Caracas Chronicles

Rejoice! We have a new Central Bank President! Nicolás Maduro has just put Ricardo Sanguino in charge of all our money!

For once, we’re getting something of a known quantity. Sanguino’s been a member of the National Assembly since 2000: he chaired Finance Commission, the guy has a record and, y’know, positions.

There’s been a bit of chatter about Sanguino as a pragmatist or even, if you listen to the truly deluded in the world of market chatter, as an “innovator” in monetary policy. Believe none of it: nothing’s going to change in terms monetary policy. In a way, when it comes to economic matters Maduro follows Il Gattopardo by heart: “if we want things to stay as they are, everything will have to change”. That’s what he’s good at.

Sanguino graduated with a degree in Economics from the Universidad Central de Venezuela (UCV) an aeon and a half ago. But as my professor used to say, “he went through University, but University did not go through him.” The guy’s not much of a scholar. As José Guerra has noted, he has not published papers, books, research, or even tweets about economic policy in over 50 years (same goes for the Vice-President for Economic Policy, Ramón Lobo).

He was  known as a die-hard Marxist during his time as a professor at UCV, even though he didn’t teach “Marxism” per se. From the perch at the AN, he helped draft the disastrous succession of reforms to the Central Bank law as President of the Finance Committee. The same reforms that took every last bit of independence from the BCV, and led the monetary policy down the spiraling drain of explosive inorganic money printing and the highest inflation in the world for 4 years in a row.

Not surprisingly Sanguino is a fervent advocate of the Economic War hypothesis for why the economy doesn’t work at all. He’s gone as far as to ask, rhetorically “What crisis?”, when asked for comment back in February 2016.

I don’t know about you but if I say there’s a war underway, that counts as a crisis, doesn’t it? That’s chavista logic at work for you, though.

So if he won’t take minimally logical monetary policy decisions, can we at least hope for some data? BCV stopped publishing key indicators (GDP growth, inflation, balance of payments, current account, poverty, global demand and supply, to mention some of them) in the third quarter of 2015. I’m afraid that’s too much to ask from him. He’s in too deep with chavistaspeak to have a sudden turn to transparency now that he finally climbed to a position of power.

Having a non-crazy idea that you don’t lift a finger to enact is enough to get you labeled as a “pragmatist” within the horribly debased standards of chavista governance.

In terms of policy, the one reasonable thing he’s said is that he favors Exchange Rate unification — a.k.a., ditching the kleptocratic lunacy where different people pay different prices for foreign currency, allowing cronies to arbitrage the daylights out of the state.  But in 15 years in the Capitolio he’s never once pushed for legislation to achieve this. Still, having a non-crazy idea that you don’t lift a finger to enact is enough to get you labeled as a “pragmatist” within the horribly debased standards of chavista governance.

Don’t be fooled. It’s a label with no meaning: chavista pragmatism amounts to cheap talk about the theoretical desirability of firefighting as a profession uttered from a lawn chair in front of an orphanage that’s on fire.

We’re way past the point where who the name of the Marxist lunatic at the helm at BCV matters in any significant way. It could be Merentes, Sanguino or the most capable person left in the PSUV. Thanks in no small part to legislation sponsored and drafted by Ricardo Sanguino, no important decisions can be made without approval by Maduro and his inner circle anyway. It’s a world populated by hardcore ideologues terrified they’ll shatter the basis of their own power if they green light any significant reforms.

And so they’ll continue to make changes, yes, but only to keep things as they are.