Arabia & the West: Painful Lessons from Media History

In the solid “The Arab Spring and the West: Seven Lessons from History,” The Guardian‘s Seamus Milne reaches into the British Pathe News Video Archive to recall the oil-dependent fundamentals of West-Middle East Relations.

1) The West never gives up its drive to control the Middle East, whatever the setbacks.

2) Imperial powers can usually be relied on to delude themselves about what Arabs actually think.

3) The Big Powers are old hands at prettifying client regimes to keep the oil flowing.

4) People in the Middle East don’t forget their history – even when the US and Europe (conveniently) does.

5) The West has always presented Arabs who insist on running their own affairs as fanatics.

6) Foreign military intervention in the Middle East brings death, destruction, and divide and rule.

7) Western sponsorship of Palestine’s colonisation is a permanent block on normal relations with the Arab world.

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Varoufakis on the Limits of Probability Mathematics, Conservative Orthodox Economics

“In a masterpiece entitled Science and Method, Henri Poincaré had warned back in 1914: ‘Probability is the opposite of certainty; it is thus what we are ignorant of, and consequently it would seem to be what we cannot calculate. . . . Among the phenomena whose causes we are ignorant of, we must distinguish between fortuitous phenomena, about which the calculation of probabilities will give us provisional information, and those that are not fortuitous, about which we can say nothing, so long as we have not determined the laws that govern them.’ In short, no one can possibly claim to know the chances of a financial crash while ignorant of its underlying causes.

How then did the economists convince the world, and the Nobel committee, that they could estimate the probabilities of events that their models assumed away not just as improbable but, in fact, as untheorizable? The answer lies more in the realm of rhetoric and psychology than in economics itself: they relabeled ignorance and marketed it successfully as a form of provisional knowledge. For instance, when unemployment seemed stuck at, say, 5%, and economists had no plausible explanation to offer, they called it “the natural rate of unemployment.” No need to explain it — it was “natural”! Or when they could not explain the deviations of human behavior from their predictions (e.g. in laboratory experiments), they (a) labeled such behavior “out-of-equilibrium strategies” and then (b) assumed that such behavior is random and “explainable” in the manner physicists describe white noise.

This thinly veiled form of intellectual fraud (i.e. the whole of what passes today as modern economic analysis) provided the “scientific” fig leaf behind which Wall Street tried to hide the truth about its “financial innovations.” The basic truth that Poincaré had exposed being willfully ignored, the three decades that led us to the Crash of 2008 coincided with the rise of a Holy Trinity that permeated all economic wisdom: the Efficient Market Hypothesis (EMH), the Rational Expectations Hypothesis (REH), and the so-called Real Business Cycle Theory (RBCT): impressively marketed theories whose mathematical complexity succeeded for too long in hiding their feebleness. Let’s take a glancing look at each one:

EMH: Financial markets contrive to ensure that current prices reveal all the privately known information that there is. In effect, no one can systematically make money by second-guessing the market. Some market players overreact to new information, others underreact. Thus, even when everyone errs, the market gets it “right.”

REH: No one should expect a theory of human action to predict well in the long run if it presupposes that humans systematically misunderstand that very theory. Sounds good, doesn’t it? A bullet between the eyes of patronizing social theorists who believe that they are closer to the truth about your behavior and mine than we are. Ay, there is the rub, for behind the façade of an anti-patronizing hypothesis lies a seriously insidious assumption: when people predict some economic variable (e.g. inflation, wheat prices, the price of some share), their errors are random — untheorizable, unpatterned, uncorrelated.

It only takes a moment’s reflection to see that anyone espousing EMH and REH cannot possibly expect recessions, let alone crises. Why? Because recessions are systematic events. However surprising when they hit, they unfold in a patterned manner, each of its phases being highly correlated with what preceded it. So, how does a believer in EMH-REH respond when her eyes and ears scream to her brain: Recession, Crash, Meltdown? The answer is: by turning to RBCT for a comforting explanation. So, here it is:

RBCT: Taking EMH and REH as its starting point, the theory portrays capitalism like a well-functioning Gaia. Left alone it will remain harmonious and never go into a spasm (like that of 2008). However, it may well be “attacked” by some “exogenous” shock (coming from a meddling government, a wayward Fed, heinous trades unions, Arab oil producers, aliens, etc.) to which it must respond and adapt. Like a benevolent Gaia responding to a large meteor crashing into it, capitalism reacts efficiently to exogenous shocks. It may take a while for the shockwaves to be absorbed, there may be many victims on the way but, nonetheless, the best way of handling the crisis is letting capitalism get on with it, without being subjected to new shocks administered by self-interested government officials and their fellow travelers who pretend to be standing up for the common good.

