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Collapse: Venezuelan oil workers voting … with their feet

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Nicolas Maduro has claimed the state-owned oil company PDVSA as an example of “maximum socialist efficiency.” Its production trends tell a much different story, but Reuters notices another kind of output that portends even more economic disaster for Venezuela. Working conditions have deteriorated to the point where workers have lined up to quit, only to be told that their resignations won’t be accepted:

What’s going on is that thousands of oil workers are fleeing the state-run oil firm under the watch of its new military commander, who has quickly alienated the firm’s embattled upper echelon and its rank-and-file, according to union leaders, a half-dozen current PDVSA workers, a dozen former PDVSA workers and a half-dozen executives at foreign companies operating in Venezuela.

Some PDVSA offices now have lines outside with dozens of workers waiting to quit. In at least one administrative office in Zulia state, human resources staff quit processing out the quitters, hanging a sign, “we do not accept resignations,” an oil worker there told Reuters.

Official workforce statistics have become a closely guarded secret, but a dozen sources told Reuters that many thousands of workers had quit so far this year – an acceleration of an already troubling outflow last year.

About 25,000 workers resigned between the start of January 2017 and the end of January 2018, said union leader and government critic Ivan Freites, citing internal company data. That figure comes out of a workforce last officially reported by PDVSA at 146,000 in 2016.

The exodus flows from every level of PDVSA, but it’s the educated flight that might matter most in the long run. Professionals at PDVSA no longer earn enough to feed their families, but they also have skills and knowledge that will allow them to flee to other countries in South America and start over.  The Venezuelan education system is no longer capable of producing professionals; in a country that can no longer feed itself, baccalaureate degrees are a low priority, let alone doctorates in engineering and law.

The flight of workers at other levels present more acute issues, and not just in production. Without enough people to service the equipment, the job’s getting more dangerous too:

Jobs at PDVSA were once coveted for their generous salaries and benefits, including cheap credit for housing. Now, many PDVSA workers can’t feed their families on wages that amount to a handful of U.S. dollars a month. …

In the Orinoco Belt, some drilling rigs are working only intermittently for lack of crews, said two sources there. In PDVSA’s refineries, several small fires have broken out because there are no longer enough supervisors, two sources in the northern Paraguana peninsula said. Lack of personnel in export terminals have forced some ports to cut back working hours, according to two shippers and one trader.

One would think under these circumstances that Maduro might try to bolster morale within PDVSA. And he’s tried, in the usual dictatorial beatings-will-continue manner:

Maduro has overseen the arrest of dozens of high-level PDVSA executives since late last year, sometimes at the Caracas headquarters as shocked employees looked on. Workers now feel watched by supervisors and are loathe to make any business decision out of fear they will later be accused of corruption, the sources said.

This, of course, is straight out of F. A. Hayek’s The Road to Serfdom. Socialism and its central command of a national economy create impossible economic contradictions. When failure inevitably results, the socialists in charge cannot admit that socialism itself is the problem, so they accuse others of corruption or incompetence and find ever-more-ruthless replacements to solve the problem. It’s not a coincidence that the man running PDVSA is a major general who had been previously a housing minister for Maduro, and it’s also no coincidence that his predecessors got arrested for “graft.”

Quevedo’s game plan could have come right out of Hayek’s warnings:

A stiff official who rose through the National Guard, Quevedo fired many long-term employees upon arrival and urged remaining ones to denounce any of their colleagues who oppose Maduro. He tapped soldiers for top roles, giving the oil firm the atmosphere of a “barrack,” two company sources said.

“The military guys arrive calling the engineers thieves and saboteurs,” said a Venezuelan oil executive at a private company who frequently works with PDVSA.

Hey, who wouldn’t want to work at PDVSA under those conditions? Small wonder that Venezuelans are exercising the only effective vote they have — voting with their feet. Even that small breath of freedom will likely depart soon. Closing the HR offices is just the first step; soon, Quevedo and Maduro will declare that workers have no right to quit their job and deprive the glorious Socialist revolution of their skills. They’ll be forced to work at PDVSA at starvation wages. Just imagine what that will do for production.

Hey, Hayek didn’t call it The Road to Serfdom by accident.

Reuters also notes that PDVSA is being propped up mainly by three international firms: Russia’s Rosneft, China’s CNPC, and … Chevron, based in California. All three are reportedly concerned over the flight of workers from the PDVSA paradise. One has to wonder why Chevron’s still sticking around at all. Maybe they should explain that.

