Category Archives: Latin America

as the empire strikes back in Venezuela, our news media does its bidding (again)

Background

A 2003 documentary entitled The Revolution Will Not Be Televised (Spanish: La revolución no será transmitida) provides a fascinating insight and behind the scenes account of the US-backed but failed Venezuelan coup of April 2002. Irish filmmakers Kim Bartley and Donnacha Ó Briain, who had been given direct access to Hugo Chavez with the intention only of making a fly-on-the-wall biography, suddenly finding themselves trapped in the midst of quite extraordinary political turmoil and turnaround:

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If at first you don’t succeed…

NEUMANN: Thank you very much. Vanessa Neumann, Asymmetrica. I am a dual America and Venezuelan citizen. So here goes my question, because we’re not covering anything about Western Hemisphere in this forum. Obviously Maduro in Venezuela regime change looks to be, we hope imminent or spiraling down until we either become Cuba in two weeks time or – and die forever or there’s a change in 60 to 90 days. I’m interested in your open assessment on American interests in or threats from Venezuela and which of course has Russian, Iranian et cetera interests and – for the region. Thank you, sir.

POMPEO: So I appreciate the question. At any time you have a country as large and with the economic capacity of a country like Venezuela, America has a deep interest in making sure that it is stable, as democratic as possible. And so, we’re working hard to do that,

I am always careful when we talk about South and Central America and the CIA, there’s a lot of stories.

(Laughter)

POMPEO: So I want to be careful with what I say but suffice to say, we are very hopeful that there can be a transition in Venezuela and we the CIA is doing its best to understand the dynamic there, so that we can communicate to our State Department and to others. The Colombians, I was just down in Mexico City and in Bogota a week before last talking about this very issue trying to help them understand the things they might do so that they can get a better outcome for their part of the world and our part of the world.1

This exchange between Mike Pompeo, Head of the CIA, and businesswoman Vanessa Neumann took place during a Q&A session at a security forum organised by the foundation funded Aspen Institute ‘think tank’. It is an admission that the US is once again covertly engaged in a regime change operation in “America’s backyard”.

Click here to read more in an article entitled “CIA chief hints agency is working to change Venezuela government” published by The Independent on July 25th.

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Whenever the media fixates on street protests in far-flung corners of the world (especially regions that it ordinarily overlooks) it is advisable to be on your guard. Check the vocabulary and consider honestly whether the coverage betrays an unspoken allegiance of any kind. Ask the obvious question: is there a colour revolution taking place?

Consider, for instance, how comparable events at home would be described, or happening elsewhere in the western world, say on the streets of other allied powers, and if, for instance, ‘protesters’ began torching barricades or hurling Molotov cocktails at those police lines? At what point would levels of violence in Britain, Europe and America be condemned and police retaliation deemed proportionate and necessary? Now consider this:

A police helicopter launched grenades at Venezuela’s supreme court building on Tuesday evening following months of protests against the country’s president, Nicolás Maduro.

Maduro said “terrorists” had lobbed two grenades that failed to detonate. Some reports put the number of grenades higher. Local media suggested a former police intelligence officer had carried out the attack.

This is how Guardian journalist Virginia López decided to report an armed assault against Venezuela’s Interior Ministry and Supreme Court little more than a month ago on June 28th. So imagine for a moment if a similar attack were carried anywhere inside Europe, America, Canada, Australia, Israel, or even inside one of our despotic client Gulf States – would apostrophes be inserted around the word “terrorists” or Maduro’s reference to the incident as an “act of terrorism”? By any definition, the unlawful use of violence in the pursuit of political aims is an act of terrorism.

Shortly afterwards, video was released (embedded above) featuring former captain in the CICPC, Venezuela’s intelligence and investigative body, Oscar Pérez, the alleged pilot of the helicopter. Flanked by masked men with assault rifles, Pérez read out a statement: “We are nationalists, patriots, and institutionalists. This fight is not with the rest of the state forces, it is against the tyranny of this government”. Details are given in the Guardian piece and commented upon as follows:

Later, information minister Ernesto Villegas read a statement accusing the helicopter of firing 15 shots against the interior ministry as a reception was taking place for 80 people. It then flew a short distance to the government-stacked supreme court, which was in session, and launched what he said were four Israeli-made grenades of “Colombian origin”, two of them against national guardsmen protecting the building.

The president of the high court said there were no injuries from the attack and that the area was still being surveyed for damages. Villegas said security forces were being deployed to apprehend Pérez, who the government accused – without giving evidence – of working under the instructions of the CIA and the US embassy in Caracas, as well as to recover the helicopter.

Many of Maduro’s opponents accused the president on social media of orchestrating an elaborate ruse to justify a crackdown against Venezuelans seeking to block his plans to rewrite the constitution.2

Thus, official government accusations of CIA involvement are presented as “without evidence”, whereas opposition accusations on social media rumouring that Maduro was “orchestrating an elaborate ruse” go unchallenged. In this fashion, the Guardian is rather quick to divert attention from US meddling for which there is a great deal of historical precedence, and perfectly happy to accuse the Venezuelans of orchestrating a ‘false flag’ attack without any supporting evidence. In fact, in a follow up article later the same day, López writes:

But on Wednesday, speculation was growing that the incident may have been staged by a government eager to divert attention from three months of protests, fueled by mounting anger at the country’s chronic lack of basic foods and medicines.

Julio Borges, president of the opposition-led assembly, said that he and other opponents of Maduro were still analysing the events.

“It seems like a movie,” he said. “Some people say it is a set-up, some that it is real … but I summarize it like this: a government is decaying and rotting, while a nation is fighting for dignity,” he added.

It soon emerged that Perez had an active Instagram account with images of him posing in fatigues with a German shepherd dog, horse riding, and scuba diving while clutching a rifle. The account has since been deleted.

He also has an eclectic CV which included a starring role in a 2015 action movie called Suspended Death in which he played an investigator rescuing a kidnap victim.

Beneath the strapline “some speculate that Oscar Perez’s actions were an orchestrated distraction from the Maduro regime’s further consolidation of power”, the same piece continues:

But skeptics questioned how an aircraft was allowed to circle above such sensitive government buildings in a city where even drones are illegal.

No other members of the police or armed forces have joined or expressed support for Perez.

“If the incident of the helicopter is a hoax, it means the regime is desperate, and if it was a coup attempt and no one defended it, then it’s even worse,” said one Twitter user.

Adding:

And the attack came hours after one of the worst outbreaks of looting since protests erupted in April. For most of Monday night and Tuesday the city of Maracay – which is home to one of the country’s most important military bases – was wracked by a wave of unrest in which at least 64 shops were sacked. It is unclear why the National Guard was unable to contain the rioting.

Before finally concluding:

“Regardless of whether this was a hoax or an act by a lunatic, the impact is the same: it suggests that the government is entering a new stage and willing to escalate violence,” said Phil Gunson, a senior analyst at the International Crisis Group.

“It seems the government is trying to find the right level of repression that can put the ‘genie back in the bottle’.” 3

Apparently then – according to the Guardian as it quotes directly from Soros funded International Crisis Group 4– it doesn’t actually matter whether this attack with grenades against the government and the Supreme Court was a hoax or not because “the impact is the same”. Either way, Maduro and his ‘regime’ is to blame!

In February 2014, Abby Martin spoke on RT’s “Breaking the Set” with Eva Golinger, author of the “Chavez Code”, about the Western backed ‘resistance groups’ and how there is a coup already underway in Venezuela:

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It’s the economic war, stupid!

The political and economic crisis facing Venezuela is being endlessly pointed to as proof of the superiority of the free market.

Images and portrayals of Venezuelans rioting in the streets over high food costs, empty grocery stores, medicine shortages, and overflowing garbage bins are the headlines, and the reporting points to socialism as the cause.

The Chicago Tribune published a Commentary piece titled: “A socialist revolution can ruin almost any country.” A headline on Reason’s Hit and Run blog proclaims: “Venezuelan socialism still a complete disaster.” The Week’s U.S. edition says: “Authoritarian socialism caused Venezuela’s collapse.”

So begins an article by Caleb T. Maupin published a year ago. Maupin continues:

In reality, millions of Venezuelans have seen their living conditions vastly improved through the Bolivarian process. The problems plaguing the Venezuelan economy are not due to some inherent fault in socialism, but to artificially low oil prices and sabotage by forces hostile to the revolution.

Starting in 2014, the Kingdom of Saudi Arabia flooded the market with cheap oil. This is not a mere business decision, but a calculated move coordinated with U.S. and Israeli foreign policy goals. Despite not just losing money, but even falling deep into debt, the Saudi monarchy continues to expand its oil production apparatus. The result has been driving the price of oil down from $110 per barrel, to $28 in the early months of this year. The goal is to weaken these opponents of Wall Street, London, and Tel Aviv, whose economies are centered around oil and natural gas exports.

Venezuela remains a deeply divided country and there is no doubt that the government under Maduro is at fault in part for the current economic crisis, but as Maupin points out, the opposition is extremely fractured and many do not wish to see a return to the rampant neo-liberalism of the pre-Chavez era:

The artificially low oil prices have left the Venezuelan state cash-starved, prompting a crisis in the funding of the social programs that were key to strengthening the United Socialist Party.

It is odd that the mainstream press blames “socialism” for the food problems in Venezuela, when the food distributors remain in the hands of private corporations. As Venezuelan political analyst Jesus Silva told me recently: “Most food in Venezuela is imported by private companies, they ask for dollars subsidized by the government oil sales to do that; they rarely produce anything or invest their own money.”

According to Silva, the economic sanctions imposed on Venezuela by the U.S., in addition to the oil crisis, have made it more difficult for the Venezuelan government to pay the private food importing companies in U.S. dollars. In response, the food companies are “running general sabotage.”

“Venezuela’s economy depends on oil sales. Now that oil prices are dropping down, the challenge is to get other sources of economic income,” he explained. “Meanwhile, the opposition is garnering electoral support due to the current economic crisis.” […]

While a clear majority cast a voto castigo (“punishment vote”) in December, punishing the government for mismanaging the crisis, the Maduro administration has a solid core of socialist activists who remain loyal to the Bolivarian project. Across Venezuela, communes have been established. Leftist activists live together and work in cooperatives. Many of them are armed and organized in “Bolivarian Militias” to defend the revolution.

Even some of the loudest critics of the Venezuelan government admit that it has greatly improved the situation in the country, despite the current hardships.

In December, I spoke to Glen Martinez, a radio host in Caracas who voted for the opposition. He dismissed the notion that free market capitalism would ever return to Venezuela. As he explained, most of the people who voted against the United Socialist Party — himself included — are frustrated with the way the current crisis is being handled, but do not want a return to the neoliberal economic model of the 1999s.

He said the economic reforms established during the Chavez administration would never be reversed. “We are not the same people we were before 1999,” Martinez insisted.5

Click here to read the full article entitled “US-Led Economic War, Not Socialism, Is Tearing Venezuela Apart”

Last November Al Jazeera invited Economist and former Venezuelan Planning Minister Ricardo Hausmann to debate with former Hugo Chavez adviser Temir Porras on “UpFront”:

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The Empire never gives up

‘Dictator’ is the epithet of choice the corporate media dishes out whenever it wishes to denigrate foreign leaders not fully subordinate to western interests. Likewise, ‘regime’ operates as a preferred synonym to denounce the members of every government hostile to Anglo-American imperialism. Hugo Chavez was routinely branded a ‘dictator’ even though he fought and won more elections than any other contemporary world leader. Like Chavez before him, Nicolás Maduro is the elected head of a democratic state.

Conversely, the media has its blinkers firmly attached whenever exalting those in opposition to a targeted ‘regime’. ‘Rioters’ become more benign ‘protesters’, and ‘insurgents’, ‘separatists’ or ‘terrorists’ are elevated to the level of ‘freedom fighters’. Thus in Libya, the murderous salafist gangs who lynched black Africans were portrayed as the valiant ‘rebels’. In Ukraine the brown-shirted brigades that gathered under wolfsangels and swastikas were heralded as Europhile crusaders for democracy – at one point the BBC actually embedded one of its journalists within the ranks of the neo-Nazi Azov Battalion. And in Syria, the al-Qaeda affiliated ‘rescue workers’ known as the White Helmets became the ‘indomitable first responders’ of an Oscar-winning documentary – they have also been promoted by human rights organisations including Amnesty International. Indeed, with the arrival of ISIS, some purportedly less savage though self-proclaimed al-Qaeda militia have come in for more favourable mainstream coverage – take for instance this BBC Newsnight report.

Yet the propaganda coverage of the crisis suddenly engulfing Venezuela is arguably more egregious again. For unlike each of the cases cited above, the West is not (at least not officially) engaged in any conflict inside Venezuela. Indeed, the fog of war offers no excuse for comparable lapses in journalistic integrity. Furthermore, recent history ought to make all journalists extremely cautious when it comes to covert US-led intervention in Latin America and suspicious of opposition claims in Venezuela especially given what we know about the last failed coup. Here is a New York Times editorial the day after Hugo Chavez was kidnapped and military junta briefly installed in April 2002:

UPRISING IN VENEZUELA: THE GOVERNMENT; VENEZUELA’S CHIEF FORCED TO RESIGN; CIVILIAN INSTALLED

By JUAN FORERO APRIL 13, 2002

A transitional government headed by a leading businessman replaced President Hugo Chavez today, hours after military officers forced him to resign. It was a sudden end to the turbulent three-year reign of a mercurial strongman elected on promises to distance his country from the United States while uprooting Venezuela’s old social order —

Pedro Carmona Estanga, the head of Venezuela’s most important business association, was installed as interim president at a ceremony at 6 p.m. He promised that the new government would adhere to “a pluralistic vision, democratic, civil and ensuring the implementation of the law, the state of law.”

Elections will be held within a year, officials said. The Bush administration laid the blame for Mr. Chavez’s overthrow firmly with the ousted leader. Officials portrayed the ouster as a victory for democracy —

And here is the New York Times offering a retraction (of sorts) the following day:

Popular Uprising Allows Chavez to Reclaim Venezuelan Presidency

By GINGER THOMPSON and JUAN FORERO APRIL 14, 2002

Two days after one huge political movement forced President Hugo Chavez of Venezuela out of power, a countervailing uprising that swept like wildfire through the slums surrounding the capital carried the populist leader back to the presidency today.

Once in power, the short-lived interim government, led by a prominent businessman, Pedro Carmona Estanga, dismantled the National Assembly, fired the ministers of the Supreme Court, arrested high-level members of the Chavez government and sent others into hiding.

The new government announced that Mr. Chavez had resigned from power. But word began to spread mostly through international television news reports that Mr. Chavez had not resigned. His followers in slums and poor towns across the country began to worry for his safety. They took to the streets to demand that Mr. Chavez be freed. And they won.

The extracts above are drawn from a well-sourced and recent article entitled “Venezuela Regime Change Project Revealed” written by David William Pear and published on August 6th. Note that even after the coup which admittedly “dismantled the National Assembly, fired the ministers of the Supreme Court, arrested high-level members of the Chavez government and sent others into hiding” has failed, the NYT continues to describe the criminals behind the coup as a “short-lived interim government”.

As Pear says:

The Bush Administration, the New York Times and the mainstream media showed no remorse or shame—the U.S. government continued to watch and undermine the Chavista movement, Venezuela’s Bolivarian Socialism, in any way that it can. The U.S. continues to be involved and fund a long-term regime change project. The Empire never gives up. 6

Click here to read a post entitled “the Latin American Spring they never mention” published to mark the death of Hugo Chavez in March 2013.

On May 11th political activist and analyst, Tariq Ali, discussed the worsening situation in Venezuela on TeleSUR:

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1 From official transcript of “Aspen Security Forum 2017: The View From Langley” on July 20, 2017, published by The Aspen Institute. http://aspensecurityforum.org/wp-content/uploads/2017/07/The-View-from-Langley.pdf

2 From an article entitled “Venezuela: police helicopter attacks supreme court with grenades” written by Virginia López, published in the Guardian on June 28, 2017. https://www.theguardian.com/world/2017/jun/28/venezuela-supreme-court-grenade-police-helicopter

3 From an article entitled “Patriot, or government plant? Rumors fly over Venezuela helicopter attack” written by Virginia López, published in the Guardian on June 28, 2017. https://www.theguardian.com/world/2017/jun/28/venezuela-helicopter-attack-oscar-perez-rumors

4 Board Members of ICG include Zbigniew Brzezinski, Wesley Clark and George Soros. Soros, Chairman of the Open Society Institute (listed in the donors below), also sits on the ICG Executive Committee.

Foundation and private sector donors include The Atlantic Philanthropies; Carnegie Corporation of New York; Ford Foundation; Bill & Melinda Gates Foundation; Flora Hewlett Foundation; Henry Luce Foundation; John D. & Catherine T. MacArthur Foundation; John Merck Fund; Charles Stewart Mott Foundation; Open Society Institute; Ploughshares Fund; Sigrid Rausing Trust; Sasakawa Peace Foundation; Sarlo Foundation of the Jewish Community Endowment Fund; United States Institute of Peace; and Fundacão Oriente.

From Sourcewatchhttp://www.sourcewatch.org/index.php/International_Crisis_Group#Foundation_and_private_sector_donors_include

5 From an article entitled “US-Led Economic War, Not Socialism, Is Tearing Venezuela Apart” written by Caleb T. Maupin, published in Mint Press News on July 12, 2016. http://www.mintpressnews.com/us-led-economic-war-not-socialism-tearing-venezuela-apart/218335/

6 From an article entitled “Venezuela Regime Change Project Revealed” written by David William Pear, published in Off-Guardian on August 6, 2017. https://off-guardian.org/2017/08/06/venezuela-regime-change-project-revealed/

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Filed under analysis & opinion, did you see?, Venezuela

one month after Ukraine’s revolution: reviewing the hype, the hypocrisy and the hysteria

During the last month or so, filtering out the lies, the half-truths and the outright nonsense in search of any semblance of truth about what’s happening in Ukraine has been an exceptionally tricky business. Propaganda has been flooding in from all sides (certainly if we were prepared to look from all sides) and the bias in the coverage has been as unstinting as it remains deliberately bamboozling.

So what can we now say with any guaranteed certainty about the situation in Ukraine? Well, firstly, and most obviously, there has been a revolution, although in saying this we should remember that this was an uprising – an insurrection – which ended in a bloodbath.

The only other uncontested facts are really these: that when the democratically elected though hugely corrupt government in Kiev was overthrown and replaced by a self-elected transitional government, Viktor Yanukovych, the former President of Ukraine immediately fled to Moscow and declared the new authorities illegitimate. Following this, Putin then deployed forces in the Crimea to “restore law and order”. A military offensive that has been widely interpreted as an act of extreme aggression, even a declaration of war, and a further indication of Russia’s return to Soviet-style expansionism.

