The CounterRevolutionary

Friday, August 29, 2003

Soviet Views – Lysenko

[By special request – a translation about Stalin’s scientist. I loved the phrase, “reactionary-idealistic directions in biology.” I’m getting better at this and taking more requests. Previous selections were about Israel, and Fascism and Terror.]

Encyclopedic Dictionary, Volume 2, April 6, 1954, p. 290

Lysenko, Trofim Denisovitch (b. 1898), eminent Soviet scientist, biologist and agronomist, academic, full member Ukrainian SSR Academy of Sciences and V. I. Lenin All-Soviet Academy of Agricultural Sciences (president, 1938 -). Hero of Socialist Labor, trice recipient of the Stalin prize. Deputy of the Supreme Soviet of the USSR.

The works of Lysenko are the furthest developments of Michurinism*. Lysenko established that plants in their development from seed to formation of new seeds undergo a series of qualitative changes – stages. Based on an omni-biological theory on staged plant development develop by him, Lysenko developed an effective agricultural technique – vernalization, discovered the causes of degeneration of potatoes in the south and developed a method to combat this degeneration (planting potatoes in the summer), suggested a series of other new, broadly used practical agricultural techniques, which heightened agricultural yields.

Lysenko developed a large body of work in exposing and defeating theoretical positions of reactionary-idealistic directions in biology (Weismanism – Mendelism – Morganism**). The results of this work are contained in the report “About position in the biological sciences” delivered to the august (1948) session of the V. I. Lenin All-Soviet Academy of Agricultural Sciences. Lysenko continues to further the Michurinistic study of inheritance and its change-ability. Lysenko’s fundamental theoretical works are collected in the book, “Agro-biology. Works on genetics, selection and seed-farming” (1943, 6th edition, 1952). Received 6 Orders of Lenin.

[* “Ivan Vladimirovich Michiurin 1855-1935 Soviet horticulturist; postulated complete heritability of acquired characteristics that as "Michurinism" became state doctrine.” From Merriam Webster online]

** Isms were popular in the Soviet Union. I may have misspelled these names.]

Wednesday, August 27, 2003

Soviet View – Fascism and Terror

[This is a continuing series of translations of passages from a 1950’s Soviet “Encyclopedic Dictionary”. The first passage was on Israel]

Encyclopedic Dictionary, Volume 3, March 31, 1955, p. 498

Fascism Openly terroristic dictatorships of the most reactionary, most chauvinistic, most imperialistic elements of financial capital; the word “fascism” is also used in labeling the most reactionary movements in capitalist countries, which came into existence during the period of the general crisis of capitalism and express the interests of the most reactionary and aggressive circles of imperialistic bourgeoisie. Characteristics of a fascist dictatorship in the sphere of foreign politics are – chauvinism, preparing and unleashing of war; in the sphere of domestic politics – destruction of all democratic rights and freedoms and establishment of an openly terroristic regime. Fascism uses the advocacy of {people-hatred}* and reactionary anti-scientific racial theories in the form of delirious plans of world supremacy, capturing and the subjugation of other countries and people.

Transition to terroristic methods of control is a sign of the weakness of bourgeoisie. The bourgeoisie in many capitalist nations transition to fascist dictatorship under conditions of sharp escalation of class struggle, when it [the bourgeoisie] can no longer rule through the old methods of parlimentarism and bourgeois democracy. Thus, with the assistance of social-democratic leaders, the bourgeoisie founded fascist regimes in Italy (1922) and Germany (1933) and several other countries. Active help in the establishment of terrorist fascist state in Germany was provided by English and American monopolistic capital. Hitlerites marked their rise to power with repression of the working class, the devastation of workers’ and other progressive democratic organizations. With the help of American and English monopolies, the Hitlerites built powerful armed forces. In Spain, fascists consolidated themselves (1939) as a result of Italian/German military intervention.

The main fascist states – Hitler’s Germany, fascist Italy, imperialistic Japan – unleashed the second world war (which was prepared by the forces of international reaction), temporarily capturing and enslaving many countries. The war ended with the complete destruction of the aggressors. The decisive role in the victory over the fascist nations belongs to the Soviet people, who with their selfless struggle saved the people of Europe and Asia from fascist enslavement.

