Life with Housing Czarina Hillary

This is a fantastic piece from the National Review on the subprime credit
"crisis" in the US. An excerpt:

Life
<http://article.nationalreview.com/?q=MmQyNzE5NmQwNTRlNWViNmRkYmM0ZmEyMzVjOG
JhMTM=> with Housing Czarina Hillary

"What about programs to help out renters who didn't make any money in this
bubble because we were responsible? What about government intervention to
lower the still-high housing prices so we aren't locked out of the market? A
natural correction in the housing market is in order, but the government
seems hellbent to prevent it from taking place. In the meantime, we are
priced out of the market because we aren't willing to get in over our heads
financially (unlike some of these revered homeowners)."

Sorry, responsible Americans. There's no seat at the next State of the Union
address, or the next Hillary Rescue roundtable, for you.

When Health Care Becomes Personal

Below is an excerpt from a Cato Institute article regarding the quality of
healthcare in the US. The entire article is worth a read, but one part in
particular I wanted to share.

As part of my personal argument against government interference in health
care, and specifically against the nationalization of the healthcare system,
I argue that when the government pays for healthcare, the government becomes
the customer. Hospitals, insurance companies, big pharma, et al will no
longer react to the demands of the patients, rather they will react to the
demands of the government. A passage in the article discusses this
principle specifically and I've copied it below.

Government is the Customer

When consumers are in the driver's seat, best practices tend to spread. In a
market economy, if you fail your customers, you go out of business. BJC,
which is regarded as one of the best hospitals in the country, should go out
of business. It should be driven out by hospitals that function more like
its subsidiary, the Rehabilitation Institute.

Internists and specialists who do not like to touch old people should be
driven out of business. They should be driven out by hands-on doctors and by
gerontologists who take a more holistic view of patients.

The reason that medical care works the way it does is that government is the
customer. Government pays health care providers for time and materials.
Shannon Brownlee and others believe that government could come up with
better compensation schemes that would help promote quality. I doubt this.

Trying to influence medical care from a government bureaucracy sets up a
game between bureaucrats and doctors. The object of Medicare Administrators
will be to get the largest change in behavior with the least increase in
compensation to health care providers. The object of the health care
providers will be to get the biggest increase in compensation for the least
change in behavior. The health care providers are bound to win. They control
the information flows ("you want to see reports that demonstrate quality?
we'll give you reports that demonstrate quality.") More importantly, they
have the most organized lobbyists, so that any "pay-for-performance" schemes
that do not work in doctors' favor will be shut down.

Medicare is wonderful for relieving the elderly from the burden of worrying
about health care expenses. By the same token, it is wonderful for relieving
doctors of the burden of worrying about the elderly as customers. You get
paid for understanding the billing system, not for understanding your
patients.

The original article can be viewed from the "view article" link below:

Feed: Cato Daily Commentary
Posted on: Monday, January 28, 2008 11:00 PM
Author: Cato Daily Commentary
Subject: When Health Care Becomes Personal by Arnold Kling

"Despite a rapidly growing elderly population, the number of certified
geriatricians fell by a third between 1998 and 2004. Applications to
training programs in adult primary-care medicine are plummeting, while
fields like plastic surgery and radiology...

View article... <http://www.cato.org/pub_display.php?pub_id=9123>

A Hannah Montana Concert (as Seen Through the Eyes of an Economist)

This is pretty good.

A
<http://freakonomics.blogs.nytimes.com/2008/01/29/a-hannah-montana-concert-a
s-seen-through-the-eyes-of-an-economist/> Hannah Montana Concert (as Seen
Through the Eyes of an Economist)

Hannah Montana is the hottest thing going. Her concerts are all sold out and
scalpers are netting thousands of dollars for her tickets,
<http://www.cnn.com/2007/SHOWBIZ/TV/10/12/montana.tickets/> according to
media reports. What is an economist who wants to see a Hannah Montana show
to do? Here is the true story of one such escapade. (The economist in
question has asked me to keep his identity secret, out of fear that his
reputation as a doting father will eclipse his economic accomplishments.)

His story starts just the way you might expect:

I had been working especially long hours recently. My family capital was
running dangerously low. My oldest daughter Annika is a huge Hannah Montana
fan. I figured it would be a good time to refill the tank and spend some
quality time with Annika, so I announced gloriously in the morning that
Annika and her papa were to see Hannah Montana that evening.

