Saturday, December 4, 2010

State Dept. Busted on Support of Coup #09TEGUCIGALPA645

This one really bugs me for some reason.  It reminds me of the School House Rock spoof video "Pirates and Emperors."

First of all, I think it's interesting that Wikileaks is being lambasted for releasing these cables.  But I do have a question.  Is there a given cable that should have been kept a secret?  Taken as a whole, it's easy to be critical.  But if you look at them one-at-a-time, specifically which cable do Wikileak's critics claim should not have been released?  If you can find one, I'd be willing to evaluate it.  But all collectivists always love to generalize everything (that's a little dry humor, by the way, I realize I just generalized).  The point is, what is so critical to national security?  Please be specific.

I know it would take quite a while to look at them one-at-a-time.  And sometimes the problem isn't readily apparent on both sides.  So I'll agree that not all of these cables are smoking guns if the critics are willing to admit not all of them as a whole represent a breach of national security.

Taking them each carefully, there are some examples of U.S. "Hegemony" demonstrated in specific cables.  In the political game, you can't be against hegemony if you are nationalistic.  So that's simple, I'm not nationalistic.  Do I like the regimes that the U.S. government is monkeying with?  No, not really.  But not liking a regime doesn't mean I want to topple it using a relativistic approach.

I can be against elected national socialistic regimes without undermining them by using relativistic means.  I guess the democratic process is the best in the world until it isn't.  That seems to be the criteria the U.S. government uses.

U.S. "interests" trump everything, apparently.  Why would we support it?

The article below mentions an Oliver Stone documentary at the end called "South of the Border."  It's a bit dry.  It makes the point over and over that the U.S. foreign policy is being used all over South America.  The cable confirms this notion.  Internally, the U.S. has no issue secretly attempting to topple governments it doesn't like.  And while these South American governments are socialist regimes that are totally wrong, it doesn't mean anyone has to police them and "fix" them, at tax payers expense.

Believe me, I think people like Hugo Chavez and his ilk are a desease of South America masquerading as its own cure.  But U.S. involvement is like recommending cancer as a cure for AIDS.

All the U.S. does is make enemies for itself.  It spreads the IMF and the DEA which actually create more problems than they solve.  And this is the democracy that is so wonderful?  Really?

The Oliver Stone documentary also holds out the hope that the Obama Administration would correct the mistakes of past administrations.  It looks like this specific leaked cable proves nothing of the sort.  No administration is willing to leave its neighbors alone.  Yet supposedly the U.S. is hated for its freedom.  But we all suffer the consequences, giving ammunition for our neighbors hate us.

By July 24, 2009, the U.S. government was totally clear about the basic facts of what took place in Honduras on June 28, 2009. The U.S. embassy in Tegucigalpa sent a cable to Washington with subject: "Open and Shut: The Case of the Honduran Coup," asserting that "there is no doubt" that the events of June 28 "constituted an illegal and unconstitutional coup." The Embassy listed arguments being made by supporters of the coup to claim its legality, and dismissed them thus: "none... has any substantive validity under the Honduran constitution." The Honduran military clearly had no legal authority to remove President Zelaya from office or from Honduras, the Embassy said, and their action -- the Embassy described it as an "abduction" and "kidnapping" -- was clearly unconstitutional.

It is inconceivable that any top U.S. official responsible for U.S. policy in Honduras was not familiar with the contents of the July 24 cable, which summarized the assessment of the U.S. Embassy in Honduras on key facts that were politically disputed by supporters of the coup regime. The cable was addressed to Tom Shannon, then Assistant Secretary of State for Western Hemisphere Affairs; Harold Koh, the State Department's Legal Adviser; and Dan Restrepo, Senior Director for Western Hemisphere Affairs at the National Security Council. The cable was sent to the White House and to Secretary of State Clinton.

But despite the fact that the U.S. government was crystal clear on what had transpired, the U.S. did not immediately cut off all aid to Honduras except "democracy assistance," as required by U.S. law.

