New York Times « Aletho News

How to Read Stories About Israel in the NY Times (Hint: Very Carefully)

By Peter Hart | FAIR | March 21, 2013

Some days the Newspaper of Record says a lot–not always in ways you might expect.

Today (3/21/13) a story by Mark Landler and Rick Gladstone about allegations of chemical weapons in Syria includes something you see often–anonymous government sources. That can often be a bad thing; but today it’s pretty useful:

Two senior Israeli officials, speaking on the condition of anonymity because they were not authorized to speak, said that Israel was sure that chemicals were used, but did not have details about what type of weapons were used, where they came from, when they were deployed, or by whom.

A third senior official, also refusing to be identified, said, “It is possible that chemical weapons were used, or some concoction of chemical substances,” but he said he had not “seen clear confirmation.”

Why is this helpful? Because other Israeli officials, speaking publicly and for attribution, pretended to be more certain. From the very same Times piece:

Two senior ministers in Israel’s new cabinet said publicly on Wednesday that chemical weapons had been used, and several government officials said in interviews that Israel had credible evidence of an attack. The ministers, Tzipi Livni and Yuval Steinetz, were among those who met with Mr. Obama here on the first day of his trip.

and:

Israeli officials provided no proof of their assertions but appeared more confident that chemical weapons had been used.

Ms. Livni, the new Israeli justice minister, said in an interview with CNN, “It’s clear for us here in Israel that it’s being used,” adding, “This, I believe, should be on the table in the discussions.”

Mr. Steinetz, the minister for strategic affairs, said on Israel’s Army Radio, “It’s apparently clear that chemical weapons have been used against civilians by the rebels or the government.”

So is the Times, in its own way, telling us not to trust the officials speaking on the record? That’s certainly one way to read the piece.

Elsewhere in the paper we learn that part of Barack Obama’s visit to Israel includes a look at the country’s “Iron Dome” missile defense system, which is funded by the U.S. government. In one story, by Mark Landler and Jodi Rudoren, we read this:

Mr. Obama was driven across the tarmac to inspect a battery of the Iron Dome air-defense system. The system, built by Israeli companies but financed by the United States, is credited with intercepting more than 400 rockets fired from Gaza at Israeli towns….

Israeli officials say that Iron Dome has been a huge success, intercepting 86 percent of the 521 incoming rockets it engaged in the Gaza conflict. Some American missile-defense experts have questioned that figure, putting the hit rate at closer to 10 percent.

So they either knock down almost every rocket, or almost none. That’s pretty unhelpful; but the Times has another piece that actually digs into the evidence (“Weapons Experts Raise Doubts About Israel’s Antimissile System”). According to this account, “a growing chorus of weapons experts in the United States and in Israel…suggest that Iron Dome destroyed no more than 40 percent of incoming warheads and perhaps far fewer.”

One former Pentagon official says there’s no system that is 90 percent effective. And the article, by William Broad, includes this:

Theodore A. Postol, a physicist at M.I.T. who helped reveal the Patriot antimissile failures of 1991, analyzed the new videos and found that Iron Dome repeatedly failed to hit its targets head-on. He concluded that the many dives, loops and curls of the interceptors resulted in diverse angles of attack that made it nearly impossible to destroy enemy warheads.

“It’s very hard to see how it could be more than 5 or 10 percent,” Dr. Postol said.

Mordechai Shefer, an Israeli rocket scientist formerly with Rafael, Iron Dome’s maker, studied nearly two dozen videos and, in a paper last month, concluded that the kill rate was zero.

Reading all of that, it’s hard to imagine anyone could really believe the Israeli claims about Iron Dome’s success rate.

So if you want to get a handle on Iron Dome, ignore the story on page 10 and pay attention to the story on page 11. And if you’re trying to figure out which Israeli officials to trust on the Syria chemical weapons story, the unnamed sources seem to be the ones who are more forthright about what they know.

That’s a lot to ask of readers, isn’t it?

March 21, 2013 Posted by aletho | Deception, Mainstream Media, Warmongering, Wars for Israel | Iron Dome, Israel, Mark Landler, New York Times, Rick Gladstone, Tzipi Livni | Leave a comment

Looking Back at Iraq With… Michael Gordon?

By Peter Hart | FAIR | March 20, 2013

The performance of the corporate media is one of the principal failures of the Iraq War. There are almost too many examples to name; but most critics agree that one of the most instrumental single pieces that made the false case for war was the front-page New York Times story (9/8/02) hyping the idea that Iraq was trying to procure special aluminum tubes for its nuclear weapons program.

Last night in its 10-years-later segment, the PBS NewsHour (3/19/13) made a rather stunning judgment: One of the two expert journalists was the guy who co-authored that piece.

New York Times reporter Michael Gordon was the lead author on that infamous tubes article, but his record goes deeper than that. A few days into the U.S. bombing (3/25/13), Gordon appeared on CNN to endorse the bombing of Iraqi TV’s offices, calling it “an appropriate target,” since “we’re trying to send the exact opposite message.”

When U.S. politicians began to seriously consider a withdrawal of U.S. troops, Gordon criticized that policy, especially in one article (11/15/06) headlined, “Get Out of Iraq Now? Not So Fast, Experts Say” (FAIR Media Advisory, 12/4/06). He went on the Charlie Rose show (1/18/07) to endorse a troop surge. (Even the Washington Post admits that the idea that the surge succeeded is a “myth”–3/15/13.) And in early 2007, Gordon wrote articles, relying heavily on anonymous U.S. sources, alleging that the Iranian government was sending weapons into Iraq (Action Alert, 2/16/07).

So why would Gordon be someone you’d want to listen to about the Iraq War? That’s hard to say, really. But Gordon had plenty to tell PBS viewers. He complained that the Obama White House wasn’t interested enough in Iraq–leading to “the decline of American influence.” As he put it:

I think they view Iraq as just another country. They don’t have the same emotional or psychological or even foreign policy stake in it that the previous administration had.

Gordon added that the U.S. military “see a lot of early mistakes in the first years” of the war, but that “I do think the surge, as a military operation and military strategy, was effective and was essential.”

