NYT’ Steven Davidoff Doesn’t Consider the Successful 300 Years of Financial Transactions Taxes In London
CEPR Beat the Press | February 26, 2013
Steven Davidoff really doesn’t like financial transactions taxes (FTT) but is not honest enough to acknowledge this fact. Instead he tells readers that proponents of a tax haven’t thought about its consequences and uncritically repeats every piece of nonsense produced by the financial industry to attack the idea.
In the course of a 1300 word essay we get assessments of the tax from Credit Suisse, Blackrock, and the Partnership for the City of New York, which is effectively the New York City Chamber of Commerce. All of these accounts are presented uncritically, as though the purveyors of this information had no interest other than conveying the truth. We are also told that the New York Stock Exchange “threatened to jump across the Hudson River to New Jersey” in reaction to a plan to increase the city’s stock tax in the 1966 (interesting image). Davidoff apparently never heard of businesses making threats to extract concessions from governments.
The NYT running a column like Davidoff’s is like the Iowa City Press Citizen running a column on a plan to cut back farm subsidies where the views of the state’s leading wheat and corn farmers are presented as unquestioned truth, along with a study from the corn growers trade organization. I suspect that the Press Citizen has higher standards.
Meanwhile when it comes to the proponents of the tax, Davidoff lectures:
“advocates of this neat idea conveniently ignore the century of less-than-successful experience with this tax, including New York State’s own failed attempt.”
This comment is more than a little bizarre. Davidoff writes as though proponents of the tax are completely ignorant of economics and have not done research into the history of financial transaction taxes.
Contrary to this assessment, the proponents of the tax include some of the world’s most prominent economists. Furthermore, there is extensive research on the history of financial transactions taxes. Much of it can be found right here on the European Commission’s (EC) website.
Contrary to Davidoff’s bizarre comment, implying the New York tax is a rare example of a government implementing such taxes, nearly all financial markets operated with financial transactions taxes for long periods of time (more than 300 years in the case of London’s market). Most of the world’s major financial centers, including London, Switzerland, Hong Kong and Singapore, still have financial transactions taxes on their stock exchanges. Perhaps Davidoff should be lecturing these governments on how their taxes really don’t work.
As far as the substance, Davidoff tells us that research shows that the tax will increase rather than decrease volatility. There are two different notions of volatility at play here. One is the volatility associated with normal price fluctuations over the course of a day or week. This is likely to be increased by a tax since it will increase the costs for arbitragers to enter a market. That means that we may see somewhat larger divergences between prices than would otherwise be the case. This could mean that the gap in the price of oil between two markets may rise to 0.4 percent rather than 0.3 percent before arbitragers whittle it down again.
Proponents of FTTs are probably not much concerned about this sort of volatility. The economic consequences are likely close to zero. Furthermore, since the levels of taxation being debated would just raise transactions costs back to where they were 10-15 years ago, it is difficult to believe that the effects could be too severe. (We did have very liquid capital markets in the 1990s.)
The type of volatility that more likely concerns proponents of FTTs are the sharp movements that are not driven by fundamentals, such as the 1987 crash and the flash crash in the spring of 2011. While it is difficult to prove that a FTT will reduce the likelihood of such sharp movements, it is worth noting that such events did not occur in the 50s, 60s, and 70s, when trading costs were much higher than in the last three decades.
As far as the incidence of the tax, Davidoff gives us the assessment of Blackrock:
“that if the financial transaction tax were set at 0.1 percent per trade, an investor putting $10,000 in its global equity fund would lose more than $2,300 in expected returns over a 10-year period. This amount would rise to $15,000 if the money were invested in a more actively managed European fund.”
Incredibly, Blackrock assumes that its trading does not in any way respond to the tax. If this were true then Blackrock’s funds would quickly go out of business since their cost would be far higher than others in the industry. There have been a range of trading elasticities estimated by various studies (see the EC research), with most estimates close to -1.0. (None are near zero.) If the elasticity is near -1 then trading volume would decline by roughly the same amount that the tax increases trading costs.
This means that if the tax doubled trading costs, then trading volume would be roughly cut in half. That means that if Blackrock’s fund managers responded as the research suggests, then they would cut back the number of trades by enough so that the non-tax trading costs for their $10,000 account would fall by roughly $2,300 over the course of a decade or $15,000 in the case of its more actively managed European fund. This would be revenue lost to Blackrock, not to its clients.
In this respect it is worth noting that the sharp decline in trading costs over the last four decades has not been associated with higher returns to investors, but rather to a more than proportionate increase in trading volume. This has caused the total amount spent on trading financial assets to rise sharply relative to the size of the economy. These trading costs are money out of investors’ pockets and a drain on the economy.
Davidoff’s effort to claim that the tax could not raise any revenue approaches the bizarre. He tells readers:
“In Britain, for example, where the financial transaction tax has fluctuated from half a percent to 2 percent, the tax has raised significantly less revenue than one might expect, about £3 billion a year. The reason is that investors who trade regularly in Britain use options to avoid the tax, which applies only to trading in stock. The result may be that the tax pushes investors into more risky securities in their efforts to avoid it.”
First, it is worth noting that £3 billion comes to 0.2 percent of UK’s GDP. (The UK had raised almost 0.3 percent of GDP from this tax before the 2008 crash [Table 2].) This would be the equivalent of almost $400 billion over the 10-year budget horizon in the United States. That is almost 3 times as much as President Obama has proposed to save by cutting the Social Security cost of living adjustment. In other words, in the current budget debates it would be regarded as real money.
Second, the decision to not tax derivatives like options is a political one made by governments that have been closely allied with the financial industry. The tax being put in place by 11 countries in the European Union would tax options and other derivatives. In the 1980s Japan had a broadly based tax that was imposed on a wide range of financial assets including options. This tax raised an amount of revenue that was close to 1.0 percent of its GDP. This would amount to $2 trillion over the 10-year budget horizon in the United States.
At one point Davidoff tells readers:
“As for seeking revenue gains to solve budget problems, if the tax is too small, it will have no effect.”
Huh? The Securities and Exchange Commission imposes a tax of 0.002 percent on stock trades in the United States. This tax raises roughly $1.2 billion to finance its budget. Is Davidoff suggesting that the SEC should get rid of this tax because it is not really raising money?
As I said, Davidoff doesn’t like FTTs, that’s pretty clear from reading this piece even though he tells us:
“This is not to say that a financial transaction tax by itself is such a terrible idea.”
He has a case built with non-sequitors (one example of the horror of FTTs is that traders fled a tax imposed by Sweden in the 1980s and instead did their trades in London, which also had a tax). And he ignores all sorts of evidence that FTTs can and do raise large amounts of revenue without disrupting capital markets. This piece lets us know where Davidoff stands on FTTs, it doesn’t provide much information on the merits of the policy.
Related articles
- Economist: Financial Transactions Tax Would Bring in Hundreds of Billions a Year (voicerussia.com)
- 5 Reasons Why The U.S. Needs A Financial Transactions Tax (thinkprogress.org)
‘No shot, no ticket’: Ethiopians decry Israeli birth control policies
RT | February 27, 2013
Ethiopian women have told RT that Israeli medics forced them to take the controversial Depo-Provera birth control vaccination without explaining the severe side effects of the drug, which can leave a woman unable to become pregnant for up to two years.
The birth control vaccination was reportedly a requirement for the women to immigrate to Israel: “They told me if you don’t take the shot, we won’t give you a ticket, so I took the shot, but I didn’t know that it would prevent pregnancies. I didn’t know,” one woman told RT correspondent Paula Slier.
The gruesome side effects of Depo-Provera are so severe that the drug is not recommended for most patients.
