South American Socialist Politics at war with Corrupted Media Journalism.

Whilst in Europe, we are told by the majority of the media that regardless of all the problems;- the economic crisis, the austerity measures since, the suffering that those austerity measures are causing, and it has to be said, the loss of life which cuts have caused as medical services and other vital services have been cut.

This has been caused by capitalist policies which much of the media still defend. Many media organisations and news papers still give support to the stock markets and give them free publicity even though they without question are continuing to make the economic problems we have worse.

In the United States, the situation is even worse. In Europe, at least leaders like Angela Merkel have the desire to take more control of the financial markets with more regulations. This has been made clear to George Osborne and David Cameron. But the British leaders constantly fight off any new regulations. This makes it difficult for the European Union to move forward on this issue. The U.S. makes their own decisions and is not influenced by any one.

But these differences between the U.K., Europe and the United States only concern the way in which capitalism is allowed to operate. On the whole, we are still led to believe that there is no alternative other than capitalism, by press, media and also education!

In South America however, things are different. The same forces exist which influence many South American people to support capitalism but many people in South America believe there is an alternative. 

It's time for us to look at what has been going on in South America. Also to understand why much of what is going on in South America has been ignored or manipulated by primarily, U.S. media but also the British Media. 

So here's some back ground into what has been happening in South America. If you don't know this.....You should may be ask yourself ....."Why don't I know this?"

Venezuela.....The Bolivarian Revolution

Unrest in Venezuela was contributed to by the IMF who enforced austerity on the Venezuelan people.

In 1992, inspired by Simon Bolivar, who liberated Venezuela from Spain in the 19th century, Hugo Chavez, then a soldier organised a coup against the corrupt, capitalist government of Venezuela.

Ten battalions, consisting of 1000 soldiers attempted to over throw the government. But the capture of Caracus, the capital failed.

After the failed coup attempt, he apologized to the people for the failure saying, "I take responsibility." But made clear the battle was not over. He then said, "This movement is going to knock down the rotten structures of this system."

Many years later, in 1998 Chavez won a majority vote in a an election. At the time the country had 80% of the people in poverty. He said, "I offer the structural transformation that people demand - To transform the political system. -Reforms of social character."

Here is what he said after being elected leader......

"I will free Venezuela from the New form of domination, -that of the free market policy that had been imposed on Venezuela by Washington."
"In the sixty's they gave out land but no loans or technical support. So what happened to the campesinos? The oil wealth never reached the campesino!................That can not happen again.....This is one of the principles enshrined in the revolutionary and Bolivarian constitution. But for this to work people need to get organised."


Ever since this day, private media companies in Venezuela and out side of Venezuela have been giving the Socialist government a tough time. There is no doubt that a lot of the influence is due to the corporations losing the control they had and were using their financial power to create propaganda that would finally remove the socialist government. (This still goes on today even after the death of Hugo Chavez).

On 11th April 2002, a coup was organised by the capitalist opposition to remove the socialist Chavez government from power. They succeeded temporarily, but Hugo Chavez was rescued by his own people and was back in power within 48 hours of the coup.

- Even though Chavez was jailed for his own coup attempt, years later he released the capitalist opposition who removed him temporarily from power, so that they would be allowed to oppose the socialist government in future elections! .......Yet the opposition party, private media and U.S. government still call this government a dictatorship!

So...What is it about the politics of Hugo Chavez that the Capitalists and most of the media appear not to like?
What is quite interesting about this is that if you watch TV coverage by the main stream media companies in Venezuela, the United States and Europe, -when dealing with issues to do with Venezuelas government, there is little information given to the public on what the policies of the government actually are! Generally it comes to a barage of personal abuse directed at his inteligence, or ridiculing of socialists or leftys. This implies that Chavez was not only a buffoon,but any one who had or has any similar ideas about how to run a country was also stupid or had issues regarding their mental stability..........In short......To all who may be watching.....Capitalism is the only way, so don't get any other ideas.............

So then.....The Venezuelan Socialist Government Policies.......

 These are the policies Hugo Chavez put into motion in a short after becoming president...

As well as renationalising the privately owned oil company which had been siphoning off the profits away from those 80% of the Venezuelan people who remained in poverty.......Despite Venezuela being the 4th largest oil producer in the world at the time!  Control of other privatised services was achieved and he took back control of Venezuelas biggest Bank.

