HiddenMysteries: More Propaganda Lies By the Khristian Bush GOPpers

Counter-attack on the U.S. media as they ratchet up campaign against Venezuela

By Les Blough, Editor

The United States corporate television and newspaper media continue to ratchet up their daily barrage against the people and government of Venezuela. In the last two weeks, they have been attacking Hugo Chavez, President of Venezuela over the recent Enabling Law, passed by the National Assembly on January 31, 2007. These attacks follow a formula, using perjurative innuendo, inflammatory language, half truths and outright lies. We say enough! Axis of Logic has taken a close look at one such corporate media attack, authored by one Brian Ellsworth (Reuters) and published in the Washington Post on February 13, 2007. We have dissected Ellsworth’s statements under the bright light of the facts about the new Enabling Law and it’s direct impact on the private corporations involved. Our factual analysis is contained within the Reuter’s article below.

Venezuela's Chavez sets fast nationalization pace
By Brian Ellsworth
Reuters

Tuesday, February 13, 2007; 7:12 PM

Ellsworth: “CARACAS - Venezuelan President Hugo Chávez is setting a faster than expected pace in his nationalization drive toward self-styled socialism, striking three takeover deals that push out U.S. firms in about a month.”

Axis of Logic: The corporate media is well-known now for it’s choice of negative terms to tilt the reader’s impressions about Venezuela and to create polarization beween U.S. citizens and the Venezuelan people. Venezuelan socialism is not “self-styled” as Ellsworth chooses to describe it. This is journalism speak. The form Venezuelan socialism will take will be decided by mass participation by the people in seminars and meetings. For example, seminars are now scheduled in Caracas and Valencia for Feb 15 to get the ball rolling. Chávez has stated that the economy will be mixed but all strategic industries – telecommunications, electricity, gas, oil, steel etc. will be taken over by the state and run in tandem with and by the workers. Ellsworth’s phrase “[to] push out U.S. firms in about a month” also suggests that Venezuelan socialism is primarily an affront to the U.S. rather than a new system designed to empower the working class in Venezuela and to strengthen the Venezuelan economy.

Ellsworth: "Chavez, an ally of Cuba who is vehemently opposed to what he sees as U.S. imperialism, is boosting state involvement in Venezuela, the No. 4 supplier of oil to the United States, as he consolidates power after a landslide re-election last year."

Axis of Logic: Introducing Chávez as "an ally of Cuba" fits well with the tired, old charge that President Chávez is "turning Venezuela into another Cuba". We've heard it over and over from the U.S.-backed wealthy minority during our visits to the country. It also reinforces the red-baiting indoctrination Washington and its corporate media have rained down on the population here for decades. This reference to Cuba is gratuitous on its face and has absolutely nothing to do with the subject of Ellsworth's article. He writes that Chávez "consolidates power" following his "landslide re-election". If he had read the new Enabling Law, he would have understood how the law consolidates power to the people and away from the private corporations.

Ellsworth: "Venezuelan authorities said on Tuesday they would buy the assets of U.S. power company CMS for $106 million, a day after cutting a similar deal with telecom giant Verizon for $572 million.

"Last week the government signed an accord to buy the holdings of U.S.-based global power generation firm AES Corp. for $750 million despite analysts' predictions of protracted takeover battles.

" 'The government has showed it's clearly willing to move at a particularly fast pace to deliver on promises,' said Patrick Esteruelas, an analyst with the Eurasia Group."

The deals came two weeks after Chavez received special powers to rule by decree and five weeks after he vowed to nationalize the telecommunications and power utilities.

Axis of Logic: Ellsworth’s reference to Chavez term “Rule by decree” is one that has been adopted uniformly in the corporate media's portrayal of the Enabling Law and is totally misleading. Under the Enabling Law, Chávez can pass laws before and after constitutional reform scheduled for the second half of this year. The changes to the 1999 constitution will be voted on by the 16 million Venezuelans in the electoral roll. Rule by decree implies that he can decree people to be taken into custody, control the courts and do whatever he wants. The President is restricted by the Constitution as it stands now. The Venezuelan constitution provides for the Enabling Law and proscribes that the 5 branches of government** are separate, each integrating participation of the people. Any law passed by presidential decree can be challenged under Article 74 of the Constitution where any individual or group can organize a signature collection of 5% of the electoral roll and call a national referendum to derogate the law. This information is conveniently omitted by Ellsworth.

