kammist hijinks

Oliver Kamm is a joke, but I like to read him to find out what bad faith is doing today. His post about Chavez, however, is beyond his usual stunning work. The disinformation conveyed by every lovely sentence (this is a man who loves the plummy sound of his own pomposity) is a work of neo-con kitsch that even Hitchens would have a hard time matching. I'm talking about golden age Hitchens, the one defending Chalabi, not the bare ruined choirs of the unreadable recent screeds in Slate. For instance, here is what Kamm says about Venezuela at the time that Chavez instigated a coup attempt, in 1992. This is in response to Johann Hari’s positive Independence interview with Chavez:

"Another point undermining Johann's morality tale is that the structural reforms, so far from being the acts of a despised regime, steadily gained support. Javier Corrales, in Presidents Without Parties: The Politics of Economic Reform in Argentina and Venezuela in the 1990s (2002, p. 55) notes that from the first quarter of 1989 (when the riots took place) to the first quarter of 1991, the number of people who wished the government to persevere with the reforms rose from 29 per cent to 45 per cent, while the economy performed strongly (a growth rate of 9.7 per cent in 1991 and a rise in investment of 81 per cent). The number of labour disputes rose in that period, but the number of actual strikes (authorised and unauthorised) declined. Mass opposition to the government's reform programme, so far from driving Chavez's failed coup attempt, was in fact driven by it. Chavez shattered a fragile consensus by showing the potential for a different form of politics, namely populist demagoguery and violence (nearly 100 people were killed in his failed coup attempt, the great majority of them civilians)."

Well, is this the same Javier Corrales who writes, in the Political Science Quarterly, 1997, comparing the Argentine and Venezuelan responses to economic crisis:

"These points will be demonstrated by referring to some cases where reforms have been implemented, successfully and otherwise. Special reference is made to the cases of Argentina (1989-1994) and Venezuela (1989-1994), which constitute clear-cut dichotomies of divergent outcomes in processes of economic reforms. After launching similar programs of economic reforms, these countries undertook different political paths. In Argentina, both the reforms and the reformers acquired unimaginable political momentum and prestige. In Venezuela, they became amply repudiated by society in general.”

Huh, Kamm does seem to have a bit of a problem with his specs, reading “amply repudiated by society in general” as “was widely acclaimed like Mickey Mouse at Disneyland.”

And here’s how Corrales describes the period in general:

“[In 1991] Venezuela plunged into its most serious political crisis since the 1960s: uncontained civic protests, two military coup attempts in 1992, intense cabinet changes, interruption of most ESSA reforms, presidential impeachment in 1993, urban terrorism, and a devastating financial crack at the end of 1993.”

Now, the heart of the deception in Kamm's little post stems from a man he, oddly, doesn't mention. Just who was that president who was impeached in 1993? Why, it seems to be a man well known for having stolen a quantity of money, Carlos A. Perez – although, as Kamm might put it, to call it stealing money is demagogic, since it was a part of a structural reform implementing a “put Venezuela’s money in Perez’s Swiss bank account” that was surely only unpopular because it was so misunderstood, Perez instituting an ultramodern CEO system of payment for Venezuela’s spanking brand new leadership. And of course his mistress, Cecilia Matos, also received a couple of million here and there, as was only right and fair. All part of a sort of New Labour before New Labour kind of thing, which Kamm so rightly beams upon. The 13 million in the Swiss bank account was all an incentive scheme..

In any case, Kamm's odd statistics for support of reform seem to be contradicted by the fact that Perez was elected on a statist platform -- and once elected, turned about and repudiated the very economic policies he represented in his campaign. Here's a May 2, 1988 Wall Street Journal article reporting on a typical Perez speech:

"Of 15 candidates standing for the December 4 election, the two front-runners are former President Carlos Andres Perez, the 65-year-old candidate of the ruling Democratic Action party, and Eduardo Fernandez, 47, who leads the main opposition party.

Both of them have pledged to fight to soften the terms for repayment of Venezuela's 30 billion dollar foreign debt, the fifth biggest in the developing world.

The country has one of the best repayment records in Latin America, repaying more principal on its debt than any other, but the leading candidates have vowed to change this.

In a newspaper interview published on Monday, Perez said Venezuela should repay its debt at a rate of around 20 per cent of its export earnings. Last year, it paid 46.5 per cent.

"We can not pay under the conditions imposed by the industrialised world," Perez, Venezuela's president from 1974 to 1979, told El Nacional. "The situation is becoming intolerable."

On the basis of such rodomontade, the man was elected, only to impose every condition asked by the 'industrialized world' and then some. Surprise surprise. It is as if George Bush had run on a platform of smaller government, only to balloon the size of the government... Oh, bad example. Well, it is as if Tony Blair had assured the British people that Saddam had weapons of mass destruction in spite of knowning that the intelligence was iffy or non-existent... Oops, another bad example. Well, it is as if the Venezuelan people are supposed to swallow the lies and bad faith of their elected leaders without complaint, as they do in the U.S. and the U.K. There, that's better.

