BoRev.Net

The editorial pages of Washington Post and the New York Times waxed neurotic today about Venezuela’s plans to buy back telecom and electrical companies sold to the United States in 1991. Of course, they don’t put it in such reasonable terms. “Nationalization!” they cry. “State hegemony!” A giant step toward “diminishing freedom” and “national impoverishment,” yadda yadda yadda.

As we pointed out yesterday, their primary concern is that US companies own huge shares of these Venezuelan industries. Much as the Post and the Times try to frame their arguments as genuine concern for, like, Venezuelans, they only seem to get their knickers in a knot this big when big U.S. biz is involved.

The Times warns: “Whatever Mr. Chávez is planning, he needs to fairly compensate shareholders,” and wonders: “Exactly what form these nationalizations will take”?

Well pick up a phone and ask, guys. Bloomberg did. In a move sure to make his J-school professor proud, reporter Guillermo Parra-Bernal got beyond the frantic speculation by “asking questions.” In an interview with the Venezuelan National Assembly’s Finance Committee Chairman, one Mr. Ricardo Sanguino, it turns out that this is a buyout, not an expropriation. As Sanguino noted, “Confiscation, expropriation are banned words in our dictionary.”

It would nice to see an apology from the editors, but I’m afraid we’re more likely to see a rant about dictionary censorship.

DC Talk show host Kojo Nnamdi dedicated a segment of his show yesterday to the changes in Venezuela’s electrical and telecom sector. Sounds riveting, no? Actually, it kind of was. And you can listen to it here with Real Player or here with Windows Media.

The guests were two local think tankers, Dr. Mark Weisbrot from the Center for Economic and Policy Research, and Michael Shifter from the Inter American Dialogue. In DC, the IAD is often called the “Monologue” because of their penchant for only inviting Latin American spokespeople of a certain class (upper) to participate in their discussions. They didn’t do much to dispel that rep on the show, as Shifter was invited into the plush warm studio, and Weisbrot was relegated to a phone-in ghetto. Maybe it was a scheduling issue, who the hell knows? But the upshot was that there was time at the beginning to hear one picture of Venezuela, and then a much longer rebuttal.

Note to Shifter: that’s not what “dialogue” means.

Two days ago, you may remember, every major newspaper, wire service and editorial board in the country seemed to be going apesh*t crazy over Venezuela’s alleged plan to confiscate property from U.S. investors.

This evening, AP reports:

But it later emerged that the Venezuelan president – whose “21st-century socialism” has managed to co-exist with a vibrant private sector – is disposed to pay fair market prices for the two utilities. That would make these “nationalizations” much less radical than initially feared and not all that unusual for Latin America.

It later emerged? Nice job fellas.

Everyone romanticizes the past a bit: snowfalls, street fights and breasts all seem a little bigger in the hazy daze of nostalgia. But economists are supposed to be hard-nosed sticklers for numbers and data, not quite so susceptible to sentimentality, right?

So, re-reading the 3-year -old NYT opinion piece that we linked to the other day, I was sort of surprised to see that the alleged economist (and super-objective NPR analyst) Moises Naim not only gets misty-eyed reminiscing on the golden age of Venezuela’s obscurity, but he seems to have bullshat some important data to make his point.

And its no small point. He writes that Venezuela “enjoyed the world's highest growth rate from 1950 to 1980.” Really? The highest in the world? You’d think someone would have written about that before 2003.

It’s news to the University of Pennsylvania, whose Penn World Tables keeps track of that kind of thing. They place Venezuela’s per-capita growth at 86% during those 30 years, higher than, say, Nicaragua or Ethiopia, but quite a bit lower than Egypt or Costa Rica.

In the same time frame, Venezuela’s per-capita growth was nearly doubled by Mexico’s (168%), tripled by Brazil’s (276%), and sextupled by Japan’s, which clocked in at 610%. Check it out in chart form, and it looks like Venezuela was a lot closer to the bottom than the top in these decades.

So Dr. Naim got it way wrong. Big deal. But the op-ed page of the New York Times? Don’t they have fact-checkers/standards/a reputation to worry about? A search of the Time's archives turns up no correction, clairification or retraction of the piece.

In less than 1400 words, Venezuelan-American turned Venezuelan-again writer Eva Golinger clarifies all your questions about recent controversies.

