tag:blogger.com,1999:blog-1631912103702174313.post9213927960972783681..comments2023-06-12T01:24:45.924-07:00Comments on Venezuela-Europa: Ideas for the Venezuelan EconomyKeplerhttp://www.blogger.com/profile/11125538872924743270noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-1631912103702174313.post-71176829454047985892009-09-09T13:56:14.417-07:002009-09-09T13:56:14.417-07:00Firstly: I am afraid I need another week more as I...Firstly: I am afraid I need another week more as I am into some big work.<br />But briefly this:<br />"you must agree that the end-goal should be a free market, the same way your aim is a free exchange rate. Right?"<br />Yes, the goal would be a free market, even those there is hardly any free market on Earth. The closest we have to that is within the EU. What happens over and over again is that the big powers tell us in Latin America WE are the ones who should have this free markets for them and they have the free market for our bananas, our coffee and our oil.<br /><br />We definitely cannot offer bigger subsidies but then I am not thinking about exporting if we don't have a competitive advantage already, but about generating more and more products for internal consumption that could start replacing those from abroad.<br />We cannot open up the markets right away. The issue is what speed should we take, how to control that opening.<br /><br />1) Start freeing the currency exchange but organize a system whereby hospitals and the like get their extra costs payed by the state. The state will have anyway more money from the Bolivars it gets for its petrodollars<br />2) Increase taxes for imported goods there are some chances of replacing, specially if we know those products are being dumped to us.<br />I will follow this weekend. Sorry.Keplerhttps://www.blogger.com/profile/11125538872924743270noreply@blogger.comtag:blogger.com,1999:blog-1631912103702174313.post-29001800127879238262009-09-09T12:34:23.475-07:002009-09-09T12:34:23.475-07:00"Please, give me an example where things as y..."Please, give me an example where things as you propose have worked."<br /><br />Sorry, I haven't found that these proposals have ever been tried anywhere. They are truly Venezuelan proposals, made with Venezuela in mind, and, especially, at heart.torresnoreply@blogger.comtag:blogger.com,1999:blog-1631912103702174313.post-57515923021725726672009-09-09T12:29:46.871-07:002009-09-09T12:29:46.871-07:00I've been thinking about your last comment whi...I've been thinking about your last comment while waiting for a reply, and two things have been nagging at me:<br />1) using fees as a way to control price of goods, as a way to control the trading of certain goods<br />2) using natural resource income as a way to pay for the investments you seem to suggest need be made<br /><br />My issue with number 1 is that if you need to control the number or the flow of certain goods, I believe that that is best accomplished through laws, not through their price. Remember, price is an indicator, a measure of a tacit negotiation between price and demand. Though affecting price definitely affects the market, using it as a form of control of the market is a no-no, as well as inefficient and corruption-prone, and mediocrity-fertilizing, analagous to exchange rate controls, by the way.<br /><br />My issue with number 2 is how unprogressive it is. For example, The Venezuelan government exporting 3million barrels of oil per day, let's just say at 30USD per barrel, is equivalent to 9USD per Venezuelan per day! But if you don't give each Venezuelan his daily 9USD from the oil you *must* spend the 90million daily USD in such a way such that the poorest receive the bulk, otherwise it's not progresssive. From our history, you would be in a bind trying to find examples demonstrating that the investments you suggest truly get goods and services representing a value of most of those 90million daily USD to the poorest.