Division of Power

There is no leader in the world that does not leave something to be desired. It is fundamental that governments have a division of powers because of the fallibilities and vulnerabilities in the character of leaders and mere mortals. The Gods make even greater mistakes!

There are few situations where the concentration of power does not lead to the abuse of power. In the United States, where the division of power amongst the executive, the judicial and the legislative is reasonably balanced, there isn’t a president, congressman or judge that can rise with limitless power for too long without being denounced and brought down in the process. That is not the case in many Latin American and African countries. The presidents, congressmen and judges in our countries get rich, exact revenge on whomever they please and abuse their positions without being punished or limited by counterbalancing institutions.

Today, left or right wing political regimes no longer exist. What exists today are political regimes where there is a balance of power and regimes were the concentration of power in some individuals is out of control.

Jung, the great XX century thinker and psychiatrist describes in Psychoanalysis of History, how humans tend to abandon the responsibility of deciding their own destiny in exchange for getting closer to any leader that offers to ease their lives. That is why totalitarian leaders like Hitler and Mussolini emerge. In behavioral economics the phenomenon is known as the insider gain vs. the outsider loss. We tend to sell our soul to the devil, to be insiders. We are born with more fear for life than love for liberty. Love for liberty is acquired and strengthened through the individual’s training and his taking responsibility over his individual decisions. It is natural to get close to those that offer us protection. But character, like muscles, grows weak when stop carrying the weight of our responsibilities. Fear is a powerful deterrent for initiative and the greatest obstacle to personal and community fulfillment.

Countries without institutional controls, where anyone that holds public office can do what they please without division of powers to limit them, are destined for failure. Failure for a country is a future in which the citizens grow poorer both economically and spiritually, lose liberties and lose the possibility of carrying out their lives in equality and mutual respect with other members of the human collective. By losing international respect and debilitating as an ideal continent, one falls in the hands of opportunistic and incompetent groups. These opportunistic groups only look out for their short-term gains.

There is no greater crime in the history of humanity than that of a ruler that destroys society’s balance of powers, because the destruction of this balance destroys the motivation for personal improvement and taking responsibility for our actions, and it destroys the political infrastructure and the souls of our people. Without a division of power we end up poor, weak and divided, like a body without an immunological system, vulnerable to any invading infection.

Happy New Year

This year surprised the world because of the fall in assets all over the world, and a dark outlook for the economy in 2009. Halfway through the year we feared accelerated inflation and nuclear experiments in Iran. Today we have a world recession. The sharp fall in the price of oil, instead of benefiting importing consumers, created a liquidity crisis by stopping the recycling of rich and oil and resource exporting countries’ surpluses towards the financial markets.

That is the nature of surprises. By definition they come unexpectedly. While peaking at 2009, it is worth thinking about what can happen, good and bad, in order to be prepared and be able to handle what happens gracefully.

There are great opportunities. There are financial bargains everywhere. Those with liquidity will be able to invest their savings little by little in a well diversified portfolio, to provide for the needs in their future. But those that invest will have to be able to handle great economic, political, and financial volatility, and maintain their discipline no matter what happens.

In the United States, politically there is change in the air. President elect Obama has chosen an intelligent, well trained and experienced cabinet, with an open mind towards dialogue and a variety of opinions. But there is no doubt that with the rise in importance of the executive power in the economy, a fall in productivity will be felt over the long term, unless fiscal intervention is limited and austere, and it does not take indefinite hold over the budget. Unfortunately fiscal policy is less agile and more sensitive to political contradictions than monetary policies. A strong and determined cabinet will also create controversy and confusion sooner or later, both internally and internationally. We all hope that the wise and well tempered Obama can orchestrate his cabinet towards policies both daring and sensible.

In Venezuela they are getting ready to discus and vote on a constitutional amendment that will allow for the indefinite election of the head of state. That does not seem very democratic, independently of how many people vote for it. It seems ironic that voting for a kind of monarchy without any balance of power would be considered a democratic process of regime. In any case, the economic and political outlook for Venezuela is bleak for 2009, except for those that manage to get rich even though the country grows poorer. People adapt to a lot of what is happening, hoping that with patience and dedication they can lift themselves.

The end of a year is a good time to make healthy resolutions for the coming year. It is important to make everyday and all of our actions relevant. I send all my readers my heartfelt wishes that they maintain their sense of humor despite any political or economic tragedy they have to go through. I wish you can keep your spirits whole in order to encourage your loved ones to keep their personal integrity when so many others are losing theirs. Finally, I wish you the capacity to live life with imagination, grace, creativity and relative peace. Enjoy the music, good books, the lunch and talks with friends, some good hallacas, pan de jamón, ponche crema and wine. I will do the same and ask the Gods who may listen for a Happy 2009 for all.