Fausta's Blog

American and Latin American Politics, Society, and Culture

Archives for May 2009

May 28, 2009 By Fausta

France: Greens not ‘appy over Allegre

Sarkozy in climate row over reshuffle

President Nicolas Sarkozy’s desire to appoint an outspoken climate-change sceptic to a new French super-ministry of industry and innovation has drawn strong protests from party colleagues and environmentalists.

Claude Allègre argues that global warming is not necessarily caused by human activity. Putting him in charge of scientific research would be tantamount to “giving the finger to scientists”, said Nicolas Hulot, France’s best-known environmental activist.
…
One critic said that associating Mr Allègre with the government’s ambitious environmental policy was like putting “organic farming alongside Chernobyl”.

Mr Sarkozy is said to value Mr Allègre’s experience, his plain speaking and his convictions on the need to free up the economy and shake up the public sector – particularly the university research establishment.

The president’s allies rode to Mr Allègre’s defence yesterday. Xavier Bertrand, the general secretary of the ruling UMP party, paid tribute to his qualities as a “reformer”, saying Mr Allègre had “an interesting profile in French political life”.

And why don’t they like him?

Mr Allègre hit back at his critics and their “lies and distortions” about his record and beliefs. The climate was certainly changing, he said, but not all the reasons for it were known. “As a scientist and citizen, I, unlike others, do not want environmentalism to accentuate the crisis or make the least well-off suffer more,” he said.

The article also mentions that France opened yesterday its first permanent military base in Abu Dhabi, its first one in the Gulf, which will be home to about 500 personnel. It’s called “Peace Camp.”

It’s not all good news, though. Sarko’s creating a bureaucracy to oversee the bureaucracy, a “super-ministry of industry and research.”

Does France (or anyone) need more bureaucrats?

UPDATE
Tim Blair has more.

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Filed Under: France, Global Warming, Nicolas Sarkozy Tagged With: Claude Allègre, Fausta's blog

May 27, 2009 By Fausta

Mario Vargas Llosa detained at Caracas airport

First Álvaro, now Mario Vargas Llosa:

Mario Vargas Llosa briefly arrested in Venezuela

Peruvian writer Mario Vargas Llosa was briefly arrested today by immigration agents in Maiquetía’s national airport near Caracas, Venezuela. He was heading to a forum on freedom and democracy, which he was invited to.

The agents withheld his passport and they took him to a special room to question him as they did on Monday with his son, Álvaro, said the Economic Knowledge Disclosure Center (CEDICE) forum’s spokeswoman Rocío Guijarro.

The novelist was arrested for almost two hours and Guijarro said military command wanted to escort Vargas Llosa to the hotel, but he refused because he had a reserved vehicle.
“I don’t understand why they do this or what they are afraid of,” said Guijarro.

Before heading to Venezuela, Vargas Llosa harshly critised President Chávez’ “populist” government and said he is using the oil money to “bribe democratic governments.”

El Universal also has the news.

The Latin American Herald Tribune reports that

An evidently irate Interior and Justice Minister Tarek El Assaimi reacted to this by accusing the journalist of lying. “We see that he communicated with a private media company to lie,” he roundly declared. “He wasn’t stopped, he wasn’t detained, and nor was his identity document taken away.”

All that had taken place had been completely normal, the minister insisted. “This person arrived in the country and an ordinary procedure was completed.”

Whether or not the Peruvian was out to make mischief, El Assaimi seemed convinced this was so. “We’re not going to fall into the provocation of these sectors. They have neither shame nor morality,” he declared. “The person received a correct and dignified treatment. We respect the human being.”

The Chavez regime is clearly frightened of these men coming to the country, and the forum hasn’t even started yet.

Noticias 24 (in Spanish) has video of Mario Vargas Llosas’s arrival, where the obnoxious VTV (government) station reporter made a scene (while asking an idiotic question):


Periodistasvtvglobov
by noticias24

Will continue posting on this as news develop.