In a sense, each of the three hypotheses is a different incarnation of a touching faith that markets know best, both at times of tranquility and in periods of crisis. You and I may think that this is just madness, but it is a lot more than that. At the political level it is the rationale behind powerful forces ranging from the Tea Party to the Bundesbank, from the UK coalition government’s self-imposed austerity to the austerity imposed upon the Greek government by the IMF-Eurozone-ECB troika. This dangerous self-delusion is founded on a hidden analytical bond: each tentacle of the EMH-REH-RBCT nexus presupposes that for the price of every different type of financial asset there exists (what statisticians refer to as) a unique sufficient statistic. One that the market converges toward, albeit in a noisy manner. But, as Poincaré knew, it is pure folly to presume that such unique statistics exist without first having established the laws that govern the determination of prices. And since in capitalist societies these laws are radically indeterminate, the very foundation of the EMH-REH-RBCT nexus is rotten to the core.

Anyone who brings a fresh pair of eyes to the EMH-REH-RBCT nexus should arrive very quickly at the firm conclusion that it is a childish theory upon which to found an analysis of capitalism. And yet it condemned a whole generation of economists to thinking of the most complex, disintegrated, precariously balanced period in the history of capitalism, the 1971-2008 period, as the era of an equilibrium-bound Gaia gallantly and successfully working out of its system all externally induced non-economic shocks.”

Varoufakis, Yanis. 2010. “The Econobubble Revisited.” MRZine, October 26.

Varoufakis continues on to describe how this piss-poor “science” was widely marketed because it supported the US’s post-1970 political-economic strategy of expanding budget and trade deficits, and paying for them with capital inflows from the rest of the world (see also Dumenil & Levy).


Luckily for us, Varoufakis is on a roll…

On Oct 23, 2010, Varoufakis gave a great radio interview with Doug Henwood on the current unfolding of the capitalist crisis.


On Oct 17, 2010, Varoufakis published (with a nod to Marx & more recently, Zizek) “First as History, Then as Farce: The Euro Crisis Revisited,” at MRZine.


Old Cold Warriors Don’t Die, They Just Become Pro-Tyranny Communications Professionals

And you thought, hoped, dreamed the Cold War was over. Well, not on the New York Times’ watch, baby.

The New Pravda (New York Times) published on November 24 a creepy Simon Romero “article” positively crowing over Chavez’s recent electoral losses to Venezuelan elites. Can the NYTimes not once tone down the overbearing propaganda on the subject of Chavez? Holy fucking shit. Pretend you’re not the Wall Street Journal. I know this junk is fed to you by your sanctimonious, over-entitled, Harvard-classmate Venezuelan elite buddies, but the professional communications on this matter is just really, really ugly. It is completely untrustworthy from any perspective other than that of a Shell shareholder or a 5,000 acre ranch-owning Venezuelan media tycoon. Think of your poor, educated middle class American audience, won’t you? Just a little, tiny bit of respect. Publishing such heavy-handed right-wing dogma makes your liberal postures on other issues look alarmingly superficial. Scratch under the surface of a liberal, and all of a sudden it’s Pinochet, Franco, and the Contras…and we’re waterboarding away!

Providing a bit of relief, constitutional lawyer-turned-journalist Glenn Greenwald dresses the NYTimes down a bit for some of this propaganda overkill in “Mumbai, the NYT’s revisionism, and lessons not learned” (Salon.com, November 28), as well as the NYT’s anti-law/pro-torture slant, in “How the media talks about torture and the rule of law.”

Economists Robert Chernomas and Ian Hudson (who co-authored “Social Murder,” a very readable analysis and critique of conservative economics, published out of Winnipeg by Arbeiter Ring Press) are soon publishing a contemporary-historical examination of the New York Times’ politics, featuring a look at the history of the NYT’s hoary verbal savaging of social democratic countries.

US oil capital to colonize European science

Adam, David. 2005. Oil industry targets EU climate policy. The Guardian, December 8.

Lobbyists funded by the US oil industry have launched a campaign in Europe aimed at derailing efforts to tackle greenhouse gas pollution and climate change.Documents obtained by Greenpeace and seen by the Guardian reveal a systematic plan to persuade European business, politicians and the media that the EU should abandon its commitments under the Kyoto protocol, the international agreement that aims to reduce emissions that lead to global warming.

