10:12 PM EDT: The National Electoral Council (CNE) officially declared Nicolás Maduro president. Tibisay Lucena, CNE’s president, made the announcement with Maduro standing by her side.

According to unconfirmed reports, after being declared the winner, Maduro suggested that the equivalent of a coup is being prepared by those who will not respect Venezuelan constitutions. Jorge Rodríguez, the governing PSUV’s campaign manager, has been quoted saying that Capriles, by disregarding the CNE’s results, “is calling for a coup against Venezuelan democracy.” 

Regarding a potential audit or re-count, Professor David Smilde reports that an audit of a majority of the votes is always conducted after an election: 

Venezuela uses electronic voting machines that emit a paper ballot which the voter then deposits in a sealed box. In all elections 53-54% of these boxes are subject to citizen audit immediately after the election. Citizens who were selected to work a given election table and witness from political parties go through the votes one by one. That process takes a couple of hours.

Mark Weisbrot noted this in his response to initial reports of the White House’s statement in support of a full re-count, which he called "calculated" and "very suspicious." Since then, the State Department press office released the transcript for its daily press briefing, which demonstrated the U.S. government’s insistence on calling for a recount despite no indications that the CNE was considering such a move. Reporters present at the briefing attempted to get a firm answer from the State Department as to whether it was suggesting that the U.S. would not recognize the election unless all votes were re-counted, as only the opposition has demanded. Here is an excerpt from that exchange. 

One of the best guilt trip tactics of the gang trying to cut Social Security and Medicare is to compare government spending on these programs, which primarily benefit the elderly, to government spending on children. By showing that the former is much higher than the latter, those of us old-timers or soon to be old-timers are supposed to feel guilty and willingly agree to surrender our Social Security and Medicare for the good of the children.

There are many serious problems with these sorts of calculations, but let’s play along for a while. If it’s interesting to compare what we spend on each senior to what we spend on each kid then it should also be interesting to compare what we spend on each rich person to each kid.

The basis for this comparison would be the amount of money that the government spends on the fastest growing entitlement: interest on the debt. This is projected to grow from $224 billion (1.4 percent of GDP in 2013) to $857 billion (3.3 percent of GDP in 2023). The main reason for this projected growth is not the larger debt burden. Rather the main reason is the Congressional Budget Office’s projection that as the economy recovers interest rates will rise substantially from the current near record low levels.

We can get a ballpark measure of how much of this interest will go to the rich by simply assuming that their share of the government debt is proportionate to the share of all wealth in the country. According to a recent paper by Ed Wolff, the richest one percent in the United States own 42 percent of non-housing wealth.

If we apply this number to interest paid on the debt, it means that 94.1 billion will be paid as interest to the wealthy in 2013. Dividing that by the 3.16 million people in the richest one percent gives us $29,800 per rich person. That compares to $12,300 per kid according to the Urban Institute.

The following are the most recent labor market policy research reports:

Center for American Progress

The High Cost of Youth Unemployment
Sarah Ayres

Growing the Wealth: How Government Encourages Broad-Based Inclusive Capitalism
David Madland and Karla Walter

Center on Budget and Policy Priorities

Earned Income Tax Credit Promotes Work, Encourages Children’s Success at School, Research Finds
Chuck Marr, Jimmy Charite, and Chye-Ching Huang

Demos

Stuck: Young America's Persistent Jobs Crisis
Catherine Ruetschlin and Tamara Draut      

Rory Carroll responds to my criticism of his NPR interview on Venezuela by calling it a “daft polemic.”  But I would like for him to explain why inflation and currency depreciation, which do not measure living standards, are more important than poverty, extreme poverty, income inequality, income per person (measured in real, inflation-adjusted terms), health care, and employment. That would truly be a “daft polemic” – but that is what he is implying in his interview.

There are other things wrong with his interview that I didn’t have room for in 800 words.  For example, he says that Chávez “basically rained petrodollars over the country, certainly in his first seven years in power.”

In fact, Chávez didn’t have petrodollars to rain on anyone for his first four years, because he did not have control over the national oil company (PDVSA).  That was controlled by his opponents, who during those years had “a strategy of military overthrow,” according to opposition leader and journalist Teodoro Petkoff.  So they used PDVSA to try and overthrow the government, including the military coup of 2002 and the devastating oil strike of 2002-2003.