When one of the hosts, Judy Woodruff, asked about the war’s legacy, he replied: “Well, I think the military learned how to do counterinsurgency. The public opinion may no longer support that, but forever is a long time. And I think you can’t say we won’t have to do that again at some point in the future.”

And if there is ever another moment that requires reporters to faithfully record the views of anonymous U.S. officials as they make their case for war, it’s a safe bet that Michael Gordon will be there to do that job.

Thomas Friedman tells millions of people to ‘suck on this’

March 21, 2013 Posted by aletho | Mainstream Media, Warmongering, Timeless or most popular, War Crimes | Charlie Rose, CNN, Iraq War, Judy Woodruff, Michael Gordon, New York Times, PBS NewsHour | Leave a comment

31% of Americans Have Abandoned News Outlets Due to Perceived Decline in Quality

By Noel Brinkerhoff and Danny Biederman | AllGov | March 20, 2013

News organizations have lost a significant share of their audience due to budget cuts that have impacted the quality and quantity of reporting.

A new poll from the Pew Research Center found that 31% of respondents said they had stopped using a particular news outlet because it was no longer providing the same kind of news and information as in the past.

Pew researchers said that those most likely to stop using news sources were better educated, wealthier and older than those who still used them—“in other words, they are people who tend to be most prone to consume and pay for news,” Pew’s The State of the News Media 2013 read.

Losses of subscribers and ad revenues have negatively impacted many news organizations in recent years, forcing layoffs and reduced coverage. Most of the people to whom Pew researchers talked were either largely or entirely unaware of this situation, the survey revealed.

There is, however, a glimmer of hope for the embattled newspaper industry, which has been under financial duress since the onset of the recession in 2007 and growing competition from online news services. The Pew study reports that a trend of stabilizing revenue is evidenced by news organizations’ use of social media to support advertisers, digital pay plans, increased investor interest, and across-the-board advertising growth attributed to a modestly improving economy.

The Pew authors concede, however, that these positive signs “are, for the time being, mostly promise rather than performance,” and that the overall prognosis still appears grim.

March 20, 2013 Posted by aletho | Mainstream Media, Warmongering | Associated Press, Media, New York Times, United States | Leave a comment

NAFTA at 20: The New Spin

By Manuel Perez-Rocha and Javier Rojo | Foreign Policy in Focus | March 14, 2013

Only a few years ago, analysts were warning that Mexico was at risk of becoming a “failed state.” These days, the Mexican government appears to be doing a much better PR job.

Despite the devastating and ongoing drug war, the story now goes that Mexico is poised to become a “middle-class” society. As establishment apostle Thomas Friedman put it in the New York Times, Mexico is now one of “the more dominant economic powers in the 21^st century.”

But this spin is based on superficial assumptions. The small signs of economic recovery in Mexico are grounded largely on the return of maquiladora factories from China, where wages have been increasing as Mexican wages have stagnated. Under-cutting China on labor costs is hardly something to celebrate. This trend is nothing but the return of the same “free-trade” model that has failed the Mexican people for 20 years.

The North American Free Trade Agreement (NAFTA), which was ratified in 1993 and went into effect in 1994, was touted as the cure for Mexico’s economic “backwardness.” Promoters argued that the trilateral trade agreement would dig Mexico out of its economic rut and modernize it along the lines of its mighty neighbor, the United States.

The story went like this:

NAFTA was going to bring new U.S. technology and capital to complement Mexico’s surplus labor. This in turn would lead Mexico to industrialize and increase productivity, thereby making the country more competitive abroad. The spike in productivity and competitiveness would automatically cause wages in Mexico to increase. The higher wages would expand economic opportunities in Mexico, slowing migration to the United States.

In the words of the former President Bill Clinton, NAFTA was going to “promote more growth, more equality and better preservation of the environment and a greater possibility of world peace.” Mexico’s president at the time, Carlos Salinas de Gortari, echoed Clinton’s sentiments during a commencement address at MIT: “NAFTA is a job-creating agreement,” he said. “It is an environment improvement agreement.” More importantly, Salinas boasted, “it is a wage-increasing agreement.”

As the 20^th anniversary of NAFTA approaches, however, the verdict is indisputable: NAFTA failed to spur meaningful and inclusive economic growth in Mexico, pull Mexicans out of unemployment and underemployment, or reduce poverty. By all accounts, it has done just the opposite.

The Verdict Is In

Official statistics show that from 2006 to 2010, more than 12 million people joined the ranks of the impoverished in Mexico, causing the poverty level to jump to 51.3 percent of the population. According to the United Nations, in the past decade Mexico saw the slowest reduction in poverty in all of Latin America.

Rampant poverty in Mexico is a product of IMF and World Bank-led neoliberal policies—such as anti-inflationary policies that have kept wages stagnant—of which “free-trade” pacts like NAFTA are part and parcel. Another factor is the systematic failure to create good jobs in the formal sectors of the economy. During Felipe Calderon’s presidency, the share of the Mexican labor force relying on informal work—such as selling chewing gum and other low-cost products on the street—grew to nearly 50 percent.

Even the wages in the manufacturing sector, which NAFTA cheerleaders argued would benefit the most from trade liberalization, have remained extremely low. According to the Bureau of Labor Statistics, Mexican manufacturing workers made an average hourly wage of only $4.53 in 2011, compared to $26.87 for their U.S. counterparts. Between 1997 and 2011, the U.S.-Mexico manufacturing wage gap narrowed only slightly, with Mexican wages rising from 13 to 17 percent of the level earned by American workers. In Brazil, by contrast, manufacturing wages are almost double Mexico’s, and in Argentina almost triple.

Mexico’s stagnant wages are celebrated by free traders as an opportunity for U.S. businesses interested in outsourcing. According to one report by the McKinsey management consulting firm, “for a company motivated primarily by cost, Mexico holds the most attractive position among the Latin American countries we studied. … Mexico’s advantages start with low labor costs.”