The hype

Before continuing, I would like to recommend a different article – one published by antiwar.com entitled “What Color is Ukraine’s ‘Color Revolution’?” Here are just a few extracts drawn from the beginning, middle and end:

As the real nature of Ukraine’s “democratic” and allegedly “pro-Western” opposition becomes all too apparent, the pushback from the regime-change crowd borders on the comic. The War Party is stumbling all over itself in a frantic effort to cover up and deny the frightening provenance of the neo-fascist gang they’ve helped to seize power in Kiev. […]

Outside the “we are all Ukrainians now” bubble, however, people are sitting up and taking notice. A Reuters piece spotlights the general uneasiness about the exact color of this latest US-sponsored “color revolution”:

“When protest leaders in Ukraine helped oust a president widely seen as corrupt, they became heroes of the barricades. But as they take places in the country’s new government, some are facing uncomfortable questions about their own values and associations, not least alleged links to neo-fascist extremists.” […]

I don’t know which is more alarming: the entrance into government of a party that traces its origins back to a fighting battalion affiliated with Hitler’s SS, or the sight of US officials whitewashing it. They’re flying the Confederate flag and the Celtic cross in Kiev, and the first African American President is hailing them as liberators. That’s one for the history books!1

Click here to read the full article.

Key to separating a little of the wheat from the chaff requires a clearer picture of the following: i) What were the people in the square protesting about? ii) What kind of protest was taking place? iii) Who were the leaders?

So let’s take each of these points in order:

i) Demands of the Maidan

I touched on this in an earlier extended post, but to recap relatively briefly here: the protesters were united primarily because of their strong opposition to the ruinous and kleptocratic presidency of Yanukovych. The majority also appear to have been demanding closer ties with the EU and so we saw quite a number of tattered EU flags fluttering above the square.

Scratch the surface just a little, however, and we learn that the protesters were most angered by the Ukrainian government’s acceptance of a Russian bailout package worth $15 billion. On paper at least, the Russian deal was far better than the EU’s alternative, but many Ukrainians who are fearful of Russia (justifiably so), were quick to point out that “the only place you find free cheese is in a mousetrap”. In other words, they wanted to know where the Kremlin wished the strings to be attached.

Yanukovych was not the Russian puppet he has been often been portrayed as, but a man desperately struggling to get out off a hole of his own making and seeking help wherever he could find it (East or West). With his downfall, the new transitional government is now led by the former banker Arseniy Yatseniuk. “Yats” was, if you recall, the man preferred by Washington as Victoria Nuland’s leaked phone call so embarrassingly revealed. It is also worth pointing out that Yatseniuk is a co-founder of the Open Ukraine Arseniy Yatseniuk Foundation, “a nonpartisan international philanthropic foundation” (according to wikipedia), which has partners including Chatham House, The United States Department of State, and Nato. Strange bedfellows for a philanthropic foundation, one might think.

And here is what Yatseniuk told the press soon after his appointment as Ukraine’s interim Prime Minister:

“We are to undertake extremely unpopular steps as the previous government and previous president were so corrupted that the country is in a desperate financial plight,” Mr Yatsenyuk told BBC Ukrainian.

“We are on the brink of a disaster and this is the government of political suiciders! So welcome to hell,” he added.2

The kamikaze mission Yatsenyuk has in mind will involve Greek-style austerity measures, served up very much to the satisfaction of the IMF and EU. So welcome to hell indeed!

For further details on the Russia and EU deals, as well as Victoria Nuland’s support for Yatseniuk, I refer you again to related sections in the post linked above.

ii) The protests

The protests in Independence Square were far from peaceful. Evidently, amongst the crowds there were many peaceful individuals and so whenever the BBC and Channel 4 reported from the square they were keener to draw attention to this non-violent contingent. It was even possible to make lazy comparisons to earlier pro-democracy demonstrations. We saw the tents, the soup kitchens, the banners and, occasionally, the poets! Here was Occupy Kiev, although rapidly spreading as it won over hearts and minds across the country to eventually become Occupy Ukraine. And according to the early accounts, every reasonable Ukrainian was chipping in to help the Maidan. These were our first impressions.

Amongst the ordinary protesters, however, there were others who appeared more sinister. Dressed for battle in WWII-style army helmets, and often marching in columns, like an army. The police locking shields like Roman legions in vain attempts to fend off a furious bombardment of sticks, rocks and petrol bombs. Well, Occupy Ukraine is more heavy duty, but that’s okay we were gently reassured. And the same news reports that implied that it was fine to rip up cobblestones, smash them up on a makeshift revolutionary production line, and catapult them at the police lines, also showed Kiev ablaze with barricades of burning tyres and looted government buildings.

During Channel 4‘s coverage on the eve of the main battle, Wednesday [Feb 19th], their Europe Correspondent Matt Frei revealed that some of the protesters were filling up hundreds of plastic bottles with petrol and polystyrene fragments which, he then explained, would cause the Molotov Cocktails to stick like napalm. So arson too was presented as not only an acceptable form of civil disobedience but a tactic requiring impressive levels of commitment and hard work – which it does – but let’s face it, if a similar situation was unfolding in London, with rivers of fire and the streets engulfed by clouds of acrid smoke, the protesters would be have been called “rioters”. Instead, we were constantly given to understand that the Maidan occupied the moral high-ground, even when evidence indicating the contrary was being simultaneously shown to us.

And then we must come to the vitally important question of who ordered snipers to open fire on the protesters. The western media has always been very clear about this (at least to begin with) – it was the Berkut who carried out government orders to shoot the protesters. But, there is an alternative version of events. When first reported upon, it was rather quickly sidelined as “a conspiracy theory”. Here, for example, is a Guardian report from March 5th:

A leaked phone call between the EU foreign affairs chief Catherine Ashton and Estonian foreign minister Urmas Paet has revealed that the two discussed a conspiracy theory that blamed the killing of civilian protesters in the Ukrainian capital, Kiev, on the opposition rather than the ousted government.

Embedded below is a recording of that intercepted phone conversation although I should warn you that there are also extremely graphic images overlaid. The controversy surrounds what Paet says to Ashton about 8 mins into the call – it is also transcribed by the Guardian in the same article that continues beneath the video:

The 11-minute conversation was posted on YouTube – it is the second time in a month that telephone calls between western diplomats discussing Ukraine have been bugged.

During the conversation, Paet quoted a woman named Olga – who the Russian media identified her as Olga Bogomolets, a doctor – blaming snipers from the opposition shooting the protesters.

“What was quite disturbing, this same Olga told that, well, all the evidence shows that people who were killed by snipers from both sides, among policemen and people from the streets, that they were the same snipers killing people from both sides,” Paet said.

“So she also showed me some photos, she said that as medical doctor, she can say it is the same handwriting, the same type of bullets, and it’s really disturbing that now the new coalition, that they don’t want to investigate what exactly happened.”

“So there is a stronger and stronger understanding that behind snipers it was not Yanukovych, it was somebody from the new coalition,” Paet says.

Ashton replies: “I think we do want to investigate. I didn’t pick that up, that’s interesting. Gosh,” Ashton says.3

This opinion expressed by Paet is not quite as extraordinary as the Guardian report would have us believe. Snipers have been used to provoke revolutionary fervour on past occasions, the best known example happening during the Miraflores confrontation in Caracas, Venezuela during a violent uprising and failed attempt to oust Hugo Chavez in April 2002. You can read more on this in another earlier post.

So I would beg to differ with the Guardian‘s rather easy dismissal of Paet’s claims. “False flag attacks” are irrefutably a part of history.

You can click here to read their full report.

More recently [Sat 8th], Associated Press released an article backing up claims that the sniper attacks had been a provocation. It begins:

On Wednesday Paet confirmed the recording was authentic, and told reporters in Tallinn that he was merely repeating what Bogomolets had told him. He said he had no way of verifying the claims, though he called Bogomolets “clearly a person with authority.”

Bogomolets couldn’t be immediately reached by the AP for comment. She did not answer repeated calls to her cellphone or respond to text messages.

In an interview earlier this week with a correspondent from British newspaper The Telegraph, Bogomolets said she didn’t know if police and protesters were killed by the same bullets, and called for a thorough investigation.

“No one who just sees the wounds when treating the victims can make a determination about the type of weapons,” she was quoted as saying. “I hope international experts and Ukrainian investigators will make a determination of what type of weapons, who was involved in the killings and how it was done. I have no data to prove anything.”

However, according to the same report, support for the “conspiracy theory” appears to be growing in Kiev, although, in admitting the claims of Paet, members of the transitional government point not to factions within the Ukrainian opposition (and why would they?) but to Russia instead:

Ukrainian authorities are investigating the Feb. 18-20 bloodbath, and they have shifted their focus from ousted President Viktor Yanukovych’s government to Vladimir Putin’s Russia — pursuing the theory that the Kremlin was intent on sowing mayhem as a pretext for military incursion. Russia suggests that the snipers were organized by opposition leaders trying to whip up local and international outrage against the government. […]

“I think it wasn’t just a part of the old regime that (plotted the provocation), but it was also the work of Russian special forces who served and maintained the ideology of the (old) regime,” [Ukrainian] Health Minister Oleh Musiy said. […]

On Tuesday, Interior Minister Arsen Avakov signaled that investigators may be turning their attention away from Ukrainian responsibility.

“I can say only one thing: the key factor in this uprising, that spilled blood in Kiev and that turned the country upside down and shocked it, was a third force,” Avakov was quoted as saying by Interfax. “And this force was not Ukrainian.”4

Click here to read the full Associated Press report.

So we might ask ourselves, whether Russia would be likely to send snipers in order to destabilise an already dangerous situation in the hope of covertly toppling Yanukovych, so that it might later seize on the chaos in order to annex the Crimea – “the Kremlin was intent on sowing mayhem as a pretext for military incursion”, as the Associated Press article suggests.

If so, then why has the West not drawn our fuller attention back to the leaked phone call? Indeed, why were the claims made by Estonian Foreign Minister Urmas Paet, first publicised by Russia Today, and then either ignored or dismissed as a “conspiracy theory” by western media? Was all this somehow a part of the same Kremlin plot?

iii) The leaders of the Maidan

Embedded below is a promotional video for a faction of the Maidan known as the “Right Sector”:

Right Sector have all the hallmarks of an extreme-right group because they are one. And disturbingly, in Ukraine, Right Sector are not alone – though they appear to be the most hardline of Ukraine’s neo-Nazi groups. As you can see from the video above, they were also a big part of the paramilitary wing of the Maidan protests.

A BBC news report (released soon after the dust had settled) calls attention to the fact that with the removal of Yanukovych, Right Sector became one of the biggest winners from the crisis:

The 42-year-old [Dmytro Yarosh, who is head of the fascist Stepan Bandera All-Ukrainian Organization or “Tryzub”] leads the paramilitary movement known as Right Sector, which was involved in violent clashes with the police in Kiev and considers the far-right party Svoboda “too liberal”. [I will come to Svobado next]

Advocating a “national revolution”, he dismissed the Yanukovych administration as an “internal occupation regime” and wants to ban both the former ruling party and its ally, the Communist Party.

There is pressure from the Maidan demonstrators to give him a security-related post in the new government, possibly as Mr Parubiy’s deputy.5

Click here to read the full BBC news report entitled “Ukraine crisis: Key Players”.

Another BBC news report from the previous day told us a little more:

Ukraine’s new interim government has been presented at Kiev’s main protest camp, the Maidan, following last week’s ousting of President Viktor Yanukovych.

The Maidan council named Arseniy Yatsenyuk to become prime minister. The cabinet – to be voted on by MPs on Thursday – includes leading activists. […]

Overall Maidan commander Andriy Parubiy – who commands huge respect among the protesters – was named candidate for secretary of the National Security and Defence Council

Andriy Parubiy is a neo-Nazi too, but we can deal with him in a second. The same article goes on:

However, some of the nominations – including that of Mr Avakov – prompted loud booing from the crowd, who said those candidates were not worthy of government posts.

People also chanted “Yarosh! Yarosh!”, demanding that the leader of the Right Sector, Dmytro Yarosh, be given a post. [the bold emphasis is added]6

Click here to read the full BBC news article.

But then, on the eve of the bloodiest night of the protest, at the end of Thursday evening’s Channel 4 news broadcast on Feb 20th, Matt Frei had already more casually let the cat out of the bag. Standing next to him was Yuriy Levchenko, captioned as spokesmen of “the far-right party Svoboda”, and Matt Frei was there to interview him in the politest possible way. What Frei might have asked, but didn’t, was why did his ultra-nationalist party with a name that now translates as “freedom” change from being “the Social-National Party” when it was founded in 1991. Back then they had also identified themselves with a symbol called the Wolfsangel, which looks like this:

The similarity to the swastika is not accidental, as this report from Der Spiegel published last month explains:

The Svoboda party also has excellent ties to Europe, but they are different from the ones that Klischko might prefer. It is allied with France’s right-wing Front National and with the Italian neo-fascist group Fiamma Tricolore. […]

In a 2012 debate over the Ukrainian-born American actress Mila Kunis, he said that she wasn’t Ukrainian, rather she was a “Jewess.” Indeed, anti-Semitism is part of the extremist party’s platform; until 2004, they called themselves the Social-National Party of Ukraine in an intentional reference to Adolf Hitler’s National Socialist party. Just last summer, a prominent leader of party youth was distributing texts from Nazi propaganda head Joseph Goebbels translated into Ukrainian.7

Click here to read the full article from Der Spiegel International.

And embedded below you can watch Yuriy Levchenko as Svoboda candidate complaining to France 24 following his defeat in the October 2012 parliamentary elections. Please judge for yourself whether Levchenko appears to be a neo-Nazi:

But in fairness to Matt Frei, he wasn’t the first to rub shoulders with the far-right extremists in this latest Ukrainian uprising. Back in December, neo-con Senator John McCain was very happy to join Oleh Tyahnybok, leader of the Svoboda party, and already a member of the Ukrainian parliament – indeed, one of thirty-eight Svoboda candidates who won seats in the last election – on the stage in Independence Square during a mass rally:

It was Oleh Tyahnybok along with Andriy Parubiy (remember him? – the recently appointed Secretary of the National Security and Defence Council of Ukraine) who in 1995 had jointly founded the Social-National Party of Ukraine (SNPU), which has since been rebranded as Svoboda. And Dmytro Yarosh (leader of the even more odious Right Sector who the crowds were chanting for – at least according to that BBC news article) has indeed since been appointed as Parubiy’s deputy.

So are there fascists in the new government? Yes. Are they in positions of influence? Well, aside from Parubiy and Yarosh who now jointly oversee national security, and Oleh Tyahnybok, of course, there is also:

The new Deputy Prime Minister Oleksandr Sych is a member of the far-right Svoboda party, which the World Jewish Congress called on the EU to consider banning last year along with Greece’s Golden Dawn.

The party, which has long called for a “national revolution” in Ukraine, has endured a long march from relative obscurity in the early 90s. Their declaration that Ukraine is controlled by a “Muscovite-Jewish mafia” has raised fears for the safety of the country’s Jewish population.

Svoboda now controls the ecology and agricultural ministry with Andriy Mokhnyk, the deputy head of Svoboda, running ecology and Ihor Shvaika as agriculture minister.

That’s taken from a Channel 4 piece also catching up with events a little late in the day (again from March 5th) and continuing:

The most important office seized by Svoboda is that of deputy prime minister, now occupied by Oleksandr Sych, whose position on abortion rights and comments about rape provoked an international outcry.

He has been criticised for declaring: “Women should lead the kind of lifestyle to avoid the risk of rape, including one from drinking alcohol and being in controversial company”.

Svoboda member Oleh Makhnitsky is now acting prosecutor general.

The initial actions of the interim government have included forcing making Ukrainian the only official language of the nation and making moves to remove a law which forbids “excusing the crimes of fascism”.8

In total, there are eight Svoboda neo-Nazis now occupying positions in Ukraine’s transitional government – fascist representatives making policy in every sector.

So why did the BBC and Channel 4 wait until after the revolution (or coup) was over before they started shedding this light on the far-right leadership at the heart of the Maidan movement, and why isn’t news of these worrying fascist gains in an Eastern European state being featured more prominently in their regular broadcasts today?

Click here to read the full article entitled “How the far-right took top posts in Ukraine’s power vacuum”

The hypocrisy

This is how veteran investigative reporter John Pilger chose to begin his latest article [from March 16th]:

Washington’s role in the fascist putsch against an elected government in Ukraine will surprise only those who watch the news and ignore the historical record. Since 1945, dozens of governments, many of them democracies, have met a similar fate, usually with bloodshed.

Nicaragua is one of the poorest countries on earth with fewer people than Wales, yet under the reformist Sandinistas in the 1980s it was regarded in Washington as a “strategic threat”. The logic was simple; if the weakest slipped the leash, setting an example, who else would try their luck?

The great game of dominance offers no immunity for even the most loyal US “ally”. This is demonstrated by perhaps the least known of Washington’s coups – in Australia. The story of this forgotten coup is a salutary lesson for those governments that believe a “Ukraine” or a “Chile” could never happen to them.9

Click here to read John Pilger’s full article.

Pilger’s point, in brief, is that the United States, more often than not by the clandestine hand of the CIA, has a long record of overthrowing governments including those in power in democratic countries and sometimes even those of its own western allies. He then implies – without providing any supporting evidence – that Washington played a central role in the fall of Yanukovych. So is Pilger correct?

Well, we certainly know that both John McCain and Victoria Nuland made pre-revolutionary visits to Kiev in support of the Maidan. We also know that America has been spending large sums of money to “build democratic skills and institutions” and to “promote civic participation and good governance, all of which are preconditions for Ukraine to achieve its European aspirations.” Nuland talked of over $5 billion in ‘aid’ of this kind, although she failed to say more precisely how any of that money was spent. (So we may wonder, for instance, if any went into the coffers of the “Open Ukraine Arseniy Yatseniuk Foundation”.)

We also have the very clear and recent historical precedents in the form of those “colour revolutions” of the last decade, including, of course, the “Orange Revolution” in Ukraine. All of which, it was later revealed, had been orchestrated by Washington and manufactured by means of NGOs, most especially those of George Soros’ Open Society Foundations.

Soros remains proud of the part his own networks played in those earlier and much more peaceful uprisings. Unsurprisingly, therefore, some see the hand of Soros assisting in this latest upheaval in Ukraine, but is there direct evidence?

Here is what George Soros himself wrote on February 26th:

Following a crescendo of terrifying violence, the Ukrainian uprising has had a surprisingly positive outcome. Contrary to all rational expectations, a group of citizens armed with not much more than sticks and shields made of cardboard boxes and metal garbage-can lids overwhelmed a police force firing live ammunition. There were many casualties, but the citizens prevailed. This was one of those historic moments that leave a lasting imprint on a society’s collective memory.

No mention of any fascist elements there – but did Soros’ funding play any role in this latest revolution? The answer he gives is almost tantalising:

I established the Renaissance Foundation in Ukraine in 1990 – before the country achieved independence. The foundation did not participate in the recent uprising, but it did serve as a defender of those targeted by official repression.

So what does this mean? “Serve as a defender” – defending by what means? And who were “those targeted by official repression”? Well, one of the groups that Soros’ International Renaissance Foundation (IRF) helped in ‘defending’ were Spilna Sprava (which translates as “The Right Deed” but are also known as “Common Cause”). And so here is another BBC news report worthy of closer inspection (and bear in mind it is was published as far back as February 1st):

Together with the Right Sector, Common Cause is also at the extreme end of the Ukrainian protest movement, though it does not appear as yet to share the former’s relish for street fighting.

It is best known for capturing several key government offices in Kiev, such as the ministries of justice, agriculture, and energy.

The group has called for early parliamentary and presidential elections, and describes any opposition leaders who may urge protesters to disperse before the early polls “either idiots or provocateurs”.