Also...

1...........An increase in the minimum wage.
2...........Augmenting of teachers and doctors pay.
3...........Set up of a micro-credit programs.
4...........Formed a women's Bank.
5...........In 2001 there was a redistribution of land to the poorest farmers.
6...........There was a hand out of building materials and poor people were given land to build a home on.
7...........Troops have been repairing roads and painting apartment buildings when not required for military duties.
8..........The rights to fishing Venezuelas waters had been 'sold off'' to multinational companies by the previous capitalist government........Chavez took back those rights and gave local fisherman a right to make a living from their livelihood. Profits from fishing in Venezuela's waters now contribute more to the Venezuelan economy as over many capitalists/investors have been removed from the payroll of the industry. This also meant that fish became more affordable to the Venezuelan people.
9..........'Mission Guaicaipuro'..........A policy that aimed to protect indigenous peoples' livelihood, religion, culture and rights.......
10........An over haul of education and training. ...Chavez launched a number of 'missions' through 'active participation of the citizenry'.........
Mission 'Robinson' taught reading and basic numeracy. In 2003, one million Venezuelans were taught to read and write.
Mission 'Ribas' enrolled more than one million students who had previously been excluded from education.
Mission 'Sucre' is a Scholarship program for university education.
Mission 'Vuelvan Caras' provides vocational training for work.
11........Free health care for all Venezuelans, regardless of income was of major importance to Chavez. Mission Barrio Adentro was a scheme to provide health care to the poor who lived in the shanty shacks of the Barrios. Twenty thousand doctors, dentists and auxilliary staff came from cuba to provide the care in a deal which provided cheap oil to cuba.
12........Out side of Venezuela, Chavez also wanted to have a positive effect. Offering cheap oil to many of Venezuela's South American neighbours. Many of the Chavez policies have been taken on by governments across South America as they have deserted the capitalist regime which we have here in the U.K. and the United States for the kind of policies you see above.

So this is it......The policies that the United States doesn't like. From these policies the U.S. government have constantly referred to Chavez and the socialist government in general  as incompetent. The socialist government have been accused of being dictators. (Telling the private sector what to do.....is not dictatorship if it is what the voting majority wanted).

So why does the U.S. government continue to accuse this socialist government of being a dictatorship. Well one reason is probably to do with Venezuela's oil. If it was privately owned, the oil could be bought by the U.S. and feed profits to a capitalist system which may well involve U.S. financial businesses like Goldman Sachs and J.P. Morgan. One way of getting the oil privatised again would be to get the current government removed and put a capitalist leader back in charge. However, if this was the only reason, it would not justify the lengths that capitalists (with finance from the U.S. government) have gone to. 

This not just about a capitalist country that wants to exploit another country for it's oil. It's a capitalism / Socialism war. Few details of the policies of the socialist government of Venezuela have been broadcast on main stream television in the U.S. or the U.K. The reason behind the propaganda from capitalist sources being served up by all of Venezuela's private TC channels, as well as the BBC, CNN, FOX, etc, on the "DICTATORSHIP IN VENEZUELA"  is because this kind of government does not only pose a threat to the capitalist opposition party of Venezuela, but also to capitalism in general throughout the world........If socialism was to become popular throughout the world, which it is doing so across South America, despite the media cover up by the press and TV companies, the people who would have the most to lose would be those who rely most on capitalism. The U.K. and the U.S. have more capitalist type businesses as a proportion of their population than any one else in the world. Many private companies running services which could be renationalised if a socialist revolution took place around the world would be at risk and so would debt that they may owe to banks who may have lent that debt irresponsibly.

My conclusion is therefore that a capitalist propaganda campaign which has been going on for more than a decade is primarily to keep the capitalist financing system/ stock market system intact. 

Additional evidence to this is the way the U.S. government treats other socialist governments in South America such as Cuba. It's no wonder Chavez wanted to form a South American union! 

There has to be something very wrong with a system that is at risk from collapsing from mere democracy.
Viva Venezuela!
Viva the Socialists every where!