Carroll’s portrayal of Chávez as “playing the race card” is also somewhat misleading.  He gives the impression that this was an important part of his politics. But in fact it was not. It was more like in the United States under President Obama, where part of the right-wing opposition plays on racist sentiment against the president (only this was much more open and explicit in Venezuela, with opposition calling Chávez a “monkey” and “gorilla” ), but President Obama does not make a point out of being African-American.  Chávez was proud of his Afro-Venezuelan and indigenous heritage, but he did not talk about it all that much.  And like Obama, he didn’t use the bully pulpit to talk about racial discrimination, or try to mobilize voters along these lines.  In Venezuela, even more than in the U.S., most people are not aware of the extent of racial discrimination.  Of course this is even more true of the upper income groups. I remember being on a television show with a prominent Venezuelan-American, and he declared that there was no racial discrimination in Venezuela; this is a typical belief of upper-income Venezuelans.  But in Venezuela, as in much of Latin America, while it is obvious to even a casual observer that there is a huge difference in skin color between upper-income and lower-income groups, there is not anywhere near the sense of “racial” identity (or even awareness of racial discrimination) as there is in the United States.  So even if Chávez had wanted to mobilize people along racial lines, it would not have been an effective political strategy.

Mark WeisbrotAl Jazeera English, April 11, 2013

In a press release yesterday, DynCorp International announced that the U.S. Department of State Bureau of International Narcotics and Law Enforcement Affairs (INL) had awarded the company with a $48.6 million contract. The purpose of the contract is to “recruit and support up to 100 UNPOL and 10 U.N. Corrections Advisors. DI will also provide logistics support to the Haitian National Police (HNP) Academy and each academy class. In addition, DI will supply five high-level French and Haitian Creole speaking subject matter experts to advise senior HNP officials.”

While the press release went out yesterday, the contract was actually awarded to DynCorp a year ago, and the first funding through the award was given to DynCorp in November 2012 in the amount of $12.9 million. DynCorp is one of the largest government contractors, receiving well over $3 billion in 2012.

As the company points out, its previous work in Haiti began in 2008 and involved the training of over 400 police officers. That work, part of the Haiti Stabilization Initiative, also entailed increasing the size of the U.N. military base in Cite Soleil. DynCorp, which continues to receive funds through that task order, has received over $23 million since 2008 for its work in Haiti.

One of the primary tasks of the U.N. military mission in Haiti (MINUSTAH) is to recruit and train members for the Haitian National Police, so that they could eventually take over for the foreign troops. With this latest contract, DynCorp has gone from training police to take over for MINUSTAH, to simply supplying troops directly to MINUSTAH.

But the awarding of the contract to DynCorp is also problematic given the company’s terrible track record in the same exact program areas where they will now operate in Haiti. 

In Bosnia in the late ‘90s, DynCorp was contracted by the State Department to provide “peacekeepers” for the U.N. police there, just as in Haiti now. One employee, Kathryn Bolkovac, was eventually fired after blowing the whistle to her superiors at DynCorp on the participation of her colleagues in sex trafficking, among other abuses. The case was the basis for the 2011 Hollywood movie, The Whistleblower.

Unfortunately, these types of abuses have been all too common in Haiti since the arrival of U.N. troops in 2004. And similar to the situation in Bosnia, there have been only sporadic and piecemeal efforts to hold those responsible, accountable.

CEPR has released a new paper, along with the human rights organization Rights Action, examining the Honduran Public Ministry's official report on the May 11, 2012 shooting incident last year in which four local villagers were killed in Ahuas in Honduras’

Dean Baker
Debate Club (U.S. News & World Report), April 11, 2013

The Wall Street Journal had a column this week that would terrify its readers, if they took its columns seriously. The piece, by Andy Kessler, derided the 7.5 percent return assumed by the Calpers, the public employer pension fund in California. Other pensions, both public and private, make comparable return assumptions.

The piece tells readers:

"Who wouldn't want 7.5%-8% returns these days? Ten-year U.S. Treasury bonds are paying 1.74%. There is almost zero probability that Calpers will earn 7.5% on its $255 billion anytime soon.

"The right number is probably 3%. Fixed income has negative real rates right now and will be a drag on returns. The math is not this easy, but in general, the expected return for equities is the inflation rate plus productivity improvements plus the expansion of the price/earnings multiple. For the past 30 years, an 8.5% expected return was reasonable, given +3%-4% inflation, +2% productivity, and +3% multiple expansion as interest rates plummeted. But in our new environment, inflation is +2%, productivity is +2% and given that interest rates are zero, multiple expansion should be, and I'm being generous, -1%."

Pretty scary, one wonders if Mr. Kessler tells his hedge fund clients that they should expect to lose 1 percent a year with the money they invest with him.

Anyhow, this is a case where Mr. Arithmetic can provide a big hand. Pension funds like Calpers typically invest around 70 percent of their assets in equities, including the money invested in private equity. The expected return on stock is equal to the rate of the economy's growth, plus the payouts in dividends and share buybacks. It also should include a term for the expected change in the price to earnings ratio, but with the PE ratio pretty much in line with long-term trends, there is little reason to expect much change.