“If we don’t force the authorities to go today, we’ll regret it tomorrow,” says the group’s website.10

You will find the organisation Spilna Sprava registered in the IRF annual report for 2009 at the bottom of page 189 where it is described as a “Charitable Foundation”.

Click here to read the full BBC news report.

However, for full-blown hypocrisy it’s hard to beat John Kerry censuring Russia and Putin after sending forces into the Crimea, saying “you just don’t invade another country on phoney pretext in order to assert your interests” [about 2:30 mins into clip]:

Not that Kerry is wrong in his assessment. Russia is most certainly “asserting its interests” but then are we really supposed to understand that in comparable circumstances America would do otherwise? When under Obama, America already daily flexes its military might in faraway Afghanistan, over Yemen, and even in Iraq (where a strong US presence still remains). Remembering that Nato’s “kinetic action” against Libya became a flagrant violation of the humanitarian bounds of UN Security Council Resolution “to protect civilians and civilian populated areas under threat of attack”. And that just six months earlier, Kerry and Obama were about to go ahead with massive air strikes against Syria without UN backing of any kind.

If there were a real crisis on the American doorstep would the US shrink from military engagement on the grounds that it ought not “assert its interests”? Would they even wait for a crisis – for are we also supposed to forget about the US invasion of the tiny island of Grenada in 1983? Or protecting its strategic interests in Panama in 1989? Or meddling in El Salvador, in Nicaragua and the notorious Iran-Contra scandal? Or US involvement in the Venezuelan coup in 2002, or for that matter their evident backing of the violent uprising taking place in Venezuela today? In fact, are we to forget about US interference in almost every country in Latin America throughout the entire postwar era – it really wasn’t so very long ago when White House officials openly referred to the continent as “America’s backyard”.

Former New York Times correspondent and investigative reporter, Stephen Kinzer, recently wrote a piece for The Boston Globe entitled “US a full partner in Ukraine debacle” in which he provides a more detailed historical perspective on the latest crisis. His article begins:

From the moment the Soviet Union collapsed in 1991, the United States has relentlessly pursued a strategy of encircling Russia, just as it has with other perceived enemies like China and Iran. It has brought 12 countries in central Europe, all of them formerly allied with Moscow, into the NATO alliance. US military power is now directly on Russia’s borders.

“I think it is the beginning of a new cold war,” warned George Kennan, the renowned diplomat and Russia-watcher, as NATO began expanding eastward. “I think the Russians will gradually react quite adversely, and it will affect their policies.”

Russia’s dispatch of troops in recent days to Crimea — a verdant peninsula on the Black Sea that is part of Ukraine but, partly as a result of Stalin-era ethnic cleansing, has a mainly Russian population — was the latest fulfillment of Kennan’s prediction.

Kinzer continues:

Putin’s decision to deploy troops reflects his loss of control over Ukrainian politics. US officials recognize this, and are pressing their anti-Russia campaign. Last week President Obama received the prime minister of Georgia. The prime minister of Moldova is due this week. These meetings are aimed at honing a strategy for further isolating Russia; it is called “Western integration.”

Much has been made of the fact that Ukraine is deeply divided between its pro-Europe western provinces and the pro-Russian east, of which Crimea is a part. A “velvet divorce” dividing Ukraine into two countries might be the best solution, but border changes, even when they seem sensible from far away, are always difficult to engineer.

If Ukrainians cannot agree to divide their country, Russia may do it for them. It already occupies part of Moldova and part of Georgia. For it to keep an army in Ukraine would anger the United States — and many Ukrainians — but it would be nothing new. Military occupation is, in fact, one of the few weapons Russia has to oppose the “Western integration” of neighboring countries.11

Click here to read Stephen Kinzer’s full article.

To read more on George Soros’ backing of previous “colour revolutions” as well as Victoria Nuland’s remarks on more recent American largesse, I refer readers again to my previous post.

The hysteria

It is even harder to know where to start when we get to the matter of hysteria over what Kinzer rightly describes as the Ukraine debacle. For convenience, however, we might begin again with John Kerry and that interview on Meet the Press! already embedded above:

“This is an act of aggression that is completely trumped up in terms of its pretext. It’s really Nineteenth Century behaviour in the Twenty-First Century. And there is no way to start with, that if Russia persists in this, that the G8 countries are going to assemble in Sochi. That’s a starter. But, there’s much more than that – Russia has major investment and trade needs and desires. I think there’s a unified view by all of the foreign ministers I talked with yesterday – all of the G8 and more – that they’re simply going to isolate Russia.”

So the aim now appears to be to isolate Russia… but is that even possible? Here is a little more of Kerry’s latest blustering:

“There could even ultimately be asset freezes, visa bans, there could be certainly disruption of any of the normal trade routine. There could be business drawback on investment in the country.”

But could it be that Kerry and the US are actually the ones in danger of becoming isolated? After all, how can Germany start imposing sanctions when it depends on a Russian gas supply. And as for those asset seizures, can Kerry really imagine that the dirty money Russian oligarchs prefer to launder by taking advantage of the uncommon laxity of our own financial centres will no longer be welcomed? Here are the thoughts of Ben Judah writing in the New York Times on “London’s Laundry Business” and the unlikelihood of such tough sanctions on Russian oligarchs [from Friday March 7th]:

The White House has imposed visa restrictions on some Russian officials, and President Obama has issued an executive order enabling further sanctions. But Britain has already undermined any unified action by putting profit first.

It boils down to this: Britain is ready to betray the United States to protect the City of London’s hold on dirty Russian money. And forget about Ukraine.

Britain, open for business, no longer has a “mission.” Any moralizing remnant of the British Empire is gone; it has turned back to the pirate England of Sir Walter Raleigh. Britain’s ruling class has decayed to the point where its first priority is protecting its cut of Russian money — even as Russian armored personnel carriers rumble around the streets of Sevastopol. But the establishment understands that, in the 21st century, what matters are banks, not tanks.

The Russians also understand this. They know that London is a center of Russian corruption, that their loot plunges into Britain’s empire of tax havens — from Gibraltar to Jersey, from the Cayman Islands to the British Virgin Islands — on which the sun never sets.12

Overall, the tone of the rhetoric coming from Washington is alarming. Economic sanctions have historically been a precursor to war. That cracks within the Nato alliance are already showing is therefore good news. Any ratcheting up of tension between the two opposing superpowers being in no one’s best interests (other than defence contractors of course) and the dangers of backing Russia into a corner are all-too obvious:

Both John Kerry’s threats to expel Russia from the G8 and the Ukrainian government’s plea for Nato aid mark a dangerous escalation of a crisis that can easily be contained if cool heads prevail. Hysteria seems to be the mood in Washington and Kiev, with the new Ukrainian prime minister claiming, “We are on the brink of disaster” as he calls up army reserves in response to Russian military movements in Crimea.

Were he talking about the country’s economic plight he would have a point. Instead, along with much of the US and European media, he was over-dramatising developments in the east, where Russian speakers are understandably alarmed after the new Kiev authorities scrapped a law allowing Russian as an official language in their areas. They see it as proof that the anti-Russian ultra-nationalists from western Ukraine who were the dominant force in last month’s insurrection still control it. Eastern Ukrainians fear similar tactics of storming public buildings could be used against their elected officials.

So begins an excellent piece by Jonathan Steele writing in the Guardian. Steele is another journalist who has managed to sidestep all of the hysteria and remain level-headed about this latest escalation of the Ukrainian crisis.

His article continues:

Kerry’s rush to punish Russia and Nato’s decision to respond to Kiev’s call by holding a meeting of member states’ ambassadors in Brussels today were mistakes. Ukraine is not part of the alliance, so none of the obligations of common defence come into play. Nato should refrain from interfering in Ukraine by word or deed. The fact that it insists on getting engaged reveals the elephant in the room: underlying the crisis in Crimea and Russia’s fierce resistance to potential changes is Nato’s undisguised ambition to continue two decades of expansion into what used to be called “post-Soviet space”, led by Bill Clinton and taken up by successive administrations in Washington. At the back of Pentagon minds, no doubt, is the dream that a US navy will one day replace the Russian Black Sea fleet in the Crimean ports of Sevastopol and Balaclava.

Russia’s movement into Crimea was certainly an invasion – of sorts – and marked the beginning of a dangerous new phase in the present Ukrainian crisis. Although Russia are entitled to keep troops at bases within Crimea, and though the number of troops appear to have remained below those permitted under treaty, by moving Russian troops into the streets, Putin has been acting outside of International law. That said, this invasion is no way comparable to the types of “shock and awe” assault we are accustomed to seeing the US and Nato engage in. What Kerry called an “incredible act of aggression” resulted in no casualties (other than the unfortunate victims of more recent sniper attacks), in part because the majority in Crimea are not hostile to the Russian forces. Indeed, it was not the elected parliament of Crimea but the self-appointed parliament in Kiev which many Crimeans fear and oppose (and do not regard as legitimate), who declared the Russian troop movements “an act of war”.

Here is more from Jonathan Steele who closes his article considering the legality or otherwise of Russia’s annexation of Crimea13 as well as his hopes of a diplomatic resolution:

It is not too late to show some wisdom now. Vladimir Putin’s troop movements in Crimea, which are supported by most Russians, are of questionable legality under the terms of the peace and friendship treaty that Russia signed with Ukraine in 1997. But their illegality is considerably less clear-cut than that of the US-led invasion of Iraq, or of Afghanistan, where the UN security council only authorised the intervention several weeks after it had happened. And Russia’s troop movements can be reversed if the crisis abates. That would require the restoration of the language law in eastern Ukraine and firm action to prevent armed groups of anti-Russian nationalists threatening public buildings there.

The Russian-speaking majority in the region is as angry with elite corruption, unemployment and economic inequality as people in western Ukraine. But it also feels beleaguered and provoked, with its cultural heritage under existential threat. Responsibility for eliminating those concerns lies not in Washington, Brussels or Moscow, but solely in Kiev.14

The article, which is entitled “John Kerry and Nato must calm down and back off”, offers a perspective which very few mainstream journalists (Stephen Kinzer and Liam Halligan being two others along with Stephen Cohen – see previous article) have so far been prepared to offer. His call for an end to the hysteria is surely the wisest call anyone can make right now.

*

Additional:

Following the referendum in Crimea, on Monday [March 17th] Democracy Now! featured a discussion about the vote and the likely diplomatic, economic and military repercussions following Crimea’s secession from Ukraine. The three guests were Oliver Bullough, Caucasus editor for the Institute for War and Peace Reporting; Nicholas Clayton, a freelance journalist who has been reporting from Crimea and covering the South Caucasus since 2009; and Dmitri Trenin, director of the Carnegie Moscow Center. Here is a snapshot of what each had to say:

Oliver Bullough: Well, the first thing about the vote is the result. The result was never in any doubt. The only option, essentially, on the ballot paper was either—well, you has a choice: to leave Ukraine or to join Russia. There was no “no” option. So, there was never any question that this would go one way. And it did indeed go that way. It went that way overwhelmingly, though, personally, I think possibly the results given are a little bit inflated. I can’t believe that the turnout was as high as 83 percent, certainly considering the fact that all the Ukrainians who live in Crimea and all the Crimean Tatars, who together make up, you know, more than 30 percent of the population, boycotted the polls. […]

Well, you know, it was—people were turning up for the polling stations. People were casting their votes in a fairly orderly manner. But it got increasingly jolly as the day wore on and it became obvious which way the vote was going to go. And people gathered on the central Lenin Square underneath the big towering statue of the founder of the Bolshevik state. And there was a rock concert, and people gathered, waved Russian flags, chanted “Russia! Russia! Russia!” as if they were at a football match. It occurred to me about halfway through that it was like a combination of Russia winning the World Cup and the Nuremberg rally. It was a very peculiar atmosphere of sort of a degree of celebration and also as a strange and slightly disquieting sense of triumphalism that I, as a non-Russian, found a little bit weird.

Dmitri Trenin: Well, I would say that the Russians have become used to people essentially using various standards for their own behavior and for other people’s behavior. Basically, President Putin in his press conference recently intimated that he was doing the things that basically the United States was doing. He was—he was placing the legitimate above the legal. If you need something and you need it badly, you go for it. It may not be legal, but if it’s your—if it’s in your national interest, then you go for it—except that the cases of Libya or Kosovo or Iraq, arguably, were less important for the United States’ national security interests than the issue of Crimea and Ukraine is, or was, for Mr. Putin and the Kremlin.

Nicholas Clayton: Well, the new leadership, it appears that they’re still very much in crisis mode, attempting to hold the country together. Many of them were not in the government before the Yanukovych regime fell. One of the more controversial things that has happened recently and one of the firmer gestures that the new government has made is saying that those advocating secession in other Ukrainian territories will be apprehended. And on one hand, this is a bit of an escalation of the rhetoric within Ukraine; however, it also represents very much the crisis mentality of the new government. As you mentioned before, there have been increasing protests in the cities of Kharkiv, Donetsk and Lugansk, where pro-Russia and pro-Ukraine protesters have clashed, and three people have died so far. There’s been accusations traded, but Kiev has claimed that a large portion, if not the majority, of these pro-Russian protesters are indeed Russian citizens that have come—been bused in from Russia, and they’re also tightening the border. It appears that they’re trying very hard to avoid any other province in Ukraine from getting the Crimea treatment at this point. […]

And as we’ve discussed already this hour, I do think that many in the West underestimated how strategic Ukraine, and particularly Crimea, is to Russia. The port of Sevastopol has been the base of the Russian Black Sea Fleet since imperial days, since the 18th century, and it actually is probably the best harbor in the Black Sea for a large fleet and one of the only ones that could safely hold a large fleet. It has a deep harbor, it’s very large, and it’s protected on both sides by hills, which means the wind is not a factor. If Russia were to be booted from there, it would have to drastically reduce the size of its fleet and spend billions of dollars attempting to build up facilities in one of its other ports in order to hold it. And the Russian Black Sea Fleet is the portion of the Russian navy that it uses to project naval force into not only the Black Sea, where it has significant interests, but also the Mediterranean Sea and through the Sinai and the Indian Ocean, and therefore, it’s an important portion of their Middle East strategy and their foreign policy in those regions.

And so, this really is a—what the Russians call a steel interest, something that is certainly a red line and certainly something that if Russia had to retreat from, would be very—would very much hurt their foreign policy and their ability to project power in the world. And we saw—this is partially why Russia moved so quickly in the upper house, was that many figures in the new government in Kiev did make statements saying that they wanted to basically cancel the lease that Russia has for the use of the base in Sevastopol. The current lease gives Russia the right to use that port until 2042, but there—in the past, previous governments have also tried to push Russia out, and it has been a major factor in Russia’s relationship with Ukraine since the end of the Soviet Union and very much—very much has been a huge card in the East-West battle over Ukraine, as well.

For once I would also recommend the latest outing of BBC’s political magazine programme This Week, which featured analysis from the Telegraph‘s Liam Halligan.

*

1 From an article entitled “What Color is Ukraine’s ‘Color Revolution’?” written by Justin Raimondo, published by antiwar.com on March 12, 2014. http://original.antiwar.com/justin/2014/03/11/what-color-is-ukraines-color-revolution/

2 From an article entitled “Ukraine crisis: Yatsenyuk is PM-designate, Kiev Maidan told” published by BBC news on February 26, 2014. http://www.bbc.co.uk/news/world-europe-26359150

3 From an article entitled “Ukraine crisis: bugged call reveals conspiracy theory about Kiev snipers” written by Ewen MacAskill, published by the Guardian on March 5, 2014. http://www.theguardian.com/world/2014/mar/05/ukraine-bugged-call-catherine-ashton-urmas-paet

4 From an article entitled “Russia, Ukraine feud over sniper carnage” written by Mike Eckel, published by the Washington Post on March 7, 2014. http://www.washingtonpost.com/world/europe/russia-ukraine-feud-over-sniper-carnage/2014/03/07/12ed2364-a638-11e3-b865-38b254d92063_story.html

5 From an article entitled “Ukraine crisis: Key players” published by BBC news on February 27, 2014. http://www.bbc.co.uk/news/world-europe-25910834

6 From an article entitled “Ukraine crisis: Yatsenyuk is PM-designate, Kiev Maidan told” published by BBC news on February 26, 2014. http://www.bbc.co.uk/news/world-europe-26359150

7 From an article entitled “’Prepared to Die’: The Right Wing’s Role in Ukrainian Protests” published by Der Spiegel on January 27, 2014. http://www.spiegel.de/international/europe/ukraine-sliding-towards-civil-war-in-wake-of-tough-new-laws-a-945742.html

8 From an article entitled “How the far-right took top posts in Ukraine’s power vacuum”, published by Channel 4 news on March 5, 2014. http://www.channel4.com/news/svoboda-ministers-ukraine-new-government-far-right

9 From an article entitled “The forgotten coup – and how the godfather rules from Canberra to Kiev” written by John Pilger, published on March 16, 2014. http://johnpilger.com/articles/the-forgotten-coup-and-how-the-godfather-rules-from-canberra-to-kiev

10 From an article entitled “Groups at the sharp end of Ukraine unrest” published by BBC news on February 1, 2014. http://www.bbc.co.uk/news/world-europe-26001710

11 From an article entitled “US a full partner in Ukraine debacle” written by Stephen Kinzer, published in The Boston Globe on March 3, 2014. http://www.bostonglobe.com/opinion/columns/2014/03/03/cold-war-over-russia-isn-zero-sum/Df9VSHeJFpKUz3tRKDjUXJ/story.html

12 From an article called “London’s Laundry Business” written by Ben Judah, published in The New York Times on March 7, 2014. http://www.nytimes.com/2014/03/08/opinion/londons-laundry-business.html?_r=0

13 ‘annexation’ is a provocative term. Many Russians including those in Crimea see it as a ‘reunification’. Mikhail Gorbachev said:

Earlier Crimea was merged with Ukraine under Soviet laws, to be more exact by the [Communist] party’s laws, without asking the people, and now the people have decided to correct that mistake. This should be welcomed instead of declaring sanctions.” He said: “To declare sanctions you need very serious reasons. And they must be upheld by the UN.” Adding: “The will of the people of the Crimea and the Crimea’s possible unification with Russia as a constituent region do not constitute such a reason.”

http://rt.com/news/mistake-fixed-crimea-gorbachev-422/

14 From an article entitled “The Ukraine crisis: John Kerry and Nato must calm down and back off” written by Jonathan Steele, published in the Guardian on March 2, 2014. http://www.theguardian.com/commentisfree/2014/mar/02/not-too-late-for-ukraine-nato-should-back-off

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Filed under analysis & opinion, John Pilger, Russia, Ukraine, USA, Venezuela

ten years of horror in Iraq: is this what Syria now has to look forward to?

On Wednesday [March 20th] Democracy Now! spoke with investigative journalist Dahr Jamail (currently working for Al Jazeera). Jamail provided a detailed review of the terrible conditions in Iraq, ten years after the US-led “liberation”; a campaign which began with the notorious “shock and awe” assault and one that has directly resulted in more than a million deaths (which include over a hundred thousand documented civilian deaths so far).

With a puppet president, Nouri al-Maliki, installed, the US occupation is now being quietly maintained by the presence of thousands of military contractors, whilst meanwhile the Iraqi population is the target of terrorist attacks on an almost daily basis as sectarian violence spirals out of control – 65 people were killed, and hundreds wounded by bomb blasts in Baghdad just on the day of the anniversary itself.