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Filed Under: Fausta's blog

May 27, 2009 By Fausta

Andres Velasco’s plan: Save for a rainy day

andresvelascoAndrés Velasco may well have saved his country’s democracy, not just its finances.

Who is Andrés Velasco, you may be asking? He’s Chile’s Finance Minister:
Prudent Chile Thrives Amid Downturn

During the emerging economies’ commodities boom a few years back, Chilean Finance Minister Andrés Velasco was a wet blanket at the fiesta. Chile, the world’s largest copper producer, was reaping a bonanza from the quadrupling in the metal’s price. Mr. Velasco insisted on squirreling away a large chunk in a rainy-day fund.

As the savings swelled above $20 billion — more than 15% of Chile’s economic output — Mr. Velasco faced growing pressure to break open the piggy bank. In September, protesters barged into a presentation by Mr. Velasco, carrying an effigy of him and shouting, “The copper money is for the poor people.”

The 48-year-old Mr. Velasco, wary that a flood of copper income could generate lending and consumption bubbles, stood his ground, even as the popularity of the center-left government withered. Latin American history, he cautioned, was full of “booms that had been mismanaged and ended badly.”

Historically, what follows the booms is an economic crash, which provokes a coup, which in turn leads to a dictatorship, as it did in Chile:

Chile, which has long been a laboratory for economic experiments, had its thrifty fiscal consciousness forged by a national tragedy in the 1970s. To finance his plan of turning Chile into a socialist state, then President Salvador Allende cranked up the money presses, leading to inflation of more than 500% and alienating the middle class.

The societal stresses came to head on the morning of Sept. 11, 1973, when Chilean air force planes bombed the presidential palace in a coup by Gen. Augusto Pinochet. Mr. Velasco was 13 years old. A few years later, Mr. Velasco’s father, a law professor, was kicked out of the country by the Pinochet government for denouncing human-rights abuses.

Mr. Velasco studied economics at Columbia University, as part of what he calls a quest “to understand how did this happen [to Chile] and how do we make sure it will not happen again.” The conclusion reached by Mr. Velasco and other economists of Chile’s left was that runaway inflation had made Chile fertile ground for coup plots, and that political stability couldn’t be ensured without financial stability.

Of course, Velasco was under huge pressure to spend, spend, spend. He stood his ground and made the right decision.

Every Chilean who believes in democracy should thank him. Go read the article, to find out why.

Hat tip Greg at RCW Blog.

UPDATE
Meanwhile, here in the USA, Exploding Debt Threatens America:

Under President Barack Obama’s budget plan, the federal debt is exploding. To be precise, it is rising – and will continue to rise – much faster than gross domestic product, a measure of America’s ability to service it. The federal debt was equivalent to 41 per cent of GDP at the end of 2008; the Congressional Budget Office projects it will increase to 82 per cent of GDP in 10 years. With no change in policy, it could hit 100 per cent of GDP in just another five years.
…
To understand the size of the risk, take a look at the numbers that Standard and Poor’s considers. The deficit in 2019 is expected by the CBO to be $1,200bn (€859bn, £754bn). Income tax revenues are expected to be about $2,000bn that year, so a permanent 60 per cent across-the-board tax increase would be required to balance the budget. Clearly this will not and should not happen. So how else can debt service payments be brought down as a share of GDP?

Inflation will do it. But how much? To bring the debt-to-GDP ratio down to the same level as at the end of 2008 would take a doubling of prices. That 100 per cent increase would make nominal GDP twice as high and thus cut the debt-to-GDP ratio in half, back to 41 from 82 per cent. A 100 per cent increase in the price level means about 10 per cent inflation for 10 years. But it would not be that smooth – probably more like the great inflation of the late 1960s and 1970s with boom followed by bust and recession every three or four years, and a successively higher inflation rate after each recession.