Remember when Venezuela was Latin America’s model democracy? Back when much of South America was ruled by military juntas and gold-digging opportunistic showgirls, Venezuela was widely applauded for its commitment to democratic values. Which is to say that it didn’t do much to piss off the US.

Well in those golden days, Venezuela had a state owned electrical company and a state-run telecommunications sector. It wasn’t perfect but it worked, and it went hand in hand with being a stand-up democracy.

You may have read that Venezuela is kicking around the idea of going back to that model. Tried the privatization thing, didn’t like it, changing our minds. No problem, right? Well to read CNN’s “analysis” of the situation, that’s just commie talk. Seriously. They say:

The decisions announced by Chavez are very similar to those taken in the early years of the Cuban Revolution.

And:

Given the announcements made last week. . .we can say that Venezuela is heading towards the old communism of the last century, and more in the Cuban or North Korean style than the Chinese.

Dramatic no? And:

...like Cuba, Venezuela will remain an economic island.

Yeah, the fastest growing economic island in Latin America. And don’t forget: still the world’s number #2 investment opportunity. Don’t cry for us, CNN.

My mama always said I had a face for radio! My Counter Spin interview will be broadcast next week on over 100 stations across the US and Canada. We discuss Venezuela and the mixed up media messages here in the U.S. You can see if when and where it will be airing in your hometown here. Or if you are an impatient type, you can listen to it right now, here.

The Venezuela discussion starts at the 20-minute mark. But the first half of the show is a tribute to the great Molly Ivins, so check out the whole thing if you can.

I imagine these are hectic days over at the Houston Chronicle, what with their diaper-wearing rabbit-boiling bitch-slapping space daughter returning to town and all. But shepherding history requires constant vigilance. Turn your back for just one moment, and suddenly your opinion page gets littered with reason.

How else to explain this piece from former Associated Press correspondent Bart Jones? Dude deftly puts the “Op” back into “Op-Ed,” and defies the conventional media take on Venezuela.

On the press: “Venezuela's media, owned largely by the country's wealthy elites, are arguably the most rabidly antigovernment media in the world.”

On the “muzzling” of a TV station: “If RCTV were operating in the United States, it's doubtful its actions would last more than a few minutes with the FCC.”

On the lurch toward one-party rule: “Chavez is not creating a single-party state as widely reported but is melding together an amorphous array of parties that support him. He is not outlawing opposition parties.”

On commie-style property takeovers: “Chavez also is not nationalizing the entire economy without compensation to companies, as Castro did in the early days of the Cuban revolution, but rather is buying back a few key strategic utilities such as the CANTV telecommunications company…”

Sure, all this is “accurate.” Sure, it’s all backed up by “facts.” Sure, the author “knows” Venezuela in the sense that he lived and worked there for years. But he certainly doesn’t know what he’s supposed to know about Venezuela.

Every newspaper in America should be on guard. In a sense we’re all just one incontinent rocket vixen away from total message meltdown.

I don’t want to get all heavy on you, but today we have an Important Media Lesson for you. Like an NBC public service announcement, we all learn something and come away better people.

All that huffing and puffing over Venezuela’s imminent commie takeover of the Caracas electrical sector ended in an all-smiles photo-op today, as the majority stakeholder AES Corporation was paid fair market value (739.3 million smackers) for their share in the company. As the company CEO put it, “Of all the business we have done in 62 countries, this turns out to be the most beneficial."

Of course, all along the Venezuelan government had said they planned to do it this way, although the US media vigorously refused to belive it. CNN said it would probably be an expropriation “very similar to those taken in the early years of the Cuban Revolution,” and the Washington Post editorial page argued it would be a giant “leap backward" for the region. Over at the Wall Street Journal, Mary Anastacia O’Grady went all blah blah blah pinko baiting about it, while the Florida papers said Chavez had “finally revealed his true colors…a bright, bold communist red.” All bullshit.

The Important Lesson here is that there are going to be many more speculative media freakouts in the months and years ahead. As with the expropriation storyline (like the elections, like the terrorism ties, like the Rule By Decree meme, like the oil sector decline, like the impending economic catastrophe, like the “one party rule,” like the anti-Semitism BS…), the press will pump up the worst possible scenario for weeks, and then one or two articles will quietly note it didn’t play out that way. Read with care.

And that’s one to grow on.