Ellsworth: “The announcements on January 8, which Esteruelas dubbed ‘Red Monday,’ wiped out a fifth of the Caracas stock exchange's value.”

Axis of Logic: Again, Ellsworth ignores the fact that the value of the Caracas stock exchange has since bounced back from a completely oversold situation. The corporate media played its part in “Red Monday” by describing the new Enabling Law. This recovery of the Stock Exchange occurred because the confidence of investors was quickly restored by the transparent way in which the government is conducting the takeovers.

Ellsworth: “Chavez quickly implemented the nationalizations by avoiding protracted legal battles and outright seizures, and, instead, striking buyout deals.”

Axis of Logic: This is purely speculative on the part of Ellsworth. The government struck buyout deals with Verizon and AES with no problems and without paying unreasonable prices to the corporations. According to their own public statements, Verizon and AES were satisfied with the results of their negotiations with the government.

Ellsworth: “The companies did not have the choice to hold on to their investments, but they and economists said the buyout terms were tough but fair given the nation's deteriorating investment climate.”

Axis of Logic: This statement is questionable when we see international oil companies now queuing up to participate in the oil and gas industries. The supervisory body (SIEX) that monitors foreign investments in the country indicates that Foreign Direct Investment in Venezuela went up 200% in 2006. Shares in the Electricity of Caracas traded at Bs. 800 yesterday and have doubled in price from its low point where it traded at 2 weeks ago. In telecommunications the government is making a public bid for all CANTV shares in Caracas and in New York at $17.56 per share in line with international takeover law. This public bid is based on the prices on the stock exchange.

Ellsworth: "New Vice President Jorge Rodriguez, a central player in the nationalization effort, cited the state's purchase of Verizon's 29 percent stake in Venezuelan phone company CANTV as a sign the process was "fast and transparent."

"Chavez is in the vanguard of Latin America's resurgent left, which has also swept Bolivia and Ecuador with promises to roll back 1990s' free-market reforms that first brought companies like AES and Verizon to Venezuela."

Axis of Logic: These ”free market reforms” amounts to nothing less than neoliberal-speak for selling off state industries to the multinationals at knock down prices under pressure from IMF restructuring recipes. These IMF restructuring recipes normally entailed:

Freezing wages
Increasing prices for basic goods and services
Followed by offering more loans to pay for existing ones and to service the interest payments.
Resulting in the institutional enslavement of hundreds of millions of people in Latin America alone.
The “free market reforms” resulted in an increase in poverty in Latin America during the “happy 1990’s” and the rise of the people to elect presidents Hugo Chávez in Venezuela, Rafael Correa in Ecuador, Evo Morales in Bolivia, Nestor Kirchner in Argentina, Luiz Inacio Lula da Silva in Brazil, and Daniel Ortega in Nicaragua. These elections demonstrate the Latino peoples use of their democratic rights to elect governments that put them first and not the interests of the multinational corporations which have flowed into US dollar profits and bleed these countries dry. Over the last 2 years, Venezuela’s campaign to nationalize basic industries simply and directly regains the people’s control of its oilfields and boosts taxes on industrial operations.

Ellsworth: “But Chavez, a former army officer, may face a tougher fight to take control by May 1 of four oil projects in the Orinoco basin worth $30 billion."

Axis of Logic: First – Why the corporate media’s description of President Chávez as “a former army officer”? These chosen terms play to the uneducated U.S. reader as other quasi-racist references like "just another Latin American dictator”, “Banana Republic” etc. Do the same media analyists introduce George W. Bush as a “Bush, a former draft dodger”?

But to Ellsworth’s point: The Energy and Oil Minister Rafael Ramírez has stated that if the multinationals’ shares in these joint ventures are not sold to PDVSA, then these companies can leave Venezuela. PDVSA wants 60% of each company with Exxon, Chevron and the rest operating as junior partners. This does not imply a “taking control” as the writer states. In reality it is transfer of shares from the multinationals to PDVSA at a negotiated price. These deals are already being negotiated. Buying up shares in the mixed companies where all multinationals are involved (e.g. Exxon-Mobile, Chevron-Texarco, Conico Phillips, Repsol, and BP) is not a “takeover”.