The disclosure comes as United Nations climate change talks in Montreal on the future of Kyoto, the first phase of which expires in 2012, enter a critical phase. The documents, an email and a PowerPoint presentation, describe efforts to establish a European coalition to “challenge the course of the EU’s post-2012 agenda”. They were written by Chris Horner, a Washington DC lawyer and senior fellow at the rightwing thinktank, the Competitive Enterprise Institute, which has received more than $1.3m (£750,000) funding from the US oil giant Exxon Mobil. Mr Horner also acts for the Cooler Heads Coalition, a group set up “to dispel the myth of global warming”.

The PowerPoint document sets out plans to establish a group called the European Sound Climate Policy Coalition. It says: “In the US an informal coalition has helped successfully to avert adoption of a Kyoto-style program. This model should be emulated, as appropriate, to guide similar efforts in Europe.”

During the 1990s US oil companies and other corporations funded a group called the Global Climate Coalition, which emphasised uncertainties in climate science and disputed the need to take action. It was disbanded when President Bush pulled the US out of the Kyoto process. Its website now says: “The industry voice on climate change has served its purpose by contributing to a new national approach to global warming.”

In January Sir Robert May, the former government chief scientist who stepped down as president of the Royal Society last week, warned in the Guardian that US lobby groups with links to the oil industry were turning their attention to the other side of the Atlantic. He wrote that a “lobby of professional sceptics who opposed action to tackle climate change” were targeting Britain because of its high profile in the debate.

Countries signed up to the Kyoto process have legal commitments to reduce greenhouse gas emissions. Oil and energy companies would be affected by these cuts because burning their products produce most emissions.

The PowerPoint document written by Mr Horner appears to be aimed at getting RWE, the German utility company, to join a European coalition of companies to act against Kyoto.

The document says: “The current political realities in Brussels open a window of opportunity to challenge the course of the EU’s post-2012 agenda.” It adds: “Brussels must openly acknowledge and address them willingly or through third party pressure.”

It says industry associations are the “wrong way to do this” but suggests that a cross-industry coalition, of up to six companies each paying €10,000 (£6,700), could “counter the commission’s Kyoto agenda”. Such a coalition could help steer debate, it says, by targeting journalists and bloggers, as well as attending environmental group events to “share information on opposing viewpoints and tactics”.

RWE says it met Mr Horner earlier this year but that they have not taken the idea forward.

In the email, dated January 28 this year, Mr Horner describes Europe as an “opportunity”. He says it “would be like Neil Armstrong, it’s a developing untapped frontier”. He adds: “US companies need someone they can trust, and it’s just a den of thieves over there.”

false "intelligence" in vietnam war too

From Shane, Scott. 2005. “Vietnam war intelligence ‘deliberately skewed,’ secret study says.” The New York Times, Friday, December 2.

In 1964, the National SecurityAgency (NSA) told officials and the public that North Vietnamese ships had attacked American destroyers in the Gulf of Tonkin. Immediately, on August 4, 1964, President Johnson authorized airstrikes to “retaliate” for the “attack”. This expanded the American commitment to the Vietnam War.

The 1964 Gulf of Tonkin incident never happened.

We do not yet know who engineered or authorized the false Gulf of Tonkin story.

NSA historian Robert J. Hanyok’s research uncovered the lie. “The overwhelming body of (intelligence) reports, if used, would have told the story that no attack had happened,” his 2001 study finds. “So a conscious effort ensued to ‘demonstrate’ that an attack occurred.”

Many of the NSA’s 30,000 employees had not considered the release of false intelligence ethical, and when historians submitted a Freedom of Information (FoI) request to see Hanyok’s study in 2003, the NSA worked to make the study and the research documents available to the public. They are now available at http://www.nsa.gov/vietnam/index.cfm.

WalMart’s Propaganda Machine

Edited from:

November 1, 2005. Barbaro, Michael. “A New Weapon for Wal-Mart: A War Room.” The New York Times.

BENTONVILLE, Ark., Oct. 26 – There is a stuffy, windowless war room inside the headquarters of Wal-Mart, the giant discount retailer that hopes to sell a new, improved image to reluctant consumers.

Wal-Mart is taking a page from the modern political playbook. Under fire from opponents who have hammered the retailer with criticisms of its wages, health insurance and treatment of workers, Wal-Mart has quietly recruited former presidential advisers, including Michael K. Deaver, who was Ronald Reagan’s image-meister, and Leslie Dach, one of Bill Clinton’s media consultants, to set up a rapid-response public relations team in Arkansas.

When small-business owners, union officials, or public advocates criticize Wal-Mart practices, the war room swings into action with press releases, phone calls to reporters and instant Web postings.

