Saturday, April 21, 2012

Confederate "Heritage" Month, April 21: John Calhoun, political theorist

John Calhoun of South Carolina was the godfather of secession and the patron saint of the post-Civil War violent overthrown of the democratic Reconstruction state government, Jim Crow laws and segregationism.

John C. Calhoun (1782-1850)
"I never saw any one who so completely gave me the idea of possession." (Harriet Martineau)

Richard Current in John C. Calhoun (1966) writes:

Wherever a White Citizens' Council meets in Mississippi, or a similar group in another of the Southern states, there is to be sought, nowadays, the true spirit of Calhoun. It is to be sought in the activities of conservative - or reactionary - Southern whites. The way they use the lobby, the bloc, the party convention, and other political devices can be considered as essentially Calhounian.
That is now the spirit that dominates today's Republican Party, from the state and local levels to the national scene.

Current quotes a passage from the travel memoirs of Harriet Martineau, Retrospect of Western Travel, Vol. 1 (1838), on her encounter with Calhoun in 1835:

Mr. Calhoun, the cast-iron man, who looks as if he had never been born and never could be extinguished, would come in sometimes to keep our understandings upon a painful stretch for a short while, and leave us to take to pieces his close, rapid, theoretical illustrated talk, and see what we could make of it. ... His mind has long lost all power of communicating with any other. I know of no man who lives in such utter intellectual solitude. He meets men, and harangues them by the fireside as in the Senate; he is wrought like a piece of machinery, set going vehemently by a weight, and stops while you answer; he either passes by what you say, or twists it into a suitability with what is in his head, and begins to lecture again. ... Mr. Calhoun is as full as ever of his nullification doctrines; and those who know the force that is in him, and his utter incapacity of modification by other minds (after having gone through as remarkable a revolution of political opinion as perhaps any man ever experienced) will no more expect repose and self-retention from him than from a volcano in full force. Relaxation is no longer in the power of his will. I never saw any one who so completely gave me the idea of possession.
Today, he would do very well as a commentator on FOX News

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Friday, April 20, 2012

Confederate "Heritage" Month 2012, April 20: Lincoln on slavery

Some quotes from Lincoln are always good in a Civil War series of posts.

Apologists for the Confederacy have since 1865 put themselves through verbal and mental contortions to argue that slavery was not the cause of the Civil War. One piece of sophistry on which they rely is the fact that emancipation was not the official aim of the Union from the start of the war.

But that is a minor effort compared to the ones required to deny the many clear, explicit enthusiastic statements from the Confederacy that slavery was at the core of their cause.

Lincoln was an abolitionist, though prior to the Civil War and even some ways into it, he favored impractical schemes like colonization of African-Americans to Africa or some other location outside the US. He also favored compensated emancipation, though Southern slaveowners had vanishingly little interest in such a proposal.

Still, Lincoln was certainly clear that slavery was the central cause of the war. Addressing a black delegation in Washington on 08/14/1862 - addressing them on the issues of colonization - he said "without the institution of slavery ... the war could not have an existence."

A year later, a small eternity had passed in the war. Lincoln had issued the Emancipation Proclamation, making emancipation an explicit issue in the conflict. In military terms of the time, the Emancipation Proclamation changed the Union strategy from one of conventional war to revolutionary war, revolutionary because it aimed not just at subduing the enemy but at overthrowing the social system of slavery on which the Confederate economy was based.

On 08/26/1863, he wrote a letter addressed to James Conkling intended to be read at a Union political meeting in Springfield, Illinois. He addressed criticisms he had received over the emancipation policy:

But to be plain. You are dissatisfied with me about the Negro. Quite likely there is a difference of opinion between you and myself upon that subject. I certainly wish that all men could be free, while I suppose you do not. Yet, I have neither adopted nor proposed any measure which is not consistent with even your view, provided you are for the Union. I suggested compensated emancipation, to which you replied you wished not to be taxed to buy Negroes. But I had not asked you to be taxed to buy Negroes, except in such way as to save you from greater taxation to save the Union exclusively by other means.

You dislike the Emancipation Proclamation, and perhaps would have it retracted. You say it is unconstitutional. I think differently. I think the Constitution invests its Commander-in-Chief with the law of war in time of war. The most that can be said - if so much - is that slaves are property. Is there - has there ever been - any question that by the law of war, property, both of enemies and friends, may be taken when needed? And is it not needed whenever taking it helps us, or hurts the enemy? Armies, the world over, destroy enemies' property when they cannot use it; and even destroy their own to keep it from the enemy. Civilized belligerents do all in their power to help themselves or hurt the enemy, except a few things regarded as barbarous or cruel. Among the exceptions are the massacre of vanquished foes and non-combatants, male and female.

But the proclamation, as law, either is valid or is not valid. If it is not valid, it needs no retraction. If it is valid, it cannot be retracted any more than the dead can be brought to life. Some of you profess to think its retraction would operate favorably for the Union. Why better after the retraction than before the issue? There was more than a year and a half of trial to suppress the rebellion before the proclamation issued; the last one hundred days of which passed under an explicit notice that it was coming, unless averted by those in revolt returning to their allegiance. The war has certainly progressed as favorably for us since the issue of the proclamation as before.

I know, as fully as one can know the opinions of others, that some of the commanders of our armies in the field, who have given us our most important successes, believe the emancipation policy and the use of the colored troops constitute the heaviest blow yet dealt to the rebellion, and that at least one of these important successes could not have been achieved when it was but for the aid of black soldiers. Among the commanders holding these views are some who have never had any affinity with what is called Abolitionism, or with Republican party politics, but who hold them purely as military opinions. I submit these opinions as being entitled to some weight against the objections often urged that emancipation and arming the blacks are unwise as military measures, and were not adopted as such in good faith.

You say you will not fight to free Negroes. Some of them seem willing to fight for you; but no matter. Fight you, then, exclusively, to save the Union. I issued the proclamation on purpose to aid you in saving the Union. Whenever you shall have conquered all resistance to the Union, if I shall urge you to continue fighting, it will be an apt time then for you to declare you will not fight to free Negroes.

I thought that in your struggle for the Union, to whatever extent the Negroes should cease helping the enemy, to that extent it weakened the enemy in his resistance to you. Do you think differently? I thought that whatever Negroes can be got to do as soldiers, leaves just so much less for white soldiers to do in saving the Union. Does it appear otherwise to you? But Negroes, like other people, act upon motives. Why should they do anything for us if we will do nothing for them? If they stake their lives for us they must be prompted by the strongest motive, even the promise of freedom. And the promise, being made, must be kept. [my emphasis]
The text of the Lincoln letter is from The Life and Writings of Abraham Lincoln (1940), Philip Van Doren Stern, ed.

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Aljazeera English's "Inside Story" looks at oil regulations 2 years after the BP Gulf spill

Aljazeera English's "Inside Story" has a 25-minute story discussing the state of oil regulations 2 years after the BP Gulf spill, Have safety regulations improved since the BP oil spill? 04/20/2012:



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Business press struggles with the YPF story

I'm fascinated to see how the business press is reacting to Argentine President Cristina Fernández' proposal to take control of 51% of the YPF oil company, which is currently controlled by the Spanish-based multinational Repsol. Argentina is one of the countries that has serious - and so far successfully - challenged the neoliberal/Washington Consensus economic policy prescriptions over the last decade. How the business press responds to actions like the YPF nationalization says a lot about the ideological outlook they take.

Roben Farzad in Argentina Tries the Chávez Way Bloomberg Businessweek 04/17/2012 takes a more frivolous approach:

It's hard to believe now, but in the early 1980s, Argentina was perhaps the most promising and talked-about emerging market. Coming off the trauma of its Dirty War and military dictatorship, and its disastrous invasion of the Falkland Islands, democracy finally took root in 1983. Endowed with abundant natural resources, endless tracts of fertile land, and half-decent infrastructure, the then-167-year-old country projected upside to the investor community.

