Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Latin and South America Page 1 of 2

Cuba’s Big Currency Mistake

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On July 14, 2021

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So, there are some protests in Cuba. I don’t know how much they amount to; I’m no Cuba expert.

But I do know that Cuba made a huge mistake when they ended their dual currency system at the beginning of the year.

Dual currency systems designate one currency for purchasing internal goods and services, and another for external goods. Their purpose is to make sure that a country doesn’t spend more money on external goods than it is earning from exports of goods and services.

When there’s way more demand for foreign goods than there are export earnings, if you allow people to just buy whatever they want in a single currency system, your single currency collapses, leading to inflation or hyper-inflation.

There’s a reason Cuba ran a dual currency system before, and while getting rid of it allowed Cubans to buy more foreign goods to start, it has also contributed (along with Covid and US sanctions) to hyperinflation:

The result of dollarization, scarcity, and devaluation: Prices have skyrocketed and inflation will likely come in at a minimum of 500 percent, and as much as 900 percent this year, according to Pavel Vidal, a former Cuban central bank economist who teaches at Colombia’s Pontificia Universidad Javeriana Cali.

Hyper-inflation destroys regimes.

Cuba is caught in a trap; they don’t have enough of anything, including food. Their primary ally, Venezuela, can no longer help (also being caught in hyper-inflation). Letting Cubans buy directly in dollars and getting rid of caps on imports must have seemed like a way out.

But shortages are shortages: Moderate inflation helps ease them, hyper-inflation simply imposes them on a different group of people -— those who can’t get foreign currency, a.k.a., US dollars.

Were I advising Cuba, I would suggest going back to the dual currency regime. Long lines and evenly-distributed shortages are tolerated much better than hyper-inflation-induced shortages because they are far more fair and predictable.

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Bolivian Socialists Sweep To Power

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On October 19, 2020

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Luis Arce is in power after a victory too large to pretend it didn’t happen. Last year, when the coup happened, I wasn’t sure if it was real or not, a call I got wrong (it was a coup). This is very good news. The election results were so clear that the coup leaders could not pretend otherwise, and a campaign of violence and intimidation, plus exile of Morales, failed. (Note that this is only barely a case of “democracy worked”, since a lot of people died, were beaten and so on fighting the coup.)

I will suggest that Bolivia will be best served by prosecuting those involved in the coup, and systematically (though carefully) expunging right wing ideologues from the military and the police so they are not willing, in the future, to back coups. As long as military and paramilitary forces are right wing, the country will always be ripe for coups and outside interference.

It is, nonetheless, an excellent sign that no attempt to retain power thru further force was used after all the intimidation failed.

I note, also, that the coup leaders were essentially fascist Christians. A warning for other nations.

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Why Actual Principled People Are Difficult (Glenn Greenwald Edition)

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On January 22, 2020

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Glenn Greenwald

You may have heard that Glenn Greenwald, the founder of the Intercept, has been charged with cybercrimes by the Brazilian Federal Government. Glenn’s the reporter who broke the story of how Brazil’s ex-President Lula was taken down by Brazilian prosecutors. Moro, the chief prosecutor, was later rewarded by Bolsonaro with appointment as the Minister of Justice. All polls indicated that Lula would have defeated Bolsonaro.

The logic of the case is the same as the logic used by the US government to go after Assange, by the way: That Greenwald was in contact with and counseled hackers. Those people who are supporting Greenwald but don’t support Assange are hypocrites: Brazil is using the Assange precedent to go after Greenwald.

I support Greenwald, of course, as I have supported Assange, Manning, and Snowden.

Now this is the part of the piece where people (and with respect to Assange, I’ve done it) cavil a bit and say something like: “Despite Mr or Ms. X being problematic,” or some-such.

And it’s that I want to talk about, but not to condemn it. To explore it.

Because it’s almost always the case.

When Greenwald indicated he was going to oppose Bolsonaro, after the election, before he had revealed the evidence of Bolsonaro’s crime, I told him, twice, “This is dangerous.”

Bolsonaro’s so right-wing one might as well just call him a fascist. He celebrates policies of shooting political enemies. He’s a dangerous, dangerous man.

Glenn ignored me. I doubt the danger ever figured into his decision to go after Bolsonaro.

