Legacy investments versus speculative investments.

datePosted on 14:01, February 22nd, 2019 by Pablo

Among the arguments about instituting a capital gains tax in NZ (common in many parts of the developed world) is the claim that much property is family residence or inheritance in nature. The argument goes that it is unfair to not differentiate between the sale of a family home, granny flat or holiday residence by middle and working class people and the sale of properties bought by developers and speculators with the intention of “flipping” them for a profit. The first category are long-term, emotionally laden investments whereas the second is simply about making money.

I see merit in the argument for differentiation of property investment categories. In particular, I see a difference between legacy investments and speculative investments. Legacy investments are those where property is bought for family use over time. These can be the main family home but more often are second, smaller flats or holiday homes that are passed on between the generations (think of the archetypical bach or a crib). The emotional as well as financial investment in such places is not based on eventually securing returns but on preserving collective experiences and traditions from generation to generation and giving off-spring the chance to acquire a property stake without the exorbitant financial costs associated with the contemporary real estate market (for example, an equity share in a family bach may help towards securing a first time mortgage loan). It specifically excludes using family members as fronts for speculative purchases (say, of a family farm).

Speculative investments are just that: property investments that are designed to be on-sold in a relatively short period of time in order to secure a positive financial return. Here the intention is to make short-term money off of the buy/sell transaction.

I would suggest that a capital gains tax is appropriate for all speculative investments. They become another cost of playing the real estate flipping game and will eventually be incorporated into the real estate price architecture. On the other hand, I do not think that capital gains tax is appropriate for legacy investments. If a family property is on-sold within blood lines or divided into part ownerships to children and grandchildren, it seems to me that the less financial burden imposed the better for all. People get to keep their properties within the family and share in the collective benefits over time and generational change. That includes rental income from family owned property subject to the requirement that the property must be used by family members for given periods within a specified time frame (this would allow seasonal rentals and other short-term lease arrangements to non-family).

The system would work if there is a legacy declaration made on a property at the time of purchase. Again, this may be less appropriate for a main family home that could likely be on-sold to strangers as the family demographic shifts. There a capital gains tax would apply. But it very much should not apply to properties that families hope to preserve within the bloodlines for posterity. Here on-selling to relatives should not incur capital gains taxes.

On-selling under the legacy clause will require verification of family lineage, and any sale to non-family voids the legacy declaration and makes the sale subject to capital gains tax. Those who try to cheat the system and are caught will be subject to heavy financial penalties in excess of the tax otherwise to be paid.

I am not an economist much less a taxation expert but it seems to me that distinguishing between legacy and speculative investments in the property market strikes a good balance between profiteering and homesteading. I admit to not having thought through all of the implications inherent in this proposed scheme so if any readers want to illuminate me please feel free to do so.

I have no doubt that clever devils will immediately try to game the system and seek out ways to turn legacy homesteading into profit-driven speculation. But with a detailed code of compliance and robust enforcement regime in place, it is possible for this approach to split the fair difference between an all or nothing capital gains tax on property and one that reflects the nuances in property buying preferences. Or perhaps that is simply too much to ask in an ideological climate where the very idea of taxing something other than salaried income, business earnings and consumer purchases and services is considered sacrilegious by the Right.

PS: I have been informed by the smarter adult in my house that this is a silly idea and unworkable. She also points out that trusts already allow for inter-generational transfers of wealth/assets without being subject to tax on the transfer. I am not familiar with trust law and am not going to risk savaging by pointing out that family trusts are something more likely to be created by the well-to-do rather than the middle class, so must accept the scolding and move on. If anyone is familiar with the intricacies of trusts, please feel free to explain.

Interest, values, trade and security.

datePosted on 14:59, February 18th, 2019 by Pablo

The media frenzy about the NZ-PRC relationship got me to thinking, but as I got to thinking I found myself meandering off of my original train of thought. You see, at first I was pondering the one-sided, hectoring nature of the media coverage, where pro-China shills like the business writers at the Herald and assorted corporate types and National Party flunkies like Tod McClay were allowed to run their mouths about how the relationship with China was headed down the tubes. There was the Kiwi coward resident 34 years in China* who implicitly disparaged Anne Marie Brady by saying that “(i)t’s unhelpful for politicians and a few anti-Chinese professors to feed uncorroborated McCarthyite conspiracies about Chinese spy networks in their countries and targeting anyone who doesn’t share their view.” There was Audrey Young’s reference to “ivory tower” eggheads in her regurgitation of business lobby bullet points. All of this was offered without a single rebuttal.

  • *I am not going to mention this useful fool’s name but it would have been nice if a “journalist” has asked him, given his long residency in China and successful business ventures there, whether he was a dual citizen and/or member of or has ever had any formal contact with the Chinese Communist Party, whether he has ever had to “facilitate” transactions or provide pay-offs to party or local officials and whether he is on any Chinese government payroll as a spokesperson, business “ambassador,” representative, go-between or in any other capacity. I say this because it is unusual for Chinese authorities to allow non-diplomat Westerners to comment on official reactions to PRC-related events in foreign countries even if they are citizens of the country in question.

There were even pro-China academics featured in the media and assorted pundits opining that the Labour-led government needed to pull an about-face and correct things ASAP. There were the usual skeptics about the GCSB rational for advising against using Huawei in the 5G roll-out. One of them, a well known rightwing blogger and pollster, used a 2012 junket to Huawei headquarters paid for by the company to proclaim that all the security concerns were a stich up up of an honest company so that Western telecom firms could gain a competitive advantage. There were the usual shouts of racism from the Chinese language media and wanna-be “influencers.” There was even something that looked suspiciously like a planted fake news article in an English language mainland media outlet that was extensively and uncritically quoted in the Herald that said that Chinese tourists in Aoetaroa complained about being “stabbed in the back” by the Kiwis. I shall leave aside the curious fact that the article only appeared in English and used rather odd quotes to describe the reaction of tourists to a minor diplomatic row involving their home and host countries–a row that had zero effect on them.

It was all so sickly obsequious to the Chinese that my initial thought centred on whether most of NZ’s business and political elites (and their lackeys in the media and academia) were so obsessed by self-enrichment, greed and short term opportunism that they completely lost sight of their moral compasses. After all, China is a one-party authoritarian state that uses mass internment camps to control a restive ethno-religious minority, mass surveillance as a form of social control, violates human rights in systematic fashion, transgresses international norms and laws as a matter of course (such as in the island-building projects in the South China Sea) and uses bribery, corruption, fraud and intellectual property theft as an integral part of its business development models. This would seem inimical to the values of the paragons of virtue extolling the “special relationship” between the PRC and NZ but nooooooo. The Chinese are good for the NZ economy and that is all that matters. It would seem that the trade-oriented business elites and their political puppets are China’s Vichy representatives in Aotearoa.

That sent my thoughts in a more academic direction. I recalled that Marx wrote that the combination of private ownership of the means of production and universal suffrage could not hold because if everyone got an equal vote and only a few were property owners (capitalists), then capitalism would be voted out of existence. He was wrong about that due to the reform-mongering function of the capitalist State, but that got me to thinking that he also wrote that capitalists were incapable of being patriots because profits were made globally and hence their interests were not confined to their countries of origin. People may recall that in the Manifesto he wrote “workers of the world unite!” as a response to capitalism as it entered the Gold Age of imperialism, a topic that Lenin subsequently developed a greater length.

