012, and the key government missions – Gran Misión Vivienda Venezuela, Mercal, PDVAL, Abasto Bicentenario, Mi Casa Bien Equipada, En Amor Mayor, Hijos de Venezuela – all focus on financing purely private consumption goods: food, housing, appliances, or just straight out cash transfers.

Once upon a time, misiones had a plausible public policy component…but more and more, they’re just free money.

48 thoughts on “Caracas Chronicles Summit in Guaroristan

  1. That picture makes Quico look like 1969 Paul McCartney, whereas Geha looks like a latin Paul Ryan.

    Not sure if I’d buy my appliances from you guys, but I’d vote for ya!

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  2. Gustavo looks uncomfortable…LOL.

    So just to understand the whole thing well: can they get a subsidized Washer for Bs. 1,472 with the fixed 15% credit at the same time? Or to be able to get the fixed credit they have to buy it full price (non-subsidized)?

    Also, can anybody on a payroll apply or you have also to be low income?

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  3. Venezuelans love a golilla. This is not that different to the “ta barato dame dos” back in the seventies.
    I think we have been focusing too much on the idea of electric appliances and access to cheap credit as a direct incentive to lure voters. It’s not just about a cheap TV or a washing machine. It’s about the mood. It’s about the feeling that things are improving. There’s money for everyone, therefore socialism can’t be that bad
    People are not concerned about who’s paying the bill. After all we are a rich nation! There’s plenty of money for everyone! Everybody should be rich or at least middle class! Isn’t that the myth that has been perpetuated by every politician?
    Yes, in the end the whole thing is stupid. As you explained previously, it is nonsense to use advance payment on our oil to buy such things when we have serious infrastructure and insecurity problems.
    But who give a rat’s ass for numbers when it feels so right? Keep the oil boom party going! F*ck fiscal responsibility! F*ck arithmetic!

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    • Miguel Angel Santos explains it better:

      http://www.unionradio.net/Exitos/actualidad/visorNota.aspx?tpCont=1&id=11293&secc=1

      The best part is around the 21-24min mark .
      “(Pasamos) de tener en el 2006 $26.000 millones de deuda a hoy en día tener $96.000 millones de deuda, además de la factura petrolera (…) para importar bienes de consumo directo”
      “46% consume una persona en promedio hoy más que en 1998 – en volumen (…) claro a la gente que le este llegando este aumento de consumo…”
      “Cuando uno compara el salario del 2012 con el salario del 98 ha caído 16% el poder adquisitivo del salario (…) Entonces, de dónde salió el boom de consumo? Cómo la gente compra más estas cosas si no hay un boom de salario? Porque hay un boom de transferencias directas, que ha generado una estructura clientelar…”

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    • GEHA looks exactly how I looked like just after graduating from the military high school down to the polished belt buckle.
      That was the last time my hair was so short or I was so skinny.

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  4. Chávez is the new Pepeganga!

    The next step should be implementing the ex-torres plan.
    I’m always weary of big dramatic changes and the unforeseeable consequences they may bring about. I’m thinking of Mao’s Great Leap Forward that brought that great famine in China (30-60 million estimated deaths). So how about to start implementing ex-torres plan with 50% of the oil income?

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    • Chavismo is being smart: free goods without empowerment. It’s the Cuban zookeeperism form of government.

      By the way, 50% seems to me like it would send the same (wrong) message of Rosales: Graft of oil is ok, if it’s just some of it (i.e., does the oil belong to the citizens, or not)? Taxing the poor is ok, so long as it’s less than what previous governments taxed ( i.e., is the spending of it regressive or not)?

      I say take a stand and get a spine selling it. It’s the right thing to do. I suggest that the next step should be a referendum to force it into a constitutional article of high ranking. The problem, you’ll find is getting buy-in from those who need the money least…

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        • What experiment? If you were talking about giving collected taxes as cash distribution, then that would be an experiment. But what we’re talking about is giving citizens what belongs to them by constitutional right, an inheritance of sorts. That’s not an experiment, it’s the right thing to do. Not giving it to them is graft. What’s worse is that this graft of taking the oil money for government use is equivalent to a regressive taxation, so it’s a double experiment, with clear negative results.

          So, no, not an experiment. What I’m suggesting is going back to basics: governments living exclusively from progressive taxation, and not allowing government to steal from its citizens.

          If you want experiment, then I have another suggestion for Venezuela, but distribution of cash from natural resources is not one of them.