After the 2nd World War, American imperialists aspiring for world supremacy, began the path of preparation for a new world war. With this goal in mind, they imposed fascism on their government apparatus, use fascist methods to fight with progressive elements and organizations, support reactionary fascist forces in other capitalist nations, aspire to restore fascism and militarism in West Germany and Japan, and organize aggressive blocks. The struggle against fascism is led by progressive forces worldwide. Anti-fascist movements are the most important component of the struggle of the broad national masses for peace and democracy.


* literal translation –

After reading this passage, you can see where the “Bush=Hitler” people get their history.

This passage was very hard to translate. The author seemed intent on squeezing as much propaganda as the space allowed. As a result, the writing was cumbersome and confused. I was also unsure about the use of “terrorist” in the definition. I decided to do a quick translation – thankfully it was short. ]

p. 394

Terror policy of frightening one’s political opponents including their physical destruction. Unusual cruelty sets apart the terror in imperialist nations with fascist and semi-fascist regimes, in particular the USA, where the government undertakes police activities against communists and other progressives.

[Note to James Taranto, maybe this is why Reuters won’t use terror without the scare quotes – it doesn’t meet their definition.

Final Note: Notice an obsession with America?]

Happy Birthday, Misha!

My son, Michael, is 1 today!

Monday, August 25, 2003

Soviet Views -- Israel

[I recently discovered that my family has a Soviet "Encyclopedic Dictionary" from the 1950’s. This three-volume set was published between 1953 and 1955 and contains Stalin-era views about a number of topics. I thought it would be interesting to translate selections of the Dictionary – most American readers would be surprised to learn how much anti-American rhetoric had it’s beginnings in the propaganda workshops of Moscow.

Instead of attempting a translation of the lengthy section on America, I decided to do a shorter piece for my first work – on Israel. Please remember that this description was written in 1953 – before the 1967 conquest of the West Bank and Gaza, before the Yom Kippur war and before Israel’ nukes.]

From the Encyclopedic Dictionary, Volume 1, page 669, September 9, 1953.

Israel [First paragraph consists of simple statistical information]

After the conclusion of the 2nd World War, in conditions of continuing escalation of the crisis of the colonial system, the English government was forced to declare a repudiation of the Palestinian mandate (received in 1920) and forwarded the Palestinian question to the UN for resolution. During the deliberations of the Palestinian question in the UN in 1947, the Soviet Union suggested either the creation in Palestine of a dual-national Arab-Jewish independent democratic state, or, if that proves impossible, the division of Palestine into 2 independent democratic states – Arab and Jewish. The latter suggestion was approved by the UN General Assembly on November 29, 1947. However, the Israeli state that was formed on the Palestinian territory in May of 1948 was not an independent or democratic state, the creation of which was envisioned of the decree of the General Assembly. Availing themselves of the weakness of the anti-imperialist movements in Palestine and having received support from American and English imperialists, power in Israel was seized by Jewish bourgeois nationalists-zionists. Anglo-American imperialists, using their agents among reactionary Jewish bourgeoisie and Arab feudal lords [Ed- literal translation], provoked armed conflict among Israel, on the one side and Iraq. Transjordan, Egypt, Saudi Arabia, Syria, Lebanon and Yemen on the other (May 1948 – July 1949). The Palestine War, ending with the defeat of the armies of the Arab states and the concluding in an armistice, was used by the American and English imperialists to fight the national liberation movements of the Arab people and Jewish workers of Palestine. Operating through the zionists, the USA in fact transformed Israel into a dependent nation and transformed it into a strategic military base in the Near East. The governing circles of Israel pursued policies of suppression of the progressive forces of the country and oppression of the Arab national minority and Jewish workers. The growing forces of peace and democracy in Israel, headed by the communist party of Israel (created in 1948) are leading a fight against reactionary politics of the government and international imperialists.