What Dahr Jamail describes is nothing less than a hell on earth where human rights abuses are rampant, and the use of indefinite detention and execution is commonplace:

… the situation in Iraq today, 10 years after the U.S.-led invasion and occupation began, it’s just utter devastation. It’s a situation where, overall, we can say that Iraq is a failed state. The economy is in a state of crisis, perpetual crisis, that began far back with the institution of the 100 Bremer orders during—under the Coalition Provisional Authority, the civil government set up to run Iraq during the first year of the occupation. And it’s been in crisis ever since.

The average Iraqi is just barely getting by. And how can they get by when there’s virtually no security across large swathes of country to this day, where, you know, as we see in the headlines recently, even when there’s not these dramatic, spectacular days of dozens of people being killed by bombs across Baghdad and other parts of Iraq, on any given day there’s assassinations, there’s detentions, there’s abductions and people being disappeared and kidnapped?

First of all, we have a situation where detentions across Iraq, primarily in Sunni-dominated parts of Baghdad, as well as in areas like Fallujah, predominantly Sunni cities, where people are being detained, en masse at times, nightly home raids, same type of stuff that the U.S. military used when they were in Iraq. And then the types of torture being described coming out of the prisons is truly horrific: people being hung by their ankles for days at a time while their heads are in buckets of water on the ground; people having their hands tied behind their backs and then hung from their hands for sometimes days at a time; electrical shock being used on people’s limbs, on their genitals, on their tongues; men being raped by broom handles as well as bottles; women in prison being raped. I spoke with one woman released just over a week ago at this point, talking about how she had been in prison for four years and was raped repeatedly by Iraqi forces. [There are] other types of techniques being used—and again, all of this comes back to the types of workings of Colonel James Steele … [more about Steele in a moment]

But the types of torture is ongoing. It’s rampant. It’s one of the driving factors as to why we’re seeing massive Friday protests now, well into the three month, across Al Anbar province and the Adhamiyah district of Baghdad, where Sunnis are demanding a halt for the detentions, a halt of the so-called Article 4, which is the legislation passed and being used in the Iraqi government that—basically where they took a page out of the Bush playbook of giving them carte blanche to arrest anybody for any reasons under the guise of terrorism charges, of suspected terrorism, and then they can be held indefinitely. I spoke with people both at Amnesty International and Human Rights Watch about this, and they said one of the problems now is, it’s the detentions and the being held secretly is so rampant now by the Iraqi security forces that there isn’t really even a need for secret prisons anymore. Remember a ways back, we had—it all came out that there were secret Maliki prisons. Well, now, today in Iraq, they’re referring—they’re being referred to by a lot of Iraqis as “secret prisoners,” because people are being detained, their families aren’t—there’s no law requiring that the families be notified, nobody knows where these people are. They can be held in any prison anywhere in broad daylight, because no name is being registered anywhere. So, literally, we have untold numbers of people being detained, being treated horrifically.

Asked whether he agreed with many people that the problems in Iraq are “not so much the result of the U.S. invasion but rather sectarian war between Sunnis and Shias”, Jamail’s response is unequivocal:

I don’t agree. I think all of this is a direct result of—either direct or indirectly a result of the U.S. invasion and occupation and the strategy applied. I mean, we saw something come out just last week in a joint investigation of BBC Arabic and The Guardian, which gave hard evidence, insider evidence, of the machinations of the U.S. using retired Lieutenant Colonel James Steele, infamous during the Reagan administration of orchestrating so many of the death squads in Central America along with Negroponte. Well, Negroponte happened to be the U.S. ambassador to Iraq for some of the occupation and, of course, brought in his old buddy James Steele to set up the same types of tactics, the detentions, the types of torture techniques that we’re seeing rampant across today—across Iraq today, the blatant attempts to foment sectarian violence, sort of a divide-and-conquer policy. Even Rumsfeld, former Secretary of Defense Don Rumsfeld under Bush, back around 2006, 2007, referred to kind of casually using the “Salvador Option” in Iraq, and that’s precisely what he was describing.

Click here to read the full transcript or to watch the interview on the Democracy Now! website.

Friday’s Democracy Now! offered a more extended profile of Colonel James Steele, investigating his role in Iraq and formerly in El Salvador, where he had previously coordinated death squads and torture centres. Also heavily implicated are General David Petraeus and Donald Rumsfeld.*

In the second part of the same interview [from Wednesday 20th], Jamail reported on another side of the horrors in today’s Iraq. A huge increase in birth defects and cancers, most especially plaguing the city of Fallujah, which are a direct consequence of the earlier US bombardment with the widespread use of weapons containing white phosphorous and depleted uranium (DU):

Overall, the country has seen a massive increase in cancer rates from the 1991 Gulf War up to present, even according to official Iraqi government statistics. In 1991, for example, there were 40 registered cases of cancer out of 100,000 Iraqis. By 1995, four years after that war, that number had jumped to 800 out of 100,000 Iraqis. And then—by 2005, that number had doubled— The most recent statistic, I’ll end with, before I get into Fallujah. And what these images are showing is that in 2005 we saw 1,600 Iraqis with cancer out of 100,000, so a massive escalation that continues.

And going on to Fallujah, because I wrote about this a year ago, and then I returned to the city again this trip, we are seeing an absolute crisis of congenital malformations of newborn. There is one doctor, a pediatrician named Dr. Samira Alani, working on this crisis in the city. She’s the only person there registering cases. And she’s seeing horrific birth defects. I mean, these are extremely hard to look at. They’re extremely hard to bear witness to. But it’s something that we all need to pay attention to, because of the amount of depleted uranium used by the U.S. military during both of their brutal attacks on the city of 2004, as well as other toxic munitions like white phosphorus, among other things.

And so, what this has generated is, from 2004 up to this day, we are seeing a rate of congenital malformations in the city of Fallujah that has surpassed even that in the aftermath of—in the wake of the Japanese cities of Hiroshima and Nagasaki that were—that nuclear bombs were dropped on at the end of World War II. So, Dr. Samira Alani actually visited with doctors in Japan, comparing statistics, and found that the amount of congenital malformations in Fallujah is 14 times greater than the same rate measured in the cities of Hiroshima and Nagasaki in Japan in the aftermath of the nuclear bombings.

These types of birth defects, she said—there are types of congenital malformations that she said they don’t even have medical terms for, that some of the things they’re seeing, they’ve never seen before. They’re not in any of the books or any of the scientific literature that they have access to. She said it’s common now in Fallujah for newborns to come out with massive multiple systemic defects, immune problems, massive central nervous system problems, massive heart problems, skeletal disorders, baby’s being born with two heads, babies being born with half of their internal organs outside of their bodies, cyclops babies literally with one eye—really, really, really horrific nightmarish types of birth defects. And it is ongoing.

The images in this report are so absolutely shocking that I have decided not to embed the video, but if you would like to hear more of what Dahr Jamail had to say or to read the full transcript then click here to watch on the Democracy Now! website.

Click here to read my own earlier post about the use of white phosphorous and DU in Fallujah.

On Friday [March 15th], a day that marked the second anniversary of the uprising against Syrian President Bashar al-Assad, Democracy Now! also interviewed Rim Turkmani, an astrophysicist and member of the Syrian Civil Democratic Alliance, who had come to New York to meet with Security Council members in order to discuss possible political solutions to the developing crisis in Syria. This is part of what Rim Turkmani said:

The uprising started as a nonviolent uprising; however, because of the extreme violence, you know, the way the regime responded to this uprising, things developed very quickly into a very violent movement. However, there have been external actors who were supporting the arming of the opposition, and unfortunately that fueled the violence, increased dramatically the number of casualties, and turned the whole thing into more of a war, rather than a revolution. So nowadays, people don’t talk about democracy anymore. You don’t talk about the original rights and freedoms, which the people two years ago went to the street to protest for. We’re talking more about ending a war.

And I see all these statements, you know, from France and Britain, and even the U.S., are very contradicting and saying that we want to arm the rebels; however, we want a political solution. I mean, for me, a political solution means a peaceful solution. Peace can only be reached through peaceful ways, peaceful means, and can’t be reached through fueling the violence. So, I don’t think their efforts will help in calming the situation or dropping the number of casualties in the country. […]

It’s more of a geopolitical struggle, really, over Syria than responding to the needs of the people. I am a member of the opposition, as well. All [of] my group, very active inside Syria, is in opposition, but it’s a nonviolent opposition. That is very clear in its aim to reach democracy. However, we don’t reach any—we don’t get any support. We are—there’s systematic efforts to marginalize people like us inside Syria and focus only on the armed rebels. And they are the ones now who are stealing all the headlines. Now, why? Because, yes, there are certain actors, regional and international, who see this as a proxy war, and it’s an opportunity to fight their international opponents. It’s a struggle over Syria, over power, and the Syrians are falling victims to that.

I cannot find this clip uploaded on youtube but you can read the full transcript or watch the interview on the Democracy Now! website by clicking here.

Obviously it was the Bush-Cheney administration who are most responsible for the campaign against Iraq, although the Obama administration has nevertheless been complicit in the on-going chaos; the US occupation now secured by the stay-behind presence of those thousands of military contractors, with a completely blind eye turned to the brutality of the Maliki regime. Meanwhile, and with Iraq already in ruins, Obama is once more talking up the need for “humanitarian intervention” in neighbouring Syria. A conflict that has been allowed to escalate in part thanks to American covert support for terrorist groups.

In an excellent week of broadcasts, Democracy Now! also welcomed freelance foreign correspondent Reese Erlich to talk more specifically about US and Saudi Arabian involvement in the Syrian conflict:

What I found was that the Saudi government and wealthy Saudis are involved in arming Syrian rebels, the most ultraconservative, ultrareligious groups, such as al-Nusra, and that hundreds of Saudis are infiltrating across the borders from Jordan and Turkey and going to fight with these extremist groups in Syria. […]

Well, the Saudis want to see a pro-Saudi government emerge. The analysts I spoke to in Saudi Arabia point to what they call the Yemen model, where there was an Arab Spring uprising, the head of the government was replaced, but a pro-Western, pro-Saudi general replaced the old guy. So, they’d love to see that happen in Syria. But as my sources pointed out, it’s not going to happen, because Syria is very, very different from Yemen.

And in the case of the U.S., the U.S.—you know, the debate in the U.S. is whether—well, shall we bomb them? Shall we create a no-fly zone and arm the rebels and take a more militant stand? Or shall we continue kind of the Obama policies of secretly arming the—and covertly arming and training the guerrillas? The problem is, the reason this has not been resolved, as pointed out to me by a Muslim Brotherhood leader that I interviewed in Istanbul, is that the U.S. hasn’t found a leader that it can trust to pursue its interests. If you recall, in the case of Iraq or Afghanistan, there was a guy the U.S. promoted as the new democrat, supposedly, who turned out to be otherwise. But they haven’t found that guy yet in Syria, and that’s one of the reasons that they’re taking a less than militant stand in support of the Syrian rebels.

In the same roundtable interview, Rim Turkmani added:

As we all know, Saudi Arabia is not a democratic country. The uprising started to reach a democratic Syria. So, I don’t have faith in any undemocratic country to support democratic transition inside Syria. I’m not surprised that they’re supporting the armed rebels and increasing the level of violence in Syria. However, we are very confident that violence never, ever leads to democracy. So, as much as I oppose the regime, my group opposes the regime, we oppose also these efforts from Saudi Arabia to turn Syria into a jihadi land. I mean, the Syrians are—their mentality is very, very different from like the jihadi extreme Muslims’ mentality, and I think they will find it very difficult to market their ideas inside Syria. However, the violence is giving them the right environment, fertile environment, for such ideology to spread. […]

And you heard even the U.K. and the U.S., even though they’re supporting a little bit the arming, they’re still talking about a political solution. A political solution means that we have to talk to all these armed people, all the armed groups, and bring them to a negotiation table. I trust we can bring the Syrians. We can bring those who defected from the army or those who thought they were carrying arms to defend their families. However, the jihadists are going to be impossible. They are going to be the real obstacle to any peace process in Syria. Their cause is global. It’s not for democracy, certainly. Even if the regime falls tonight, they’re going to continue their fight. They are not interested in any negotiations and any peace deal. And their threat is not going to be contained inside Syria. It’s certainly going to affect the whole region. This is why we have to act very quickly to end this war and bring together a peaceful solution for all the Syrians. It has to be all-inclusive, to bring all the Syrians into a negotiation table to reach a peaceful solution towards a democratic Syria. We’re not interested in any project that doesn’t lead eventually to a democratic country.

Click here to read the full transcript or to watch the interview on the Democracy Now! website.

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Additional:

Mike Prysner joined the US Army when he was 17, between his junior and senior years in high school. He left for basic training in June 2001 and was assigned to the 10th Mountain Division in Fort Drum, NY. In March 2003, his company was attached to the 173rd Airborne Brigade to take part in the initial invasion of Iraq. This is an edited version of a powerful speech he delivered at the 2008 “Winter Soldier” in Maryland. Testimony of what was really going on in Iraq:

Mike Prysner was also one of the speakers at the event “Speaking Truth to Power: a permanent state of war” on April 9, 2011 in Asheville, NC:

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* Click here to watch “James Steele: America’s Mystery Man in Iraq”, a 15-month investigation made by the Guardian and BBC Arabic and produced by Maggie O’Kane [who gave an extended interview about the film on Democracy Now! on Friday 22nd].

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Filed under al-Qaeda & DAESH / ISIS / ISIL, depleted uranium, did you see?, El Salvador, Iraq, Saudi Arabia, Syria, USA, Yemen

the Latin American Spring they never mention

On February 27th 1989, the Venezuelan army, under orders from President Carlos Andrés Pérez, put down a mass uprising against the imposition of IMF led “austerity measures”; a protest which became known as the Caracazo (“the big one in Caracas”). According to official government reports “only” 276 people were killed in their attempts to “restore order”, however estimates for the actual number of casualties range between 500 to more than 3000.

Just a few years on, in 1993, and having narrowly survived two failed coups attempts, Carlos Andrés Pérez (otherwise known simply as CAP) was suddenly forced out of office when the Supreme Court found him guilty of embezzlement. With the impeachment of CAP, the next directly elected President was Rafael Antonio Caldera Rodríguez, and it was Rafael Caldera who, during his second term in office, had pardoned the leader of the original coup against CAP, a then little known military officer by the name of Lt. Colonel Hugo Chavez Frías.

Back in the 1990s news stories from Venezuela rarely if ever made our headlines, and unless you happen to be Venezuelan, there is a good chance you have never heard of either Carlos Andrés Pérez or Rafael Caldera. But this is not the case for the man who succeeded Caldera following the 1998 elections. For whatever else might be said of the late Hugo Chavez, there is no dispute that his political leadership during the last fourteen years – Chavez having been voted into office on four separate occasions in free elections – has put Venezuela altogether more firmly on the political map. So when Chavez died on Tuesday, it was an event that reverberated across the world. The debate over what his lasting legacy will be, and what happens next for Venezuela, buzzing in newsrooms and all over the internet.

Hugo Chavez was a social reformer, outspoken and with unashamedly revolutionary intent; his frequently stated ambition being nothing less than to inspire the downtrodden and oppressed of Latin America and beyond with his own brand of Bolivarian “participatory socialism”. To those ends, Chavez had immediately set about nationalising the Venezuelan oil industry, and then redirecting the huge profits to fund social projects both at home and abroad. Poverty levels in Venezuela were soon halved, and extreme poverty reduced by more than two thirds. Chavez also opened up education for the poorest in society and brought in a system of universal free healthcare.

That his programme of reforms has gradually improved the standard of living for the vast majority of Venezuelans is now acknowledged even by his fiercest critics, and so during last year’s election campaign, which he again won comfortably, the main opposition parties did not even challenge his social programme – their criticisms being reserved for his failures in other ways. That his policies have not allowed the Venezuelan economy to flourish as it should have (which seems odd given that Venezuela has actually maintained growth even throughout these troubled economic times), that inflation levels are unacceptably high (which is perhaps true although inflation is only a little higher now than during the period immediately prior to his presidency), and that Venezuela is suffering from a breakdown in law and order. This last charge is perhaps the most warranted, with Chavez unquestionably paying too little attention to the vital issue of ensuring law and order, but even here his supporters will fairly claim that the escalation in violent crime is to some extent a direct consequence of drug trafficking from neighbouring Colombia.

Incidentally, you can find a useful breakdown of all the statistics here.

Of course, the most serious charge levelled against Chavez is that his government has systematically turned a blind-eye or actually encouraged the violation of the human rights of his opponents. Human rights abuses that mostly seem to have come in the form of threats and intimidation, but which also include use of blacklists, other forms of exclusion, and in a few cases, even false imprisonment. This is obviously not acceptable. That said, it is sadly the truth that nearly every government on earth can also be charged with comparable abuses and more often than not with tactics that are very much more brutal again.

In Venezuela, unlike in America and the fifty and more states (including the UK) that have helped them out with “extraordinary rendition”1, torture and kidnapping are not sanctioned. In Venezuela, there is no equivalent to Guantánamo or the many “black sites” where inmates are indefinitely detained without charge. And if you still imagine that America, to return once more to the self-proclaimed home of freedom, has no political prisoners of its own then you evidently fail to take into account what has recently happened to John Kiriakou and Bradley Manning. In reminding readers of all this, it is not my intention to make excuses for Chavez and his government, but simply to put the charges against him into a more honest context.

Overall, it is surely fair to say that Chavez not only fundamentally altered the course of his home nation, with a dramatic shift away from the imposed neo-liberalism of his predecessors and the new emphasis placed on social justice, but alongside the popular success of those policies, he also more directly helped to establish other socialistic leaders across the whole of Latin America. In other words, it was Chavez above all others who spearheaded the Latin American Spring (not that it is ever called this of course) – the beginnings of a social and economic revolution that has been sweeping an entire continent for more than a decade, bringing with it a desperately needed power shift away from the oligarchs and the interests of their neo-imperialist associates. An upheaval, which being against the interests of the ruling establishment in the West (their own puppets having been vanquished), and by virtue of remaining fundamentally peaceful, has been consistently overlooked and misrepresented.

In short then, Chavez steadily won the political debate in South America, and not only in the barrios of Caracas, but also more widely, and this is the reason why millions to have taken to the streets to mourn his loss. A devout Catholic, Chavez was not a saint and he certainly was not infallible, but neither was he a tyrant or a dictator. He was a shrewd politician and more rarely and importantly, an uncommonly reliable one – a politician who actually abided by his own manifesto promises. A national leader who encouraged the previously disenfranchised to become actively involved in the democratic process of change and someone who engendered real hope in a people trying to transform their own future for the better.

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Also last Tuesday, a trial began in Argentina that is set to reveal new details about how six Latin American countries coordinated with each other in the 1970s and 1980s to eliminate political dissidents. The campaign known as Operation Condor had involved military dictatorships in Argentina, Bolivia, Brazil, Chile, Paraguay, Peru and Uruguay. It was launched by the Chilean dictator Augusto Pinochet, but evidence shows how both the CIA and former Secretary of State Henry Kissinger were complicit from its outset. The objective of Operation Condor has a familiar ring: it was to track down, kidnap and kill people they labelled as subversives and terrorists — leftist activists, union leaders, students, priests, journalists, guerrilla fighters and their families.

