How Putin Outwitted the Russian Oligarchs

The Rise and Fall of the Russian Oligarchs

Directed by Alexander Gentelev (2006)

Film Review

The Rise and Fall of the Russian Oligarchs focuses on the scandalous period after the collapse of the Soviet Union, in which 100 opportunist oligarchs destroyed the economy of a relatively wealthy country (with the help of the CIA, USAID, the IMF and the World Bank) by seizing $20 billion of assets for roughly a billion dollars. The admitted goal of these Russian oligarchs (and their CIA supporters) was to privatize as many industries as possible behind the scenes before the Communist majority in the Russian parliament could consolidate power and stop them. The documentary’s overarching theme concerns Putin’s rise to power in 1999, which is credited for saving the Russian economy via his shrewd confrontation and defeat of these oligarchs.

This Russian-made documentary focuses on three specific oligarchs: Mikhail Chernoy, who now lives in exile in Israel; Theodore Gusinski, who now lives in exile in Spain, and Boris Beresovksy, who now lives in exile in London. It’s divided into two parts.

Part 1

Part 1 describes how these men used privatization schemes introduce by the last Soviet president Mikhail Gorbachev (under Perestroika – 1985-1991) to acquire a variety of Russian assets for pennies on the dollar. With the collapse of the Soviet Union in 1991, many state-owned factories were threatened with closure, the Russian government initially privatized them through an ill-conceived voucher scheme. Ownership in the factories was broken up into millions of shares in the form of vouchers distributed to all Russian citizens. Because they had no other source of income, many were forced to sell their vouchers cheaply for food. Others were tricked into “investing” them in phoney investment schemes as their owners sold on their hoard of vouchers and pocketed the proceeds.

Chernoy wound up with hundreds of thousands of these vouchers, which he used to buy up Russia’s aluminum industry.

Using western financing, Gusinski would form Russia’s first commercial TV network in 1993. In 1994 Berezovsky (again with the help of western financing) would buy Russian state TV for a few million dollars. Joining with other oligarchs, they skillfully used their media monopoly to promote their privatization agenda.

Part 1 also covers the 1991 attempted coup against Gorbachev (a desperate attempt by the Communists to reverse rapid privatization); Yeltsin’s successful (CIA-backed) coup in 1993, in which he used the military to attack the Russian parliament, effectively dissolving parliament and the constitutional court; and the vast human misery caused by the “shock therapy” Wall Street imposed Russia as they looted their economy. This, in turn, would lead to escalating mass protests demanding a return of the Communists to power.

Part 2

Part 2 focuses on the oligarch (and CIA) financed and controlled election of Boris Yeltsin in 1996 – as well as the direct role the oligarchs assumed in government following Yeltsin’s victory against his more popular Communist opponent.

The Russian economy reached breaking point in 1998. By then, the Russian government had lost so main state-owned industries (75%) that it could no longer pay its debts and Russian banks froze depositors assets.

This, along with Yeltsin’s failing health, would lead to a political crisis, resulting in Vladimir Putin’s appointment as acting president initially supported by the oligarchs – in 1999. Following Putin’s election in 2000, he quickly turned on oligarch supporters, who expected to control his government as they had Yeltsin’s.

Then, as now, he excelled at media manipulation, capitalizing on popular fear of Chechen terrorism to heighten his popularity. He also shrewdly confronted individual oligarchs for tax evasion and other financial crimes during televised cabinet meetings.

This was followed up by security raids and harassment, arrest – and in some cases imprisonment – to encourage numerous oligarchs to relinquish their ill-gotten shares to state control.

In this way, Putin essentially ended Wall Street’s wholesale exploitation of the Russian economy and the Russian people – and Wall Street and the US military-intelligence complex have never forgiven him for it.

The documentary’s main weakness is its failure to explore the major role Wall Street and US intelligence played in the destruction of the Russian economy between 1991-2000. Good background on this at the following links:

The Harvard Boys do Russia

US Meddling in 1996 Russian Elections in Support of Boris Yeltsin

USA Russia

The Plunder of Russia in the 1990s

The Rise and Fall of Britain’s Working Class

the-people

The People: The Rise and Fall of the Working Class 1910-2010

By Selina Todd

John Murray Publishers (2015)

Book Review

The People is about the rise of the British working class during World War I and its systematic erosion during the seventies as the Thatcher government systematically dismantled Britain’s manufacturing base.