Our hero had not, however, mentioned to dear Annika that he didn't actually
have tickets to that night's concert.

I quickly realized how out of touch with reality I am-the event was "sold
out" and the ticket prices on various scalper sites were beyond reach for
this academic's salary. I concluded that I would take Annika to the local
Wal-Mart and buy her a Hannah Montana CD and doll in lieu of the show.

This economist has raised far better children than I have, as you'll see.

Annika raced in the house after school wondering when we would leave for the
event and where we would be sitting. I shamefully broke the news that I had
yet to find tickets. She took the news well, claiming that she really only
knew half of the Montana songs anyway. Deep inside she yearned to go to the
concert, but was not willing to admit that her papa let her down.

Shame is a powerful motivator.

After some reflection, I boldly announced that we would hold the course;
Annika and I would leave at 5 p.m. for the show. I figured this would get us
to the United Center by 6 p.m., with plenty of time to find a ticket scalper
on site and get situated. After pilfering the family stash, I had enough
cash in hand to pay up to $200 per seat, which I figured would gain us
access to the restricted viewing seats (situated behind the stage).

If only it were this simple.

With heavy Chicago traffic, we arrived at the United Center just after 6:10
p.m. I wasn't worried yet, as we still had 50 minutes to find tickets and
get to our seats for the concert opening. For the first 15 minutes, we
searched for tickets without much luck. No one was selling, and the euphoria
around the stadium was beginning to get to Annika. Her eyes gleamed, and my
willingness to pay shot up to $300 per seat...better find the closest cash
machine!

Around 6:30 p.m., we came in contact with the first ticket scalper. He
offered us some not-so-good, restricted view tickets, for $400 each. Glumly,
Annika and I passed. I did not even have that much cash available. After
haggling with a few other scalpers, the best offer I could find was $300
each for restricted view tickets. The price was too high.

The economist then does something so stupid and out-of-touch that only an
economist would think to do it.

I decided to approach the United Center ticket box to inquire about
available tickets.

Unfortunately for our hero, the show had been completely sold out for four
months, and the woman behind the counter reminded him of that when he got to
the front of the line. All the others in line had pre-ordered tickets and
were collecting them at the will-call window. But as deluded as the
economist was that he was going to be able to buy tickets at the box office
minutes before the show, the strategy had an unintended benefit.

As I got into line, the ticket scalper who had stood firm at $300 for the
restricted view tickets suddenly offered them for $275 each. "No thanks," I
said. Time was running out-6:45 and still no tickets. Annika told me to just
buy the tickets for $275 each, but I told her to be patient.

Undeterred, the economist continued along the same path.

I approached a different ticket office. Once again my approach was
interrupted by the ticket scalper who now offered the restricted view seats
for $250 each. The official at the ticket box again refused my request, but
I felt I was onto something. When I approached the ticket box, the ticket
scalpers became anxious, trying hard to sell me their tickets. It dawned on
me that the United Center must be releasing tickets slowly. Perhaps they had
some tickets in hand that were still available.

There is obviously no way that there are any tickets left.

Out of the corner of my eye, I caught another ticket box, this one different
from the others-it had a disabled sign placard clearly displayed. I
approached the official at this window and asked if he had two tickets.
"Yes," he replied. "Two seats in the second row." I was stunned. I openly
wondered how this could be the case, and he informed me that they were just
released to the public. I happily paid $66 per ticket.

Hurray! Against all odds, little Annika would get to see the concert from
the second row. Oops, not so fast. This is an economist, after all.

I had gotten extremely lucky. Given the ticket prices I had been quoted by
the scalpers, these two tickets were likely worth at least $1,000 apiece. If
I acted quickly, I could sell them, and then go find the scalper with the
two restricted view seats. His price might be down to $225, in which case I
would net roughly $1,400 in profit, and Annika would still get to see the
show.

Brilliant plan, except for one small detail:

I quickly explained my plan to Annika. We didn't have time to dither. I
strode off in search of buyers for our tickets. When I turned around to
beckon Annika to follow me, I saw silent tears streaming down her face.

Torn between what he knew was the right thing to do (sell those tickets for
as much as possible) and appease his daughter, the economist faced a tough
choice. He knew he would be criticized later, but it had to be done.

