More news from the workers paradise of Venezuela

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Been surfing a bit more and found two other articles of interest. First -- from the Christian Science Monitor:
Long subsidized, gasoline now rationed in parts of Venezuela
The government is implementing gasoline rationing in Venezuela�s border states.

The way they are doing it is by installing a chip on each vehicle. The idea is to put a maximum weekly limit on the number of liters each car can purchase. The chip is already in place in the border state of T�chira, and is currently being rolled out in Zulia, another border state. Twitter is aflame with rumors it will soon be mandatory nationwide. Andr�s Rojas from El Nacional thinks it�s gonna happen.

As with all rationing schemes, this one is bound to have, shall we say, �unintended consequences.� These are ripe for cutting edge economic research. Here are a few that I can think of, off the top of my head:
1. When the black market for gasoline appears (�when,� not �if�), we will learn the actual market price for gas. We can then use that to estimate the exact amount of the gas subsidy. We can also see how the black market varies between, say, Maracaibo (which is far away from non-rationing states) and El Venado (which is right on the edge of a non-rationing state).
Four more unintended consequences at the link. Defeating the chip will be hard because, like all other RFID chips out there, there is no 'information' on the chip. The gallons of gas is not on the chip, it is stored on a central database. All that the chip has is a GUID -- a unique serial number that references that particular vehicle. The gas station sends that back to the government database and the government database tells the gas station how much gas is available to that vehicle for that month. There is probably some workaround for when the link to the database is down so outside of hacking the database, jamming the link is the only simple option. You could create another RFID chip with a different GUID but you would either be: #1) - not in the system or #2) - stealing someone else's gasoline ration. Yes, there are a few other options but I am not discussing them on an open forum... PBBBTTT!!! Second -- from The Devil's Excrement
Venezuelan Infrastructure Suffers From Fourteen Years of Chavismo
Caracas has three main highways that take you out to the rest of the country. For a few hours this weekend, only one of them was available, the Autopista Regional del Centro. The other two, the Autopista de Oriente and the Caracas-La Guaira highway were closed for different reasons, making life difficult for those wishing or needing to travel.

The Autopista de Oriente was closed because the bridge at Cupira, about 130 Kms. East of Caracas, collapsed last week, as you can see in the picture above. The School of Engineers of Puerto La Cruz had been warning since 2009 that the bridge was in bad shape, but the warnings, much like those of the viaduct in the Caracas La Guaira highway a few years ago, were ignored by the Chavista Government. On top of that, you can see in the picture the large truck crane sitting in the middle of the bridge. There are reports that this truck crane, leased by the Government, weights almost twice as much as Venezuelan laws allow for a vehicle. Nobody stopped it and it was not complying with the regulations for a large vehicle circulating in a highway. This may have contributed to the collapse of the 40 year old bridge.

The consequences are felt everywhere. This is vacation season and an estimated 30,000 people scheduled to return from Margarita island by Ferry in the next couple of weeks will have troubles doing so, unless they take a 4 to 5 hour detour. Add commerce and supplies to the East and you can see that the picture is not pretty. The first day of the collapse the Government said it would have an alternate route ready in three days, but word now is that it will take around 15 days for the alternate route to be ready.
Some more:
But the more interesting thing is why this distributor is being built. The Distributor leads to Ciudad Caribia, a supposedly �socialist� city invented by Chavez on one of his Alo Presidentes. People are given the apartments, but they don�t own them. But the worst part is that thousands of apartments have been built but transportation to and from that new city is terrible. The plan is to have over 100,000 people live there by the year 2018. The problem is that the Caracas La Guaira highway is already overloaded and there are no plans for an alternate route to the 59 year old highway. (I know exactly how long it has been around, my mother always told us about going to see the highway the day it was opened, despite the fact that she was nine months pregnant and gave birth to my sister the next day)

But this is typical of the improvisation of Chavismo. Ciudad Caribia was rushed, without having proper infrastructure for it. People are very critical of it and construction quality has been bad, with building walls falling down months after the construction has been completed. This is not unique to Ciudad Caribia. All over the country buildings are rising, without any additional infrastructure being built. In order to rush the housing units to completion, all ordinances are bypassed, there is no planning and the result is that the quality of life is simply lowered for everyone. I guess that is what they mean by socialism.
This is where we are heading if we do not restore our Government, our Republic back to its original standards. Our current government is corrupt, traffics with crony capitalists and it stifles the economic engine that made it great. If our current regime gets its way, there will be no middle class. There will be the institutional poor -- a fully subsidized Democrat voting bloc. There will also be two classes of rich -- the rich that play along (GE) and get crony access and cheap tax rates and the rich that do not play along and get stiffed... Of course, the revenues will dwindle so that will (short-term) be made up with borrowing. Eventually, this house of cards will tumble with a huge butcher's bill and our kids will be the ones to pay it all back. Is that what we want to leave as our legacy?

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About this Entry

This page contains a single entry by DaveH published on August 25, 2012 10:28 PM.

Curious news from the workers paradise of Venezuela was the previous entry in this blog.

Silly season - just getting started is the next entry in this blog.

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