British workers first began to see themselves as a cohesive force during 1914-18 as hundreds of thousands left domestic service (where most were employed) for the war industry. Working class consciousness reached its zenith during World War II, in part due to discriminatory treatment by the Churchill government. Working class women were often forced to leave well-paying jobs to be conscripted into the munitions industry. In contrast, middle and upper class women were exempted from conscription because they did “voluntary” work. Middle and upper class families also found it easier to be exempted from the mandatory evacuation scheme. The latter required rural families were required to accept child evacuees from urban centers without compensation.

The Churchill government provided virtually no funding for the mandatory evacuation scheme (which was organized mainly by schools and charitable groups), nor for benefits for families who lost housing, jobs and breadwinners due to German bombing, nor for proper air raid shelters. Government provided shelters were so wet and filthy, Londoners spontaneously seized and occupied the subway system, and there was nothing the government could do to stop them.

According to Todd, the austerity cuts that have turned Britain into a low wage economy actually started in 1976 (three years before Thatcher was elected prime minister) with public spending cuts imposed on the UK as a condition of an IMF loan. For the most part, this “free market” attitude continued under Blair and New Labour.

In her Afterward, Todd sees evidence of a growing popular discontent over inequality in the rise of UKIP (the United Kingdom Independence Party) and the Scottish independence referendum. The latter, she maintains, was actually more about inequality. More recently, this discontent has manifested in the election of left wing Jeremy Corbyn to run the Labour Party and the successful Brexit referendum.

Stealing Africa

Stealing Africa – Why Poverty

BBC (2012)

Film Review

Stealing Africa is about the Swiss corporation Glencore and how they have been ripping off Zambia’s copper for the last 16 years.

Despite exporting $29 billion worth of copper annually, Zambia remains one of the twentieth poorest countries in the world. The reason? A Swiss company called Glencore that keeps the vast majority of these profits for themselves. Thanks to creative bookkeeping and major tax evasion, Glencore pays less to the Zambian government in taxes than they pay to provide electricity to their mines.

Glencore has an interesting connection to the Clintons. The company was started in the 1970s by Marc Rich, an American white collar criminal who fled to Switzerland in 1983 to avoid imprisonment on money laundering, tax fraud and trading with the enemy* charges.

In 1994, the company changed their name from Marc Rich and Company to Glencore.- in 2000, Bill Clinton pardoned Rich in return for millions in campaign contributions and donations to the Clinton Library.

The Zambian copper mines were a state owned industry until 2000, when the global price of copper plummeted, leaving Zambia unable to repay its foreign debt. Allegedly under pressure from the International Monetary Fund, President Frederick Chiluba sold all Zambia’s copper mines to Glencore and other foreign companies. In 2007, a case in the British high court found Chiluba (who died in 2011) guilty of conspiracy to defraud.

In 2011, a confidential tax audit of Glencore’s Mopani mine was leaked to Friends of the Earth. It revealed that Glencore (with the collusion of Switzerland) was reducing their tax bill in Zambia by rigging the price of copper and fraudulent profit reporting. Following public release of the audit, the EU investment bank suspended further loans to Glencore. Sadly the company persists in their refusal to pay the tax demands of a government lacking the legal resources to take on a gigantic multinational corporation.

The result is a country in which 64% of the population live below the poverty line and residents adjacent to Glencore copper mines suffer major health problems. These relate mainly to the company’s refusal to abide by World Health Organization standards for sulfur dioxide emissions.

Can We Stop Climate Change Without Dismantling Capitalism?

The Cross of the Moment

By Jacob Freydont-Attie (2015)

Film Review

Can climate change be addressed without dismantling capitalism? The current track record of world leaders suggests not – especially with the election of the world’s most prominent climate denier to the US presidency.

