For some reason, this article brought this paper (by THE Paul Krugman) to mind:
http://www.princeton.edu/
~pkrugm...nterstellar.pdf
The money quote from the introduction:
"This paper, then, is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics."
Re your elasticity comments about Weisbrot FT: if memory serves well Kensey checked Weisbrot's 'thesis' and found out that there wasn't a single formula in it. Rather it's meant to be pure socialist blab.
"to get a sense, picture an MD confusing your aorta with your placenta"
How about confusing the aorta with a capillary? Same function, but entirely different scale, which I think describes the error well.
I did like Weisbrot's housing statistics, which show a massive increase in access to sewers (15.5% IN ONE YEAR? What Mision did that - Mision No Mas Mierda?) at the same time as a reduction in houses with access to water via pipes. (Maybe they achieved that by simply reversing some of those pipe flows.) Plus the proportion of houses with dirt floors tripling from the prior year.
I'm disappointed in the GINI issue as well. Bizarre that Rodriguez would try that, because he couldn't have thought no one would notice. Not that Weisbrot's rebuttal proves that income distribution is changing. Just because the INE says so doesn't mean much.
Oh, and nice picture and title. That one takes me back a ways - love that movie.
Alek,
That was me, it wasn't Kensey! (Well, maybe Kensey looked but I remember looking as well).
I looked through the whole thing - not a single equation, not a single data point, not a single regression, not a decent economist in his committee. It was the department's four Marxist cranks who approved his dissertation.
AIO,
Sadly, "aorta" and "capillary" don't rhyme.
Man, I'm reading Francisco's response and it's really quite brilliant.
I think Francisco used the 2000-2005 comparison because he was quoting a BCV study that used those two data points. We shouldn't read too much into it - it's not that he was cherry-picking, it was more like he was quoting the BCV.
this would appear irresponsible in my opinion:
"Spanish President José Luis Rodríguez Zapatero and UNESCO's general director, Koïchiro Matsuura, sent the Venezuelan government public letters of congratulation for the achievement. (After Matsuura's statement, the Chávez's administration claimed that its eradication of illiteracy had been "UNESCO-verified.")"
I think he nailed it on the head when he said:
The story of Chávez as a social revolutionary finally redressing the injustices created by centuries of oppression fits nicely into traditional stereotypes of the region, reinforcing the view that Latin American underdevelopment is due to the vices of its predatory governing classes. Once one adopts this view, it is easy to forget about fashioning policy initiatives that could actually help Latin America grow,"
Isn't it a self fulling prophecy that what we believe, we tend to keep creating?
If we truly believe that we are victims, then victim hood would have to continually be recreated.
UNESCO verified? hahahaha Alek already de-bunked that one, he sent a simple email query, and they replied that they had not verified erradication of illiteracy.
FC,the lies and distortions are so vast that at some point, there is a temptation to cave in as it so tiring to protest them all...
that appears to be their strategy..
also psf's just continually write non sense in order to exasperate us I think...such cynicism and sociopathy is mind boggling...
Sorry Katy, I would have thought it was Kensey, accept my apologies if that wasn't the case.
FC, Sydney also had a go at verifying 'UNESCO's certification' with same results: only Weisbrot types believe the bullshit coming from Chavez, as Francisco brilliantly pointed out, one must take a huge leap of faith to take official statements at face value.
In any serious academic debate, there must be mechanisms that subject research to high standards of quality. One such mechanism is the peer review system, which ensures that research papers that do not pass basic standards of quality will not be published. I would like to invite Mark Weisbrot to make use of that mechanism in the future, and wish him the best of luck
Hahaha...an instant classic. This is what is called academic malandreo...
It's hard to shake the feeling that FR enjoyed that line immensely. (I did too!)
Incidentally, he (FR) just wrote in to tell me that:
if you take the correctly calculated Gini series (including zero-income households) and fits a post-1999 trend through it, you find a statistically significant increase of .001685 points/semester, or .0253 points since the first semester of 1999. This is statistically significant at 1.8% (not a bad fit for 23 observations). One can get hung up on particular semester-to-semester changes here, but you also have to remember that there can be significant measurement error in this series, so you want to be able to identify general trends. In any case, it seems to me that the correctly calculated series does indicate (at least in a statistical sense) a significant trend of increase after 1999.
Alek, no sweat.
Omar, Quico and I were just commenting on that line. There's something very British about the way the thing is said.
looks to me like there are still flaws in FRs points.
