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Daily Archives: May 23, 2017
More Puerto Rico agencies enter bankruptcy – MarketWatch
Posted: May 23, 2017 at 11:26 pm
The federal board overseeing Puerto Rico's financial rehabilitation is enlarging the U.S. territory's court-supervised bankruptcy, placing its nearly depleted pension system and its transportation agency under court protection.
The Employees Retirement System, known as ERS, and the Highways and Transportation Authority, known as HTA, entered a debt-restructuring process that amounts to municipal bankruptcy Monday in the federal court in San Juan.
Those two systems are now under a federal debt-adjustment law known as Title III alongside the Puerto Rico government and its sales-tax bond issuer, known as Cofina. U.S. District Judge Laura Swain Taylor, who is presiding over the cases, held the first court hearing on the government's case last week.
"This is part of a court-supervised process within a framework that provides for an orderly restructuring of the debt of each entity and allows as much creditor consensus as possible," said a spokesman for Puerto Rico's fiscal agency.
The pension system's bankruptcy has implications for hundreds of thousands of government retirees and pensioners who are up against bondholders in the renegotiation of Puerto Rico's debts. So far, the oversight board has signaled it wanted more of the restructuring burden to fall on financial creditors compared with retirees, proposing a 10% cut in pension benefits while allocating less than a quarter of the debt service owed for the next 10 years.
Estimates vary as to the size of the gap between what the pension fund's assets and its promises to its beneficiaries, but Puerto Rico projects the unfunded liability at roughly $45 billion, the product of years of deficient funding by government employers. ERS also owes $3 billion to bondholders. The highway agency owes roughly $6.3 billion in debt, including $1.8 billion to Puerto Rico's insolvent industrial development bank, according to the oversight board.
Puerto Rico and its agencies owe roughly $73 billion in bond debt, dwarfing the roughly $9 billion owed by the city of Detroit when it entered what was previously the largest municipal bankruptcy in 2013.
The bankruptcy proceedings are the culmination of years of economic distress and heavy borrowing that has more recently pitted Wall Street creditors against local officials struggling for fiscal flexibility. Creditors are also battling each other for top priority.
Write to Andrew Scurria at Andrew.Scurria@wsj.com
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Puerto Rico’s bankruptcy will only prolong its economic meltdown – Fox News
Posted: at 11:26 pm
While serving in the U. S. Congress, I had the pleasure of working with the leadership of Puerto Rico and experiencing the Commonwealths rich and beautiful culture. Its future now hangs in the balance due to a financial crisis and the leadership of Puerto Rico has decided the most expedient way to confront the crisis is through Title III bankruptcy.
While I dont agree with this strategy, I understand it from a political standpoint: allowing a federal judge to make the difficult decisions that politicians would prefer to avoid.
Years of bad governance has led Puerto Rico to this point. Years of outspending its resources and borrowing billions of dollars from creditors.
Bankruptcy is a cop-out that not only absolves elected officials from making tough choices, but stretches out an already terrible situation and prevents Puerto Rico from having access to capital that is critical to its rebirth.
The creation in 2016 of the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) was a bipartisan effort on the part of the U.S. Congress and the Obama administration to find a way out of this mess and develop a fiscal plan for the country that only allowed bankruptcy as a last resort, after all other options had failed.
Unfortunately for the Puerto Rican people, all other options did fail. And now the governments decision to file for bankruptcy will jeopardize the recovery of the Commonwealth.
By choosing to allow U.S. District Court Judge Laura Taylor Swain of the Southern District of New York to determine how to impose and manage the bankruptcy, Puerto Rico will stretch out the process, deny itself access to capital markets, and increase the possibility of numerous lawsuits by unhappy creditors.
The Puerto Rican people are witnessing an unemployment rate of over 12 percent, and over 45 percent of the people living in the island are living below the poverty line. Puerto Rico is also facing the critical issue that its pension programs are drying up. According to one news outlet, The three main retirement systems in Puerto Rico are expected to "deplete" all their assets between July and December [2017].
As an elected leader, it is difficult to see the people you represent suffer, but it is your responsibility to make the tough decisions and find a solution that will work.
Undeniably, the new governor of Puerto Rico, Ricardo Rossello, is facing an unprecedented budgetary and economic challenge. At $73 billion, the debt of Puerto Rico is the largest insolvency in U.S. history, far outstripping Detroits $18 billion restructuring in 2013. Due to a lack of funding, many critical government services across the island are at risk, including the health care system.
But this decision to file for Title III bankruptcy completely undermines the process designed by the U.S Congress, which was originally designed to resolve the situation out of the courts. And the reason for this is simple: by going to court, the debt crisis is stretched out over a long period of time which will only make everyones life on the island more difficult due to the uncertainty of the resolution.
The absence of clarity on how the bankruptcy will be restructured also makes investors nervous, and prevents capital from flowing into the island where it is so desperately needed.
Congress, the oversight board for PROMESA and the governor have all refused to make the hard decisions necessary to move the island forward. And on May 1, the day a freeze on litigation expired, several creditors filed lawsuits against the Commonwealth for the lack of good-faith negotiations. Two days later, Governor Rossello announced he would file for Title III protections.
If the governor wants to show real leadership, he should walk away from Title III and start serious negotiations with creditors and all parties. A comprehensive, fair and transparent restructuring plan will be difficult, but it will be better for the people of Puerto Rico and put the island on a faster path to recovery.
Title III is a cop-out that not only absolves elected officials from making tough choices, but stretches out an already terrible situation and prevents Puerto Rico from having access to capital that is critical to its rebirth.
As a Congressman, my advice and counsel was often sought by Americas Hispanic communities and leaders in Puerto Rico. It is my hope they will still listen.
Henry Bonilla represented Texas 23rd Congressional District from 1993 2007.
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Puerto Rico's bankruptcy will only prolong its economic meltdown - Fox News
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How brokers are making bank from retail bankruptcies – The Real Deal Magazine
Posted: at 11:26 pm
From the retail issue: Retail has seen brighter days. But one companys loss may be anothers gain.
As more retailers shutter in the wake of shifting consumer patterns, the rampant store closures provide an unprecedented opportunity for brokers and attorneys to seize new business, unearthing a ripe market of backfilling, subleases, concession negotiations and litigation.
Brokers and consultants working for both tenants and landlords say theyve seen a surge in such business.
Every day I get a list of companies filing for bankruptcies, said Leslie Mayer, an executive director of retail services at Cushman & Wakefields West Los Angeles office. But these situations create an opportunity for both landlords and other tenants.
On the tenant side, brokers and bankruptcy attorneys can capitalize on retailers that want to optimize cash flow from their real estate assets. In many cases, this means hiring disposition teams to negotiate out of leases.
On the landlord side, leasing brokers have the opportunity to backfill vacated spaces and potentially bring in investors to reposition entire retail developments into mixed-use complexes.
Were seeing an uptick in litigation as well as strategic counseling and negotiation, said Y. David Scharf, a partner at Morrison Cohen, a Manhattan law firm that represents both retail tenants and landlords. The tensions are higher now than I recall seeing them in many, many years.
