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Bloomberg’s Hit Job on Venezuela – and Me
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I just had a disastrous and embarrassing interaction with Bloomberg, and feel that I was ambushed and sandbagged by having my comments taken out of context in a hit piece Bloomberg’s journalists wrote on Venezuela – evidently trying to distort my own views in a two-for-one job.

On Monday, March 27, I received a message from a Bloomberg reporter asking me about a very nice compliment that the President of Venezuela and Secretary General of the Non-Aligned Movement, Nicolás Maduro, had said about me:

I was reading one of the greatest American economists, Michael Hudson, I don’t know if you know him, I recommend reading his work. He is an economic thinker, worked as an economist for a long time on Wall Street, knows this world very well, and has been insisting on the need for construction of a real economy. He’s been alerting for a long time through conferences, writings, books and interviews of the danger that the world has, because he says in his research that of every $20, $19 arise from the speculative economy and only $1 arises from the real economy.

More than 90% of the country’s economic apparatus is in the hands of private companies.

The reporter, Christine Jenkins, asked if I knew President Maduro or could explain what he found of value in my writing. I said that I thought he probably was referring to my discussion in Killing the Host of a September 2014 Harvard Business Review article by William Lazonick, “Profits without Prosperity,” calculating that for the decade 2003-2012, the 449 companies publicly listed in the S&P 500 index spent only 9% of their earnings on new capital investment. They used 54% to buy back their own stock, and 37% to pay dividends. I told the reporter that I thought the President’s point was that the financial sector was not financing capital formation and employment to increase output.

I told her that I had not followed Venezuela’s economy closely in recent years. I did say that I had discussed how Argentina and Greece were subjected to austerity as a result of foreign debt, and my belief that no sovereign nation should be obliged to impose austerity on its population to pay foreign bondholders. That has indeed been the problem confronting Latin America for decades, and is a central theme of all my books since Super Imperialism in 1972.

And to cap matters, of course, U.S. foreign policy has mobilized the World Bank and IMF to back creditor interests, foreign investment and privatization – while isolating countries from Cuba through Venezuela (and now Greece) to demonstrate that neoliberal diplomacy will make such a country a pariah if it makes a serious attempt to oppose austerity and financialization.

Apart from that, we had no substantive discussion. The reporter ran down some recent economic facts about Venezuela’s economic crisis, and I replied to the effect that it sounded like a real quandary. She said that the country looked like it was straining to pay its foreign debts and might soon default. I replied with the same advice that I had given Greece: If you are inevitably going to default on sovereign debt, it’s best to stop paying now and keep what foreign exchange you have, and try to renegotiate the debt to bring it within the ability to be paid. Otherwise, you will end up suffering the legal tangle of default, but be stripped of funds needed by the domestic economy to survive.

I said that I didn’t have a solution to this problem. I haven’t studied the legal status of Venezuela’s foreign debt, or what alternatives the government might have had open to it in the face of strong opposition from its domestic oligarchy as well as foreign pressure.

The reporter, Christine Jenkins, said that she would read my books to see how they might have attracted the attention of President Maduro. On Wednesday, she got back to me, and said that she was going to write up an article for Bloomberg.

I asked for a copy, and she wrote back that “Hi – so we actually aren’t allowed to send articles before publication!” That’s what raised a red flag in my head. My impression is that every serious reporter checks back with his or her source to ascertain that the report is accurate. This seems to be basic journalistic ethics.

The article was to appear at 6 AM Thursday morning. She tried to allay my fears by telling me “a little bit about what it says … we make it very clear that you don’t consider yourself a Venezuelan expert, like you said, but that if the government sees that default is inevitable, that its better to get it over with. We mention your recent book, and also that Killing the Host is the one that probably got Maduro’s attention. And we talk about how you’ve gotten an international following, advising some governments, but the one thing I wanted to give you a heads up about is that we call you a somewhat obscure economist – and I hope you agree that’s fair, that you’re definitely not in the mainstream, not a household name, and like you talked about your area of coverage not being taught at the typical universities, etc.”

But by noon I still had not received a copy. I asked for it, and when I got it, it was nothing at all like what I had said. It made me appear to be criticizing Venezuela’s politicians and, by implication, President Maduro. But at no point had I criticized Venezuela’s attempts at reform. Rather, I had criticized the problem of neoliberal opposition to countries trying to uplift their populations along the lines that Venezuela had done, using debt leverage to force countries to impose austerity. It looks to me like Venezuela is getting the “Greek treatment.”