The economy of Israel retains a colonial character and remains dependent on international capital. Growth of citrus (oranges, grapefruit, etc.), grains. Widespread small and semi-domestic enterprises of light and agricultural industry. In large cities the processing of diamonds sent from South Africa. American capital plants only those branches (assembly factories, enterprises of light industry) that strengthen the dependency of Israel on American imperialism. Mining of potash (Dead Sea area), also, sulfur, asphalt, marble, gypsum, etc. Exploitation of the mineral wealth is led by Anglo-American companies. Through Israel flows an oil pipeline form Kirkut to Haifa, and important strategic routes, connecting the Mediterranean Sea and the Persian Gulf.

Israel – bourgeoisie republic. Israel does not have a permanent constitution. The head of state is a president. The functions of a temporary parliament are performed by a constituent assembly. A council of ministers is selected by the president. In fact, the nation is a dictatorship of a small group of large Jewish capitalists – proteges of England and the USA.


1. The language used in the description of Israel (colonialist, oppressive of the Arab minority, etc.) and attitude towards Israel (reactionary oppressive state) is almost identical to today’s anti-Israeli rhetoric. The language of Arab and Western “anti-Zionism” was written in Moscow.

2. The USA and The UK (the selection used the term “England”) are treated as the villains of the story. The few selections that I’ve read in the Encyclopedia reflect this trend. The US and/or the UK are always to blame. Think of this the next time someone asks, “Why do they hate us?” The answer may very well be that the Soviets spent decades focusing the normal frustrations of numerous populations into hate for the US.

On translation: I’m not a professional translator. I tried to translate as literally as possible, as long as the translation preserved the meaning. However, at times I used phrases with equivalent meanings.

I welcome any suggestions for further translation topics.]

Saturday, August 23, 2003

Must Read From Steyn

"Iraq may be on the edge but France has hit rock bottom abyss"

Regarding the recent weather related deaths in France, he writes:

And where are the Red Cross and Oxfam and Human Rights Watch and all the other noisy humanitarians? If 10,000 Iraqis had died of dysentery on George W Bush's watch, you'd never hear the end of it. A few weeks back, with three fatal cases of cholera, the Humanitarian Lobby was already shrieking that we stood on the edge of a humanitarian catastrophe.

France isn't on the edge, it's in the abyss. When I motored round Iraq a couple of months ago, the hospital wards were well below capacity. Yet in France the entire health system – or that percentage of it not spending August at the beach – is stretched beyond its limits (35 hours a week, 44 weeks a year). Why aren't Médecins Sans Frontières demanding to be allowed in to take over?

There's an old, cynical formula for the weight accorded different disasters on American TV news. It runs something like: one dead American = 10 dead Israelis = 100 dead Russians = 1,000 dead Bangladeshis. But 10,000 French can die, and even the French don't seem to care – or not too much, and not with any great urgency.
He is absolutely right everytime someone stubs his toe in Iraq, the press is all over it, but 10,000 (!) have died through negligence in France and the press and international community are eerily quiet.

Thursday, August 21, 2003

Bob Herber Squaler, part 2

Bob Herbert, my favorite squealer, is at it again. Remember, before the war, he posed this question to the American nation:

"Are Americans ready to pay the cost in lives and dollars of a long-term military occupation of Iraq? To what end?"

Once again, Herbert answers his own question:

How long is it going to take for us to recognize that the war we so foolishly started in Iraq is a fiasco — tragic, deeply dehumanizing and ultimately unwinnable? How much time and how much money and how many wasted lives is it going to take?
Are these questions, Mr. Herbert, or your prayers?

Vietnam comes up a lot -- squealers have very selective memories. (Just for the record, The Telegraph's John Keegan writes today -- Iraq is not Vietnam)

Then Herbert suggests that the UN be in charge -- does the man actually process any information that does not fit his views of the world?

Another Phrase that has lost all meaning...

CNN Headline:

"Hamas quits cease-fire after Gaza strike"

Gee, I thought that they quit the cease fire when they murdered 20 people on a Jerusalem bus. But what do I know....

Wednesday, August 20, 2003

What’s Fair?

A quick observation – I know my posts have been long lately. A few weeks ago I had a political conversation with a European friend. We usually have great debates and I always learn something new from them.

What I realized during this conversation is that there is another major difference between the Europeans and us (at least the majorities). It concerns the concept of fairness. In other words – what is considered fair and equitable.