Ellsworth: "Rex Tillerson, chief of Texas-based Exxon Mobil, expressed doubt that change of control of the Orinoco projects could meet Chavez' ambitious deadline. The aggressive nationalization efforts have sparked investor concerns about working in Venezuela, already a tough environment due to double-digit inflation and heavy government regulations."

Axis of Logic: Ellsworth mentions inflation but does not mention growth of 48% of Venezuela’s GDP over three years (2004-2006) and total consumption rising by 32% in 2006 vs. 2005. Huge growth and consumer spending will obviously make inflation more difficult to control as it does in any country’s economy. Also missing from his analysis is the fact that inflation has also been exacerbated by rampant speculation by capitalists using price increases as a tool to undermine spectacular economic performance since 2004. It’s interesting to note that the private sector has led this economic performance in the construction industry which naturally contributes to inflation. Private sector has been outperforming the state industries by more than 5% per year overall – despite high oil prices. Retail sales increased by 40% in 2006 vs.2005. This was due to more money in the street, indicating that people are getting a fairer share of the “economic cake”.

Ellsworth fails to mention that Venezuela’s total internal and external debt is just 24% of GDP and the lowest since at least 1992. Venezuela has enough international reserves to pay off its external debt with a check and the Country Risk Rating is at an all time low since that measure was invented in 1997. Venezuela’s debt - 24% of GDP stands in stark contrast to US total debt of $9 trillion dollars which is 75% of US $12 trillion GDP.

Ellsworth: "Chavez's heavy social spending has built up political support but has sparked inflation, and government price controls at times restrict the supply of basic consumer goods."

Axis of Logic: Untrue. Here is how it works: Basic consumer goods, especially food had been used by speculators (middle men) to line their own pockets. There is no shortage of consumer goods in Venezuela and in the last few days the government has clamped down on price speculation on all mass consumption protein foods and hoarding of products such as sugar where more than 500 tons has been discovered by the Venezuelan National Guard. The government has sold these hoarded foods to *Mercal. Hoarding has always been a problem in Venezuela as powerful economic groups hide meat and produce to force the price up by creating artificial shortages. (*Mission Mercal is a state-run company which sells food to the poor at regulated prices. Read more about Mercal below). Chavez has now warned that food distributors could also be nationalized if they resist new regulations on the price of food. Yesterday he stated on public television:

“The larger you are, the greater care you should take with Chavez. If we have to intervene and nationalize, just wait a few hours… I will be very attentive from now on. A supplier that sells meat above the regulated price we will intervene and give to a communal council."

Ellsworth: "Annual inflation reached 18.4 percent in January and grocery stores last week ran out of beef, a problem the government blamed on hoarding by suppliers."

Axis of Logic: Ellsworth’s statements regarding recent beef shortages and the government’s charge of hoarding are true. But Ellsworth’s opening line obfuscates the issue by implying that inflation is to blame. Suppliers have been hoarding beef despite government warnings. This hoarding has resulted in beef shortages and unreasonable corporate profits of 100% to 150%. Nobody, including the government has a problem with private food suppliers making more reasonable profits of 30-40%. But they will not tolerate corporate practices of hoarding in order to earn unreasonable profits, lining the pockets of a few at the expense of the consumer. Since the beef shortages occurred, the government has been monitoring beef prices at private grocery stores and their prices have suddenly dropped, resulting in affordable meat for all consumers. According to Venezuelanalyis.com - under the new Enabling Law on February 11, the government has also eliminated value added tax (VAT) "... on meat and other foodstuffs in a set of new measures aimed at curbing inflation. The measures also include agricultural subsidies for some basic products, and two decree laws to combat food hoarding".

Ellsworth: "Luis Zambrano, an economist with Venezuela's Banco Mercantil, said Chavez's nationalization announcements had led to panic that fueled economic problems, convincing authorities they needed to finish the takeovers quickly."

Axis of Logic: The only panic was on the Caracas stock exchange for merely three days following the Enabling Law. This was a “panic” of 100,000 investors out of a population of 27 million people. The economic problems were caused by hoarding and price speculation as described above. Zambrano conveniently fails to mention that car sales rose by 40.4% in January 2007 over car sales in January 2006. In 2006 more than 344,000 units were sold at an all time record and far above the previous record of 256,000 units in 2001. You only have to see the traffic in any major city to appreciate this. Zambrano also fails to mention that the construction industry is now working at 94% capacity. Ellsworth’s choice to quote Zambrano is interesting indeed.