The fact that the Federal Reserve is now buying longer-term Treasuries in an effort to keep Treasury yields low adds credibility to this scary story, because it suggests that the debt will be monetised. That the Fed may have a difficult task reducing its own ballooning balance sheet to prevent inflation increases the risks considerably. And 100 per cent inflation would, of course, mean a 100 per cent depreciation of the dollar. Americans would have to pay $2.80 for a euro; the Japanese could buy a dollar for Y50; and gold would be $2,000 per ounce. This is not a forecast, because policy can change; rather it is an indication of how much systemic risk the government is now creating.

Why might Washington sleep through this wake-up call? You can already hear the excuses.

“We have an unprecedented financial crisis and we must run unprecedented deficits.” While there is debate about whether a large deficit today provides economic stimulus, there is no economic theory or evidence that shows that deficits in five or 10 years will help to get us out of this recession. Such thinking is irresponsible. If you believe deficits are good in bad times, then the responsible policy is to try to balance the budget in good times. The CBO projects that the economy will be back to delivering on its potential growth by 2014. A responsible budget would lay out proposals for balancing the budget by then rather than aim for trillion-dollar deficits.

Which is highly unlikely.

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Filed Under: Chile, economics, economy Tagged With: Andrés Velasco, Fausta's blog

May 27, 2009 By Fausta

Back on CNN today

UPDATED

Unfortunately I had no video or sound at all for most of the show!

I’ll back on CNN Live’s Blogger Bunch at noon today again. The subject is Sonia Sotomayor’s nomination to the Supreme Court.

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Filed Under: SCOTUS Tagged With: Fausta's blog, Sonia Sotomayor

May 27, 2009 By Fausta

North Korea threatens strike

While we wallow in empathy, North Korea is getting bolder:

First they dropped the bomb on another test, then they launched an additional short-range missile from its east coast Tuesday night, and now North Korea Threatens Armed Strike, End to Armistice

– North Korea threatened a military response to South Korean participation in a U.S.-led program to seize weapons of mass destruction, and said it will no longer abide by the 1953 armistice that ended the Korean War.

“The Korean People’s Army will not be bound to the Armistice Agreement any longer,” the official Korean Central News Agency said in a statement today. Any attempt to inspect North Korean vessels will be countered with “prompt and strong military strikes.” South Korea’s military said it will “deal sternly with any provocation” from the North.

North Korea’s Kim Jong Il has challenged President Obama more in four months than he did President George W. Bush in eight years.

Looking at it from the insane point of view of North Korea, what is the downside? A strongly-worded letter from the US, or one from the UN?

UPDATE
Time for a nuclear Japan:

Allahpundit weighs in on Sino-American relations.

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Filed Under: Barack Obama, China, Japan, North Korea Tagged With: Fausta's blog, North Korea

May 27, 2009 By Fausta

Alvaro detained

Álvaro Vargas Llosa, author of Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, co-author of the Guide to the Perfect Latin American Idiot, and steady critic of Hugo Chavez, was detained by Venezuelan authorities when arriving in Caracas

On the evening of May 25, Independent Institute Senior Fellow Alvaro Vargas Llosa was detained for questioning for almost three hours by Venezuelan authorities following his arrival at the Caracas International Airport.

Since the officers in charge of his custody forgot to take away his cell phone, he was able to answer a call from Globovisión, a Venezuelan television network opposed to Chavez´s regime, which broadcast the conversation live. Alvaro believes that call was key to his release since it rapidly spread the news of his detention through media outlets worldwide, placing pressure on the ruling dictatorship.

Alvaro traveled to Caracas to attend a forum on freedom and democracy organized by the Center for the Dissemination of Economic Knowledge (CEDICE), a Caracas-based free-market think tank. He is scheduled to speak at an event commemorating the organization’s 25th anniversary, along with other distinguished lecturers including Alex Chafuen, Manuel Ayau Cordón, Enrique Ghersi, Jorge Castañeda, Guy Sorman and his own father Mario Vargas Llosa.

