Economy / Finance, Human Rights, Inequality and Social Justice, Intelligence, Politics, Violence

In Venezuela, White Supremacy Is a Key Driver of the Coup

Feb 8 2019

By Greg Palast* – Truthout

On January 23, right after a phone call from Donald Trump, Juan Guaidó, former speaker of Venezuela’s National Assembly, declared himself president. No voting. When you have official recognitionfrom The Donald, who needs elections?

Say what?

I can explain what’s going on in Venezuela in photos.

First, we have Juan Guaidó, self-proclaimed (and Trump-proclaimed) president of the nation, with his wife and child, a photo prominently placed in The New York Times. And here, the class photo of Guaidó’s party members in the National Assembly. They appear, overwhelmingly light-skinned — especially when compared to their political opposites in the third photo, the congress members who support the elected President Nicolás Maduro.

This is the story of Venezuela in black and white, the story not told in The New York Times or the rest of our establishment media. This year’s so-called popular uprising is, at its heart, a furious backlash of the whiter (and wealthier) Venezuelans against their replacement by the larger Mestizo (mixed-race) poor. (Forty-four percent of the population that answered the 2014 census listed themselves as “white.”)

Four centuries of white supremacy in Venezuela by those who identify their ancestors as European came to an end with the 1998 election of Hugo Chavez, who won with the overwhelming support of the Mestizo majority. This turn away from white supremacy continues under Maduro, Chavez’s chosen successor.

In my interviews with Chavez for BBC beginning in 2002, he talked with humor about the fury of a white ruling class finding itself displaced by a man who embraced his own Indigenous and African heritage.

In Venezuela, as in the USA, poverty and race are locked together. Why did so many Mestizo, poor Venezuelans love Chavez? As even the CIA’s surprisingly honest Fact Book states:

“Social investment in Venezuela during the Chavez administration reduced poverty from nearly 50% in 1999 to about 27% in 2011, increased school enrollment, substantially decreased infant and child mortality, and improved access to potable water and sanitation through social investment.”

But, just as Maduro took office, the price of oil began its collapse, and the vast social programs that oil had paid for were now supported by borrowing money and printing it, causing wild inflation. The economic slide is now made impossibly worse by what the UN rapporteur for Venezuela compared to “medieval sieges.” The Trump administration cut off Venezuela from the oil sale proceeds from its biggest customer, the US.

Everyone has been hurt economically, but the privileged class’s bank accounts have become nearly worthless. So, knowing that the Mestizo majority would not elect their Great White Hope Guaidó, they simply took to the streets — often armed. (And yes, both sides are armed.)

I’ve seen this movie before. When I look at today’s news reports of massive demonstrations against the so-called “dictatorship” of Venezuela’s left government, it looks awfully like 2002, when I was first in Caracas reporting for BBC Television.

Then, The New York Times, NPR and other mainstream outlets in the US reported on marches against the Chavez government, describing the tens of thousands of Venezuelans calling for Chavez’s removal. The light-skinned protesters were overwhelmingly wealthy — and they wanted you to know it. Many of the women marched in high heels, the men peacocking in business suits, proudly displayed in the uniforms of their privileged class. The Chavistas wore patriotic yellow, blue and red T-shirts, sneakers, jeans.

To anti-Chavista protesters, race was an issue as much as class economics. I heard these opposition demonstrators shout “Chavez, Monkey!” and worse.

Many in the US have never heard this story of race war in Venezuela (and war is what it is), as the US press does not recognize its own racial bias. In 2002, as today, the massive demonstrations of the whiter Venezuelans were reported as evidence that Chavez was wildly unpopular. Yet, the day after each anti-Chavez march, I would witness and film the pro-Chavez demonstrations that flooded Caracas with an ocean of nearly half a million marchers, largely the Mestizo poor, that received little or no coverage in the US press.