It occurred to me that in the arguments about China we see a NZ variant of this. NZ capitalists and their toadies do not give a darn about democratic values, transparency, norms, a rules based order or the security concerns of Western states. They are in it for the buck and if that means kowtowing to a dictatorship then so be it. Given that NZ business and political elites have kowtowed to the likes of the Saudis, this should not be surprising. In their view if there is money to be made then the less impediments to doing so the better.

The smarter types will show the structural impact of Chinese trade with NZ by citing the usual $27 billion in 2018 bilateral trade figure and 8,700 jobs connected to it. But this trade is mostly in milk powder, tourism and English language and tertiary education (as NZ exports) and consumer non-durables (electronics, light machinery and plastics, mostly) as imports, so it is not as if NZ is going to turn into a high tech artificial intelligence and robotic hub thanks to the Chinese. The bottom line, then, is the bottom line: NZ capitalists by and large will cling to the window of opportunity presented by the opening of the Chinese market even if it confirms our trade dependency on primary goods and agro-exports and even if it means sacrificing NZ’s commitment to principle when it comes to exercising an independent foreign policy.

That was going to be the end of my thought process on the matter. I was going to balance the criticism of China by noting that the US and traditional Western partners have less than stellar records in their foreign relations and spy histories and that the US under Trump is an insane clown posse when it comes to international affairs even if the intelligence and security professionals who staff the 5 Eyes network would not be swayed by the craziness swirling around them and would make assessments about security matters on objective grounds. But then I got to thinking about something I read repeatedly on right-wing political sites: values.

One of the major objections to the Chinese and NZ’s relationship with the PRC appears to be the issue of values, or the fact that we do not share values. People point out the long cultural ties that bind NZ to the UK and Anglophone Commonwealth as well as the US. They point to joint sacrifices in war and peace, common sports, notions of good and bad, proper behaviour, etc. These folk do not want these shared values to be usurped and replaced by Asian values, or at least the Confucian-derived cultural mores that contact with China brings to NZ. The list of fears and concerns is long but the bottom line is that many on the conservative side of the political ledger have real fears of the Chinese “other” that go beyond the “Yellow Peril” of the Cold War.

That prompted a turn in my thought. You see, although I have a fairly idealistic streak and understand the utility of constructivism in international relations practice, I am a realist at heart. And realists are not sappy snowflakes looking for a global group grope. Instead, they focus on two things as the currency of international relations and foreign policy: power and interest. As the saying goes, in an anarchic world or Hobessian state of nature where values are not universally shared and norms are contingent on voluntary acceptance by independent State actors as forms of self-imposed restraint, then what matters is the exercise of power in pursuit of national interest.

That leads me to the following pseudo-syllogism:

States have interests, not friends.

Foreign partnerships are based on interest, not friendship.

Trade and security relationships are therefore interest-based.

They may overlap, complement but should never countervail.

A State’s degree of interest in any matter is self-defined.

Values help define but do not determine interest.

Interest may be influenced by values and values may involve shared cultural mores, norms and history that make for notions of “friendship,” but interest is not reducible to them.

Interest prevails over values when interest and values are at odds.

It is the relationship between values and interest that concerns me now. If I accept that values are only part of the definition of interest, then I must accept that shared values do not necessarily place some forms of interest above others. Nor does the absence of shared values do likewise in the negative. And if that is the case, then the matter of trade versus security must be weighed based on the degree of value-free interest in each and the impact each has on the ability of NZ to wield what limited power it has on the global stage.

The issue is problematic because NZ has long claimed to have a “principled” foreign policy that is based on the values of independence, multilateralism, transparency, non-proliferation, human rights adherence and assorted other good things. I do not believe that NZ actually adheres to these when push comes to shove or even as a foreign policy bottom line, but if virtue signaling in international relations is characterised as lauding the role of “principle” in foreign policy, then NZ is the semaphore of that movement.

To be sure, NZ is a trading nation and is committed in principle to it. Securing a favourable balance of trade that helps GDP growth and distribution is a matter of economic security and must be included in any national security estimates, to include threat assessments. There are as a result practical and principled reasons why the issue of assessing relative interest is so important and why it may favour the trade whores.

Put another way, what are the interests at stake in NZ’s security relationships and what is their worth to the national well-being when juxtaposed against the country’s trade relationships (since security and trade have been uncoupled in the NZ foreign policy perspective)? If the benefits of trade are real and immediate while the benefits of security partnership are more ethereal or hypothetical than real (especially given the actual and opportunity costs involved), interest would dictate that trade should be favoured over security. But what if the benefits of security relations are more like those of insurance policies, in which you only fully realise them when you need them? How do you calculate the pluses/minuses of the trade-security dichotomy over the medium to long-term?

I do not have the answer to this. I have written plenty about the NZ-PRC-US strategic triangle and the unfortunate balancing act NZ has to engage in because of the misguided attempt to trade preferentially with China, on the one hand, and seek security guarantees through partnership with the US, on the other. Either could have worked in isolation or when the two great powers were not in competition, as it seemed when the two-track foreign policy approach was developed and refined in the late 1990s and early 2000s. But those days are long gone. There are ascendent and descendent great powers contesting for dominance in the Western Pacific, and we are just another pawn in their increasingly acerbic game.

So the question now is how do we measure “interest” in our trade and security relationships and which, on balance, should we favour given the centrifugal pull of each on our policy-makers? Do we give up our Western-centric security ties to fully embrace a China-led Asian/non-Western foreign policy orientation? Or do we give up the material benefits of our Asian-focused trade, learn to live within our means and reaffirm our security ties to our “traditional” partners? Is there a middle road or happy medium that can be pursued without suffering the consequences of alienating our partners on either side?

That seems to be the preferred option for the moment. But that assumes that NZ has a choice in the matter and that its behaviour will influence the corresponding behaviours of its larger, contending interlocutors because their respective interests are maintained by our dichotomous foreign policy approach. That is a very tenuous assumption to make because it is also quite possible that in the end it will be a larger partner who, exercising its power over us in its own national interest within a strategic context dominated by great power rivalries, that makes the choice for us.

Spare a thought for Anne-Marie.

datePosted on 10:10, February 15th, 2019 by Pablo

Put yourself in the following position: You are a professor at a NZ university, a NZ citizen who although well-known in your academic sub-field is virtually unknown outside of academia. Your research interests focus on the foreign policy of an Asian country and you have written well-received books and articles about aspects of it. You speak and read the language of that country and have many contacts in it. Because of your acknowledged expertise, you are invited to give talks and presentations on these subjects and are awarded visiting fellowships at prestigious institutions overseas.

In 2017 you write a paper about how the country you study influences politics in NZ. The paper is not theoretical or conceptually ground-breaking, but instead gives a fairly detailed description of the people and organisations involved in promoting the interests of that country in Aotearoa. It demonstrates the pervasiveness of this influence-mongering amongst the NZ political elite, including the two major political parties. It also shows the systematic way in which this country uses front organisations to control the foreign language media related to it as well as shut down independent ex-pat voices critical of it. The country you study is, not surprisingly, ruled by a one-party authoritarian regime and intolerant of criticism at home and abroad.

The paper is first presented overseas, whereupon the local media seize upon it to highlight how that country is exploiting the NZ political system. You receive much media attention and gain your five minutes of fame.

However, within weeks of it being made public, you begin to receive threatening messages and phone calls from people who apparently do not like the thrust of your paper. A few months after its publication your university office and home are burgled, twice. Nothing of value is taken other than some cell phones, lap tops and flash drives. The thieves make no attempt to disguise the robberies.