Meanwhile we have Manning, who is in jail for refusing to testify against Assange. When in military prison, Manning tried to commit suicide, she found it so unbearable. Despite that, knowing how awful it would be, she chose to go to jail rather than testify.

That’s bravery. (I note that all the Republicans refusing to testify under subpoena are sleeping at home, and haven’t been hit with fines intended to bankrupt them and cost them their home, as was Manning.)

Snowden pissed off the most powerful intelligence service and country in the world. He ran. Wikileaks helped him run, Greenwald published his revelations.

So I understand the caviling, but the point normal people don’t get is that these are all immensely morally brave individuals. They have actual principles they are willing to suffer for.

Most people don’t. They claim to have values, but they have never sacrificed anything meaningful for them, and never will. That sounds harsh, but it’s true. I’d say that even when it comes to their children, whom most people claim to love more than themselves, actions indicate that, well, they don’t.

People have preferences, not principles.

Most people.

Then you get people like Greenwald, Assange, Manning and Snowden. They are polarizing figures. They are loved or hated. They piss people off.

They piss people off precisely because they have principles they consider non-negotiable. They will not do the easy thing when it matters. They will not compromise on anything that really matters.

That’s breaking the actual social contract of “Go along to get along,” “Obey authority,” and “Don’t make people uncomfortable.” I recently talked to a senior activist who was uncomfortable even with the idea of yelling at powerful politicians. It struck them as close to violence.

So here’s the thing, people want men and women of principle to be like ordinary people.

They aren’t. They can’t be. If they were, they wouldn’t do what they do. Much of what you may not like about a Greenwald or Assange or Manning or Snowden is why they are what they are. Not just the principle, but the bravery verging on recklessness. The willingness to say exactly what they think, and do exactly what they believe is right even if others don’t.

They don’t compromise, and they often act without regard to the risks and dangers and whether or not anyone else agrees with them.

That’s what makes them what they are, and it is very rare that you get the good without the bad.

Ordinary people judge them by their own, ordinary standards. But these people don’t live by the standards of ordinary people, because ordinary people are mostly authority and herd followers. And those courtiers who have betrayed principle over and over again to become senior journalists and editors, well, people like Greenwald, Assange, and Manning are a rebuke to them that they can never even acknowledge consciously.

People with principles and bravery enough to stand on them, even in the face of great risk and against authority and the herd, are rarely comfortable people.

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Bolivia’s Evo Morales Forced Out of Presidency

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On November 11, 2019

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Evo Morales

Well, strictly speaking he resigned, but not only has the military come out against him, his followers’ houses were being firebombed and the guards at the presidential palace left.

“Resign or die” is the fairly-clear message. This is how you force a politician out.

Did he cheat on the election, as he’s been accused of? I don’t know, but I do know that, absent the military turning on him, he’d still be in office.

What we’ll see now is if the violence continues: If there is a right wing “militia” sweep which sees the murder of his supporters, along with rape and torture.

If so, then yeah, it was a right-wing coup.

Morales was virtually the last South American left-wing leader. They’ve almost all been swept from power over the last few years. This is because commodity prices crashed. Their prosperity was based on high commodity prices.

Nonetheless, Morales dropped poverty rates by half, and unemployment by a third. He was unquestionably good for most Bolivians.

However, because these leaders never secured the state’s coercive apparatus, they were relatively easy to get rid of (with the exception of Venezuela and to a lesser extent Peru). For example, the situation in Brazil, wherein Lula was forbidden to run (because they knew he’d win) due to corruption charges, after which the prosecutor who charged him joined the new government.

Left-wing governments need to control key parts of the state apparatus: the military, police, and courts. They also need a press which is at least neutral. If they don’t control these thing, when they lose power it often results in horrible consequences: firebombings, imprisonment, death squads, rape, and torture.

This isn’t a game. The people on the other side are rich, ruthless, and scared, and they will do anything to keep power. They don’t play by the “rules.”

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Dangers and Possibilities in the Chile Protests

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On October 28, 2019

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Tribune Magazine has an excellent interview with an activist in Chile, Isidora Cepeda Beccar, about the progress and prospects of the protests in Chile. It’s worth your while to read.

In my original post on the Chile protests, I noted that burning down the metros was stupid. It seems that the protestors agreed, and actually set up guards to make sure that no more of them were damaged.