I was appalled to find the article a hit-piece on Venezuela, and to make me appear to criticize President Maduro by implying that the country is not helpable. I never said that I was not “a fan of the socialist leader.” I applaud his attempts to maneuver as best he can within the corner into which Venezuela has been painted. I did indeed repeat the headlines of the day – that the country “has entered a period of anarchy.” There were riots going on, and a constitutional crisis led to the Supreme Court suspending its congress. That wasn’t a criticism, just my “umm-hmm” comment on what the reporter was telling me about the situation.

Venezuela has made herculean efforts to pay its bondholders in recent years. This has been a political decision to avoid the even deeper problems that default would cause. I’m in no position to second-guess President Maduro or other Venezuelan policy makers. They’ve probably steered the best course available to them – bad as all the choices are.

The article concluded that I would “be disinclined to add an advisory role to his busy schedule if asked to.” That’s not my language. I said that I hadn’t been following the situation and have hardly spent any time in Latin America. Of course I would help in any way that I could, if asked.

The real damage came from the right-wing paper Caracas Chronicles, which did a guilt-by-association attack piece by Jose Gonzales Vargas, “Hudson on the Guaire.” Asking rhetorically “Who the hell is he?” the article identified me with

“anti-establishment outlets across the political spectrum like CounterPunch —who not long ago was posting apologetic pieces on chavismo − and Zero Hedge, which … was called by a former contributor a cheerleader for “Hezbollah, Tehran, Beijing, and Trump.” Speaking of things that may be linked to Russia, he has also been on RT a couple of times.”

I have never written for Zero Hedge, although they sometimes reprint articles that I publish on Naked Capitalism and CounterPunch. The nasty quip about being “a cheerleader for “Hezbollah, Tehran, Beijing, and Trump” was not about me; it was written by a Zero Hedge member who was criticizing his own publication when he left it.

Neither publication noted that I’ve written numerous op-eds for the Financial Times, the New York Times, 3 cover articles for Harpers, and have been featured on the BBC and on Bloomberg radio.

The kicker of the article was its last sentence: “Well, at least they’ve still got Weisbrot and Ciccariello-Mahler and those Podemos guys. They would never turn against the Bolivarian revolution, right?… Right?

The implication is that I’ve broken ranks and that “the left” is turning against President Maduro. For my part, I can’t think of a better advisor than Mark Weisbrot. I have no advice to give Venezuela in its current economic straits that its leaders have not already thought of. But of course I would like to help if asked. As I wrote to the Bloomberg reporter after reading her story: “The problem is that I AM sympathetic with the AIMS of Chavez etc. The problem is the hostility all around him that is undercutting the economy. That’s what makes the problem insolvable.”

None of my beliefs are what Bloomberg and Caracas Chronicles implied.

Michael Hudson is the author of Killing the Host (published in e-format by CounterPunch Books and in print by Islet). His new book is J is For Junk Economics. He can be reached at [email protected]

(Republished from Counterpunch by permission of author or representative)
• Category: Economics • Tags: American Media, Neoliberalism, Venezuela 
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  1. tom... says:

    That’s why whenever anyone asked being interviewed by professional lying propagandists, you always mention that you’ll do a recording the interview as well. Then we’ll see if they still want to do the interview.

  2. Agent76 says:

    Mar 11, 2017 VENEZUELA INFLATION JUMPS 741% Total Currency Collapse Inevitable

    Venezuelan consumer prices rose 700 percent while the economy contracted by 18.6 percent, according to preliminary central bank figures seen by Reuters, the sharpest contraction in 13 years and the worst inflation reading on record.

  3. FKA Max says:

    These types of tactics by the media don’t surprise me in the least, taking into consideration the following:

    According to Dutton, the ten careers that have the highest proportion of psychopaths are:[11]

    1. CEO
    2. Lawyer
    3. Media (TV/radio)
    4. Salesperson
    5. Surgeon
    6. Journalist
    7. Police officer
    8. Clergy
    9. Chef
    10. Civil servant

    Surprise! What jobs have the highest number of psychopaths?