Anyway, the comedy of Kamm writing propaganda for the regime of a ex-crook who was put under house arrest twice for his crimes (and protected from worse by his buddies on the Venezuelan Supreme Court) is pretty good. One looks forward to his defense of the Salinas family next. But there is still more from this one little post. Two points, actually. One has to do with the figures that Kamm quotes, pointing to them as if the early nineties was a time of sound economic policies. Now, the background here is important, This is how Corrales puts it:

“Nevertheless, comparing numbers alone tends to ignore issues of diachronic relativity. Venezuela in January 1989 was in the midst of its most severe economic crisis since the 1930s. Venezuela's GNP was expanding but only as a result of deficit spending, growing indebtedness, and reserve burning. Artificial aggregate-demand boosting was a deliberate state strategy to hide the severity of the economic crisis for electoral purposes. But the severity of the crisis was real--very high and accelerating inflation for the first time ever, large trade and budget deficits, declining revenues, severe foreign reserve shortage (unusual for oil exporters), consumer goods scarcity, and growing social unrest. And yet, this was only the tip of the iceberg of a chronic, decade-old economic deterioration. Since the 1970s, Venezuela's economic competitiveness and living standards declined steadily. Despite the growth of GNP between 1984 and 1988, there is little evidence of any trickle-down effect. (See Table 1.) After peaking in 1982 at US $4,980, the GNP per capita declined to US $3,190 in 1988, roughly the same level as in 1977. Few countries experience such a dramatic (35 percent) decline in such a short period of time. Argentina certainly did not: its GDP per capita actually increased 32.9 percent during this period.[25] Venezuelan real wages between 1980 and 1988 also exhibit a dismal record (34 percent decline compared to 2.7 percent for Argentina). In 1988 alone, real wages declined 11.3 percent compared to 5.5 percent in Argentina.”

But how about the good times to which Kamm refers -- that strong 9 percent growth? How about those the privatizations, the austerity, the price liberalization, all of the stuff “promoting sound economic policies through so-called structural adjustment programmes.” Well, here we must leave Coralles, who has a soft spot for the Washington concensus, and ask about the way the neo-liberal policies in Venezuela, and Mexico, and Argentina go round and round in the same cycle of boom and bust, with the busts being those times when the government kindly extends itself to the neediest -- owners of banks and telephone companies and such --and bails them out.

In 1996, the Economist gave a soft focus view of what happened:

"During Venezuela's most recent boom, in the early 1990s, its banks grew like topsy. Lax supervision allowed lenders to run wild, and there were too many soft loans to bank insiders. The boom ended in January 1994 when Banco Latino, then the second-largest bank, was taken over by the government. As panicked depositors pulled out their money, seven other banks also failed. Standard & Poor's, a credit-rating agency, reckons the bank bailout has cost 1.8 trillion bolivars ($12 billion), equal to 22% of GDP in 1994. The crisis helped drive the inflation rate above 60%. That led to a sharp devaluation of the bolivar. In 1993, 106 bolivars could buy one American dollar. Today, it takes 474.

Officials see privatisation as one way to recover some of the costs of the continuing bank bail-out. Two other banks now in government hands, Banco Republica and Banco Latino, will go on the block early next year. Esther de Margulis, head of Fogade, the deposit-guarantee agency, expects to receive over $1 billion from the sale of banks and related assets."

The typical cycle -- tax money bails out banks that fail due to the lax regulation that is ignored by "structural adjustments" that encourage privatization. Using the state as a piggy bank, the banks are nursed back to health and sold, often to the same people who bankrupted them in the first place or their friends. To really get a sense of what happened in Venezuela, read the Funny Money chapter in The Blood Bankers by Henry S. James. Kamm's notion that the structural adjustments were sound is as bogus as is his careful non-disclosure of what happened, economically, after the reforms were put into place.

The other point, on which we will take Corrales' word, is that, far from Chavez destabilizing Perez, Corrales claims his own party did:

"In Venezuela, the ruling party virtually rebelled against the executive and his reforms at the end of 1991." And here:

"AD [Accion Democratica] felt increasingly threatened. It soon began to attack the reforms and reformers, disparaging most economic initiatives and belittling every economic accomplishment. Never in Venezuela's democratic history were executive-ruling party relations so distant and discordant. A vicious cycle developed: the party grew increasingly resentful, in turn, further persuading the executive of the need to supersede the party.

By 1991, AD was in a virtual state of war against the executive, even though this was the "best" economic year of the reforms in terms of macroeconomic indicators. This war culminated in AD's internal elections of September-October 1991 in which the orthodox sectors captured the top positions in the party. From this moment on, the balance in executive-ruling party relations shifted toward the party, now under the control of the most recalcitrant critics of the reforms."

Finally, a word about Corrales. Three years after the 1997 article, the much praised Argentine economy, which Corrales regards as a model of instituting sound economic policies, collapsed. By coincidence (I guess I should put heh here) the reformist Argentinian president, Menem, was accused of massive corruption himself. The neo-cons do love their leader/swindlers.

There are days when Kamm is just an average punter, and then there are days when he is absolutely golden – attaining scores that are almost near the legendary Melanie Phillips. This post was one of the latter.

PS: – for Bush corruption -‘n-incompetence junkies who just can’t get enough, this article in the NYT is the place to go. The usual complaints about the “good news from Iraq’ being a pack of lies served up by right wing talking heads and relayed dutifully by a cowed press doesn’t really get to the function of the lies. If you are going to pick a country apart, if you are going to pursue unilateral power in the Middle East, and if you are going to disgorge tax money to your campaign contributor – all at the same time - you need to operate like cartoon villains in Sin City, you need a bunch of zombies constantly relaying ‘good news’ and you need to baptize the whole thing with an inspiring name. Democracy, freedom, the rest of it. And that is what 2003 and 2004 were all about.