“We are talking about a contraception that has heavy medical and mental effects – period irregularities, vaginal bleeding, osteoporosis, alongside mental side effects like depression, mood swings, rage and more,” said Sharon Eliyahu-Chai of the Association for Civil Rights in Israel.
At least six organizations – such as Tebeka, an Ethiopian legal aid group – now aim to take the matter to court over alleged human rights violations.
Last month, the Israeli Health Ministry’s director general ordered gynecologists to cease administration of the drugs, bowing to public pressure after accusations that they had been forcing the birth control injections on Ethiopian women without their consent.
Israeli officials have denied that the birth control program was part of a plan to reduce the Ethiopian birthrate. The scandal has worn on, with the organizations involved all pinning blame on one another.
For more, watch Paula Slier’s report from Israel.
Related article
- Israelis admit pushing long-term contraceptives on Ethiopian women (alethonews.wordpress.com)
Chávez Haters Not “Limited by Truth, Reality or Common Sense”
By Dan Beeton | CEPR Americas Blog | February 26, 2013
A new op-ed in the Guardian by Ricardo Hausmann portrays a dystopian fictional Venezuela, one in which the Venezuelan government has run the economy into the ground despite abundant oil wealth, but yet its charismatic president continues to be re-elected through some sort of sinister trickery.
Sound familiar? It should: it’s the same tired story repeated in the U.S. and U.K. media almost every day, but in this case Hausmann was apparently given free rein to present his own set of “facts.” It isn’t surprising that Hausmann would write something so divorced from reality; he went to elaborate lengths to invent a conspiracy theory about supposed fraud in Venezuela’s 2004 recall referendum by relying on fake exit polls. An independent panel of statisticians selected by the Carter Center determined that Hausmann and his colleague Roberto Rigobón had in fact found no evidence of fraud. [PDF]
But let’s get back to Hausmann’s latest Guardian piece, starting with the economy. Hausmann writes, “Since 1999, the year [Chávez] took over the presidency, Venezuela has had the lowest average GDP growth rate and the highest inflation of any Latin American country except Haiti.”
The source for this “lowest average GDP growth rate” to which Hausmann links is a highly opinionated BBC article which in turn quotes a colleague of Hausmann’s from the Center for International Development at Harvard University who has a Bachelor of Arts degree in economics. Had Hausmann consulted official government data, or growth numbers for the region from the IMF, he would have found a very different set of facts.
In fact, Brazil, Mexico, El Salvador, Guatemala, Jamaica, Nicaragua, Paraguay, Uruguay, and other countries all had lower average GDP growth than did Venezuela since 1999, according to IMF data.
Hausmann’s next sentence reads: “[Venezuela] has also seen a fivefold increase in assassinations to arguably the highest murder rate in the world.”
Why does Hausmann want to “argue” the case for Venezuela having the “highest murder rate” in the world? Because the U.N. keeps track of such figures, and at 91 per hundred thousand, post-coup Honduras’ homicide rate is about twice as high as Venezuela’s; El Salvador’s is also much higher.
Hausmann then makes the usual claims about Chávez “eliminat[ing] checks and balances” and describes – without providing any evidence – “a very large civilian army of political activists that are handsomely compensated by the state for their party work.” Such distortions of Venezuela’s democracy belittle both the many elections in which voters have overwhelmingly chosen pro-Chávez legislators and state and local officials, and the bottom-up nature of much of the transformative processes occurring in Venezuela. Hausmann then claims that Chávez “dominate[s] the airwaves,” even though Venezuelan state television has a 5.4 percent audience share while more than 94 percent of the TV seen by Venezuelans is not pro-government.
As Hausmann himself writes, “in choosing your narrative, be creative. Don’t be limited by truth, reality or common sense. …Whenever you fail, blame a conspiracy.” Hausmann has provided an excellent demonstration of the former with his Guardian op-ed, just as his post-recall referendum fantasy stories were a great example of the latter.
Related articles
- World Bank and IMF Forecasts Follow Predictable Pattern for Haiti, Venezuela
- There is an alternative: what Venezuela can teach us about the banking sector
- Venezuela’s Economy Grows by 5.5 Percent in 2012
- Economic BS in Rich Countries is Reinforced by BS about Venezuela
- The Achievements of Hugo Chavez
- Venezuela Among the Most Positive Countries, Gallup Says
US Dairy Industry Wants to Put Aspartame in Milk
By NICK MCCANN | Courthouse News Service | February 21, 2013
WASHINGTON – Dairy industry groups have asked the Food and Drug Administration to be able to put artificial sweeteners in milk, and not change the label, claiming that it is so consumers can “more easily identify its overall nutritional value”.
The Food and Drug Administration is asking for data related to those sweeteners.
The International Dairy Foods Association (IDFA) and the National Milk Producers Federation (NMPF) filed a petition in 2009 requesting that the FDA amend its standard of identity for milk.
The petition asked the agency to allow the use of “any safe and suitable” sweetener for milk and asked to amend the standards of identity for 17 other milk and cream products.
Those products include sweetened condensed milk, whipping cream, yogurt and eggnog, which the groups say should be allowed to have “safe and suitable” sweeteners.
The groups request that the FDA “allow optional characterizing flavoring ingredients used in milk (e.g. chocolate flavoring added to milk) to be sweetened with any safe and suitable sweetener – including non-nutritive sweeteners such as aspartame.”
FDA regulations currently only allow milk products to contain “nutritive sweeteners” (those with calories) which the agency generally recognizes as safe.
The groups say the amendments “would promote more healthful eating practices and reduce childhood obesity by providing for lower-calorie flavored milk products.”
“They state that lower-calorie flavored milk would particularly benefit school children who, according to IDFA and NMPF, are more inclined to drink flavored milk than unflavored milk at school,” the FDA wrote in its notice.
The groups also say they would help with programs that aim to improve nutrition in school meals and argue that the proposed amendments would promote “honesty and fair dealing in the marketplace,” the FDA wrote.
The agency published a notice of the petition on Wednesday requesting comments, data, and information about the proposed amendment to the identity of milk products. The comments are due by May 21.
LIBOR: Viewing the Biggest Financial Crime in History
By DARWIN BOND-GRAHAM | CounterPunch | February 26, 2013
It’s been five years since a few academics and journalists began to dig up evidence that something was wrong with the London Inter-Bank Offered Rate, or LIBOR (pronounced appropriately as “lie-bore.”) The data that curious researchers were compiling couldn’t be explained using the prevailing definition of what LIBOR supposedly was: a trustworthy interest rate that accurately gauged the market price of borrowed US dollars held overseas by the world’s biggest banks. Instead, their findings pointed toward something other than an idealized neoliberal market, influenced only by impersonal supply and demand forces. Many began to realize that the data could easily be explained if the banks were rigging the LIBOR rate in their favor. Strange discrepancies in LIBOR’s correlation to other rates, and to the economic fundamentals of the bank companies responsible for formulating the rate, showed something seriously amiss, but it made sense if the banks were cheating.
The motives of the banks have been clear from the beginning. A few banks that dominate the marketplace for derivatives stand to make billions if LIBOR moves in their favor on particular days when contractual payments between them and their customers come due. They therefore suppressed the rates in order to skim billions of dollars off derivatives and investments. Later these same banks suppressed LIBOR rates to create the illusion that their balance sheets were robust during the financial crisis. This also allowed them further rounds of money-siphoning from their unwitting derivatives customers.