A documentary film was made about Hugo Chavez a few years back....Whilst it was being made he was removed by a coup by capitalists. He was rescued and reinstated as president within 48 hours. The film that was made has now been renamed....."The Revolution Will Not Be Televised."
I'm sure it could be a block buster film but many organisations have tried to prevent it's distribution. This includes a trading standards regulator in the U.K. You can get it from the Venezuelan Solidarity Campaign. There is also a book about the making of the film,"Chavez:the revolution will not be televised; A case study of Politics and the Media."    .....The film you really must see. It will open your eyes to what is really going on in the world!

    

Yet More Hypocrisy from the U.K. Chancellor.....'Pay Day Loan' Firms to Face Interest Rate Restrictions in New 'Banking Reform Bill'.

It's five years since the beginning of the financial crisis yet we are still having to listen to politicians talking about new 'banking reform bills' to be brought in. Makes you think, 'What the hell have they been doing up until now?'

A month ago parliament discussed bringing in a new interest rate cap for high street 'Pay day loan' anbd money shops, etc. But then backed out of it. It is now back on again as part of apparently a new 'Banking Reform Bill'. So when a cap is likely to actually go into effect is any one's guess. Unfortunately there are a few things clouding the issue for George Osborne, which is for sure delaying any necessary actions......

To start with, these loan shops don't collect savings deposits, so they are taking investment from financial institutions and borrowing money from the big banks for their needs. The loan shops are now big business for the banks. If you think that George Osborne is going to make the banks lose out on business at the expense of a million poor people, you probably need to look a bit more deeply into Tory policies and the way the lobbying system works.

High streets of most towns are littered with these eye sores. Any new major regulations could see some of them closing. But I just don't see the new regulations being stringent enough to do this. A month ago there was all kinds of talk about how the costs of borrowing would be reduced , but then at the last minute, George Osborne backed out of the interest rate cap issue............

We don't hear much about the problems these businesses cause, but that is obviously because they are under protection of the finance industry. This means the media doesn't give them too much of a tough time. The media generally doesn't go into much detail on the effects the financial system is having on individual people. You can find the reasons for this in other posts in X-ECONOMICS.

The fact is that when people use these loan shops, other out standing debts they may have for example on credit cards becomes a much higher risk. If some one borrows some money  from a loan shop because they are near their credit card limit before Christmas and then struggles to pay that money back the problems on all those debts escalate. Before long, bankruptcy may seem the easiest way out. This happens to many people and is costing us all a fortune. This is because that people defaulting on credit is more of a problem for the public than the finance industry, as the finance industry simply removes the risks of these debts from themselves onto investments which they sell. Pension funds get hit hard by this. It is an abuse of savers by the banking industry. An abuse, that unless people spread the word, many will be unaware of what is happening to their pension fund whilst they pay into it every week..........
.................If it wasn't for this unloading of risk by the financial system, we wouldn't have our high streets littered with money shops and pay day loan shops!

If the financial system had to pay for the economic problems these high interest lenders cause, we wouldn't be in this situation. The lenders wouldn't exist. If in any doubt about this, may be you should compare the return you are receiving on your pension, as compared with a top banker's wages and bonuses!
......................Now it's all beginning to make sense, isn't it..?... !....

Whilst George Osborne beats around the bush on whether to enforce a new interest rate cap on pay day loans, the bank of England still claims that the Bank of England base interest rate being kept low is to help the economy.........?

Slightly sceptical about this to say the least............-For the reason that, if the government really cared about the economy, they would have restricted the interest rates on pay day loans long ago....-You see, the governments policies just don't add up..........Low base interest rates are not to help the ordinary people. They are due to a vested interest of the government.

Helping let's say, middle income people with their mortgages, whilst at the same time letting slightly less well off people be crucified by unregulated landlords who have no restrictions on the rent they charge (....and no restrictions on pay day loan companies they may use!) seems hypocritical. The fact is there are other reasons why the base rate is kept low, and it nothing to do with ordinary people. It's all to do with the financial industry and stock markets. For example preventing corporations involved in buyouts from collapsing under irresponsible debts and conveniently keeping down the national debt interest rate low!

................This is evidence that the government policies on the whole are based on the success of the stock markets and finance industry as opposed to the ordinary people. Irrespective of their claims.............. But what is most annoying is those supposedly clever people on the BBC will never expose the gaping holes in the logic and claims of the government, whilst they obviously continue to mislead the majority of the public!
.

The Legacy of 'Private Equity Businesses' on our Public Services and Businesses.