Losing liquidity
For the likes of Payless, BCBG and American Apparel, filing for bankruptcy can indicate that companies were not able to downsize in time, experts say. If retailers were more conscientious about how their leases affect their operations and hired the right disposition team, bankruptcy could be avoided.
The smartest companies get way ahead of it, but the typical company is in denial, said Thomas Mullaney, managing director of JLLs retail restructuring services in Manhattan. Like a patient on a gurney, they continue to lose blood liquidity month after month after month until they finally collapse into bankruptcy.
In bankruptcy proceedings, retailers have two choices with their leases: Assume the lease or surrender it to the landlord.
Within 60 days of filing, they must assess the performance of each retail location and make the decision to stay or to shutter it.
The bankruptcy filing will protect retailers from legal action and eviction by their landlords, and may excuse them from unpaid rent from the previous few months leading up to the bankruptcy. But when the petition is filed, the retailer is liable for every cent of rent owed from that point on.
However, a bankruptcy doesnt have to be the end of the world.
Bankruptcy doesnt mean youre going out of business, it just means youre going to restructure, said Mullaney, who works with retailers that want to consolidate.
More than a decade ago, Mullaney and his team helped the Houston-based crafts store Garden Ridge work through its bankruptcy. The company went public in 2016.
There are also strategic-closure bankruptcies, in which retailers will have already picked out real estate companies to work with to evaluate which leases to assume, which to reject and which to assume and then assign subleases, according to Garrick Brown, Cushman & Wakefields director of retail research in the Americas.
Among the entire brokerage community, the second we hear a retailer is going bankrupt, we try to get a list of their store locations and evaluate how good the real estate is, Brown told TRD. We have corporate services that specialize in this. Theres nothing new here except for the sheer number of bankruptcies its unprecedented.
Now, Brown added, every major national brokerage has groups that focus on distressed retailers and their leases. Still, nine times out of 10, its best for all parties involved if bankruptcy can be avoided.
Damage control
For the tenant at risk of bankruptcy, the first strategy is to look for a broker, according to Scharf, and make a contingency plan.
A broker will see what the market is going to bear in terms of getting replacement tenants for your leases. You may have assets in only some of these leases, and certain locations may be liabilities, he said. If theres going to be a bankruptcy, youll have to make decisions very early on, which leases youre assuming and which ones youre rejecting.
Next, with the broker, the retailer will want to engage its landlords and try to renegotiate lease terms.
Very often landlords will want to negotiate some kind of arrangement or discount because of the concern that if one tenant leaves and then another leaves, other tenants have an opportunity to legally cancel their lease, Scharf explained. So very often the larger tenants have leverage over landlords.
Scharf and his firm were recently tapped by Kenneth Cole to represent the designer in a lawsuit filed by Simon Property Group, which sought to keep 43 outlet stores open after Cole made the decision to shutter them.
There are several strategic issues that arise in the case of closures, the attorney said. An empty or dark store obviously looks bad for mall operators, so theyll likely invoke contractual obligations such as the go-dark provision, which says a tenant cannot cease operations at an ongoing lease.
In that case, however, a tenant may choose to dress the window and keep the light on but still halt the operation of the store, Scharf said. This tactic satisfies the obligation, but landlords hate it, which gives tenants a window for negotiating concessions on rent or other accommodations.
A lot of companies may not realize that the capitalized value of their leases may be as big as their bank loans or overall bonded indebtedness, according to Mullaney. But unless a retailer has an internal real estate department, like Macys or Sears, managing leases is typically too great a feat to handle.
Its entirely possible that a company has a borrowing capacity with Wells Fargo for $250 million, and that this is something the chief financial officer can deal with him or herself, he said. But when it comes to leases, they could have hundreds with countless different landlords. Thats a logistical nightmare, and thats where our firm comes in.
Mullaney operates a 10-person team scattered throughout the country to negotiate on behalf of retail chains. On the other side of the negotiations, the landlords have their own consultants as well.
Backfill patrol
When a tenant leaves, the landlords biggest fear is a domino effect with tenants leaving one after another. This means that it must consider providing concessions and abatements to keep [the store] operatingeven if it means forgiving past rent, Scharf said.
But when a big tenant leaves, it could be a golden opportunity for the mall operator, according to Larry Jensen, JLLs director of development, operations and tenant coordination.
There are so many options today that if its a piece of real estate, you really dont have to worry about it, said Jensen, whose team works with mall landlords to fill and sometimes even reposition large spaces vacated by struggling department stores.
Like the strategies employed on the tenant side, its best to have preemptive ones in place.
[As a landlord], you constantly assess the performance of your existing retailers. If this person leaves, if that person leaves, what do you do? he told TRD. You, the broker, have those discussions with the owners of that property. It might even trigger a landlords desire to sell the property.
Jensen worked with a Midwestern mall owner a couple of years ago to buy back a department store and redevelop the space into a mixed-use center with a theater, restaurant and a handful of smaller retailers including a Talbots, a DSW shoe store and a salon.
When theres an empty space, typically your first thought is entertainment. Can you add a theater? If so, can you add a restaurant, a Dave & Busters? And then you look at other options a Dicks, T.J. Maxx or a Home Goods, he said. Grocery stores and health clubs are other options.
For smaller spaces, there are retailers interested in taking what are called second-generation spaces.
Mayer, of Cushman in L.A., represents Skechers, a retailer that takes advantage of vacated properties.
Its kind of a bit of a musical-chairs situation, she told TRD. Skechers is one of the retailers taking advantage of these second-generation spacesthese are great opportunities for Sketchers to come in and say, We move fast and have great credit.
At the end of the day, the retail industry has no choice but to accept the changing market. But change isnt anything new.
If you went to a shopping center in the 1980s, you saw Stride Rites and Naturalizers. All of those guys are dinosaurs now, said JLLs Jensen. The mall has been reinvented three times. So thats whats new? We arent scared of it, we just deal with it let the young eat the old.
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How brokers are making bank from retail bankruptcies - The Real Deal Magazine
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Seadrill: Bankruptcy Looming – Seeking Alpha
Posted: at 11:26 pm
Business Fundamentals
Seadrill Limited (NYSE:SDRL) is a company offering services in deep sea oil exploration, and its share price and business model has been seriously tested in the recent three years with low oil prices. As a result, Seadrill shares have dipped below $1.00 to $0.524 per share, 98.8% below its all-time high. In addition, the stock will be delisted from the NYSE unless it trades above $1.00 within 30 days. Unfortunately for Seadrill, the oil price situation is unlikely to improve soon, and investors should definitely stay away from Seadrill shares. For current Seadrill shareholders, the author recommends to sell shares even at the depressed valuation.
Summary of Company Information
Macro Headwinds: Revenue Decreasing, Contract Expiring
In general, Seadrill Limited needs around $65 to $75 in Brent crude for its services to be in demand. At the very least, Seadrill will need $65 to renew some of its existing contracts, and the company will require around $75 per barrel Brent to achieve decent day rates and full rig utilization.