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  5. Quico, a couple of things. First, given the retriction to qualify for the Mi Casa Bien Equipada program, I suppose you were overstating the impact of this particular program on the election results. Second, regarding the old “misiones” and the new social programs, the difference has nothing to do with externalities. The difference is that the old “misiones” were providing public goods and the new one are just providing subsidized private goods. You using your car imposes an externality on everybody else (pollution, more traffic, etc.), free clinics is just a public good.

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  6. The big news is that Maduro is the new Vice President. The sad, underhand news is that Capriles is going to remove Ocariz as candidate for Miranda state, completely ignoring the opposition primaries. Some sort of democrat. Not a good example at all.

    No matter how you spin it Gustavo looks monumentally p***ed off compared to happy-go-licky Quico. Conclusion – Quico is a good loser; Gustavo a bad one.

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  7. Let me be the first to say as a Marxist, that Nicolas Maduro as first vice president is a big f—ing mistake and many in the grassroots will see this as a bad step, the only good is maybe he will keep his nose out of foreign policy( and out of the loop) which he was way out of his league doing and just like any other capitalist country(much like the US) Venezuela praticed the “enemy of my enemy is my friend” and not proletarian internationalism.

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    • Yes, Cortie. Certainly one needs to be a Marxist to realize that Maduro would be a bad VP.

      Bring back Diosdado, coño.

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    • Cort – I have read your stuff and opinions from time to time and they are interesting and I agree with most of them. But your comment about Maduro is ill founded, without evidence and it is almost as if you are either talking from where the sun don’t shine or you are having a joke? Correct? I fail to see how you can mention the grassroots of the PSUV when it is impossible to take an opinion poll of these people in 90 minutes after the announcement.

      Be a Marxist but your ideas are so out of date that they go back to the textile mills in early 19th century Manchester in England.

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    • Verga Cort, anda con cuidado que Arturo como que te va a sapear con el jefe por tener un pensamiento propio . De acuerdo que Maduro estaba out of his league como canciller.

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  8. “Capriles should not even think about running for Miranda, he should be above the fray for now”, – Miguel Octavio, Devils Poop.

    It is simple. Capriles is not a democrat at heart. It is just self-interest and it does not give a hoot about screwing Ocariz.

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    • They are such hypocrites: Marxists that love products fabricated by exploiting workers as labor conditions in china are shameful, Homophobes that support the LGBT community, at “war” with their best client… 

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  9. I’m no politician just an ordinary citizen trying to understand the fractured society I love in. Am I wrong in wishing that Venezuela be more in tune with the western civilization rather than the Bedouins?

    Just a thought, should the opposition win majority of the national assembly in 2015, would it be possible to pass laws preventing the government going on such massive pre-election spending sprees? Thus making the elections fairer?

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  10. Different trolls, differents factions!, Now that their 7-O battle is over, its time to fight internally for more dough….

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  11. But there is a catch…. Las varias veces que mi persona o mis compañeros de trabajo hemos ido a solicitar el crédito, hemos visto, que como todos los planes, están colapsados… una persona que tiene el tiempo y la oportunidad para hacer dos días de cola, obtendrá los productos (hay noticias viejas de que la gente en el país acampa, cuando viene una jornada humanitaria). De querer comprar a hacerlo hay un gran trecho, y abundan las ofertas de “gestores” que te consiguen un cupo para comprar. Se supone que lo puedes comprar en cash, pero por lo menos en el antiguo EXITO (bicentenario de Terrazas del Avila) sólo podías hacerlo por financiamiento, y en de zona rental (al que fuí dos dias antes de las elecciones, sólo para ver si podía hacerlo) hay que venir el domingo a anotarse, para luego venir en la semana a solicitar el producto. (http://www.vive.gob.ve/inf_art.php?id_not=34263&id_s=6&id_ss=1). Así que la estrategia es prometer que se va a entregar algo (carros, mercal, viviendas, linea blanca) y luego entregar sólo una fracción de lo que se prometió, lo cual deja a la población esperanzada de conseguirlo, pero cuesta mucho menos. Yo seguiré en mi búsqueda de beneficios, pero les diré que es una tarea titánica.

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  12. You guys have to see the plant that Haier built near Yare, in the Tuy Valleys, it is HUGE ! The road between Yare and Ocumare wil collapse with all the trucks bringing CKD components for assembling appliances and then taking them out

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