You go to the police to report the crimes. You have not had this happen to you before and you are concerned that the burglaries may be connected to the threats about your paper. The police initially fob you off saying that burglaries are a low-level crime and therefore of low priority, but then re-open their investigation after you go to the media to express your concerns that something sinister may be at play. The police dedicate a special investigative unit to the task and contact Interpol, the international police information sharing organisation, about the case. Months go by.

Almost a year after the burglaries, while your car is being warranted, the mechanics doing the job notice that your front tires appear to have been deliberately deflated. Not knowing who you are they contact the police because they believe the vandalism could result in a serious accident. The car in question is used by other family members as well as yourself, so when the police contact you it causes you further alarm. You worry about the safety of your husband and children as well as your own.

A few months after the tire-tampering the Police issue a statement saying that the investigation has concluded with no culprits having been found, either for the burglaries or the tampering. They encourage people with additional information to come forward but reiterate that they will not continue to investigate the case. The offenders have gone free. Meanwhile, even though statements of support for your right to academic freedom and freedom of expression have been signed by scholars and activists at home and abroad, the government–including the Prime Minister–refuse to be drawn on the case.

What are you to do? Here you are, a NZ citizen who has every reason to believe that the actions taken against you have the hand of a foreign power. behind them. The police offer you no protection but instead advise you to up your own security and have the university do likewise in your workplace. You do not know if the offenders are still in your home town or if they will come back again. You put on a brave face but you are afraid. You might even consider moving to a safer place, perhaps out of the country.

This is the situation facing Anne Marie Brady. All she did was write a paper detailing Chinese influence in NZ politics. She deserves to have her rights as an academic and a person of conscience defended by those entrusted with protecting the security of NZ citizens. Instead, those responsible for doing so decided that there was nothing that they can do. She is on her own in her own country.

Perhaps there are reasons of State behind the Police decision to wind up the investigation. Perhaps the Police are simply incompetent and wasted over a year chasing shadows. Either way, professor Brady has reason to feel that she has been abandoned by the authorities.

If in fact the burglaries and vandalism were done to intimidate her because of what she wrote, and if the perpetrators were aided, abetted or acted as agents of the Chinese regime, then they succeeded. Because even if professor Brady will not be intimidated, the real message from the NZ Police and the Labour-led government is that those who write critically about the PRC do so at their peril even if they do so while on NZ soil.

Is Israel Democratic?

datePosted on 10:41, February 13th, 2019 by Pablo

An interesting thing happened after I wrote last week’s first blog post about Venezuela ( http://www.kiwipolitico.com/2019/02/on-the-venezuelan-mess/). A gentleman from the Israel Institute of New Zealand wrote me at my business email address to request a correction or retraction for something I had written in that post. The objectionable phrase was my reference to Israel as “semi-democratic.” He pointed out that Israel ranked just one point away from France as a “flawed” democracy in the latest Economist democracy ratings, not far behind Germany. In that post I characterised France and Germany as Right-leaning “advanced democracies” so he reckoned that I had slighted Israel when I labeled it as “semi” democratic instead.

We backed and forthed on the subject for a day or so. I told him that I based my characterisation on the fact that Arab Israelis are treated as second class citizens. I told him that I would leave it at that and not get into the subject of settlements on occupied land, the drift rightwards towards extremism and intolerance in its politics under the Likud Party (created by those paragons of democratic virtue Menachem Begin and Ariel Sharon and now led by Benjamin Netanyahu), the corruption of its government under Netanyahu (and his predecessor), its approach to Palestinians etc. He countered by pointing out that Arab Israelis have all rights given to non-Arabs, that they do not have to do compulsory military service but can vote and that a High Court judge who will hear Netanyahu’s corruption trial is an Arab.

I explained to him that I do not take the Economist’s ranking as gospel. In fact, I think that they are flawed due to an Anglo-Saxon bias and formal procedures and frameworks rather than substantive interactions (for example, I believe that New Zealand is ranked too high and Uruguay is ranked too low in the Economist list). I pointed out that I had an academic background that included writing about democratic theory (and democratisation in practice), so understand democracy to involve procedural (free and fair elections), institutional (impartial application the rule of law), societal (toleration, equality as mass values), and economic (fair distribution of productive wealth) dimensions, all of which I believe are deficient in Israel. He replied that Israel fulfilled the first three criteria. I also told him that I was raised in a strongly pro-Israel household and that I understood its unique security and geopolitical conditions as well as the fact that, when compared to pretty much every other nation in the Middle East, Israel was the most democratic of them. But that is just damning it with faint praise.

Perhaps I expect more of the Israelis, but its behaviour in the last two decades (and more) leads me to believe that it is no longer (if it ever was) a liberal democracy. Just because people have formal, de jure rights on paper does not mean that they have de facto rights on the ground. It may not be apartheid but in its treatment of Arab Israelis, African migrants and other non-European Jewish peoples, it falls very short of the “equality for all” mark that I would expect of a truly substantive democracy and well short of most European, North American and Antipodean democracies. This is not to say that the latter are all healthy and above reproach. It just means that Israel does meet even their lowered standards.

We agreed to disagree. I did not print a reaction or correction. I invited him to explain his views in a comment on the thread but he declined. After our correspondence I found myself thinking about how KP readers would classify Israel. I realise that given the ideological leanings of the blog many will be firmly in the anti-Israeli camp, but I wonder what, upon honest reflection, readers think about Israel’s form of governance. In other words, what argument do readers make to themselves about where they stand on Israel?

So here is an invitation for readers to express their views on the matter, formally posed as this question: is Israel democratic? . That way we can get a sense of how intelligent (mostly Left and Kiwi) readers see the Jewish state. But first a few rules:

No anti-Semitic anything. One can be anti-Zionist without being anti-Semitic (as an example, see this). One can criticise Israel without running nasty alt-Right tropes. One can defend Israel without resorting to false charges of anti-Semitism against those who oppose it, and one can defend Israel without making bigoted or other prejudiced remarks about Arabs, Palestinians etc. No re-litigating history. Israel is here to stay regardless of what some might prefer. And, as other democracies have done, it has behaved ruthlessly towards its enemies. So please, do not go down the worm-hole of who did what to who first.

IT goes without saying but is worth repeating nevertheless: No personal attacks on other commentators. Keep the discussion polite, rational and on-topic. I say this because any time Israel is mentioned people tend to lose their senses when confronted with contrary views. It really is a hot button issue.

I shall moderate the comments section a bit more vigorously given the subject matter. But by all means have at it because I am genuinely curious as to how people come to form their opinions on Israel.

The Venezuelan mess, again.

datePosted on 10:37, February 6th, 2019 by Pablo

I continue to watch developments in Venezuela with interest, including the reaction of the international community to the crisis. Increasing numbers of democracies are lending their support to Juan Guaido’s presidential challenge, including 11 of 14 members of the Lima Group convened to facilitate negotiations on a peaceful resolution. Spain, Portugal, Denmark, Austria, the Netherlands, Sweden, Latvia and Lithuania joined the UK, France and Germany (and Canada!) in siding with Guaido after the Maduro government refused to call for new elections within the eight day deadline demanded in an ultimatum issued by the EU members. It seems that much of the Western democratic world is now openly opposed to seeing Maduro continue in office.

