Friday, May 02, 2008

The Ugly, the Bad and the Good

That will be today’s film title by an Italian film production wanting to portray Bolivia’s “wild west” political scenario; I explain myself.

The Ugly; comes from the economical stupidity and political anorexia, including a not so secret desire to spy and control the information of the freedom fighters opposing the totalitarian regime of Evo Morales. That is, the “nationalization” of Entel, Transredes, Chaco and CLHD; ENTEL, with Italian investors is the main telecommunications company in the country, the only one of today’s nationalized corporations that is not related to the hydrocarbon activity and the reason of its nationalization has to do more with the possibility to intervene phone calls, specially cell phones and to have access to censor internet, since ENTEL has about 90% of the internet connections of the Country.

The nationalization of the other 3 oil corporations is plain economic ignorance; the idea is for the government of Bolivia to “forcefully” buy the little percentage of the stock needed to acquire 51% or more from these companies at the buyer’s, the maSSist regime, settled price. I am pretty sure Microsoft and Yahoo are all ears about this “intellectual” proposition of the XXI century socialism, specially the former.

What is simply going to happen is that the offended international companies, with German, British and American interests will rightly put their own price to their Bolivian stock and demand for it to be paid. Once the issue is settled in international courts, you can forget about the IDH and the super habit, the money will be diverted strait from the gas sales to these companies bank accounts. It is simple, as a former US president could put it; it is the jurisdictional security stupid!

The Bad; comes from the fact the REPSOL, has decided to sell their 1.8% percentage to the government, alleging un understanding with the Morales regime but at the same time stating that their revenue from Bolivia was so insignificant within their company that it was easier to make money doing nothing that to spent time and resources on international arbitration.

The above and the previous only mean and end of international investment in hydrocarbons for the long run in the country, at least form the competent companies. I am pretty sure we will be hearing the maSSist zealots in YPFB saying that investors from China, Iran, Rusia and Venezuela will be coming; Great, there goes to the trash the first world industrial safety standards, the best environmental protection standards we aver had in the country and of course, state of the art quality controls ensuring economic sustainability. Way to go Evo the great indigenous king protector of mother earth and its inhabitants.

The Good; yes, believed or not there is a good thing about all this, t is a little obscure and there will be very little talk about it, perhaps is only going to happen in this post and that is it. But the socialistic intellectuals have come up with a, well, socialistic, idea that would work to improve equalitarian conditions among the workers within a capitalistic structure, improving upwards; yes I know, sounds impossible. That is the decree that come up with the other nationalization decrees stating that the executives of the companies that make more than US$ 4.440 a month wild have to contribute 10% of it, which will be distributed to the workers in the country that have a minimum retired pension.

It is of course, not a new idea, the rich tax deduction is widely used in the US and in Europe, the only innovation is where this founds will go. Hopefully this money will in deed go to those ex workers of different sectors with the minimum retired pension and not to the pocket of the typical maSSist collaborator or to the infamous “ghost” retired employees.

Socialistic policies like the above where the ones expected from this government, this is just one small idea among a sea of possibilities; that is “executing” government and I applaud it. I also hope that after the Santa Cruz referendum the maSSist regime realizes it is better to work over policies and decentralization instead of being constantly campaigning for a XXI century socialism that is an already smelling corpse.


JRO said...

The tax penalty for individuals who make more than $4,000 monthly is just as ridiculous as the BS10,000 salary cap for public and semi-private employees.

It punishes entrepreneurship and success.

How can a so-called socialist rationalize these individual-crushing methods?


Jro, the tax penalty as you name, it isn’t an invention of the Morales regimen at all; as I said it in my post it is widely used in the capitalistic world and is usually named “Rich Tax Policy”. In the US for example, the more you make, from a specific amount, I think is US$100K a year, you pay higher taxes rates than those making less. You even have tax discounts if you have a non working wife and children.

Making US$ 4K a month in Bolivia is like making US$ 12K a month in the US, thus it will be like going up to US$ 144 K a year; the maSSist proposition is not irrational at all this time.

If you live in Bolivia as it appears, you know very well that a family of 4 can live really well, in the upper medium class with US$ 2 K a month; the 4 K line does not punish anybody or anything since isn’t a barrier like the Bs 10 K a month salary cap for public base jobs, you can still make way more than the US 4K a month if you want.

It will be nice to be able to make all the money of the world, and keep it all; but that doesn’t happen in the real world, not even to dictators for life like Fidel Castro. You will have to live within a certain type of government and will have to pay to that government for your protections. One way of protecting entrepreneurship and success is making policies that will help the poor move up without hurting the producing rich in excess. The Bolivian governments previous to Morales didn’t do it and in response we got stuck with the maSSist agenda; which almost all their policies, excluding the one we are discussing, attempt to move the rich down with the poor.

I will like for you to add up “The Discourses on Livy” written by Nicollo Machiavelli to your book collection, he is the greatest political analyst of all times when referring to human nature.

JRO said...

As far as US taxation refers, I have to dissagree, they apply a set of formulae to quantify tax owned, not a blind percentage as is the case here.

Since I´ve been filing my 1040 religiously for the past five years I do know a bit about this...

I consider that option to be *fair* in comparison to the 10% policy.

I´m not even considering the issue of how well we can live with X amount of money, and neither should anyone (i.e the government) make those decisions/assumptions for me.