This leads to a second issue:

Social movements like this can ignite very quickly. But the risk is always that they cannot burn for a long time. People have to go back to work, and after a while, they want things to return to normal. I do think it’s a risk that this movement has such little institutional form. In my view, unless its demands are taken forward by the Left it could result in no real change in the long term.

The problem here is that elites can generally out-wait protestors. They have more resources after all, and the revenue they are losing in a general strike is something they can absorb in a way that poor people can’t absorb losing wages.

Protests which do not really hurt or scare elites thus tend to fail. They either need to genuinely fear for themselves, or be in so much pain they will capitulate to make the problem go away. You saw this in a mild form in the US when the gays went after Obama for opposing gay marriage (yes, he did, this is a memory hole issue). They got personally in his face, they crashed fundraisers held by his wife and screamed. They made his family’s life hell.

It worked.

As I noted about rioting, or even inconvenient peaceful protesting, you need to do it where the elite live, so they can’t avoid it. You need to take away their feeling of safety, of invulnerability–violate their sense that they can wait it out.

If you don’t have a strategy to make the lives of elites miserable, or make them scared, why shouldn’t they just wait you out?

Beccar notes that the institutional left, including the Communist party, has been largely useless in the protests. They didn’t lead them, they don’t know how to respond. The politicians are all used to working in a neoliberal state, making trimming adjustments to basic neoliberal policy. The only institutional left-wing force helping out are the unions, which called a general strike.

What’s interesting is that this includes the miners. Leaving aside that mining is crucial to Chile’s economy, this matters because miners have access to heavy machinery and explosives. Miners, along with construction workers and truckers, are basically capable of going anywhere they want. They are a credible threat, if they want to be.

Students are good, and in Chile it started with the students. But it only ends well for the left if the hard-hat, working class gets involved and gets serious.

This doesn’t have to mean widespread violence. Simply breaking the gates on a few key elites’ estates may well get the message through.

One of the problems with the protests is, in fact, the lack of leadership. They were spontaneous and unexpected, and the demands are incoherent. I think that Beccar is very smart when she suggests that the demand should be for a new constitutional order.

It’s clear that this movement is not just addressing this or that issue. It is raising questions which go right to the roots. So I think we need to demand a new constitution. Our constitution today is the heritage of neoliberalism in Chile, dating back to Pinochet and the Chicago Boys. To change things fundamentally we need to cut those roots. We need to create new rules of the game.

We need a completely new constitution, created by a constituent assembly, with all kinds of social representatives involved. That would give real power to the people and encourage a much-needed new culture of participation, involvement, and social commitment to the political space. The president, the parliament, the political parties today are not representing the people’s voice. They haven’t done it for decades, why should they start now?

Trimming within a constitutional order set up by Chicago Economists and Pinochet won’t work. It was set up for that not to work.

Make fundamental change.

This applies, in many ways, to other countries, by the way. It may seem, for example, in the US that the Constitution is the same as it was in the early 70s, but it isn’t. Vast swathes of it have been reinterpreted by courts, especially the Supreme Court, in ways that are essentially conservative and neoliberal. Citizens United, which says money=speech would have been unimaginable in the 60s. So, frankly, was Bush v. Gore, the vast effective reduction in Miranda rights, the mandatory minimum sentencing, RICO laws (which violate freedom of association in fundamental ways), and the acceptance of current practices of civil forfeiture (where the cops now take more stuff from Americans than burglars do).

I grew up in the 70s, and the US today is far different from it was then: It is fundamentally less free, and that was a deliberate choice that shudders through law and the constitution.

I wish the people of Chile the best. Allende was a bright possibility, stolen from them by a very evil man with American backing. (Remember that Pinochet had dogs trained to rape women, and do not defend him to me.)

This is a chance for a reset and a new future. Pinochet made sure there was a lot more money in Chile, and made sure it wouldn’t get to most of the population.

Time to change that.

 

 

need for constitutional reset

A Few Words About Argentina

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On August 13, 2019

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Okay, so Argentina elected a neoliberal president. He went to deep austerity, removed capital controls, and sought an IMF bailout.

Now it looks like a socialist may win and markets are freaking out, because he may default on some of the debt and re-institute capital controls.

Argentina’s problems have a long history, but it’s worth remembering this: Before WWII, it was a first world country, with a standard of living about equal to Canada’s.