It seems to me that the Europeans believe that the strong/rich are morally required to give to the weak/poor. The weak/poor are not required to give anything in return. If the weak/poor are upset it means that they are not receiving enough, which is morally wrong. Hence, Europeans often look at their relationship to their state as one-way. The state has to give, and all they have to do is take. They look at the US the same way – because we are strong we are required to give to those weaker. We should not expect anything in return. This theory of fairness has Marxist roots.

Americans believe that any relationship has to have a quid pro quo. The parties can negotiate what their respective duties are, but the bargain is up to them. The relationship between the strong/rich and the weak/poor can be one sided, but the details have to be agreed by the parties – neither party is required to do anything. In the context of international relations, we are happy to protect others, but we demand at least respect in return. We bristle at “allies” who live under our protective umbrella, but never miss a chance to undermine us. Where there is no quid there should be no quo.

As a proponent of the latter view, allow me to point out a few issues with the former. First, the relative designation of weak/strong is fickle and subject to political preferences. Second, in order to operate properly, the current “strong” must believe that when they are “weak” they will receive the same sort of bargain. History tells us, unfortunately, that when the weak become strong, usually they want to become even stronger and then renounce the bargain that got them their strength in the first place.

So that’s it. See, I can write short things.

Tuesday, August 19, 2003

Blackout threatens to imperil electricity delivery process!

Doesn't make sense, does it? A blackout is the result of the failure to deliver electricity. Everyone knows that. So how long to we have to tolerate quotes like,

A suicide bomber attacked a crowded bus in Jersusalem [sic] today, killing at least 18 people and wounding scores more, Israeli officials said. Two Palestinian militant groups hastened to take responsibility for the attack, which threatened to imperil the fragile Middle East peace plan. [Emphasis added]
Isn't an attack a failure of peace? I know that many in the blogosphere agree with me, but it pisses me off every time the liter-nazis keep twisting logic this way!

UPDATE: The Times just moved the story on me -- thhe link now takes you to a new story which does not include this quote.

Wednesday, August 13, 2003

An objective test for Objectivity, a proposal.

Is the BBC’s coverage non-partisan? Is Fox News “fair and balanced”? Can journalists be “objective”? The issue of reporters’ objectivity has intensified recently. Years ago, the inquiry was brought up by various conservative groups who were reacting to what they believed was a liberal bias in the establishment media. Once Fox News was established, liberals began to sneer at its claims of objectivity. Today, as a result of the September 11th attacks and the Iraq War, the question of what side, if any, the media is on has become even more important.

The most interesting debate concerns itself with the allegations that the BBC “sexed-up” its allegations that the Blair government “sexed-up” its pre-war dossier on Iraq’s WMD. This is troubling because the agreement between the government and the Corporation requires the latter to “treat controversial subjects with due accuracy and impartiality” [Agreement, §5.1(c)]. If the Beeb can be shown to have been biased in its treatment of the Iraq war, then the Corporation’s Royal Charter should be in jeopardy.

Needless to say, the central inquiry regarding the objectivity has never been answered to anyone’s satisfaction. This is not for the lack of trying, however. Many organizations, columnists and bloggers have spent countless hours going over reports and newspapers. Recently two dueling books have claimed that the media in the US is alternatively liberal and conservative. Yet, without a clear answer, the battle over objectivity in the media has become a quagmire. The cause of this impasse may be the way we test for objectivity.

The current approach to Objectivity.

The trouble with the present approach to objectivity is that it’s so subjective. The most common means of proving bias is to take a news story and analyze it. Critics will point to factual omissions or errors, usage of loaded words, tone of the article, etc to show the bias of the reporter. The defenders argue that the omitted facts and errors were irrelevant and that the loaded language is in fact the common usage. These back and forth arguments go on for both sides of the debate.

Not surprisingly, a conclusion is never reached. Instead, the advocates for both sides become more and more entrenched and the sniping escalates. The trouble is that the test itself is subjective. Too much depends on the critics’ and defenders’ points of view. What facts are vital and which words are loaded are subjective judgements of the beholder. Analyzing supposed bias in reporting with a biased view will not solve the current debate.

An objective approach to Objectivity

In mathematics, if one method of proof does not work, others are tried until a satisfactory result is obtained. I propose that we abandon the current subjective inquiries into objectivity and try a new approach. To develop a new test we must ask two questions: 1) what is “objectivity”? and 2) how can we measure that quality?