The Cross of the Moment is a documentary exploring the climate change dilemma and various options for limiting global warming and mitigating the effects of catastrophic climate change. It’s produced in a panel discussion format, with the filmmaker posing specific questions to prominent astrophysicists, climate scientists, political economists and climate activists (including Bill McKibben, Gary Snyder, Derrick Jensen, Peter D. Ward, Jill Stein, Bill Patzert, and Guy McPherson). I’m not normally a big fan of talking heads, but the optimism conveyed by this film – in stark contrast to the usual alarmist arguments – definitely held my attention.

I was especially impressed with Bill McKibbon’s elegant explanation of why changing light bulbs and other market-based behavioral changes aren’t going to end global warming. The climate activist lays out an elegant argument why systemic structural changes is needed to wean humanity off of fossil fuels and why fossil fuel companies aren’t going to allow this without a major global movement to counter their power and greed.

The other panelists present a range of views on the specific structural/systemic changes that are necessary to prevent climate changes from wiping out our ability to produce food. Most seem to agree that fossil fuels could be totally phased out – and replaced by renewable energy – by 2050. They estimate this could be done for a total capital cost of $15 trillion (which according to the IMF is less than we currently spend annually to subsidize the fossil fuel industry*).

The film offers a number of viewpoints on how to bring this about. One economist favors a carbon tax; another would totally ban wasteful industries such as packaging (the third largest global industry after energy and food) and junk mail (which produces 51 millions tons CO2 annually in the US alone). Two activists express the view that the political corruption exerted by the fossil fuel industry couldn’t be overcome without dismantling capitalism altogether.


* According to the IMF, fossil fuel companies benefit from $5.3 trillion a year in subsidies.

 

Reconciling Heathrow’s Third Runway with UK Climate Commitments

no-3rd-runway

BBC News reports the British cabinet has just approved the extremely controversial third runway at London’s Heathrow airport. It will allegedly bring billions of dollars of economic benefit to Britain’s economy and create tens of thousands of new jobs.

Oh really? Big business is always promising pie in the sky economic benefits and job creation for big infrastructure projects that seriously disadvantage the rest of us by evicting us from our homes and otherwise destroying our quality of life. Experience teaches these economic projections aren’t worth the paper they’re written on. Thanks to the growing complexity of the global economy, economists can predict what the economy will do next month – much less 20 years from now.

The inimitable George Monbiot says it all in an October 18 opinion piece in the Guardian: “In a world seeking to prevent climate breakdown, there is no remaining scope for extending infrastructure that depends on fossil fuels.”

As Monbiot rightly points out, there’s no way Prime Minister Theresa May can allow Heathrow to build a third runway and simultaneously uphold the Paris climate change agreement Britain signed last year.

Subsidizing Air Travel for the Rich

He cites last year’s Airports Commission report, which offers two possible strategies for ensuring the new runway (and extra flights) won’t conflict with the climate pledges Britain made in Paris. The first is for the rest of the economy to make extra cuts in greenhouse gases to accommodate aviation. Already the Climate Change Act imposes a legal target of 80% reductions by 2050. But if flights are to keep growing as the commission expects, those cuts would have to rise to 85%. This is fundamentally unjust. The large majority (75%) of Heathrow’s international passengers are holiday travelers. As they also have a mean income of £57,000, this option makes everyone else pay for the holidays taken by the well off.

The second option they offer is a carbon tax on aviation. An analysis by the Campaign for Better Transport suggests that the tax required to reconcile a new runway with Britain’s carbon commitments is somewhere between £270 and £850 for a return flight for a family of four to New York.

IMF Calls for Carbon Tax on Aviation

The International Monetary Fund is also calling for a carbon tax on aviation and shipping to help the industrialized world meet the carbon reduction goals it agreed to in Paris. Emissions from planes and ships, presently accounting for 4% of global emissions, are steadily increasing. Unlike other forms of transportation, it’s impossible to replace jet fuel with more carbon neutral energy sources such as electrification.