But Argentina regressed. In late 2001, as its economy collapsed, the country defaulted on $100 billion in debt and nationalized several enterprises. Argentina has since been a pariah state among international creditors. At the World Bank’s International Centre for Settlement of Investment Disputes, Argentina has more disputes pending against it than any other nation. Since 2003, rulers Néstor Kirchner and wife Cristina Fernández de Kirchner have nationalized $24 billion in private pensions and raided $6.6 billion in reserves from the central bank to make debt payments.

Now, Cristina Fernández (a widow since October 2010 and reelected by a landslide a year later) is seizing control of YPF, the former national oil monopoly that since 1999 has been majority-owned by Spain’s Repsol (REP). On Monday, she delivered a fire-and-brimstone speech on TV that blamed foreigners for the energy shortages plaguing the country—a rationalization for what would be the largest natural resource re-nationalization since Russia moved to seize Yukos in 2003. Fernández decreed that Argentina’s minister of planning and public investment would immediately assume the reins at YPF.
I have the irresistible urge to unpack this particular pile of hoo-hoo piece of reporting. So I will:

It's hard to believe now, but in the early 1980s, Argentina was perhaps the most promising and talked-about emerging market.
That would have been under the leadership of President Carlos Menem, also still a member of Cristina's Partido Justicialista (PJ), the Peronist party. Menem was committed to neoliberal fundamentalism. His government privatized state functions like crazy and deregulated according the dictates of what became known as the Washington Consensus endorsed by the International Monetary Fund (IMF) and the World Bank. A man whose economic policies Angela Merkel would surely love. Those measures, along with Argentina's euro-like tying of their currency to the US dollar, crashed their economy spectacularly in 2001. Deregulation of the capital markets made Argentina particularly vulnerable to attacks by international financial speculators.

Coming off the trauma of its Dirty War and military dictatorship, and its disastrous invasion of the Falkland Islands, democracy finally took root in 1983. Endowed with abundant natural resources, endless tracts of fertile land, and half-decent infrastructure, the then-167-year-old country projected upside to the investor community.
Democracy first "took root" in Argentina in the early 1800s, but it would be fair to say that the roots were relatively weak ones. The country was plagued by a long series of military takeovers. But all of them were mild in comparison to the brutal military dictatorship of 1976-83, the worst Argentina and South America has ever experienced. It was that dictatorship that began the push for Argentina to adopt the aggressive neoliberal economic policies demanded by the IMF and the World Bank. Or, to use Farzad's phrase, the military dictatorship "projected upside to the investor community".

But Argentina regressed. In late 2001, as its economy collapsed, the country defaulted on $100 billion in debt and nationalized several enterprises.
They "regressed" because the neoliberal/Free Market/Washington Consensus policies insisted on by the US, the IMF and the World Bank failed miserably - for the people and national economy of Argentina. It worked well for financial speculators and for companies like Repsol that got to buy a majority in YPF and milk it as a cash cow for the benefit of their investments outside of Argentina.

In late 2001, as its economy collapsed, the country defaulted on $100 billion in debt and nationalized several enterprises. Argentina has since been a pariah state among international creditors. At the World Bank’s International Centre for Settlement of Investment Disputes, Argentina has more disputes pending against it than any other nation. Since 2003, rulers Néstor Kirchner and wife Cristina Fernández de Kirchner have nationalized $24 billion in private pensions and raided $6.6 billion in reserves from the central bank to make debt payments.
Or, to put it more briefly, Argentina stopped playing the neoliberal game after it had wrecked their economy. And they've been recovering nicely ever since. Countries like Greece, Spain, Portugal, Ireland and Italy are suffering from a similar disaster today that Argentina suffered in 2001. But they are following Angela Merkel's neoliberal prescriptions and it's wrecking their economies even more badly. The sooner they learn from Argentina's lessons, the better. They will no doubt be criticized by Bloomberg Businessweek when they do. But their people and their national economies will have a chance to improve that they won't get under Angienomics.

Now, Cristina Fernández (a widow since October 2010 and reelected by a landslide a year later) is seizing control of YPF, the former national oil monopoly that since 1999 has been majority-owned by Spain’s Repsol (REP). On Monday, she delivered a fire-and-brimstone speech on TV that blamed foreigners for the energy shortages plaguing the country—a rationalization for what would be the largest natural resource re-nationalization since Russia moved to seize Yukos in 2003. Fernández decreed that Argentina’s minister of planning and public investment would immediately assume the reins at YPF.
Nationalization is always a sin for the American business press. A "fire-and-brimstone" type sin, we might say.

They could have also used other examples of partially or fully state-owned oil companies, from Saudi Arabia, China, Venezuela, Mexico, Brazil and others. As The Economist reported in some detail earlier this year, the 13 largest oil companies in the world fall into that category. But since neoliberalism says that nationalized oil firms are inefficient, that must mean the world oil business is in a shambles, right?

Or, not. What it means is that Argentina has rejoined the list of countries that consider oil and gas production such a critical national resources that they choose not to leave it to the whims of the Great God Free Market. One leader who expressed such a sentiment in 2008 was Mariano Rajoy, currently the conservative Prime Minister of Spain, who said, "Nuestro petróleo, nuestro gas y nuestra energía no se pueden poner en manos de una empresa rusa, porque eso nos convertiría en un país de quinta división." ("Our oil, our gas and ourenergy can't pass into the hands of a Russian firm, because that would convert us into a fifth-rate country.") His concern then was that the Russian oil company Lukoil might buy shares in Repsol. Now, Rajoy is loyally defending Repsol against Cristina's nationalization proposal while wrecking his own country's economy with the austerity economics demanded by Princess Angela von Merkel. (Hace cuatro años, Rajoy se oponía a la extranjerización de los hidrocarburos en España Télan 19.04.2012; Medios argentinos airean vídeos de Rajoy rechazando la entrada de Lukoil en Repsol El País 20.04.2012) Here's Rajoy back then holding forth on the need for sovereignty in energy matters (in Spanish), Rajoy exige que se impida la entrada de Lukoil en Repsol Libertad Digital Televisión 22.11.2008:



Farzad does get around to some relevant information about the case of Argentina and YPF: "In 2011, for the first time since YPF was privatized in the early 1990s, Argentina became a net importer of natural gas and oil. The government there blames Repsol for starving YPF of investment in order to pay out shareholder dividends."

Then he takes another shot at Cristina: "This month, on the 30th anniversary of the war over the islands Argentina persists in calling Las Malvinas, she has been thumbing her nose at London." Actually, Argentina generally has persisted in calling the island the Malvinas since, you know, Britain occupied them illegally in 1833. But Farzad treats it as an arrogant quirk of the current President.

Xavier Vidal-Folch offers refutations of the Argentine government's charges about the business inadequacies of YSP under Repsol's ownership in Repsol ¿fiera predadora? El País 19.04.2012. But at best it's a sloppy analysis, in which he doesn't make at all clear the sources of his counter-claims. And the arguments are fairly slippery. He makes the point that only 50 of YPF's employees are Spaniards, but so what? I haven't noticed Cristina's government arguing that too many of YPF's employees were Spanish. He also claims that Repsol is the largest investor in Argentina, but based on what? The market value of the shares they bought in YPF? The point of the Argentine government's criticism of Repsol-YPF is that they haven't invested sufficiently in exploration and development. Vidal-Folch addresses that arguments, but also in a very unclear way. He also seems to basically think the issue of dividend payouts is an irrelevant issue to anything else, that it stands alone separate from any question of what the company is delivering to Argentina in terms of development and exploration.

Ben Sills and David Voreacos report for Bloomberg on the agreement between Repsol and YPF's second-largest owners, the Petersen Group, which is controlled by Argentina's Eskenazi family: Repsol Required to Buy Eskenazi YPF Stake 04/20/2012. There is likely to be a legal fight over Repsol's commitments to the Petersen Group.