What is objectivity?

I’m certain that many philosophical treatises have been written on the concept of Objectivity. However, just like the current debates they have been the subjective opinions of the authors. Instead of asking individually what Objectivity is, I propose we should inquire who should decide questions of Objectivity to make the answers more objective.

To begin our analysis, lets examine the case of the BBC. It is the easiest to analyze because of its Royal charter and contractual relationship. The Charter demands impartiality, but why? The BBC is a media organization that is unique in the UK in that it has the right to collect a fee from every British subject who owns a TV. In return for being able to demand this fee on the penalty of prison, the viewing public makes certain demands of the BBC (through their elected representatives). These demands are spelled out in the Agreement.

So whatever Objectivity is, it’s a function of the British license-paying public. The same can be said of commercial news entities. They are eager to attract readers or viewers and seek to assure them of the quality of their product – that it is “objective” or “fair and balanced”. Contrast this promise with the claims of political magazines like the Nation or the National Review – they explicitly deny being objective, but try to attract their readers by being partisan. So, even in the commercial setting, Objectivity is a promise made to the viewing/reading public.

We can stop our inquiry into what Objectivity is at this point. The right of describing Objectivity belongs to the whole of the relevant public, not elite thinkers right or left. The remaining step is to decide how to measure the public’s view of Objectivity.

How can Objectivity be measured?

Therefore, if Objectivity is a duty owed to the public, then it seems that the best way to determine whether a news source is objective is to ask the population. Take a poll. Ask, “Do you believe that reporter so-and-so is objective?” That would be far more objective than to rely on a select group of individuals either in the media or criticizing it. This simple idea does bring up two practical issues: who are the relevant public? and what is the passing grade?

The relevant public can be easy to answer. In the case of the BBC, it’s everyone who is forced to pay the license fee. For cable and broadcast stations, the relevant public are all those who are capable of receiving the signal. The most difficult decision is in the case of newspapers – is it the current subscriber base or the potential subscriber base. The latter seems to be the better choice, since the former excludes readers who have made their decision about the newspaper’s objectivity by not subscribing to it. The current subscriber list is, in effect, self-selecting.

The passing grade is a more difficult question – what percentage of the relevant public has to say “Objective” in order for a reporter to get a passing grade. If one was to follow the plain meaning of “unbiased” – then unanimity seems to be required. If not a single person thinks that you have offended anyone else – then you must be unbiased. However, this standard is certainly unworkable. A simple majority doesn’t work either --- if 51% says you are objective and 49% says you are not, then the reporter is not exactly getting rousing support from the relevant public. More likely, he or she is merely saying things that the 51% think is unobjectionable.

Statisticians typically use a 95% confidence interval in their analysis (sometimes 90%). Still, that number is too stringent. Practically speaking there will always be 5%-10% of the population that will disagree with anything. And the test must be practically workable.

I propose an 85% test level. It is high enough to ensure that the reporter is truly being objective and not just mirroring the majority’s views. At the same time, it is not impossible to meet. So the Test of Objectivity is this: you are if 85% of your relevant public say you are. For the BBC, its 85% of their license payers and for Fox it’s 85% of their potential viewers. Simple and objective.

The Repercussions.

I presume that main result of the adoption of this test is that most reporters would be judged to be un-objective. This would be a huge change from the status quo and would probably encounter quite a bit of resistance from the community. But knowing what we know about human nature, is the result surprising?

By design, human beings are not objective creatures. Our biases and prejudices seep into everything we do and say. How is it that an entire industry avoids this most human of pitfalls, when most others fail so badly? Moreover, how does it accomplish this when nothing in the training of the potential journalist (many of whom are not even “professionally” educated) teaches him to be objective? When the industry itself is self-policing with few penalties for non-compliance and no one incentivised to enforce objectivity on the members of the profession? Simply put, how can merely deeming someone objective, without any enforcement, override our natural tendency for bias? It can’t.