As Monbiot points out in his article, it makes absolutely no sense to spend billions of dollars on this infrastructure boondoggle and then price people out of the air travel market with a carbon tax. For this simple reason, he predicts the third runway won’t happen. The current timeline proposed by the Department of Transport is so long and convoluted, construction on a third runway couldn’t start before 2020. I suspect Monbiot is right – that it won’t happen at all.

photo credit: Liberal Democrats Brian Paddick with London Borough leaders campaigning against Heathrow expansion via photopin (license)

Refugees and Anarchists – Greece’s Burgeoning Popular Resistance

Resistance in Athens

Medialien (2016)

Film Review

Resistance in Athens is a short documentary about the ongoing dismemberment of Greece by the Syriza government to satisfy harsh bailout conditions imposed by the IMF and European banks. As brutal austerity measures continue to shrink the Greek economy, unemployment (now at 25%) and hunger continue to increase and more than 200,000 young people have left Greece for other European countries.

Meanwhile a continuing influx of Syrian, Afghan and African refugees across the Mediterranean continues to fuel the resistance movement. Owing to government budget shortfalls and refusal by other EU countries to accept non-European migrants, Greek anarchists and socialists have played a major role in welcoming refugees and meeting their needs for shelter, food and other survival needs.

The documentary focuses on Exarcheia, a growing self-governing anarchist community spanning four decades.

For me, the highlight of the film was the personal interviews –  with Exarcheia members about their work with traumatized refugee children and with refugees who have turned against capitalism due to their brutal treatment by European authorities.

Click on the cc icon in the lower right hand corner for English subtitles.

Empire Building US-Style

Apologies of an Economic Hitman

Directed by Stelios Kouloglou (2008)

Film Review

This is a very intriguing Greek documentary about John Perkins, author of the 2004 book Confessions of an Economic Hitman. In the film, Perkins summarizes his recruitment by the NSA to work as an “economic hitman.” Despite his close affiliation to US intelligence, he was technically under the employ of a private engineering company called Charles T Main Inc. It was his role to approach third world presidents with bribes to accept World Bank loans for massive infrastructure projects – which were usually built by major US companies such as Bechtel and Halliburton.

This was done with the deliberate intention of saddling the third world countries with debt they couldn’t repay. Their only option would be to seek refinancing from the International Monetary Fund (IMF), which usually demanded they slash public services and open up their resources to further exploitation by Wall Street interests .

As Perkins describes it, this was the strategy of choice (as opposed to direct military intervention) for expanding US empire between 1945-2000. Any third world leader who refused to play ball was openly threatened with assassination. The first step in dealing with a recalcitrant leader was to send in the “jackals,” CIA officers and contractors who would try to instigate a military coup. If this failed, US intelligence would send in an assassination team. If this also failed, they would fall back on military invasion and occupation (always a last resort).

The film zeroes in on the assassination (via plane crash) of Ecuadorian president Jaime Roldós Aguilera and Panamanian president Omar Torrijos in 1981. It also provides interesting background to the US invasion of Iraq, following Saddam Hussein’s rejection of a massive Bechtel oil pipeline project.

I was previously unaware of the CIA effort to instigate a military coup against Saddam in 1996. The CIA discarded the option of assassinating him because he had too many doubles. Even his own bodyguards never knew if they were guarding the real Saddam.

Untold History of the US – Bush and Clinton Squandered Peace

Part 9 of Oliver Stones Untold History of the United States covers the Bush senior and Clinton presidency

Bush Senior Presidency

Stone begins by exploring the role of Bush’s father Prescott Bush and other Wall street figures in supporting the rise of Hitler and the Nazi war machine. The list of Wall Street corporations that supplied money, weapons, chemicals, tanks, aircraft and other material support to the Third Reich is a long one: Ford, IBM, GM, Hearst, Standard Oil, Dupont, Kodak, United Fruit, Westinghouse, Douglas Aircraft, ITT, GE, Singer, International Harvester, Union Bank, Chase Manhattan Bank, JP Morgan and the Bank of International Settlements.

Many of these companies demanded (and received) reparations when the Allies bombed their German factories.