But even as the damning evidence against NAFTA continues to roll in, entrenched advocates of the trade agreement have been busy crafting new arguments. In his recent book, Mexico: A Middle Class Society, NAFTA negotiator Luis De la Calle and his co-author argue that the trade agreement has given rise to a growing Mexican middle class by providing consumers with higher quality, U.S- made goods. The authors proclaim that “NAFTA has dramatically reduced the costs of goods for Mexican families at the same time that the quality and variety of goods and services in the country grew.”

Most of the economic indicators included in the book conveniently fail to account for the 2008-2009 financial crisis, which hit Mexico worse than almost any other Latin American country. The result has been skyrocketing inequality. As the Guardian reported last December, “ever more Mexican families have acquired the trappings of middle-class life such as cars, fridges, and washing machines, but about half of the population still lives in poverty.”

The indicators of consumption that suggest the rise of Mexico’s middle class also exclude the dramatic increase in food prices in recent years, which has condemned millions of Mexicans to hunger. Twenty-eight million Mexicans are facing “food poverty,” meaning they lack access to sufficient nutritious food. According to official statistics, more than 50,000 people died of malnutrition between 2006 and 2011. That’s almost as many as have died in Mexico’s drug war, which dramatically escalated under Calderon and has continued under President Enrique Peña Nieto.

The food crisis has coincided with the “Walmartization” of the country. In 1994 there were only 14 Walmart retail stores in all of Mexico. Now there are more than 1,724 retail and wholesale stores. This is almost half the number of U.S. Walmarts, and far more than any other country outside the United States. The proliferation of Walmart and other U.S. big-box stores in Mexico since NAFTA came into effect has ushered in a new era of consumerism—in part through an aggressive expansion built on political bribes and the destruction of ancient Aztec ruins.

The arguments developed prior to the signing of NAFTA focused primarily on the claim that the trade agreement would make Mexico a nation of producers and exporters. These initial promises failed to deliver. Throughout the NAFTA years, the bulk of Mexico’s manufacturing “exports” have come from transnational car and technology companies. Not surprisingly, Mexico’s intra-industry trade with the United Sates is the highest of any Latin American country. Yet the percentage of Mexican companies that are actually exporters is vanishingly small, and imports of food into Mexico have surged.

Same Snake Oil, Different Pitch

Because their initial promises utterly failed to deliver, the NAFTA pushers are now hyping “consumer benefits” to justify new trade agreements, including the Trans-Pacific Partnership. One of the most extreme examples of this spin is an article in The Washington Post that celebrates a “growing middle class” in Mexico that is “buying more U.S. goods than ever, while turning Mexico into a more democratic, dynamic and prosperous American ally.” Devoid of all logic, it goes on to say that “Mexico’s growth as a manufacturing hub is boosted by low wages.” How can low wages make people more prosperous?

The Post also boasts that in “Mexico’s Costco stores, staples such as tortilla chips and chipotle salsa are trucked in from factories in California and Texas that produce for both sides of the border.” Is this something to celebrate? The influx of traditional Mexican food staples, starting with maize, and goods from the United States has displaced and dislocated millions of Mexican small-scale farmers, producers, and small businesses. And not only that, Mexicans’ increasing consumption of processed foods and beverages from the United States has made the country the second-most obese in the world.

In essence, NAFTA advocates have been reduced to saying: “so maybe NAFTA didn’t help Mexico reduce poverty or increase wages. But hey! At least it gave it Walmart, Costcos, and sweat shops.”

The bankruptcy of NAFTA’s promises is only compounded by the poverty of this consolation.

Facing the Threat of the Trans-Pacific Treaty (ips-dc.org)

March 17, 2013 Posted by aletho | Deception, Economics, Mainstream Media, Warmongering, Timeless or most popular | Bill Clinton, Carlos Salinas de Gortari, Latin America, Mexico, NAFTA, New York Times, North American Free Trade Agreement, United States | Leave a comment

Armistice’s Day Is Done–Contrary to NYT

By Jim Naureckas | FAIR | March 13, 2013

The New York Times (3/8/13), writing about Korean tensions, reported:

The North said this week that it considered the 1953 armistice agreement that halted the Korean War to be null and void as of Monday because of the joint military exercises. The North has threatened to terminate that agreement before, but American and South Korean military officials pointed out that legally, no party [to an] armistice can unilaterally terminate or alter its terms.

“Nonsense,” says Francis Boyle, professor of international law at the University of Illinois (Institute for Public Accuracy, 3/13/13):

An armistice agreement is governed by the laws of war and the state of war still remains in effect despite the armistice agreement, even if the armistice text itself says additions have to be mutually agreed upon by the parties. Termination is not an addition.

Boyle pointed to both U.S. military regulations and international law as evidence that the Times’ claim was wrong:

Under the U.S. Army Field Manual 27-10 and the Hague Regulations, the only requirement for termination of the Korean War Armistice Agreement is suitable notice so as to avoid the charge of “perfidy.” North Korea has given that notice. The armistice is dead.

The Army Field Manual states, “In case it [the armistice] is indefinite, a belligerent may resume operations at any time after notice.” Article 36 of the Hague Regulations says:

An armistice suspends military operations by mutual agreement between the belligerent parties. If its duration is not fixed, the belligerent parties can resume operations at any time, provided always the enemy is warned within the time agreed upon, in accordance with the terms of the armistice.

The New York Times should let its readers know that it allowed anonymous officials to mislead them.

March 14, 2013 Posted by aletho | Deception, Mainstream Media, Warmongering | Francis Boyle, Korean War, New York Times, North Korea | Leave a comment

Chavez in the Crosshairs

By Laura Carlsen | Americas Program | March 12, 2013

You could almost hear the sigh of relief coming out of Washington at the news of Hugo Chavez’s death on March 5.

President Obama issued a brief statement that failed even to offer condolences, forcing a senior State Department official to patch over the evident callousness and breach of diplomacy by offering his personal condolences the following day.

Within moments of Chavez’s death, commercial media and mouthpieces for the U.S. government were verbally dancing on his grave and predicting the imminent demise of Chavismo—Chavez’s political legacy in Venezuela and abroad.