<br /><br />One final comment regarding other nations subsidizing some of their imports and exports, the way to beat those controls is by no means attempting to counter-subsidize. There is just no way Venezuela can outsubsidize USA. The only way would be to export to other nations that we can outsubsidize, but USA is probably also exporting there! I say, let the market handle it. There is no way a politician sitting in office will make better and more dynamic decisions about such things than the owner of a business dedicated to that. You are right that the floodgates cannot simply be opened overnight; the market could not handle the abruptness, but you must agree that the end-goal should be a free market, the same way your aim is a free exchange rate. Right?torresnoreply@blogger.comtag:blogger.com,1999:blog-1631912103702174313.post-12498193576249090242009-09-02T09:42:51.086-07:002009-09-02T09:42:51.086-07:00Above all, remember to keep all my suggestions wit...Above all, remember to keep all my suggestions within the context of having cash distribution proposal implemeneted (which guarantees zero poverty for life for every citizen, regardless of anything else). <br /><br />Regarding my supporting free-floating currency exchange rate as much as free trade, keep in mind that this is within the additional context of the taxation via devaluation proposal, so the more of our money they take in exchange for their products, the larger brunt of the devaluation they will absorb for us.<br /><br />But aside from that, take a real moment to think about every country in the world seeing Venezuela as a fiscal paradise, as well as a duty-free market! The competition would no longer between Venezuela and another country over a particular product; it would be between all countries trying to step over each other to sell their products in Venezuela. The ramifications of something like this are astounding, but let me focus on one angle: An investor would see the immediate benefit of *producing* in Venezuela, rather than importing because his having to be competitve in Venezuela just for someone else to turn around and export his product cheaper than he can to another nation is a losing proposition. So investment, not imports, end up being the name of the game.<br /><br />You want industries in Venezuela, but I shudder to think why anyone would think the government has to be the one to be behind that. This would not only bring industries like crazy, it would make the demand for industrial land skyrocket, also benefitting the land concession fees.<br /><br />Basically, competitiveness boils down to having something that is more desireable than what anyone else has. A Duty-free, fiscal paradise certainly makes Venezuela desireable, and because government can be less efficient and less costly with such a setup, Venezuela would be more competitive. The key is to make sure the benefits from such a setup do not disappear into the dreams of a few; this key is accomplished by the cash distribution together with the taxation via devaluation.torresnoreply@blogger.comtag:blogger.com,1999:blog-1631912103702174313.post-19366988076499950362009-09-02T08:49:08.096-07:002009-09-02T08:49:08.096-07:00Torre, I am sorry I won't have much time to an...Torre, I am sorry I won't have much time to answer until the weekend, but here I disagree. <br />Venezuela would be the first country following such a blind free trade policy. Give me a break, the US, Europe, Japan, every single region/nation that has developed preached like hell free trade for others, but they were and still are incredibly protectionist. It is great if we have real free trade BOTH WAYS, but for that a lot of preparation is needed. <br /><br />Other countries would use Venezuela as a new Congo.<br />First we need to build some industry, first we need to get our people some solid, basic education, which they do not have.<br />Else, the best thing we can expect is to be everybody's else's sweatshop and they will screw up the country in such a way that sooner than later we will have massive riots and back to square one with a new, incredibly protectionist government.<br /><br />Please, give me an example where things as you propose have worked.<br />As I said: the US was one of the most protectionist nations on Earth, it still is, it just does not put tariffs on bananas (I think) or oil because it cannot get enough. Same for the EU.<br />But oh, lo and behold if someone tries to put some tariffs on their textiles or their machines!<br /><br />As for currency: I am for letting it float, but we should have done it years ago. As it is, we need an extra plan, well-designed measures. Fine for me if the luxury yachts Venezuelan rich have cost so much more, or everybody's whiskey, but it is not fine if out of the blue, hospitals do not have the dosh to <br />buy material that is only produced abroad.