For example, the difference between MW and FR on the percentage of the government spending that goes towards social programs depends on what period it is calculated over. FR calculates it as an average over the eight years prior to Chavez and then the 8 years of Chavez and finds them similar. MW compares what the social spending has been in each year of Chavez's term to what it was in 1998 (the last year before Chavez took office) and finds the numbers have been going up since Chavez took office. Both methods are valid but MW's does a better job of showing TRENDS and the trend clearly is that social spending as a percentage of GDP has been going UP under Chavez while it can be infered from what FR is giving that in the previous eight years that number was falling. That is, the numbers were likely getting worse under the previous governments and have been getting better under Chavez and they only average to about the same because Chavez inherited such a crappy starting point from the previous governments. Can FR (or MS) help clearify this further by publishing the social spending numbers year by year from 1991 to 2007? That would help show what the exact trends are.
FR, seems a little dishonest in asserting that MW tried to include non-social spending from PDVSA in his numbers. He did not and even noted in his article that the PDVSA numbers could include infrastructure but that he could not find the actual numbers. So he was just inept in not finding the numbers in PDVSA financial statements published on the PDVSA web-site; he wasn't pulling a fast one.
There are in my opinion some even bigger logical flaws in FR's original analysis that I am surprised that MW never went after but MW has more time for this than I do so let him figure it out...
Please read the House Rules.
Edited By Siteowner
Two interesting things I would love to see from the household data.
First, evolution of "labor" income inequality, to see how the world without misiones is behaving.
Second, an analisys of the distributions to see how pro-poor the change in global income (from micro data) has been...
Yeeez, my job suck, I wish I had time to take on this myself...
Quico, those don't rhyme, but capillary sort of rhymes with elasticity. Besides, not many people have placentas, and everything in economics has elasticity. Like everyone has capillaries.
ow sez: "FR, seems a little dishonest in asserting that MW tried to include non-social spending from PDVSA in his numbers. He did not"
Weisbrot: "But this does not include an enormous amount of social spending that comes directly from the National
Development Fund (FONDEN) or PDVSA (the state oil company), which for example funds the misiones.
This was reported as 7.3 percent of GDP in 2006, which brings the total of social spending for 2006 to
20.9 percent of GDP"
Since that 7.3% includes 3.221 billion in debt refinancing (and many other things), it's clear that Weisbrot is mistaken to count that as social spending. Does this "clearify" things a bit, Dan?
AIO,
thx
Nope, AIO, your comment doesn't clarify much. MW said on the top of page 6 of his paper:
A complete breakdown of the PDVSA spending in the various areas (e.g., health, education, housing) is not availalbe, so it is possible that some of the company's reported social spending may be on projects (for example transportation) where the categorization as social spending is debatable.
Further, his table comparing central budget spending on social programs did NOT include the PDVSA number and in that table the numbers under Chavez were both higher than in 1998 and trending up.
Now, if either MS or FR would supply those numbers going back to 1991 it would be interesting to see what the trend on social spending was prior to Chavez.
Hee hee, so your defense is Whitebread's incompetence?
FR & FT, apart from repeatedly debunking his BS, tell us that Weisbrot has a bit of a problem with some rather basics economic concepts. Katy tells us that Weisbrot's doctorate thesis did not contain a single formula. BUt who comes to Weisbrot's rescue? Dan Burnett, Assistant Director Finance & Administration of The Harriet and Robert Heilbrunn Department of Population and Family Health
You got to love the rationale of these lot.
Funny how the line of defense whittles and whittles as more holes are punched in their arguments. Now, all they can muster is a squalid "Chávez has been better than Caldera's last year in office." Somebody stop the presses.
I just openned a group in facebook, in the section just for fun...
One is called "Despite what Burnett might say, comparing with the bottom of the cycle is not fair"
And the other "Do you remember 1998 was the year of the 8-dollar barrel of oil?"
Alek, has Burnett fulfilled his promise to send you a ticket to Venezuela if you unmasked him?
Just curious.
Did you see the Appendix? Compare that to the Weisbrot statement you quote. If it's lacking in completeness, it's only because PDVSA is lacking in transparency.
Good point, Omar. That's why an 8-year vs. 8-year comparison is more valid than 8 vs. 1.
PSF's words are as trustworthy as those of their messiahs.
To be honest it doesnt take a rocket scientist to figure out the economy in Venezuela is bad. I dont see how OW pretends to even attempt to defend the waste of resources and lack of results of the goverment.
