Opinion and observation on a world gone crazy

Joe Gill, journalist and game inventor from Brighton, UK

Monday 30 May 2016

What went wrong in Venezuela




The best insider description I've read on what went wrong with Venezuela's leftist experiment - by Ryan Mallett-Outtrim for Counterpunch. A catastrophic currency control system that led to speculation and corruption on a grand scale and emptied the shops. Essentially for fear of changing the Chavez legacy, the government of Maduro acted like a rabbit in the headlights - failing to radically reform or abolish the currency controls that were spiralling toward a full blown crisis:

After over a decade of remaining in check, suddenly inflation began to head upwards in late 2012. This was accompanied by a collapse in the black market value of the Bolivar Fuerte (BSF). For example, in October 2012, I purchased currency on the black market for around BsF13 to the dollar. Six months later, I got around BsF20 for a dollar.


This was the beginning of what economist Mark Weisbrot has described as an “inflation depreciation spiral”. The basic idea is that people in Venezuela saw inflation go up, so they traded some of their BsF for US dollars on the black market. ...

In March 2013, the government announced the creation of Sicad, a mechanism through which the state would auction off dollars to private industry. By July, weekly Sicad auctions were being held. At these auctions, BsF were being sold at a rate of around 11 to the dollar. By this point, the black market rate was well over BsF20=US$1, meaning the government was hugely subsidizing access to currency for industry. For every dollar the government sold industry, the government itself was losing a second dollar in its overly generous exchange rate. This is a key piece of the puzzle as to why the inflation-depreciation spiral has become so damaging.

The Venezuelan state makes money by selling oil on international markets, meaning much of its income is in dollars. Yet much of the state’s day to day expenditures are denominated in BsF (like wages). So, when the BsF drops, the government’s coffers should suddenly start looking a lot better. Unfortunately, the government has dug itself into a hole by effectively subsidizing the value of the BsF through official channels. By keeping the official exchange rate stable even as the BsF plunges on the black market, the government has to pay out more to maintain the former rate. For example, as mentioned back in 2012 the government was losing US$1 for every US$1 it sold through Sicad (assuming the official rate). Today, the Venezuelan government’s lowest exchange rate sells BsF at around 450 to the dollar. On the black market, US$1=BsF1050. Even from the government’s perspective, it’s still basically losing at least a dollar for every dollar it sells. It shouldn’t surprise anyone that under this arrangement, private industry has repeatedly complained the government has failed to deliver enough foreign currency to cover imports. After all, a system like this isn’t sustainable by any stretch of the imagination.
Worse still is the preferential rate, which was consolidated at BsF10=US$1 in March. At that rate, the government is now selling an entire dollar for the same amount of BsF that wouldn’t even fetch 10 cents on the black market. In the past, the government has said this rate accounts for around 70 percent of all official currency exchanges, meaning the government is likely forking out an astronomically high amount of money to keep its exchange system in place, even as it wreaks havoc on every aspect of the economy.
If private industry can’t obtain foreign currency, then it can’t import goods. This is a huge problem in an import dependent country like Venezuela. On top of this, the discrepancy between official and unofficial exchange rates creates its own unique phenomenon not so different from Dutch Disease. Importers are given an incentive to not actually import anything. A great example of this was a once rampant scam known as the carousel. Popular back in the late 2000s, the scam involved an importer applying for foreign currency at one of the government’s preferential rates, then importing a load of the product (such as medical supplies). However, the supplies were never unloaded. Instead, they remained inside the freight truck, and were again exported. Meanwhile, the importer sold their foreign currency allocation on the black market for a nice profit. The importer then applied for more foreign currency to purchase more medical supplies, and drove their freight truck across the border yet again. Under this scheme, the importer made far more money than they ever could through legitimate business activities by simply buying foreign currency cheap from the government and selling it at a higher rate on the black market.


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Saturday 27 February 2016

ISIS: A conspiracy drama



This review was first published on FringeReview UK 2016 on 19 February and is written by Joe Gill

I.S.I.S
Random Order Theatre Company
Etcetera Theatre, Camden

Low Down
“I.S.I.S has a strong cast led by Hampstead born actor Michael Culver. Michael played Captain Needa in “The Empire Strikes Back”. Now he plays Group Captain Beresford at the “Etcetera”.”