    Dr. Kevin Dutton, Research Psychologist-Oxford University, joins Thom Hartmann. When you hear the word psychopath – what do you think of? Probably some brutal serial killer that was out of his mind – right? But – what if I told you that psychopaths that can function at extremely high levels – and succeed in all levels of society? If you think that psychopathic tendencies and success have nothing in common – then everything you know is wrong!

  4. You didn’t know that Bloomberg is an enemy of Maduro? Well now you know. And now you are collateral damage.

  5. When I was a new reporter, I still recall the editor standing before the huge picture window of the paper’s newsroom overlooking the city, arms akimbo, and declaring, “I tell people what to think.”

    The only folks who believe in media accuracy are those who’ve never been interviewed and then had to read afterwards what they never said. A lot of publications don’t exist to serve the truth, but to misrepresent it to the public in the interest of their owners. As more and more those interests diverge, the more official fake news can be expected to be served up.

    • Replies: @Jus' Sayin'...
  6. no sovereign nation should be obliged to impose austerity on its population to pay foreign bondholders

    This point cannot be emphasized enough.

    The way I see it, if bankers/bondholders continually give loans to bad credit risks, then that’s on them; they shouldn’t be able to have governments or international institutions act as their mafia style debt collectors. Creditors nowadays want all of the interest and rents, but without any of the risk that financiers should be obliged to assume.

    Michael Hudson’s Killing the Host radically changed the way I view debt and responsibility. He’s a brilliant economist, so shame on Bloomberg for this smear.

  7. Hibernian says:

    “Venezuela has made herculean efforts to pay its bondholders in recent years.” Somehow these don’t include allowing producers to produce.

    • Replies: @Jus' Sayin'...
  8. Svigor says:

    Hibernian: yeah not being socialist would seem like a good start on not economically collapsing.

    That’s why whenever anyone asked being interviewed by professional lying propagandists, you always mention that you’ll do a recording the interview as well. Then we’ll see if they still want to do the interview.

    Record everything, not just the interview. When a reporter calls and asks for an interview, say you’ll call right back. Start recording, call right back. After pleasantries, say you’re recording. Don’t turn the recorder off until the reporter hangs up. If the reporter doesn’t say goodbye before hanging up, consider adding a “well, that was odd, he didn’t even say goodbye before hanging up” before ending the recording. In other words, get as much on tape as possible. This will make “hostile edits” and cheating much more difficult, because you’ve recorded what sounds like an entire conversation.

    Most journalists are professional liars, that’s their job, so it’s best to be cautious.

  9. @Bay Area Guy

    Then the solution is simple: Venezuela tells its bondholders that the debts will not be repaid. This is never done of course, because then Venezuelan politicians wouldn’t be able to get the loans to buy the votes which keep them in power. And the people vote for benefits well beyond their society’s capacity for that level of public spending.

    What Venezuela needs is a Pinochet, but I think all the Pinochets have left.

  10. @Bay Area Guy

    What actions by institutions or foreign governments to help private lenders recoup their losses from defaulting governments do you have in mind? Isn’t the key source of pressure just the knowledge that if they don’t pay interest and principal on their current loans they won’t be able to borrow in future, at least not at acceptable interest rates?

    • Replies: @Bay Area Guy
  11. Tulip says:

    The Mainstream Media will never let the truth get in the way of a good story.

  12. @Fran Macadam

    I still remember the brief period back in the early 1990s when I was working in an area of some public interest and I’d regularly receive calls from NYT reporters seeking to interview me on related topics.The calls invariably degenerated into a contest in which the reporter would try to get me to utter a soundbite supporting the NYT’s editorial stance and I would artfully dodge his efforts and present an informed and nuanced picture. I never was quoted in the Times and eventually the calls stopped coming. My conclusion from this experience and more general observations is that all the “experts” one sees interviewed in the fake news MSM are publicity whores to one degree or another.

  13. @Hibernian

    Chavez began his Bolivarian Revolution by driving the managers, engineers and technicians who managed the country’s petrochemical industry into exile and replacing them with incompetent political cronies. He compounded this by totally neglecting maintenance and capital improvement in this industry, diverting petrochemical profits and raiding surpluses to fund massive handouts to supporters of the Bolivarian Revolution.