Unfortunately for the company, oil prices are currently stalling at around $54 per barrel Brent, and Seadrill will have no way to renew its expiring contracts. To make matters worse, the company's revenues have decreased for each of its last four quarters - most recently dropping 10% to 667 million for the fourth quarter of 2016. Refer to the following chart for details on the company's revenue and operating income in 2016.
Unfortunately, this decreasing revenue trend is expected to continue and even accelerate into 2017 because more and more contracts are expiring in 2017. In fact, take a look at the chart below for a summary of its contract situation and decreasing day rates.
Number of Contracts
Contracts expiring in 2017
20
Longer term contracts
27
Expiring contracts total day rate
~$5.0M per day worth of contracts in total expiring within 6 months
Due to the expiring contracts, the company may start to face liquidity problems as a total of $450M per quarter of revenue will start to expire within 6 months. As a result of these contract expirations, Seadrill's operating revenues are expected to decrease steadily in the next 6 months. To understand the severity of a loss of $450M per quarter in income, note that the company's total cash pile is only $1.2B with almost no way for additional debt financing (debt over $10B) or equity financing (shares at $0.50). In conclusion, expiring contracts are about to push Seadrill into bankruptcy.
Bankruptcy and Liquidity Situation
As noted above, Seadrill may have liquidity troubles as early as 2018. To avoid this situation, Seadrill will need the price of oil to breakthrough to $65 to $75 range to help the company renew contracts and bring in new revenue. In order for that to happen, two of the three following items may have to materialize:
Conclusion
In conclusion, Seadrill's future is bleak even though oil prices have broken through to $54 per barrel. Contracts will continue expiring and the company's revenues will continue to suffer. As a result, investors should sell or stay away from Seadrill common shares even at its current depressed valuation.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
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Latest: Coal giant emerges from bankruptcy – High Country News
Posted: at 11:26 pm
Peabody is benefiting from the natural gas price hike.
BACKSTORY Coal giant Peabody Energy filed for bankruptcy in 2016, raising doubts about whether it would fulfill its legal obligation to reclaim land that it mined in Wyomings Powder River Basin. The company had self-bonded, meaning that it promised to pay to restore damaged land and water sources rather than posting cash or bonds up front. After Peabody and two other self-bonded companies declared bankruptcy, the government released a policy advisory warning states against self-bonding (Coal company bankruptcies jeopardize reclamation, HCN, 1/25/16).
FOLLOW UP Peabody emerged from bankruptcy in March, with one of the conditions being that it will no longer self-bond. In May, the company reported a 29 percent increase in revenue over the same period last year, with quarterly net income the highest in five years. Peabody attributes this to increased revenue from its Australian mines and greater demand for coal from Western utility companies due to higher natural gas costs. It also praised the Trump administration for its strong actions supporting coal.
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Latest: Coal giant emerges from bankruptcy - High Country News
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Venezuela: Seven keys for understanding the current crisis – CADTM.org
Posted: at 11:25 pm
Venezuelas treatment by the international media is certainly special. Undoubtedly there are too many distortions, too much Manichaeism, too many slogans, too many manipulations and omissions.
Beyond the stupefying versions of media newspeak that interprets everything that happens in the country in the key of humanitarian crisis, dictatorship or political prisoners, or the heroic narrative of the Venezuela of socialism and revolution that interprets everything that happens in the country in terms of economic war or imperialist attack, there are many topics, subjects and processes that are invisible and that essentially constitute the national political scene. It is not possible to understand the current crisis in Venezuela without analysing the factors that develop from within.
The criterion of action and interpretation based on the logic of friend-enemy responds more to a dispute between the elites of the political parties and economic groups than the fundamental interests of the working classes and the defence of common goods Common goods In economics, common goods are characterized by being collectively owned, as opposed to either privately or publicly owned. In philosophy, the term denotes what is shared by the members of one community, whether a town or indeed all humanity, from a juridical, political or moral standpoint. . It is necessary to provide a comprehensive overview of the process of crisis and national conflict, which helps us plot the coordinates to transcend or deal with the current situation.
We present seven keys to your understanding, analysing not only the dispute between government and opposition, but also the processes that are developing in the political institutions, the social fabric, and the economic networks, while highlighting the complexities of neoliberalism and the forms of government and governance in the country. 1/ It is not possible to understand what is happening in Venezuela without taking foreign intervention into account
The rich and vast array of the countrys so-called natural resources; its geo-strategic position; its initial challenge to the policies of the Washington Consensus; its regional influence for integration; as well as its alliances with China, Russia and Iran, all give a considerable geopolitical significance to Venezuela. However, there are intellectual and media sectors that continually seek to avoid the very fluid international dynamics that impact on and determine the political future of the country, which highlights the persistent interventionist actions of the government and the power of the United States.
In this sense, these sectors are responsible for ridiculing the critique of imperialism, and present the national government as the sole actor of power at play in Venezuela, and therefore the sole object of political interrogation.
However, since the inauguration of the Bolivarian Revolution there has been much US interventionism in Venezuela, which has intensified and become more aggressive since the death of president Chavez (2013) and the context of the exhaustion of the progressive cycle and conservative restoration in Latin America. It is worth remembering the executive order signed by President Barack Obama in March 2015 which stated that Venezuela was an unusual and extraordinary threat to the national security and foreign policy of the United States. We already know what has happened to countries that are categorized in this way by the power to the north.
Now, we have the threatening statement of the head of the Southern Command, Admiral Kurt W. Tidd (April 6, 2017), arguing that The growing humanitarian crisis in Venezuela could eventually compel a regional response. This is combined with the evidence of the aggressive nature of the foreign policy of Donald Trump with the recent bombing of Syria, while the Secretary General of the Organization of American States (OAS), Luis Almagro, together with other countries in the region, intends to apply the Democratic Charter to open a process of restoration of democracy in the country.
The ideologues and the media operators of the conservative restoration in the region are very concerned about the state of human rights in Venezuela, but fail to explain in their analysis why, strangely, there is no supranational effort of the same type in the face of the appalling crisis of human rights in countries such as Mexico and Colombia.
In this sense it seems that the moral indignation is relative and they remain silent. It is because, for reasons of political intent or analytical naivety these sectors depoliticize the role of the supranational bodies and are unaware of the geopolitical relations of power that constitute them, that are part of their own nature. While a paranoid reading of all the operations driven by these global bodies is one thing, another very different approach is a purely procedural interpretation of their actions, ignoring the international mechanisms of domination and control of markets and natural resources that have been channelled through these institutions of global and regional governance.
But there is something important to add. If we talk of intervention, we cannot just talk about the US. In Venezuela there are growing forms of Chinese interventionism in the political and economic measures that have been taken, which points to a loss of sovereignty, an increase in dependency on the Asian power and processes of greater economic flexibility.
A part of the left has preferred to remain silent on these dynamics, since it seems that the only intervention that deserves to be mentioned is that of the USA. But both streams of foreign interference are being developed to promote transnational capitalist accumulation, the appropriation of natural resources and have nothing to do with popular demands. 2/ The concept of dictatorship does not explain the Venezuelan case
From almost the beginning of the Bolivarian Revolution Venezuela has been branded a dictatorship. This concept remains the subject of extensive discussions in political theory because it has been challenged by the transformations and complexity of contemporary regimes and exercises of power, especially in the current globalized era, which raises serious gaps and imprecisions in its definition.