Time headlined its article “Death of a Demagogue.” The New York Times, which bent over backwards to minimize Chavez’s overwhelming victory in Venezuela’s October elections—and later to portray his battle with cancer as a cover-up, mimicking opposition claims—proclaimed that Chávez’s death“casts into doubt the future of his socialist revolution” and “alters the political balance not only in Venezuela, the fourth-largest supplier of foreign oil to the United States, but also in Latin America”—and this in a news article with no sourcing provided.

The Inter-American Dialogue, a U.S. think tank, concluded that “Chavez’s legacy, and the damage he left behind, will not be easily undone,” and predicted that the social gains and regional institutions Chavez built over his political lifetime will soon fall apart and things will soon return to normal—that is, with the United States back in the hemispheric driver’s seat.

Congressman Ed Royce (R-CA) came right out and said “Hugo Chávez was a tyrant who forced the people of Venezuela to live in fear. His death dents the alliance of anti-U.S. leftist leaders in South America. Good riddance to this dictator.”

So why did Washington hate this guy so much?

It never helped that the South American president had a penchant for insulting his adversaries personally. But one supposes that diplomacy rises above name-calling, even if the other guy did it first. The anti-Chavez current in Washington goes far deeper than personal enmity or even political differences.

What scared Washington most about Chavez was not his failures or idiosyncrasies. It was his success.

The official reasons given for demonizing Hugo Chavez don’t hold water. Chavez is accused of restraining freedom of the press in a nation known for its ferociously anti-Chavez private media. And while his Yankee critics called him a dictator, Chavez and his policies won election after election in exemplary electoral processes. You can disagree with his reform to permit unlimited terms in office, but this is the practice of many nations deemed democratic by the U.S. government and considered close allies. And the criticisms of Chavez’s social programs as “patronage” cannot ignore the millions of lives tangibly improved.

Before Chavez turned Venezuela away from the neoliberal model, the nation was a basket case. But throughout his tenure, social indicators that measure real human suffering showed steady improvement. Between 1998, when he was first elected, to 2013 when he died in office, people living in poverty dropped from 43 percent of the population to 27 percent. Extreme poverty dropped from 16.8 percent of the population to 7 percent. According to UNESCO, illiteracy—nearly 10 percent when Chavez took office—has been eliminated. Chavez also reduced childhood malnutrition, initiated pensions for the elderly, and launched education and health programs for the poor.

Venezuela’s human development ranking subsequently climbed significantly under Chavez, reaching the “high” human development category. The programs that Washington scorned as “government handouts” made people’s lives longer, healthier, and fuller in Venezuela.

Now that Chavez is dead, the U.S. press has revived the State Department’s practice of designating the “good left” and the “bad left” in Latin America. Chavez, of course, embodied the “bad left,” while Brazil’s Lula was unilaterally and unwillingly designated the “good left”.

Yet it was Lula da Silva who defended his friend and made the case for Chavez’s lasting positive legacy in the pages of the New York Times. He eulogized the leader and predicted, “The multilateral institutions Mr. Chávez helped create will also help ensure the consecration of South American unity.”

In fact, Chavez’s success in building institutions for alternative regional integration is one of the big reasons Washington hated him. The self-declared anti-capitalist led Venezuela as it joined with regional powerhouse Brazil and other southern cone countries to make a bid to crack the Monroe Doctrine. Along with Andean nations, they also sought, in varying degrees, to wrest control of significant natural resource wealth from transnational corporations to fund state redistribution programs for the poor.

In 2005, Chavez helped scuttle the U.S. goal of a Free Trade Area of the Americas. Later he spearheaded the formation of the Union of South American Nations (Unasur) in 2008. As a Latin American alternative to the U.S.-dominated Organization of American States, the 12-member Unasur proved its value by successfully mediating the Colombia-Ecuador conflict and the Bolivian separatist crisis in 2008. In 2010, Chavez again played a major role with the creation of the Community of Latin American and Caribbean States, made up of hemispheric partners, excluding the United States and Canada.

The Bank of the South, also promoted by Chavez, seeks greater South-South monetary and financial autonomy. As Lula writes in his editorial on Chavez´s death, the Bank offers an alternative to the World Bank and IMF, which “have not been sufficiently responsive to the realities of today’s multipolar world”.

With stops and starts, these initiatives have moved regional integration forward outside the historic model of U.S. hegemony.

U.S. Moves and the Principle of Self-Determination

What happens next? Venezuela held an emotional funeral on March 8 and is planning for April elections. Most predict that Vice President Nicolas Maduro, selected by Chavez as his successor, will win easily. He has the advantage of Chavez’s blessing: a common slogan in Caracas these days is “Chavez, te juro, que voto por Maduro” (“Chavez, I swear, my vote is for Maduro”). Another sign that Chavismo lives on was the thousands of people at the funeral chanting “Chavez didn’t die; he multiplied.”

The State Department views dimly the prospect of an improved U.S.-Venezuela relationship under Maduro. On March 6, the State Department held a press call on which “Senior Official One” (a State Department practice for “background” when its officials apparently don’t want to be identified with their own public statements) said the department was optimistic following Chavez’ death, but that “yesterday’s first press conference, if you will, the first address, was not encouraging in that respect. It disappointed us.”

He referred to a 90-minute address by Maduro, stating that “the enemy” attacked Chavez’s health. The Venezuelan government also announced the expulsion of two U.S. military personnel in Venezuela, allegedly for having contacted members of the Venezuela military to stir up an insurrection.

The State Department noted that it plans “to move ahead in this relationship” by holding conversations in areas of common interest, citing “counternarcotics, counterterrorism, economic or commercial issues including energy.” It added, “We are going to continue to speak out when we believe there are issues of democratic principle that need to be talked about, that need to be highlighted.”

During the Chavez years, U.S. officials and the press went into contortions to avoid congruency with the basic principle that democracy is measured by elections. With Chavez having indisputably won some thirteen elections, the U.S. government applied new criteria to Venezuela along the lines of “democracy can be wrong.” Despite his broad-based support, many went so far as to dub Chavez a “dictator.”