On Thursday [March 7th] Democracy Now! spoke with John Dinges, a professor at the Columbia School of Journalism and the author of “The Condor Years: How Pinochet and his Allies Brought Terrorism to Three Continents”, who explained the significance of the latest hearings:

Well, there have been several trials, and this goes back to when Pinochet was arrested in London in 1998. That unleashed an avalanche of evidence that went across Europe and led to trials in many places—Rome, Paris, Argentina, Chile—but all of them much smaller than this one. This one has 25 people accused. Unfortunately—or fortunately, who knows?—many of the people who were involved in this have already died, they’re getting old, of the top leaders. But this is 25 Argentinians and one Uruguayan, all of whom were in military positions, all of whom were involved directly with the actions of Operation Condor.

This is historic in the sense that we’re going to hear from 500 witnesses. And really, in the Latin American legal system, it’s unusual. It’s really only coming to the fore now that you hear witnesses, as opposed to just seeing them give their testimony to judges in a closed room, and then later on people like me might go and read those testimonies, but really it doesn’t become public. This is all public. And apparently, a lot of it is being videotaped. So this is—this is the first time that the general public is going to hear the details of this horrible, horrible list of atrocities that killed so many people.

The United States, in this period, the 1970s, was a major sponsor of the military dictatorships that had overthrown some democracies, some faltering civilian governments, [and] whatever it was, the result [of the overthrow] was governments, like Videla, like Pinochet, like Banzer in Bolivia, who were killing their citizens with impunity. The United States knew about the mass killing. We had this kind of schizophrenic, Machiavellian attitude toward it. We really don’t want these communists to be taking over governments, and we fear that democracy is leading to communist governments. Indeed, a leftist government led by Salvador Allende installed a democratically elected, civilian and revolutionary government in Chile, and that’s why—and Pinochet overthrew that government. The United States was deathly fearful that this would spread in Latin America, and so supported the coming of dictatorships.

Click here to read the full transcript or to watch the interview on the Democracy Now! website.

In April 2002, Chavez had himself narrowly survived an American-backed coup, and a 2003 documentary entitled The Revolution Will Not Be Televised (Spanish: La revolución no será transmitida) provides a fascinating insight and behind the scenes account of the attempted overthrow. Irish filmmakers Kim Bartley and Donnacha Ó Briain, who had been given direct access to Chavez with the intention only of making a fly-on-the-wall biography, suddenly finding themselves trapped in the midst of quite extraordinary political turmoil. Three days which changed the course of Venezuelan history:

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Chávez: Inside the Coup (as the documentary is also known) first aired on RTÉ1 on 18th February 2003, as an installment of the Irish channel’s True Lives documentary series. It was later broadcast on BBC2 on 16th October 2003, as part of the channel’s Storyville documentary strand, and repeated on BBC4 on 18th November 2003.

The October broadcast by the BBC had caused considerable furore, the corporation receiving 4,000 e-mails demanding that Storyville‘s commissioning editor, Nick Fraser, should be sacked. And these attacks could hardly have come at a worse time. Already under the spotlight of the Hutton Inquiry, which had been set up ostensibly to investigate the circumstances surrounding the death of David Kelly, although as it turned out Lord Hutton was actually more intent on censuring the BBC. Blaming the messenger for accurately leaking the truth about the “sexed up” intelligence dossiers used justify the invasion of Iraq, rather than the government and security services who had conspired to fabricate those lies. For the BBC to re-screen Bartley and Ó Briain’s film just a month later must therefore have taken considerable courage.

Meanwhile, the claims made by those critical of the film were taken up by Ofcom, who eventually ruled in September 2006 that it had not upheld the complaints. A subsequent appeal in November was also dismissed by Ofcom, validating the BBC’s original decision to air the documentary.

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Additional:

In an article from March 5th for Vice Magazine and also posted up on his own website, Greg Palast asks:

Despite Bush’s providing intelligence, funds and even a note of congratulations to the crew who kidnapped Chavez (we’ll get there), Hugo remained in office, reelected and wildly popular.

But why the Bush regime’s hate, hate, HATE of the President of Venezuela?

The answer, of course, is the obvious one:

Reverend Pat [Robertson] wasn’t coy about the answer: It’s the oil.

“This is a dangerous enemy to our South controlling a huge pool of oil.”

A really BIG pool of oil. Indeed, according to Guy Caruso, former chief of oil intelligence for the CIA, Venezuela hold a recoverable reserve of 1.36 trillion barrels, that is, a whole lot more than Saudi Arabia.

If we didn’t kill Chavez, we’d have to do an “Iraq” on his nation. So the Reverend suggests,

“We don’t need another $200 billion war… It’s a whole lot easier to have some of the covert operatives do the job and then get it over with.”

A short (about 25 mins) made for BBC television film based on Palast’s own encounters with Chavez, his kidnappers and his would-be assassins is also available as a FREE download.

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1A groundbreaking document published by the Open Society Foundation, on Tuesday shows that 54 countries, a quarter of the world’s nations, cooperated with the CIA’s extraordinary rendition programme.” Taken from an article entitled “Extraordinary Rendition: Israel, Russia and France ‘Surprisingly’ Not on List” written by Jessica Elgot, published by Huffington Post (UK) on February 5, 2013. http://www.huffingtonpost.co.uk/2013/02/05/extraordinary-rendition_n_2622079.html

A full list of all 54 countries is published beneath the same article.

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Filed under analysis & opinion, Argentina, did you see?, Greg Palast, Latin America, neo-liberalism, obituary, Venezuela

Gold Diggers of 2013

We are now in the midst of what can only be described as a gold rush. Of course some countries, China being the shining example, have been rapidly expanding their gold reserves for many years – the full amount of Chinese gold being a closely guarded secret although most analysts anticipate a full disclosure of Chinese gold reserves in the relatively near future, and based on an accumulation rate of slightly less than 1,000 tons per year, it is widely believed that China may already be the second largest holder in the world, which, as zerohedge noted back in November, means “surpassing Germany’s 3,395 tons and [becoming] second only to the US.”

Meanwhile, other countries are suddenly asking for the repossession of their own physical reserves that have been stored in vaults around the world during many decades. About a year ago I reported on Hugo Chavez’s retrieval of Venezuela’s physical gold reserves, and more recently we hear how, for instance, the Dutch and German governments are increasingly eager to get their hands on their own gold. Here is part of a report from Dutch News published in late November:

Questions have been asked in parliament about the location and value of the country’s gold reserves, most of which is said to be in foreign vaults, news agency ANP reports on Wednesday [Nov 28th].

The Netherlands is said to have 612 tonnes of gold, with a value of some €24bn. Just 10% of it is held at the central bank headquarters in Amsterdam. The rest is in bank vaults in the US, Canada and Britain.

Socialist and Christian Democrat MPs are now asking if it is sensible to keep the gold abroad and want to know how pure the gold bars actually are. 1

Anyone would think they don’t trust us or something – although when I mean us, I actually mean our central bankers obviously, and frankly who does trust them? Indeed, it turns out that the Germans had started repatriating their own reserves shortly after the launch of the euro and around the time of Brown’s Bottom, which was more then a decade ago:

The report [I’ll come back to this in a moment] claimed that the Bundesbank had slashed its holdings in London from 1,440 tons to 500 tons in 2000 and 2001, allegedly because storage costs were too high. The metal was flown to Frankfurt by air freight.

The revelation has baffled gold veterans. The shift came as the euro was at its weakest, slumping to $0.84 against the dollar. But it also came as the Bank of England was selling off most of Britain’s gold reserves – at market lows – on orders from Gordon Brown. 2

Click here to read the full article in the Telegraph.

The report in question, which had been produced by the German court of auditors (Bundesrechnungshof), is now demanding a complete audit of the nation’s gold reserves:

Germany’s gold bars, stored in the United States, Britain and France “have never been physically checked by the Bundesbank itself, or other independent auditors, regarding their authenticity or weight,” reveals a report prepared by the Federal Auditors’ Office. Instead, the Bundesbank relies on a “written confirmation by the storage sites.” […]

Concerns about Germany’s gold reserves arose this year after a group of German federal lawmakers wanted to check gold bars stored at the Banque de France in Paris. But they were turned away by local officials who said there were no facilities to visit the vaults, Deutsche Welle reported. […]

The Bundesbank has reportedly decided to ship 150 tons of gold from the New York Federal Reserve to Germany, according to German daily Bild. After returning to Germany the gold will be melted down to test the overall purity of each consignment before being re-cast into standard gold bars. 3

Click here to read the full report published by Russia Today in late October.

So why this accelerating rush to acquire gold, as in the case of China, or, as in the cases of Germany and Holland, to repatriate their gold reserves? What can it all portend…?

An article simply entitled “Are Fiat Currencies Headed for a Collapse?” published by CNBC back in July 2012 offers a concise assessment of the situation:

A fiat currency derives its worth from the issuing government – it is not fixed in value to any objective standard. That means central banks can print as much money as they want. If an economy is struggling, injecting more notes into the system juices activity but lowers the value of the currency in question.

With major central banks all desperate to stimulate their economies, some say currencies have entered a dangerous new phase often described as a race to the bottom.

Mark Mobius, Executive Chairman of Templeton Emerging Markets Group, says investors will soon start to demand fiat currencies be backed by gold or other hard assets.

“It’s already happening, you’re beginning to see that trend with central banks stocking up on gold. The estimate is that at least half of the buying is central bank buying. They are looking to the day when they can say okay, our currency is backed by gold and therefore we’re a strong country,” Mobius told CNBC Asia. 4

Of course, such rumours of widespread currency collapse have been with us ever since the financial panic of 2007/8 – rumours that were quickly given extra legs thanks to the enormous bank bailouts and the multiple rounds of quantitative easing (QE) both in the US and in Europe – all this money printing being the immediate way that the derivatives Ponzi scheme, the original cause and the deep root of the crisis, could be propped up. Yet, in spite of such vast injections of new money, the more serious catastrophe predicted by many has not (as yet) come about. So does this mean, as our governments wish to persuade us, that the crisis has been brought under control, or does it simply mean that they’ve managed to kick the can just a little further down the road than most of the economic pessimists could have imagined?

Undoubtedly such rampant money printing without anything like commensurate economic growth does mean, and however cunningly it may be have been disguised, that the money we hold has undergone and continues to undergo a rapid devaluation. So prices in the longer term must be expected to rise since inflation is already baked into the quantitatively-eased cake: the only legitimate questions being not if, but when, and importantly, how sharp the eventual decline in our purchasing power turns out to be.

In Britain, for instance, prices of goods and services are certainly rising quickly, and well above the skillfully massaged Consumer Price Index (CPI) figure of less than 3%, whilst at the same time wages remain flat (falling in real terms and thereby magnifying the impact of inflation for most people), but, on the face of it at least, there is little indication of any kind of hyperinflationary collapse coming around the corner. However, there is one outstanding factor to be considered here: that the newly printed money has largely been hoarded by the banks that received it, and for so long as the banks are reluctant to lend, little to none of this issuance flows back out into the money supply. For this reason, most of the coming inflation remains as yet in the pipeline.

So are we about to see a protracted devaluation of our currencies involving many decades of relatively low inflation at survivable rates (although perhaps as high as ten or twenty percent), or ought we to expect a sudden leap to genuine hyperinflationary levels? Put differently, are the western economies going to continue to more slowly but inexorably sink or, alternatively, is the genuine ‘fiscal cliff’ of a currency collapse nearing? The simple answer is that I don’t know – I’m not an economist and I don’t pretend to understand the deeper complexity here; and when it comes to economics, pretending to understand and then making lousy predictions is far better left to the professionals! What is clear is that so long as the imposed ‘solution’ to this still deepening financial crisis relies upon the deadly cocktail of “austerity measures” mixed with money printing, the prospect of eventual hyperinflation looms not merely as a worst-case scenario, but a worst-case that appears increasingly likely.

Why do I say this? Well, because at the same time as “austerity” is destroying growth, the endless rounds of QE are effectively reducing the value of our money by repeatedly diluting it. So maintaining this combination of imposed “austerity” and sustained money printing is just about the most perfect recipe for creating not mere inflation, but stagflation – which is precisely what we are already seeing.

But then outright hyperinflation is always a result of political choices, rather than simply an outcome of economic failures. It happens whenever a government decides (or, very often, feels coerced) to flood the economy with currency in an increasingly desperate attempt to keep up with repayments on unsustainable debts and so to survive. And for dramatic effects, this tail-chasing exercise has to go on and on and on…

So here’s what I think we can most certainly expect in the immediate future – even given a best-case scenario. Undoubtedly our economies will continue to shrivel away under the imposed “austerity measures”, bringing mass unemployment in the wake of economic decline, and that rise in joblessness, in turn, generating a frenzied competition for the remaining jobs, and forcing down ordinary wages still further (when wages have already, certainly in real terms, substantially fallen since the crisis began).

In the meantime, attacks of QE are continually eating into our earnings and savings, and in terms of devaluation, it hardly matters whether one decides to stuff their money under the mattress or deposit it in a savings scheme, given the poor rates of return on offer. But let’s also keep in mind that all of this is being done merely to serve and protect the interests of the major banks: the ones long-since deemed “too big too fail”. Institutions not only operating outside of the law, but tacitly encouraged to carry on doing so (as the lack of prosecutions following the fixing of Libor and the more extraordinary scandal involving HSBC goes to show).

And now the increasing desire shown by governments and central banks (not to mention many of the richest individuals) to suddenly acquire gold and, perhaps even more importantly, to hold on to it, offers clues beyond the competing economic theories as to what the “money masters” themselves are actually anticipating. Needless to say, it does not bode well for the majority of us.

The steadily rising price of gold is at the same time, of course, a key indicator (alongside the rising price of other commodities like silver and copper) of how much our currencies have already been debased. During the past five years, both gold and silver have approximately doubled in their value, equivalent to an annual inflation rate of slightly less than 15% (which is obviously far higher than the CPI’s paltry 3%) – I offer a more detailed analysis of these trends as a footnote.5 And these rises have happened in spite of the fact that the price of gold and silver, like everything else in our supposedly ‘free market’ system, is subject to manipulation by the major financial players, who, having “invested” so heavily in varieties of paper, have a clear interest in keeping the value of precious metals down – and the Ponzi scheme up and running.

Meanwhile, the continued appliance of tough “austerity measures” in spite of so much damning evidence of ineffectiveness in rescuing any ailing economies, anywhere, ever (either during this crisis – to judge by the effects on Greece, Spain and elsewhere – or earlier ‘interventions’ in Latin America, Africa and in the aftermath of the break-up of the Soviet Union) proves only that there is still very much a political will to enforce such neo-liberal “shock therapy”.

“Austerity” kills the poor and the weak and is already doing precisely this in places like Greece. It cannot provide any cure for what is an intrinsically systemic failure. Instead, such tight restrictions on government investment in welfare and infrastructure during a depression is like telling a starving person that it might help if they were to eat their own stomach. A brutal approach that is nothing short of criminal lunacy. And the same goes for the bailouts – the banks are fundamentally broken, indeed the entire financial system is in a state of ruin, and repeatedly bailing them out means simply throwing good money after bad… ad infinitum.

During the depression years of 1930s, there was another famous rush for gold. It eventually led to US President Franklin Roosevelt signing the notorious Executive Order 6102 in April 1933, “forbidding the hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States”. An order that was supposed to apply to every individual, partnership, association and corporation, and making possession “of gold or silver coin or bullion or currency” a criminal offence. It was the same year that Warner Bros. released the first of a string of popular musicals: Gold Diggers of 1933; quickly followed up with Gold Diggers of 1935 and … of 1937. These sugary confections, mostly remembered now for their lavish and dreamy choreographed sequences put together by the great Busby Berkeley, are ‘rags to riches’ tales with guaranteed happy endings that had helped to keep the public’s pecker up.

This time around we are perhaps still a long way off any equivalent to FDR’s Executive Order, though it is always wise to keep history in mind. Back on the entertainment front, and with the depression looking set to move up through the gears once more, we are offered the rather grittier and altogether more worthy distraction of a big screen release for Victor Hugo’s grand epic turned Broadway musical, Les Misérables – Surely the producers aren’t trying to plant the seeds for revolution?!!!

I can think of no better way to finish such a gloomy article than with a song. And what better than Noël Coward’s wonderfully sardonic ditty “There Are Bad Times Just Around The Corner” (albeit written during the rather more solvent 1950s). Here’s a chorus:

There are bad times just around the corner
The horizon is gloomy as can be
There are black birds over
The greyish cliffs of Dover
And the rats are preparing to leave the BBC
We’re an unhappy breed and very bored indeed
When reminded of something that Nelson said
And while the press and the politicians nag, nag, nag
We’ll wait until we drop down dead

You can enjoy a complete performance embedded below – Is there any better national anthem for these turbulent times?

*

Update:

It seems that the story had already moved forward before I released the post – so here’s the part I missed: “Germany bring home gold stored in US, France,” released by Associated Press (published by The Wall Street Journal on Wednesday Jan 16th):

In what sounds like the setup for a stylish Hollywood heist movie, Germany is transferring nearly 700 tons of gold bars worth $36 billion from Paris and New York to its vaults in Frankfurt.

The move is part of an effort by Germany’s central bank to bring much of its gold home after keeping big reserves outside the country for safekeeping during the Cold War.

Click here to read the full story.

*

1 From an article entitled “Are the Netherlands’ gold reserves real? MPs want answers” published by Dutch News on November 28, 2012. http://www.dutchnews.nl/news/archives/2012/11/are_the_netherlands_gold_reser.php

2 From an article entitled “Bundesbank slashed London gold holdings in mystery move” written by Ambrose Evans-Pritchard, International business editor, published by the Telegraph on October 24, 2012. http://www.telegraph.co.uk/finance/financialcrisis/9631962/Bundesbank-slashed-London-gold-holdings-in-mystery-move.html

3 From an article entitled “Germany orders a check on its gold reserves” published by Russia Today on October 29, 2012. http://rt.com/business/news/germany-gold-reserves-check-472/

4 From an article entitled “Are Fiat Currencies Headed for a Collapse?” written by Lisa Oake, published by CNBC on July 27, 2012. http://www.cnbc.com/id/48349503/Are_Fiat_Currencies_Headed_for_a_Collapse

5 As I write, the price of gold is $1687 per oz and silver stands at $31.7 per oz. Over the last five years this compares to lows and highs of $709 and $1900 for gold and ranging between $8.92 and $48.5 for silver. In other words, the current values are still below the high peaks that were reached in 2011. However, if you judge from the trend rather than from spot values then both graphs are very clearly climbing throughout the 5 years – and in that period (a period which approximately coincides with the length of the current crisis) gold has almost doubled in value (being around $900 in January 2008) and silver likewise (from just over $15 in January 2008). A doubling of prices over five years would equate to an inflation rate of very slightly under 15%. Click on the links to see price charts over 5 years for gold and silver.