I grabbed Annika's hand and we headed for our seats. My colleagues would
berate me at faculty lunch, but I would forgo this wonderful money-making
opportunity and watch Hannah Montana from the second row.

The story ends happily:

Upon our arrival at the seats, one of the backup singers named Candace
greeted us. Annika gave her a hug for good luck. As she left, Candace said
that she would wave to Annika. Our seats were so close that Hannah even
touched Annika's outstretched hand at one point. Annika was kept busy
singing and dancing the entire show. The smile never left her face.
Remarkably, during the show, Candace even kept her promise. Her wave to
Annika was heartfelt.

Don't Hobble Houston with Land Planning by Randal O'Toole

From the CATO institute: http://www.cato.org/pub_display.php?pub_id=9107

Don't Hobble Houston with Land Planning

by Randal O'Toole

This article appeared in the Houston Chronicle
<http://www.chron.com/index.html> on January 19, 2008.

Houston is the freest major city in America, with no zoning and only
moderate government intrusions into how property owners use their land. This
freedom has made Houston the most affordable major city in America, with
housing costs that are less than half of most other major urban areas. This
freedom has also created an innovative and growth-friendly environment that
is creating tens of thousands of new jobs each year.

Despite these benefits, the recent controversy over the Bissonnet/Ashby high
rise has inspired local planning advocates to call for an increased amount
of government planning of land in Houston.

Proposals have ranged from a "general plan" for the entire city "based on
citizen vision, values and goals" to a variety of ordinances that appear to
be aimed at limiting dense developments.

Though planners may have the best of intentions, such planning is likely to
lead to higher living costs, more traffic congestion and dramatically
reduced job growth.

We can see this by looking at other cities with zoning and planning.

In a sense, American cities have engaged in a controlled experiment with
planning, with Houston and a few other cities doing very little, many other
cities doing some planning and some cities doing highly restrictive
planning.

Advocates of planning say that it will make cities more livable, but the
results of many experiments across the country show just the opposite.

Cities with strong planning authority, such as Portland, Ore., and San Jose,
Calif., almost invariably have the least affordable housing, the fastest
growing traffic congestion and growing taxes and/or declining urban
services. In the long run, these problems tend to suppress urban growth and
job creation.

The national real estate firm Coldwell Banker reports that, in 2007, a
Houston family could buy a four-bedroom, two-and-one-half bath, 2,200-square
foot home for $170,000. The same house would cost more than twice that much
in Portland and more than eight times as much in San Jose.

Such huge variations in the cost of housing from city to city did not exist
50 years ago. Today, they are mainly due to artificial housing shortages
created by heavy regulations and land-use planning.

Planning also imposes huge costs on businesses. The same land shortages that
drive up housing costs also increase the costs of retail, commercial and
industrial developments. Congestion increases the costs of delivering
freight and other goods to and from businesses. Higher taxes and more
government regulation also make heavily planned cities less growth-friendly.

The result is that growth once attracted to places like California and
Massachusetts is now attracted to less heavily planned states like Georgia
and Texas. Between 2000 and 2006, California's population grew by 7 percent
— mostly foreign immigration — while Georgia and Texas populations grew by
12 to 14 percent.

Advocates of planning say that it will make cities more livable, but the
results of many experiments across the country show just the opposite.

As Harvard economist Edward Glaeser observes, "places with rapid [housing]
price increases over one five-year period are more likely to have income and
employment declines over the next five-year period" because the rules that
drive up housing prices also drive away employers.

Government planning spins out of control when it attempts to be
comprehensive, prescriptive and long term. Comprehensive planning attempts
to account for all of the impacts of any government action.

Prescriptive planning attempts to control how private landowners use their
land. Long-term planning attempts to look decades into the future. No one
can really predict the future, so such plans do far more harm than good.

Instead of comprehensive, prescriptive, long-range planning, government
agencies should limit themselves to the short-term plans needed to carry out
their missions. Houston comes closer to this ideal than any other major
American city.

Houston's lack of zoning and heavy regulation have led to an evolving system
of private covenants and deed restrictions that respond to changes in tastes
and demand for housing. The Harris County Toll Road Authority builds roads
in response to transportation needs as expressed by people's willingness to
pay tolls.