Dictatorship is usually associated with political regimes or types of government in which all power is concentrated, without limitation, into a single person or group; there is a lack of separation of powers; the absence of individual freedoms, freedom of political parties, freedom of expression; and sometimes the concept has even been vaguely defined as the opposite of democracy.
The term dictatorship has been used in relation to Venezuela in media jargon of a fairly superficial, visceral and moralizing kind, practically to raise it as a kind of specificity in Venezuela, distinct from the other countries of the region, where in theory there would be democratic regimes.
The thing is that in Venezuela at the present time it is difficult to say that all power is concentrated in one person or group, due to the fact that in this country we are faced with a map of actors, which, although hierarchical, is fragmented and volatile, especially after the death of President Chvez, with the existence of various power blocs that can link up or be at odds among themselves and that goes beyond the dichotomy between government and opposition.
Although there is a government with a significant military component, with increasing expressions of authoritarianism and with some capacity for centralization, the scenario is highly unstable. There is no total domination from top to bottom, and there is some parity between the disputing power groups. On the other hand, the conflict could spill over, making the situation even more chaotic.
The fact that the Venezuelan opposition controls the National Assembly, winning convincingly by the electoral path, also indicates that rather than a pure absence of separation of powers, there is a dispute between them, until now favourable to the executive-judicial combination. Rather than a homogeneous political regime, we are faced with a wide and conflicting network of forces. The metastasis of corruption means the exercise of power is decentralized even more, making its centralization by the constituted power difficult.
What is relevant to the old Roman concept of dictatorship, is that, in this context, the national government is governing through decrees and special measures in the framework of a declared state of emergency, which has officially existed since the beginning of 2016. In the name of the struggle against the economic war, the advance of criminality and para-militarism, and the subversive advances of the opposition, many institutional mediations and democratic procedures are being omitted.
Security policies stand out for their severity, exemplified by the Operacin de Liberacin del Pueblo (OLP Peoples Liberation Organization); there are direct interventions by the state security bodies in different parts of the country (rural, urban, suburbs), to fight the underworld, which tend to lead to a controversial number of deaths; there is the paralysis of the referendum; gubernatorial elections were suspended in 2016 and it is not yet clear when they will be held; there is increasing repression and police brutality in response to the social unrest resulting of the situation in the country; and there is an increase in processes of militarization, especially in the border areas and those declared to contain strategic natural resources.
This is the political map, which, together with the various forms of foreign intervention, sets the stage for a low-intensity war that runs through virtually all the spheres of everyday life for Venezuelans. This is the framework within which individual freedoms, party opposition and pluralism, the convening and realization of marches, expressions of dissent and criticism in the media, among other forms of so-called democracy in Venezuela, are developing. 3/ In Venezuela the social contract, institutions and frameworks of the formal economy are being overwhelmed
If there is something that could be defined as a specificity of the Venezuelan case, it is that the current socio-political scenario is torn, deeply corrupted and highly chaotic. We have argued that in this country we are facing one of the most severe institutional crises in all of Latin America, with reference to the set of legal, social, economic and political institutions, among others, that make up the Venezuelan Republic.
The historic crisis of oil rentier model of accumulation, the metastasis of corruption in the country, severe violations to the social fabric from the neoliberal period and in particular since 2013, and the intensity of the attacks and political disputes, have overflowed the frameworks of the formal institutions of all areas of society, channelling a good part of the social dynamics by means of informal mechanisms, often underground and illegal.
In the economic sphere, corruption has become a transversal mechanism for distribution of oil revenues, diverting enormous amounts of foreign exchange at the discretion of a few, and undermining the foundations of the formal rentier economy. This occurs in a decisive manner with PDVSA, the main industry of the country, as well as with key funds like the Sino-Venezuelan Fund or a number of nationalized companies.
The collapse of the formal economy has made informality practically one of the drivers of the national economy as a whole. The sources of social opportunities, whether for social ascent or the possibility of higher profits, are often in the so-called bachaqueo in foodstuffs (illegal trade, at extremely high prices, on the black market) or other forms of trade in the various parallel markets, exchange, medicines, gasoline, and so on.
In the political-legal order, the rule of law lacks respect and recognition on the part of the main political actors, who not only mutually repudiate each other but are willing to do anything to overcome each other.
The national government faces what it considers the enemy forces with emergency measures, while the most reactionary opposition groups deploy violent operations of vandalism, confrontation and attacks on infrastructure. In this scenario the rule of law has been greatly eroded, making the Venezuelan people very vulnerable.
Impunity is ever greater, and has spread to all sectors of the population. This leads to corruption becoming even more rooted and impossible to prevent, and means the people expect nothing from the legal system, increasingly taking the law into their own hands.
The collapse of the social contract generates trends of everybody for themselves among the people. The fragmentation of power has also helped to generate, grow and strengthen various territorial powers, like the so-called miners unions that control gold mines in Bolivar state by force of arms, or the criminal gangs that dominate sectors of Caracas like El Cementerio or La Cota 905.
The framework presented implies nothing more and nothing less than the future and political definitions of the current situation in the country being developed to a great extent by force. 4/ The long-term crisis of Venezuelan rentier capitalism (1983-2017)
The collapse of the international price of crude oil has been instrumental in the development of the Venezuelan crisis, but it is not the only factor that explains this process. Since the 1980s there are growing signs of exhaustion of the model of accumulation based on the extraction of oil and the distribution of income that it generates. The current phase of increasing chaos in the national economy (2013-present) is also a product of the trends of the last 30 years in the countrys economy. Why?
For several reasons. About 60% of Venezuelan crude is heavy or extra-heavy. This crude is economically more costly and requires greater use of energy and the use of further processing for marketing. The profitability of the business that feeds the country is declining with respect to earlier times, when conventional crude prevailed. This is happening as the model requires ever more rentier profits and increased social investment to deal with the needs of a population that is still growing.
The hyper-concentration of the population in the cities (over 90%) promotes the use of profits directed primarily towards consumption (imported goods) rather than production. The boom years promoted the strengthening of the extractive (primary) sector - the effects of the so-called Dutch Disease - while significantly weakening the already weak productive sectors. After the end of the boom (as happened at the end of the 70s and now from 2014), the economy was more dependent and even weaker in the face of a new crisis.
The socio-political corruption in the system also makes it possible for leakages and fraudulent diversion of profits, which prevents the development of coherent distribution policies to alleviate the crisis.
The increasing volatility of international prices of crude oil, as well as changes in the global power balances in oil (such as the progressive loss of influence of OPEC OPEC Organization of Petroleum-Exporting Countries OPEP is a group of 11 DC which produce petroleum: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela. These 11 countries represent 41% of oil-production in the world and own more than 75% of known reserves. Founded in September 1960and based in Vienna (Austria), OPEC is in charge of co-ordinating and unifying the petroleum-related policies of its members, with the aim of guaranteeing them all stable revenues. To this end, production is organized on a quota system. Each country, represented by its Minister of Energy and Petroleum, takes a turn in running the organization. Since 1st July 2002, the Venezuelan Alvaro Silva-Calderon is the Secretary General of OPEC.