The U.S. government’s commitment to democracy falters when Washington doesn’t like the results. It supported the failed coup against Chavez in 2002 and blocked the return of Honduras’s elected president after the 2009 coup there.

Now all eyes will be on Washington to see whether it upholds another value reiterated by President Obama—the right to self-determination. Will U.S. “democracy-promotion programs” under NED, IRI, and other regime-change schemes resist the temptation to meddle in Venezuela’s April 14 elections? Venezuela without Chavez will be a test of moral and diplomatic integrity for the second Obama administration and John Kerry’s State Department, and a challenge for Congress and the citizenry to monitor and prevent covert activities that interfere with the exercise of democracy.

Unprecedented Show of Support and Honor at the Historic Funeral of Hugo Chávez (alethonews.wordpress.com)
Chavez Is Dead, the Media Are Alive and Kicking (alethonews.wordpress.com)
U.S. and Canada Isolated as Latin American Leaders Acknowledge Chávez’s Regional Leadership (venezuelanalysis.com)

March 14, 2013 Posted by aletho | Deception, Economics, Mainstream Media, Warmongering | Chavez, Hugo Chávez, Latin America, New York Times, Union of South American Nations, United States, Venezuela | Leave a comment

CHAVEZ IS DEAD, THE MEDIA ARE ALIVE AND KICKING

By Pablo Navarrete | Latin America Bureau | March 13, 2013

On Tuesday 5 March, at the age of 58, Venezuelan president Hugo Chávez lost his almost two-year battle with cancer and passed away. Within seconds of the news being announced, the wheels of the global media bandwagon went into overdrive, with largely unsurprising results, in both the US and British media. At the most distasteful end of the spectrum was the headline in the New York Post, the paper with the 7^th highest circulation in the US, that read ‘Off Hugo! Venezuela bully Chavez is dead’.

New York Post Cover on Chávez

Other US media followed closely behind. ‘Death of a Demagogue’ ran a headline on the website of Time, the world’s biggest selling weekly news magazine. These and other US media reaction were included in a piece by the US media watchdog Fair and Accuracy in Reporting (FAIR) that also examined the distorted, often hysterical, US media coverage of Chávez during his presidency. It’s worth recalling that following the 2002 US-supported coup that briefly removed Chavez from the presidency the New York Times declared that Chavez’s “resignation” meant that “Venezuelan democracy is no longer threatened by a would-be dictator.”

Following Chávez’s death, the antipathy towards a president that had so vehemently challenged the actions and interests of the United States was also evident in the British media. Rightwing outlets displayed the usual cynical disdain that had characterised their reporting of Chávez’s presidency, although Nicolas Maduro, Chávez’s former vice-president, the current interim president and the government’s candidate for the April 14th presidential election, was also now in the firing line. In the UK’s biggest selling broadsheet, the rightwing Daily Telegraph, its chief foreign correspondent David Blair described Maduro’s role as foreign minister under Chavez in the following terms: “Mr Maduro was the obedient enforcer of his master’s highly personal foreign policy”. For Blair, Maduro, rather than responsibly representing his government’s foreign policy, was “a loyal purveyor of ‘Chavismo’ around the world”.

The ‘liberal’ left in Britain

Britain’s liberal-left media also offered a timely reminder of where their loyalties lay in relation to Chavez, whose democratic mandate included presiding over 15 national elections since he took office in February 1999, a greater number of elections than were held during the previous 40 years in Venezuela. In a remarkable editorial, The Independent newspaper opined:

“Mr Chavez was no run-of-the-mill dictator. His offences were far from the excesses of a Colonel Gaddafi, say. What he was, more than anything, was an illusionist – a showman who used his prodigious powers of persuasion to present a corrupt autocracy fuelled by petrodollars as a socialist utopia in the making. The show now over, he leaves a hollowed-out country crippled by poverty, violence and crime. So much for the revolution.”

This from a newspaper that in June 2009, following a military coup that overthrew the democratically elected government of President Manuel Zelaya in Honduras, ran an editorial that included the following:

“The ousting of the Honduran President Manuel Zelaya by the country’s military at the weekend has been condemned by many members of the international community as an affront to democracy. But despite a natural distaste for any military coup, it is possible that the army might have actually done Honduran democracy a service.”

The Independent’s competitor in the UK’s liberal-left newspaper market, The Guardian, showed a similarly hostile stance towards Chavez during his presidency. In a piece on the New Left Project website examining the critical UK media coverage of Chavez following his death, Josh Watts noted how the anti-Chavez bias of Rory Carroll, a Guardian journalist and its former Latin America correspondent, “has been extensively documented”. As Samuel Grove noted in a damming 2011 article, Carroll’s Latin America coverage “has attracted widespread criticism for its selectivity and double standards, brazen anti-left bias, and above all slavish loyalty to Western interests”. There is now surely a book’s worth of material exposing Carroll’s distorted Venezuela coverage.

Carroll has managed to take his agenda beyond the confines of The Guardian. For example, in an Al Jazeera English debate on the continued demonisation of Chavez by the Western media that took place three days after Chavez’s death, Carroll repeatedly tried to present Venezuela under Chavez as an economic failure. He repeated this line of attack in a BBC 3 radio interview in late February, where he accused the Chavez government of being responsible for “decay, ruin, waste” in relation to the economy. Contrast this with the rigorous reports on the socio-economic changes under the Chavez presidency by the Washington-based think tank, the Center for Economic and Policy Research (CEPR), which completely undermine Carroll’s narrative of economic failure.

This fact-based approach to appraising elements of the Chavez legacy has not been lost on The Guardian’s associate editor Seumas Milne, who referenced CEPR’s latest report when he tweeted: “Media claims #Chavez ruined #Venezuela‘s economy absurd: here are the facts on growth, unemployment, poverty http://bit.ly/13Nnwno @ceprdc”

It was precisely these socio-economic gains, especially for those in the low-income neighbourhoods known as barrios that encircle Caracas and other Venezuelan cities and who formed Chávez’s support base, that lay behind his popularity and his repeated electoral victories.