Houston should not attempt to write a comprehensive land-use plan or try to
control or limit land uses in a misguided effort to improve livability by
controlling where or how residents live. To preserve Houston's livability,
affordability and growth-friendly environment, Houston should focus on
maintaining a responsive government that provides the services people need,
not one that is merely carrying out the latest planning fads.

_____

Randal O'Toole <http://www.cato.org/people/otoole.html> , a senior fellow
with the Cato Institute, is the author of The
<http://www.catostore.org/index.asp?fa=ProductDetails&method=&pid=1441366>
Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your
Pocketbook, and Your Future.

Say no to fascist big brother nanny state politicians!

Before I get to the heart of my argument I want to clarify that I think the
UK is a wonderful place. I don't think I could live there for more than a
year at a time, though, because it really is a big brother nation.

So, how seriously do we take our freedoms and more importantly our stance
against fascism? A nanny state or big brother government is nothing more
than fascism with a different name. We are in serious danger of allowing
California drawing us closer to the UK in the ridiculousness of laws and
government intrusion in our lives.

California, the government of California, wants to come in to its citizens
homes to control their thermostats!

* California Seeks
<http://www.nytimes.com/2008/01/11/us/11control.html> Thermostat Control

Consider in the UK a drama troupe that must register plastic weapons with
the police:

* Amateur
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=508797&in_page_id=1770> dramatics group ordered by police to use plastic
swords - and keep them under lock and key

This from a country renowned for its use of CCTVs... a definite direct tie
to Orwell's 1984 "Big Brother". Consider this:

* Tens
<http://www.thisislondon.co.uk/news/article-23412867-details/Tens+of+thousan
ds+of+CCTV+cameras,+yet+80%25+of+crime+unsolved/article.do> of thousands of
CCTV cameras, yet 80% of crime unsolved

There are stories every week about groups of 'yobs' who get drunk and kill
innocent men in front of their homes:

* Until
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=508616&in_page_id=1770> Britain changes - we will NEVER have justice, says
wife of father kicked to death by thugs

* Murdered
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=408063&in_page_id=1770> for ticking off gang of yobs

* Dad
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=404518&in_page_id=1770> killed after confronting yobs

* Secretary
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=504479&in_page_id=1770> dies on dual carriageway 'after yobs pelt her car
with stones'

* Judge
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=496125&in_page_id=1770> attacks 'cowardly knife culture' after father's
murder by teenaged yobs

* The
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=475655&in_page_id=1770> innocent lives destroyed by drunken yobs

* Gang
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=474950&in_page_id=1770> attack man 'plagued by yobs'

* Judge
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=506864&in_page_id=1770> accused of 'joke justice' frees yobs who battered
hero father for protecting his son

* 'Let's
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=396378&in_page_id=1770> brick them' cry yobs as they attack wedding party

* Sick
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=481223&in_page_id=1770> yobs degraded disabled woman as she lay dying in
street - and filmed it all on a mobile phone

And if you try to stand up for yourself or others, the government will fine
you:

* Given
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=491052&in_page_id=1770> a police caution, the rail guard who was sacked
for defending commuters from yob

* War
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=504773&in_page_id=1770> hero's daughter facing arrest for tackling yobs
who 'trashed war memorial'

* Park
<http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id
=481988&in_page_id=1770> warden arrested after tackling yob urinating in
paddling pool

So under a neo-fascist liberal nanny-big-brother state, you won't be allowed
to protect yourself and the government won't protect you. If you do try and
become a 'vigilante' or protect yourself and others, you will be fined by
the courts.

This certainly can't be the future we want for our nation?

Make sure you don't vote for a big government politician, liberal or
conservative.

Buzzwords @ IBM

Fortune's Jon Fortt translates IBM CEO's announcement, much to my amusement.

Don't Get too Excited About IBM

What, then, to make of the IBM pre-announcement? CEO Sam Palmisano gave some
interesting spin:

"The broad scope of IBM's global business - led by strong operational
performance in Asia, Europe and emerging countries - drove these outstanding
results," he said in a statement. "IBM is well-positioned as we begin 2008
as a result of our global business reach, solid recurring revenue stream and
strong financial position. We are on track to achieve our long-term
earnings-per-share roadmap objective in 2010."