Until recently LIBOR rates have been set by a panel of banks that are members of the British Bankers Association (BBA). The BBA is a private industry group established almost 100 years ago to lobby for the financial industry in one of its global hubs, London. The BBA really came into power in the mid-1980s with the creation of LIBOR. LIBOR was created to further integrate the giant global money market in US dollars held in overseas banks or holding companies, and therefore unregulated by the US Federal Reserve. Called “Eurodollars,” because they originally were dollar savings accumulated in European banks, especially banks in London, these funds quickly became a de facto global currency. LIBOR began as a way for the banks to standardize investment products for these vast pools of American dollars flowing through Europe, and later Japan, the Middle East, and Latin America. By the 1990s LIBOR had become such an important set of interest rates, and US dollars held overseas had becomes such an important source of credit for US consumers, that LIBOR became the key global interest rate around which many financial products were pegged. As LIBOR became more and more important to the globalization of finance, it accrued a sort of official, trusty gloss; nearly everyone assumed that LIBOR was a market rate reflecting competition. Instead, LIBOR has probably all along been a fudged rate, determined less by vast market forces and invisible hands, and more by the vulgar self-interest and power of the elite banks that set LIBOR rates.
Last year government investigations into this globe-spanning crime —rightly called the biggest financial scam in all of history— led to multi-billion dollar fines against Barclays, the Royal Bank of Scotland, and UBS, the 7th, 8th, and 20th largest banks in the world, respectively. Criminal investigations spearheaded by US, UK, Japanese, Canadian, Swiss, and Singaporean authorities are ongoing and aimed at other banks such as Citigroup, JP Morgan, Bank of America, and other “too big to fail” institutions. More details of the crime will be forthcoming as e-mails, internal documents, phone tapes, text messages, and other evidence, is made public, and as the banks are forced to pay significant fines, and sign plea agreements.
While this scandal might seem worlds away, concerning complex financial concepts and obscure money market instruments dealt by bankers out of skyscraper offices in the City of London, the importance of uncovering the complete truth about the LIBOR rigging conspiracy cannot be overstated for local communities across the United States, especially here in California.
Why? First, LIBOR has been used since the 1990s to determine cash flows on interest rate swaps that local governments have purchased from banks to insure themselves against wild swings in variable interest rates owed on billions of municipal debt. Messing with LIBOR messes with the payments due on these instruments.
Second, LIBOR has also been used as a main interest rate of reference for an array of investment products that yield a variable return, dipping and rising in concert with LIBOR. Local and state governments have used these investment products, called “municipal derivatives reinvestment products” to temporarily park public funds, while pension systems and government enterprises like utilities use them make investments. Governments and public agencies earn LIBOR rate returns on their dollars invested in numerous kinds of municipal derivatives, so if LIBOR is illegally fixed downward, they earn less income.
Through both of these forms of exposure, local governments have potentially been harmed by LIBOR-fixing perpetrated by the banks, often times the very same banks that have sold them swaps or municipal derivatives investment products.
California is fast emerging as a center of investigation and litigation into the LIBOR-fixing conspiracy. California is the largest single municipal debt market in the United States, and one of the largest in the world. Last year alone the state of California and its cities, counties, school districts, and other public entities issued $65.7 billion in total public debt. Because of California’s regressive tax structure and chronic budget crises, the state’s multitude of governments have been among the most aggressive in issuing variable rate debt hedged with interest rate swaps.
The Golden State’s local governments have also been the largest purchasers of municipal derivatives contracts from banks because streams of tax and fee revenues often don’t match up with the dates that payments to public employees and contractors come due. Collusive suppression of LIBOR rates by the 16-member panel who were trusted to provide accurate quotes could mean that California local governments have paid untold millions to their interest rate swap counterparties (the banks) that should otherwise have remained in budgets and used to fund school construction, bus lines, street paving, water and sewerage services, etc.
In the 1990s and 2000s local governments across California increasingly issued bonds with variable rates. Investment bank underwriters and municipal debt advisers from the private sector encouraged variable rate bond financing because it promised lower interest rates for California’s cash-strapped municipalities. To hedge against the risk that variable rates might explode, as they did in the 1980s, the banks sold interest rate swaps to local governments. The swaps effectively converted floating rate debt into a fixed rate. Under a typical swap contract the bank seller agrees to pay a floating rate designed to mimic the variable rate interest on the bond debt, and in return the local government agrees to pay a fixed rate. I’ve written elsewhere about how this deal blew up and created a financial injustice when variable interest rates plummeted during and after the Financial Crisis, but the LIBOR rigging conspiracy adds to these harms. The US government bailed out the banks and assisted them in taking “toxic” derivatives assets off their hands, but stood idly by while cities, counties, and public agencies suffered without aid during the Financial Crisis, allowing derivatives instruments on the public’s books to blow up and drain budgets. At this very moment the banks perpetrated an illegal scam to suck even more money from the public via further depression of LIBOR.
Barclays, RBS, UBS, and other banks worked together to suppress LIBOR below even the depths to which it sank after 2008. A number of lawsuits filed by various cities, counties, and public agencies in California asserts the banks did this to skim off an unknown, but very large, amount of money from their public victims, and also to bolster their own balance sheets during the crisis. By suppressing LIBOR the banks ensured that the net difference between the variable rates they owed, and the fixed rates the public was paying on swaps, was wider than it would otherwise have been. This net difference meant that the public owed the banks higher amounts when the interest rate swap payments came due (usually twice a year).
For San Francisco this could mean that millions have been stolen from the capital budget of its Airport. SFO currently has seven interest rate swaps it has purchased to convert variable rate bond debt into synthetic fixed rates. The airport’s counterparties on its swaps included JP Morgan Chase, Merrill Lynch (owned by Bank of America), and Goldman Sachs. Each of these banks likely benefited from conspiratorial suppression of LIBOR, even if it was by just a few basis points (hundredths of a percent). JP Morgan Chase and Merrill’s parent Bank of America are both members of the panel that sets LIBOR, and are both believed to have played a role in the conspiracy.
San Francisco’s pension system may have also been raided by the banks through its speculative investments in swaps. According to the most recent audit of the San Francisco Retirement System’s portfolio, the city’s pension system holds two interest rate swaps on its books with a notional value of $15 million. In prior years, SFERs held other swaps. In 2010, the Retirement System’s audit showed three interest rate swaps with a total notional value of $41 million. Over the last two years these swaps drained $5.3 million from the pension system, and some of these losses might have been due to the downward manipulation of LIBOR. Also on the Retirement System’s books are other investments in bank loans, options, and other securities that might have been impacted by the LIBOR fraud.
San Francisco’s LIBOR damages are probably small in comparison to other local governments and public agencies. The East Bay Municipal Utility District has already filed a lawsuit in federal court alleging damages from bank rigging of LIBOR. The water district’s complaint, filed in January of 2013, alleges that LIBOR suppression drained potentially millions, again from interest rate swap agreements with some of the very banks that sit on the LIBOR-panel: Citibank, JP Morgan Chase, and Bank of America. East Bay MUD lists nine interest rate swaps potentially affected by LIBOR rigging in its lawsuit.
East Bay MUD’s swaps had a total notional amount of $481 million in 2012, according to the utility’s most recent financial report. Downward manipulation of LIBOR by just 10 to 50 basis points (1/10th to 1/2 of a percent) could have drained between $481,000 to $2,400,000 through East Bay MUD’s swap payments every six months. Over a few years, say the conspiracy’s 2007-2010 time-frame alleged in EBMUD’s lawsuit, this would add up to millions of dollars stolen by the banks.
The cities of Richmond, San Diego, and Riverside, and the County of San Mateo, are other California governments that have now filed lawsuits against the banks responsible for setting LIBOR. All of these lawsuits have been consolidated into a larger class action case currently being heard in the U.S. District Court, Southern District of New York, before Judge Naomi Buchwald. There are now about two dozen LIBOR manipulation lawsuits that have been filed and consolidated in New York. The lead case is the City of Baltimore and the New Britain Firefighters’ and Police Benefit Fund lawsuit against the 16-bank LIBOR panel, filed in April of 2012.
