Caracas Chronicles

Quico says: OK, people, we’re through the looking glass here. Just when we thought chavismo had exhausted all the rhetorical curve-balls it could possibly throw at us, they pitch us the ultimate change-up: the truth.

Late last week, we had Arias Cardenas just come out and say Chávez would pipe down about the Colombia-US military deal if Obama would just give him an oval office audience. At the weekend, Chávez told the truth again, saying the opposition didn’t have the balls to run primaries. And now, Alí Rodríguez just about busts the truth-o-meter with this neocortex-scrambling statement, which defends the government’s exchange rate policy noting that “the overvalued bolivar is a mechanism for economic redistribution.”

Oh wow. Turns out that the government doesn’t see keeping an insanely overvalued currency as a problem in need of a solution. Just the opposite: they see it as a key means calculated to bring about a cherished end.

La vaina es a proposito!

Make no mistake about it: Alí is speaking unvarnished truth here. An overvalued currency is a mechanism for economic redistribution. Any econ undergrad could tell you that.

It’s just that our esteemed Minister of the People’s Power for Finance left out one small detail: redistribution from whom, precisely, and to whom?

An overvalued currency redistributes wealth from people who produce stuff in Venezuela to people who buy the same stuff abroad and then import it. That’s the main effect of a policy that, in layman’s terms, could be rendered as “making sure a bolivar buys more stuff abroad than at home.”

Or, to be a little bit more exact, an overvalued currency means a currency that buys more once it’s turned into a foreign currency (at the official rate, bien sur) than it buys internally. After all, what would you rather find when you’re rooting around between couch cushions, two bolivars and fifteen cents or four quarters?

If we’re going to be precise about it, it’s not imports that overvaluation makes cheaper, it’s the currency that imports are priced in. So overvaluing a currency is a way of redistributing wealth from people without access to those official-rate-dollars to people with access to them.

Not, of course, that you need a degree in economics to explain that to any of the thousands of poor, connectionless saps banging their heads against a keyboard in frustration that Cadivi won’t release their official dollar requests while Chávez’s army of Crony Socialists make off with the nation’s petrodollars at bargain basement prices.

For the third time this week, we can fault chavismo for many things, but not for dishonesty. Alí Rodríguez got at a core truth here. Keeping the bolivar deliriously overvalued is no mistake; it’s a cherished policy goal.

Those Hummers don’t come cheap, y’know?