The bias continues. The New York Times did not run a photo of this past week’s pro-Maduro demonstrations. But in hard-to-find photos and reports from my colleagues on the ground, the Chavista demonstrations are bigger, involving mass turnouts in several cities, not just wealthy neighborhoods in Caracas.

Why do the poor march for Maduro? Even though the Mestizo majority suffers today, they will not turn back to the pre-Chavez days of de facto apartheid.

And we must remember this is not the first time the US government has tried to overthrow the elected government in Venezuela.

In 2002, George W. Bush’s State Department cheer-led the coup. The plotters kidnapped Chavez and held him hostage. The coup was led by an oil industry leader and head of the Chamber of Commerce, Pedro Carmonawho had seized the nation’s White House, and, like Guaidó today, declared himself president. Carmona told me proudly about the fancy inaugural ball held by the nation’s elite and attended by Bush’s ambassador.

But the Bush/Carmona coup collapsed when a million mostly Mestizo, Indigenous and Black Venezuelans flooded the capital and forced the plotters to return their hero, the supposedly unpopular Chavez, to Miraflores, the presidential palace. “Presidente” Carmona fled.

Today, Guaidó’s supporters, like Carmona’s, know they can’t win an election given the overwhelming fact of the newly empowered Mestizo majority. So Guaidó has skipped the idea of an election altogether, simply replacing running for office with the “recognition” from Trump and allies which Guaidó can’t get from Venezuelans.

When I see the images and hear the chants of the anti-Chavista demonstrators now, I’m also reminded of what I saw at a Trump rally in Macon, Georgia, this past November. The president slid out of Air Force One to tell the crowd — heavily weighted with white supremacists — that they needed to take back their country from those “invading” the border. Trump told them to fear gubernatorial candidate Stacey Abrams, who is Black, saying she would “turn Georgia into Venezuela.”

I don’t think Trump was talking about Abrams’s program to bring universal health care to Georgia, as Chavez did for Venezuela.

Some of the US press is quick to condemn the racial hatred on display at Trump rallies. But I have yet to hear or read in the US press what our eyes can see in the three photos from Venezuela: an uprising of white or light-skinned people wanting to “take back their country.”

The putsch in Venezuela is run by the wealthy, internationally connected minority operating by a regime-change plan designed by neocon retread John Bolton, Trump’s national security adviser — a plan to control Venezuela and its oil, as Bolton openly proclaims.

Ah, yes, the oil. It’s always the oil. And Venezuela has plenty to seize: the world’s largest reserves.

We’ll get to that in Part II.

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*Investigative reporter Greg Palast is the author of The Best Democracy Money Can Buy, now a film, The Best Democracy Money Can Buy: The Case of the Stolen Election.Palast covered Venezuela during the Chavez presidency for BBC Television Newsnight and the Guardian. This article incorporates additional reporting by William Camacaro in Caracas.

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Annex:

The Venezuela Myth Keeping Us From Transforming Our Economy

By Ellen Brown* – Truthdig 

Modern Monetary Theory (MMT) is getting significant media attention these days, after Rep. Alexandria Ocasio-Cortez said in an interview that it should “be a larger part of our conversation” when it comes to funding the “Green New Deal.” According to MMT, the government can spend what it needs without worrying about deficits. MMT expert and Bernie Sanders adviser professor Stephanie Kelton says the government actually creates money when it spends. The real limit on spending is not an artificially imposed debt ceiling but a lack of labor and materials to do the work, leading to generalized price inflation. Only when that real ceiling is hit does the money need to be taxed back, but even then it’s not to fund government spending. Instead, it’s needed to shrink the money supply in an economy that has run out of resources to put the extra money to work.

Predictably, critics have been quick to rebut, calling the trend to endorse MMT “disturbing” and “a joke that’s not funny.” In a Feb. 1 post on the Daily Reckoning, Brian Maher darkly envisioned Bernie Sanders getting elected in 2020 and implementing “Quantitative Easing for the People” based on MMT theories. To debunk the notion that governments can just “print the money” to solve their economic problems, he raised the specter of Venezuela, where “money” is everywhere but bare essentials are out of reach for many, the storefronts are empty, unemployment is at 33 percent and inflation is predicted to hit 1 million percent by the end of the year.