I’ll bet you were dying to see how the press would frame the day-after stories of the Caracas electrical nationalization. I mean, Chavez defied their dire predictions, kept his word and paid fair market value. Here’s how: the “markets” are pleasantly surprised, but investors are not convinced that it will ever happen again. Oh, and this is a victory for international pressure.

Clap clap clap clap clap clap clap!

So how does the finance world view Venezuela’s recent (re) nationalizations? As Hallgarten & Co. reports, things are all very “investor-friendly” in the Bolivarian Republic. Company spokesman Mark Turner takes aim at the US press for whipping a potentially damaging frenzy with “politically tinged news reports that ignore basic facts.”

Apparently, reporters ready to hate on Hugo Chavez “for his politics made the mistake of not looking at economic evidence. It would seem that an attempt to stay politically neutral and concentrate on financial realities is more rewarding.” Indeed.

As it turns out, “The agreement between AES and the Venezuelan government for AES’s 82% stake in Electricidad de Caracas brought a much-needed dose of sanity to the over hyped and misunderstood Venezuela situation. Far from forcing AES into a bad deal, Venezuela paid 20% above the market price for their share of the company that Chavez wanted to nationalize.”

Or, to put it another way, why does CNN want to destroy our way of life?

We were shocked last week when Bart Jones’ excellent Op-Ed was printed in the Houston Chronicle. Doubly-so today to see it picked up by the Providence Journal and in longer form in the National Catholic Reporter (the latter is subscription-required. Sorry).

What’s gotten into these editors?

The headline writers let their freak flag fly today. The same Associated Press story generated these headers: “Chavez Nationalizes Orinoco Oil Fields” “Venezuela Takes Control of Foreign Oil Projects,” and this heart-pounder: “Venezuela to Seize Foreign Oil Projects.” Christ. Can you hear the drums, Fernando?

So what’s wrong with the descriptions?

>> For one, Venezuela’s oil was “nationalized” back in 1976.

>> For two, the government is not “taking over” any foreign companies. They are buying out their shares and getting a controlling stake in the development of the Orinoco basin.

>> For three, foreign companies will still be operating in the region and generating enormous profits. This is far more business friendly than countries like, say Mexico or Saudi Arabia, who don’t allow foreign investment in their oil sector at all.

>> For four, the only reason the Orinoco oil hadn’t been operating under these terms in years past is because, back in the 1990s some politicians with ties to oil interests made the ridiculous determination that the heavy crude in the Orinoco wasn’t oil at all. According to them, it was coal, and had been regulated as such until now.

So to paraphrase the bumper sticker: Nationalization is the Radical Notion that Oil is Not Coal.

Stick that on your Volvo.

Remember how earlier this year the U.S. press was up in arms that Venezuela had “nationalized” oil drilling in the Orinoco Delta even though Venezuelan oil had been nationalized 20 years earlier and everyone was compensated at market value?

Well something else happened today. And it involved “a deal with the holder of approximately 79 percent of the aggregate principal of the Cerro Negro bonds” and “a purchase price equal to par plus accrued and unpaid interest blah blah blah…”

What does it all mean? Who the hell knows! But it’s not the nationalization of the Mexican Railroads, is all.

When beloved oil giant ExxonMobil is not busy helping marine mammals vastly improve their competitive “viscosity” or drafting policy frameworks for freshly-liberated Arabian colonies, you’ll find its dedicated staff pioneering the frontiers of international regulatory law. And boy these days do the fruits of their efforts really show!

For instance did you know that you can get a court order freezing billions dollars of a country’s assets without ever inviting that country to defend itself in court—or even letting them know your little hearing was taking place? Well you can. The only catch is to be an Oil Company™. If you simply meet that one little criterion, all kinds of new aspects of the law are opened up to you like magic!

You’ve heard of “jurisdiction,” right? Did you know that it’s only for the little people? As an Oil Company™, you can get a court order from a country that has no relationship whatsoever with either you or the target of your extortion dispute! Damages? Sure, the poor schlub down the block may have to settle for “the relative equivalent of the value of their loss,” but an Oil Company™ is entitled to assets far, far beyond the subject of disagreement!

Take it from me, if you want something from somebody else only they won’t give it to you, don’t take the law into your own hands. Take the approach that’s been time tested, from “Teapot Dome” to “Cheney’s Energy Task Force”: Be an oil company. Life can be better.