With the barrel of oil at $106 Caracas should be Dubai II.
This debate reminds of something that my dad always says: pelea de burro con tigre!
FR's piece was brilliant. I only wish that on top of all that, he could have emphasized the magnitude of some of the pro-rich or pro-middle class policies like Cadivi. I'm sure somebody has already done this, but a back of the envelope would be to multiply the monthly flows of Cadivi times the monthly spreads. My guess is that probably adds up to a few points of GDP. The gasoline subsidy is another clear candidate, as well as those funky debt management operations (Notas estructuradas de Fonden anyone?).
I'm also appalled at how Weisbrot emphasizes that most of the growth comes from the non-oil sector to try to dismiss the notion that the venezuelan growth is driven by oil! The essence of an oil driven boom is precisely that the non-oil sector grows, as it is driven by ever expanding fiscal policies (just looking at non-oil fiscal deficits provides a clear picture of the source of growth).
One last comment on the macro picture: I think the problem with arguing with guys like Weisbrot is that you have to argue that, even when the macro indicators seem good (the current account surplus, gdp growth), the issue is that you need to compare it to what should have been (and not to a completely unrelated country like the US). You have to assess what a reasonable fiscal policy should have been, what it would have entailed for the current account, for the accumulation of international reserves, for growth (including in the non-oil tradeable sector) and for real exchange rate appreciation. That seems like a trifle when the economy is at its peak. So I'm sure Weisbrot will continue to convince many people about the economic benefits of the Bolivarian revolution.
FT, if you could only read Weisbrot's thesis. I read it a couple of years ago and it was quite sad. No graph, no equation, no numbers. I should have made a copy but didn't feel like wasting the money. Perhaps I'll check it out again.
As for your comment:
"How this guy worked up the nerve to challenge Francisco Rodríguez to a mano-a-mano totally defeats me."
It's because Weisbrot isn't trying reach economists in his debate but simply playing to those less knowledgeable.
Katy, I didn't know you read it too. Here is what I wrote about it for those interested. Thanks to Alex for still hosting it.
http://www.vcrisis.com/index.php...rs/
200605280104
http://www.vcrisis.com/?content=...rs/
200606050933
I still have the pdf of his thesis summary, let me know if your interested in reading it. Don't worry it's short and easy to read 
Wee distraction: I kept entering the amount of murders in Carabobo in a spreadsheet for some time now and here you have what I got now:
http://
desarrollosostenibleparav...iminalidad.html
I will post more on some statistics and how the regime chooses the "right month" to declare crime has decreased.
I'm not an economist so perhaps this observation is a bit off base but:
In regards to the PDVSA expenditures; the way that FR says that including them keeps the percentages the same seems like it needs further thought. If we are examining priorities, percentages of total money spent going towards social spending, it stands to reason that to include or exclude PDVSA numbers you would also have to include or exclude them equally for the pre-Chavez periods. Let's assume the PDVSA social spending is truly an artifact of the Chavez era (on the missiones, etc) and is 37.2% of expenditures and so does not change the total percentages as FR argues. Let's then assume for the sake of argument that in previous administrations this social spending by PDVSA was 0% (again, just for the sake of argument). So while adding in PDVSA spending does not change the Chavez era spending percentages much, adding them to the pre-Chavez administrations' spending percentages would. It 0% (or a small percentage) would drop the overall percentage of social spending for the pre-Chavez years. For example with simple made-up numbers: average social spending for 8 years before Chavez: 39% = $19.5 billion of $50 billion. Average for 8 years of Chavez 39% = $39 billion of $100 billion. Same percentages. But now with PDVSA spending: Pre-Chavez: 0% of $20 billion, so now total percentages are $19.5 billion of $70 billion = 27%. Chavez era PVSA spending 39% of $40 billion= $15.6 billion. So total percentages for Chavez era is the same (39+15.6) $56 billion of $140 billion @39% but now is compared more accurately to previous years. Obviously I pulled these numbers out of the air (I, tampoco, have much time for crunching numbers outside of my own these days), but it seems that FR is still not comparing apples to apples and that he AND MW need to go to previous PDVSA numbers to get an accurate comparison if they want to include or exclude them in analysis. For all we know maybe percentage PDSA social spending was much higher pre-Chavez and LR would have even stronger argument. Anyway, I welcome comments.