Consider this – what incentive does a new reporter have to be objective on the first day of work? Already, without doing a lick of work, he is deemed objective by the industry, having attained this supernatural quality by the fiat of the human resources department. To him, the practical manifestation of objectivity is whatever his editor says it is, in whose hands the cub reporter’s career resides. The opinions of the public don’t matter to him, practically or philosophically, he is already objective for as long as he is employed. What incentive does he have to do the extra work and possibly jeopardize his career to attain what he already has – objectivity?

If we truly care about fairness and objectivity in the media, we should ensure that reporters see those qualities as goals to be attained not fringe benefits of employment like free coffee. To begin with, the burden of objectivity should fall on the reporters seeking it. Instead of being presumed fair, they should be judged biased, until they have proven themselves objective beyond a reasonable doubt.

The test I propose can help with that. It takes away the power to claim objectivity from the media and punditry elite and hands it to the people. It can give reporters (and it should be applied on an individual not organizational basis) an incentive to write objectively and fairly. A reporter who can meet the stringent requirements of the test can rightfully claim to be objective and distinguish himself from the crowd.


The very debate about objectivity today, with each side presenting a set of facts that it deems relevant shows how difficult it is to be objective. The proposed test can differentiate the truly objective reporter without relying on the subjective judgements of media elite or their critics. Maybe then we can stop debating the details of each news report and instead ask ourselves what we can do to incentivise reporters to be objective.

Sunday, August 03, 2003

Crony Journalism

Is the Washington Post trying to fill the void left by Howell Raines-less New York Times? Today in a front page, above the fold story, Paul Blustein blames the current economic situation in Argentina on Wall Street. This is not reporting – it is an ideologically motivated position piece that plays fast and loose with the facts, morality and history. Says the author,

Ah, the memories: Feasting on slabs of tender Argentine steak. Skiing at a resort overlooking a shimmering lake in the Andes. And late-night outings to a "gentlemen's club" in a posh Buenos Aires neighborhood.

Such diversions awaited the investment bankers, brokers and money managers who flocked to Argentina in the late 1990s. In those days, Wall Street firms touted Argentina as one of the world's hottest economies as they raked in fat fees for marketing the country's stocks and bonds.

Thus were sown the seeds of one of the most spectacular economic collapses in modern history, a debacle in which Wall Street played a major role.

The fantasyland that Argentina represented for foreign financiers came to a catastrophic end early last year, when the government defaulted on most of its $141 billion debt and devalued the nation's currency. A wrenching recession left well over a fifth of the labor force jobless and threw millions into poverty.
The writer goes on to make a comparison between the recent Wall Street scandals and Argentina’s plight:
Big securities firms reaped nearly $1 billion in fees from underwriting Argentine government bonds during the decade 1991-2001, and those firms' analysts were generally the ones producing the most bullish and influential reports on the country. Similar conflicts of interest involving analysts' research have come to light in other flameouts of the "bubble" era, such as Enron Corp. and WorldCom Inc. In Argentina's case, though, the injured party was not a group of stockholders or 401(k) owners, it was South America's second-largest country. [Emphasis added]
This is where the writer performs a rhetorical slight of hand. What Blustein is painfully trying to avoid saying is that Argentina, thanks to Wall Street, received $141 billion to play around with.

In fact, the situation here is similar to that of the corporate scandals. The borrowers (Enron, WorldCom, Argentina) borrowed too much money (thanks to Wall Street) and then defaulted leaving many investors in the lurch and others out of work. However, notice the contrast in the media treatment of the borrowers. Enron and WorldCom were themselves considered “evil” and were aided and abetted in their “crimes” by Wall Street. But according to this article, in the case of Argentina, the borrower is not only not responsible for the disaster, but is in fact a “victim” of Wall Street.

Why does Argentina get the kid glove treatment? Why weren’t poor Enron and WorldCom also branded victims of Wall Street excesses? Is there anything in the facts that would imply the disparate treatment?

Blustein’s article consists of many facts and interviews, but none of them actually support the central thesis of Wall Street culpability. Furthermore, there is nothing in the article to explain why Argentina should be treated as a victim of the default. The disconnected pieces of his opus are all crafted to show bankers in the worst light possible and leave out many inconvenient acts and conclusions. Let’s take a look at his positions.