More California cities, counties, and public agencies are expected to file their own lawsuits soon, however. CalPERS, which has numerous investments that fluctuate in value and yield with LIBOR, is also said to be investigating its own exposure to rate rigging.
Darwin Bond-Graham is a sociologist and author who lives and works in Oakland, CA. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion.
Related articles
- California Cities Sue Banks Over Libor Rates, Law Firm Says (bloomberg.com)
- Rabobank Faces Libor-Rigging Fine of $440 Million Plus (bloomberg.com)
- The Royal Bank of scot-free (morningstaronline.co.uk)
Reporting on Romer’s Charter Cities: How the Media Sanitize Honduras’s Brutal Regime
By Keane Bhatt | NACLA | February 19, 2013
On the evening of Saturday, September 22, human rights lawyer Antonio Trejo stepped outside a wedding ceremony to take a phone call. Standing in the church parking lot of a suburb of Tegucigalpa, Honduras, he was shot six times by unknown assailants. Despite his requests, he had been granted no police protection in the face of death threats; Trejo had believed he would be targeted by wealthy landowners over his outspoken advocacy on behalf of small farmers seeking to reclaim seized territories.1 In his death, Trejo joined dozens of fallen peasant leaders whom he had defended, as well as murdered opposition candidates, LGBT activists, journalists, and indigenous residents. All were victims of the violence and impunity that has reigned in Honduras since the 2009 coup d’état against its democratically elected and left-leaning president, Manuel Zelaya.
Earlier that day, Trejo had appeared on television, denouncing the powerful interests behind the government’s push for ciudades modelos—swaths of land to be ceded to international investors and developed into autonomous cities, replete with their own police forces, taxes, labor codes, trade rules, and legal systems. He had helped prepare motions declaring the proposal unconstitutional.
This concept of “charter cities” has been promoted for a couple of years by Paul Romer, a University of Chicago–trained economist teaching at New York University. He described his brainchild in a co-authored op-ed as “an effort to build on the success of existing special zones based around the export-processing maquila industry.” A “new city on an undeveloped site, free of vested interests” could bypass the “inefficient rules” that hinder “peace, growth and development” worldwide, he argued. With new and stable institutions, the charter city could become an “attractive place for would-be residents and investors.”2
The international press swooned over Romer’s revolutionary idea: Foreign Policy magazine named him one of its Top 100 Global Thinkers of 2010 for “developing the world’s quickest shortcut to economic development”;3 that same year, The Atlantic dedicated a 5,400-word paean to Romer and his “urban oases of technocratic sanity,” which held the promise that “struggling nations could attract investment and jobs; private capital would flood in and foreign aid would not be needed.”
But the applicability of Romer’s radical vision in Honduras always depended on the enthusiasm of the authoritarian, post-coup government of Porfirio Lobo. Lobo owes his presidency to the sham elections of 2009, which took place under the U.S.-backed de facto military government that overthrew Zelaya and were marred by violent repression and media censorship. With the exceptions of the U.S.-financed International Republican Institute and National Democratic Institute, international observers boycotted the electoral charade that foisted Lobo into power.
Romer’s lofty theories also remained utterly detached from the brutal nature of the collaborating government. “Setting up the rule of law” from scratch in a new city, he contended, would be an antidote to “weak governance” (weak in no small part due to Lobo’s appointment of coup perpetrators to high-level government positions).4 In a co-authored paper, Romer also mischaracterized his allies, the “elected leaders in Honduras,” as earnest in their intent to end a “cycle of insecurity and instability that stokes fear and erodes trust.”5 (Romer offered no comment when Lobo designated Juan Carlos “El Tigre” Bonilla, accused of past ties to death squads, as the national chief of police.)6
Even on its own terms, Romer’s development theory is disconnected from reality. He has repeatedly invoked Hong Kong as the sunny inspiration for the remaking of Honduras: “In a sense, Britain inadvertently, through its actions in Hong Kong, did more to reduce world poverty than all the aid programs that we’ve undertaken in the last century,” he claimed.7 Romer neglected to add that the city developed as a hub for the largest narcotrafficking operation in world history, through which Britain inflicted untold misery on the Chinese mainland. Britain dealt a humiliating military defeat to China (which had attempted to prohibit illegal British opium from entering its borders), took over Hong Kong, and forced China to abandon its tariff controls in 1842. Given that Hong Kong was one of the spoils of a drug war, and that its inhabitants were permitted democratic elections only 152 years after its incorporation into an empire, Romer’s dream for Honduras could just as easily be considered a nightmare.
Romer’s focus on good rule making is similarly fanciful; his effort to change the rules that engender poverty conspicuously excludes the international legal privileges that allow undemocratic leaders to sell a country’s resources and borrow in its name (he wrote positively of a trade agreement that Lobo struck with Canada this summer).8 Romer also approved of the legal architecture that “gives the United States administrative control in perpetuity over a piece of sovereign Cuban territory, Guantanamo Bay,” through a 1901 treaty that he failed to mention was ratified by a militarily occupied Cuba. Whether Romer knows it or not, his endorsement of power politics is clear: Investor-owned cities would be safe from future efforts by governments to repossess sovereign territory, because “Cuba respects the treaty with the United States, even as they complain bitterly about it.”9
Romer rebutted criticisms that his idea smacks of neocolonialism: “There are some things that it shares with the previous colonial enterprises,” he admitted, “but there’s this fundamental difference: at every stage, there’s an absolute commitment to freedom of choice on the part of the societies and the individuals that are involved.”10 Which choices are available to individuals living under a coercive, illegitimate government is a question left unanswered, and the adulating press could not be bothered to probe further.
After all, it would be impolite to reveal Romer’s close cooperation with a government whose security forces—many of whom are personally vetted, armed, and trained by the United States—killed unarmed students Rafael Vargas, 22, and Carlos Pineda, 24, as well as pregnant indigenous Miskitu women Juana Jackson Ambrosia and Candelaria Trapp Nelson, among others.11 Indeed, the Committee of Families of the Detained and Disappeared of Honduras observed that more than 10,000 official complaints have been filed against Honduras’s military and police since the coup. Such unsavory details might have chastened The Atlantic’s ebullient portrait of the “elegant, bespectacled, geekishly curious” professor, and would have tarnished President Obama, who praised Lobo for his “strong commitment to democracy” while providing his brutal security apparatus with $50 million in aid last year.12
In their coverage of Romer’s charter cities, the media have almost entirely excised the innumerable human rights violations occurring under the undemocratic Honduran regime. The New York Times is a case in point. About a week after Amnesty International, Human Rights Watch, the Inter-American Commission on Human Rights, and even the U.S. State Department were compelled to release statements of condemnation over Antonio Trejo’s assassination, Times reporter Elisabeth Malkin fawned over Romer’s idea while ignoring the killing of one of its most prominent critics. (Romer himself offered no public statement in the wake of Trejo’s death-squad-style killing.) Charter cities promised to “simply sweep aside the corruption, the self-interested elites, and the distorted economic rules that stifle growth in many poor countries,” asserted the imperturbable Malkin. She added with uncommon journalistic authority, “Nobody disputes that impoverished, violent Honduras needs some kind of shock therapy.”13
This is not the first instance in which the Times has glossed over inconvenient facts to laud shock therapy, a doctrine of massive privatization and investor-friendly deregulation developed at the University of Chicago.14 Many years after Chile’s coup government pushed through a rash of measures designed by economist Milton Friedman and his acolytes, the Chicago Boys, the Times reported that “Chile has built the most successful economy in Latin America, and one of the vital underpinnings of that growth was the open economic environment created by the former military dictator, Gen. Augusto Pinochet.”15 Leaving aside Pinochet’s torture and murder of tens of thousands of dissidents, Chile’s per capita gross domestic product was practically unchanged 13 years after the coup; Pinochet’s “free-market” experiment also ended with re-nationalizations in banking and copper extraction, the institution of capital controls, and continuous state support for Chile’s exports.16
Following in this dubious tradition of portraying a reactionary societal experiment as a formula for prosperity, the Times’ first piece on Honduran charter cities appeared in its Sunday magazine in May 2012. Author Adam Davidson, co-creator and host of National Public Radio’s Planet Money program, considered charter cities a “ridiculously big idea” for fixing an “economic system that kept nearly two-thirds of [Honduras’s] people in grim poverty.” Davidson related the story of Octavio Sánchez, Lobo’s chief of staff, who met with Romer to develop a “secure place to do business—somewhere that money is safe from corrupt political cronyism or the occasional coup.”17 Davidson, however, scrupulously avoided Sánchez’s own role as an apologist for the 2009 military overthrow of Zelaya. Days after Zelaya’s ouster, Sánchez advised Christian Science Monitor readers not to “believe the coup myth,” and in an Orwellian flourish, the Harvard Law graduate declared that “the arrest of President Zelaya represents the triumph of the rule of law.”18
In November, Planet Money provided an obsequious follow-up on Romer and Sánchez’s collaboration, scrubbing any mention of the 2009 coup and Lobo’s emergence from it, and portraying Sánchez as an idealistic dreamer. “Instead of fighting to do two, three or four reforms during the life of a government,” Sánchez asked, “why don’t you just do all of those reforms at once in a really small space? And that’s why this idea was appealing. It’s really the possibility of turning everything around.”19
Planet Money’s co-hosts unwittingly conveyed the fundamental obstacle to shock therapy: “Paul Romer has this killer idea and no real country to try it in; Octavio has the same idea, but no way to sell it to his people.” They acknowledged that even with “a government that’s ready to go,” the “people in Honduras” viewed Romer’s plan as “basically Yankee imperialism.” The episode concluded by explaining the apparent collapse of the charter cities initiative, resulting partly from the post-coup government’s lack of transparency (Romer was “stunned”), as well as a Honduran Supreme Court ruling in October that found charter cities unconstitutional. Romer remains unfazed, the hosts said. He has a promising lead in North Africa—another opportunity to answer “one of the oldest problems in economics: how to make poor countries less poor.”