Like several reports I've seen, Sills and Voreacos make a particular point that the Eskenazi family's investment in YPF was backed by former President Néstor Kirchner, Cristina's late husband:

The Eskenazis made their fortune in banking and construction, buying 15 percent of YPF from Repsol in 2008 in a deal backed by then-president Nestor Kirchner, the late husband of Fernandez. The acquisition was financed with a syndicated bank loan and a seller’s note from Repsol. The Eskenazis bought an additional 10 percent of YPF in 2011 with two similar loans.
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Thursday, April 19, 2012

Confederate "Heritage" Week 2012, April 19: Secessionism then and now

Glenn LaFantasie takes a look at present-day neo-Confederate ideology in How the South rationalizes secession Salon 12/19/2010:

... if you think that all this secession bluster is only a symptom of some peculiar Texas Tea Party madness, you need only Google the word “secession” to find that the radical right believes, apparently in growing numbers, that the Constitution does not prohibit secession and that states can leave the federal union whenever they want. Worse, a Middlebury Institute/Zogby Poll taken in 2008 found that 22 percent of Americans believe that “any state or region has the right to peaceably secede and become an independent republic.” That’s an astounding statistic, one that means that nearly a quarter of Americans don’t know about the Civil War and its outcome. Sadly, it also means that for 1 out of every 4 Americans, the 620,000 of their countrymen who died during the Civil War gave their lives in vain.

He deals with the intriguing question of whether the Confederacy was a revolution or a counterrevolution, a question which I won't go into here. LaFantasie goes with the revolution description. But here he summarizes some of the major conceptual and historical background for the arguments over secession:

More to the point, Confederate Vice President Stephens plainly asserted in March 1861 that the “present revolution,” which had brought about the creation of the Confederate States of America, “is founded … on the great truth that the negro is not equal to the white man; that slavery — subordination to the superior race — is his natural and normal condition. This, our new government, is the first in the history of the world based upon this great physical, philosophical, and moral truth.” Other Confederates cringed at the persistent description of their revolution as a revolution (but not at the admission that the preservation of slavery was their primary motive for seceding) and turned instead to defending their actions by arguing that secession was, in fact, legal and not revolutionary at all. Harking back to the Virginia and Kentucky Resolutions of 1798, written by James Madison and Thomas Jefferson in response to the Federalist Party’s enactment of the draconian Alien and Sedition Acts, Southerners advanced the idea that the Union under the Constitution consisted of simply a compact among the states and that any state, by means of its retained sovereignty, could divorce itself from the Union if it ever desired to do so. Confederates also based their rationalization of secession on John C. Calhoun’s notion of nullification, which held that a state could declare a federal law null and void. But Calhoun — a South Carolinian who had served in Congress, as secretary of war under Monroe, as vice president under John Quincy Adams and Andrew Jackson, and later as the South’s most famous (or infamous) senator — went further in his states’ rights arguments than Jefferson or Madison had ever done. In his view, states were not only sovereign, they were virtually independent; thus states were simultaneously in the Union and out of it. In 1832, President Andrew Jackson, a fellow Southerner, forced South Carolina to nullify its nullification of a federal tariff. Instead of reinforcing the idea of a perpetual Union, the nullification crisis simply laid the groundwork for the South’s later secession. [my emphasis]
It's nice that he gives Old Hickory credit for squelching South Carolina's treasonous effort in the nullification controversy. But I would disagree with his suggestion that Jackson's victory was a failure in "reinforcing the idea of a perpetual Union". On the contrary, it was very effective in doing so. But in the decade leading up to the Civil War, the South wasn't asserting "states rights". They were insisting on using the power of the federal government to override the rights of the free states and their citizens in the matter of slavery. Only after Lincoln's election didn't they revert to a "states rights" position. The Slave Power's goal and principle was defending slavery. All the rest of the Constitutional arguments this way or that way were window-dressing to them.


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The YPF nationalization and Argentina

Marcelo Justo reports on Repsol's claim that the Chinese state-owned oil company Sinopec had offered to buy Reposol's 57% stake in YPF for $15 billion in Operación china Página 12 19.04.2012. Miles Johnson and Jude Webber reported on the claim in Argentina swoop scuppers China oil deal Financial Times 04/17/2012.

Basically, there are good reasons to doubt the claim. Yes, it's shocking, just shocking to think that respectable oil companies like Repsol or Sinopec might just lie about such a thing in hopes of squeezing more compensation out of the Argentine government than they might otherwise get. But it could be possible!

One issue is that Sinopec bought 40% of Repsol's operations in Brazil in 2010 for $7 billion. So there could be some mutual back-scratching going on between the Sinopec and Repsol business partners in making a claim. With investments already in the region, why would they make a lucrative offer to buy Repsol's stake in Argentina? Especially when YPF has been under intense criticism from Cristina Fernández' government for failing to making decent exploration and operational investments in Argentina. Justo's article suggests that Sinopec has been maneuvering in some way to cut a deal with the Argentine government to gain access to shale gas reserves recently discovered (not by YPF) known as the Vaca Muerta formation.

Spain is trying to rally international criticism against the proposed nationalization of YPF. Victor Mallet writes that Argentina strikes at bad time for Rajoy Financial Times 04/17/2012:

The seizure of what was once the largest investment abroad by a Spanish company could hardly have come at a worse time for Mariano Rajoy, Spain's current prime minister and successor to Mr [José María] Aznar as leader of the centre-right Popular party.

Politicians and business leaders accuse Ms Fernández of kicking Spain while it is down. She is taking advantage, they say, of a Spanish economic recession and a eurozone sovereign debt crisis so grave that some analysts predict Madrid will follow Athens, Dublin and Lisbon in seeking an international financial bailout.

Worse, almost the only bright patch for the Spanish economy over the past four years of crisis has been the performance of its investments in emerging markets - especially Latin America.
Although it's not clear to me what role the multinational Repsol actually plays in the Spanish national economy. When they lose most of their stake in YPF, YPF will no longer be available to Repsol as the kind of cash cow it is now. But if the official Argentine claims are correct, Repsol has been mostly investing those profits in other countries outside of Spain and Argentina, like Libya. So Mariano Rajoy's conservative government, whose first priority is to cater to the Spanish One Percent while following Germany's orders on austerity economics, is obviously upset that Repsol is being inconvenienced. But how much it may hurt their national economy, if at all, is not clear.

The Financial Times has been doing some sloppy reporting on the YPF takeover. For instance, Jude Webber in Argentine deputy economy minister holds sway 04/17/2012 uncritically echoes the charges against Cristina's economic advisor Axel Kicillof made in the frivolous and barely-disguised anti-Semitic column by Carlos Pagni in the dogmatically anti-Peronist, anti-Cristina paper La Nación I discussed previously. Webber at least omits the more obvious anti-Semitic inuendo and does not credit Pagni directly. He follows it up on 04/18/2012 with another hit piece of the same tone, Baby-faced Marxist's rhetoric is music to the ear of the president (link is to Newsbank Access World News version).

A less sleazy but apparently purely speculative take on it comes from John Paul Rathbone, Fernández takes her revenge Financial Times 04/17/2012.

But another line of reasoning leads to Argentine domestic politics and cronyism. Indeed, YPF may not be a Venezuelan-style nationalisation, as many have compared it to. Instead it may be closer to the kinds of power battles that Russia is known for. Argentina has oligarchs too and Repsol, much like western oil groups in Russia, may have got caught in the crossfire of an internal battle.

The Argentine oligarchs here are the Eskenazi family. Four years ago, they were encouraged to take a 26 per cent stake in YPF by former president Néstor Kirchner, Ms Fernández's late husband. The Eskenazis did this via their Melbourne-incorporated Petersen Group. The $3.5bn deal was a highly leveraged transaction, with the debt entirely financed by YPF's unusually high dividend payout - an arrangement that necessarily had Mr Kirchner's blessing.
Rathbone, however, does not offer any reason Cristina might have had to do anything against the Eskenazi family. Instead, he resorts to FOX-style "some say ..." speculation: "How and why is the subject of much speculation. Some say the Eskenazis may have reneged on whatever arrangement they had with Mr Kirchner after the former president's death."