<br />So: let the currency float, but before doing that, have a real plan with complete details about how you will keep basic services going on.Keplerhttps://www.blogger.com/profile/11125538872924743270noreply@blogger.comtag:blogger.com,1999:blog-1631912103702174313.post-17983218030174244882009-09-02T08:33:06.757-07:002009-09-02T08:33:06.757-07:00Regarding 2.5. MAKE VENEZUELA MORE COMPETITIVE VIA...Regarding 2.5. MAKE VENEZUELA MORE COMPETITIVE VIA EXPORTS, I support the proposal of making Venezuela have an open Free-Trade Agreement with all. Make Venezuela a two-way Duty-Free nation. The only checks at the points of entry and exit should be for controlled goods and their corresponding paperwork, nothing else.<br /><br />Clearly, the currency exchange rate must be free-floating. The exchange rate is a thermometer measuring the demand of any given currency. The same way one would not mess with a thermometer to control a fever, one should not mess with the exchange rate to control a market demand.torresnoreply@blogger.comtag:blogger.com,1999:blog-1631912103702174313.post-7195679098562251362009-09-02T08:19:03.105-07:002009-09-02T08:19:03.105-07:00Regarding 2.4. INCREASE TAXES FOR LUXURY GOODS, th...Regarding 2.4. INCREASE TAXES FOR LUXURY GOODS, this also becomes moot, as per 2.1. If what is wanted, however, is to "control" these items instead of just "tax" them, then this should be achieved through legislation, not taxation.torresnoreply@blogger.comtag:blogger.com,1999:blog-1631912103702174313.post-35740705298004152312009-09-02T08:13:45.006-07:002009-09-02T08:13:45.006-07:00Regarding 2.2. TAX LAND IN A FAIRER WAY I suppport...Regarding 2.2. TAX LAND IN A FAIRER WAY I suppport the proposal of dealing with land the same way of dealing with broadcast frequencies, or geostationary satellite postions: concession fees, which should go up as demand goes up, and down as demand goes down, given that supply for these is fixed. A single Title Management Office centralizing all these title assignments would make sense. Having the titles made public online would greatly help reduce any lags in the show of demand for calculating fees.<br /><br />Once again, transparent, easy, and easy to police by all citizens.torresnoreply@blogger.comtag:blogger.com,1999:blog-1631912103702174313.post-30792686586576134952009-09-02T08:10:06.261-07:002009-09-02T08:10:06.261-07:00Torres, thanks for your contribution. I will go ba...Torres, thanks for your contribution. I will go back to it during the weekend. I am an absolute layman in economics but I will give it a thought, how it could work and how it could fail.Keplerhttps://www.blogger.com/profile/11125538872924743270noreply@blogger.comtag:blogger.com,1999:blog-1631912103702174313.post-21779736197155347892009-09-02T07:59:15.208-07:002009-09-02T07:59:15.208-07:00Regarding TAX EVERYBODY, INCLUDING STREET VENDORS ...Regarding TAX EVERYBODY, INCLUDING STREET VENDORS WHO EARN ENOUGH I support taxation via devaluation as a means of ensuring that *everybody* pitches in by an equal percent. By creating money, the government is, in effect, devaluating everyone's money. If this is done on a daily basis, even a small devaluation produces huge income for the government because now the number of "taxpayers" includes money launderers, foreign holders of our currency, and tax evaders.<br /><br />After all, it is the same for the government to have you pay 10% of your money to them, than to simply make the money in your pocket worth 10% less. The government ends up with the same buying power, and we end up with the same buying power, but we all saved ourseves all the costs and troubles of a taxation system. (Note how this proposal is about devaluating *instead* of taxing, not *in addition to* taxing). In fact, this would put all the tax-related workers in the nation producing at something else, so it's like an injection of educated workers into the economy, while saving the nation all the time and cost spend in dealing with taxes.<br /><br />It's transparent, simple, and easy to police by the citizens.<br /><br />Also noteworthy is that the nation would become a fiscal paradise, bringing a huge and constant influx of monies from all over the world, rendering almost imperceptible the amount that each citizen would even feel the daily devaluation.<br /><br />Naturally, I tie my support to this proposal together with the "daily, equal, unconditional cash distribution for every citizen" proposal. Together, the proposals give everyone the same *amount* while taking from everyone the same *percent*, thus eliminating poverty while having everyone contribute, progressively.torresnoreply@blogger.com