Instead, a month after this cable was sent, the State Department, in its public pronouncements, pretended that the events of June 28 -- in particular, "who did what to whom" and the constitutionality of these actions -- were murky and needed further study by State Department lawyers, despite the fact that the State Department's top lawyer, Harold Koh, knew exactly "who did what to whom" and that these actions were unconstitutional at least one month earlier. The State Department, to justify its delay in carrying out U.S. law, invented a legal distinction between a "coup" and a "military coup," claiming that the State Department's lawyers had to determine whether a "military coup" took place, because only that determination would meet the legal threshold for the aid cutoff.

QUESTION: And so - sorry, just a follow-up. If this is a coup - the State Department considers this a coup, what's the next step? And I mean, there is a legal framework on the U.S. laws dealing with countries that are under coup d'état? I mean, what's holding you guys [back from taking] other measures according [to] the law?

SENIOR STATE DEPARTMENT OFFICIAL ONE: I think what you're referring to, Mr. Davila, is whether or not this is - has been determined to be a military coup. And you're correct that there are provisions in our law that have to be applied if it is determined that this is a military coup. And frankly, our lawyers are looking at that exact question. And when we get the answer to that, you are right, there will be things that - if it is determined that this was a military coup, there will be things that will kick in.

As you know, on the ground, there's a lot of discussion about who did what to whom and what things were constitutional or not, which is why our lawyers are really looking at the event as we understand them in order to come out with the accurate determination.

 

But the July 24 cable shows that this was nonsense. The phrase "military coup" occurs nowhere in the document, a remarkable omission in a cable from the Embassy presenting the Embassy's analysis of the June 28 events, their constitutionality and legality one month after the fact, if that were a crucial distinction in assessing U.S. policy. And indeed, initial press reports on the statements of top U.S. officials in response to the coup made no such distinction, using the descriptions "coup" and "military coup" interchangeably.

Why did the State Department drag its feet, pretending that facts which it knew to be clear-cut were murky? Why didn't the State Department speak publicly after July 24 with the same moral clarity as the July 24 cable from the Embassy in Honduras? Had the State Department shared publicly the Embassy's clear assessment of the June 28 events after July 24, history might have turned out differently, because supporters of the coup in the United States -- including Republican Members of Congress and media talking heads -- continued to dispute basic facts about the coup which the US Embassy in Honduras had reported were not subject to reasonable dispute, and U.S. media reporting on the coup continued to describe these facts as subject to reasonable dispute, long after the Embassy had firmly declared that they were not.

As the Center for Economic and Policy Research noted in an August 2009 report, in the previous 12 months the U.S. had responded to other coups by cutting U.S. aid within days. In these cases -- in Africa -- there was no lengthy deliberation on whether a "coup" was a "military coup."

What was the difference?

A key difference was that Honduras is in Central America, "our backyard," so different rules applied. Top officials in Washington supported the political aims of the coup. They did not nominally support the means of the coup, as far as we know, but they supported its political end: the removal of the ability of President Zelaya and his supporters to pursue a meaningful reform project in Honduras. On the other hand, they were politically constrained not to support the coup openly, since they knew it to be illegal and unconstitutional. Thus, they pursued a "diplomatic compromise," which would "restore constitutional order" while achieving the coup's central political aim: removal of the ability of President Zelaya and his supporters to pursue a meaningful reform project in Honduras. The effect of their efforts at "diplomatic compromise" was to allow the coup to stand, a result that these supporters of the coup's political aims were evidently content with.

Why does this matter now?

First, the constitutional and political crisis in Honduras is ongoing, and the failure of the U.S. to take immediate, decisive action in response to the coup was a significant cause of the ongoing crisis. After nominally opposing the coup, and slowly and fitfully implementing partial sanctions against the coup regime in a way that did not convince the coup regime that the U.S. was serious, the U.S. moved to support elections under the coup regime which were not recognized by the rest of the hemisphere, and today the U.S. is lobbying for the government created by that disputed election to be readmitted to the Organization of American States, in opposition to most of the rest of the hemisphere, despite ongoing, major violations of human rights in Honduras, about which the U.S. is doing essentially nothing.

Second, the relationship of actual U.S. policy -- as opposed to rhetorical pronouncements -- to democracy in the region is very much a live issue from Haiti to Bolivia.