That got me thinking more about Juan Guaido. How could this young (age 35) man emerge so quickly and be received so warmly by so many democracies? What I found out is interesting.

Guaido is a former student activist and industrial engineer who received post-graduate training at George Washington University in Washington DC. He got into politics when the Chavez government closed down the most popular private TV station in Venezuela and proposed constitutional reforms that strengthened the presidency at the expense of the other two government branches, and has reportedly spent time since entering public life at several Right-leaning think tanks in the US and Europe. After his introduction to politics he came under the wing of the well-known anti-Chavista Leopoldo Lopez. Lopez, now under house arrest, is a neoliberal economist by training (he has degrees from Kenyon College and the Kennedy School of Government at Harvard). He is the son of a former president and former mayor of Caracas himself, so his elite credentials are impeccable (he even did his high school education at an exclusive private boarding school in the US). Reportedly a friend of Elliot Abrams (see previous post), he was a leader of the 2002 abortive coup against Hugo Chavez and spent several years in military prison as a result. In 2014 he led another failed uprising against Maduro, getting house arrest rather than popular support for his efforts. He agitates from his home, where he uses social media and encrypted apps to communicate with foreign and domestic allies and uses his telegenic wife to serve as his spokesperson.

In 2009 Lopez and Guaido formed the Voluntad Popular (Popular Will) Party. Although it claims to be a Social Democratic Party affiliated with the Socialist International, VP gained notoriety for its uncompromising, hardline anti-Bolivarian orientation and direct action street tactics. Although some of its thuggery was in response to that of Bolivarian militias and para-militaries, the strategy employed by VP was essentially a two-track approach: work within the institutional framework as given by contesting elections for the National Assembly and presidency; and use direct action on the streets to foment mischief and undermine Bolivarian attempts to establish law and order.

Under an agreement with Lopez, Guaido became VP’s parliamentary leader while Lopez retained the party chairmanship. First elected as an alternate delegate in 2010, Guaido was elected to a full National Assembly seat in 2015 and, given that more senior party members were either under arrest or exiled, named Opposition Leader in 2018. Under the power sharing arrangement in the National Assembly, Guaido assumed the rotating parliamentary leader’s position on January 5 of this year. A week later he declared his presidency, arguing that Maduro’s re-election was illegitimate due to massive fraud and low voter turn-out (both of which are true). Under the Venezuelan Constitution, the National Assembly leader is declared president if the elected President and Vice President are disqualified, absent or cannot serve, which Guaido claims is the case here.

There is strong suspicion that Lopez has a direct connection to neoconservative circles in Washington, and through them, the Trump administration. There is speculation that some form of material assistance is being funnelled from the US, including from Venezuelan exiles, to VP in order to support its anti-regime efforts and the Guaido campaign. Although I have no direct knowledge of this, it would not be surprising if these claims prove to be true given the quickness in which Guaido emerged on the scene, the strength of the organisation supporting him and the rapidity with which the US recognised his claim. What is confirmed is that emissaries from a number of the region’s democracies as well as the US met quietly and exchanged secret messages with Guaido and his representatives in the weeks leading to his assumption of the parliamentary presidency.

This has me wondering why so many democracies have been quick to jump on the Guaido bandwagon. They surely are not acting just out of ideological distaste for the Bolivarian regime. They surely have good information on Guaido’s background and connections to Lopez and US interlocutors. They surely must know that although Maduro and his cronies are reprehensible thieves posing as a popular government, Guaido’s connections to the US will make it very difficult for him to claim legitimacy and could in fact, spark a violent backlash from the 30 percent of the Venezuelan population that continue to support Maduro (mostly the poor and working class). They also must understand the perils of supporting a foreign-backed constitutional coup (which is essentially what being attempted), especially when the move is closely tied to the threat of US military intervention. So why would they abandon long-held commitments to upholding the doctrine of non-intervention?

Some will argue that the humanitarian crisis in Venezuela requires drastic action and that action cannot come from within Venezuela under present circumstances. Yet even the issue of humanitarian assistance has turned into a political tug of war. The Lima Group and European democracies, led by Spain, have pledged humanitarian assistance, mostly in the form of food and medical provisions, to Venezuela. The same is true for Argentina, Canada and Brazil. But they insist on having Guaido and his supporters administer the aid provision, something that the Maduro government categorically rejects. Neither contender is interested in talking to the other about jointly administering relief assistance and instead are busy staging demonstrations and claiming support from within the military (where so far Maduro has a considerable advantage).

Perhaps the show of external support for Guaido is designed to be no more than a form of pressure on Maduro to call for new elections under international supervision, and not really a vote of confidence in Guaido per se. Coupled with the redoubling of sanctions by the US, UK and others against Maduro, his entourage and state agencies suspected of money laundering, the idea seems to be that the combination of forces being applied to the Boliviarians will make them cave to the election demands. The reasoning may well be that Maduro will see this option as preferable to civil war or a coup because it gives him the chance to run again rather than be run out of town in a hearse. After all, the primary rule for coup-plotters is that the people being ousted must not survive the ouster less they come back to haunt the usurpers–something the failed coup against Chavez demonstrated in spades.

This assumes that the target of the foreign pressure a) feels it to the point of pain and b) has no other options other than to cave to it. At this moment there is no evidence to suggest that Maduro and company are close to either concern. And for all his foreign support, Guaido does not appear to have moved the dial with regards to popular support significantly in his direction.

What we have, thus, is what the Latin American political scientist Guillermo O’Donnell (of bureaucratic-authoritarianism and democratic transitions fame) once called (with reference to Argentina 1946-1983) an “organic crisis and hegemonic stalemate” where both sides can check the other but where neither can unilaterally impose its vision for arresting the national decline.

Under those conditions, it may well be external actors who play a decisive role in determining the outcome, something that does not bode well for the prospects of national reconciliation required to reaffirm democracy while returning peace and stability to Venezuelan life.

The Venezuelan mess.

datePosted on 14:35, February 1st, 2019 by Pablo

WARNING: This post is long and somewhat meandering, as it gathers several strands of thought about the issue.

There has been some concern voiced about New Zealand’s refusal to take a side in the power contest now being waged in Venezuela, where the leader of the National Assembly, Juan Guaido, has declared himself interim president in opposition to fraudulently re-elected Nicolas Maduro, the successor to Hugo Chavez in what is known as the “Boliviarian Revolution” that started in 1999. The Maduro administration is notoriously corrupt and incompetent and has driven Venezuela into the ground, to the point that millions are starving and more than 2.1 million have fled the oil-dependent country in the last two years (the largest refugee crisis in Latin American history). The reasons for this human-made disaster are many and will not be covered here. Instead, let’s start with the NZ reaction and proceed to how things might eventuate over the next weeks and months.

When first asked about US support for Guaido (the US recognised his presidency a few hours after he made his claim public) and whether New Zealand would follow suit, Prime Minister Arden said that NZ supported “neither side.” That sent the NZ political right into paroxysms of indignant fulmination, with politicians and commentators claiming that she supported Maduro, communism, evil-doers in general and people who kick their dogs. Not surprisingly, her ad-lib was followed shortly thereafter by a more measured comment by Foreign Minister Winston Peters that NZ does not choose between foreign political parties and contenders and prefers to allow them to settle differences on their own.