Review
What happens when a group of people decides they don’t believe the official narrative of events, and begin to construct a version of their own? Largely, they get called conspiracy theorists – or extremists. Sometimes they gather together to share their disbelief, determined to disseminate their view that the authorities are involved in a Big Lie to deceive the public.
This is the base material of I.S.I.S, Peter Neathey’s cleverly plotted and entertainingly subversive play. We join a group of 9/11 disbelievers who call themselves Seven Seconds (the time it took World Trade Centre 7 to collapse on 9/11), led by the charismatic but somewhat self-important Bob (Peter Neathey). He organises public protests to raise awareness of his group’s theory about the September 11 attacks, which, as we discover in scene two, has attracted the attention of the security services (even though, given its modest following, it is hard to see exactly why they would be so worried).
Sitting in a corner behind a desk throughout the performance is the wonderful Michael Culver (Star Wars, Secret Army) as a kind of old school spy master, whose young agents are sent out to infiltrate the Seven Seconds group using sexual entrapment. This thrillerish turn creates real suspense – Culver and the young agents, played by Jordan John and Ayesha De-Garci, both excellent, are assigned undercover roles as would-be group members, sent to undermine and ultimately destroy it. Culver explains how attractive young American agent Lataetia (De-Garci), seconded from Langley, will go under cover to bring down the group by befriending Bob’s partner Sara (Susan Hoffman), then ensnaring Bob using his own narcissism to destroy his leadership. Fellow agent John meanwhile befriends Brad (Michael McClare), an eccentric gay Jewish activist who is obsessed with Israel’s alleged role in the 9/11 attacks, and wants to overthrow the reign of Bob.
The devious goal of this subversion aims to move the group away from the “science” of the attacks toward a campaign targeting Israel – which, as Culver again explains, will fatally tar it as anti-Semitic. It sounds nuts, but as the infiltrators get to work, what unfolds is tragically familiar; and as anyone who has been involved in radical activism will attest, infighting in small groups around apparently obscure differences of doctrine can get very nasty. There is also a surprising twist in the story of infiltration and subversion that I did not see coming.
Throughout the play, the protagonists use a projector to play clips that explain their theories about the 9/11 attacks – and, ultimately, this is the political pay-off of the plot, the critical bits of data not normally aired on mainstream media that filter through amid the amusing drama. Nuggets of hidden history include the 1967 Israeli attack on the USS Liberty, protests by anti-Zionists American Jews in Washington, a speech by the late Labour ex-cabinet minister Michael Meacher, and another by John F Kennedy. And of course, the collapse of those buildings in Manhattan in 2001.
Amid the unfolding deception and sexual jealousy, we are invited down the rabbit hole into an Alice in Wonderland reality in which the villains are not the terrorists, but Western and allied intelligence agencies use “false flag” attacks to hypnotise the public and justify endless war.
While one doesn’t have to buy into all the theories, I.S.I.S is an unsettling, funny and mostly well-acted way into the “Truth movement”, as well as an indictment of security services’ underhand actions against peaceful activism. As the late Michael Meacher says in a recent clip, used in ISIS: “Sometimes conspiracies do happen.” Published February 21, 2016 by Paul Levy

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Monday 18 January 2016

Stalin and Hitler: the actual death tolls


I remember the communist idealism of my youth, when I believed in the cause handed down to me from my parents. I felt in the early 80s as a teenager that something was wrong with the "socialist system" as it was then called by its supporters.
Then came Gorbachev, and the brief hope that the inherent goodness of the system could be revitalised by a democratic reformist leadership. That hope lasted a short whole but, as I listened to people recently returned from the Soviet Union, it became apparent that things were very, very far from the cooperative socialist society that was once proclaimed.
So I turn now to the reality of the bloody birth and gradual deformation of that system, and why it could not be reformed. Personally speaking, I suffer from a terrible dilemma that I still believe that the goals of the socialist and communist movement were sound and I don't wish to constantly defame all hope of change.
And here and now, the reason why I am writing about the crimes of Stalinism is simply that I believe only by shedding all the illusions of communism, and facing the fact that the Bolsheviks of 1917 were essentially obliterated by Stalin and his regime, and whatever was glorious of the first decade or so of the revolution was remorsely crushed in the decade from 1930 to 1940. This occured not just in the Soviet sphere but also in the Spanish revolution, which like the Soviet revolution was crushed from 1936-39.
Fascism was defeated but what remained after 1945? We need to fully understand this, because in the 21st century there may yet be an opportunity to build an alternative system to capitalism. But that possibility requires a crystalline understanding of what can replace capitalism, which I believe is revolutionary, popular democracy, and what can't, which is a reconstitution of what failed in the 20th century.
Here are some very tough facts on Stalin and the nazis crimes in this balanced essay from Timothy Snyder in New York Review of Books. A sober assessment backed up by the most recent archive data. Snyder shows how the cold war led to exaggeration of death tolls caused by Stalinism - the 20m or 30m often quoted is replaced by 9.5 million based on the Soviet archives, including half a million who died of starvation in the Gulag due to the war. (Snyder asks, who was responsible for those war deaths? Well, yes, mostly the nazis, but not exclusively.)
What is most difficult for those who still persist in believing in communism / Marxism-Leninism, is the fact that Soviet deaths occured before the Nazi genocide began by a decade.
Of course the Soviet Union was isolated and surrounded by enemies in 1930, when forced collectivisation began. So it wasn't in any sense a normal peacetime. The nazis killed 12 million but another 20 million plus died due to the Hitler's war, raising the nazi death toll to 32 million. For some reason Snyder does not give us the grand total for Hitler's war, including those murdered on the eastern front and in the camps. War is the pre-eminent crime, according to Nuremberg, so this number should be included.
Snyder's key argument is the following: "Apart from the inaccessibility of archives, why were our earlier assumptions so wrong? One explanation is the cold war. Our wartime and postwar European alliances, after all, required a certain amount of moral and thus historical flexibility. In 1939 Germany and the Soviet Union were military allies. By the end of 1941, after the Germans had attacked the Soviet Union and Japan the United States, Moscow in effect had traded Berlin for Washington.
By 1949, the alliances had switched again, with the United States and the Federal Republic of Germany together in NATO, facing off against the Soviet Union and its Eastern European allies, including the smaller German Democratic Republic. During the cold war, it was sometimes hard for Americans to see clearly the particular evils of Nazis and Soviets. Hitler had brought about a Holocaust: but Germans were now our allies.
Stalin too had killed millions of people: but some of the worst episodes, taking place as they had before the war, had already been downplayed in wartime US propaganda, when we were on the same side.
We formed an alliance with Stalin right at the end of the most murderous years of Stalinism, and then allied with a West German state a few years after the Holocaust. It was perhaps not surprising that in this intellectual environment a certain compromise position about the evils of Hitler and Stalin—that both, in effect, were worse—emerged and became the conventional wisdom."

Snyder also says that Stalinism must take responsibiity in part for the 30 million deaths from Mao's Great Leap Forward, which followed Stalin's template on collectivisation.
Who was worse, Hitler or Stalin? Read the full essay here.
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