Yesterday there was an election in Haiti. This election was funded by the U.S., despite the fact that major parties were excluded from participation by the government's electoral council, a fact that Republican and Democratic Members of Congress, in addition to NGOs, complained about without result. The Washington Post reports that the election ended with "nearly all the major candidates calling for the results to be tossed out amid 'massive fraud.'": "12 of the 19 candidates on Sunday's ballot appeared together at a raucous afternoon news conference to accuse the government of President Rene Preval of trying to steal the election and install his chosen candidate, Jude Celestin."

Yesterday's election in Haiti had the fingerprints of the U.S. government all over it. It was funded by the U.S. "Security" for the election was purportedly provided by UN troops, paid for by the U.S. And the crucial historical context of the election was the 2004 coup that deposed democratically-elected President Jean Bertrand Aristide, a coup engineered by the U.S. with years of economic destruction clearly intended to topple the elected government.

Last week, Bolivian President Evo Morales called out the U.S. for its recent history of supporting coups in the region.

AP's treatment of President Morales' remarks was instructive:

Morales also alleged U.S. involvement in coup attempts or political upheaval in Venezuela in 2002, Honduras in 2009 and Ecuador in 2010.

"The empire of the United States won," in Honduras, Morales said, a reference to the allegations of former Honduran President Manuel Zelaya that the U.S. was behind his ouster.

"The people of the Americas in Venezuela, Bolivia and Ecuador, we won," Morales continued. "We are three to one with the United States. Let's see what the future brings."

U.S. officials have repeatedly denied involvement in all of those cases and critics of the United States have produced no clear evidence. [my emphasis]

It's certainly true that critics have produced "no clear evidence" of U.S. "involvement" in any of these cases -- if your standard for "clear evidence" of U.S. "involvement" is a US government document that dictated in advance everything that subsequently happened. But this would be like saying that critics have produced "no clear evidence" for the Armenian Genocide because researchers haven't yet found a Turkish Mein Kampf. [Some who dispute that there was an "Armenian Genocide" do actually claim something like this -- "there is no proof of a plan" -- but claims like this are generally not taken seriously by U.S. media -- except when the U.S. government is an author of the crime, and the crime is recent.]

 

In the case of the coup in Venezuela in 2002, we know the following:

- Groups in Venezuela that participated in the coup had been supported financially and politically by the U.S.

- The CIA had advance knowledge of the plans for a coup, and did nothing to warn the Venezuelan government; nor did the US do anything meaningful to try to stop the coup.

- Although the US knew in advance about the plans for a coup, when these events played out, the US tried to claim that there was no coup.

- The US pushed for international recognition of the coup government.

- The International Monetary Fund, which would not take such action without advance approval from the United States, announced its willingness to support the coup government a few hours after the coup took place.

These facts about U.S. government "involvement" in the coup in Venezuela are documented in Oliver Stone's recent movie, South of the Border. This is why it's so important for as many Americans as possible to see this movie: because there are basic facts about the relationship of actual U.S. government policies -- as opposed to rhetoric -- to democracy in Latin America that major U.S. media simply cannot be counted upon to report straight. In order to successfully agitate for meaningful reform of U.S. government policy in Latin America, Americans have to know what the actual policy of the U.S. government has been, something they are unlikely to learn from major U.S. media.

And this is why Just Foreign Policy is urging Americans to organize house parties on December 10 -- Human Rights Day -- to watch South of the Border. You can sign up to host a screening here.

Here is a clip from South of the Border, in which Scott Wilson, formerly foreign editor of the Washington Post, describes the "involvement" of the U.S. in the coup in Venezuela:

And here is a clip from South of the Border in which President Morales talks with Oliver Stone about the role of the media:

Oliver Stone: "Now [Morales] is joining the Hugo ranks, becoming more the 'bad left' in the American media."

President Morales: "The media will always try to criminalize the fight against neoliberalism, colonialism, and imperialism. It's almost normal. The worst enemy I have is the media."

 

South of the Border Clip #2 from Cinema Libre Studio on Vimeo.

 

Follow Robert Naiman on Twitter: www.twitter.com/naiman

 

Posted via email from Anthony Martin's Weblog

Thursday, December 2, 2010

Private Banking and Other Free Market Myths

It's time to have an adult conversation about private vs. public.  There is no private banking system, at least not on the large scale.  If we had a private banking system, it would be able to go under.  The ability to fail is one of the main criteria that makes something private.  Safety nets obscure this notion.  It blurs this distinction.  If the safety net is big enough and strong enough, it obliterates this distinction.

