Sunday, February 10, 2019

My Log 699 Feb 10 2019: Chronicles from my Tenth Decade: 133; My four favorite issues all stuck in the doorway; nothing much more to say until something changes; meanwhile a distinguished economist explains what is happening in Venezuela

A guy like me who comments mischievously on the affairs of this world from time to time should be happy right now. After all, four  issues  have recently attracted my interest, and in each of them, nothing seems to be moving: politics appear to have ground to a halt, leaving me to chortle over the inadequacy of our politicians.

First, there is the farcical, snail-like process of the fatuous Brexit, Britain’s attempt to leave the European Union, that appears to have been stuck in the doorway for the last month or two. Mind you, when they announced in 2016 that Brexit was coming, I think Europeans must have breathed a sigh of relief, because the islanders never really joined. That never surprised me:  I remember from my first sojourn in Britain in the 1950s, how whenever there was a heavy storm, the newspaper posters would announce, “Europe cut off,” as if those foreigners over there were just hanging on desperately by their thumbs. And of course in those days the islanders never hesitated to tell you that “the foreigners begin in Calais.” After all, they beat them all into the ground, all those foreigners, during the war (with a little unacknowledged help from the Soviet Union and the United States.)

I remember when I worked for some months in a factory in London on a conveyer belt sending out food to Lyons’s tea shops: I agreed politically with my fellow workers who were all Labour supporters, but their attitudes to “those foucking foreigners” was something else: the only two foreigners apart from me ---- oh, yuh’re one of us, n’t yuh? ---  were a Dutchman --- the only Conservative voter ---  and a Greek woman, who were blamed --- it was something completely automatic --- for anything that went wrong on the line. One of the old dears on the line invited us to her home one evening, where she confided to us, “Mind you, there was one thing Hitler done right,” Oh, really, What was that? “He got rid of all them Jews.”

Second, there is the case of the arrested Chinese mogul Meng Wanzhou, cooling her heels in Vancouver after being  seized on December 1 by Canadian police, with the full knowledge of our “happy days” Prime Minister, at the insistence of Mr. Trump.  Our defence for this ludicrous action is that we are a nation of laws, into which politics never intrudes, which the facts in this case do not seem to support, since only the Minister of Justice, a politician,  can extradite anyone from Canada.

Third, is the astounding spectacle of the naked attempt by Mr. Trump and his lunatic minions to simply wish the elected government of Venezuela out of office, just by dictat, and our knee-jerk, questionable action in  springing to attention at the say-so of Mr. Trump.

And fourth, to add a bit of spice to all of these, is the strange spectacle of our former Attorney-general, recently demoted mysteriously (since she apparently had done nothing wrong) after having apparently refused to withdraw her prosecutors from the proposed trial of one of Quebec’s largest multinational companies, SNC Lavalin, on charges arising from their alleged bribery in applying for major  construction contracts, and instead to have them follow a new law (especially written to apply to their case) called a “remediation agreement” — which often allows  a corporation to pay a fine after reaching a plea bargain. The allegation is that she came under pressure from the Prime Minister’s Office to take this measure, and refused, and then was demoted.  The Prime Minister poured oil on this particular troubled water by denying the report in the most legalistic language that would convince nobody, especially after hearing him carefully repeat exactly the same formula four times in as row in both languages.

There are viable arguments to be made on both sides of these causes. But in all except the first of them, Brexit, our government appears to be acting the lap-dog to the American master. One of the first things I noticed when I arrived in Canada in 1954 was how uncomplaining Canadians were that their economy seemed to be mostly owned and almost totally controlled, by the United States. This was explained at the time by a conservative philosopher George Grant, in his book Lament for a Nation, when he wrote that  any move ever made by a Canadian government to assert national control over the economy, had always been resisted by our businessmen and entrepeneurs.