In a radio interview, Alvaro told how without any explanations the police withheld his passport and took him to a room reserved for smugglers, where they interrogated him and among others things asked him to identify his “accomplices”. He also anticipated that his father Mario will surely undergo similar treatment when he arrives in Caracas on Wednesday.

Here’s Alvaro’s telephone conversation (in Spanish) with Globovisión, the TV station currently under attack by Chavez:

Anthony Gregory at the Independent Institute’s Blog has more.

Upon his release, Álvaro headed straight to Globovisión. Here is the interview, where he deplored the accelerated decline in Venezuelan democracy:


Vargas Llosa en Aló Ciudadano
by noticias24

The Buenos Aires Herald, El Universal, El Herald and the Miami Herald also reported on the story.

Today Álvaro’s father, eminent writer Mario Vargas Llosa, is expected to arrive in Caracas. He’s already let it be known that he won’t be holding back any criticisms of the regime.

I’ll be talking about this in today’s podcast at 11AM Eastern. Chat’s open at 10:45AM and all podcasts are archived for your listening convenience.

UPDATE
Via commenter Rodrigo, the official Venezuelan news agency didn’t take long to call both Vargas Llosas and Plinio Apuleyo Mendoza characters in the service of the empire. By “empire” they mean the US.

Perhaps Le Monde’s South American correspondent Jean-Pierre Langellier also is a “character in the service of the empire,” too?

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Filed Under: Communism, Hugo Chavez, podcasts, Venezuela Tagged With: Álvaro Vargas Llosa, Fausta's blog

May 26, 2009 By Fausta

Brazil arrests high ranking al-Qaeda spy

Brazil arrests high ranking Qaeda operative

Brazil’s federal police have arrested a high-ranking al Qaeda operative in Sao Paulo and are keeping him under tight security, a local newspaper reported on Tuesday.

The suspect is allegedly a chief of international communications for al Qaeda, according to the report in Folha de S.Paulo, Brazil’s largest daily newspaper.

The report did not give the suspect’s name or say when he was taken into custody, nor did it provide a source for the information.

The arrest was surrounded by secrecy with the federal police disguising it as part of an investigation into neo-Nazi groups in the country, Folha said. The report also said U.S. authorities were notified of the arrest.

Ricardo Noblat (in Portuguese) points out the importance of the suspect’s duties as chief of international communications for al Qaeda.

UPDATE Via commenter Rodrigo, the member of al-Qaeda is no longer in jail, and would not be extradited. Representative and director for the Commissioner for Public Safety Raul Jungmann says that the release shows that “we are not in control of the terrorist situation”

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Filed Under: al-Qaeda, Brazil, terrorism Tagged With: Fausta's blog

May 26, 2009 By Fausta

Soak the rich, lose the rich: Maryland edition

Millionaires Go Missing
Maryland’s fleeced taxpayers fight back.

Maryland couldn’t balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O’Malley, a dedicated class warrior, declared that these richest 0.3% of filers were “willing and able to pay their fair share.” The Baltimore Sun predicted the rich would “grin and bear it.”

One year later, nobody’s grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller’s office concedes is a “substantial decline.” On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year — even at higher rates.

Soak the rich, lose the rich.

Soak the middle class, next.

UPDATE
Moe:

The refusal of fans of progressive taxation to understand that there’s a direct correlation between how much people hate progressive taxes and how much they suffer from them – and that people reserve the right to either stop being so productive, or just simply go somewhere else – would be sad, except that too many of said fans have a say in crafting fiscal policy. This is really kitchen economics: if there’s not enough money, stop spending it until there is. Even if it’d be really, really great if [Insert Feel-Good Initiative Here] was done.

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Filed Under: Democrats, taxes Tagged With: budget, Fausta's blog, Maryland

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