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Fearless Girl to stand on her own, at least for now

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Fearless Girl is finally going to move and, at least for now, she won’t be taking Charging Bull with her. The decision to move Fearless Girl a few blocks away to a position opposite the New York Stock Exchange was prompted by concerns about crowds and traffic. From the NY Daily News:

The much-beloved statue will depart her perch opposite the iconic Charging Bull to stare down some new scenery: The New York Stock Exchange, the Daily News has learned…

The move comes as the city and the company sought a more permanent home for the popular statue — and one with fewer safety issues than her current spot in a Bowling Green median, which gets overrun with onlookers who often stand in the busy street…

Due to safety concerns about traffic — and potential terror attacks using cars — the city said it was also exploring moving the Charging Bull itself.

But while Fearless Girl will move by year’s end, there are no immediate plans to move the bull — the city said Wednesday it was “exploring” putting it somewhere else downtown.

However, there’s really no doubt that Fearless Girl doesn’t work without some opponent to be fearless about. So will staring down the New York Stock Exchange be enough? The NY Times reports that Mayor de Blasio really wants to keep the statues together:

A spokesman for Mr. de Blasio said that it was important to the mayor, who has posed with “Fearless Girl” and spoken of its meaning to young women and girls, to keep the two works together.

“The mayor felt it was important that the ‘Fearless Girl’ be in a position to stand up to the bull and what it stands for,” said Eric F. Phillips, the mayor’s press secretary. “That’s why we’re aiming to keep them together. The bull has also always been a traffic and safety issue the city’s hemmed and hawed over. The moves achieve a few goals.”

Artist Arturo Di Modica, the creator of Charging Bull, has said his figure was meant to be a symbol of “freedom in the world, peace, strength, power and love.” It was, of course, a symbol of America’s economic strength and, implicitly at least, of the power of capitalism itself. Di Modica felt the addition of Fearless Girl turned his optimistic statue into a corporate comment on gender politics and, worse, a threat to be defied.

It’s interesting that the progressive Mayor is so eager to maintain that reinterpretation of Di Modica’s art. In fact, I think his press secretary’s statement goes a long way to proving Di Modica’s point about the attempt to reinterpret his work. Fearless Girl isn’t just standing up to the bull but also “what it stands for.” Why would Mayor de Blasio want to do that? A statement he made last year to New York Magazine might give a hint:

I think there’s a socialistic impulse, which I hear every day, in every kind of community, that they would like things to be planned in accordance to their needs. And I would, too. Unfortunately, what stands in the way of that is hundreds of years of history that have elevated property rights and wealth to the point that that’s the reality that calls the tune on a lot of development. . . .

Look, if I had my druthers, the city government would determine every single plot of land, how development would proceed. And there would be very stringent requirements around income levels and rents. That’s a world I’d love to see, and I think what we have, in this city at least, are people who would love to have the New Deal back, on one level. They’d love to have a very, very powerful government, including a federal government, involved in directly addressing their day-to-day reality. [Emphasis added.]

Fearless Girl’s placement opposite Charging Bull goes well beyond standing up for more women in high finance jobs and boardrooms (the alleged point of the statue). The Mayor who praised the “socialistic impulse” toward government planning is doing is best to change one of the best-known symbols of America’s free market into a threat to be defied. I really don’t think that’s an accident.

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Whoa: DOJ Inspector General sends criminal referral for Andrew McCabe to U.S. Attorney

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You know who you can thank for this? James Comey! He’s the one who initiated the IG investigation into leaks to the WSJ in October 2016 about the FBI’s investigation of the Clinton Foundation, or so he claimed to the Daily Beast. Which makes this tweet from January seem … awkward now:

Comey will be on Jake Tapper’s show for an interview within the hour. I wonder what the first question will be.

The Justice Department inspector general referred its finding that former FBI Deputy Director Andrew McCabe repeatedly misled investigators who were examining a media disclosure to the top federal prosecutor in D.C. to determine whether McCabe should be charged with a crime, according to people familiar with the matter…

Lying to federal investigators is a crime punishable by up to five years in prison, and some legal analysts speculated in the wake of the report that the inspector general seemed to be laying out a case for accusing McCabe of such conduct. The report alleged that one of McCabe’s lies “was done knowingly and intentionally” — which is a key aspect of the federal crime

Ironically, Comey — who appointed McCabe to his post as the No. 2 official in the FBI — stressed in his book released this week the importance of telling the truth to federal investigators and holding accountable those who do not.