Stone devotes much of this episode to the fall of totalitarian rule in Eastern Europe (1989-91), which he describes as the largest peaceful revolution in history. He also discusses the military coup by Boris Yeltsin that shut down parliamentary rule in the Russian Federation and the role of Wall Street, the World Bank, IMF and a handful of Russian oligarchs in systematically stripping the Russian people of their industrial wealth. During this period, many Russians died of malnutrition and medically preventable illness. The life expectancy would drop from 67 to 57 for men and from 76 to 70 for women.

Bush senior, surrounded by anti-Soviet hawks (eg Dick Cheney and Donald Rumsfeld who would go on to found Project for a New American Century) rebuffed all Gorbachev’s overtures for world peace. Stone maintains Gorbachev would never have been forced out of office if Bush had supported him.

The Clinton Presidency

Instead of delivering the promised “peace dividend” when the Cold War ended, Clinton initiated a new wave of defense spending and multiple military interventions overseas. Among them

  • He launched a war on Yugoslavia to gain access to Caspian Sea oil for US oil companies.
  • He authorized numerous bombing raids on Iraq, supposedly as enforcement of the no-fly zone in regions controlled by Kurds and Shiite rebels.
  • He began expanding NATO to former Eastern Bloc countries to enable US oil companies to build pipelines to transport Russian oil to Europe.
  • He ordered 75 cruise missiles (at $750,000 each) to be fired on a Sudanese pharmaceutical factory and Zawhar Kili Camp in Afghanistan to distract public attention from the Monica Lewinsky scandal.

Bush and Clinton: Squandered Peace – New World Order

The Hidden History of Big Oil

How Big Oil Conquered the World

Corbett Report (2016)

Film Review

This is an extremely gripping documentary about the hidden history of John D Rockefeller and the global oil cartel. Much of this history, including Rockefeller’s early background, the role of the “oilagarchy” in instigating World War I, Prohibition and their total domination of education, medicine, agriculture and finance has been systematically erased from US history books.

I found the beginning of the film, in which James Corbett talks about JD’s father William Avery Rockefeller, most revealing. Rockefeller senior was a notorious snake oil salesman (and cunning sociopath) who changed his name to Dr Bill Livingston to escape the clutches of the law for fraud, bigamy, rape and various other crimes.

The film traces Rockefeller junior’s entry into the oil drilling business in the 1850s with the formation of the Pennsylvania Rock Oil Company. From the very beginning of his career, JD demonstrated the same knack for treachery, deceit and fraud as his father – in dealings with both business partners and competitors.*

The invention of the internal combustion engine in the 1870s put Rockefeller in direct competition with the electric vehicle industry. Even the first electric cars (built in 1884) had a number of advantages over gas-powered cars. In 1900, they made up 28% of the US market. Thanks to the discovery of plentiful oil in Texas, Rockefeller easily flooded the market with cheap gasoline and put electric car makers out of business.

After World War I, he faced similar competition from ethanol-fueled cars (Henry Ford designed the Model T to run on either gasoline or alcohol produced from agricultural waste). Here Rockefeller and his corporate allies demolished their competition by conspiring to instigate a national anti-alcohol movement. The latter resulted in the enactment of Prohibition in 1919 and a total ban on alcohol. In a similar vein, after World War II the “oilagarchy” conspired with General Motors to acquire and shut down electrified public transport systems in at least a dozen cities.

Rockefeller’s transformation of medicine (by funding and acquiring control of medical schools) into a field dominated by synthetic petroleum-based pharmaceuticals is fairly well known. There is less public awareness that he played a similar role in shaping public education (especially the teaching of history) and the replacement of organic-based farming with industrial agriculture reliant on petrochemicals. Rockefeller played a similar role in secret meetings that resulted in the creation of the Federal Reserve, as did Rockefeller’s Chase Manhattan Bank in the creation of the World Bank and IMF.

Corbett also traces the creation of parallel oil monopolies in Europe by the Rothchilds, the Nobel family and the British and Dutch royal families. Germany posed a major threat to this global oil cartel with a treaty they signed with the Ottoman Empire to acquire a controlling interest in Iraqi oil development. The threatened competition with established European oil interests set wheels in motion for a British-led war against Germany (ie World War I).


* JD’s favorite motto: “Competition is a sin.”