And, oh, by the way, the Petersen Group's shares in YSP are not being compulsorily bought out in the nationalization Cristina has proposed. Only shares held by Repsol are targeted, and Repsol could still retain a 6% stake after the buyout is finalized. At the end of his column after spinning his speculations, Rathbone does at least allude to what the democratically elected Argentine government actually says its reasons for the action are:

The extraordinary thing is that the roots of this controversy lie in YPF's dividend policy. It financed the Eskenazis' entry. It meant Repsol, as majority owner, "raped the country" by repatriating huge dividends, or so official rhetoric goes. And it caused YPF to scrimp supposedly on investment - ostensibly the reason for the nationalisation - even though Mr Kirchner endorsed the policy.
None of this criticism should be terribly surprising. Oil companies know they have to make skillful propaganda. (See BP, Gulf Oil Spill, 2010)

Miles Johnson in another FT article from the same day offers a different picture of the Eskenazi family's position in the YPF deal (Repsol reeling from Argentinian body blow):

Away from the issue of compensation, Repsol also faces losses on $1.9bn of loans made to the Petersen Group, controlled by the Argentine Ezkenazi family, which bought a 25.5 per cent stake of YPF from the Spanish company between 2008 and 2011.

The Ezkenazi family had been funding the loans with dividends from YPF, with the clauses of the loan agreements showing that if the Argentinian company's dividend payout ratio falls below 90 per cent of profit, then they can give the shares back, and the debt, to Repsol. A similar clause is activated if Repsol's control over YPF drops below 50.01 per cent, a situation now seemingly certain.

Fitch, the credit rating agency, had already cut Repsol's rating in March as speculation about nationalisation increased, noting the impact a loss of the subsidiary would have on the Spanish group's reserves and leverage, and the possible loss of the loans made to the Ezkenazi family. [my emphasis]
Cristian Carrillo looks at the Eskenazi family's YSP investment in El laberinto Eskenazi Página 12 19.04.2012

In yet another hostile piece in FT on 04/18/2012, Radical policies risk ending in tears (link is to Newsbank Access World News version),
Jude Webber quotes the Mayor of Buenos Aires, Mauricio Macri, criticizing the YPF takeover move. Macri is the highest profile opposition leader against Cristina right now. Macri heads the Propuesta Republicana (PRO) party, which is largely his personal electoral vehicle. Like the main opposition party, the Unión Cívica Radical (UCR), Macri initially opposed the YPF nationalization. The day after the announcement, he told a cheesy and strange story about getting up in the middle of the night and looking at his young daughter and thinking about the insecurity so many people in Argentina feel. Yes, the oil multinational Repsol is like a defenseless little girl. (?!?)

The more I hear about Macri, the more of a flake he comes off to me. By Thursday, he was saying that if he were elected President in 2015, he would keep YPF nationalized. (Las volteretas de Mauricio Página 12 19.04.2012) Go figure.

Carnegie Endowment associate Moisés Naím is described at the Carnegie website as having served as the Venezuelan "Minister of Trade and Industry in the early 1990s, director of Venezuela's Central Bank, and executive director of the World Bank". He also grumps in The Siren Call of Populism Seduces Again about the nationalization proposal:

Repsol "pursued a policy of pillage, not of production, not of exploration", the Argentine president thundered on Monday. "They practically made the country unviable with their business policies, not resource policies." Such was Cristina Fernández's sulphurous stance as she announced her government was renationalising YPF, the country’s largest oil group.

There are of course many convoluted reasons behind the Argentine government’s contentious decision to reverse the privatisation of a few years ago. But objective observers will agree that this was not part of an overarching development strategy, nor a manifestation of resource nationalism – nor indeed any other carefully crafted initiative forming part of a broader design. Rather, cronyism, rifts between rival oligarchs, political expediency, populism and the wish to please a public resentful of the privatisations of the 1990s all played into the decision. [my emphasis]
Those "objective observers" being, of course, safely conventional Very Serious People like Moisés Naím.

There will no doubt be more weeping and gnashing of teeth over the nationalization of YPF from the One Percenters and their loyal spokespeople.

And, gosh, I just head on the news that World Bank head Robert Zoellick thinks it's a bad idea! Who could have predicted?

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Spain, the US, China and Argentina's nationalization of YPF

Reuters reports on a claim that a state-owned Chinese oil company, Sinopec, was in negotiations with Repsol to buy the Argentine oil firm YPF, which Cristina Fernández has proposed to re-nationalized by having 51% of its shares - all to be bought from Repsol - controlled by the Argentine federal government and provinces (Charlie Zhu and Jim Bai, Argentine move to seize YPF spoils Sinopec deal 04/18/2012).

Argentina's move to nationalize local oil company YPF (YPFD.BA), controlled by Spain's Repsol (REP.MC), has spoiled years of planning by China's Sinopec Group to buy the South American company, sources said.

Bankers said China's second-largest oil company had held talks with Repsol to buy its controlling 57-percent stake in YPF. Chinese website Caixin.com cited a source as saying Sinopec had reached a non-binding agreement to take over YPF for more than $15 billion.

But plans by Argentine President Cristina Fernandez to seize control of YPF, which have incensed Spain and sparked international criticism, have killed any hopes that state-owned China Petrochemical Corp (Sinopec) could seal a deal, they said.
Releasing this information may be a ploy by Repsol to establish a claim for a higher price that what Argentina may eventually pay for its shares. That's how Axel Kicillof, Cristina's leading economic adviser and a key spokesperson for the nationalization proposal, treats it in this Spanish-language interview with TV Pública Argentina puts it in this interview with Recuperación de YPF: Entrevista a Axel Kicillof 18.04.2012:



The Cristina-friendly Página 12 ran this cartoon on 04/19/2012:

"Argentina says that its going to pay for Repsol what it's really worth." - "Ugh, so little?"
The US State Department officially grumps about the nationalization proposal (U.S. says Argentina's YPF plan "a negative development" 04/18/2012):

State Department spokesman Mark Toner said the United States was very concerned about Argentina's bid to seize the company, controlled by Spanish energy group Repsol, and had raised its concerns with the highest levels of the Argentine government.

"Frankly, the more we look at this we view it as a negative development," Toner told a news briefing.

"These kinds of actions against foreign investors can ultimately have an adverse effect on the Argentine economy and could further dampen the investment climate in Argentina."
But if the US can live with nationalized oil companies in Saudi Arabia, China, Mexico and Venezuela, to name only a few, it can live with an YFP majority-owned by public institutions in Argentina.

Spain's conservative government is fuming over the proposal. But their options are fairly limited, as Fiona Ortiz reports in Spain has few ways to pressure Argentina over YPF 04/18/2012. I'll be curious to see what if anything the Spanish government may have to say about Repsol's alleged negotiations with Chinese government-owned Sinopec to sell YPF.

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Wednesday, April 18, 2012

Confederate "Heritage" Week 2012, April 18: Barry Goldwater and segregation

It's a common tactic in political campaigns to taunt the other side with positions their party once took that they now seemed to have abandoned. We hear it in the 2012 Presidential race, when commentators suggest that Ronald Reagan would have been too liberal for today's Republican Party. Actually, Reagan generally pushed as conservative of policies as he could get away with. But it makes good politics.

Unfortunately, it also can make for bad history. Barry Goldwater was the leader of what came to be known as "movement conservatism" in 1964, when he won the Republican nomination for President. His brand of conservatism was crushed in the election of 1964, in which the two primary issues were the Vietnam War (Goldwater was for escalation, Lyndon Johnson against it) and desegregation in the South (Goldwater against, Johnson for). Goldwater's disgust for ministers in politics later found him trading insults with Christian Right leaders like Jerry Falwell. But the Goldwater brand of conservatism is what now dominates the Republican Party.