Regardless of what Romer and his media sycophants think of the charter city’s (questionable) efficacy, their deafening silence on its antidemocratic implications and Honduras’s human rights abuses is unconscionable. In this insulated world, Honduran victims of economic hardship and state terror, and their own proposals to solve poverty, remain invisible. Pinochet, the original administrator of shock therapy, distilled the insouciance of today’s intellectual and media culture when, in 1979, he remarked, “I trust the people all right; but they’re not yet ready.”20
Keane Bhatt is a regular contributor to the MALA section of NACLA Report and the creator of the Manufacturing Contempt blog on the NACLA Website.
1. Alberto Arce, “Slain Honduran lawyer Complained of Death Threats,” Associated Press, September 25, 2012.
2. Paul Romer and Octavio Sánchez, “Urban Prosperity in the RED,” The Globe and Mail: April 25, 2012.
3. “The FP Top 100 Global Thinkers,” Foreign Policy, November 26, 2012. Sebastian Mallaby, “The Politically Incorrect Guide to Ending Poverty,” The Atlantic, July/August 2012.
4. Romer and Sánchez, “Urban Prosperity.” Dana Frank, “Honduras: Which Side Is the US On?,” The Nation, May 22, 2012.
5. Brandon Fuller and Paul Romer, “Success and the City: How Charter Cities Could Transform the Developing World,” Macdonald-Laurier Institute, April 2012.
6. Katherine Corcoran and Martha Mendoza, “New Honduras Top Cop Once Investigated in Killings,” Associated Press, June 1, 2012.
7. Sebastian Mallaby, “Politically Incorrect Guide.”
8. Romer and Sánchez, “Urban Prosperity.”
9. Can “Charter Cities” Change the World? A Q&A With Paul Romer,” Freakonomics.com, September 29, 2009.
10. Jacob Goldstein and Chana Joffe-Walt, “Episode 415: Can a Poor Country Start Over?” NPR’s Planet Money, November 9, 2012.
11. Javier C. Hernandez, “An Academic Turns Grief Into a Crime-Fighting Tool,” The New York Times, February 24, 2012; Annie Bird and Alexander Main, “Collateral Damage of a Drug War,” Center for Economic and Policy Research and Rights Action, August 2012.
12. U.S. Office of the Press Secretary, “Remarks by President Obama and President Lobo of Honduras Before Bilateral Meeting,” whitehouse.gov, October 5, 2011; Dana Frank, “Honduras.”
13. Elisabeth Malkin, “Plan for Charter City to Fight Honduras Poverty Loses Its Initiator,” The New York Times, September 30, 2012
14. Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism (Metropolitan Books, 2007).
15. Nathaniel C. Nash, “Terrorism Jolts a Prospering Chile,” The New York Times, April 9, 1991.
16. Paul Krugman, “Fantasies of the Chicago Boys,” The Conscience of a Liberal (blog), The New York Times, March 3, 2010.
17. Adam Davidson, “Who Wants to Buy Honduras?,” The New York Times Magazine, May 8, 2012.
18. Octavio Sánchez, “A ‘Coup’ in Honduras? Nonsense,” The Christian Science Monitor, July 2, 2009.
19. Goldstein and Joffe-Walt, “Can a Poor Country.”
20. John B. Oakes, “Pinochet in No Rush”, The New York Times, May 3, 1979.
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- Honduras: Murdered Lawyer’s Brother Killed in Aguán (alethonews.wordpress.com)
- NPR Examines One Side of Honduran “Model Cities” Debate (alethonews.wordpress.com)
- IMF Ignores Proven Alternatives With Recommendations to Honduras (alethonews.wordpress.com)
- Killings Continue in Bajo Aguán as New Report Documents Abuses by U.S.-Trained Honduran Special Forces Unit (alethonews.wordpress.com)
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‘Noble Savages’: Chagnon’s new book triggers resignation and protests
Survival for Tribal Peoples | February 26, 2013
Davi Kopenawa, Yanomami spokesperson and shaman, has spoken out against Napoleon Chagnon’s new book ‘Noble Savages’.
© Fiona Watson/Survival
A new book by controversial American anthropologist Napoleon Chagnon has triggered a wave of protests among experts and Yanomami Indians:
- Marshall Sahlins, ‘the world’s most respected anthropologist alive today’, has resigned from the US National Academy of Sciences in protest at Chagnon’s election to the Academy. Sahlins previously wrote a devastating critique of Chagnon’s work in the Washington Post.
- Davi Kopenawa, a spokesman for Brazil’s Yanomami and President of the Yanomami association Hutukara, has spoken out about Chagnon’s work: ‘[Chagnon] said about us, ‘The Yanomami are savages!’ He teaches false things to young students. ‘Look, the Yanomami kill each other because of women.’ He keeps on saying this. But what do his leaders do? I believe that some years ago his leader waged a huge war – they killed thousands of children, they killed thousands of girls and boys. These big men killed almost everything. These are the fierce people, the true fierce people. They throw bombs, fire machine guns and finish off with the Earth. We don’t do this…’
- A large group of anthropologists who have each worked with the Yanomami for many years have issued a statement challenging Chagnon’s assessment of the tribe as ‘fierce’ and ‘violent’. They describe the Yanomami as ‘generally peaceable.’
- Survival International’s Director Stephen Corry has said, ’Chagnon’s work is frequently used by writers, such as Jared Diamond and Steven Pinker, who want to portray tribal peoples as ‘brutal savages’ – far more violent than ‘us’. But none of them acknowledge that his central findings about Yanomami ‘violence’ have long been discredited.’