Coming after the PM’s comments (which reminded me of her “there are no undeclared Russian spies in NZ” remark in March 2018), Peter’s tidying up was appropriate. Although the Maduro regime is odious, it is less repressive than many other authoritarian regimes that NZ recognises and trades with (its major flaws are grotesque corruption and incompetence). NZ also has a long-standing public commitment to the principle of non-intervention and support for peaceful constitutionally-driven political change. The Maduro regime is now being confronted by an externally-backed constitutional coup in the form of the Guaido challenge (and no one elected him to be anything other than an opposition National Assemblyman. He only assumed leadership of the National Assembly in December as part of a rotation-in-office deal with other opposition coalition parties). Guaido and his supporters are not necessarily democratic champions themselves and their promises to hold new elections in a timely fashion are vague at best, so immediate recognition of him as “president” is more an act of faith or cynicism rather than a demonstrable fact of his democratic inclination. In that context Peter’s statement strikes a good diplomatic balance.

With some notable exceptions most of the Latin American governments supporting Guaido are right-leaning like that of Mauricio Macri of Argentina, Jair Bolsonaro in Brazil and Sebastian Pinera in Chile, with the advanced democracies supporting his challenge also being governed by Right administrations (UK, Australia, France, Germany as well as semi-democratic Israel). Meanwhile, left-leaning democracies such as those of Bolivia and Uruguay support the Maduro government. So there appears to be an ideological bias at play in how some democracies are casting their lots on the matter. The majority of the global community have taken a stance akin to that of NZ.

The usual clustering of dictatorships and semi-democracies that are backing Maduro such as the Cuba, PRC, Russia, Iran, Turkey and Syria have hard-nosed geopolitical as well as ideological reasons for doing so. Cuba gets the majority of its oil from Bolivia at discounted prices and has propped up the Boliviarians with both civilian and security assistance. Russia has cultivated Venezuela as an anti-US bulwark with weapons sales and military aid. China has spent billions investing in Venezuelan infrastructure. Iran and Syria have both benefitted from the Boliviarian’s alliance with Hezbollah and Iranian Revolutionary Guards. None of them may be particularly enamoured of Maduro but they have serious investment stakes in the game.

As for the NZ response, think of the PRC’s potential reaction to New Zealand siding with the US after its “choose a side” demands, particularly in light of the Huawei imbroglio. Think of the US response if it sides with Maduro. In other words, the diplomatic consequences of taking sides are not positive regardless of which side is chosen. That is why Peter’s statement is judicious–it annoys no one.

In summary, NZ is correct to not choose sides in the Venezuelan crisis, both for principled as well as pragmatic reason

With regards to the crisis itself, the solution has to be internal rather than externally imposed. They key is for the military–the 130,000 troop Army in particular since it will have to do the repressing–to drop support for Maduro in favour of a transitional government that schedules elections in the near future (the Navy has a limited land presence and along with the the Air Force can only support or resist what the Army does, but neither can prevail on their own no matter which side is chosen). To this end, Guaido’s emissaries have been working hard to establish a dialogue with the armed forces, something that, at least with regard to the Venezuelan high command, so far has been rebuffed.

Venezuelan flag rank officers are Maduro cronies who are deeply corrupt and incapable of leading troops in battle. Instead, they have been siphoning off “tax” from the ministries and border commands that they control (which cover drug, people, petrol and arms smuggling routes). The ones that are the key to what happens next are field grade officers (Colonels, LTCs, Majors and Captains) and NCOs who command the enlisted soldiers with the guns. That means bridging the division between constitutionalists (those who swear an oath to protect the constitution no matter who is president) and nationalists who see themselves as saviours of the nation in a time of need–but those include both pro- and anti-Maduro factions. The move involves mending horizontal (between service branches and ideological factions) and vertical (between ranks or military school graduating class) cleavages, something that often involves intra-institutional violence as a precursor to what follows.

In this type of scenario, the military is subject to what are known as “push” and “pull” factors. The “push” factors are those internal to the military that compels them to intervene in politics. These can be a loss of combat readiness or military discipline and professionalism, overt politicisation of the officer corps, rampant corruption etc. All of these are present within the Venezuelan military.

“Pull” factors are external events or conditions that draw the armed forces out of the barracks and into politics. They include armed challenges to military monopoly over organised violence (say, by paramilitaries, guerrillas, criminal organizations and the like, all of which operate with some impunity in Venezuela), and what is known as civilian pleading. Civilian pleading refers to calls from civil society for the military to act. This includes appeals by business groups, unions, religious and community organizations as well as external actors such as Venezuelan exile communities and foreign governments and organisations such as the OAS.

The sense of compulsion is reinforced by the personal experiences of troops when not in uniform. Militaries do not exist in a vacuum and in fact are reflective, in their own way, of the society from which they are drawn. Venezuela has a volunteer military and many of its personnel return to their families and homes after a day’s work. So they are living the crisis both as uniformed personnel as well as citizens.

In short, the Venezuelan military is getting an earful from many sides and has internal, “corporate” reasons to act in order to preserve its position as the pre-eminent institution responsible for managing organised violence in that society. Whether it adopts an arbitrator or governing role once it does so remains to be seen, but it is now the primary determinant of the nation’s political future.

If the field ranking officers and NCOs abandon support for Maduro he is finished, although his loyalists in the Cuban-dominated intelligence and police/paramilitary services will resist the move. It is also likely that, barring massive defections, the 70,000-strong National Guard (which is the agency primarily responsible for domestic repression and which has gained a reputation for brutality) and 150,000 strong National Militia will continue to side with Maduro. The scene is then set for mass violence and prolonged resistance (remember that the Cubans have helped Maduro create thousand of small-scale neighbourhood militias that are trained to use guerrilla tactics against any superior force, foreign or domestic. Along with National Guard resistance that could protract the conflict and drag foreign forces into another long-term ‘pacification” campaign).

The military could opt to simply lay down their weapons, but that is unlikely given the presence of loyalists in the ranks and the National Guard still loyal to Maduro. Or the military can unite around Maduro and ward off US interference by getting Guaido to back down on his presidential challenge, possibly in exchange for new elections and/or constitutional and political reforms. That is the most peaceful option but it does not solve the underlying economic and social problems or the issue of a potential US military intervention if Maduro remains in power (it is highly unlikely that any Latin American country will contribute troops to any US-led intervention force, although it is feasible that Colombia and Brazil might allow US forces to forward deploy and stage in their territories).

So the likely scenario is that Maduro is removed by force, be it threatened or actual. While inevitably bloody, a pro-Guaido military coup will be better than an external military intervention, where many erstwhile opponents of Maduro will rally against armed foreign interference, especially from the US. If it is revealed that Guaido and his supporters have been receiving advice, money and logistical help from the US, that could backfire hard on his military and civilian allies and increase as well as prolong the bloodshed.

In order to avoid civil war the military will have to be united in its support for one or the other presidential contender and willing to demonstrate its resolve. That is easier over the short term if the field officers and NCOs side with their superiors in defence of Maduro, but given the circumstances that is unlikely to hold over the longer-term and could lead to a direct confrontation with US forces should the Trump administration determine that it is expedient (say, as part of a declaration of “national emergency” that includes emergency funding of the border wall by Executive Order) to sacrifice lives in order to see him ousted (the annotation of “5000 troops–>Colombia” on John Bolton’s press briefing notes this past week may or may not be a real statement of intent but certainly signals that “all options are on the table,” even if they are not well thought out. After all, 5000 troops are not enough to control all Venezuelan territory and will have difficulty subduing militias, guerrilla groups and nearly 1 million strong volunteer military that even with defections and intra-service clashes will dwarf the invading force coming across a well defended land border. Which is to say, armed intervention by the US will involve a lot more than a brigade and a lot more than a land assault from Colombia).