Jason Morgan Ward in Defending White Democracy: The Making of a Segregationist Movement and the Remaking of Racial Politics, 1936-1965 (2011):

Goldwater churned out a manifesto in 1960, but with much more fanfare. Published and distributed by the senator's influential right-wing supporters, The Conscience of a Conservative shot up the summer bestseller charts. Ghostwritten by William F. Buckley's brother-in-law, L. Brent Bozell, the slim volume summed up Goldwater's stance on a variety of political issues, from government spending to "the Soviet Menace." But nothing encouraged southern conservatives more than the successive chapters on states' rights and civil rights.

The subjects required separate chapters, Goldwater argued, because the civil rights struggle had both obscured and dramatized a much broader issue. Blasting attempts "to disparage the principle of States' Rights by equating it with defense of the South's position on racial integration," Goldwater championed the concept as a bulwark against growing federal power. Goldwater, who had voted for civil rights measures as a sitting senator, reassured southern conservatives by criticizing Brown [v. Board of Education] and arguing for limits to racial reform. He criticized the "extravagant and shameless misuse" of civil rights, a blanket term he accused liberals of expanding to include "human" and "natural" rights not granted by the Constitution. So Goldwater could be for "civil" rights such as voting while still maintaining that "the federal Constitution does not require the States to maintain racially mixed schools." Whether or not Goldwater liked segregation did not matter. In a concise and carefully worded chapter, he declared white opposition to integration a perfectly legal and downright American stance. "It may be just or wise or expedient for negro children to attend the same schools as white children," Goldwater argued, "but they do not have a civil right to do so." [my emphasis in bold]
This is the same brand of conservatism and "libertarianism" that we hear today in different forms from the Ron "Papa Doc" and Rand "Baby Doc" Paul, from the Ludwig von Mises Institute and these days more and more often from the Republican Party generally. Though retroactively agreeing with Goldwater's opposition to the landmark Civil Rights Acts of 1964 and 1965 is still a little risky for Republican candidates to say out loud.

This is why it's worth listening carefully to Republican warnings about "tyranny" and so forth today. Ward also relates:

Barry Goldwater bucked his party leadership, and his own voting record, by opposing the Civil Rights Act of 1964. A week after the cloture vote ended the southern filibuster, the presumptive Republican nominee voiced his "constitutional" objections to the bill. Declaring his opposition to "discrimination of any sort," Goldwater warned that the bill authorized "the creation of a federal police force of mammoth proportions" and encouraged "an 'informer' psychology" among citizens. "These ... ," Goldwater declared, "are the hallmarks of the police state and landmarks in the destruction of a free society." If the public "misconstrued" his vote as a defense of segregation, Goldwater concluded, he would accept the fallout. [my emphasis]
When Papa Doc Paul and Newt Gingrich and Mitt Romney talk about their devotion to the Constitution and their opposition to federal oppression, they are speaking from the same segregationist perspective from which Barry Goldwater spoke in 1964. The segregationist ideology of 1964 is thriving today, alive and well in the Nixonized, Reaganized, Bushized Republican Party.

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Tuesday, April 17, 2012

Spain's conservative government - and the Socialist opposition! - loyally defend the Spanish One Percent in the YPF takeover

This is a mostly Spanish-language report from TV Pública Argentina about the object from the government of Spain to Argentine President Cristina Fernández' move to compel the sale of a 51% stake in the Argentine oil company YPF. The entire 51% will be taken from Repsol, a Spanish multinational who currently holds around 57% of the shares. None of the other investors will be required to sell their shares.

I have zero sympathy for conservative Spanish Prime Minister Mariano Rajoy in this. He's aggressively implementing Angela Merkel's austerity policies, damaging the lives and well-being of his own people but he leaps to the defense of the Spanish-based multinational Repsol in the controversy. The fact that the Spanish Socialist Party (PSOE) is supporting Repsol as well is almost too pitiful for words. Though it's not really surprising. I am surprised at the PSOE leader Alfredo Pérez Rubalcaba grovelling shamelessly to the president of Repsol, Antonio Brufau, who is also seen in the news report.

Rajoy: "Rompe el buen entendimiento en la relación entre ambos países" 04/17/2012:



EU Commission President José Manuel Barroso is seen in the report giving a statement in English defending Repsol's position. However, he uses the word "bilateral", which is a hopeful diplomatic sign from Argentina's point of view. The EU Commission would take a very limited role in a dispute they define as a bilateral dispute between Spain and Argentina.

Here is an English-language report from Euronews from a few days ago, before Cristina's formal proposal, Spain warns Argentina over energy nationalisation 04/13/2012:



Here are a couple of other important Argentine players in the current move to nationalize YPF. Julio De Vido, Minister of Planning and as of Monday acting head of YPF, and Axel Kicillof, Cristina's Vice-Minister of Economics and one of her closest advisers, who is acting as a leading advocate for the nationalization proposal.


La Nación is traditionally the paper of the Argentine "oligarchy", as the Peronists call them, the oligarchy being the traditional enemies of Peronism; in fact, their enmity to the Peronist Partido Justicialista (PJ) has been one of the defining characteristics of Peronist politics from the beginning to this day. Kicillof was the target of a hit piece in the paper last month by columnist Carlos Pagni: Axel Kicillof, el marxista que desplazó a Boudou 12.03.2012. It's really a pretty nasty piece. Kicillof does not describe himself as a Marxist, though it's pretty clear Pagni knows that. Kicillof was a professor of economics who, according to Pagni, approved of Nobel Prize winning economists Paul Krugman and Joe Stiglitz, and read some of Karl Marx' work in German. No doubt all very sinister signs for a economist who Pagni notes specialized in the history of economic theory. He throws in that his mother was a psychoanalyst and his great-grandfather was a famous rabbi in Odessa, Russia. (In other words, he's Jewww-wwwish!) What a sleazy piece. You would hope that even the oligarchy's paper wouldn't want to run trash like that. But apparently you would be wrong.

Gee, the Argentine One Percent and their spokespeople hate Cristina and her policies! Of course, we didn't need a sleazy column from this fool Carlos Pagni in La Nación to know that.

(Full disclosure: I also admire Stiglitz' and Krugman's work and I've also read some of Karl Marx in German. And I'll say to Carlos Pagni in German, lech mich doch. (You could translate it as "bite me" or "kiss my ***".)

Kicillof is also a bogeyman for Ezequiel Burgo in the anti-Cristina Clarín, Los secretos del gurú económico que logró hipnotizar a Cristina 15.04.2012. Despite the FOXist headline - "The Secrets of the Economics Guru Who Succeeded in Hypnotizing Cristina" - they only find him guilty of the economics-theory sin of specializing in the "heterodox" John Maynard Keynes. Yeah, he was "heterodox" in, oh, 1935. Even though macroeconomics has forgotten a lot of what he taught the profession that the current depression has shown to be extremely valid and durable. Maybe his psychoanalyst mama taught him hypnosis. But Cristina Fernández doesn't strike me as the type for fall under the spell of a Svengali. (Although there may be a nudge-nudge wink-wink sexual insinuation in the tone of the article.) They also noted his background as a "militant" in the Peronist youth organization La Cámpora, which for La Nación and presumably for many Clarín fans would be a negative thing. Though for a Peronist adviser in an activist left-leaning Peronist government, it's a plus. Burgo's article takes a critical, even unfriendly, attitude toward Kicillof. But he didn't seem to have found the kind of nonsense Pagni was slinging in La Nación.

Francisco Peregil also looks at Cristina's current circle of advisors, Kicillof included, in Fernández estrecha su círculo de poder El País 31.03.2012.