“People must fear the consequences of lying in the justice system or the system can’t work,” wrote Comey in his new book, per WaPo, and how here we are. Will the next McCabe fundraising webathon be for bail money?

Comey reiterated yesterday on “The View” when asked about McCabe that lying to the feds isn’t okay. McCabe and his lawyer didn’t like that:

“In his comments this week about the McCabe matter, former FBI Director James Comey has relied on the accuracy and the soundness of the Office of the Inspector General’s (OIG) conclusions in their report on Mr. McCabe. In fact, the report fails to adequately address the evidence (including sworn testimony) and documents that prove that Mr. McCabe advised Director Comey repeatedly that he was working with the Wall Street Journal on the stories in question prior to publication. Neither Mr. Comey nor the OIG is infallible, and in this case neither of them has it right.”

The wrinkle here is that the IG’s recommendation is based partly on a test of credibility between McCabe and Comey himself. McCabe claims that when Comey asked him in October 2016 whether he had authorized any info on the Clinton Foundation probe to be released to the WSJ, McCabe told him yes, that he was working with the paper to correct inaccuracies in the story. Comey, however, told the IG that McCabe told him he didn’t know who’d been talking to the paper. Upon further investigation, the IG agreed with Comey. Which is to say, if this turns into a prosecution — and there’s no guarantee that it will — the star witness against Andrew McCabe might be … James Comey.

The statute here, by the way, is the same statute that Mike Flynn pleaded guilty to violating: 18 U.S.C. 1001, which makes it a crime to lie to federal officials. The U.S. Attorney will be under heavy political pressure to indict McCabe in order to show that the “no lying” rule applies to its own officers just as much as it does to Trump’s aides. Although I wonder if Trump might inadvertently let them off the hook by tweeting something celebratory about the McCabe referral, leaving the U.S. Attorney to argue that the president’s endless Twitter attacks on McCabe have made it impossible for him to get a fair trial. As such, he might not be charged or, if he’s amenable, he may be allowed to cop a plea with a wrist-slap penalty. If anything is capable of driving home the lesson to Trump that he shouldn’t be tweeting about pending legal matters, watching McCabe walk free because of his big mouth might be it.

Nah, who are we kidding. Nothing will drive that lesson home. Exit question: What if McCabe and Michael Cohen end up as cellmates in the federal pen? I smell sitcom.

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Trump: Feds will not pay for Jerry Brown’s National Guard ‘charade’

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The war of words between President Trump and California Governor Jerry Brown over illegal immigration heated up again this morning. Just yesterday Gov. Brown suggested 400 National Guard troops would be headed for the border and that the federal government had agreed to pay for it. But this morning President Trump tweeted this:

This all started a couple weeks ago when President Trump announced that, since funding for his border wall was stalled, he was calling on states to send National Guard troops to the border. A week later, there was another surprise when Gov. Jerry Brown announced that he would be sending 400 National Guard troops to the border to fight smuggling and drug trafficking. However, Brown also drew a line at getting involved in preventing illegal immigration saying, “It will not be a mission to round up women and children or detain people escaping violence and seeking a better life. And the California National Guard will not be enforcing federal immigration laws.”

That made it a bit unclear what California’s troops were actually going to do. National Guard troops are not allowed to arrest people at the border. That’s the job of Customs and Border Protection (CBP) officers. Troops from other states were using surveillance equipment and notifying the border patrol if they saw someone trying to cross the border. They were also given jobs doing paperwork and other support roles aimed at freeing up more border patrol officers. But earlier this week the Associated Press reported that California was rejecting most of the actual jobs the border patrol wanted the troops to do.

The state informed federal officials it will not allow its troops to fix and repair vehicles, operate remotely-controlled surveillance cameras to report suspicious activity to the Border Patrol, operate radios and provide “mission support,” which can include clerical work, buying gas and handling payroll, according to officials with knowledge of the talks who spoke condition of anonymity because they were not authorized to discuss the matter.

The next day, California officials said they were not backing away from sending troops to the border even as a CBP Deputy Commissioner confirmed the core of the Associated Press report, i.e. Gov. Brown would not let his troops do a number of support jobs for the border patrol.

Wednesday, Gov. Brown released a statement saying 400 troops were headed to the border, “after securing the federal government’s commitment this week to fund the mission.” That certainly makes it sound as if some agreement has been reached. But if so, Trump’s tweet this morning appears to be rejecting that agreement. So far, there has not been a response from Gov. Brown clarifying whether or not his National Guard troops are still headed for the border.

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