No organization that is shielded from failure is private.  It can't be.  Failure avoidance is the incentive that makes organizations efficient.

If you could eat ten cheesecakes with no risk, wouldn't you?  I mean no risk at all.  If the cheesecakes were free ... if you knew you wouldn't feel sick later in the short term ... if you knew you wouldn't gain weight in the long term ... if you knew you would have no chance of a coronary in the very long term ... what would stop you from eating ten cheesecakes every day?

Failure and risk are natural checks and balances.  It's the ultimate cost of doing business.

The same is true financially as with the cheesecakes.  There is no credible risk of a large bank going under.  Even if a bank looks like its at risk, it will be absorbed by another.  Assets will be transferred, liabilities will be wiped out.  The executives get their pay.  Their bonus will resume.  Did you know CEO bonuses are higher today than they've ever been, even in the middle of this recession?

 

I don't want to focus on the bonuses.  They are a drop in the bucket.  Focusing on executive bonus is just an indicator, similar to porkbarrel spending, which is also a drop in the bucket.  But if you want to know the health of an institution, take executive bonuses for banks and porkbarrel spending for legislators to extrapolate.  When they're out of whack, the institution is in trouble.

"Too Big To Fail" is just a cute euphemism for nationalization.  The banks have been nationalized long long ago.  You could say it happened in 1913 when the Federal Reserve was created.  It took a long time to devalue the currency to this point.  It's just like the frog in luke-warm water.  The frog has been in there a very long time.  It's a very tender frog.

In the real private industry, if you do a bad job, your profits are hit at some point.  You might be able to shield or cloak your losses for a while.  But eventually, reality sets in and you have to deal with the problem.  The more deception used to shield the loss, the more the losses pile up.  And if you can just call your "uncle" to make the losses just disappear, then guess what?  You are no longer in the private industry.  You've been nationalized.  It's that simple.

So what's wrong with nationalization?  Well, the failure guarantee is no longer implicit.  The failure guarantee becomes explicit.  Is there an implicit guarantee for banks anymore?  No.  It's completely explicit.  Therefore, they are a nationalized industry.  There's no need for speculating when nationalization will happen.  It's a done deal.  The implicit guarantee is an indicator that will lead to the explicit guarantee.

Has healthcare been nationalized?  Yes it has.  Is the doctor guaranteed to get paid?  Well, at the moment, the guarantee is just implicit.  If enough of them suffer devastating losses (high malpractice, financial ruin from non-payment, anything you can think of), they will become "Too Important To Fail" (or come up with some other cute euphemism).  So while doctors are still at risk of financial ruin at the moment because the relationship between doctor and government hasn't been completely hammered out in practice, there is no doubt in my mind, if a sudden crisis hits the medical field, government will pull out the safety net.  If the sudden crisis isn't forthcoming, it will be created.  "Never waste a disaster," as they say.

Is this all some big mistake?  Nope, it's by design.

Posted via email from Anthony Martin's Weblog

Monday, November 29, 2010

Reply to The Underground Economist, Why Bitcoin can't be a currency

I wasn’t going to make a post bashing Bitcoin because their FAQ clearly states that its value only stems from the fact that merchants are willing to accept it. Unfortunately, this hasn’t stopped people from pushing it as the currency of the future, so regretfully, I feel compelled to post why this is not so.

While Bitcoin has managed to bootstrap itself on a limited scale, it lacks any mechanism for dealing with fluctuations in demand. Increasing demand for Bitcoin will cause prices in terms of Bitcoin to drop (deflation), while decreasing demand will cause them to rise (inflation). What happens in each of these cases?

Let’s start with deflation, because right now demand for Bitcoin is on the rise. What do people do when they think something’s value will be higher tomorrow than it is today? Well, they acquire and hold on to it! Who wants to give up money that’s constantly rising in value? In other words, rising demand causes demand to rise further. Irrational exuberance at its finest. Deflation begets deflation, ad infinitum, or at least until something breaks. You could make lots of money on Bitcoin, provided you get out of the market at the right time.