It is telling that the person nominated to lead the US Venezuela task force is Elliot Abrams, of neocon Iran-Contra, death squads and the 2002 coup attempt against Chavez fame. His “skill set” is a dark and narrow one, so his appointment pretty much reveals the foundation of the current US approach to the crisis. The irony is that Abrams was originally a “never-Trumper,” who was initially blacklisted from any administration job. But with fellow neocon John Bolton as NSC advisor, the time for redemption is apparently at hand. It will be the Venezuelans who pay the price for that. 

Foreign supporters of Maduro like to claim that US sanctions imposed on his government are a large part of why the country was crippled. This ignores the fact that the sanctions targeted Maduro administration officials and state-controlled firms suspected of money laundering and pilferage. The sanctions did not target economic activities connected to the provision of basic goods and services, nor did it target average citizens. The loss of basics such as food and medicines is not due to sanctions, but to the rampant thievery and incompetence of what now can only be called a kleptocracy as well as the response by the private sector to it.

On the other hand, the Venezuelan political opposition, when not in-fighting, have behaved less than honourably towards the Boliviarians even before Chavez began to tighten his grip after the 2002 coup–a coup that business elites, domestic political opponents and the US government were quick to support even before his arrest was made public (he was freed and launched a counter-coup just hours after being detained). Business elites have largely liquidated assets and decamped the country rather than accept increased taxes on individual wealth and corporate profits. Since 1999 political opponents have schemed and plotted with the ex-pat community and other Latin American rightwing groups to overthrow the Boliviarians. So there is much blame to spread around and choosing between Maduro and Guaido will not necessarily solve the underlying fundamentals of the national decline.

Let us be clear on a key point: if Maduro and his associates had one shred of decency and honour they would have resigned rather than rig last year’s election. They have managed to squander Chavez’s already diminished legacy, allied themselves with some rather unsavoury foreign actors, alienated most of their regional counterparts and overseen the collapse of what once was a prosperous country. Some of that may be due to the so-called “oil curse,” where countries dependent on fossil fuel exports almost inevitably succumb to authoritarianism and the vicissitudes of commodity booms and busts (as has happened in Venezuela). But the blame for what Gramsci would call an organic crisis of the Venezuelan state lies squarely on the shoulders of Boliviarians, not imperialists and domestic reactionaries. The extent of their perfidy and ineptitude is outlined here.

Guaido is believed to have offered Maduro and his associates (including the military leadership) amnesty for their crimes in exchange for abdication. There are reports that he has offered safe passage into exile for regime leaders along with much of their ill-begotten assets. There are rumours of secret talks between his representatives and field rank officers. His supporters have gathered outside military bases clamouring for the troops to lay down their arms or join with the opposition. It is clear to everyone that the military holds the key to what happens next, but the question remains open as to whether the military will choose a side, fracture or simply remain neutral while the civilian actors negotiate or fight for political control. So far the military leadership remains loyal to Maduro, but defections in the ranks are commonplace (including the military attache to Washington, who defected and requested asylum).

It is unlikely that Guaido would have made his move spontaneously or without the encouragement and support of the US. It is very likely that US representatives worked with him in the weeks leading to his challenge for power, and it would not be surprising if the US has provided logistical and material assistance to his campaign. It is also likely that discrete overtures have been made to military officers by the US, if nothing else then to ascertain the mood of the troops. The emergence of a right-leaning political bloc in Latin America provided Guaido with a favourable geopolitical context in which to make his move (Argentina, Brazil, Chile, Colombia, Peru, Guatemala, Honduras and Costa Rica all have right-leaning governments at the moment). This has translated into Organisation of American States (OAS) support for Guaido, something that breaks with a long-standing tradition of promoting non-interference in the sovereign affairs of its members.

The bottom line is that Maduro’s position is increasingly untenable but Guaido is somewhat tainted by his association with the US. The solution to the impasse rests in the hands of middle and junior rank Army officers and NCOs, who must choose to defend Maduro or opt to support an election-based political transition to a post-Bolivarian regime (that may or may not be led by Guaido or Maduro if the elections are genuinely free and fair). That requires a public move one way or the other from within the Army as a signal of intent. There is likely to be violence involved with either choice, both within and between armed service branches, paramilitary organisations, intelligence agencies and guerrilla cadres connected to civil society and political parties. But that will be the lesser price to pay if the alternative is US military intervention.

In the meantime the international community can do its part by marshalling humanitarian assistance for the Venezuelan people. The UN and OAS can lead those efforts and the contending political factions can broker an interim agreement on priority needs and the means and methods of conveying that aid, something that could lessen factional and partisan tensions and set the stage for more substantive negotiations on the terms and conditions for the political transition that, one way or another, is an inevitable part of Venezuela’s future.

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KP ten years on.

datePosted on 12:20, January 30th, 2019 by Pablo

In January 2009 KP started publication. I was living in Singapore and was part of the original team that included Anita and Pete. Shortly thereafter Lew joined us. Over the years Pete, then Anita and later Lew dropped out (much to my regret) and others came and went. We have had a couple of guest contributors (Kate and Selwyn Manning) but these days it is just me rattling around the shed. I am not sure about Anita but Lew is a prolific presence on twitter, although I believe that however brilliant a 140 character snark may be, it is no substitute for the type of essays he used to write here. Pete moved into work roles that prevented him from continuing after the first few months and a couple of years later Anita made clear that work conflicts precluded her further participation, which is fair enough.

During the last decade I returned to NZ and welcomed a son into the family. I stay connected to academia through my partner but justify my existence with some consulting and commentary work. Most of the time, when not researching and writing for applied or personal reasons I dedicate my time to watching that boy grow up in the splendorous settings of the Waitakere seaside bush. He is lucky to have been born in such a place. He is not quite the hunter-gatherer yet but he is most certainly an outdoor kid who knows his way around livestock, dogs, poultry and wild birds and who knows which varmints are good and which are bad (in our household, the latter referred to as “evildoers” or, in the case of stoats, “Trumps”).

So, what have the ten years brought? We have published 1,072 posts, 542 of which are mine. There have been 901, 090 page views and 14, 825 approved comments (that does not included deleted troll comments and spam, which runs into the thousands). The greatest single day for pages views saw 4000 readers, but the average now is just 60-150 per day. Domestic topics get the most hits, which is slightly unfortunate given that my major focus is on international relations, comparative foreign policy, US politics, intelligence and military-security issues. As one can see from the Archives column on the right hand side of the front page, we started off with a bang but then gradually diminished the amount of posts published per month. Things dropped off markedly after Lew departed and now average around 1-3 per month depending on my mood, work commitments and what is happening the in the world. I continue to hope that Lew will return or that I can find another regular contributor but so far those hopes have not worked out.

The blog gets traffic from other NZ political blogs but most of what gets directed over is via search engines and mass consumption social media (Twitter, FB, Reddit). Although it is asked to accept advertising or paid content from time to time, it was the intention of the KP originators that we never go down that path, something that I continue to honour.

There is a dedicated cadre of regular commentators, some who have been around since the inception. Since I am unwilling to indulge ill-informed people, trolls or political onanists, it does not have much in the way of regular contrarians amongst the commentators, although people like Tom Hunter, Phil Sage, Redbaiter and, to a lesser extent, Paul Scott drop in to keep me on my toes. Otherwise the commentators display clear Left leanings, often considerably to the Left of me.