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The US position at the Summit of the Americas

The Real News reports on the results of last weekend's Summit of the America's from a US point of view in US Isolated at Summit of Americas 04/16/2012:



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More on Argentina's YPF takeover

Argentine President Cristina Fernández' proposal to have the Argentine federal government take a 51% stake in the YPF oil company has been big news in Argentina and Spain. Francisco Peregil reports for Spain's El País, which has been editorially critical of Argentine President Cristina Fernández' policies toward the oil company YPF on her proposal to re-nationalize the once state-owned company in Argentina announces expropriation of Repsol oil subsidiary YPF 16.04.2012:

In a speech made in Buenos Aires after returning from the Americas Summit in Colombia, Fernández de Kirchner explained that she will send a law to Congress that proposed giving 51 percent control of YPF to the federal government and the remaining 49 percent to the country’s provinces.
I haven't looked at the actual documents. But this is quite different from what Página 12 reports in El Gobierno Nacional propuso la expropiación del 51 por ciento de las acciones de Repsol en YPF y declarar de interés público el autoabastecimiento de combustibles 16.04.2012. Página 12 says that Cristina's proposal calls for government control of 51% of the YPF shares, with the federal government holding 26.01% of the total and the provinces 24.99%. This is the only report I've seen that claimed the proposal was for 100% nationalization. Bloomberg News has a silly headline for a report by Rodrigo Orihuela: Argentina Seizes 51% of Oil Producer YPF to Stem Imports 04/16/2012.

Continuing with the El País article:

In the coming days, the country’s appraisers will decide how much it will reimburse YPF for its shares.

"When one makes decisions in the interests of national management [...] one also expects that managers understand the interests of the state,” Fernández de Kirchner said.

"We are the only country in America and one of the few in the world that doesn’t manage its own natural resources, but there were stronger arguments in favor of us taking this decision," she said.

The nationalization came just days after Spain issued a stern warning against the Argentinean government not to take control of YPF, threatening to break “economic and fraternal” relations if the leftist Peronist administration of Fernández de Kirchner followed through with the plans.

In Madrid, María Dolores de Cospedal, secretary general of the ruling Popular Party (PP), said the government intends "to give an energetic response" after consulting with its European Union partners.

An EU delegation from Brussels was scheduled to arrive in Buenos Aires on Thursday to demand that Argentina respect the agreements it has signed with foreign investors.

"The EU has nothing against Argentina demanding that YPF invest more in the country, but it must be done respecting the commitments both sides adopt in their agreements," a Brussels source told the [stauchly anti-Cristina] Buenos Aires daily Clarín.
Cristina has seen how the EU is destroying the lives of millions of its citizens with German Chancellor Angela Merkel's insane austerity policies. And also how it has responded to the authoritarian, anti-democratic turn in the Hungarian government with enormous indifference. I'm guessing she's going to take a dim view of the EU siding with Spain's conservative government and Spanish multinational Repsol when the EU leaders are so plainly and cynically callous toward democracy and prosperity in the EU. Argentina has spent over a decade now recovering from the disaster they brought on themselves by the very policies with which the EU is destroying itself. I'm guessing her response to them will be some diplomatic version of, "Bite me".

A later report says that the EU Commission later characterized it as a bilateral dispute between Spain and Argentina. We'll soon see how the EU will proceed. My thought is they would be wise to stay out of it as much as they can. The EU also announced the cancellation of a scheduled visit of officials to Argentina this week; hard to tell if that's "retaliation" or "washing our hands of this one".

Also from El País' English-language articles, the Spanish government is huffing and puffing at the command of Repsol, the current government's exclusive purpose being to comfort the Spanish One Percent while the rest of the country faces staggering unemployment and a decline in real living standards. This is from a few days ago before Cristina's formal proposal: Andrew Sim, Spain ups the ante in its dispute with Argentina over Respol 13.04.2012.

Even early, columnist Mariano Marzo offered this excuse: "Yet they [the Argentine government] also ought to ask themselves whether the fall is not due to a more general and irreversible phenomenon: the ageing of the oil fields." (YPF, a victim of political hounding El País 10.04.2012) Yes, the oil fields are aging and Repsol has been using YPF as a cash cow to finance investments in other parts of the world and in dividend payouts, while not doing very much in the way of new exploration in Argentina itself.

Spain's government is threatening reprisals: Amanda Mars y Miguel Ángel Noceda, El Gobierno da por rota la amistad con Argentina y prepara represalias El País 16.04.2012; España calificó la medida como "un gesto de hostilidad contra nuestro país y nuestro gobierno" Página 12 16.04.2012 Repsol, not surprisingly, is initiating legal proceedings against Argentina. I'm very impressed with the loyalty of Spain's government to Repsol. And to the contrast between that and its loyalty to the needs of the Spanish people in their Angienomics austerity policies.

Sadly, the PSOE (Spanish Socialist Party) displayed how completely they have surrendered to neoliberal concepts by pledging their loyal support to Repsol, as well. Pitiful. PSOE head Alfredo Pérez Rubalcaba called Repsol president Antonio Brufau to show "todo el apoyo del PSOE a la compañía" ("the total support of the PSOE for the company") (my emphasis), the company being Repsol. That is just painfully pitiful. If he's not bought, he's leaving money on the table. Because companies pay well for that kind of support. That's just pathetic.

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Confedederate "Heritage" Month 2012, April 17: the Tulsa murder and racial terror

Even if it's largely a matter of more sophisticated PR, I've been struck by the contrast between the official handling of the Trayvon Martin case and the Tulsa serial-killing case from a couple of weeks ago. From this Tulsa World article, I take it that the Tulsa PD is going all-out to convey to the public that they were all over the case from the get-go: Jerry Wofford, Tension ruled Tulsa for two days 04/15/2012.

Now, parts of this article read like a police department PR release written by somebody trying to make it sound like the plot from a TV police "procedural". And I'm guessing that Tulsa cops and politicians were telling each other early on, "we can't let this become another Trayvon Martin deal."

It strikes me that if the Sanford FL police had been more diligent in their intial investigation with interviewing witnesses and so on, and had more clearly publicized what they had done (confiscating Zimmerman's clothes, taking him into custody for five hours, etc.), they might have at least mitigated the negative image they got from the case.

Just to be clear, based on the publicly available information I've seen in following the Martin case, it looks to me like this was a racially-motivated murder, at the very best a case where George Zimmerman provoked a confrontation with no good reason in which he wound up killing Trayvon with a bullet to the chest. And it certainly looks to me like the Sanford police department handled the initial investigation with considerable sloppiness. We can certainly hope that the legal proceedings will produce definitive information. Though the initial probable cause affidavit has given Emptywheel contributor Bmaz pause as to the competency of the prosecution in this case, as he explains in Zimmerman: Anatomy Of A Deficient Probable Cause Affidavit 04/14/2012.

What I want to focus on in this post is the description that Wofford gives of the effects in the African-American neighborhood of Tulsa where the murders to which Jake England and Alvin Watts have confessed were taking place. It's give a very contemporary image of how racial vigilante violence spreads a feeling of vulnerability and terror beyond the immediate victims and their families.

But there were immediate victims:

Police learned later they likely were. Dannaer Fields, 49, Bobby Clark, 54, and William Allen, 31, were dead. David Hall, 46, and Deon Tucker, 44, were in critical condition with gunshot wounds. All had been shot within a three-mile radius in the span of a few hours early April 6, Good Friday.

Here is Wofford's description of the atmosphere it created:

A white man shooting black victims seemingly at random in north Tulsa.

"So it doesn't take rocket science to say that it's a possible connection that somebody was targeting black (people)," Evans said.

City Councilor Jack Henderson represents the district where all the victims were found. He also was kept informed as the situation progressed and knew there was a possibility that black residents in his district were being targeted.

"At this point, fear had set in, and everyone is asking me what they should do," Henderson said. "We needed to start making sure people don't start taking things in their own hands."

Warren Blakney, president of Tulsa's NAACP chapter and the minister of the North Peoria Church of Christ, was headed back from a revival in Texarkana when he heard about the shootings. He and Henderson started working with the north Tulsa community to balance the anger about the situation with a call for safety and awareness.

"I decided to get some folks together and said let's meet Friday night and inform this community they could be in danger," Blakney said. "I didn't want anybody else hurt."

Henderson said he was telling people to stay indoors and not put themselves in dangerous situations.

Theo Ballard hadn't heard those calls from community leaders but heard enough from a neighbor. He lives about a block from where Clark was shot near Denver Avenue and 63rd Street North.

"He said I better watch it, sitting on the porch," Ballard said. "I stayed inside and secured the door real good."