Blogger Arnold Kling also pointed to the Venezuelan hyperinflation. He described MMT as “the doctrine that because the government prints money, it can spend whatever it wants . . . until it can’t.” He said:

To me, the hyperinflation in Venezuela exemplifies what happens when a country reaches the “it can’t” point. The country is not at full employment. But the government can’t seem to spend its way out of difficulty. Somebody should ask these MMT rock stars about the Venezuela example.

I’m not an MMT rock star and won’t try to expound on its subtleties. (I would submit that under existing regulations, the government cannot actually create money when it spends, but that it should be able to. In fact, MMTers have acknowledged that problem; but it’s a subject for another article.) What I want to address here is the hyperinflation issue, and why Venezuelan hyperinflation and “QE for the People” are completely different animals.

What Is Different About Venezuela

Venezuela’s problems are not the result of the government issuing money and using it to hire people to build infrastructure, provide essential services and expand economic development. If it were, unemployment would not be at 33 percent and climbing. Venezuela has a problem the U.S. does not, and will never have: It owes massive debts in a currency it cannot print itself, namely, U.S. dollars. When oil (its principal resource) was booming, Venezuela was able to meet its repayment schedule. But when the price of oil plummeted, the government was reduced to printing Venezuelan bolivars and selling them for U.S. dollars on international currency exchanges. As speculators drove up the price of dollars, more and more printing was required by the government, massively deflating the national currency.

It was the same problem suffered by Weimar Germany and Zimbabwe, the two classic examples of hyperinflation typically raised to silence proponents of government expansion of the money supply before Venezuela suffered the same fate. Professor Michael Hudson, an actual economic rock star who supports MMT principles, has studied the hyperinflation question extensively. He confirms that those disasters were not due to governments issuing money to stimulate the economy. Rather, he writes, “Every hyperinflation in history has been caused by foreign debt service collapsing the exchange rate. The problem almost always has resulted from wartime foreign currency strains, not domestic spending.”

Venezuela and other countries that are carrying massive debts in currencies that are not their own are not sovereign. Governments that are sovereign can and have engaged in issuing their own currencies for infrastructure and development quite successfully. I have discussed a number of contemporary and historical examples in my earlier articles, including in JapanChinaAustralia and Canada.

Although Venezuela is not technically at war, it is suffering from foreign currency strains triggered by aggressive attacks by a foreign power. U.S. economic sanctions have been going on for years, causing the country at least $20 billion in losses. About $7 billion of its assets are now being held hostage by the U.S., which has waged an undeclared war against Venezuelaever since George W. Bush’s failed military coup against President Hugo Chávez in 2002. Chávez boldly announced the “Bolivarian Revolution,” a series of economic and social reforms that dramatically reduced poverty and illiteracy as well as improved health and living conditions for millions of Venezuelans. The reforms, which included nationalizing key components of the nation’s economy, made Chávez a hero to millions of people and the enemy of Venezuela’s oligarchs.

Nicolás Maduro was elected president following Chávez’s death in 2013 and vowed to continue the Bolivarian Revolution. Recently, as Saddam Hussein and Moammar Gadhafi had done before him, he defiantly announced that Venezuela would not be trading oil in U.S. dollars following sanctions imposed by President Trump.

The notorious Elliott Abrams has now been appointed as special envoy to Venezuela. Considered a war criminal by many for covering up massacres committed by U.S.-backed death squads in Central America, Abrams was among the prominent neocons closely linked to Bush’s failed Venezuelan coup in 2002. National security adviser John Bolton is another key neocon architect advocating regime change in Venezuela. At press conference on Jan. 28, he held a yellow legal pad prominently displaying the words “5,000 troops to Colombia,” a country that shares a border with Venezuela. Clearly, the neocon contingent feels it has unfinished business there.