Focus on denigrating the individual

Rather than try to explain Chávez’s appeal to large sectors of the Venezuelan population or understand the process of radical change underway in the country, the West’s media class preferred to focus almost entirely on the figure of Chávez. It was precisely this narrative that was so effective in discrediting the Venezuelan process through concealing the role of collective agency, silencing the people from below, and rendering them insignificant. While the mainstream media routinely ignores the voices of the government’s grassroots supporters, they have been instrumental in driving the Venezuelan process forward and should be at the centre of the story.

Thus, when we contrast Chávez’s popularity at home with the open hostility with which Western political elites viewed him, we’re left questioning the motivation behind the anti-Chávez mass media campaign that has systematically misrepresented events in Venezuela.

John Pilger is right when he writes:

“Never has a country, its people, its politics, its leader, its myths and truths been so misreported and lied about as Venezuela.”

Even though Chávez is dead, his vilification by the US and UK media is alive and kicking.

Pablo Navarrete is a LAB correspondent and a PHD student at Bradford University in the UK, researching the political economy of the Chavez presidency. He is also the director of the documentary ‘Inside the Revolution: A Journey into the Heart of Venezuela’ (Alborada Films, 2009). You can watch the documentary online here.

March 14, 2013 Posted by aletho | Deception, Mainstream Media, Warmongering | Chavez, Hugo Chávez, Independent, New York Times, Nicolás Maduro, Rory Carroll, United States, Venezuela | Leave a comment

In the End, Awful Journalism

By Chris Carlson | Venezuelanalysis | March 12th 2013

On the occasion of Venezuelan President Hugo Chavez’s death last week, much of the international media responded in typical fashion, by painting the Chavez administration much as they painted it when Chavez was alive—as an autocratic regime led by a foolish tyrant who mismanaged the country and squandered its oil wealth.

They showed little mercy for the larger-than-life leader, so beloved by the majority in his country, and by millions around the world, giving the impression that Hugo Chavez got almost everything wrong, and did virtually nothing right.

Many of the criticisms have an element of truth to them, as many problems persist in Venezuela. And the press made sure to highlight these problems as evidence of Chavez’s failure, making it sound as if any sensible leader or government in Chavez’s position could have resolved them. But what showed through more than anything in these anti-Chavez tirades was a very revealing, almost embarrassing, misunderstanding of Venezuela’s principal economic and social issues.

“It’s a pity no one took 20 minutes to explain macroeconomics to him,” writes Rory Carroll in an op-ed in the New York Times that claims Chavez was “an awful manager” who destroyed Venezuela. Carroll slams Chavez for everything from failing to fix up the presidential palace, to spending too much on education and health, to not investing enough in infrastructure.

As The Guardian’s correspondent in Venezuela since 2006, Carroll apparently had seen enough to conclude that Chavez had “left Venezuela a ruin”. Yet one wonders if he ever managed to talk to the millions of Venezuelans—those who packed the streets to mourn the president’s death last week—who feel the country has been forever transformed.

For literally days on end, non-stop, all day and all night, people filed through the building where Chavez’s body was displayed to pay their final respects. A line stretched for miles outside, as people waited several days, eating and sleeping in the line, just to see their president one last time. This immense outpouring of emotion is very hard to square with the image Carroll gives us.

It might be an exaggeration to say Chavez transformed the country—though many things were deeply changed—but one doesn’t have to be an expert to know that Venezuela’s problems are more complicated than one man and his personality quirks.

The Economist tells us that Chavez was a “narcissist” who was “reckless” with his country’s economy and who “squandered an extraordinary opportunity”. We are told Chavez could have used the country’s oil wealth to “equip [Venezuela] with world-class infrastructure and to provide the best education and health services money can buy”. But due to mismanagement, “the economy became ever more dependent on oil”. Carroll echoes this, blaming Chavez for a “withering” private sector, and decaying infrastructure.

But apparently these self-proclaimed experts have never taken even the most cursory look at Venezuelan history. Had they done so, they would know that since Venezuela’s oil wealth was first discovered nearly a century ago, no government has ever been able to do what they claim should have been accomplished by the Chavez government.

Past governments have invested the country’s oil wealth in infrastructure, industry, and development projects—though never as much as Chavez—yet not one of them managed to break dependence on oil, diversify the economy, create a flourishing private sector, or build adequate health and education services. Was it because they were all reckless narcissists? Or do these problems perhaps have an explanation that goes deeper than the president’s personal style?

Of course, the truth is much more complex than what the Chavez haters would like to admit. It is true that Chavez did not provide solutions to many of Venezuela’s problems, and that some problems even got worse, but contrary to the media claims, he probably did better than any previous government in Venezuelan history.

One gets the opposite impression from much of the international media. Take a look at the following paragraph from last week’s article in the The Economist:

Behind the propaganda, the Bolivarian revolution was a corrupt, mismanaged affair. The economy became ever more dependent on oil and imports. State takeovers of farms cut agricultural output. Controls of prices and foreign exchange could not prevent persistent inflation and engendered shortages of staple goods. Infrastructure crumbled: most of the country has suffered frequent power cuts for years. Hospitals rotted: even many of the missions languished. Crime soared: Caracas is one of the world’s most violent capitals. Venezuela has become a conduit for the drug trade, with the involvement of segments of the security forces.

Amazingly, almost every sentence in the paragraph is false. Agricultural output did not drop, but rather grew by 2 to 3 percent per year, and grain production, which was the government’s major focus, grew by 140 percent. Inflation was considerably lower under Chavez than the previous two governments. Food shortages and power cuts were caused by the explosion in consumption among the poor, not a fall in production.

Both electricity production and food production have increased to all time highs. Thousands of new health clinics have been built around the country. However, it is true that many hospitals remain inadequate, that crime has soared, and that Venezuela is still a conduit for the drug trade, as it shares a large border with Colombia.

The claims of increased oil dependence are also not borne out by the facts. It is true that oil as a percentage of total exports has increased, but this is largely due to the fact that oil prices have increased nearly ten-fold since Chavez came to power, making it inevitable that their value in relation to total exports would also increase.