Argentina partially defaulted in 2001. We should remember that that default was caused by following the conservative policy of pegging the Peso to the dollar, which any moron should have known would eventually backfire.

It is also worth remembering that, when Argentina defaulted in 2001, it wasn’t actually allowed to. American courts wouldn’t let Argentina pay the creditors who allowed their debt to be reduced unless they also paid those debtors who didn’t take the deal.

We live in a stupid, perverse world where people don’t understand that there has to be a balance between debtors and creditors. Creditors are making a bet, and if they lend to the wrong entity, and that entity eventually can’t pay back the debt, they should have to eat their losses. Don’t lend to people who can’t pay you back. Everyone knew that Argentina was going to have debt problems, every time, but they took the chance because they wanted high returns.

But the central financial system, the NY and London courts, and the IMF act as debt collectors for people who want the upside of high payments from distressed borrowers without the downside of possibly losing the money.

Worse, they act as enforcers for bad actors, who won’t cut deals, and expect to litigate.

Debtors may lose some money, but leg-breaking countries for rich debtors kills and impoverishes poor people.

Now, none of this is to say Argentina hasn’t made mistakes. Flipping back and forth between neoliberals and socialists is stupid. Pick one, and suck it up. Electing Macri was stupid, but then being outraged when he does what a neoliberal technocrat would do (i.e., austerity and sucking up to the IMF) is equally stupid.

Pick a governing philosophy and elect governments that adhere to that philosophy until the leading parties all follow it (like when Labour became neoliberal under Blair, cementing Thatcher’s victory).

Right now, Argentina is getting the worst of both worlds.

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The Big, Wet Venezuelan Coup Flop

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On May 1, 2019

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Maduro

Well, it seems to have gone pretty much nowhere. A big flop. Far from being a dictator, Maduro appears to be running for the most forgiving person in power on the planet. A dictator would have had Guiado shot; a normal politican would have had him arrested for treason by now.

Remember when the CIA was feared for being good at coups? (Well, to be fair, they’re still racking up some: The Color revolutions and Maidan, in particular.)

One of the reasons the US keeps invading and bombing countries is that the CIA keeps failing; they couldn’t overthrow Saddam, Khomeini, Assad, Castro, or Gaddafi. The black boys having failed, the military is then the last resort.

It would be better if the US just let other countries run their own affairs and dealt with whoever wound up in charge. The coups usually backfire (as with overthrowing Iran’s elected government and installing the Shah), and the wars leave failed states and refugee crises behind, while fueling violent terrorism and powerful militias. But some empires never learn, I guess.

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The Coup Attempt in Venezuela

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On January 24, 2019

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So, Juan Guaido has declared himself the President of Venezuela. (He wasn’t elected as such.)

The US and Canada have recognized him, along with Brazil, Argentina, and Peru, among others. (Freeland, the Canadian Foreign Minister did so while on stage with Brazil’s Bolsonaro, who won an election after his main opposition was locked up. The person responsible for that is now his Minister of Justice.)

All perfectly above board, I guess.

I’ve never been a huge fan of the Bolivaran revolution, mostly because it was mismanaged. But this is clearly a foreign-supported coup against an elected leader. Venezuela’s election was no more compromised than, say, the 2000 US election–or many other elections.

It’s probably just a coincidence that Venezuela has the world’s largest oil reserves.

The Venezuelan situation is complicated, but there appears to be no question that the opposition forces (pale, middle, and upper class) have done everything they could to sandbag the government, up to and including destroying consumer goods so they could enhance shortages. Meanwhile, Maduro has generally had the support of the darker-skinned, lower classes descended from Indians.

Meanwhile, the US, of course, has punitive sanctions on Venezuela.

The Bolivaran revolution has not been well managed, but the criticism that “socialism always fails, because the US always makes it fail” is looking more and more valid.

The US has said “all options” are possible if Maduro crushes the opposition, which is code for using military force.

Maduro, of course, is perfectly within his rights to use force to capture someone declaring themselves President without being elected.

This has been coming for some time.

So far, despite his various failings, Trump has not been as bad as Obama simply because he has not started a war. (Yes, yes, he has been nastier to various people in the US rather than people who live in other countries.)

If he starts a war here, this will no longer be the case.

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