OPEC : http://www.opec.org/opec_web/en/ ) also has significant impacts on the national economy.
While all these economic shocks are affecting the country, ecological resources will continue to be undermined and depleted, which threatens the livelihood of millions of Venezuelans for the present and future.
The governments current solution has been to greatly increase external indebtedness, distribute income more regressively, expand extractivism and favour transnational capital.
To sum up, any of the elites who rule in the coming years will have to face the historic limits that have been reached with the old oil-based model. It is not enough just await a stroke of luck and a rise in oil prices. Momentous changes are taking place and it is necessary to be prepared to deal with them. 5/ Socialism? Venezuela is carrying out a process of progressive economic flexibility and adjustment
Venezuela is developing a process of progressive and sectoralized adjustment of the economy, with more flexibility in comparison with prior regulations and restrictions on capital, and the gradual dismantling of social advances achieved in earlier times in the Bolivarian Revolution. These changes are masked by the name of socialism and revolution, although they represent policies increasingly rejected by the population.
This includes policies such as the creation of Special Economic Zones, which represents a comprehensive liberalisation of parts of the national territory, with sovereignty being delivered to foreign capital which administers practically without limitations in these regions. This is one of the most neoliberal measures of Agenda Venezuela, implemented by the government of Rafael Caldera in the 1990s, under the recommendations of the International Monetary Fund IMF International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.
When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.
As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).
The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%). The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
Also we should highlight the gradual relaxation of the agreements with foreign corporations in the Orinoco; liberalization of prices of some commodities Commodities The goods exchanged on the commodities market, traditionally raw materials such as metals and fuels, and cereals. ; growing issuance of sovereign bonds; devaluation Devaluation A lowering of the exchange rate of one currency as regards others. of the currency, creating a floating exchange rate (Simadi); acceptance of some trade procedures directly in dollars, for example, in the tourism sector; or the faithful fulfilment of payment of the external debt and its servicing, which implies a reduction in imports and consequent problems of shortages of basic consumer goods.
A renewed and more flexible extractivism is being adopted, aimed mainly at the new frontiers of extraction, such as the mega-project of the Mining Arc of the Orinoco, which proposes to install mega-mining on an unprecedented scale in a territory of an area of 111,800 km2, threatening key resources of life for Venezuelans, especially for indigenous people. These projects add to long-term relations of dependency that are produced by extractivism.
It should be noted that these reforms are combined with the maintenance of some social assistance policies, continuous increase in nominal wages, some concessions to the demands of the popular organizations and the use of a revolutionary and anti-imperialist narrative. This obviously has as one of its main objectives the maintenance of the electoral support that remains.
We are witnessing what we have called a mutant neo-liberalism, to the extent that forms of commodification, financialisation and deregulation are combined with mechanisms of state intervention and social assistance.
Parts of the left have been very focused on preventing conservative governments coming to power so as to avoid the return of neo-liberalism. But they forget to mention how progressive governments have also made progress in a number of measures reflecting a mutant and hybrid neo-liberalism profile, which ultimately have an impact on the people and on nature. 6/ What alternative? The project of the parties of the Mesa de la Unidad Democrtica (MUD) is neo-liberal
The right-wing Mesa de la Unidad Democrtica (MUD Table of Democratic Unity) is the predominant bloc of party-based opposition to the national government, although a left opposition has been growing slowly and is very likely to continue growing. This critical left, at least in its more defined elements, is not identified with the MUD so does not link with it politically.
The MUD is not a homogeneous block, and there are sectors ranging from influential radical groups of the extreme right - which we could call Uribistas - as well as some sectors of moderate conservatism, and elitist liberalism with a certain distributionist tendency. These various groups have a mutually conflictual relationship characterized by possible confrontation and mutual insults.
Despite their differences, the various groups of the MUD agree on at least three key factors: its ideological matrix, the bases of its economic program and its reactionary agenda in relation to the national government and the possibility of a profound transformation of popular emancipation.
We will refer to the first two. Their ideological matrix is deeply determined by neoclassical theory and conservative liberalism, honouring obsessively private property, the end of the ideology on the part of the state and corporate and individual freedoms.
These ideological pillars are clearer in the program of this bloc than in its media discourse, where the rhetoric is simplistic, superficial and full of slogans. The synthesis of its economic model is in the Guidelines for the Program of Government of National Unity (2013-2019). It is a more orthodox neo-liberal version of oil extractivism, in relation to the project of the current Venezuelan government.
In spite of the slogans of change and productive Venezuela, what stands out is its proposal to extract up to six million barrels of oil per day, placing an emphasis on increasing the quotas of the Orinoco Oil Belt. Although they dispute publicly, the oil proposals of Henrique Capriles Radonski (Petrleo para tu Progreso) and Leopoldo Lpez (Petrleo en la Mejor Venezuela) are twins, and accord with the governments Plan de la Patria of 2013-2019. The change demanded is no more than another ratcheting up of extractivism, more profit Profit The positive gain yielded from a companys activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. and development oriented, with the economic and socio-environmental consequences and cultural features associated with this model. 7/The fragmentation of the people and the progressive undermining of the social fabric
In all these processes of low-intensity warfare and systemic chaos, working people are the most affected. The powerful socio-political cohesion set up in the early years of the Bolivarian Revolution has suffered not only from erosion but a gradual disintegration. But these effects have reached the very core of the tissues of the community in the country. The difficulty in covering the basic requirements of daily life; incentives for the individual and competitive resolution of the socio-economic problems of the people; the metastasis of corruption; the channelling of social conflicts and disputes by force; the loss of ethical-political references and polarization due to the discredit of the political parties; the direct aggression against strong or important community experiences and community leaders from various political and territorial actors; they are part of this process of erosion of the social fabric that aims to undermine the true pillars of a potential process of popular-emancipatory transformation or of the capacities of resistance of the people to the advancement of regressive forces in the country.
Meanwhile, various grassroots organizations and social movements across the country are building an alternative. Time will tell what their capacity for resistance, adaptation and above all their collective ability to articulate among themselves and to exert greater strength on the course of the national political project will be.
If there is an irreplaceable solidarity that should be promoted from the left in Latin America and the world, it must be with this struggling people, which has historically borne the burden of exploitation and the costs of the crisis. Which has frequently risen up and taken to the streets so that its demands are listened to and met. Which is currently facing the complex dilemmas posed by the current times of reflux and regression. This seems to be the true point of honour of the left. The cost of turning away from these popular counter-hegemonies in the name of a strategy of power conservation could be very high.
Source: Europe Solidaire Sans Frontires->http://www.europe-solidaire.org/spi...]