Thereafter, in the 1970s Prime Minister Pierre Trudeau tried to slow and even to reverse this process: I believe a reduction from somewhere in the higher 70 per cent to something closer to 50 per cent of foreign ownership was achieved, but with the election of Brian Mulroney the policy was reversed, and unsurprisingly this has again led to the increasing ownership of Canada’s economy by foreigners. A school of young nationalist economists led by Mel Watkins and James Laxer became active politically, but were effectively sidelined by the establishment of the New Democratic Party, whose Ontario leader,  Stephen Lewis, cut them off at the base by expelling  their so-called Waffle group, and never letting them back into the party.

With this cautious history towards U.S. control as a background, one might have expected a more hard-nosed attitude from the current Trudeau government towards the American attempt to undermine Venezuela economically, as a first step, then to openly produce their own candidate for the presidency without bothering go worry about an election, and finally  to openly brag that the imposition of privately- owned American oil companies to take over the publicly-owned Venezuelan oil company, would be of benefit to everyone.  Unexpectedly, no one has been more willing to salute and shout, “Yes sir, ready and willing,” than the young Mr Trudeau (unless it could be his Foreign Minister, Ms. Freeland.)

The problem with Venezuela for the Americans is that for the first time in its history some of the profits earned by sale of their oil were directed to alleviating poverty, providing education, and health care and building houses for the poor. A terrible sin, justifying, apparently, the imposition of crippling sanctions on the Venezuelan economy. In vain might one ask, why Venezuela? Why not Egypt? Saudi Arabia? Or one other of  the U.S.’s authoritarian allies?

The U.S.  ---  “making America great again” --- has been aiming to re-establish the hegemony it once exercised unchallenged over Latin America, an authority that was challenged by first Cuba, and secondly Venezuela, with  spin-off effects from these two socialist-leaning governments on other Latin American countries. The American economist Michael Hudson, one of the world’s leading experts on debt,  in a recent interview gave a coherent account of the origins of the Venezuelan crisis that appears to have by-passed the Western leaders of the international community. Hudson said as Venezuela developed it was always in the control of a wealthy local oligarchy subservient to American interests.

“Chavez sought to restore a mixed economy to Venezuela, using its government revenue – mainly from oil – to develop infrastructure and domestic social spending. What he was unable to do was to clean up the embezzlement and built-in rake-off of income from the oil sector. And he was unable to stem the capital flight of the oligarchy, taking its wealth and moving it abroad – while running away themselves.

He was asked by his interviewer if Chavez and Maduro were responsible for the current mess.? Did they make mistakes, or should U.S. sabotage, subversion and sanctions be more to blame?

He replied: “There is no way that Chavez and Maduro could have pursued a pro-Venezuelan policy aimed at achieving economic independence without inciting fury, subversion and sanctions from the United States. American foreign policy remains as focused on oil as it was when it invaded Iraq under Dick Cheney’s regime. U.S. policy is to treat Venezuela as an extension of the U.S. economy, running a trade surplus in oil to spend in the United States or transfer its savings to U.S. banks.”

He said that freezing of Venezuela’s bank deposits in the U.S. is making it impossible for Venezuela to repay its foreign debt, thus forcing it into default, which the U.S. hopes to use as an excuse for foreclosure on the country’s oil reserves, just as they had previously tried to do in Argentina.

“Just as U.S. policy under Kissinger was to make Chile’s economy scream," said Hudson, “so the U.S. is following the same path against Venezuela,  using it to warn other countries not to act in their self-interest in any way that prevents their economic surplus from being siphoned off by U.S. investors.”

He said the best Maduro could do now was demonstrate to the world the need for an alternative international financial and economic system. “He already has begun to do this by trying to withdraw Venezuela’s gold from the Bank of England and Federal Reserve. Their refusal to grant an elected government control of its foreign assets demonstrates to the entire world that U.S. diplomats and courts alone can and will control foreign countries as an extension of U.S. nationalism.

Over the longer run, Maduro also must develop Venezuelan agriculture --- rural extension services and  credit, seed advice, state marketing for crop purchase, and the same kind of price supports that the United States has long used to subsidize domestic farm investment to increase productivity, said Hudson. In short, he must go  along much the same line as the United States did to develop its agriculture under the New Deal legislation of the 1930s.









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