Copper is a little different. The price of copper as I write is $3.6 per pound. If you study the price over the last 5 years then there has been a more modest rise compared to gold and silver (beginning with a price already a little over $3 in January 2008, before sharply falling by December 2008 and then recovering again in late 2010). But the trend for copper is very much more interesting when considered over ten years. Back in 2003, silver was still in a dip at around $0.7 but in early 2004 it sudden began to rise spectacularly, reaching $3.5 by mid 2006 – an incredible five-fold increase. It has more or less maintained this high price ever since, flattening off in recent years, although as the chart below shows, the overall trend remains modestly upward:

Historical Copper Prices - Copper Price History Chart

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Filed under analysis & opinion, austerity measures, China, Germany, Netherlands, Venezuela

making out like bandits: the endless profits of an endless war

Last Monday [Dec 10th] was an extremely interesting day for news stories. For one thing, it was the day when the New York Times disclosed the altogether astonishing decision made by US federal authorities not to indict British bank HSBC for violations of the Bank Secrecy Act and the Trading with the Enemy Act:

HSBC’s actions stand out among the foreign banks caught up in the investigation, according to several law enforcement officials with knowledge of the inquiry. Unlike those of institutions that have previously settled, HSBC’s activities are said to have gone beyond claims that the bank flouted United States sanctions to transfer money on behalf of nations like Iran. Prosecutors also found that the bank had facilitated money laundering by Mexican drug cartels and had moved tainted money for Saudi banks tied to terrorist groups.1

High crime indeed, and please keep in mind the last part: “tainted money for Saudi banks tied to terrorist groups”. Could that mean al-Qaeda…?

HSBC was thrust into the spotlight in July after a Congressional committee outlined how the bank, between 2001 and 2010, “exposed the U.S. financial system to money laundering and terrorist financing risks.” The Permanent Subcommittee on Investigations held a subsequent hearing at which the bank’s compliance chief resigned amid mounting concerns that senior bank officials were complicit in the illegal activity. For example, an HSBC executive at one point argued that the bank should continue working with the Saudi Al Rajhi bank, which has supported Al Qaeda, according to the Congressional report.

The message is that bankers have become entirely immune to prosecution for almost any kinds of racket imaginable. No prosecution because, as the New York Times reports, of “concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system”, which is plainly ludicrous. Put simply, “too big to fail” has now slipped to become – and inevitably so, when you think about it – “too big to jail”:

Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities.

Apparently the biggest settlement in history, but chickenfeed to HSBC nonetheless. The same article also going on to explain how:

Given the extent of the evidence against HSBC, some prosecutors saw the charge as a healthy compromise between a settlement and a harsher money-laundering indictment. While the charge would most likely tarnish the bank’s reputation, some officials argued that it would not set off a series of devastating consequences.

A money-laundering indictment, or a guilty plea over such charges, would essentially be a death sentence for the bank. Such actions could cut off the bank from certain investors like pension funds and ultimately cost it its charter to operate in the United States, officials said.

So, excuses in hand, the federal authorities have chosen put aside the law and apply something they euphemistically call a “deferred prosecution agreement” – a glossy title for what is really nothing more or less than a ‘get out of jail free’ card.2

Click here to read the full report published in the New York Times.

You can also read and hear more about “deferred prosecution agreements” courtesy of William K Black in this previous article.

On Thursday, Democracy Now! invited Matt Taibbi, Rolling Stone contributing editor and author of “Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History.” Now you might be wondering how on earth an editor of Rolling Stone magazine became a serious fraud investigator, but seeing how others apparently better qualified and positioned were failing in that vital task, Taibbi eventually decided to jump in. He has since turned himself into one of leading experts on the current banking crisis (and its related scandals). And this is what Taibbi has to say regarding the latest cover-up:

Here we have a bank that laundered $800 million of drug money, and they can’t find a way to put anybody in jail for that. That sends an incredible message, not just to the financial sector but to everybody. It’s an obvious, clear double standard, where one set of people gets to break the rules as much as they want and another set of people can’t break any rules at all without going to jail.

It is unusual to see a news discussion in which all of the participants are at such a loss in trying to comprehend what they are describing, but here Taibbi and the others appear almost lost for words. Between all the raised eyebrows and the quizzical smiles, Taibbi put it this way:

[And] what’s amazing about that is that’s Forbes saying that. I mean, universally, the reaction, even in—among the financial press, which is normally very bank-friendly and gives all these guys the benefit of the doubt, the reaction is, is “What do you have to do to get a criminal indictment?”

What HSBC has now admitted to is, more or less, the worst behavior that a bank can possibly be guilty of. You know, they violated the Trading with the Enemy Act, the Bank Secrecy Act. And we’re talking about massive amounts of money. It was $9 billion that they failed to supervise properly. These crimes were so obvious that apparently the cartels in Mexico specifically designed boxes to put cash in so that they would fit through the windows of HSBC teller windows. So, it was so out in the open, these crimes, and there’s going to be no criminal prosecution whatsoever, which is incredible.

Click here to watch the interview or read the full transcript on the Democracy Now! website.

On the very same day, Monday 10th, the New York Times was also running an editorial piece entitled simply “Al Qaeda in Syria”. An article that begins:

The presence of rebel fighters in Syria that were trained and supported by Al Qaeda poses a serious problem for the United States and Western allies. The Nusra Front, an offshoot of Al Qaeda in Iraq, has become one of the most effective forces fighting against President Bashar al-Assad.3

Not that news of al-Qaeda rebel fighters in Syria can really be called news at all any more – this latest development involving the Iraqi group known as Jabhat al Nusra having already surfaced in a report from McClatchy that was published a week prior to the more prominent New York Times version of events:

When the group Jabhat al Nusra first claimed responsibility for car and suicide bombings in Damascus that killed dozens last January, many of Syria’s revolutionaries claimed that the organization was a creation of the Syrian government, designed to discredit those who opposed the regime of President Bashar Assad and to hide the regime’s own brutal tactics.

Nearly a year later, however, Jabhat al Nusra, which U.S. officials believe has links to al Qaida, has become essential to the frontline operations of the rebels fighting to topple Assad.4

Click here to read the full report from McClatchy.

The steady assent of al-Qaeda amongst the Syrian rebels is a story that has slowly been leaking out for many, many months. It emerged in the Guardian back in late July, and as long ago as August, the BBC had also put together their own news report to show how one group of Syrian insurgents were forcing prisoners to become unwilling suicide bombers – a story that was quickly removed by the BBC – but one that you can find embedded below from youtube:

The video footage in the report was actually shot by New York Times reporters (NYT again) who had spent five days following a group known as the Lions of Tawhid. And you can read an accompanying New York Times article published August 20th here.

At this time, both the BBC and the New York Times were still avoiding any mention of al-Qaeda, or for that matter circumventing words like Islamist or Jihadist that might be used to describe some of the rebels, and so instead the writer, C.J. Chivers, makes what with hindsight appears to be a few hints at the kind of force they might be dealing with: mentions of thick beards and repeated quotes from the rebels saying “God is Great” or along the lines of “we will kneel only for God.” Reading down the New York Times article, you will also find a parallel account of the story of the unwitting ‘suicide’ bomber who features in the (subsequently censored) BBC news clip:

The rebels lacked the heavy weapons to take the checkpoint in a head-on fight. So several of them would dress as civilians, move the truck bomb near the checkpoint and set it off. This would be the signal for an assault over the ground.

There was one problem. The Lions of Tawhid said they did not believe in using their fighters as suicide bombers.

Two fighters poured fuel into the truck’s gas tank while Mr. Meldaoun, the nurse, snipped branches from shrubs and stacked them on the bomb, hiding it from view.

The real plan was beginning to emerge. It involved the prisoner, Abu Hilal. The assurances that he would be released had been a deception. The fighters intended to put him behind the wheel of the truck bomb near the checkpoint and tell him to drive forward in a prisoner exchange.

[…]

“We told Abu Hilal, ‘Go, drive that way, your father is waiting for you there, don’t do any bad things in the future,’” Hakim said. “And he was so happy, and he drove.”

Abu Hilal stopped the truck at the checkpoint. Abdul Hakim Yasin pushed the button on the remote detonator, ready for the flash and thunderclap of more than 650 pounds of explosives. It would be the signal for his fighters to move forward and mop up.

Nothing happened.

He pushed the button again.

The truck did not explode.5

If the bomb had detonated this would have been a much more terrible atrocity, although obviously even this failed attempt was a war crime. And the embedded New York Times reporters might have highlighted the barbaric nature of this incident (as the BBC report had done), but instead the main body of the article devotes itself to presenting the rebels as a band of ordinary guys caught in the crossfire. Portrayed as romantic heroes, here is how the same article ends:

But as the rockets struck, the Tawhid fighters were barely distracted. They were waiting for the government soldiers nearby to show themselves, certain that night by night their foes were growing weaker, and their uprising was gaining strength.

After each explosion, Mr. Yasin, an accountant leading a life and a role delivered to him by war, keyed his two-way radio, and checked on his men. All around him they crouched in the smoky darkness, weapons ready, waiting for orders or for more action against a government they consider already dead.

It reads more like pulp fiction than serious journalism. But the point I wish to make is that mainstream stories about Islamist terrorists in Syria were just beginning to trickle out around this time. Indeed, in the New York Times blog of the following day [Aug 21st], David D. Kirkpatrick actually wrote the following:

Reports from Western officials, militant Islamist Web sites [sic], neighboring countries and, to a limited extent, inside the Syrian opposition indicate that Al Qaeda and homegrown militants are joining the fight and competing for influence. And that poses a vexing question for American policy makers and politicians. So far, all sides of the debate in Washington have called for supporting the insurgency, and the only question is how much. The Obama administration talks of diplomacy and economic sanctions, while some Republicans push to provide weapons to the insurgents. Is the United States acting side by side with Al Qaeda?6

Kirkpatrick is then very quick to answer his own question:

The short answer is no. A group as numerically tiny as Al Qaeda could never by itself steer a movement as large as the Syrian revolt. And even if Al Qaeda or other anti-Western militants are seeking to exploit or direct the Syrian uprising — why wouldn’t they? — that merely makes them rivals to the West for influence over the course of the revolt.

The difference three months later is that Kirkpatrick’s snap judgment is entirely overturned. Not only are al-Qaeda more or less running the Syrian revolt, but we also know that the American government is well aware of the fact. Obama himself now trying to explain the case for supporting the rebels, as he did on ABC news on Tuesday:

Obama expressed caution today about some Syrian factions involved with the coalition, warning that the United States will not support extremist elements.

“Not everybody who’s participating on the ground in fighting Assad are people who we are comfortable with,” Obama told Walters. “There are some who, I think, have adopted an extremist agenda, an anti-U.S. agenda, and we are going to make clear to distinguish between those elements.”

The president specifically singled out the group Jabhat al-Nusrah for its alleged affiliation with Al Qaeda in Iraq. The State Department says the jihadist group is responsible for nearly 600 violent attacks in major Syrian cities in the past year.7

Click here to read the full ABC news report and to watch the interview with Obama.

But did the situation in Syria really transform so rapidly and if so, how so…? I will leave the answers for others to fill in and move to the next part of Kirkpatrick’s rather remarkable article, as he candidly admits what many will have suspected all along:

The West, for its part, is eager to deprive Iran of its principal regional ally, the Assad government.

Yes, and lest we forget, this whole decade of war has consistently had as its long term objective some kind of military offensive against Iran. Meanwhile, and with regards to the developing crisis in Syria, these latest admissions make “Al Qaeda in Syria”, a more officially sanctioned story. With the ugly truth no longer plausibly deniable, the new hope of the American administration being that the press and the public won’t begin asking too many difficult but obvious questions. Questions like why does the US increasingly appear to be in cahoots with al-Qaeda – again?

So playing this whole story down has necessarily become the fall-back approach, and the New York Times helps the cause by reporting this latest episode (on Monday) with the same impartial tone as many of its earlier reports about the role and rise of the Syrian jihadists. Explaining to its readers that these al-Qaeda forces might “hijack the revolution”. And that “there are no easy answers.” And anyway, “[al-Qaeda’s] skilled fighters have been so effective.” Such a dilemma for any hawk…

The fear is that the group could hijack the revolution and emerge as the dominant force in Syria after Mr. Assad is ousted from power. […]

There are no easy answers, and no one believes that Washington, or any external power, can dictate the outcome. But President Obama still needs to provide a clearer picture of how he plans to use American influence in dealing with the jihadi threat and the endgame in Syria.

These repeated statements are a measure of how dumb they actually think most of us are. After all, American administrations have spent more than half a trillion dollars8 fighting off al-Qaeda forces in Afghanistan in a war that is well into its twelfth year. Yet we discover that the current administration are simultaneously backing a different group of resistance fighters, whilst fully aware that these other rebels are thoroughly infiltrated by al-Qaeda – and not just any old al-Qaeda, but a group that has established a foothold in another of the old war haunts, neighbouring Iraq. Asking us to believe that all of this has happened almost without them noticing truly beggars belief!

Mr. Obama has blacklisted the Nusra Front as a terrorist organization, which would make it illegal for Americans to have financial dealings with it. It makes sense to isolate the group and try to dry up its resources, but the designation by itself isn’t sufficient. American officials have to make a case directly to the countries or actors that are believed to be most responsible, either directly or as a conduit, for the weapons and other assistance to the Nusra Front: Qatar, Saudi Arabia, Turkey and Iraqi Kurdistan.

Click here to read the full report published in the New York Times.

Which means that as the war against al-Qaeda in Afghanistan grinds on and on into bloody stalemate, and through its horrors, helps in recruiting fresh militants ready to take up AK47s and plant IEDs against the imperialist infidels, there will be American officials “making a case” to favoured client states in the Middle East in efforts to persuade them not to supply “the weapons and other assistance” to this self-same enemy in a different place and under another name. Assistance that presumably includes all of that “tainted money for Saudi banks tied to terrorist groups”, laundered, so we now learn, by one of the world’s leading banks. A criminal enterprise that, in view of the laughable excuse for not seeking prosecution – remember those “concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system” – seems more than likely to continue. Such open corruption and such flagrant lies.

When Obama first came into office in 2008, the war in Afghanistan was already thought by many to be unwinnable. Obama might very easily (given the weight of public opinion) have begun the process of pulling troops out of Afghanistan. Instead of this, however, Obama brought in more troops and then covertly expanded operations across the border into Pakistan. This expansion being made possible thanks to a change in tactics; more specifically, by the use of secret and illegal drone strikes. Attacks that are officially unauthorised by the Pakistan government and illegal according to the United Nations.

The death toll from these cowardly and, by any proper understanding of the word, ‘terrorist’ drone strikes against the people of Pakistan is already estimated to be around 3000, of which, it is officially acknowledged9 that many hundreds are innocent civilians – deaths and injuries that the US continues to disregard as “collateral damage”.

All of which brings me to the third of the three reports from Monday 10th: a somewhat mixed but nonetheless worthwhile BBC Panorama investigation into “The Secret Drone War”. Reporter Jane Corbin interviewing members of families who have become victims of the drone attacks in Waziristan, a region inside Pakistan that the programme makers describe as “one of the most dangerous places in the world”.

Corbin also speaks with former cricketer and politician Imran Khan, who has helped to organise a mass anti-drone protest march across half the country, as well as to Medea Benjamin of CodePink and lawyer Clive Stafford Smith; just two of the many human rights activists who had joined in the march. And in the latter part of the programme, Corbin questions the use of so-called “signature strikes”: indiscriminate assassination where no named target has been located, but an attack is still launched against anyone unfortunate enough to be deemed involved in “an activity that looks suspicious”.

Click here to watch the Panorama episode “The Secret Drone War” which is available until Tuesday 10th December 2013.

It is now more than a decade since the then-US Under Secretary of State and prominent neo-con, John Bolton, (someone more recently spotted endorsing Mitt Romney during the presidential race) made an announcement in a speech that was entitled “Beyond the Axis of Evil” to the effect that:

… three nations [Cuba, Libya and Syria] could be grouped with other so-called “rogue states” – Iraq, Iran and North Korea – in actively attempting to develop weapons of mass destruction.10

Of those original six nations making up Bolton’s extended “Axis of Evil”, two, Iraq and Libya, have since been subjected to American-led campaigns resulting in regime change; one under Bush and one under Obama. Certainly, Obama’s less sustained “kinetic action” against Libya was to some extent sanctioned by the UN Security Council, in contrast to Bush’s entirely illegal “shock and awe” assault on Iraq. But there are many similarities.

After the bombardment and with the old despotic rulers gone, oil contracts and reconstruction deals were quickly approved by the newly appointed representatives of the two countries. Both countries were then otherwise abandoned to the chaos that the war had brought, and, as a direct consequence of the war, both are now teeming with jihadi forces. Syria, which was another country on Bolton’s wish list, is now suffering from a similar influx of jihadists, whilst waiting its turn for yet another Nato “intervention”. Is all of this mere coincidence?

Of course, we don’t hear so much about the “war on terror” these days, even as it continues unabated in the Af-Pak conflict; and absolutely nothing at all about that loose-fitting alliance called the “Axis of Evil”. Instead, we have been hearing more again about “weapons of mass destruction”. Periodic reminders of the nuclear threat from Iran, and most recently, new rumours of chemical weapons about to be used in Syria. Rumours that rhyme with yellowcake uranium and those mobile chemical warfare laboratories of George W. Bush and Colin Powell’s vivid imaginations.

We see then that under Obama the methods have changed in some respects, but that the general trajectory remains unaltered. American foreign policy still following a course that was publicly outlined by the Project for the New American Century (or PNAC) as far back as 2000. Certainly the talk is less bellicose and more guarded, but the war profiteering goes on and even the list of target nations has remained significantly unaltered.

The battle over Libya was justified as humanitarian, and any full-scale intervention in Syria will most likely be presented the same way (unless, that is, the WMD card comes into play), and yet in other ways the cloak of humanitarianism has since been dropped altogether. So we learn, for instance, from “a despicable article in Military Times” that the US military has recently declared that children have become legitimate targets on the battlefield, at least when it comes to operations in Afghanistan. The following coming from an article published on Dec 4th in The Nation magazine and frankly entitled “The US Military Approves Bombing Children”:

When Marines in Helmand province sized up shadowy figures that appeared to be emplacing an improvised explosive device, it looked like a straightforward mission. They got clearance for an airstrike, a Marine official said, and took out the targets.

It wasn’t that simple, however. Three individuals hit were 12, 10 and 8 years old, leading the International Security Assistance Force in Kabul to say it may have “accidentally killed three innocent Afghan civilians.”

But a Marine official here raised questions about whether the children were “innocent.” Before calling for the M142 High Mobility Artillery Rocket System mission in mid-October, Marines observed the children digging a hole in a dirt road in Nawa district, the official said, and the Taliban may have recruited the children to carry out the mission.

Shockingly, the [Military Times] article quotes a senior officer saying that the military isn’t just out to bomb “military age males,” anymore, but kids, too:

“It kind of opens our aperture,” said Army Lt. Col. Marion “Ced” Carrington, whose unit, 1st Battalion, 508th Parachute Infantry Regiment, was assisting the Afghan police. “In addition to looking for military-age males, it’s looking for children with potential hostile intent.”11

Click here to read the full article by Robert Dreyfuss.

I began writing this article because within these three different reports from last Monday there is a common thread. On one level that thread is simply al-Qaeda – bombed in Afghanistan and Pakistan, covertly supported in Libya and Syria, and all whilst the US government turns its blind eye to any financial assistance provided by banks like HSBC. All of which, for different reasons, makes a nonsense of the on-going “war on terror”. It makes no sense, that is, until one considers the underlying geo-strategy combined with the enormous profits to be made from all these wars. It makes no sense, in other words, unless you look at who the winners are – the private contractors alongside the global financiers. Because these wars are all very lucrative.