Eventually, of course, prices won’t be able to fall any further. Either people won’t be spending their Bitcoin anyway because they’re making so much money just by holding it, or the merchants will get tired of changing their prices every few seconds, assuming they don’t hit technical issues first, like the indivisibility of coins or their software not being able to handle all the zeros after decimal points.

At this point or shortly before, people will start taking their profits. They’ll start spending or selling their hoarded coins. If this manages to start any inflationary momentum at all, you’ll see the deflation scenario played out in reverse. And who’s going to stop it? The supply of Bitcoin is fixed and there is no other use for it besides as a currency. I doubt prices will have much of a chance to rise, since this will happen so fast. Merchants will go from taking one coin for a year of porn to not taking Bitcoin at all, and a bunch of people will be left with worthless Bitcoin.

The reason this can’t happen with government currencies is that government currencies *are* backed. They’re backed by bullets. If demand for USD starts to fall faster than the USG would like, the USG can just raise taxes without increasing spending, increasing demand and reducing supply simultaneously. There’s a bunch of stuff the FED can do, of course, and the FED tends to act first, but its operations are harder to explain. This is obviously not a perfect mechanism, since bubbles are still blown and popped, but even this mechanism is not available with Bitcoin.

Negative feedback loops like this are basically homeostasis. In nature, positive feedback loops like exist with Bitcoin are lethal; the only thing that’s even kept Bitcoin alive this long is its novelty. Either it will remain a novelty forever or it will transition from novelty status to dead faster than you can blink.

This is an interesting and honest critique. I especially like the part about how governments can protect their currencies with bullets. That is so true.

It is true that merchants must update their prices to reflect the current market price of Bitcoin. But there are mechanisms to make this less tedious. For instance, if you use the MyBitcoin.com shopping cart integration, you can peg your product against USD so your BTC price stays in sync. This isn't a perfect solution because getting an accurate peg relies upon the fledgling market data that comes from the Bitcoin exchanges.

Another barrier against the falling price against the BTC value is the use of inventory. This is something somewhat unheard of in USD denominated economies. If you prepare your inventory blocks for multiple sets of price, when you run out of inventory at one price, then inventory in another price becomes available. Welcome to the deflationary economy. It's fun!

Another problem cited by the author above is the problem of having to handle all the zeros after the decimal point. But many government currencies have this same problem in reverse. I.e., they have to handle all the zeros *in front* of the decimal point.

So the author is very worried about Bitcoin deflation. But I am looking forward to it very much. If demand for Bitcoin is that high, it should be very interesting indeed. I, for one, think the coin division isn't prepared *enough*. I think we should be expecting 10^-32, just to be on the safe side. If you have even 50 BTC, right now, hold it. When scarcity *really* sets in, that will be a tidy sum (e.g. if you think 20¢ one-month rise against USD is a lot, you ain't seen nothing yet).

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Posted via email from Anthony Martin's Weblog

Wednesday, October 20, 2010

Bitcoin May Rise on Demand for Alternative Currencies, Survey Shows

Bitcoin, which rose to a record this week, may extend its advance on demand for an alternate currencies, a survey found.

Twelve of 18 traders, investors and analysts surveyed that the "crypto-currency" will gain next week. Five forecast lower prices and one was neutral. Bitcoin rose to a record 9.2¢ today by the end of trading on BitcoinMarket.

The dollar yesterday slid to the lowest level against the yen in 15 years and dropped to an eight-month low against the euro on speculation that the Federal Reserve will ease monetary policy more to bolster U.S. growth. The Bank of Japan lowered its main interest rate to “virtually zero” this week.

It is speculated that as long as central banks are willing to be led by the Fed down a never-ending pathway of debasement, bitcoin will continue to rise.

The weekly bitcoin survey that started six months ago has forecast prices accurately in 19 of 33 weeks, or 58 percent of the time.

This week’s survey results: Bullish: 12 Bearish: 5 Neutral: 1

Posted via email from Anthony Martin's Weblog

Thursday, October 7, 2010

Special

New California Driver License

Here's an example of what the news paper reports as the new driver license.

Posted via email from Anthony Martin's Weblog

Wednesday, October 6, 2010

A4 - Span

Span by Anthony Martin  
Download now or listen on posterous
Span.mp3 (4117 KB)

Posted via email from Anthony Martin's Weblog