Ballard, 84, and his wife, Ann Ballard, 75, both stayed inside. They liked sitting on their porch in the evening, enjoying the twilight, the weather, their flower garden and their neighbors. But the threat of a random shooter kept them inside Friday night.

"I was beginning to suspect anybody," Ann Ballard said. "I wasn't ruling anything out. ... I'd just shoot anybody that came up here."

Police were anxious, too. Extra patrols roamed the streets across the city, not just on the north side.
Also from the Tulsa World on the case: Zack Stoycoff, Jake England was shaped by tragedy, responsibility, desperation 04/15/2012; Bill Sherman, Jesse Jackson comes to Tulsa with message of healing 04/14/2012

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Argentina, Spain and YPF oil company

Here are several links to early articles on the proposal by Argentine President Cristina Fernández to compel the sale of a 51% majority ownership in the YPF oil firm, currently majority owned by the Spanish multinational Repsol. They are calling it an "expropriation", though there is an official governmental body in Argentina that will establish a price for the purchase of shares in YPF.

Rodrigo Orihuela, Argentina Will Seize 51% of YPF Under Fernandez Proposal Bloomberg 04/16/2012

The newspaper Clarín is bitterly "anti-K", as the Argentine press writes it, meaning anti-kirchernismo and specifically anti-Cristina Fernández de Kirchner, also commonly called Cristina and CFK in the press. Here are a couple of their early articles.

Cristina presentó el proyecto para expropiar el 51% de YPF

Clarín also provided a link on their front webpage Monday to an article about a vote by Cristina as a member of Congress in 1992 in favor of the privatization of YPF: Juan Cruz Sanz, El día que Cristina reclamó votar a favor de la privatización de YPF 04.04.2012

TV Pública Argentina provides a number of Spanish-language reports on the news, including these:

Cristina:"Corríamos el riesgo de transformarnos en un país inviable" 04/16/2012



Por la recuperación de YPF Dellatorre 2 04/16/2012



Análisis sobre la recuperación de YPF 04/16/2012 (also featuring Dellatorre):



Here is Cristina's speech after the official announcement of the legislative proposal, Cristina: "El modelo no es de estatización, sino de recuperación de la soberanía" 04/16/2012:



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Monday, April 16, 2012

Cristina goes for it: proposes expropriation of 51% of YPF oil company

President Cristina's Fernandez has proposed to the Argentine Congress a law authorizing the expropriation of 51% of the YPF oil firm, currently majority-owned by the Spanish multinational Repsol: El Gobierno Nacional propuso la expropiación del 51 por ciento de YPF y declara de interés público el autoabastecimiento de combustible Página 12 16.04.2012

In her message on the proposal, Cristina noted that, even though Argentina has the third-largest reserves of natural gas after China and the US, Argentina is faced with the need to import both gas and oil for the first time in 17 years. She has criticized the Repsol subsidiary YPF, which was privatized in 1999, for insufficient investment in Argentine exploration and production. When it comes to exploration, they've essentially not done any Argentina since the company was privatized, having been a state-owned firm since its founding in 1922.

The President criticized them for having paid out in dividends since 1999 amounting to over 80% of the company's net worth, while failing to invest adequately in Argentina. Repsol has used YPF as a cash cow to fund its investments in other countries, notably Libya.

The logic of the free market from the perspective of a multinational corporation like Repsol may not meet the needs of an individual country like Argentina, which was clearly the case with YPF. Cristina said, "El problema fue la desnacionalización" ("The problem was the de-nationalization.")

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Confederate "Heritage" Month 2012, April 16: More on slave patrols


John Hope Franklin and Alfred Moss, Jr. give the following description of the slave patrols in their From Slavery to Freedom: A History of African Americans (8th edition, 2003):

One of the devices set up to enforce the Slave Codes and thereby maintain the institution of slavery was the patrol, which has been aptly described as an adaptation of the militia. Counties were usually divided into "beats," or areas of patrol, and free white men were called upon to serve for a stated period of time: one, three, or six months. These patrols were to apprehend slaves out of place and return them to their masters or commit them to jail, to visit slave quarters and search for various kinds of weapons that might be used in an uprising, and to visit assemblies of slaves where disorder might develop or where conspiracy might be planned. This system proved so inconvenient to some citizens that they regularly paid the fines that were imposed for dereliction of duty. A corrupted form of the patrols system was the vigilance committee, which came into existence during the emergencies created by uprisings or rumors of them. At such times it was not unusual for the committee to disregard all caution and prudence and kill any blacks whom they encountered in their search. Committees like these frequently ended up engaging in nothing except a lynching party.
They don't elaborate on the point, but obviously those whites less able to afford the fines were inconvenienced at least as much as those who could. While some no doubt turned their resentment toward the white slaveowners for the inconvenience, others were more likely to channel their frustration toward the black population whose existence they blamed for the disruption of their lives involved in the slave patrols. And some portion just liked the chance to lord it over somebody, vicariously taking the position of slaveowners who they otherwise envied.

The Franklin and Moss text reproduces a portion of this drawing from Frank Leslie's Illustrated Newspaper 07/11/1863:


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Krugman: "I’m really starting to think that we’re heading for a crackup of the whole system."

Exactly which system he means isn't entirely clear in his blog post, Insane in Spain 04/15/2012. I'm guessing he means the euro system:

So, the euro crisis is risk on again. And this time it’s centered on Spain — which in a way is a good thing, because now the essential craziness of the orthodox German-inspired diagnosis of the crisis is on full display.

For this is really, really not about fiscal irresponsibility. ...

What happened to Spain was a housing bubble — fueled, to an important degree, by lending from German banks — that burst, taking the economy down with it. Now the country has 23.6 percent unemployment, 50.5 percent among the young.
And what is the EU prescription? More Angienomics: austerity, austerity, austerity - for the 99%, of course!

He elaborates in his New York Times column, Europe's Economic Suicide 04/15/2012:

This is, not to mince words, just insane. Europe has had several years of experience with harsh austerity programs, and the results are exactly what students of history told you would happen: such programs push depressed economies even deeper into depression. And because investors look at the state of a nation’s economy when assessing its ability to repay debt, austerity programs haven’t even worked as a way to reduce borrowing costs.

What is the alternative? Well, in the 1930s — an era that modern Europe is starting to replicate in ever more faithful detail — the essential condition for recovery was exit from the gold standard. The equivalent move now would be exit from the euro, and restoration of national currencies. You may say that this is inconceivable, and it would indeed be a hugely disruptive event both economically and politically. But continuing on the present course, imposing ever-harsher austerity on countries that are already suffering Depression-era unemployment, is what’s truly inconceivable.
And then, there's also the democracy thing, which also didn't fair as well as one might have hoped in Europe in the 1930s. Something our establishment press and Pod Pundits seem to have forgotten all but entirely. Not Krugman. But then he's considered "shrill" and, as he often notes, not one of the Very Serious People. He concludes his column:

So it's hard to avoid a sense of despair. Rather than admit that they’ve been wrong, European leaders seem determined to drive their economy — and their society — off a cliff. And the whole world will pay the price.
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Sunday, April 15, 2012

Argentina and the fight against the neoliberal "financialized playground"

Marcy Wheeler has an provocative Economic Big Picture post, based in part of Jamie Galbraith's new book, Inequality and Instability: A Study of the World Economy Just Before the Great Crisis (2012). (Amazon tells me my copy should get to me Thursday or so; maybe I should have gone for the Kindle version.) Her post is called The US Attempts to Retain Control Over the Financialized Playground Emptywheel 04/14/2012. She quotes Galbraith:

The financial crisis (and the world economic crisis it engendered) thus represented not so much the natural outgrowth of rising inequality as a further phase; it was the consequence of a deliberate effort to sustain a model of economic growth based on inequality that had, in the year 2000, already ended. By pressing this model past all legal and ethical limits, the United States succeeded in prolonging an "era of good feeling," and in ensuring that when the collapse came, it would utterly destroy the financial sector.
Marcy's long post gives some idea of the diverging economic models in the world, and the discrediting of the so-called "Washington Consensus" also known as neoliberalism among some of the countries with the strongest developing economies.