To understand just how profitable, I highly recommend a documentary entitled “Iraq for Sale” that was made by acclaimed filmmaker Robert Greenwald in 2006. It is embedded below:

You might also be interested in reading an extended pamphlet called “War is a Racket” (available online) that was written by Major General Smedley D. Butler and first published as long ago as 1935.

Butler, who was the most highly decorated soldier in American history, takes the case of war profiteering during WWI, and in a few short chapters he lays out the evidence with countless, very detailed examples. His research and considerable military experience leading him to the conclusion that, as he states in the very first paragraph:

“War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are recognised in dollars and the losses in lives.”

On another occasion12, Butler summarised his own part in that racket with these words:

“I spent 33 years in the Marines, most of my time being a high-class muscle man for big business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents. ”

Tragically, that same old war racket is now reaching a new apogee. So is there any appropriate and useful response to this never-ending carnage and human misery? Butler saw only one lasting solution:

“A few profit – and the many pay. But there is a way to stop it. You can’t end it by disarmament conferences. You can’t eliminate it by peace parleys at Geneva. Well-meaning but impractical groups can’t wipe it out by resolutions. It can be smashed effectively only by taking the profit out of war.”

Ending the war profiteering won’t happen overnight, but it is definitely an objective we might practically and realistically aim for. It would mean reversing the last twelve years of American foreign policy, but this is not impossible. It will require America and the rest of the world to make genuine international attempts to stall this insane war machine once and for all. The journalists could even help to set the ball rolling by reporting promptly and honestly as the battles continue to rage. Later, the courts must bring to justice all of the criminals who were complicit. No more deferred prosecution agreements for anyone. If all of this requires little short of a revolution, then what’s the alternative? Doing nothing means only that this war racket will keep on growing unopposed, when already we find its shadow over everything.

*

In the meantime, and if you are an American citizen, you might like to add your name to a “We the People” petition to the White House that calls for a cease to “all funding and support for al-Qaeda terrorists and extremist rebels in Syria”:

Hillary Clinton has admitted that Al-Qaeda is supporting the Syrian rebels, who are backed by the Obama administration with $200 million dollars in aid. According to McClatchy Newspapers one of these groups, Al Nusra Front, an Al-Qaeda affiliate, is now conducting “the heaviest frontline fighting” in Syria and has been responsible for terrorist attacks. Impartial observers such as Dr. Jacques Beres say the majority of rebels in Syria are foreign extremists whose goal is to impose Sharia law. These rebels have also been filmed burning U.S. flags and chanting anti-American slogans. Funding terrorists is a crime under the National Defense Authorization Act. Such activity has had disastrous consequences in the past, such as 9/11. We demand all support direct or indirect to cease immediately.

To locate the petition click here.

1 From an article entitled “HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering”, written by Ben Protess and Jessica Silver-Greenberg, published by the New York Times on December 10, 2012. http://dealbook.nytimes.com/2012/12/10/hsbc-said-to-near-1-9-billion-settlement-over-money-laundering/

2 Ibid.

“The HSBC deal includes a deferred prosecution agreement with the Manhattan district attorney’s office and the Justice Department. The deferred prosecution agreement, a notch below a criminal indictment, requires the bank to forfeit more than $1.2 billion and pay about $700 million in fines, according to the officials briefed on the matter. The case, officials say, will claim violations of the Bank Secrecy Act and Trading with the Enemy Act.

“As part of the deal, one of the officials briefed on the matter said, HSBC must also strengthen its internal controls and stay out of trouble for the next five years. If the bank again runs afoul of the federal rules, the Justice Department can resume its case and file a criminal indictment. An independent auditor will also monitor the bank’s progress to strengthen its internal controls, and will make regular assessments on the firm’s progress.”

3 From a New York Times Editorial entitled “Al Qaeda in Syria” published on December 10, 2012. http://www.nytimes.com/2012/12/11/opinion/al-qaeda-in-syria.html?_r=0

4 From an article entitled “Al Qaida-linked group Syria rebels once denied now key to anti-Assad victories”, written by David Enders, published by McClatchy Newspapers on December 2, 2012. http://www.mcclatchydc.com/2012/12/02/176123/al-qaida-linked-group-syria-rebels.html

5 From an article entitled “Life With Syria’s Rebels in a Cold and Cunning War”, written by C. J. Chivers, published by the New York Times on August 20, 2012. http://www.nytimes.com/2012/08/21/world/middleeast/syrian-rebels-coalesce-into-a-fighting-force.html?pagewanted=all

6 From an article entitled “Concerns About Al Qaeda in Syria Underscore Questions about Rebels”, written by David D. Kirkpatrick, published by the New York Times on August 21, 2012. http://thelede.blogs.nytimes.com/2012/08/21/concerns-about-al-qaeda-in-syria-underscore-questions-about-rebels/?ref=middleeast

7 From a report entitled “Obama Recognizes Syrian Opposition Group”, written by Devin Dwyer and Dana Hughes, published by ABC news on December 11, 2012. http://abcnews.go.com/Politics/OTUS/exclusive-president-obama-recognizes-syrian-opposition-group/story?id=17936599#.UMyZ_qywbZP

8 You can find a detailed breakdown of the costs of recent US military interventions at this site courtesy of the National Priorities Project : http://costofwar.com/about/counters/

9 A full official breakdown can be found here: http://counterterrorism.newamerica.net/drones

10 From a BBC news report entitled “US expands ‘axis of evil’” published May 6, 2012. http://news.bbc.co.uk/1/hi/1971852.stm

The report continues as follows:

“[Bolton] also warned that the US would take action.

“America is determined to prevent the next wave of terror,” he said, referring to the 11 September attacks in Washington and New York that killed up to 3,000 people.

“States that sponsor terror and pursue WMD (weapons of mass destruction) must stop. States that renounce terror and abandon WMD can become part of our effort, but those that do not can expect to become our targets,” he said.”

11 From an article entitled “The US Military Approves Bombing Children”, written by Robert Dreyfuss, published in The Nation magazine on December 4, 2012. http://www.thenation.com/blog/171582/us-military-approves-bombing-children#

12 From Socialist newspaper Common Sense in 1935. You can find the quote attributed here: http://en.wikiquote.org/wiki/Smedley_Butler

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seven ways of reporting on a coup: the overthrow of Paraguayan president Lugo

A coup d’etat is taking place right now, Friday afternoon, in Paraguay.

So began a report by Mark Weisbrot published in the Guardian on Friday 22nd June. Weisbrot continuing:

That is how it has been described by a number of neighboring governments. And the Union of South American Nations (UNASUR) is treating it as such, taking it very seriously. All 12 foreign ministers (including those of Brazil and Argentina, who are deeply concerned) flew to Asunción Thursday night to meet with the government, as well as the opposition in Paraguay’s Congress.

The Congress of Paraguay is trying to oust the president, Fernando Lugo, by means of an impeachment proceeding for which he was given less than 24 hours to prepare and only two hours to present a defense. It appears that a decision to convict him has already been written, and will be presented Friday evening (at 20.30 GMT). It would be impossible to call this due process under any circumstances, but it is also a clear violation of Article 17 of Paraguay’s constitution, which provides for the right to an adequate defense.1

In his article entitled “What will Washington do about Fernando Lugo’s ouster in Paraguay?”, Weisbrot also reminds us of the meddling part played by the Obama administration (and especially of Hillary Clinton) during the 2009 Honduran coup, which led to the overthrow of democratic left President Manuel Zelaya:

Zelaya’s ouster was a turning point for relations between the US and Latin America, as governments including Brazil and Argentina, which had previously hoped that President Obama would depart from the policies of his predecessor were rudely disappointed. The Obama administration made conflicting statements about the Honduras coup, and then – in opposition to the rest of the hemisphere – did everything it could to make sure that the coup succeeded. This included blocking, within the OAS [Organization of American States], efforts by South American nations to restore democracy in Honduras. At the latest Summit of the Americas, Obama – in contrast to the summit of early 2009 – was as isolated as his predecessor George W Bush had been.

And the prospects this time? Weisbrot offers his thoughts as news of the coup is still breaking:

The Obama administration has responded to the current crisis in Paraguay with a statement in support of due process. Perhaps, they have learned something from Honduras and will not actively oppose efforts by South America to support democracy this time. And certainly, South America will not allow Washington to hijack any mediation process, if there is one – as Hillary Clinton did with the OAS in Honduras. But Washington may still play its traditional role by assuring the opposition that the new government will have support, including financial and military, from Washington. We will watch what happens.

So we waited and then, just a few days later [June 24th], and, as the BBC reported, Washington responded with the following message:

The US urged “all Paraguayans to act peacefully, with calm and responsibility”.2

Whilst by June 28th (almost a week after the coup) the BBC were still taking an impartial stance and not prepared to declare that any kind of coup had actually taken place. The question no longer being one of ‘rule of law’ but more simply a matter to be settled by Paraguayan public opinion, which they therefore set out to canvass:

People in Paraguay seemed to have different opinions on the impeachment and removal of President Fernando Lugo from office a few days ago.

Some people called the measure taken by the Senate as a coup against the democracy, others think the decision was the result of his poor performance as a leader.3

Unsurprisingly, the BBC succeeded in finding a relatively even balance of opinions when they put together the vox pop montage that you can watch here.

So what’s the truth about the removal of Fernando Lugo? Was it a matter of legitimate impeachment after Mr Lugo’s “poor performance” or simply a new kind of “express coup d’etat”? Well, here’s a report by Jorge Heine published in The Hindu that digs a little deeper and sets the story within a somewhat wider context:

Although hit, like every other country, by the Great Recession of 2008-2009, in 2010, the Paraguayan economy grew 14.5 per cent, one of the highest rates in the world, comparable to the rates clocked by Singapore or some of the Gulf Emirates, and Paraguay’s highest in 30 years. It grew again at 6 per cent in 2011, and prospects are upbeat for this year as well. In other words, the country is booming, and doing better than it ever did in the past. […]

The last thing that could be said of Mr. Lugo is that he mismanaged the economy. If anything, he was much too cautious in the handling of social demands, and too accommodating to established interests. Though he had promised land reform, and his approval ratings were at 84 per cent in the early days of his government (as opposed to 17 per cent for his outgoing predecessor) he was unable to make headway on it, not surprising in a country as conservative as Paraguay.4

With regards to the impeachment proceedings, Heine writes:

The notion that you could give the President less than a day to prepare his defence, and a mere two hours to present it — as the Paraguayan Senate did when Mr. Lugo had asked for a couple of weeks to do so — stretches credulity. Yet, that is exactly what happened. When asked why the rush, Federico Franco, President Lugo’s VP and now his successor said “to avoid civil war”. If you believe that, you will believe anything. Paraguay is no closer to civil war than Switzerland is. It is South America’s second poorest country, very conservative, with many issues, but certainly not on the verge of civil war.

And what does Heine make of Washington’s involvement?

This raises an interesting question. Should the United States, the alleged champion of democracy worldwide, embrace and sign FTAs with countries that are forced to leave regional integration schemes for violating the democratic clause? The equanimity with which the U.S. State Department reacted to the soft coup in Paraguay (“We urge all Paraguayans to act peacefully, with calm and responsibility, in the spirit of Paraguay’s democratic principles” (sic)) hints that, after legitimising the coup in Honduras, and accepting without as much as a blink the ouster of President Lugo in Paraguay, the defence of democracy and the rule of law in the Americas is not a high priority in Washington these days.

But then obviously we know this already, and who is Jorge Heine anyway…? Well, he is chair of global governance at the Balsillie School of International Affairs and a distinguished fellow at Centre for International Governance Innovation, CIGI. The CIGI is, in turn, in partnership with the Institute for New Economic Thinking, INET. In short then (and seeing beyond all the MUDI acronyms), Heine is a leading academic proponent of globalisation and someone uncomfortably close to a certain George Soros (already featured in a number of posts on this blog). All of which caused me to wonder if there wasn’t perhaps just a little more to Washington’s involvement in Lugo’s fall than meets Heine’s rather too well-connected eyes?

And it turns out that there is indeed another part to the jigsaw:

If you go by WikiLeaks, Lugo’s removal reads like the chronicle of a foretold coup. According to cables from the US embassy in Paraguay leaked by WikiLeaks, the coup has been on the table since 2009.

According to the cables the leader of the extreme right wing Unión Nacional de Ciudadanos Éticos (UNACE, National Union of Ethical Citizens) disgraced General Lino Oviedo, and the former president, the Partido Colorado’s Nicanor Duarte Frutos began plotting the end of Lugo shortly after he took over.

According to WikiLeaks, their objective was to profit from Lugo’s political slips – which have been a few – to impeach him, appoint Federico Franco and force a general election within 90 days. Now, whether Lugo’s overthrow last week was the culmination of the 2009 plot made public by WikiLeaks remains nebulous.5

This wikileaks evidence that plans of a coup were already known by the US administration back in 2009 is also available in numerous other places around the web:

The extract quoted above was taken from an interesting post written by Antonio Castillo, a journalist and journalism lecturer at The University of Sydney, who in the same piece asserts that “What happened in Paraguay last week was a ‘political coup.’” Castillo being another author who is concerned by obvious parallels with the 2009 Honduras coup:

The final aspect that emerges from the Paraguayan crisis is that perhaps we are witnessing a “new kind of coup.” This new kind of coup – like the one against Manuel Zelaya in Honduras in 2009 – is more sophisticated and dressed up in some sort of legality. But it is essentially a coup – a conspiracy of the political elite that will resort to any measures to stop any leader who might have links to progressive social movements in the region.

But then there is perhaps yet another side to all of this. We are given the impression by many of the commentators who are sympathetic to Lugo that his reforms have been far-reaching, whereas Castillo, on the other hand, sees the same reforms as having been mostly stifled and essentially failed:

The agrarian reform he promised – to end the land monopoly orchestrated by the former dictator Alfredo Stroessner – didn’t go anywhere, while the demands from the popular sector fell on deaf ears. During the past four years, the popular social movement lost ground while the right became the beneficiary of Lugo’s many concessions. Even his nemesis, the Partido Colorado benefitted from his incongruous political decisions, including the hand over of the Ministry of Agriculture to neoliberal exponents and the appointment – after the incident in Curuguaty – of Rubén Candia from the Partido Colorado to the Ministry of Interior.

In reality Lugo never threatened the financial and political interests of Paraguay’s oligarchy. It would be a mistake to say the coup was intended to end a progressive left wing government – as was the case in 1970s Chile under Salvador Allende. Let’s be clear, Lugo’s government was never in that league.

Click here to read more of Antonio Castillo’s analysis.

Not that Castillo is a lone voice in making this assessment. Here are the altogether more radical thoughts of William Prieto writing for socialistworld.net:

Lugo came to power in 2008, backed by an eclectic coalition of parties, with a margin of 10% over his nearest rival from the Colorado Party. His election was an historic blow to The Colorado Party, the traditional political voice of the ruling class, which governed uninterrupted for 61 years until Lugo’s election, including during the 35 years of the bloody Stroessner dictatorship. […]

However, there are key elements which differentiate the Paraguayan experience from the processes in Venezuela and Bolivia for example. Lugo was elected as candidate of the Patriotic Alliance for Change, which despite including many political and social organisations of the workers and peasants, was also backed by the Liberal capitalist, Partido Liberal Radical Auténtico (PLRA), which saw in Lugo’s election an opportunity to occupy positions of political power benefiting from the breaking of Colorado’s monopoly. This party is the very one which Federico Franco leads and which led the charge to remove Lugo!

Prieto, who is a member of the Trotskyist Socialismo Revolucionario [Revolutionary Socialist] party in Venezuela, believes that these contradictions were a ticking time-bomb always ready to be exploited as during the instigation of the recent coup:

[Thus,] From the very beginning, the Lugo presidency contained the contradictions which have been exploded in this coup. […]

This is a consequence of Lugo’s mistaken approach, basing himself on negotiations and alliances with pro-capitalist parties (including the Colorado party) in parliament, rather than on the movements and mobilisations of the working masses to achieve their demands for real change. As the other revolutionary processes in Venezuela and Bolivia, the experience of Left governments is proving in practice the need for a political fight based on a struggle of the workers and peasants, through independent and democratic political organisations armed with a programme to break the power of imperialism and the oligarchs.

If decisive anti-capitalist measures are not adopted, a “balancing act” between reforms benefiting the poor and the maintenance of the rule of the multinationals and landlords can only end in the wearing out of the struggle and return of the right wing. In Paraguay, commentators are suggesting that Lugo’s removal is part of the preparations for the right wing to be able to take power again in the 2013 elections in 9 months’ time. Indeed, as an article in El Pais following the coup on 24 June, described as “a miracle” the fact that Lugo had been able to remain in power until now, going on to speculate that: “this miracle can only be explained by assuming that the interests of the landlords were not put into question”.6

However, the most comprehensive overview I’ve discovered so far was published this weekend in Counterpunch. Written by Gabriel Rossman and entitled simply “Return of the Coups”, the piece begins:

On June 22, the Paraguayan Congress impeached President Fernando Lugo, a progressive who assumed office in 2008. Although technically legal, Lugo’s removal threatens the very integrity of democracy in Paraguay. It is the latest in a disconcerting series of attacks against progressive governments in South America that highlights the vulnerability of its nascent democratic institutions and calls into question the trend of democratization in the region.7

Click here to read Gabriel Rossman’s complete article at Counterpunch.

Finally, there is one person whose important opinion has been strangely absent during the last few weeks of turmoil: that person being, of course, Fernando Lugo himself. On Thursday [July 12th] Lugo broke his silence giving an exclusive interview on Russia Today:

RT: Mr. President, right after you were voted out of office, you spoke as if you were resigning of your own accord. You also looked as if you weren’t quite yourself. Later we saw a more energetic Lugo, like the one we see now. So why did you fail to be as convincing in your resistance to the coup in those first hours?

FL: I saw people out in the square. They wanted me to go because of the ministers. I knew that a new massacre was being prepared.

I am a convicted pacifist. I didn’t want to see any Paraguayan lose their blood as a result of violence. That is why we went along with this illegal and unfair process. It was a politically-charged trial disguised as a constitutional process. As one MP said, it all looked like a circus designed to depose a democratically-elected president.

Click here to read the full transcript or watch the interview on the Russia Today website.