The critics say Chavez squandered the country’s oil wealth, which he could have used to transform it into a modern state. Indeed, the oil boom left Venezuela awash in oil money, a situation that Chavez’s policies had a hand in creating, as he united OPEC and increased royalties and taxes on the oil sector, giving the state vastly more funds to work with. If only this “awful manager” knew how to administer the funds, critics say, Venezuela could have been well on its way to becoming a modern, developed nation.

But this is shortsighted. Nations do not develop on the basis of resource wealth or commodity booms. A country cannot spend its way into the first world. Rather, economic development is about systematic growth in productivity, innovation, and technical change, activities that typically fall on the shoulders of the private sector. In the developed world, it is largely the private sector that invests surpluses into new technologies and improvements in the productive process, something that does not occur in Venezuela in a systematic fashion.

Of course, critics and opponents of Chavez argue that this is also the fault of the government, that it is Chavez’s fault for not creating the right environment for private investment, and that with the “right” policies the private sector would decide to invest in the country and would produce the kind of economic development that will benefit all sectors of society. Apparently no Venezuelan government in history has been able to figure out what those “right” policies are.

But this ideology defeats itself with its own logic, for private investors in market economies don’t invest in productivity because they feel like it, or because the conditions are just as they like. They do so because they have to in order to match the competition, to survive in the market, and to avoid going out of business. In modern market economies, producers invest in improving productivity because they are compelled to do so by the market, not because they decide they want to.

The fact that much of the private sector in Venezuela has seldom been compelled to do the same only demonstrates that this economy does not function like the model market economy that these theories are based on.

Huge swaths of the nation’s agricultural land have long been dominated by large estates—the infamous latifundios—that feel very little pressure to improve productivity, and graze cattle on the nation’s best land. The commercial and industrial sectors have long been dominated by highly diversified conglomerates—the so-called grupos económicos—that control key sectors of the economy, and are rarely threatened by competition.

In other words, it goes against these critics’ whole line of reasoning to point out that what really determines whether a country is rich or poor is not commodity booms or resource wealth, but rather has to do with productivity growth—something that has seldom been a priority for much of Venezuela’s private sector.

It’s a pity that no one took 20 minutes to explain this to Rory Carroll, The Economist and others who blame all of Venezuela’s problems on Hugo Chavez, for he did more than any president in history to try to change the unproductive logic of the private sector.

More than 3.6 million hectares of unproductive land were expropriated and redistributed to over 170,000 small producers—far more than the entire 40 years of pre-Chavez land reform. Major sectors of the economy were nationalized, and state companies expanded, in an attempt to improve production, raise investment, and remove bottlenecks. Massive investments were made in agriculture and industry—far more than under previous governments—in an attempt to spur their growth.

Many of these attempts were failures. The growing state sector often allowed for inefficiency and corruption. Chavez’s solutions to the country’s economic and social issues were not always the correct ones.

But the point is that Venezuela’s problems are quite complex and defy easy answers. Previous governments with previous oil booms also failed to resolve the country’s major problems, and did much less to help the poor, something that does not seem to interest those who want to blame everything on Chavez.

Instead of seeking to gain a better understanding of the country’s problems—to understand why they have been so intractable throughout the country’s history—the major media have preferred to vilify and condemn one man; a man who, right or wrong, spent his life trying to solve the problems that plague his country, and was undeniably dedicated to helping the poor; a man who constantly reminded his country’s poor majority that they mattered, that they were not inferior to anyone, and that they should feel proud of their national heritage. That doesn’t sound like a narcissist to me.

March 13, 2013 Posted by aletho | Deception, Economics, Mainstream Media, Warmongering | Chavez, Guardian, Hugo Chávez, New York Times, Rory Carroll, Venezuela | Leave a comment

ACLU and CCR Comment on New York Times Article on Killing of Anwar Al-Aulaqi

ACLU | March 10, 2013

NEW YORK – The American Civil Liberties Union and the Center for Constitutional Rights issued the following statement in response to The New York Times article today detailing the U.S. government’s killings of three U.S. citizens:

“In anonymous assertions to The New York Times, current and former Obama administration officials seek to justify the killings of three U.S. citizens even as the administration fights hard to prevent any transparency or accountability for those killings in court. This is the latest in a series of one-sided, selective disclosures that prevent meaningful public debate and legal or even political accountability for the government’s killing program, including its use against citizens.

“Government officials have made serious allegations against Anwar al-Aulaqi, but allegations are not evidence, and the whole point of the Constitution’s due process clause is that a court must distinguish between the two. If the government has evidence that Al-Aulaqi posed an imminent threat at the time it killed him, it should present that evidence to a court. Officials now also anonymously assert that Samir Khan’s killing was unintended and that the killing of 16-year-old Abdulrahman al-Aulaqi was a mistake, even though in court filings the Obama administration refuses to acknowledge any role in those killings. In court filings made just last week, the government in essence argued, wrongly, that it has the authority to kill these three Americans without ever having to justify its actions under the Constitution in any courtroom.”

The ACLU and CCR are challenging the legality of the drone strike that killed Al-Aulaqi and Khan, as well as the separate strike that killed Al-Aulaqi’s 16-year-old son, Abdulrahman, in Yemen in September and October 2011.

The ACLU is also seeking disclosure of the legal memoranda written by the Department of Justice Office of Legal Counsel that provided justifications for the targeted killing of Al-Aulaqi, as well as records describing the factual basis for the killings of all three Americans, in a separate Freedom of Information Act lawsuit.

More information is at: www.aclu.org/targetedkilling and http://ccrjustice.org/targetedkillings

Justice Department White Paper Details Rationale for Targeted Killing of Americans (alethonews.wordpress.com)

March 11, 2013 Posted by aletho | Civil Liberties, Progressive Hypocrite, Timeless or most popular, War Crimes | Abdulrahman al-Aulaqi, Al-Aulaqi, American Civil Liberties Union, Anwar al-Aulaqi, New York Times, Samir Khan, United States | Leave a comment

Will the U.S. Government, Media Seek to Improve Relations with Venezuela?