 

How European Banks Hijacked the Euro Monetary Union

Buy, Buy Europe

Pieter De Vos (2013)

Film Review

This is a five-part miniseries describing how European banks have hijacked the euro monetary union to vastly increase their wealth. The upcoming Brexit vote in Britain makes this a particularly relevant topic.

Part 1 A Bank Crisis a Week

The series begins by describing the history of the European monetary union. Built at the height of neoliberalism it adopted all the rhetoric of Ronald Reagan, Margaret Thatcher and Alan Greenspan promising that globalized capitalism and free markets would end economic crises, increase prosperity and end inequality.

What really happened is that creating the euro massively increased inequality between northern and southern Europe and between workers and the super rich.

In seeking to make European banks as strong and competitive as US and British banks, Eurozone leaders ceased regulating them. Wall Street is often blamed for the EU’s 2008 meltdown. In actuality, deregulated European banks were equally guilty of risky speculation in derivatives and subprime mortgages.

Following the 2008 economic crash, European banks required massive government bailouts to keep European economies from collapsing. Promised banking reforms to prevent a recurrence of 2008 never happened. And according to the IMF, the global banking system is even more unstable today as it was right before the meltdown.

Part 2 Austerity Till the Grave

The bailouts required to keep their banks (and economies) going virtually bankrupted all Eurozone governments. All borrowed deeply (from the global banking system they had just bailed out) to keep their governments going. As a condition of this borrowing, the banks required them to reduce their deficits via deep austerity cuts. To qualify for further loans, they all cut pensions and benefits and laid off public service workers.

This segment focuses on Spain, where workers are organizing to block evictions, and Greece, where unemployed parents are forced to drop their kids off at orphanages because they can’t get welfare benefits to support them.

Part 3 Tax Haven Europe

This segment begins by profiling the Greek shipping magnates who run the largest merchant fleet in the world and pay virtually no tax. Corporations and the super rich pay far less tax than working people in all the EU countries. This massive tax avoidance forces all European governments to acquire major debt to keep from collapsing.

The documentary offers the example of Belgium, where the average tax rate is 12.5% and the most profitable corporations pay only 5% of their earnings in tax.

The filmmakers maintain that workers create wealth, though I doubt most neoliberals would see it that way. In 1981 Europe, 74% of the wealth workers created was returned to them as wages and government benefits. By 2012 only 49% of this wealth was returned to them and the super rich claimed the rest.

Part 4 Bratwurst, Lederhosen and Minijobs.

This was the most eye-open segment for me. It exposes the punitive conditions imposed on German workers from 2000 with the goal of making German export industries more competitive. Under former chancellor Gerhart Schroeder, massive wage reductions were imposed on all German workers – something IMF chief Christine LaGarde likes to call “labor market reform.”

Among other labor “reforms,” were a massive increase in “minijobs” – low wage part-time temporary positions that pay an average of 400 ($US 448) euros a month. Given Germany’s high cost of living, both parents need to work 2-3 “minijobs” (if they can find them) to cover a family’s basic needs.

The result was truckloads of cheap German imports flooding into southern EU countries (Greece, Spain, Portugal and Italy), shutting down local industries that couldn’t compete.

In this way, Germany’s vicious attack on their own workers forced wages down in other EU countries. This, in turn, forced countries like Greece and Spain to borrow lots of money from German banks to keep their governments going.

Ironically Germany currently has the highest number of working poor (7 million) of all EU countries.

Part 5 What Kind of Europe Do We Want?

It’s vital for people to understand that the mantra EU governments repeat ad nauseum – that saving the euro is essential to strengthening the EU and restoring prosperity – is pure propaganda. Seven years of austerity is massively increasing deficits and debt by putting so many people out of work.

The truth is that the Eurozone has been hijacked by banks and multinational corporations who are determined to use trade agreements to lock member countries into austerity and statutory destruction of Europe’s proud tradition of democratic socialism.

The only solution is a public takeover of too-big-to fail banks. Continuing to bail them out, while allowing them to privatize all the profits, is simply legalized theft of public monies. And a yes vote on Brexit.