I am delighted by Quico's post, by his inclusion of the formally published rebuttal to Mark Weisbrot's pseudo-economics by the more academically rigorous Francisco Rodríguez (I want to send him flowers), and by the comments on this board. Yes, even Dan Burnett's two cents help to illustrate the sham of some degrees (i.e., Weisbrot's) by certain academic departments.
Regarding the literacy issue..I first contacted Unesco (Dr. Madhu Singh) on December 18, 2005, to gain confirmation of Venezuela's literacy rates, and UNESCO's official statistics for same. My query followed: (1) a public announcement in October 2005, by an official of the Venezuelan consulate in Toronto who mentioned that Unesco had awarded Venezuela a certificate for being free of illiteracy; and (2) a U.N. press release on Unesco's Policy Dialogue on literacy in Latin America, taking place in Mexico City in June 2005.
Four days later, Dr. Singh replied, not with actual figures, which is what I wanted - she was too busy - but she did mention that "Venezuela was not at this (Policy Dialogue) meeting." And that "I agree with you when you say that the Venezuela literacy figures are blown out of proportion."
Meanwhile, I was naïve to share my information with a group of bcc's. What followed was a parachuting into the two-way discourse between Dr. Singh and myself by one Venezuelan of a certain age (who should have known better). This Venezuelan got his bytes for his blog, and to hell with protocol. ("Quítate tú para ponerme yo.") Certainly, the unprofessional behaviour didn't help set a good tone, nor speed up the provision of figures from Unesco. And I, meanwhile, was forming new opinions, not about illiteracy...
Seven months later, Alek Boyd published, and rightly so, his article in Vcrisis, following his conversation with a Unesco Public Information representative - Sue Williams - who informed him that "Unesco has not endorsed, or made any statement to the effect that Vzla is free of illiteracy."
All this to say, there are ways and means. And Francisco Rodríguez' have been brilliant. Chapeau!
Dan/ow, disappearing rather than continuing on? I know you'd point out that I've done that before, but I believe your lead in that category is now 11-1.
Tank, given that total UAE oil production is only around 2 million bpd ( http://www.uae.gov.ae/Government...ent/
oil_gas.htm ), and just a portion of that by the Dubai Emirate, Dubai should be CARACAS II.
To Kepler:
Can't access your blog from the Office (the firewall let's me see everyone else's...go figure)
http://www.yucatan.com.mx/notici...6892&
f=20080403
I thought this might interest you, you were comparing how much congressmen make in Germany and Venezuela, aparently in Mexico senators earn a great deal of money, about $11.000 a month.
Weisbrot is interviewed in yesterday's (Wednesday) El Nacional. It's a pretty basic interview but I found two items of interest about him. First, that he works with the Centro Internacional Miranda, the "think-tank" that has been created recently to cultivate links between Venezuelan and foreign scholars in favor of Chavismo.
Second, El Nacional mentions that Weisbrot is also employed as a consultant to Minister of Planning Haiman EL Troudi.
So, I was wrong in implying a few days ago that Weisbrot is an "unofficial" propagandist for the Venezuelan government. He is an official, paid propagandist for the Venezuelan government.
Mision NO MAS MIERDA deberia existir... jajajajaja
Buen dato GP, lo increíble del asunto es 1) que El Nacional le tire esas bombitas a los apólogos tarifados del régimen; y 2) que el periodista no presentase a Weisbrot como lo que es sino como "un economista estadounidense que simpatiza..."
But then again that's Venezuelan journalism for ya.
GP, could you send the the PDF of that article?
Thanks in advance!!
kumich@yahoo.com
KA,
I read it at Lorch Hall Library. Were you there?
Pachadan,
Good point. However, I doubt pre-Chavez PDVSA social spending was 0.
Katy
Yes, I doubt as well that pre-Chavez PDVSA social spending was zero as well, but it was just the easiest way to illustrate the idea.
The main point is though, not that it would have to be zero but only if it was considerably lower than the @39% PDVSA claims now then it could potentially change the percentages to back up MW's position (at least on this point) and undercut FR's central argument that state priorities towards social spending have not changed in the Chavez years (regardless of the efficacy of such spending). If my point is valid than it either didn't occur to FR to carry it this far or he is being at least a little disingenuous.
Katy, I actually had it sent to me since I wasn't at UofM at the time. It's no longer at Lorch it is now at Buhr shelving facility.
"Mision NO MAS MIERDA deberia existir"
Si, Adri, pero la unica manera para cumplirla es callar a Chavez.
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