By Dan Beeton | CEPR Americas Blog | March 5, 2013

Venezuelan Vice President Nicolas Maduro’s announced today that President Hugo Chávez had died at 4:25pm. According to Venezuela’s constitution [PDF], new presidential elections are supposed to be held within 30 days.

The news could prevent an opportunity for an improvement in U.S.-Venezuelan relations, but that is unlikely. Earlier in the day, Maduro announced that the Venezuelan government would expel the U.S. military attaché for unsanctioned meetings with certain Venezuelan military officers. While this is of course a significant development in U.S.-Venezuela relations that marks yet further deterioration, unfortunately it seems safe to say that most U.S. media outlets will not provide the crucial context necessary in order to understand current relations and why they are so tense.

Maduro mentioned the April 2002 coup d’etat in his press conference today. Declassified C.I.A. and other government documents reveal the U.S. role in that coup against Hugo Chávez. As Scott Wilson, former foreign editor at the Washington Post has explained:

Yes, the United States was hosting people involved in the coup before it happened. There was involvement of U.S.-sponsored NGOs in training some of the people that were involved in the coup. And in the immediate aftermath of the coup, the United States government said that it was a resignation, not a coup, effectively recognizing the government that took office very briefly until President Chavez returned.

I think that there was U.S. involvement, yes.

(Video clip here. This information has however never been reported this fully in the pages of the Washington Post itself.)

The coup was overturned two days later, but before it was the coup regime headed by businessman Pedro Carmona demonstrated its feelings about democratic institutions by dissolving the congress, the supreme court, and the constitution. The New York Times editorial board applauded the coup, writing, “Venezuelan democracy is no longer threatened by a would-be dictator.” The IMF explained that “We stand ready to assist the new administration in whatever manner they find suitable.” After the coup was overturned by Venezuelans in the streets and soldiers loyal to the elected government, and Chávez returned to Caracas from the island where his golpista kidnappers had taken him, the New York Times offered a sheepish apology for its previous applause. The U.S. government and the IMF, however, never apologized for their support for the coup.

It is also important to note that U.S. government interference in Venezuela did not stop there. The U.S. has continued to fund various groups in Venezuela opposed to the government – including political parties and media outlets. The U.S. State Department and entities such as the National Endowment for Democracy also have not disclosed who all of these recipients are, in Venezuela nor in other countries such as Bolivia, where the government has also expelled U.S. diplomats, and where the U.S. media has also done a poor job in providing context behind the deteriorating relations.

More recently, last month U.S. State Department spokesperson Victoria Nuland referred to “how the transition is going to take place” in Venezuela. Not surprisingly, the Venezuelan government also took this to be a form of meddling. Talk of a “transition” was premature, and Nuland’s statement was “nothing less than the open meddling into issues that are for Venezuelans to resolve,” according to Eleazar Diaz-Rangel, editor in chief of Venezuela’s most-widely read – and probably most objective – newspaper Últimas Noticias.

It is hard to imagine U.S. government officials making similar statements if the leader of an ally country such as the U.K. or Israel were fighting for her/his life. But when it comes to Venezuela the behavior fits a pattern of ongoing efforts to undermine the elected government.

It will also be interesting to see how the international community and the media will receive Maduro, should he become Venezuela’s next president. Chávez called on Venezuelans to support Maduro should new elections be necessary, and polls show Maduro would likely win over an Henrique Capriles or another opposition candidate. Both U.S. media outlets and U.S. government officials have often sought to blame poor relations between the U.S. and Venezuela on Chávez’s “fiery” personality; will they do the same with Maduro? Earlier media reports today indicate that the answer is probably yes. Media – and many other observers –also focused much on Chávez’s military background, something that Maduro does not have.

For his part, Maduro got an early taste of U.S. hospitality in 2006 when he was unceremoniously searched at the airport prior to departure back to Venezuela in his first U.S. trip as Venezuela’s Foreign Minister. It was an unfortunate first impression to make on the man who will probably be Venezuela’s next president.

March 6, 2013 Posted by aletho | Mainstream Media, Warmongering, Progressive Hypocrite, Timeless or most popular | Hugo Chávez, Maduro, New York Times, Nicolás Maduro, Scott Wilson, United States, Venezuela | Leave a comment

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.

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)

February 27, 2013 Posted by aletho | Deception, Economics, Mainstream Media, Warmongering | Blackrock, Davidoff, Financial transaction tax, New York Stock Exchange, New York Times | Leave a comment

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.”¹⁰Which 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.”¹⁷Davidson, 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.

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)
Honduras: Miguel Facusse is Tragically Misunderstood (alethonews.wordpress.com)

February 26, 2013 Posted by aletho | Civil Liberties, Deception, Economics, Mainstream Media, Warmongering | Honduras, Human rights, Lobo, Manuel Zelaya, New York Times, Paul Romer | Leave a comment

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By Mahdi Darius NAZEMROAYA | Strategic Culture Foundation | 30.03.2015

The United States and the Kingdom of Saudi Arabia became very uneasy when the Yemenese or Yemenite movement of the Houthi or Ansarallah (meaning the supporters of God in Arabic) gained control of Yemen’s capital, Sanaa/Sana, in September 2014. The US-supported Yemenite President Abd-Rabbuh Manṣour Al-Hadi was humiliatingly forced to share power with the Houthis and the coalition of northern Yemenese tribes that had helped them enter Sana. Al-Hadi declared that negotiations for a Yemeni national unity government would take place and his allies the US and Saudi Arabia tried to use a new national dialogue and mediated talks to co-opt and pacify the Houthis.

The truth has been turned on its head about the war in Yemen. The war and ousting of President Abd-Rabbuh Manṣour Al-Hadi in Yemen are not the results of «Houthi coup» in Yemen. It is the opposite. Al-Hadi was ousted, because with Saudi and US support he tried to backtrack on the power sharing agreements he had made and return Yemen to authoritarian rule. The ousting of President Al-Hadi by the Houthis and their political allies was an unexpected reaction to the takeover Al-Hadi was planning with Washington and the House of Saudi. … continue

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