Many private equity businesses have been linked with the loading of debt and the resultant collapse of many important businesses.....Although the collapse of Petroplus, Southern Cross Care Homes and Comet and many other companies reached the media and their stories are common knowledge throughout the U.K., I don't think we have actually been given the full story of what has happened to these and many other companies that are no longer with us.
.......X-ECONOMICS has previously posted articles on Petroplus, Southern Cross and Bain Capital.

Bain Capital, a company that was formed by Mitt Romney has bought the U.K.'s Blood Transfusion Service which includes the freely donated blood of British people. But what you may not have heard through the usual media is that 22% of businesses invested in actually collapse once Bain Capital have invested in them! Yet our government has given the go ahead for Bain to buy our blood service under the 'Section 75 Reforms' which is actually privatisation of the vast majority of the NHS even though David Cameron continues to deny that the NHS is being privatised. The businesses that have collapsed under bain I have suffered under typical abuse which has become customary by such equity companies. A combination of loading of debt, job cuts and asset stripping!

Many health and pharmaceutical type businesses that Bain has controlled are now bust. But of course the media generally doesn't blame the management of these equity companies.
.......They get to run these companies not so much because they have some rare genius ability to run these companies, but because of their relationship with people in control of stacks of money such as pension funds, banks and Insurance companies. This simply gives them overwhelming power to buy control of these businesses, regardless of their qualifications or any training that would be expected for some body to merely work for the company!

-What businesses like Bain Capital and Blackstone do is based around investments and return on investments.-It doesn't have quite as much to do with the hands on running of the company as the media would have you believe.-Much of what they do isn't particularly clever. Much of it involves cost cutting which gives short term returns, but damages the long term prospects of the company.

To give an example, lets take Blackstone Capital. One of the worlds most successful Private Equity Companies. The people working for Blackstone no doubt have economics, finance and business qualifications but these qualifications are a total waste at Blackstone Capital. This is what happened to Southern Cross. Until it's collapse, it was the U.K.'s largest care home operator. Looking after thousands of elderly and disabled people..............
................Having acquired a number of care home businesses and bringing them under the umbrella of Southern Cross Health Care, the management decided to take every property which the business owned and sell it off for cash! All the property was sold to other similar investment businesses, who lets be honest, were not buying them so they could contribute to helping the old and disabled, but to get their own return!
-Seeing as tax payers are paying much of these costs through benefits, and many elderly are funding their care through selling their own homes, you can see why the property of Southern Cross Health Care was in big demand from investment businesses, hedge funds, other private equity companies etc....-So the property was all sold.........
...............Some years later, the business collapsed under debts. Blackstone blamed the new landlords of the properties they had sold for demanding rent that was at to high a rate! -They also blamed problems within the economy. But the economy wasn't the cause. The cause was to put it politely incompetence by Blackstone. Or maybe less politely, it was caused by the typical short turmness of the strategies of these investment businesses. When they put the cash from the property sales into an off shore bank account, they surely knew that the selling off of all the property would be damaging to Southern Cross Healthcare, in the long term.

One of the problems which encourages bad decision making from private equity firms and other similar investment companies is that they don't have to make a success out of a company to make money for their own equity company. They will make money regardless. Private Equity firms and banks still make money even though investments may appear to fail! One reason contributing to this is that private equity firms charge their investors a percentage of their investment, whether it is successful or not. Private equity companies have been known to lose an investors cash in full, and then send them a bill for their services as their is nothing left of their investment to take commission from! The basic costs of wages and running costs of offices are paid for not by the businesses they are seen to be running but by their investors. And this creates a clear problem. These businesses that are run by private equity firms do not have to be treated as a sacred commodity. In fact what happens is the opposite. The business is not treated as a valuable commodity at all. It's treated as a cash cow for short term gains!

When Permira bought the AA, the UKs largest motorist's break down service they immediately sold off all the break down trucks. After they were all sold for cash, whenever they needed a break down truck, they had to hire one from a private owner. This is just like Blackstone selling their care home properties off to landlords.The result is exactly the same. The private equity company receives a bundle of cash, but then has to pay a higher cost out to rent back what they have just sold off. Selling off your own home and renting it back could seem a good idea while your spending the money from its sale on holidays and luxuries. But you know the day will come when you won't have the money to pay the rent. It has short term benefits. But at the cost of long term sustainability!