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Venezuela: Seven keys for understanding the current crisis - CADTM.org
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Microfinance and the challenge of failing states – BusinessDay (satire) (press release) (registration) (blog)
Posted: at 11:25 pm
The problem of poverty in Nigeria is not abating. At best it is getting worse and at worst it has gone beyond our capacity to manage. And this has nothing to do with the laudable policy of microfinance and its very successful implementation. Nigeria is at critical cross roads of its socio-economic development. The continued organised misgovernance and manipulation of religion and politics by vested interests have ensured that we get into a bind that is hard to break. Today, the poor in many parts of the country are no longer afraid of poverty because something worse than poverty has arrived. They fear for their lives. As things stand, the nation is in such a bad shape that in or out of recession, it makes no difference to the lives of most of the ordinary people. In Nigeria hard facts are risky to share but the man dies..
There is incontrovertible evidence that most of the 36 states have practically become unable to meet the needs of their people. They exist only because it is politically profitable to some of our political class to continue to maintain this failed structure and leadership style. Not only are the majority of the states insolvent and unable to meet their financial obligations, they are flatly unable to provide safety and security to their people. And this is one of the parts of the Nigerian problem that everyone would like to avoid but the man dies
Worse still, the institutions endowed with the capacity to secure them have been privatized. The police and, sometimes, the army whose primary duty is to protect the people, have been parcelled out to politicians and the privileged few on guard duty and as orderlies for all manner of people. Few are left for the real calling. As a result, the streets have been occupied by dangerous gangs who make sure that, in some rural areas, farmers no longer farm and traders no longer come to markets. The economic activity of the poor, which is the basis of microfinancing has been victimised and brought to a standstill. In such areas, one begins to wonder how the effectiveness of our microfinance programme can be assessed, as social collapse and insecurity continue to rubbish microfinancing.
A recent Channels Television presentation on the power supply challenges faced by artisans in Nassarawa state was as elixir for this piece. Although it was a rehash of the tale of woes we get from all over the country on the failure of governments to solve the basic problem, which everyone knows is behind the mass poverty in Nigeriadebilitating epilepsy of power supply. In that story, a spray painter and many other artisans, who seek to legitimately earn a living, spend all they make to provide power through generators. This is the same story everywhere and instead of declaring a national emergency on electricity we are busy splitting hair on what an Acting President could sign and not sign.; and following the same spending pattern that brought us to this shameful state a battle of supremacy between the executive and the legislature, a bloated civil service of many ghost workers the source of whose entry to the service has never been found, translucent security votes and inflated contracts and more.
Following the Nassarawa story I decided to dig deeper on the economic activity of the poor in that area of Nigeria. The results are terrifying. As we sit in Abuja to postulate our shares of the 2017 budget, life has come to a standstill in many parts of the middle belt. At a point one wonders whether some of these states, including Nassarawa and Taraba, are not worse hit by Boko Haram than the North East. I dont know how many of us are aware that life in many parts of that area, especially outside their state capitals, is a nightmare. How many of us know that there are days reserved for armed robbers to rob the people in some places and that there are days when people in some villages literally dress up and wait to be robbed by armed robbers? The robbers come on certain market days as a matter of appointment, to rob the people in some villages outside Lafia in Nassarawa state. I was told that the robbers come on market days to rob those who sold cattle. It was alleged that the police is aware and feeling inadequate to confront the robbers, often close by 6pm and return to their bases, leaving the people to their own devices.
This further strengthens the argument that Nigeria as presently constituted cannot serve the needs of a modern state. The borders are wide open and trailer loads of strangers, most of whom do not speak any Nigerian language poured into Taraba when Sambisa Forest was attacked, according to the Governors Chief of Staff. The strange visitors entry was turned to a political discourse and nothing happened.
This story of the artisans in Nassarawa is not a unique. It is the story of every part of the country. The absence of electricity, among other tools of economic empowerment, has made it impossible for Nigerians to depend on themselves. They have been deprived of the opportunity to exercise their talents and therefore, poverty has become the destiny of many children yet unborn. Poverty reduces the quality of the human person. The poor often sound incoherent and appear somewhat unintelligent because they have little learning and no time to think outside the box of hunger and destitution. They are forced to focus on the immediate stomach infrastructure challenges to the exclusion of any futuristic engagement. Some governments around the world, including North Korea, have at one point or the other used mass emiseration to elicit loyalty from their people.
Microfinancing cannot succeed in an environment where people have suspended their will and enterprise and resorted to opportunism and dependence on prebendalism. The essence of microfinancing is to tackle poverty by empowering the poor who are economically active. This is what prompted the federal government to launch the National Microfinance Policy, which has gone a long way to tackle the endemic poverty across the country.
Today, microfinance banks, numbering about 1000 have been established and working all over the country. However, while considerable progress has been made in canalizing financial resources to the poor and boosting their economic activities, it does appear that much has not been achieved. As more microfinance institutions get into the fray, more people seem to get into the poverty net. There are more educated beggars today than in 2005. Many are beginning to think that the microfinance sector is failing in reducing poverty. This may be a wrong impression but it is justifiable based on facts outside the control of the microfinance sector.
It is hard to talk about microfinancing without talking about poverty, its raison deter. Nor can we discuss poverty in Nigeria without mentioning the rapidly shrinking ability of the state to protect the citizens. How does a microfinance institution deal with the poor in a state where people sleep in churches and mosques most nights? How do people survive in a state where hotel management evacuates guests because an attack was expected? This is what is going on in the villages of Nassarawa state and perhaps, other surrounding states. I hope Boko Haram has not left and changed tactics while we continue to bombardSambisa. Could it be that the robbers are not mere armed robbers? Could it be that Boko Haram has stopped holding territories but makes do with ensuring that the place is destabilised? As I said there are certain topics we do not like to discuss but microfinance fails wherever the state fails.
Emeka Osuji
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Youths’ vote can sway 2018 election – DailyNews
Posted: at 11:25 pm
Blessing Kasiyamhuru 23 May 2017 2:57PM 0 comments
HARARE - As the 2018 general election fast approaches, Zimbabwe Partnership for Prosperity (ZIPP) challenges the youths in Zimbabwe to rise up and vote in numbers as this crucial vote will help shape their future.
The first step is for them to register to vote and show up to vote on Election Day.
While young voters in the past have been comfortable in apathy neglecting the importance of voting, they should realise that their voice is an important one because democracy doesnt work without citizen participation. Their vote does matter, so much so because history has shown that a collective youth vote could actually sway an election.
Voting gives the youths the power to make important choices as they decide what they like, dont like, and their voices are heard. If they fail to vote they are yielding the ultimate power to adults to make decisions about the leaders and laws that will shape and lead society for decades.
It is always essential that young Zimbabweans take advantage of their right to vote, creating a future that aligns with their fundamental beliefs and setting a precedent for future generations.
Regrettably, ZIPP has noticed that in the past the youth in Zimbabwe have not used their huge numbers at the ballot box to shape political and socio-economic decisions. Interestingly, the youths are known to complain about issues that affect them yet squander opportunities to influence the election of people who share their aspirations.
The majority of the youths today are walloping in poverty as the country witnesses high unemployment levels believed to be hovering over 90 percent which if unchecked, will be a disaster in waiting for the government. They also still face a host of other challenges, including limited access to entrepreneurship opportunities and credit for setting up businesses.