One target of the effort are “swing voters,” or consumers who have not soured on Wal-Mart. The new approach appears to reflect a fear that Wal-Mart’s critics are affecting the very consumers the company needs to keep growing, especially middle-income Americans motivated not just by price, but by social relations.

The first big challenge of the strategy will come Nov. 1 with the premiere of an unflattering documentary. “Wal-Mart: The High Cost of Low Price”was made on a shoestring budget of $1.8 million and will be released in about two dozen theaters. But its director, Robert Greenwald, hopes to show the movie in thousands of homes and churches in the next month. The possibility that it might become a cult hit like Michael Moore’s 1989 unsympathetic portrait of General Motors, “Roger & Me,” has Wal-Mart worried.

So, Wal-Mart has embarked on an offensive. Wal-Mart has also begun to promote a second film, or advertisement, “Why Wal-Mart Works & Why That Makes Some People Crazy,” which casts the company in a rosy light. Wal-Mart declined to make its executives available for the Greenwald film, but it participated with its own film’s director, Ron Galloway. The war room team helped distribute a letter, written by Mr. Galloway, that demands that Mr. Greenwald show Wal-Mart’s advertising movie along with the critical documentary.

Wal-Mart “has to run a campaign,” said Robert McAdam, a former political strategist at the Tobacco Institute who now oversees Wal-Mart’s corporate communications. Wal-Mart’s aggressive use of political image consultants is a departure from its tradition of relying on an internal staff to manage the company’s image.

The war room, which is part of a larger Wal-Mart effort to portray itself as more worker-friendly and environmentally conscious, runs counter to the philosophy of the chain’s founder, Sam Walton. Believing that public relations was a waste of time and money, the penny-pinching Mr. Walton would not likely have hired a public relations firm like Edelman, Wal-Mart’s choice to operate its war room.

So what has changed? For one thing, Wal-Mart’s practices have made produced a social movement. Over the last year, two small groups –Wal-Mart Watch and Wake Up Wal-Mart– set up shop in Washington with the goal of waging the social movement equivalent of guerilla warfare against the high-profits company. Wal-Mart Watch received start-up cash from the Service Employees International Union; Wake Up Wal-Mart is a project of the United Food and Commercial Workers International Union. Wal-Mart has usually broken efforts to organize Wal-Mart’s employees, in some cases by closing a store rather than allowing workers to gain strength.

At the suggestion of Wake Up Wal-Mart, members of the nation’s largest teachers’ unions staged a boycott of Wal-Mart for back-to-school supplies this fall. Wal-Mart Watch, meanwhile, set up an automated phone system that called 10,000 people in Arkansas in June seeking potential whistle-blowers willing to share secrets about the retailer.

Wal-Mart did not initially counterattack, even when Wal-Mart Watch released a 24-page report blasting the company’s wages and benefits. Wal-Mart Watch said the report had been downloaded from its Web site 55,000 times.

Once a darling of Wall Street, Wal-Mart’s stock price has fallen 27 percent since 2000, when H. Lee Scott Jr. became chief executive, a drop that executives have said reflects, in part, investors’ anxieties about the company’s image. Sales growth at stores open for more than a year has slowed to an average of 3.5 percent a month this year, compared with 6.3 percent at Target. And Wal-Mart is facing growing resistance to new urban stores, with high- profile defeats in Los Angeles, Chicago and New York.

There is some evidence that criticism is influencing consumers. A confidential 2004 report prepared by McKinsey & Company for Wal-Mart, and made public by Wal-Mart Watch, found that 2 percent to 8 percent of Wal-Mart consumers surveyed have ceased shopping at the chain because of “negative press they have heard.”

The Greenwald movie threatens to make matters worse. It features whistle-blowers who describe Wal-Mart managers cheating workers out of overtime pay and encouraging them to seek state-sponsored health care when they cannot afford the company’s insurance. And it travels across small-town America to assess the effects on independent businesses and downtowns after a Wal-Mart opens.

The film is a particular concern now that Wal-Mart is trying to move upscale, a strategy it hopes will appeal to higher-income consumers. In the last year, Wal-Mart has introduced a line of urban fashions called Metro 7, hired hundreds of fashion specialists to monitor how clothing is displayed in stores, and produced more polished advertising.

But for the fashion strategy to pay off, Wal-Mart must win over a group of shoppers who are have more discretionary income to purchase on the basis of a company’s social record – consumers, in the words of Wal-Mart’s chief executive, “who are not worried about their next paycheck.”

Hence the war room in Bentonville. Wal-Mart executives realized they were unprepared to react to what Mr. Scott began to call (incorrectly) the most “expensive” campaign ever waged against a corporation. So the company mailed a letter to the country’s biggest public relations firms several months ago seeking their help in developing a response.

