Caracas Chronicles

The reply that follows has been published in whole and with no edits from the Caracas Chronicles editorial team:

I have been attacked by many people, in Venezuela and abroad, for my opinions on this matter. By politicians, world-renowned Venezuelan analysts, and academics. Here is an example. Today I want to challenge those attacks with a proof of electoral fraud and conspiracy against the American nation. I am willing to enter the discussion based on arguments, rather than on fallacies, struggles related to political interests, or power quotas in the media. 

The author in Caracas Chronicles attacks me for my supposed Chavismo, Trumpism and fundamentalism. In this additional article I respond to those accusations, which is useful because I show my learning process, including the fact that for some time I did not believe, like many of you for the US, that there was a conspiracy in our country.

The key to my argument has to do with the social, economic, and political disease that we suffer: the Curse of Abundance. My experience and my learning, in addition to my training in Economics at the University of Chicago, allow me to identify the variant of our virus with which the United States is now contaminated: Rentism. Rent-seekers exist everywhere. They use lobbying to gain economic advantage from political connections in government. Rentism, the political economy aspect of the Venezuelan disease, occurs when a cartel of rent-seekers goes to the extreme of capturing the government, which goes from serving the people, the legitimate owners of the nation, to serving those new owners. Their lobbyists now become elected officials in key public positions. In this situation the new owners behave like a mafia, since the rule of law is replaced by the rule of the cartel.

The rent-seekers capture not only the executive branch of the national public sector, but also the legislative and judicial powers. I show in the paper that this is one in the United States through the puppet Joe Biden. Not only at the national level, but also at the regional and local levels. Control of the media and some other private institutions, such as pollsters and academia, is also key to maintaining their power. In a fake democracy, for example, the mafia cartel uses a combination of populism, control of the media, and systematically rigged elections to stay in power. Some of the symptoms of the disease can be already observed in the US: endemic corruption, institutional centralism, territorial centralism, militarism, great inefficiency of public administration, control of the media, rigged elections and rentistic populism. In rentistic populism the cartel employs electoral handouts and deceptive propaganda to capture the middle class and the most vulnerable and underprivileged members of society.

My proof of fraud is based on Economic Theory and private business management insights, where similar situations occur every day. For example, in the same way that a job applicant knows more about his experience than a company that hires people, a politician knows more than citizens about the public administration that he carries out in private. Economic science has developed powerful tools that allow us to make qualified inferences about unobservable variables, such as personal ability or political corruption, using observable variables, such as a resume or the public performance of a politician. In our case, I use the Principal-Agent theory and the Signaling Games for this purpose, since they help us to understand those situations in which the key aspect in the relationship between the actors involved is the asymmetry of information on the subject at hand.

For the conclusions I reach regarding fraud and conspiracy, which are the variables that we take as unobservable, we only have to recognize the high correlation between corruption and public attempts to hide it, on the one hand, and between innocence and the observable willingness to be transparent.

To apply the first model, we only have to realize that citizens and politicians are placed on opposite sides of the Principal and Agent contradiction. In the same way that a job applicant has to prove to the prospective employer that he is capable, the politician has the burden of proof to convince people that he did not commit fraud. The Biden camp is using the fallacy of ignorance: Since fraud has not been proven, there is none. They claim the burden of proof is on Trump’s camp, when it actually lies with Biden’s camp. In this sense, I show, using the first model, that in a political trial like this, it is false for a politician to be innocent until proven guilty. It is the other way around: he is guilty until he proves his innocence himself. The only way Biden can clear his reputation is to promote evidence review, especially now when more than 50% of citizens think the election was rigged.

The Signal Games model more accurately confirms that Biden committed fraud. The reason is that not only has it not been transparent about it. His political allies, Dominion in particular, have taken systematic actions to hinder the investigation, even going so far as to blatantly commit federal crimes. In the cases of the Colorado Secretary of State, computer data on elections was erased with the complicity of the media and many politicians. I show that, with what we know of the public performance of the group that supports Biden, including Dominion, there is a “separating equilibrium” that signals them as guilty. The reason is that it is too expensive for them to give the signal of transparency. Trump, on the other hand, as well as Michael Lindell and Sidney Powell, have given “costly signals” that prove they are innocent of bluffing.

In an election, the politician does not usually have to prove that there was no fraud. It’s about the electoral and judicial systems, particularly if they declare him innocent. But in this case, as I show in the article, these systems are on the suspect list and the first model applies: they are guilty until proven innocent. What they have done, as can be seen publicly, points to the exact opposite, as in the Maricopa County example for the electoral commission. And as for the judicial system, the same, because the institutions that must carry out the investigations, the Department of Justice and the FBI, have not only shown disfavor of the investigations, but have actively hindered them. It is private citizens and some politicians who have spent a significant amount of their own resources in an attempt to show evidence of fraud. The case is now in the Supreme Court of the nation, presented by several State Attorneys using the finding of Michael Lindell and Douglas Frank.

Another argument allegedly in favor of the Biden camp is that, as various Republicans and even Trump public officials have found no reason to investigate the fraud, there is no fraud. As I show in the article, this conflict is not between left against right, or Democrats against Republicans, or opposition against government, but between right and wrong, since the disease of rentism captures people of all parties, public jobs and ideologies.

In the companion paper I present that, in the de facto confrontation in which we find ourselves, it is clear that whoever ends up being the winner is the player with the greatest relative strength. It is true that the Deep State won a crucial battle in the war by fraudulently taking over the presidency of the republic. With this they carried out a next-generation coup D’Etat without firing a single shot and had a wealth of resources at their disposal to accomplish this remarkable and unique feat in human history. I maintain that there are still forces in the field of the Patriots that can turn the tables. Especially those that have to do with combat morale, in addition to some institutions that still defend the rule of law. My opinion is that there is a high probability that David will defeat Goliath and Trump will return to power before 2024.  

Finally, in that scenario of Donald Trump back in the presidency, I foresee a counterattack by the Deep State against the United States, which would most likely imply a hot third world war, because in my opinion we are in apocalyptic times, and Satan is also on the loose. In this conflagration the good side will prevail at the end, but many crises and cataclysms will occur, such as economic, monetary and financial collapse, famines, plagues and millions of deaths. You do not have to be a believer to envision those kinds of events coming. Let us be prepared in all aspects, especially spiritually.