It is not a secret that high unemployment levels in Zimbabwe are quite undesirable especially after President Robert Mugabes 2013 election promise to deliver more than two million jobs by 2018 that has not come to pass.
While every year Zimbabwe produces an estimated 300 000 graduates from its 16 universities plus others coming out of polytechnic colleges, nursing schools, teacher colleges and apprenticeships, the countrys floundering economy that is starved of investment and job creation can scarcely absorb a fraction of them.
This paints a grim picture of many young people with no source of income and no future to look forward to.
It is against this background that ZIPP urges all the unemployed youths to take time out and exercise their only hope for a better future, which is to vote for a government that will address their employment needs.
Young voters who want to inspire change need to show their support for the candidates whom they feel best represent their needs because no one else is going to vote in the interest of young people except young people.
In particular, the youths not only should they practice their right to vote but the right to be voted for into office themselves. Zipp, therefore, offers this opportunity as a youthful party to all youths that aspire to be leaders and policy makers of the future government of Zimbabwe in 2018.
Voting and being voted for or supporting the candidates that includes youths of their choice is effective youth participation in politics.
ZIPP urges government, Zimbabwe Election Commission, NGOs, political parties, churches and learning institutions to create enough awareness among the youth as to why they should vote.
It is only in Zimbabwe that we have an organisation like Zimbabwe Coalition of Unemployed Graduates formed by jobless but highly qualified youths. The coalition has since presented a petition to the Parliament of Zimbabwe highlighting their dissatisfaction with the state of the economy.
We also challenge Zimbabwe Coalition of Unemployed Graduates to mobilise its wide membership to register and vote.
Zanu PF government is struggling to deal with a worsening unemployment crisis as companies collapse, hence our call for youths to use the only weapon still in their possession the vote.
Local companies have resorted to retrenchment for business sustainability and survival while others have been forced to restructure and downsize as a direct response to low capacity utilisation and product demand.
Over time, the increase in retrenchments has seen unemployment figures rising.
For the few companies still operating, foreign currency to buy new equipment has been a challenge and as a result companies are forced to use obsolete machinery susceptible to frequent breakdowns.
As a government in waiting ZIPP has the advantage of a pool of known professional human resource base; graduates that are jobless - be they teachers, nurses, engineers that we shall absorb into employment through facilitating an environment conducive for creating the necessary jobs.
*Kasiyamhuru is President ZIPP.
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The True Story of Brainwashing and How It Shaped America – Smithsonian
Posted: at 11:25 pm
built upon the idea of brainwashed GIs in Korea.
Journalist Edward Hunter was the first to sound the alarm. Brain-washing Tactics Force Chinese Into Ranks of Communist Party, blared his headline in the Miami Daily News in September 1950. In the article, and later in a book, Hunter described how Mao Zedongs Red Army used terrifying ancient techniques to turn the Chinese people into mindless, Communist automatons. He called this hypnotic process brainwashing, a word-for-word translation from xi-nao, the Mandarin words for wash (xi) and brain (nao), and warned about the dangerous applications it could have. The process was meant to change a mind radically so that its owner becomes a living puppeta human robotwithout the atrocity being visible from the outside.
It wasnt the first time fears of Communism and mind control had seeped into the American public. In 1946 the U.S. Chamber of Commerce was so worried about the spread of Communism that it proposed removing liberals, socialists and communists from places like schools, libraries, newspapers and entertainment. Hunters inflammatory rhetoric didnt immediately have a huge impactuntil three years into the Korean War, when American prisoners of war began confessing to outlandish crimes.
When he was shot down over Korea and captured in 1952, Colonel Frank Schwable was the highest ranking military officer to meet that fate, and by February 1953, he and other prisoners of war had falsely confessed to using germ warfare against the Koreans, dropping everything from anthrax to the plague on unsuspecting civilians. The American public was shocked, and grew even more so when 5,000 of the 7,200 POWs either petitioned the U.S. government to end the war, or signed confessions of their alleged crimes. The final blow came when 21 American soldiers refused repatriation.
Suddenly the threat of brainwashing was very real, and it was everywhere. The U.S. military denied the charges made in the soldiers confessions, but couldnt explain how theyd been coerced to make them. What could explain the behavior of the soldiers besides brainwashing? The idea of mind control flourished in pop culture, with movies like Invasion of the Body Snatchers and The Manchurian Candidate showing people whose minds were wiped and controlled by outside forces. FBI director J. Edgar Hoover referred to thought-control repeatedly in his book Masters of Deceit: The Story of Communism in America and How to Fight It. By 1980 even the American Psychiatric Association had given it credence, including brainwashing under dissociative disorders in the Diagnostic and Statistical Manual of Mental Disorders-III. Had Chinese and Soviet Communists really uncovered a machine or method to rewrite mens minds and supplant their free will?
The short answer is nobut that didnt stop the U.S. from pouring resources into combatting it.
The basic problem that brainwashing is designed to address is the question why would anybody become a Communist? says Timothy Melley, professor of English at Miami University and author of The Covert Sphere: Secrecy, Fiction, and the National Security State. [Brainwashing] is a story that we tell to explain something we cant otherwise explain.
The term had multiple definitions that changed depending on who used it. For Hunterwho turned out to be an agent in the CIAs propaganda wingit was a mystical, Oriental practice that couldnt be understood or anticipated by the West, Melley says. But for scientists who actually studied the American POWs once they returned from Korea, brainwashing was altogether less mysterious than the readily apparent outcome: The men had been tortured.
Robert Jay Lifton, one of the psychiatrists who worked with the veterans and had previously studied doctors who aided Nazi war crimes, listed eight criteria for thought reform (his more measured term for brainwashing). They included things like milieu control (having absolute power over the individuals surroundings) and confession (in which individuals are forced to confess to crimes repeatedly, even if they arent true). For the American soldiers trapped in the Korean prison camps, brainwashing meant forced standing, deprivation of food and sleep, solitary confinement, and repeated exposure to Communist propaganda.
There was concern on the part of [the American military] about what had actually happened to [the POWs] and whether they had been manipulated to be [what would later be known as] a Manchurian candidate, says Marcia Holmes, a science historian at the University of Londons Hidden Persuaders project. Theyre not sleeper agents, theyre just extremely traumatized.
The early 1950s marked the debut of the militarys studies into psychological torture, and instead of concluding the American soldiers needed rehabilitation, military directors came to a more ominous conclusion: that the men were simply weak. They became less interested in the fantasy of brainwashing and became worried our men couldnt stand up to torture, Holmes says. This resulted in the Survival, Evasion, Resistance, Escape program (SERE), meant to inoculate men against future attempts at psychological torture by using those same torture techniques in their training.
Meanwhile, the American public was still wrapped up in fantasies of hypnotic brainwashing, in part due to the research of pop psychologists like Joost Meerloo and William Sargant. Unlike Lifton and the other researchers hired by the military, these two men portrayed themselves as public intellectuals and drew parallels between brainwashing and tactics used by both American marketers and Communist propagandists. Meerloo believes that totalitarian societies like Nazi Germany and the Soviet Union or Communist China were in the past, and continue to be, quite successful in their thought-control programs [and] the more recently available techniques of influence and thought control are more securely based on scientific fact, more potent and more subtle, writes psychoanalyst Edgar Schein in a 1959 review of Meerloos book, The Rape of the Mind: The Psychology of Thought ControlMenticide and Brainwashing.