At this juncture KP survives as a tiny niche blog with a majority NZ audience but predominantly international focus. That is OK with me and justifies paying the server fees (it is a WordPress platform hosted by Dreamhost). For me it fits somewhere in between editorial commentary in corporate media, personal opinion and professional writing–a bit more ideological and subjective in many cases but most often somewhat above a rant.

It is hard to discern what the future holds for the blog but in the interim it will plod along in its current form in its designated space in the blogosphere. Thanks to those who continue to come along for the ride.

On the post-truth moment.

datePosted on 14:36, January 25th, 2019 by Pablo

For a while now I have been wondering about how we have come to the current state of affairs where objective facts and reality-based truths are subject to question at the same time that blatant falsehoods and denials of fact are promoted and increasingly accepted as part of contemporary social discourse. We now live in a world of “fake news” and “alternative facts” where reality denial and abject lying are regular features of the cultural landscape.

I cannot claim any expertise in tracing the origins of the phenomenon. What I can say is that fake news and truth relativism follow a long line of disinformation, misinformation and propaganda aimed to deceive or distract from a particular reality or fact. It has roots dating back to ancient times, where the practice of seeding public debates with false narratives was employed by Egyptians, Greeks, Persians, Romans and Chinese dynasties. In the late 20th century it was associated with a type of “yellow” journalism as practiced by the Daily Mail and National Enquirer, where stories about alien abductions and pregnancies shared space with false stories about celebrity deaths, illnesses, criminality, two-headed babes and assorted other lunacy. This overlapped with conspiracy theories peddled by Right and Left wing extremists, who saw dark machinations behind an array of global events.

As of the late 1980s another factor entered into the mix. The rise of post-modernism and its attendant notions of epistemological, cultural and moral relativism, liminality, intersectionality, post-structuralism, rejection of “objective” reality in favour of subjective, contingent and socially-constructed interpretations of “truth” and concern for the narratives of subordinated and traditionally unheard of voices (e.g. indigenous peoples, women, LGBT communities) gave intellectual foundation to the idea that nothing real was truely “objective” and that no fact was universally factual. Like four blind people groping an elephant, reality is defined by the position of the subject as much as it is by the empirical conditions in which s/he is located. And as Isaac Asimov noted with regard to his extraterrestrial beasts and characters, they only appear grotesque, scary and outlandish because we are trapped in the physical constraints of our own Earthly reality, which in turn determines the mental framework we use to categorise what is real, imaginary and unimaginable.

Post-modernism has been deservedly critiqued for its focus on subjectivity and relativity, particularly where it intersects with hard science (say, with regards to the laws of physics and biological imperatives). But it also is correct in bringing attention to the fact that history as well a values lie in the eye of the beholder, and that perspective is often socially constructed and not universally shared.

9/11 gave conspiracy theorists a major boost and the false pretences under which the US invaded Iraq (non-existent WMD “ready to launch” in Tony Blair’s words) spawned wide-spread skepticism about official claims and narratives once the ruse was exposed and the consequences revealed. Meanwhile, the rapid rise of social media and telecommunications technologies gave state intelligence agencies and non-state actors new channels of communication through which they could manipulate and distort “reality” for partisan, political, military, economic and diplomatic advantage.

It appears that the right-wing propaganda outfit Breitbart was one of the first Western agencies to introduce fake news into mainstream political coverage. Steve Bannon honed his skills in this dark art at Breitbart and used them very successfully during the course of the Trump campaign for the US presidency. He got a boost from Wikileaks, which was used by Russian intelligence as a conduit for hacked communications by and disinformation about Hillary Clinton’s campaign. This in turn fed into the Rightwing echo chamber fronted by Fox News and conservative talk radio, who willingly and unknowingly parroted fabricated lies deliberately planted by Bannon and his coreligionists.

Trump then turned everything on its head. Although the mass propagation of “fake news” began with Brietbart and its ilk, Trump started (probably at Bannon’s behest) to use the term as an attack on mainstream, corporate media coverage of his campaign and later presidency. His assault on the free press has been relentless yet very effective because it depends on doubt about factual veracity in the media as a whole. On top of that Trump uses another tactic that seems absurd but which works: he denies obvious things he has said and done even if they have been recorded the day before and lies on top of lies to the point that it is near impossible to determine when the falsehoods began.

In Trumpworld objective reporting is fake and outright lies and deceptions are truth. Climate change is a hoax; the security threat posed by undocumented migrants of colour is real.

His advisors and surrogates imitate his style and add their own flourishes, such as Kelly Anne Conway’s remark that the administration deals in “alternative facts.” A whole machinery of Republican-linked PR and crisis management agencies now engage in institutional whitewashing and blacklisting via dissemination of fake narratives and denial of reality. Witness the case of the catholic school punk who confronted an Omaha tribe elder outside the steps of the Lincoln Memorial. Within days of his smirking gob going “viral” on cellphone videos he was fronting up to leading television outlets spouting the manicured lies of a Republican advisory agency that he, in fact, was the victim of the encounter. Also consider the Republican-backed campaigns to link the Clintons to various murders and the infamous pizza parlour pedophile ring. And of course the “Obama is a Muslim non-citizen” trope.

The practice of using fake news and accusing honest media agents of doing so has spread world-wide particularly in rightwing political circles. Although authoritarians like Putin are masters at the art of disinformation, even upstart despots like Erdogan, Bolsonaro and Dutarte have trotted out their variations on the theme.

But that is not the only realm where the post-truth moment has gone. It is now considered–at least in large parts of the US– to be a socially accepted strategy to deny, dispute and lie about objective facts rather than take responsibility for what actually happened. It is now acceptable to flout ignorance of facts, be they scientific or political, in support of a particular world view. It is now common for bigots to not only come out fo the closet but to openly display prejudice while denying doing so. One is no longer a racist; one is a proud white nationalist simply sticking up for his/her heritage and cultural values.

It is like a kid caught out stealing cookies from a bakery display jar. When confronted about stealing cookies, he yells “says who?” When told that he was seen by several people in the act of committing the deed, he yells “who are they?” When told they are responsible adults who just happened to be on the scene he yells that they saw wrong and even of they did see right they are plants and snitches out to get him. And when his parents turn up, they angrily take his side of the story even though he has crumbs on his hands and chin. At that point the baker and witnesses just want to move on, thereby allowing the kid to get away with his misbehaviour. So it is with Trump and an ever growing number of people enamoured by his type of approach to facts that do not accord with his notion of a preferred reality.

New Zealand has so far been largely spared the ignominy of embracing the post-truth moment. But if the actions of certain ideological circles are an indication, the introduction of Bannon-style politics is on its way, at least in terms of using fake news to cloud public perceptions of what is fact and what is not.

For the time being I remain confident that Kiwis have the ability to identify and call out the BS artists and purveyors of mistruths. And I am reminded of something that I have said to my children over the years as they came of age and found it difficult to discern fact from fiction when reality is contested:

“May your path be that of the gentle warrior, steeled by conviction. And may your eyes always shine brightly with the beacon of truth.”