Bolton does not even pretend that it’s all about restoring “democracy.” He blatantly said on Fox News, “It will make a big difference to the United States economically if we could have American oil companies invest in and produce the oil capabilities in Venezuela.” As President Nixon said of U.S. tactics against Salvador Allende’s government in Chile, the point of sanctions and military threats is to squeeze the country economically.

Killing the Public Banking Revolution in Venezuela

It may be about more than oil, which recently hit record lows in the market. The U.S. hardly needs to invade a country to replenish its supplies. As with Libya and Iraq, another motive may be to suppress the banking revolution initiated by Venezuela’s upstart leaders.

The banking crisis of 2009–10 exposed the corruption and systemic weaknessof Venezuelan banks. Some banks were engaged in questionable business practices. Others were seriously undercapitalized. Others still were apparently lending top executives large sums of money. At least one financier could not prove where he got the money to buy the banks he owned.

Rather than bailing out the culprits, as was done in the U.S., in 2009 the government nationalized seven Venezuelan banks, accounting for around 12 percent of the nation’s bank deposits. In 2010, more were taken over. Chávez’s government arrested at least 16 bankers and issued more than 40 corruption-related arrest warrants for others who had fled the country. By the end of March 2011, only 37 banks were left, down from 59 at the end of November 2009. State-owned institutions took a larger role, holding 35 percent of assets as of March 2011, while foreign institutions held just 13.2 percent of assets.

Over the howls of the media, in 2010 Chávez took the bold step of passing legislation defining the banking industry as one of “public service.” The legislation specified that 5 percent of the banks’ net profits must go toward funding community council projects, designed and implemented by communities for the benefit of communities. The Venezuelan government directed the allocation of bank credit to preferred sectors of the economy, and it increasingly became involved in private financial institutions’ operations. By law, nearly half the lending portfolios of Venezuelan banks had to be directed to particular mandated sectors of the economy, including small business and agriculture.

In a 2012 article titled “Venezuela Increases Banks’ Obligatory Social Contributions, U.S. and Europe Do Not,” Rachael Boothroyd said that the Venezuelan government was requiring the banks to give back. Housing was declared a constitutional right, and Venezuelan banks were obliged to contribute 15 percent of their yearly earnings to securing it. The government’s Great Housing Mission aimed to build 2.7 million free houses for low-income families before 2019. The goal was to create a social banking system that contributed to the development of society rather than simply siphoning off its wealth. Boothroyd wrote:

… Venezuelans are in the fortunate position of having a national government which prioritizes their life quality, wellbeing and development over the health of bankers’ and lobbyists’ pay checks. If the 2009 financial crisis demonstrated anything, it was that capitalism is quite simply incapable of regulating itself, and that is precisely where progressive governments and progressive government legislation needs to step in.

That is also where, in the U.S., the progressive wing of the Democratic Party is stepping in—and why Ocasio-Cortez’s proposals evoke howls in the media of the sort seen in Venezuela.

Article I, Section 8, of the Constitution gives Congress the power to create the nation’s money supply. Congress needs to exercise that power. The key to restoring our economic sovereignty is to reclaim the power to issue money from a commercial banking system that acknowledges no public responsibility beyond maximizing profits for its shareholders. Bank-created money is backed by the full faith and credit of the United States, including federal deposit insurance, access to the Fed’s lending window, and government bailouts when things go wrong. If we the people are backing the currency, it should be issued by the people through their representative government.

Today’s government, however, does not adequately represent the people, which is why we first need to take our government back. Thankfully, that is exactly what Ocasio-Cortez and her congressional allies are attempting to do.

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*Ellen Brown is an attorney, chairman of the Public Banking Institute, and author of twelve books including “Web of Debt” and “The Public Bank Solution.”

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