1 From an article entitled “What will Washington do about Fernando Lugo’s ouster in Paraguay?”, written by Mark Weisbrot, published in the Guardian on June 22, 2012. http://www.guardian.co.uk/commentisfree/2012/jun/22/washington-fernando-lugo-ouster-paraguay

2 From an article entitled “Lugo denounces removal from Paraguay presidency as coup”, published by BBC news on June 24, 2012. http://www.bbc.co.uk/news/world-latin-america-18569378

3 From an article entitled “’I think this was a coup’, says Paraguayan resident” posted by BBC news on June 28, 2012. http://www.bbc.co.uk/news/world-latin-america-18633364

4 From an article entitled “A soft coup in South America”, written by Jorge Heine, published in The Hindu on July 12, 2012. http://www.thehindu.com/opinion/lead/article3628430.ece

6 From an article entitled “Fernando Lugo brought down in “legal” coup d’etat”, written by William Priesto, posted by socialistworld.net on June 29, 2012. http://www.socialistworld.net/doc/5830

7 From an article entitled “From Honduras to Paraguay: Return of the Coups” written by Gabriel Rossman, published in Counterpunch on July 13–15, 2012. http://www.counterpunch.org/2012/07/13/return-of-the-coups/

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the Chicago School is dangerously wrong: I’m with Michael Hudson

On Thursday’s episode of the Keiser Report [March 8th], Max Keiser spoke with Dr. Michael Hudson from the University of Missouri, Kansas City. Hudson explained how neo-liberal economic theories have become dominant simply by virtue of the fact that they fail to accommodate any antithetical viewpoint:

We’re the unspeakable ones. We’re the people that liberals like [Paul] Krugman won’t talk about. We’re the people that the University of Chicago – in the magazines that it’s put its editors in – will not permit discussion. So basically the free-marketers are censors; they don’t believe in a free market of ideas. They believe in what they did in Chile. Remember, the first thing the Chicago Boys did in Chile was close down every economics department in the country except the one they controlled…

Hudson also explained to Keiser, how these ideas, which are most associated with Milton Friedman and the University of Chicago (more thoughts on Friedman are provided in an appended article at the bottom of this post), have quite literally inverted the original free market thinking of its founders Adam Smith and J.S. Mill:

The idea of ‘free market’ to classical economics was to bring prices in line with the actual technologically necessary costs of production… Monopolies were either to be regulated to keep their prices in line with the actual costs – like America regulates the bills that electrical utilities can charge – or, that most monopolies would be, as in Europe, kept in the public domain and operated as public utilities. And if there was something basic like education, or roads, these should be provided freely in order to minimise the economy’s cost of production, and make it more competitive. This was the whole philosophy of the industrial revolution, and it was the ‘free market’ idea that the Classical economists had. […]

But [the modern] idea of a ‘free market’ was free for predators. Free for monopolists. Free for landlords to gouge whatever rents they could get, and to free themselves from taxation, so that the government had to tax labour and to tax industry. And the result is that the American economy today under the so-called ‘free market’ has such a high cost of living, and a high cost of production, that labour can’t compete internationally. That’s why America’s balance of trade has moved so far into deficit.

So ‘free market’ is what is killing the American economy and it’s not free at all… not the kind of ‘free market’ that Adam Smith talked about.

You can read more about Michael Hudson’s economic thinking along with the views of his fellows at the University of Missouri-Kansas City (including an insider perspective from former financial regulator William Black) at the ‘new economic perspectives’ blog http://www.neweconomicperspectives.org/.

*

Milton Friedman was professor at the University of Chicago. There he helped to found the acclaimed Chicago School of Economics – a group that produced a number of Nobel Prize winners. Friedman himself received the Nobel Prize for Economics in 1976, whilst The Economist once described him as “the most influential economist of the second-half of the twentieth century.”1

It was the economic ideology formulated and promulgated by Friedman and his Chicago School, with its emphasis on market deregulation and free trade, that exercised such great influence during the eighties with the ‘hands off’ economic policies of Reagan and Thatcher. Indeed the legacy of those years has persisted throughout the administrations led by Major, then Blair and Brown, and now Cameron and Clegg (Quelle différence?), and today’s political consensus offers little alternative but the full acceptance of Friedman’s old deal, with economic differences between New Labour and Conservative being merely a matter of degrees. Friedman seems to have won, for the time being at least. So what exactly is the rationale behind his winning formula?

Broadly he came to his theories from two angles. Firstly, he distanced himself from the sorts of social reformers who saw state control as a necessary element of modern civilisation. Regarding welfare legislation, such as minimum wage laws as self-defeating (because they would supposedly prevent those without skills from finding gainful employment), he was equally dismissive of the meddling trade unions, and sought ultimately to banish all social security programmes.

Whereas previously, economists like Keynes, and also Adam Smith, had got themselves all tangled up on what sorts of policies were better or worse for the general welfare, Friedman carefully side-stepped such messy complications. As far as Friedman was concerned, government is mostly a stifling and wasteful inconvenience (which, in fairness, is all too often the case). But here Friedman goes to extremes: left to its own devices, he says, all government must undoubtedly veer toward some form of tyranny. The best thing then is to clip its wings completely. Instead of government making decisions, the people should be left to choose for themselves. But how? Well, by forcing government to give way to the market.

Secondly, and in common with many cool-headed intellectuals, Friedman regarded human beings with a deeply felt suspicion. “Mankind is selfish and greedy,” he said in a television interview. But when asked by the interviewer whether in admitting this, he’s not inadvertently making a good case for more control rather than less, he quickly dismissed such Hobbesian objections, replying: “Therefore, we have to put power into the hands of other selfish and greedy men.”2 It’s an odd and revealing answer for one who purported to be a liberal rather than a conservative, and who always wrapped himself in the flag of Freedom.

So here is Milton Friedman, the high evangelist of a radical lassez-faire “limited government”, fast talking and slick, and preaching ever less intervention, less regulation, and less central control. Less is more. Less interference makes more profits, and more profits equates with more goods, and goods are of course, by definition, good.

Work hard, make money: this was the heart of his doctrine – and leave it to the individual to make all the right choices. Trying to do good with “other people’s money” is simply fallacy – Friedman liked the term “other people’s money” (though nowadays he’d almost undoubtedly say “taxpayer’s money”; same difference):

“If I want to do good with other people’s money I’d first have to take it away from them. That means that the welfare state philosophy of doing good with other people’s money, at its very bottom, is a philosophy of violence and coercion. It’s against freedom, because I have to use force to get the money.” [about 11:30 min into part 1]

Phew, it certainly sounds bad when you put it like that. All that collecting of taxes and then divvying the money out for housing, schools, hospitals and caring for the old folk, sure is some serious violation of our inalienable human rights. Friedman, characteristically, takes such reasoning to its logical and ultimate extremes. Indeed, he is actually prepared to estimate just how many people might reasonably be done-away-with to ensure that we remain free from the sorts of deplorable ‘violence and coersion’ that are all too familiar when it comes to tax collection:

“But let’s look at that a little farther,” he says,”Suppose that five percent of the elderly would not be able to provide for themselves. Does it make sense to impose a programme on a hundred percent of the people in order to do something about five percent? Does that really make sense? You see, that’s the great defect in this line of thinking – ” [about 1:30 min into part 2]

Although why stop at five percent, when it makes economic sense to sacrifice a few more of the useless-eaters…

As for the new role of economists themselves, and with the tricky problem of people dismissed, their attention can be properly focused on complex theories of monetary policy: intricate models of how money and the markets function in and by themselves. Here is enough to be getting on with, says Friedman, and the new economists agree. Why? No doubt in part, because it grants them a legitimacy that previously only attached to the expertise of the scientist. It offers an intellectual purity.

But how can anyone objectively divorce economics from society (even if they would choose to), and draw such clear divisions between money and its effects on people? Economics, if it is a science (and there are extremely good grounds for saying that it isn’t), might conceivably be a science like psychology, but it can never be anything like, say, physics. The reason being that money is inherently a people thing; a human construct, bearing only a superficial resemblance to other kinds of natural phenomenon, which it most definitely isn’t. Nor are markets freely-floating entities immune to all human frailty, but composed of analysts and traders: people who are driven at least as much by fear as by good reason. Constantly jittery; every now and then ‘the markets’ totally crap their pants. Yet Friedman desperately wants to cut all this out of his equation, whilst insisting that all other economists eventually join him in his perfect economic bubble.

And following Friedman’s prescription has led us to a perfect economic bubble. A debt bubble that has swollen to such an extent that it currently exceeds the value of everything else on earth.3 We should not be surprised. This is what’s likely to happen when you entirely decouple economics from social needs. When money becomes the main ‘product’ in the world. When high frequency trading involving the use of computer algorithms forces commodity and share prices to rise and fall in fractions of second, whilst outside in the real world nothing about those commodities or businesses has altered in anyway – the values being driven instead by feedback loops of speculation. When markets are also rigged by insider knowledge – an anathema to the ‘free market’ and yet, thanks to deregulation, easier than ever. And when ‘the markets’ in themselves are bloated by the never-ending creation of ‘financial products’, quite apart from any judgment of how all these new paper contracts might blight the real economy. No value judgments are allowed. No distinction between profits earned from the supply of real goods and services as opposed to profits made by profiteers and financial predation. Money making more and more money being an inherent good.

In truth, Friedman was never really a liberal, but a libertarian of sorts (and saying this does a disservice to the better half of libertarianism). The neo-con intellectual apologist Francis Fukuyama is another libertarian of a similar sort, and Fukuyama undoubtedly derives a great deal from Friedman. Liberty, in the eyes of both men, is inextricably tied to the freedom to buy and sell. Indeed, Friedman once claimed that: “underlying most arguments against the free market is a lack of belief in freedom itself.”4

In defence of this extremist position, Friedman has often pointed to history. History, he tells us, has long been constructed along collectivist principles, which is indeed the normal state of humankind. The trouble is that collectivism doesn’t work, and so, although the system of minimal collective intervention may appear, at least on the surface, to be crueller and more selfish, the results it yields are for the betterment of most, if not all. We should judge much better by the consequences rather than from the objectives, he always insisted, looking at the ends rather than the means. Okay then let’s do just that. And let’s be fair here, and judge Friedman on the basis of his most acclaimed success.

On September 11th of 1973 the democratically elected government of Salvador Allende was overthrown by a CIA backed military coup and replaced by a junta government led by Augusto Pinochet. What immediately followed is common knowledge. Imprisonment of political opponents, torture, and the “disappearance” of thousands of innocent victims. The record of atrocities committed by the Pinochet regime is well documented. But perhaps what is less well remembered is the parallel economic measures imposed by the so-called Chicago Boys during Pinochet’s reign of terror.

Sweeping deregulatory reforms that involved the abolition of the minimum wage, the removal of food subsidies, the suppression of trade union activity, and the privatisation of just about everything in sight. The pension system, the banks and assets of state-ownership, all greedily seized and sold off. This kind of “shock treatment”, as Friedman unflinchingly referred to it, resulted in a real wage drop of more than forty percent, a doubling in levels of poverty, and a staggering one in five of the working population (a five-fold increase within a decade) forced into desperate unemployment and left to fend for themselves .5 Yet Friedman regarded all of this as merely the price of success, and described the transformation from Allende’s democratic socialism to Pinochet’s hard-line, totalitarian capitalism as “the miracle of Chile”. Individual suffering was simply a small price for Friedman’s greater ‘liberty’, and back in 1975, in the discussion with Heffner, he staked out that position too, albeit a little clumsily:

“I want people to take thought about their condition and to recognize that the maintenance of a free society is a very difficult and complicated thing. And it requires a self-denying ordinance of the most extreme kind. It requires a willingness to put up with temporary evils on the basis of the subtle and sophisticated understanding that if you step in to try to do them [do what? the temporary evils?], you not only may make them – [hesitation as he corrects himself] – to do something about them – you not only may make them worse, but you will spread your tentacles and get bad results elsewhere.” [about 6:00 min into part 2]

Milton Friedman spread his own tentacles pretty much everywhere, and the world has long been poisoned by his ‘free market’ phoney liberalism. Friedman’s Chicago School branch of economics having not merely served as justification for the continued exploitation of workers, but also, and by virtue of its mantra for deregulation, encouraged the rampant, cancerous growth of a crony capitalist elite. Fundamentalist ‘free market’ thinking isn’t just cruel, it has been calamitous. Milton Friedman, its high priest, was so very dangerously wrong.

1 From an article entitled “Milton Friedman, a giant among economists” published November 23rd, 2006, The Economist.

2 All otherwise uncredited quotes in this section have been drawn from an interview with Richard D. Heffner, broadcast on Sunday December 7th, 1975 as part of the TV series “Open Mind” , produced by WPIX, Channel 11, New York, in cooperation with Saturday Review (based on a transcription found at http://www.theopenmind.tv/tom/searcharchive_episode_transcript.asp?id=494).

Friedman’s full answer to Heffner’s question is this: “Therefore, we have to put power into the hands of other selfish and greedy men. Now I want to apologize for what I said. The great bulk of mankind. There are always conspicuous exceptions, not everybody. And also for each person there is an exception. People are selfish and greedy in one aspect of their activity. They are unselfish and generous in another.” [about 8:00 min into part 2]

3 The underlying cause of the current crisis is the worldwide trade in “derivatives”. It is currently estimated that in the order of a quadrillion US dollars (yes, that’s with a qu-) has been staked on derivations of various kinds. We can compare this with the entire world GDP which turns out to be a mere 60 trillion US dollars [According to IMF economic database for October 2010, World GDP is $61,963.429 billion (US dollars)]. One quadrillion being more than twenty times larger. Or we might compare it against the estimated monetary wealth of the whole world: about $75 trillion in real estate, and a further $100 trillion in world stock and bonds. So one quadrillion is a number exceeding even the absolute monetary value of the entire world! Warren Buffett once described derivatives as “financial weapons of mass destruction”, and he should know because he trades in them.

4 “A major source of objection to a free economy is precisely that it … gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.” Taken from chapter 1 of “The Relation Between Economic Freedom and Political Freedom“, 2002 edition, page 15.

5 From 1973-83 unemployment rose from 4.3% to a staggering 22%, whilst by all measures, the average worker was worse off in 1989 than in 1970, labor’s share of national income having fallen from 52.3 to 30.7 percent. Statistics courtesy of James Petras and Fernando Ignacio Leiva with Henry Veltmeyer, from “Democracy and Poverty in Chile: The Limits to Electoral Politics“, Boulder: Westview Press, 1994.

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Filed under analysis & opinion, Britain, Chile, financial derivatives, Max Keiser, neo-liberalism, USA

Brown, Bernanke, Chavez and the price of gold

They say that a fool and his gold are soon parted, and it turns out that was certainly the case when it came to Gordon Brown; squandering not his own reserves, but the nation’s:

Between 1999 and 2002, Mr Brown ordered the sale of almost 400 tons of the gold reserves when the price was at a 20-year low. Since then, the price has more than quadrupled, meaning the decision cost taxpayers an estimated £7 billion, according to Mike Warburton of the accountants Grant Thornton.1

Having settled for such a poor return on our national savings — a decision described in the article as “one of the Treasury’s worst mistakes” (which is putting things mildly) — we also learn (in the same article) that Brown and the Treasury “have repeatedly refused to disclose information about the gold sale amid allegations that warnings were ignored.”

Here is financial journalist Max Keiser trying to get to the bottom of what’s become known as, ah-hum, “Brown’s Bottom”:

Meanwhile, in another part of the world, Hugo Chavez sat tight on his own country’s gold reserves – and now he’s asking for them back:

Venezuela plans to transfer billions of dollars in cash reserves from abroad to banks in Russia, China and Brazil and tons of gold from European banks to its central bank vaults, according to documents reviewed Tuesday by The Wall Street Journal.

The planned moves would include transferring $6.3 billion in cash reserves, most of which Venezuela now keeps in banks such as the Bank for International Settlements in Basel, Switzerland, and Barclays Bank in London to unnamed Russian, Chinese and Brazilian banks, one document said.

Venezuela also plans to move 211 tons of gold it keeps abroad and values at $11 billion to the vaults of the Venezuelan Central Bank in Caracas where the government keeps its remaining 154 tons of bullion, the document says.2

As Venezuela demands its gold back, some commentators are feigning incomprehension. Why on earth would anyone want their gold back at a time like this…? But perhaps the question they should really be asking is this: what if Chavez is refused?

Keiser, a former equities broker, runs a campaign that encourages people to buy up physical silver in an effort to crash JP Morgan; an organisation that he describes as “the biggest financial terrorist on Wall Street”. He says that Chavez’s demands for the return of Venezuelan gold could have a similar effect on JPM:

The fun begins if Chavez demands physical delivery of more than 10.6 tons of physical because as today’s CME update of metal depository statistics, JPM only has 338,303 ounces of registered gold in storage. Or roughly 10.6 tons. A modest deposit of this size would cause some serious white hair at JPM as the bank scrambles to find the replacement gold, which has already been pledged about 100 times across the various paper markets.

Posted at maxkeiser.com on 17th August.

The price of gold has skyrocketed during the last few weeks, but this doesn’t automatically mean we are witnessing a bubble, at least not in the usual sense. If you look over the longer term, you’ll see that the price of gold has actually been rising steadily for around a decade (about the same time when Gordon Brown decided to sell). That same trend is true for silver, as well as other “physicals”. So is it that the value of gold and silver are rising, or is it that paper currencies (most significantly the dollar) have been devalued?

About a month ago, when the price of an ounce of gold was a mere $1,500, Congressman Ron Paul confronted Federal Reserve Chairman Ben Bernanke in a U.S. House Financial Services Committee. Paul asked Bernanke directly: “do you think gold is money?” Bernanke’s answer: “No”.

But if gold isn’t money, then just what is? The ever increasing supply of virtual ones and zeros orbiting the global markets, or those tattered pieces of paper in your wallet which declare: “I promise to pay the bearer on demand the sum of five pounds” – five pounds, ten pounds, twenty pounds, but pounds of what exactly? Hugo Chavez isn’t waiting to find out, and he’s not alone.

1 From an article entitled “Explain why you sold Britain’s gold, Gordon Brown told”, by Holly Watt and Robert Winnett, published March 24, 2010. http://www.telegraph.co.uk/finance/personalfinance/investing/gold/7511589/Explain-why-you-sold-Britains-gold-Gordon-Brown-told.html

2 From an article entitled “Venezuela Plans to Move Reserve Funds” by Jose De Cordoba and Ezequiel Minaya, published in The Wall Street Journal on August 17, 2011. http://online.wsj.com/article/SB10001424053111903392904576512961180570694.html

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Filed under Britain, Max Keiser, Uncategorized, Venezuela

the IMF and its part in our downfall

For a refreshingly frank and insightful examination of the reasons for the current global economic crisis, and, more specifically, of the IMF’s part in our accelerating downfall, I recommend the following programme:

Empire: The IMF on trial

broadcast on Al Jazeera on Thursday 11th August at 9:00pm–10:00pm

Presenter Marwan Bishara leads a searching debate into the historic failures of the IMF, with reflections on the legacy of its intervention in Latin America — most especially in Argentina — as well as in East Asia and Africa. There is also speculation about what is likely to happen to Egypt, after calls for IMF intervention were declined, and to Greece, where the imposition of “austerity measures” is already in full swing.

The guests are:
Professor Alex Callinicos, director of European Studies, King’s College London and author of “Bonfire Of Illusions”.

Ann Pettifor, fellow, at the New Economics Foundation and author of “The Coming First World Debt Crisis”

Georges Corm, former Lebanese finance minister and former special consultant, World Bank

Dr Mario Blejer, former governor, Argentine Central Bank and former advisor, Bank Of England

Also included are interviews with:
Christine Lagarde, managing director, International Monetary Fund

Professor Alan Cibils, chair, Political Economy, Universidad Nacional Sarmiento

The programme is still available on Al Jazeera at the following times next week:

Sunday: 7:00 am; Monday: 9:00 pm; Tuesday: 1:00 pm; Wednesday: 2:00 pm; and Thursday: 7:00 am.

Click here to watch on the Al Jazeera website.

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Filed under Argentina, did you see?, Egypt, Europe, Greece, Iceland, Ireland, Italy, Latin America, Spain, Tunisia, Uncategorized, USA