A translation, for those who don't speak CEO:

"U.S. corporate buyers don't look so hot, but thanks to a weak dollar and
overseas customers, we're making the best of it. Since no one expects the
dollar to perk up soon, that overseas income should keep us looking good in
2008. Don't forget, we have a huge services business, so customers pay us to
fix their old stuff even if they don't buy new stuff! And we have $16
billion in the bank! So don't panic. Look! Profits!"

Not-so-rich buy Texas Lottery's $50 ticket

On rare occasions I enjoy gambling a bit in a casino, generally playing
Black Jack. I always set a low limit to how much money I'm going to gamble
with and if I run through it then I am finished. I usually walk away having
lost very little money.

I don't play the lottery though, just like I don't play many of the other
casino games. Your potential payout can be huge, but the odds are
overwhelmingly against you.

I think it's sad that the state uses the lottery to fund education.

Here's an interesting study which finds that the majority of lottery players
are those who don't have the means to play (and lose) continually. Yet,
many are habitual gamblers.

Not-so-rich buy Texas Lottery's $50 ticket

Top lottery officials had hoped the $130 Million Spectacular — the priciest
lottery ticket in the nation — would appeal to the affluent. But sales
indicate it's most popular among those who can least afford the gamble.
<http://feeds.chron.com/~r/houstonchronicle/metro/~4/216274124>

…

Estrada harbors no illusion: She knows the lottery is a money drain for
habitual players like herself. But it's her favorite hobby. So she doesn't
calculate the losses; she concentrates on the wins, like the $200 she
collected on a $50 ticket. She has to think hard about how many $50 tickets
she's bought to win that one — between six and 10, she estimates.

Her reason for continuing to play? "I have to try to get my money back."

View
<http://feeds.chron.com/~r/houstonchronicle/metro/~3/216274124/5451633.html>
article...

Clinton Doesn't Understand Economics

Hillary Clinton's call for an "economic stimulus package" is nothing more
than rhetoric. No economists or other learned person would consider the
welfare programs she's suggested as economic stimuli. Her dribble is
nothing more than populist offerings to the poor and uneducated.

http://www.politico.com/news/stories/0108/7842.html

Clinton econ plan aimed at struggling Dems

By: Mike Allen

January 11, 2008 02:14 PM EST

Sen. Hillary Rodham Clinton (D-N.Y.) plans to propose a $70 billion economic
stimulus package - including emergency housing and heating assistance - as
part of an effort to reinforce her appeal to non-affluent Democrats.

Clinton is to announce her "plan to jump-start America's ailing economy" at
a union training institute in City of Commerce, Calif., (part of Los Angeles
County) Friday at 2:15 p.m. Eastern.

California, the nation's most populated state, is part of the huge round of
Feb. 5 primaries, which could determine the Democratic nominee.

The Hillary Clinton for President event will include questions from the
audience.

The plan is part of the senator's appeal to voters who need a president, as
opposed to the more upscale Democrats where Sen. Barack Obama (D-Ill.) has
won substantial support.

As part of her leadership pitch, Clinton casts the plan as what she would do
if she were president now.

The senator is releasing the plan at a time when both the White House and
Democratic leaders in Congress are making moves toward passing a stimulus
package amid signs the U.S. could be tipping into a recess.

As part of her successful closing argument in the New Hampshire primary,
Clinton deliberately made news at one of her events by citing new
unemployment data to declare Jan. 5: "I think the economy is slipping toward
recession."

Pocketbook issues are moving to the fore as gas prices go up and housing
foreclosures increase. Indeed, strategists in both parties speculate that
the economy could be a bigger issue than national security in next fall's
general election.

"Hillary believes we need real action now," says a policy paper to be issued
by the Clinton campaign Friday. "While economists may still be debating
whether we've met the technical definition of a recession, for hard-hit
middle class families that question has already been answered.

"That is why today Sen. Clinton called on the president and congressional
leaders from both parties to enact an aggressive, fast-acting stimulus
package based on common-sense economic principles."

The elements of the package, as described by the campaign:

- Establishing a $30 billion Emergency Housing Crisis Fund to assist states
and cities in mitigating the effects of foreclosures: "Her $30 billion fund
would provide immediate, time-limited resources to states, cities and
community organizations to help prevent unnecessary foreclosures. States and
communities could also use the funds to offset the costs associated with
vacant properties by supporting efforts like community-level anti-blight
programs and helping local housing authorities buy up vacant properties and
rent them to working families."