Ellsworth: "The deterioration of the economic environment produced by the president's initial announcements has pushed the government to negotiate quickly," he said. (Additional reporting by Enrique Andres Pretel)”

Axis of Logic: Wrong, wrong, wrong. Ellsworth’s statement is misleading. Why did the government negotiate so quickly? Because mass demonstrations by electricity and telecommunications workers in Caracas and other cities forced the government to act quickly. These workers were demanding the nationalization of these companies due to the terrible way they had been treated for years by these now ex- private companies.

Steel workers at SIDOR are demanding the re- nationalization of the steel industry, for example. Even workers of Paramalat are asking the government to expropriate Parmalat since the company forced powered milk prices up. These are now regulated by the Ministry of Light Industry and Commerce and the Consumer Protection Agency in the street with the organized communities which stop basic goods from being sold at unreachable prices for the great majority of the people.

Moreover, hundreds of thousands of workers in telecommunications were paid pensions based upon cost-of-living indices in the early 1990s and some were receiving only 5000 month ($2.40)- around about 30 dollars a month! Venezuelan law provides that pensions must be in step with cost-of-living indices. Since the 1990s the corporatiosn never increased the pensions based upon cost-of-living indices. The government will now pay these people retroactively the money owed them to them.

State pensions are now at $238 a month – certainly not spectacular but far better than what pensioners have been receiving from the corporate employers. One year ago, there was a high court ruling in Venezuela, demanding the private corps pay these people what they owed them. Since that ruling, the government tried to convince the corporations (e.g. CANTV) to meet their obligations to their retirees but the corporations ignored the law. The people have been battling for their pensions for 14 years. Now the government has stepped in and required these corporations to meet their obligations to their retirees.

Brian Ellsworth and many other well-paid "journalists" work in service to Reuters, Associated Press, Knight-Ridder, the BBC, Agence France Presse and other media corporations of the Global Corporate Empire. The corporate media in the United States and in other western countries have been attacking Venezuela's new Enabling Law in their own interests. As eventide settles on the gradually fading movement toward globalization, the transnational corporations and their governments see a real threat in this bold move by the Venezuelan government. No longer will they be able to exploit the natural resources, intellect and labor of the Venezuelan people. In fair negotiations with these corporations, Venezuela is gaining control of what has always belonged to them by rights of national sovereignty and true freedom and independence. They are shaking off the corporate chains that have bound them for almost 180 years since the death of Simon Bolivár. The masters of Global Corporate Empire see in Venezuela's Enabling Law a model for all of Latin America and the rest of the world to follow.

© Copyright 2007 by AxisofLogic.com

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*Mission Mercal (officially launched on April 24, 2003) is a Bolivarian Mission established in Venezuela under the government of Hugo Chávez. The government has set up subsidized grocery stores in a state-run company called Mercal. At present some 11.36 million Venezuelans benefit from Mercal food programs on a regular basis. At least 14,208 Mission Mercal food distribution sites are spread throughout Venezuela, and 4,543 metric tons of food are distributed each day. Mission Mercal stores and cooperatives are mostly located in impoverished areas and sell generic-branded foods at discounts as great as 50%. While the company is heavily funded by the government, the goal is to become self-sufficient by replacing food imports with products from local farmers, small businesses, and cooperatives (many of whom have received microcredits from Mercal). This endogenous development is central to Chávez's stated goal of non-capitalistic development from the bottom up.

Additional Note on Mercal: The Wikipedia description of Mission Mercal is a little out of date. Recent figures indicate that Mercal distributes about 6000 metric tons of food per day now to about 15 million people. Mercal is well on it's way to reaching it's goal for 2007 food distribution - 6500 metric tons per day.

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**5 Branches of Venezuelan Government: The Executive, The Legislative, The Judiciary, The Electoral Council and the Citizens Power or Ombudsman.

Sources

Thanks to Rámon Santiago, Axis of Logic Correspondent in Caracas for his research and contribution to this article.
Wikipedia
Washington Post
Venezuelanalysis.com
Venezuela Television (VTV)
Vive TV
Venezuela Central Bank
Venezuela Stock Exchange

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Axis of Logic
http://www.axisoflogic.com/

More Propaganda Lies By the Khristian Bush GOPpers

Saturday, February 17 2007 @ 02:14 AM CST