The contract went to Edelman, which assigned its top two Washington operatives to the account. Wal-Mart would not say what it is paying Edelman, nor would it allow interviews with the war room staff. Mr. Dach was an outside adviser to President Clinton during the impeachment battle. Mr. Deaver was President Reagan’s communications director and the creative force behind Mr. Reagan’s so-called Teflon image.

Edelman also dispatched at least six former political operatives to Bentonville, including Jonathan Adashek, director of national delegate strategy for John Kerry,and David White, who helped manage the 1998 re-election of Representative Nancy Johnson, a Connecticut Republican. Terry Nelson, who was the national political director of the 2004 Bush campaign, advises the group. Through its financial support of mainly the Republican Party, Wal-Mart has a long history of maintaining these men’s public relations careers.

The public advocate opposition employs outsider political consultants. Wakeup Wal-Mart is led by, among others, Paul Blank, former political director for the Howard Deanpresidential campaign, and Chris Kofinis, who helped create the DraftWesleyClark.com campaign. Wal-Mart Watch’s media team includes Jim Jordan, former director of the Kerry campaign, and Tracy Sefl, a former Democratic National Committee aide.

The war room staff arrives at Wal-Mart’s headquarters, a short drive from a nearby corporate apartment where they live, by 7 every morning. The group works out of an old conference room on the second floor, christened Action Alley, the same name Wal-Mart gives to the wide, circular aisle that runs around its stores. Three display boards are covered with to-do lists. One says: “Promote Week of 10/24/05: MLK Memorial Donation. Urban/blighted community plan.” Two large maps show the location of Wal-Mart and Sam’s Club stores across the United States. The team starts the day by scanning newspaper articles and television transcripts that mention Wal-Mart. Next come conference calls with Wal-Mart employees around the country to plan for events. Whenever possible, Mr. McAdam said, the war room will try to neutralize criticism before it is leveled.

That was the strategy behind what Action Alley considers its first coup. In late September, after several unions broke off from the A.F.L.-C.I.O., the splinter groups announced they would hold a convention in St. Louis on a Tuesday.

Action Alley members, assuming Wal-Mart would be a target of criticism during the union gathering, arranged for Wal-Mart to hold its own news conference the day before. It invited three local suppliers, a sympathetic local official and a cashier to say that Wal-Mart had a positive effect on the community.

“If you look at many of the stories that were written about that overall convention, they’ve got our messages in them,” Mr. McAdam said. “In the past, when we’ve just responded to something somebody else is doing, it’s sort of ‘you know, by the way, Wal-Mart says …’ We got ahead of this one.”

A campaign atmosphere pervades Action Alley. When discussing Wakeup Wal-Mart, Wal-Mart Watch and the Greenwald movie, Mr. McAdam slips into political-speak. “The people who show up at Mr. Greenwald’s film are probably not swing voters,” he said. Mr. McAdam continued: “They’ve got their base. We’ve got ours. But there is a group in the middle that really we all need to be talking to.”

professionalism/propaganda

According to an article by Charles McGrath (“The reporter who put Monica on the map.” New York Times 5/17/05: A16), communications professionals (or “reporters”) view submitting stories to the Pentagon for approval to be the definition of “professionalism.”

Michael Isikoff, a reporter who works for Newsweek, wrote a piece on the desecration of the Koran by American guards at the Guantanamo concentration camp. Although Isikoff submitted it, per “professional” standards to the Pentagon for approval, the Pentagon failed to censor the article. It was published in Newsweek. After Islamists protested the desecration, the White House criticized the article for hurting the U.S.’s image, and Newsweek retracted the report.

However, the problem was not with the communications professional’s professionalism.

“Neither Newsweek nor the Pentagon foresaw that a reference to the desecration of the Koran was going to create the kind of response it did,” Isikoff explained. “The Pentagon saw the item before it ran, and then they didn’t move us off it for 11 days afterward. They were as caught off guard by the furor as we were.”

Mark Whitaker, the editor of Newsweek, said in an interview yesterday, “Everybody behaved professionally and by the book in this case.”

Isikoff first achieved fame by investigating former President Bill Clinton’s affair with Monica Lewinsky. After Isikoff’s then-employer The Washington Post expressed reluctance to print the scandal, Newsweek offered Isikoff a job. The scandal provided a rationale for the Republicans’ attempt to impeach the Democratic President.

Newsweek should probably be classified as private-state cooperative propaganda. However, we probably have to assume that it is such private-state cooperative propaganda that sets the professional standards of the “news” business.