One front in the conflict between the neoliberal model and alternatives is in Argentina. I don't know that it has or needs a distinct name, though the political thinking and policymaking behind the current version is known as kirchnerism. President Cristina Feranández (de Kirchner) is positioning the Argentine federal government to begin taking a major ownership stake, maybe even a controlling one, in the country's largest oil company YPF (pronounced e-epe-efe in Spanish). YPF stands for Yacimientos Petrolíferos Fiscales. It is currently a majority-owned subsidiary of the Spanish oil company Repsol. Reuters reports, "Repsol, which holds a 57 percent stake in the company, has been gradually reducing its holdings as it frees capital to invest in other emerging markets such as Brazil. Argentina's Eskenazi family holds 25.5 percent." (Uncertainty over fate of Argentina's YPF persists 04/12/2012) The Eskenazi family's holdings are via Grupo Petersen (the Petersen Group).

This English-language report by Raphael Minder in the New York Times gives some background, Spain Cautions Argentina on Takeover of Energy Firm 04/13/2012. Minder notes accurately that "the government in Buenos Aires [has] gradually intensified its criticism of Repsol, accusing the company of not investing enough in Argentina and instead paying too much of its profits in dividends."

In its public demands, what Cristina's government is demanding is that YPF behave more responsibly and make more investments in oil production in Argentina. But she has also been acting in conjunction with the state (provincial) governors to revoke some of YPF's oil concessions, which no doubt has contributed significantly to recent drops in YPF's share prices, making the government threat of acquiring its shares more credible. As one might guess, the conflict has provoked speculation in YPF shares.

Spain's conservative government under Prime Minister Mariano Rajoy, currently enthusiastically applying Angienomics, the currently dominant variant of neoliberalism in the EU, to impoverish its own people, further deregulate businesses, reduce government services and weaken labor unions, is leaping to the defense of Repsol in its drive to maintain its current level of control over YPF, in a way that the current Spanish government can never be expected to defend the well-being of ordinary Spanish workers. That's the neoliberal creed. And, given the difficulties of implementing national economic suicide in a democratic system, Rajoy's government surely doesn't mind exploiting the moment to get a tiny bit of nationalistic cred. As Minder reports:

The Spanish government warned on Friday that it would take unspecified retaliatory measures against Argentina if it proceeded with plans to take back control of YPF, the large oil and gas producer, from Repsol, its Spanish parent.

The warning came as José Manuel Garcia-Margallo, the Spanish foreign minister, also announced that Spain had called on the European Commission, the United States Treasury and other governments in Latin America to support Spain in its efforts to prevent the nationalization of YPF.
Of course, the symbolism of Spain trying to ran stuff down the throats of Argentina isn't very good elsewhere. That ship pretty much sailed for good in 1816 during the reign of Fernando VII. Atilio Boron characterizes the reaction of Rajoy's government as "una virulenta reacción de funcionarios del gobierno ultraconservador español" ("a virulent reaction by functionaries of the ultraconservative Spanish government") (España, ¿cuál España? Página 12 15.04.2012). He also refers to them as "ardent functionaries of the Crown"; Spain is a constitutional monarchy. From the point of view of Argentina's strategic energy interests, writes Alfredo Zaiat, "los españoles de Repsol son parte del problema; no una opción de solución ("the Spaniards of Repsol are part of the problem; not an option of the solution") (Chiste catalán Página 12 15.04.2012). Repsol has been using YPF largely as a "cash cow", neglecting the development of reserves and further exploration in Argentina itself. The Great God Free Market is mainly concerned with the enrichment of shareholders, not with how it helps or hurts the general public or particular countries.

Trying to rally the EU, which of course includes Great Britain, around the cause of attacking Argentina is complicated by the fact that Rajoy's own government has piggy-backed on Cristina's diplomatic push to force Britain to the negotiating table over the status of the Malvinas Islands, illegally occupied by Britain since 1833, to press Spain's claims for sovereignty over Gibraltar. European colonial oil interests are also at play in the controversy over the Malvinas, because Britain claims offshore mineral rights through its colonial occupation of the Malvinas/Falklands.

Raúl Dellatorre looks at the issues surrounding the status of YPF in Por qué y para qué una YPF del Estado Página 12 15.04.2012. Cristina's government rejects the neoliberal theology of the Great God Free Market (my formulation, not her government's or Dellatorre's). In the case of oil and natural gas, her government views them as strategic assets that cannot be treated simply as commodities in a global free market. Having sufficient petroleum production at home and their availability at affordable prices are critical to the larger health and international competitiveness of the Argentine economy. As The Economist noted in its series earlier this year on "state capitalism", the thirteen largest oil firms in the world are state enterprises of some sort or the other.

Dellatorre cites the examples of PDVSA and Petrobras, the state oil companies of, respectively, Venezuela and Brasil, as models in which the extraction of oil and gas can be shared with private companies but the priorities and uses of the product are under the direction of the state. PDVSA is fully state-owned, Petrobras partially so.

See also: Andrés Asiain y Agustín Crivelli, La explotación de hidrocarburos en Argentina - Estudio de caso; YPF S.A. Feb 2012

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Confederate "Heritage" Month 2012, April 15: Slave patrols, the Ku Klux Klan and present-day white racism

Once more with something from Chauncey DeVega. He makes a connection between the pre-Civil War slave patrols in the slave states and later white vigilantism against black Americans. As the title of his post indicates, it was in the context of discussing the Trayvon Martin murder: George Zimmerman, the Murder of Trayvon Martin, and the Twenty-First Century Slave Patrol WARN 03/20/2012.

Slave patrols were a common feature of life in Southern slave states. White men in the community were required to periodically participate in routine patrols to look for runaway slaves. They were empowered to question any black person they saw and could arrest or beat or otherwise abuse any who couldn't convince them they were legitimately present is whatever public place they were found. As DeVega writes, "Historically, racism and racial violence have done work through the control of public space." And that was part of the function of the white patrols. Slave patrols not only provided law enforcement against escaped slaves. They also functioned as an instrument to occasionally terrorize and generally spread fear among all blacks, slave and free, in the areas where they patrolled.

As DeVega indicates in this following quote, they also provided an institution through which poor whites could share momentarily in the power of the slaveowners whom they often envied and gave them an emotional stake in the slavery system:

What does it mean to be deemed inexorably and permanently "suspicious?" What does it mean to be forever "suspect?" What does it mean to be marked as a "threat" from "the womb to the tomb?" It means to be "black." This is the new/old Curse of Ham as seen in the social and racial imagination of people like George Zimmerman and his enablers in the local police department.

History echoes. Ultimately, George Zimmerman reminds me of those white men riding on the slave patrols, eager, petty tyrants who are looking for any excuse to put their boots on the throat of a black person in order to raise themselves up a bit higher. They live to control public space, and how different bodies exercise their freedoms and liberties in it.

Maybe I just broke a rule about evoking slavery in discussions of twenty-first century American social and political life. But sometimes a little line-stepping is healthy, necessary, cathartic, and appropriate. [my emphasis]
The Ku Klux Klan type terrorist groups of the immediate post-Civil War years were in some ways a continuation of the function of the slave patrols. But the antebellum slave patrols were official posses, operating under the cover of law, while the postwar terror groups were unofficial, though often tolerated by sympathetic white authorities.

In another post, DeVega embeds this segment from a documentary called Slave Catchers and Slave Resistors (2005); it discusses the colonial origins of the slave patrol:



The full version includes a segment starting around 1:22:35 that connects the slave patrol tradition to the postwar terrorist groups like the KKK:



In that segment, historian Sally Hadden says:

The Klan is an extension of slave patrols. In most direct, obvious ways, it's white men on horseback who go out, typically at night to terrorize African-Americans. It is racial oppression continued from one generation to the next. They've changed the names from "patrols" to "Klan", they've put on sheets, but the activities and the purpose remains pretty much the same.
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