- Providing $25 billion in emergency energy assistance for families facing
skyrocketing heating bills: "The grants will the purchasing power of energy
assistance to where it was five years ago. And they will ensure that
hardworking families and seniors on fixed incomes will not have to choose
between heating their homes, putting food on the table or purchasing
prescription drugs this winter."

- Accelerating $5 billion in energy efficiency and alternative energy
investments to jump-start green collar job growth: "The immediate actions
that could be part of a 2008 stimulus could include a crash weatherization
program to cut home energy costs by up to 20 percent this winter; expanded
tax credits to encourage families and businesses to accelerate purchases of
hybrids and other low-emission vehicles and to reduce energy costs by
purchasing efficient appliances, new windows and other clean, efficient
technologies; and acceleration of a Green Building Fund and green collar job
training program to put tens of thousands of people to work making schools
and other public buildings energy efficient."

- Investing $10 billion in extending and broadening unemployment insurance
for those who are struggling to find work: "By strengthening our
unemployment insurance program and extending unemployment insurance for
workers who are laid off for extended periods, this effort will empower more
Americans to re-enter the labor market in good-paying jobs."

All are new proposals. Clinton is billing it as a five-point plan,
including this previously announced plan for mitigating the housing crisis:
"Sen. Clinton has called for a 90-day moratorium on subprime foreclosures
and an automatic rate freeze on subprime mortgages of at least five years or
until servicers have converted the unworkable mortgages into loans families
can afford."

Alex Conant, press secretary of the Republican National Committee, said:
"Clinton says she wants to 'put money in people's hands,' but her plans
require massive tax increases on hardworking families. Clinton's campaign
says that every spending proposal 'must be paid for,' but she can't tell the
American people how she will finance nearly $800 billion in new government
spending."

One of Clinton's rivals for the nomination, former Sen. John Edwards of
North Carolina, announced a $25 billion job creation plan in Iowa in
December.

Big Brother

This is what big government ultimately wants... to come into our homes and
control every aspect of our lives. The question is why do people continue
to allow government to grow into a monster.

California is the ultimate example of a state government gone big brother:

California <http://www.iht.com/articles/2008/01/11/america/calif.php> wants
to control home thermostats

Next year in California, state regulators are likely to have the emergency
power to control individual thermostats, sending temperatures up or down
through a radio-controlled device that will be required in new or
substantially modified houses and buildings to manage electricity shortages.

Test Post

I'm testing a blog post using MS Office 2007.

Interestingly enough the New Hampshire Primaries are taking place today.

It doesn't look well for Hillary.

Chavez the Wizard

Hugo Chavez and Robert Mugabe must have seen the same economics cartoon on
TV (even though they failed to understand it).

Hugo, in a bid to grapple with inflation, redenominated the Venezuelan
currency, the Bolivar. In addition, he renamed the Bolivar to the "Bolivar
Fuerte" or in English the "Strong Bolivar". In a fit of madness, the man
renamed the currency by adding the word "strong" in front of it as though
through magic the adjective is going to actually manifest its meaning on the
currency.

Rather than reforming the economy by lifting price controls, this idiot is
playing mind games with his people. It's such a shame, too, because with
the natural resources Venezuela has there is absolutely no reason why it
should have the highest amount of inflation in all of South America.

Here's an excerpt from the Economist article:

Venezuela's
<http://economist.com/daily/news/displaystory.cfm?story_id=10436099> new
bolívar

With aggregate demand exceeding supply, introduction of the bolívar fuerte
will do nothing to stabilise prices, despite government claims to the
contrary. In fact, the easing of some price controls is likely to boost
inflation further. In addition, the government remains reluctant to cut back
significantly on its spending. Although the Economist Intelligence Unit
forecasts a gradual decline in public expenditure as a percentage of GDP,
this will not be enough to prevent an increase in the central government
deficit to 2.6% of GDP this year (from an estimated 1.4% in 2007). The true
fiscal position will be worse, as a rising burden of expenditure will be
placed on entities other than the Treasury (such as the state oil company,
Petróleos de Venezuela).