Okay, so the AA hasn't gone out of business. Well that was always unlikely due to domination the organisation has in it's market. But the charges to customers have risen substantially. Many customers only being able to afford for a tow service to the nearest garage, where as before the buyout by Permira, the price for home relay, that is towing you to where ever you are going in the country, or all the way home was affordable for most. The price for that service is now substantially higher than back in the pre-Permira days. You have to also bare in mind that as time has gone on , vehicles are more reliable and break down less often, which should reduce the rate that costs rise.

When Boots was bought Kolberg Kravis Roberts, they opened opticians in the stores, but made their own rules on the eye tests that had to be taken. Charging many contact lens customers for two tests when only one was required by regulations. KKR have since bought up other competing opticians like Dolland & Aitchson who are now operating under the same rules as the Boots Opticians. Costs for eye tests have risen significantly since. The Merger & Acquistion Commission supposedly made an inquiry before Boots took over Dolland Aitchson, but as usual in these cases, it was allowed to go ahead. Boots still forces clients to take tests that are not required by any health regulator, but they still tell customers that they are acting on regulations.

Riverstone and Carlyle, both private equity companies were involved with petroplus, the oil refinery company before it collapsed. There were a number of problems that contributed to its collapse. First was debt. Private Equity companies are all about debt. Riverstone and Carlyle own masses of businesses and property portfolios around the world. Todays figures would probably be in excess of $170 Bn between them in investments! These businesses invest money mostly in established business and property. They don't actually create very much themselves. If you was to kind of compare them to a private landlord of domestic homes, Riverstone and Carlyle (Like KKR and hundreds of others like them) are really most accurately described as.....'Landlords of Businesses'........They buy a business just the same as a landlord would by a property....With usually around these days 75% borrowed money!

Petroplus bought up existing refineries around Europe, all with borrowed money. Even though they may have been originally financed via Riverstone or Carlyle, it is not Riverstone or Carlisle who will be responsible for the debt their after. The oil refinery business of Petroplus will be responsible for the debt. (If debts are loaded onto a business by a private equity firm, the business-not the private equity firm is at risk of collapse.-But if the business invested in does collapse, banks who provide the finance to the private equity firms will be 'bailed out' by the pension funds investing in the private equity firms!). So when these private equity firms buy up businesses, they often put the businesses they buy at substantial risk......Whilst risking little themselves.-...because it is the investors into the pension funds investing in the private equity firms that will be at risk.-...These pension funds are used to guarantee any funding from banks, so the banks are at little risk whilst taking part in these deals. The petroplus story is very complicated. To be honest it has probably been made more complicated in order to prevent people from knowing what was going on with the company. For example, petroplus set up it's own finance company....Petroplus Finance Ltd........... which could issue bonds for Petroplus through an investment bank! It was non payments on interest on 7 year bonds which brought in the administrators. Also Petroplus Finance was charging financial services to Petroplus even whilst Petroplus was losing money. (Petroplus Finance could profit whilst actually adding to the debts of Petroplus. If you set this up knowingly it would be the big F word and because it issued some billions of dollars in bonds, this was probably a likely scenario)........Also conveniently, Petroplus finance was based off shore I, think in Bermuda where profits tax free, but also accounts can be kept secret.........I wonder why they might want to do that?

Any way, the point of this post........
For people to understand the real effects that the private equity firms have on all our lives. They are involved in all types of businesses. Britain and the U.S. again have been leading the world in private equity business, with the U.S. pretty much dominating the world.

The financial press and media give them far too much respect. I don't mind if they have done something comendable, fine report it. But they don't report the other side. The examples above are just a few old examples of how thes businesses operate. Often you will about how prices are rising. Rising costs are blamed. The economy is blamed. All too often I hear of extortionately rising prices for a type of business only to find that business and possibly it's associated has been taken over by a private equity company/companies......But the financial press turns a blind eye........Because private equity is good business for the financial industry........................................Just like a blind eye is turned to the private landlords who have been buying properties for years, whilst rents have had to be paid by the tax payer where a tenant has become unemployed!.......Or in fact in reality has been added to the national debt............................Irony?......................Or is it that the ability of the financial system to make money from undermining the economy is actually a higher priority than getting the national debt under control ???!
                                     ...............The picture becomes clearer day by day by day............