    As oil revenues declined, Chavez and later Maduro imposed price and production controls on other sectors of the economy to keep the gravy train running for their political supporters. These sectors collapsed in turn. Venezuela, which once easily fed its own population and exported meat and dairy products, is now slowly starving to death. You don’t need a degree in economics or any fancy financial explanations to figure out what happened and what’s needed to fix the problem.

    Repudiating the national debt will not solve the underlying problems which were created and are being maintained by Chavez’s and Maduro’s insane economic policies. Augusto Pinochet and Milton Friedman solved worse problems in Chile with a simple application of Adam Smith’s economic insights.

    • Replies: @Albertde
  14. Albertde says:
    @Jus' Sayin'...

    Pinochet in Chile solved his problems by killing everyone who disagreed with him, including opponents who had gone into exile. Milton Friedman is one of those economists who exist to give false intellectual arguments in support of the 1%. I suggest you rest Michael Hudson’s books.

  15. Albertde says:

    Should be “read” not “rest”

    • Replies: @Ivy
  16. FKA Max says:

    In the American experience, increased financialization occurred concomitant with the rise of neoliberalism and the free-market doctrines of Milton Friedman and the Chicago School of Economics in the late Twentieth Century. Various academic economists of that period worked out ideological and theoretical rationalizations and analytical approaches to facilitate the increased deregulation of financial systems and banking.

    After all, who owns stocks and bonds?

    Jewish people stood out in a third trajectory in which people invest early in life in high-risk, high-return assets such as stocks and bonds and build wealth quickly while putting less emphasis on homeownership. About one-third of Jews followed this path, compared to no conservative Protestants, 7 percent of mainline Protestants and 4 percent of Catholics.

    Capitalism, Socialism, and the Jews

    Uploaded on Nov 23, 2009

    Why have the Jewish people, who seem to have benefited greatly from capitalism, contributed disproportionately to socialist literature? Although the question remains unanswered, Dr. Milton Friedman, a secular Jew himself, offers some fascinating observations.

  17. Ivy says:

    Hudson might even say “The defense never rests”, at least relative to his ideas.

  18. @Albertde

    Allende turned Chile into an economic basket case just like Chavez/Maduro did for Venezuela. When Pinochet took over Chile was not in quite as bad shape as Venezuela is now but only because Allende had far less time than Chavez/Maduro to destroy his country’s economy. After Pinochet took over and invited Friedman to reform the country’s economic system Chile became for a while South America’s economic powerhouse. After Pinochet’s overthrow later Chilean governments became more left wing and the economy started faltering again. There’s a pattern here for those with the intelligence to see it.

  19. @Wizard of Oz

    What actions by institutions or foreign governments to help private lenders recoup their losses from defaulting governments do you have in mind? Isn’t the key source of pressure just the knowledge that if they don’t pay interest and principal on their current loans they won’t be able to borrow in future, at least not at acceptable interest rates?

    My stance is that bankers who make bad loans shouldn’t be coddled and bailed out by the government. Before issuing any loans, they should thoroughly vet prospective borrowers. There’s a reason why banks – who presumably know how to allocate credit to the most deserving recipients – can charge higher interest rates while regular people like me who deposit money in banks hardly get anything back. Any of us could be professional bankers if we could lend money with reckless abandon and then have governments strong-arm debtors into paying us back.

    Therefore, to answer the part of your question that I bolded, I think that countries with bad credit should simply have a harder time procuring loans (or loans with lower interest rates). If creditors are always issuing loans to people (or nations) who don’t pay them back, then maybe they don’t belong in that line of work.

    • Replies: @Wizard of Oz
  20. And that’s why we read the Unz Review and not fake news purveyors like the NYT, the WaPo, Bloomberg, CNN and so on.

  21. @Bay Area Guy

    Setting aside how much banking executives are paid and the parallels that can be made to respectable enough insurers who relate premiums to risks and to bookmakers who try to balance (“make”) their books I do see the point of the banks, who I want to be able to pay me secure interest on my deposits and dividends on my shares, to that end, assessing the risks as well as they can and charging more on small business overdrafts than on loans to Exxon or well secured home mortgages in Florida. I would direct my criticism to the heavyhitters of the EU (especislly the EZ) forcing years of poverty on the Greeks – beyond what they “deserved” according to democratic theory – so that French, German and perhaps Dutch banks didn’t have their shareholdera equity wiped out and their bondholders forced to suffer losses.

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