Psychiatrists, as well as writers like Aldous Huxley, were aided by the dominant theory of the human mind at the time, known as behaviorism. Think of Ivan Pavlovs slobbering dogs, trained to salivate upon hearing a bell, even if they werent tempted with food. The basic assumption of behaviorism was that the human mind is a blank slate at birth, and is shaped through social conditioning throughout life. Where Russia had Pavlov, the U.S. had B.F. Skinner, who suggested psychology could help predict and control behavior. Little wonder, then, that the public and the military alike couldnt let go of brainwashing as a concept for social control.
With this fear of a mind-control weapon still haunting the American psyche, CIA director Allen Dulles authorized a series of psychological experiments using hallucinogens (like LSD) and biological manipulation (like sleep deprivation) to see if brainwashing were possible. The research could then, theoretically, be used in both defensive and offensive programs against the Soviet Union. Project MK-ULTRA began in 1953 and continued in various forms for more than 10 years. When the Watergate scandal broke, fear of discovery led the CIA to destroy most of the evidence of the program. But 20,000 documents were recovered through a Freedom of Information Act request in 1977, filed during a Senate investigation into Project MK-ULTRA. The files revealed the experiments tested drugs (like LSD), sensory deprivation, hypnotism and electroshock on everyone from agency operatives to prostitutes, recovering drug addicts and prisonersoften without their consent.
Despite MK-ULTRA violating ethical norms for human experiments, the legacy of brainwashing experiments continued to live on in U.S. policy. The same methods that had once been used to train American soldiers ended up being used to extract information from terrorists in Abu Ghraib, Iraq and Guantanamo Bay.
Here, then, is the brief history of brainwashing, Melley writes in a 2011 paper for Grey Room. The concept began as an [O]rientalist propaganda fiction created by the CIA to mobilize domestic support for a massive military build-up. This fiction proved so effective that the CIAs operations directorate believed it and began a furious search for a real mind control weapon. The search resulted not in a miraculous new weapon but a program of simulated brainwashing designed as a prophylactic against enemy mistreatment. This simulation in turn became the real basis for interrogating detainees in the war on terror.
While few people take seriously the notion of hypnosis-like brainwashing (outside Hollywood films like Zoolander), there are still plenty who see danger in certain kinds of control. Consider the conversations about ISIS and radicalization, in which young people are essentially portrayed as being brainwashed. Can You Turn a Terrorist Back Into a Citizen? A controversial new program aims to reform homegrown ISIS recruits back into normal young Americans, proclaims one article in Wired. Or theres the more provocative headline from Vice: Inside the Mind-Control Methods the Islamic State Uses to Recruit Teenagers.
I think a program of isolation and rigorous conversion still does have a life in our concept of radicalization, Melley says. But outside those cases related to terrorism its mostly used facetiously, he adds.
The notion of brainwashing, no less than radicalization, often obscure[s] far more than it reveal[s], write Sarah Marks and Daniel Pick of the Hidden Persuaders project. Both terms could be a lazy way of refusing to inquire further into individual histories, inviting the assumption that the way people act can be known in advance.
For now, the only examples of perfect brainwashing remain in science-fiction rather than fact. At least until researchers find a way to hack into the network of synapses that comprise the brain.
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The True Story of Brainwashing and How It Shaped America - Smithsonian
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What Erdogan And The Turkish Government Are Doing To This NBA Star Is Chilling – GOOD Magazine
Posted: at 11:24 pm
Education and Technology:
Microsoft Learning Tools is software that helps improve reading skills by reducing visual crowding, highlighting words, and reading text aloud, so students can engage with words in a whole new way.
Again?
AsTurkeys president, Recep Tayyip Erdogan takes extraordinary steps to consolidate power and to crush dissent within his country. Here in the United States, Oklahoma City Thunder star and Turkish native Enes Kanter has been unafraid to speak out against the undermining of democratic institutions withinhis home country. His basketball stardom has afforded Kanter a platform most Turks dont have, giving his criticism of the Turkish government more weight. Thats too much for a strongman like Erdogan to take. So the Turkish government tried to silence Kanter just this past weekend once and for all, and now the basketball star is opening up about the oppression he and other Turks face with Erdogan in power.
The harassment of Kanter came to a head on his latest trip abroad. With his NBAseason over, Kanter has been traveling around the world, hosting basketball camps with his foundation. When he wasin Indonesia, Kanters manager knocked on his hotel room door in the middle of the night and said they needed to talk. He told me the Turkish government has called Indonesia and told them Enes Kanter is a dangerous man, Kanter says. The army and secret service were going to shut down his camp, and they needed to get out of the country.
They fled to Romania, the site of his next scheduled event, on the earliest flight they could board. But as he tried to enter Romania, he found the Turkish government had revoked his passport. He worried that he would deported back to Turkey and jailed by Erdogan. WhileRomanian policedetained him, he filmed a video for Twitter to let the world know what was happening.
To understand Kanters objections to Erdogan, it helps to have a little background. Erdogan effortsto change Turkey from a parliamentary democracy into to a country with a strong executive have been successful. It has been part of a decades-long quest for power. In 1994, when he was elected mayor of Istanbul, he started banning alcohol sales in cafs as part of his effort to turn secular Turkey into an Islamic-dominant country. In the 2000s he founded a party that would eventually win a majority of seats in Parliament and make him prime minister. Herose to president and just as corruption investigations seemed poised to bring him down;he was able to deflect blame and quash the inquest. Since then he has been cracking down on dissent. And with his country in turmoil, last year a failed military coup gave him the political capital to seize more power. He had people fired from their jobs, jailed people deemed as coup sympathizers, and became the worlds leader ofjailing journalists.
The frightening reach of Erdogans autocratic ways were felt in America last week. He came to the States to be welcomed by friend of dictators, President Donald Trump. While he was in Washington, D.C., Kurdish immigrants protested the Turkish embassy. What happened next was truly disturbing.
The bodyguards who beat the protestors in full view of Erdogan left the country withoutconsequence. In fact, when they returned, the Turkish government demanded an apology from the United Statesfor interfering with Erdogans security detail.
Its behavior like this from Erdogan and his lackeys that has Kanter speaking out that nearly cost him his freedom this weekend, but this wasnt the beginning of the harassment.It started with him being left off the Turkish national team, despite being their best player, and has evolved into his inabilityto visitTurkey for fear of being arrestedorkilled. Andto protect family and friends back home and in order to keep Erdogan from jailing them, hes had to cut off all communications. Those family members still face harassment in Turkey. (His dadhas been spit on at the supermarketfor having a son who questions Erdogan.)
With some help from the United States, Kanter was able to leave Romania for London and then return to New York toavoid detention by Turkish authorities. Yet, it will be a while before life will be back to normal for him or his country.
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What Erdogan And The Turkish Government Are Doing To This NBA Star Is Chilling - GOOD Magazine
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