Playing us for suckers.

datePosted on 19:18, January 13th, 2019 by Pablo

Huawei NZ has offered to only use NZ citizens to install its 5G equipment as part of the national broadband upgrade. It does so because of concerns about a revised Chinese National Intelligence Law that requires all Chinese citizens and firms to serve the interests of state security. Prior to now, many of the technicians involved in installing Huawei equipment around the world were and are Chinese citizens. After the GCSB advised against using Huawei in the NZ 5G roll-out citing national security concerns and publicizing of the Chinese intelligence law requirement of its citizens, Huawei NZ decided to allay fears by offering to use Kiwi technicians instead.

This is akin to ISIS using white females to deliver package bombs. It is not the method of delivery that matters but the content of what is being delivered.

Huawei technicians in NZ may or may not know what “backdoors” or other bulk collection or data mining filters are embedded in the equipment that they install. That comes from the source, and when it comes to Huawei the source is intimately bound up with the Chinese state and its ruling party. Huawei is not a publicly traded company. Instead, it is a state capitalist enterprise and the CCP has a major role in its direction. Its technical arm is believed by Western intelligence agencies to have close ties to Chinese signals intelligence, which given the intelligence law’s requirement on Chinese firms is part but not all of the reason that Huawei has been banned from 5G roll-outs in Australia, NZ and the US.

Western telecommunications firms also install backdoors in their equipment. Those are used to, via bulk collection and data mining, ascertain customer preferences with an eye to selling advertising. According to Western security agencies, the difference between them and Huawei and its Chinese counterpart ZTE is that the former do not work hand in glove with intelligence agencies and in fact (especially after the Snowden revelations about bulk collection of domestic communications in Western democracies) require warrants from security courts in order to access encrypted communications on private networks.

So the argument goes that Western telecommunications firms install backdoors in their equipment in order to enhance commercial profitability while Huawei and ZTE install backdoors in order to serve Chinese intelligence. This includes collecting political, economic, military, diplomatic, commercial and intellectually proprietary information that extend well beyond aggregating and selling consumer preference data.

That is a big difference that the nationality of the technicians doing the installing of such equipment cannot obscure. Perhaps the Huawei NZ management think the NZ public are gullible enough to believe that the citizenship of technicians is the reason the GCSB advised against using it as a supplier.

When it comes to who to believe in a contest between NZ profit-seekers and national security professionals, especially when the profit-seekers are backed by an aggressive authoritarian state that regularly violates international norms, my inclination on this particular matter is to believe the security professionals, warts and all.

It’s over.

datePosted on 14:01, December 27th, 2018 by Pablo

Media coverage of the Trump administration is like a group of people standing around the bedside of a terminally ill person. Instead of dealing with the fact that the person is soon to depart this earthly coil, they linger on the details of her illness, the early symptoms that remained undiagnosed, the downhill course of her trajectory, the therapies used to prolong her life, the deterioration of her body and the awfulness of it all. That is all well and true but the bottom line is that for the person in the bed, life will soon be over and no amount of picking through her medical history will change that.

Whether it be out of morbid curiosity or driven by ratings boosts linked to the politically macabre, the US media fixates on Trump’s every action. He fuels their addiction to administrative chaos with his inane tweets and moronic statements. Truth be told, the press cannot get enough of it and many a pundit has made his name off of analysing the Trump train wreck. But all this ignores the larger picture, which is that, whether it happen in days, weeks, months or a year, the Trump presidency is finished. Done. Dusted, Kaput. Finis.

The disaster that is his presidency is too obvious to recount in sordid detail here. Suffice it to say that people are being fired or leaving the administration in droves, and many jobs remained unfilled or have been taken by intellectual lightweights. Trump lashes out and reacts impulsively across a range of issues, with suspicions emerging in print that he is addicted to the prescription stimulant Adderol (which is a 25th amendment grounds for removal). He is besieged on several legal fronts, both at the federal as well as state level. Congress is soon to see Democrats gain control of the House of Representatives (which means his legislative agenda is all but finished), and his own Party is not wiling to blindly follow his policy leads. His foreign policy is in tatters, his border wall will not be built and the Mexicans certainly will not pay for it, North Korea still has nukes, his trade war is hurting the states where is electoral base is strongest, the Russians and others laugh at him to his face, his children are in legal jeopardy, and his cabinet has an increasingly feral character to it. Daily scandals, lies and inanities are a constant soundtrack of his presidency. Absorbing all of that, Wall Street, which had been so opportunistically bullish when he entered office (and for which he claims credit), is now moving beyond skittish into full bear territory (for which he blames the Federal Reserve). As New York state prosecutors pointed out with regard to the Trump Foundation, his administration is basically an on-going criminal enterprise rooted in fraud and corruption posing as a government. His lying acolytes are no longer able to keep straight faces when spinning the White House narrative and many of his supporters in high places have simply gone to ground. Even Fox News and rabid rightwing radio personalities are breaking ranks with him. The exact precipitant and method of exit remain unknown, but one thing is clear: He is isolated, incoherent and irrational. He will soon be irrelevant.

That is why the media would be better off ignoring him and focusing on the line of succession and other aspects of institutional continuity. The era of president Mike Pence is at hand, and if it turns out that he played loose with the Russians during the campaign (as is claimed), then he too may be shown the door. That brings the Secretary of State, Mike Pompeo, into the Oval Office, and if he is unfit to serve, then Nancy Pelosi as the incoming Speaker of the House follows in the line of succession. If Pence is not indicted or otherwise tainted by his association with Russians during the campaign, he is free to choose his own Vice President (subject to Senate confirmation).

It behooves the US political elite to be working with Pence on transition scenarios. Pence is a religious freak and troglodyte on gender and sexual issues, but as a former congressman and governor he knows what it takes to get things done in DC and he is rational in a hyper-conservative way. Although he will likely return to the neoconservative approach to foreign policy and continue to be on the wrong side of history when it comes to guns, reproductive choice and race relations, he will be, after the lunatic steps down, positively easy to deal with. The same goes for Pompeo, who served in Congress before being named CIA director and then Secretary of State.

The institutions themselves need to develop transition plans. Already defence strategists openly worry about Trump going rogue and trying to launch a nuclear strike somewhere as a diversion or as a act of petty revenge on his successors. They point out that he can do so on his own and that there are no formal institutional checks on him (he is only supposed to consult with the Joint Chiefs of Staff, Secretary of Defence and National Security Council as well as other cabinet officials, but he is not obliged to do so or to heed their counsel). Even if senior officers refuse his orders to launch a nuclear strike, he can work his way down the nuclear chain of command until he finds a compliant one. There is consequently a move to get Congress to re-write the law governing nuclear weapons use, but in the meantime DoD and the service commands need to consider the very real possibility of having to refuse a presidential order to use the arsenal. There is precedent for this under Nixon (during Watergate) and Reagan (after his Alzheimer’s became apparent), so it is not an unimaginable task.

The same can be said across the federal bureaucracy. Although Pence will not roll back all or most of Trump’s policies (say, on the environment), he will want his own team at the helm of federal agencies and will want to impose his own stamp on the policy-making process. In order for that to happen in an orderly fashion, planning must be done in anticipation of the change-over. It would be best for career public service managers to prepare contingency plans with an eye towards moving out from under Trump’s political appointees, particularly in contentious portfolios like Education and Homeland Security.

The bottom line is that the obsessive focus on Trump obscures the inevitability of his demise and the need to prepare for a change of administration. Because his downfall of itself will not right the ship of state. For that to happen a plan of action must be in place, something that requires congressional and executive branch coordination even if done without the knowledge of the political moribund in the White House.

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