Borrowing too much or, “My banker made me do it!” Blustein’s central thesis seems to that Argentina’s default is a direct consequence of borrowing too much which is the direct responsibility of Wall Street. This is the only way to explain the claim that Argentina is a victim – it could not achieve this moral status if it were itself responsible for the borrowing.

He never explicitly states this chain of responsibility knowing that most readers would reject such reasoning. Instead, he dances around it –providing examples of Wall Street’s attention to Argentina, Wall Street reaping fees, quotes from cherry picked analysts and, at the same time, the consequences of the default. The reason for this shadow dancing is clear – most Americans could not accept the notion that a sovereign nation is not itself responsible for borrowing too much.

In our daily lives we are constantly confronted with offers of debt. Credit card offers in the mail, advertisements for home equity loans on TV and merchants offers’ of financing for every conceivable product – we are constantly bombarded with solicitations to lend. While the borrowing of ordinary Americans has increased significantly in the past decade, we still recognize that when an individual gets in trouble with debt – the responsibility is his. We do make exception in the case of fraudulent representations to the borrower, but there are no allegations of such conduct here. No one held a gun to Argentina’s head and forced them to borrow. To accept Blustein’s theory, one would have to believe that the Argentinean government is less responsible for its decisions than an individual American.

This is, of course, a silly concept, but the author leaves clues that he believes this to be the case. Consider this line:
In practice, the gusher of foreign money lulled Argentina's government into complacency, acknowledged Rogelio Frigerio, who was secretary of economic policy in 1998. "If you get the money so easily as we did, it's very tough to tell the politicians, 'Don't spend more, be more prudent,' because the money was there, and they knew it," he said.
Poor, simple Third World politicians – “American man come, he give money, we spend – how were we supposed to know the consequences?”

The tendency of leftists to hold in contempt those they claim to protect is well known – the bigotry of low expectations. But to lower the expectations of a sovereign nation to a level lower than that of a Western consumer is something new indeed. Unfortunately for Blustein, if Argentina is held responsible for the level of its borrowings then his theory falls apart.

Early warning. The author spends plenty of space claiming that there was no early warning of imminent default and that pessimism about Argentina was underplayed. Unfortunately, nothing in this discussion shows why Argentina should be treated as a victim. Blustein never addresses whom the warning would have helped. If he means that the information would have helped the investors – it is a valid argument, but not in martyring Argentina. If Wall Street was whitewashing facts, then a silent Argentina was, at best, a co-conspirator in the fraud. A lack of warning to investors does not make Argentina into a victim.

The only way that a lack of warning would have a bearing on this case is if the warning was meant for Argentina. In this scenario, Wall Street had to warn the nation of the consequences of its borrowing. However, such a position, that Argentina had to be guided by the Western Elite in Manhattan is extremely disparaging to the government and the people of Argentina. It assumes that Argentina some sort of political incompetent and must be guided by more enlightened forces. Furthermore, many of the nation’s problems stemmed from the actions (e.g. spending decisions) of the government – how could Wall Street even know what actions the nation intended to take in the future? The government of Argentina knew far better what actions it would take.

Finally, the argument is factually wrong. There was plenty of warning about the state of affairs in Argentina. During the 1990s the highest rating assigned to it by Moody’s Investors Service (a rating agency) was Ba3 – a “speculative grade”. Standard and Poor’s had similarly low ratings on the debt. Contrast that with the highest ratings obtained by Enron and WorldCom, Baa1 and A3 respectively -- both considered investment grade. Any investor doing even the most basic research would have seen that their investment held a great deal of risk.

Rating agencies also took swift action to warn investors of the deteriorating economy in Argentina. Blustein writes that
The reports that Wall Street firms published on Argentina, to be sure, became much less bullish as the recession deepened in 2000 and early 2001. Analysts increasingly stressed the importance of the government cutting its deficit and reforming labor laws. But in general, the reports predicted that Argentina would muddle through. An example was a report published in October 2000 by J.P. Morgan, the biggest underwriter of Argentine bonds in the 1990s, titled, "Argentina's debt dynamics: Much ado about not so much."
However, if he did even some basic research he would have know that Moody’s began to downgrade Argentina in 1999.