Napoleon Chagnon’s autobiography ‘Noble Savages: My Life Among Two Dangerous Tribes – the Yanomamö and the Anthropologists’, has just been published. His 1968 book ‘Yanomamö: The Fierce People’ portrayed the Yanomami as ‘sly, aggressive and intimidating’, and claimed they ‘live in a state of chronic warfare’. It is still a standard work in undergraduate anthropology.
The Yanomami live in Brazil and Venezuela and are the largest relatively isolated tribe in South America. Their territory is protected by law, but illegal goldminers and ranchers continue to invade their land, destroying their forest and spreading diseases which in the 1980s killed one out of five Brazilian Yanomami.
Napoleon Chagnon’s view that the Yanomami are ‘sly, aggressive and intimidating’ and that they ‘live in a state of chronic warfare’ has been widely discredited.
© Fiona Watson/Survival
Chagnon’s work has had far-reaching consequences for the rights of the Yanomami. In the late 1970s, Brazil’s military dictatorship, which was refusing to demarcate the Yanomami territory, was clearly influenced by the characterization of the Yanomami as hostile to each other and in the 1990s, the UK government refused funding for an education project with the Yanomami, saying that any project with the tribe should work on ‘reducing violence’.
Most recently, Chagnon’s work was cited in Jared Diamond’s highly controversial book ‘The World Until Yesterday’, in which he states that most tribal peoples, including the Yanomami, are ’trapped in cycles of violence and warfare’ and calls for the imposition of state control in order to bring them peace.
Survival International’s Director Stephen Corry said today, ‘The greatest tragedy in this story is that the real Yanomami have largely been written out of it, as the media have chosen to focus only on the salacious details of the debate that rages between anthropologists or on Chagnon’s disputed characterizations. In fact, Yanomamö: The Fierce People had disastrous repercussions both for the Yanomami and tribal peoples in general. There’s no doubt it’s been used against them and it has brought the 19th century myth of the ‘Brutal Savage’ back into mainstream thinking.’
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Oscar Prints the Legend: Argo’s Upcoming Academy Award and the Failure of Truth
By Nima Shirazi | Wide Asleep in America | February 23, 2013
One year ago, after his breathtakingly beautiful Iranian drama, “A Separation,” won the Academy Award for Best Foreign Film, writer/director Asghar Farhadi delivered the best acceptance speech of the night.
“[A]t the time when talk of war, intimidation, and aggression is exchanged between politicians,” he said, Iran was finally being honored for “her glorious culture, a rich and ancient culture that has been hidden under the heavy dust of politics.” Farhadi dedicated the Oscar “to the people of my country, a people who respect all cultures and civilizations and despise hostility and resentment.”
Such grace and eloquence will surely not be on display this Sunday, when Ben Affleck, flanked by his co-producers George Clooney and Grant Heslov, takes home the evening’s top prize, the Best Picture Oscar, for his critically-acclaimed and heavily decorated paean to the CIA and American innocence, “Argo.”
Over the past 12 months, rarely a week – let alone month – went by without new predictions of an ever-imminent Iranian nuclear weapon and ever-looming threats of an American or Israeli military attack. Come October 2012, into the fray marched “Argo,” a decontextualized, ahistorical “true story” of Orientalist proportion, subjecting audiences to two hours of American victimization and bearded barbarians, culminating in popped champagne corks and rippling stars-and-stripes celebrating our heroism and triumph and their frustration and defeat. Salon‘s Andrew O’Hehir aptly described the film as “a propaganda fable,” explaining as others have that essentially none of its edge-of-your-seat thrills or most memorable moments ever happened. O’Hehir sums up:
The Americans never resisted the idea of playing a film crew, which is the source of much agitation in the movie. (In fact, the “house guests” chose that cover story themselves, from a group of three options the CIA had prepared.) They were not almost lynched by a mob of crazy Iranians in Tehran’s Grand Bazaar, because they never went there. There was no last-minute cancellation, and then un-cancellation, of the group’s tickets by the Carter administration. (The wife of Canadian ambassador Ken Taylor had personally gone to the airport and purchased tickets ahead of time, for three different outbound flights.) The group underwent no interrogation at the airport about their imaginary movie, nor were they detained at the gate while a member of Iran’s Revolutionary Guard telephoned their phony office back in Burbank. There was no last-second chase on the runway of Mehrabad Airport, with wild-eyed, bearded militants with Kalashnikovs trying to shoot out the tires of a Swissair jet.
One of the actual diplomats, Mark Lijek, noted that the CIA’s fake movie “cover story was never tested and in some ways proved irrelevant to the escape.” The departure of the six Americans from Tehran was actually mundane and uneventful. “If asked, we were going to say we were leaving Iran to return when it was safer,” Lijek recalled, “But no one ever asked!…The truth is the immigration officers barely looked at us and we were processed out in the regular way. We got on the flight to Zurich and then we were taken to the US ambassador’s residence in Berne. It was that straightforward.”
Furthermore, Jimmy Carter has even acknowledged that “90% of the contributions to the ideas and the consummation of the plan was Canadian [while] the movie gives almost full credit to the American CIA… Ben Affleck’s character in the film was only in Tehran a day and a half and the real hero in my opinion was Ken Taylor, who was the Canadian ambassador who orchestrated the entire process.”
O’Hehir perfectly articulates the film’s true crime, its deliberate exploitation of “its basis in history and its mode of detailed realism to create something that is entirely mythological.” Not only is it “a trite cavalcade of action-movie clichés and expository dialogue,” but “[i]t’s also a propaganda movie in the truest sense, one that claims to be innocent of all ideology.”
Such an assessment is confirmed by Ben Affleck’s own comments about the film. In describing “Argo” to Bill O’Reilly, Affleck boasted, “You know, it was such a great story. For one thing, it’s a thriller. It’s actually comedy with the Hollywood satire. It’s a complicated CIA movie, it’s a political movie. And it’s all true.” He told Rolling Stone that, when conceiving his directorial approach, he knew he “absolutely had to preserve the central integrity and truth of the story.”
“It’s OK to embellish, it’s OK to compress, as long as you don’t fundamentally change the nature of the story and of what happened,” Affleck has remarked, even going so far as to tell reporters at Argo’s BFI London Film Festival premier, “This movie is about this story that took place, and it’s true, and I go to pains to contextualize it and to try to be even-handed in a way that just means we’re taking a cold, hard look at the facts.”
In an interview with The Huffington Post, Affleck went so far as to say, “I tried to make a movie that is absolutely just factual. And that’s another reason why I tried to be as true to the story as possible — because I didn’t want it to be used by either side. I didn’t want it to be politicized internationally or domestically in a partisan way. I just wanted to tell a story that was about the facts as I understood them.”
For Affleck, these facts apparently don’t include understanding why the American Embassy in Tehran was overrun and occupied on November 4, 1979. “There was no rhyme or reason to this action,” Affleck has insisted, claiming that the takeover “wasn’t about us,” that is, the American government (despite the fact that his own film is introduced by a fleeting – though frequently inaccurate1 – review of American complicity in the Shah’s dictatorship).
Wrong, Ben. One reason was the fear of another CIA-engineered coup d’etat like the one perpetrated in 1953 from the very same Embassy. Another reason was the admission of the deposed Shah into the United States for medical treatment and asylum rather than extradition to Iran to face charge and trial for his quarter century of crimes against the Iranian people, bankrolled and supported by the U.S. government. One doesn’t have to agree with the reasons, of course, but they certainly existed.
Just as George H.W. Bush once bellowed after a U.S. Navy warship blew an Iranian passenger airliner out of the sky over the Persian Gulf, killing 290 Iranian civilians, “I’ll never apologize for the United States of America. Ever. I don’t care what the facts are.” Affleck appears inclined to agree.
If nothing else, “Argo” is an exercise in American exceptionalism – perhaps the most dangerous fiction that permeates our entire society and sense of identity. It reinvents history in order to mine a tale of triumph from an unmitigated defeat. The hostage crisis, which lasted 444 days and destroyed an American presidency, was a failure and an embarrassment for Americans. The United States government and media has spent the last three decades tirelessly exacting revenge on Iran for what happened.
“Argo” recasts revolutionary Iranians as the hapless victims of American cunning and deception. White Americans are hunted, harried and, ultimately courageous and free. Iranians are maniacal, menacing and, in the end, infantile and foolish. The fanatical fundamentalists fail while America wins. USA -1, Iran – 0. Yet, “Argo” obscures the unfortunate truth that, as those six diplomats were boarding a plane bound for Switzerland on January 28, 1980, their 52 compatriots would have to wait an entire year before making it home, not as the result of a daring rescue attempt, but after a diplomatic agreement was reached.
Reflecting on the most troubled episodes in American history is a time-honored cinematic tradition. There’s a reason why the best Vietnam movies are full of pain, anger, anguish and war crimes. By contrast, “Argo” is American catharsis porn; pure Hollywood hubris. It is pro-American propaganda devoid of introspection, pathos or humility and meant to assuage our hurt feelings. In “Argo,” no lessons are learned by revisiting the consequences of America’s support for the Pahlavi monarchy or its creation and training of SAVAK, the Shah’s vicious secret police.
On June 11, 1979, months before the hostage crisis began, the New York Times published an article by writer and historian A.J. Langguth which recounted revelations relayed by a former American intelligence official regarding the CIA’s close relationship with SAVAK. The agency had “sent an operative to teach interrogation methods to SAVAK” including “instructions in torture, and the techniques were copied from the Nazis.” Langguth wrestled with the news, trying to figure out why this had not been widely reported. He came to the following conclusion:
We – and I mean we as Americans – don’t believe it. We can read the accusations, even examine the evidence and find it irrefutable. But, in our hearts, we cannot believe that Americans have gone abroad to spread the use of torture.
We can believe that public officials with reputations for brilliance can be arrogant, blind or stupid. Anything but evil. And when the cumulative proof becomes overwhelming that our representatives in the C.I.A. or the Agency for International Development police program did in fact teach torture, we excuse ourselves by vilifying the individual men.
Similarly, at a time when the CIA is waging an illegal, immoral, unregulated and always expanding drone execution program, the previous administration’s CIA kidnappers and torturers are protected from prosecution by the current administration, and leaked State Department cables reveal orders for U.S. diplomats to spy on United Nations officials, it is surreal that such homage is being paid to that very same organization by the so-called liberals of the Tinsel Town elite.
Upon winning his Best Director Golden Globe last month, Ben Affleck obsequiously praised the “clandestine service as well as the foreign service that is making sacrifices on behalf of the American people everyday [and] our troops serving over seas, I want to thank them very much,” a statement echoed almost identically by co-producer Grant Heslov when “Argo” later won Best Drama.
This comes as no surprise, considering Affleck had previously described “Argo” as “a tribute” to the “extraordinary, honorable people at the CIA” during an interview on Fox News.
The relationship between Hollywood and the military and intelligence arms of the U.S. government have long been cozy. “When the CIA or the Pentagon says, ‘We’ll help you, if you play ball with us,’ that’s favoring one form of speech over another. It becomes propaganda,” David Robb, author of “Operation Hollywood: How the Pentagon Shapes and Censors the Movies” told The Los Angeles Times. “The danger for filmmakers is that their product — entertainment and information — ends up being government spin.”
Awarding “Argo” the Best Picture Oscar is like Barack Obama winning a Nobel Peace Prize: an undeserved accolade fawningly bestowed upon a dubious recipient based on a transparent fiction; an award for what never was and never would be and a decision so willfully naïve and grotesque it discredits whatever relevance and prestige the proceedings might still have had.*
So this Sunday night, when “Argo” has won that coveted golden statuette, it will be clear that we have yet again been blinded by the heavy dust of politics and our American mantra of hostility and resentment will continue to inform our decisions, dragging us closer and closer to the abyss.
***** ***** *****
* Yes, in this analogy, the equivalent of Henry Kissinger is obviously 2004’s dismal “Crash.”
*****
1 The introduction of “Argo” is a dazzingly sloppy few minutes of caricatured history of Iran, full of Orientalist images of violent ancient Persians (harems and all), which gets many basic facts wrong. In fact, it is shocking this intro made it to release as written and recorded.
Here are some of the problems:
1. The voiceover narration says, “In 1950, the people of Iran elected Mohammad Mossadegh, the secular democrat, Prime Minister. He nationalized British and U.S. petroleum holdings, returning Iran’s oil to its people.”
Mossadegh was elected to the Majlis (Iranian Parliament) in 1944. He did not become Prime Minister until April 1951 and was not “elected by the people of Iran.” Rather, he was appointed to the position by the representatives of the Majlis.
Also, the United States did not have petroleum interests in Iran at the time.
2. After briefly describing the 1953 coup, the narrator says Britain and the United States “installed Reza Pahlavi as Shah.”
Wow. First, the Shah’s name was not Reza Pahlavi. That is his father’s (and son’s) name. Furthermore, Mohammad Reza Pahlavi was not installed as Shah since he had already been Shah of Iran since September 1941, after Britain and the Soviet Union invaded and occupied Iran and forced the abdication of his father, Reza Shah Pahlavi.
During the coup in 1953, the Shah fled to Baghdad, then Rome. After Mossadegh had been forced out, the Shah returned to the Peacock Throne.
This is not difficult information to come by, and yet the screenwriter and director of “Argo” didn’t bother looking it up. And guess what? Ben Affleck actually majored in Middle East Studies in college. Unsurprisingly, he didn’t graduate.
The rest of the brief intro, while mentioning the torture of SAVAK, glosses over the causes of the revolution, but lingers on the violence that followed. As it ends, the words “Based on a True Story” appear on the screen. The first live action moment we see in “Argo” is of an American flag being burned.
Such is Affleck’s insistence that “Argo” is “not a political movie.”
Still, as Kevin B. Lee wrote in Slate last month, “This opening may very well be the reason why critics have given the film credit for being insightful and progressive—because nothing that follows comes close, and the rest of the movie actually undoes what this opening achieves.”
He continues,
Instead of keeping its eye on the big picture of revolutionary Iran, the film settles into a retrograde “white Americans in peril” storyline. It recasts those oppressed Iranians as a raging, zombie-like horde, the same dark-faced demons from countless other movies— still a surefire dramatic device for instilling fear in an American audience. After the opening makes a big fuss about how Iranians were victimized for decades, the film marginalizes them from their own story, shunting them into the role of villains. Yet this irony is overshadowed by a larger one: The heroes of the film, the CIA, helped create this mess in the first place. And their triumph is executed through one more ruse at the expense of the ever-dupable Iranians to cap off three decades of deception and manipulation.
And brilliantly concludes,
Looking at the runaway success of this film, it seems as if critics and audiences alike lack the historical knowledge to recognize a self-serving perversion of an unflattering past, or the cultural acumen to see the utterly ersatz nature of the enterprise: A cast of stock characters and situations, and a series of increasingly contrived narrow escapes from third world mobs who, predictably, are never quite smart enough to catch up with the Americans. We can delight all we like in this cinematic recycling act, but the fact remains that we are no longer living in a world where we can get away with films like this—not if we want to be in a position to deal with a world that is rising to meet us. The movies we endorse need to rise to the occasion of reflecting a new global reality, using a newer set of storytelling tools than this reheated excuse for a historical geopolitical thriller.
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Was the British Raj beneficial for India?