It hard to see why these passages were included in the article since they do nothing to support Blustein’s thesis and the facts are cherry picked so as show a certain version of events. The only plausible reason for the inclusion of the discussion is to elicit sympathy from the reader for the writer’s cause. Presumably, that is also the reason for the accompanying photos of poverty in Argentina (see they must be victims – they are poor!).

Regulation. In one segment, the authors laments the fact the absence of government oversight:
Charles W. Calomiris, a Columbia University economist who was one of the earliest prophets of Argentina's financial doom, wonders why government investigators have not intervened, given the danger that the same fate could befall other countries.

"How come we have one standard for private-sector deals, where everybody is getting all upset about conflicts of interest, and nobody in Washington has raised an eyebrow over the obvious conflicts of interest involving research and underwriting activities by U.S. financial firms in the area of emerging-market sovereign debt?" Calomiris said.
Sounds innocent, right? But think through this complaint for a second – this economist seems to imply that Washington should have regulated the sales of debt by another government. Can you imagine the outcry if we did? “Americans block poor nations’ access to needed money!” The activists would be outraged – and rightfully so. Argentina is a sovereign (we’ve been hearing that word a lot in a different context) nation and can make its own decisions about its debt. We have no business telling others how much they can borrow.

Others. There are two other sub-plots given prominence in the article: the loss of money by European investors and the Debt Swap. Like the other arguments, they do not show Argentina as a victim. The Italian situation is interesting, but irrelevant on the topic. So is the debt swap. Blustein’s biggest complaint is the fact that Wall Street made money on the trade. Considering the nation was in distress at the time of the exchange – this may be one of the few times that the bankers actually earned their large fees.

Nothing in the history of the nation shows why Argentina should be treated with more sympathy that any other borrower who defaulted. Why, then, is Argentina treated as a victim by this author? The answer is ideology. We no longer even blink when we hear journalists lecture us about the dangers of the American capitalism. That has become par for the course. So in the case of Enron and WorldCom it was expected that they would share the blame for the defaults with Wall Street (not incorrectly, in my view). Both are symbols of the hated American capitalist system and thus appropriate villains.

But in the case of Argentina, the borrower was a Third World nation, and as we all know Third World nations are never responsible for their fates, but are victims of Western/American oppression. This view is derived from Marxist thought that states that the West (especially America) has gotten rich by stealing Third World resources. In the December 2002 issue of The Policy Review, Lee Harris lays out the foundations of anti-Americanism, including this recent reinterpretation of Marxism:
A Polish born American economist and a Marxist, Baran is the author of The Political Economy of Growth (Monthly Review Press, 1957). In it, for the first time in Marxist literature, Baran propounded a causal connection between the prosperity of the advanced capitalist countries and the impoverishment of the Third World. It was no longer the case, as it was for Marx, that poverty — as well as idiocy — was the natural condition of man living in an agricultural mode of production. Rather, poverty had been introduced into the Third World by the capitalist system. The colonies no longer served the purpose of consuming overstocked inventories, but were now the positive victims of capitalism.

Blustein’s goal is to fit the facts of the Argentina default into this ideology. That is why Argentinean government officials are treated like helpless kittens against the onslaught of Wall Street. That is why he focuses on the images of Western bankers enjoying themselves in Argentina (cue caricatures of fat international bankers in top hats). Finally, that is why there is so much emphasis on the fees earned by the bankers. Presumably, these fees signify how the West stole money from the poor people of Argentina. Unfortunately, Blustein’s rhetoric masks the real cash flow in this case. Yes, Wall Street reaped fees on underwriting the debt ($1 billion on $141 billion of debt is less than 1% -- your real estate broker gets 6%), but the net transfer of wealth from the West to Argentina to the tune of $140 billion. When Argentina defaulted, it was the West that lost the billions and Argentina got to keep whatever it bought with the money. Even by Marxist standards this article is joke.

I work in the financial world, but I don’t normally write about it (disclosure: I work in fixed income, but not with emerging markets). But I could not keep quiet about this. I think that the author is trying to re-write the history to absolve Argentina of all fault in the matter and place it on America and Wall Street. His screed belongs in a left-wing opinion magazine like The Nation and not in a newspaper that hides behind the veil of objectivity. It’s an even bigger shame that the Washington Post decided to publish this article on page one.

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