The Hindu Perspective | February 19, 2013
The idea that British rule in India was a force for good is not uncommon in Britain and even in certain sections of westernised Indian elite. Read right-of-centre British newspapers and you will regularly find articles and columns that glorify Britain’s colonial past, giving the impression that Britain was spreading the light of Western Civilisation to the dark corners of the world. Many British history books still do their best to highlight the benefits that British rule brought to the numerous colonies, rather than the hardships.
Recently in an interview with the BBC, Niall Ferguson, a British historian who has recently produced a six-part documentary series for Channel 4, and also works in a research department at Oxford University, said that British rule greatly benefited the ruled nations and people.
To be sure, many white Britons, perhaps even the majority, think that the colonial era is not something to be proud of. But at the same time it must be acknowledged that the idea of British rule as benevolent is not just a fringe idea. In this light it is worth examining some facts about the British Raj that are seldom discussed in the media.
History is never black and white. There are benefits that come out of otherwise bad situations. In the case of India, British rule certainly did have some benefits, such as development of previously absent infrastructure. Of course, colonial historians such as Niall Ferguson will be fast to point this out:
By the 1880s the British had invested £270 million in India, not much less than one-fifth of their entire investment overseas.
But at what cost were these investments made? The pro-colonial authors miss out or even cover-up some basic points about the British Raj, which should be the foundation of any debate about the ‘merits’ of colonialism.
The economic devastation of India under British rule is discernible from the fact that India’s share of world trade fell from 17% percent in 1800 (almost equal to America’s share of world trade in 2000) to less than 2%. It is a very telling fact that during British rule of India, British per capita gross domestic product increased in real terms by 347 per cent, Indian by a mere 14 per cent. But even more important are the famine statistics of British-controlled India.
According to British records, one million Indians died of famine between 1800 and 1825, 4 million between 1825 and 1850, 5 million between 1850 and 1875 and 15 million between 1875 and 1900. Thus 25 million Indians died in 100 years! Since Independence, although poverty still exists, there have been no such mass famines, a record of which India should be proud. Funnily enough, there is no mention of this by pro-colonial authors. It is certainly a strange omission on their part and something they should be ashamed of. Perhaps not surprising as it would make British investment in India seem trivial and pointless by comparison. Any rational person would rather avoid millions of deaths than have a few railway tracks built and some land irrigated.
How did these famines occur? The main reason was not bad weather or natural causes but rather the breaking up of India’s indigenous crop patterns. The British replaced food crops such as rice and wheat and instead forced Indian farmers to produce jute, cotton, tea and oil seeds, which they needed as raw materials for their home industries. The implication of this in times of shortages was catastrophic, as the famine figures show.
Niall Ferguson also credits the British with labouring to improve India’s public health:
It was the British who introduced quinine as an anti-malarial prophylactic, carried out public programmes of vaccination against smallpox – often in the face of local resistance – and laboured to improve the urban water supplies that were so often the bearers of cholera and other diseases.
Once again, there is some truth in this, but also some omission, and some downright distortion. On the subject of smallpox vaccination, it is well documented that before the British arrived, Indians had a system of immunisation against smallpox, in which cowpox was used inoculate against smallpox. The British doctor J Z Holwell wrote a book in 1767 describing the system, accepting that it was safe and effective. European medicine did not have any treatment against the disease at that time.
Inoculation against smallpox became a part of Western medicine by 1840. No sooner did that happen that the British in India banned the older method of vaccination, denouncing it as barbaric, without making certain that sufficient number of inoculators in the new technique existed. Smallpox in India became a greater scourge than before. This is not the only example in which the British undermined and even banned indigenous systems of knowledge, particularly medicine, creating dire consequences.
In writing this article I am not trying to stir up bitterness. As I have mentioned, many if not most white Britons see colonialism as a dark part of their history, and refrain from glorifying it or acting triumphant over it. I am simply trying to combat the smug, celebratory version of Imperial history that is in vogue in some circles. This distorted version of history should be discarded into the dustbin of history.
This article is dedicated to the millions men, women and children, of India as well as other nations, who perished in unnecessary and avoidable famines during the colonial era.
Related article
- British PM falls short of apology for India massacre (worldbulletin.net)
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When You’re Cutting Social Security, ‘Wealthy’ Begins at $25K
By Jim Naureckas | FAIR | February 21, 2013
Here’s a proposal for Social Security that was on the New York Times‘ op-ed page yesterday (2/20/13):
The top third of beneficiaries (by lifetime income) [would] receive no annual cost-of-living adjustment in retirement. The middle third would get half of today’s adjustment, and the bottom third would receive the same annual increase they do now. Such a reform…would reduce Social Security spending by more than a tenth over a decade and fix the program’s long-term financing.
This is part of Paul Ryan adviser Yuval Levin‘s attempt to find “common ground” on the entitlement issue: “Both sides should agree at least to spend less money on the wealthy.” So who are these “wealthy” people who would be getting a benefit cut equal to the rate of inflation every year? According to the SSA, about 34 percent of people over 65 have family incomes of $50,000.
Now, you can argue about what “wealthy” is, but I think you would find pretty widespread agreement on what wealthy isn’t: $50,000 a year. If you sent the New York Times an op-ed outlining your plan to balance the budget by raising taxes on “wealthy” people who make 50k a year or more, it would be put in the same pile that gets the submissions about Elvis’s UFO diet. But when you’re talking about cutting entitlements, if you want to call those people “wealthy,” that’s perfectly reasonable.
But wait! Those aren’t the only people who are getting too much from the government and need to have their benefits cut–the middle third of the elderly are also “wealthy” and need their benefits cut–but by only half the rate of inflation per year. The ones making more than $50,000 must be the super-wealthy, the regular wealthy make…between $25,000 and $50,000, roughly.
For comparison purposes, the poverty line for a family of four is $23,350. Talk about a shrinking middle class!
This idea of “means testing” as a painless way to solve the supposed entitlement crisis is very popular among wealthy pundits. It’s not hard to understand why. One of the principles Levin suggests we should all be able to agree on is “give less to the wealthy rather than take more from them.”
OK, so let’s say you’re wealthy–not Levin’s pretend wealthy, but truly super-rich, in the top 0.01 percent of income. Average income in this group is about $24 million a year. So you can easily afford to give up their whole Social Security paycheck. If you’ve paid in the maximum possible amount and retire at 66, that’s $2,513 a month–or $30,582 a year. You have sacrificed for your country.
But let’s say that instead of taking away your Social Security check, we tax your income–which comes entirely in the form of investment income, since you’re a wealthy retiree–at the rate for regular income rather than at the special lower fat-cat rate. So instead of paying (very roughly) $4.8 million in federal income tax, you’ll be paying about $9.5 million.
Now, you can surely afford to live on $14.5 million a year rather than $19.2 million–just as you can afford to give up your Social Security check. Somehow, though, making the latter sacrifice is probably going to seem more appealing.
And the thing is, there aren’t that many really wealthy people who won’t miss their Social Security checks–so in order to save any appreciable amount of money, you have to take a substantial chunk away from people who actually aren’t very wealthy at all. That’s a principle we can all agree on. All of us making $24 million a year, anyway.
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Left-leaning despisers of 9/11 Truth movement: Do you really believe in miracles?
David Ray Griffin | Global Research | 06 Jul 2010
An Open Letter to Terry Allen, Noam Chomsky, Alexander Cockburn, David Corn, Chris Hayes, George Monbiot, Matthew Rothschild, and Matt Taibbi.
[1]According to several left-leaning critics of the 9/11 Truth Movement, some of its central claims, especially about the destruction of the World Trade Center, show its members to be scientifically challenged. In the opinion of some of these critics, moreover, claims made by members of this movement are sometimes unscientific in the strongest possible sense, implying an acceptance of magic and miracles. … Full article
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