Below is a slightly edited (and rushed) transcript of a talk I was asked to give. It was part of the webinar series organized by the Venezuela Solidarity Group and the Alliance for Global Justice. There were some minor technical glitches with the sound level but the recording is here.

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Ok we’re here to talk about fighting back against the international media’s economic war on Venezuela. That’s a tall order because they have been at it for 17 years. It’s been 17 years of this very impressive propaganda campaign that’s been out to demonize and vilify the Venezuelan government. It started back in 2001 when relations soured between Venezuela and the United States.

The stakes are very high in this because in our young century alone the Unites States and its allies have intervened in many countries and cost well over a million lives. Consider Iraq alone were probably about a million lives were lost due to a US war of aggression. If you also consider Libya, Afghanistan, Yemen, Haiti – the death toll is just astounding. That’s again, just in the twenty first century.

So to jump right into Venezuela about fighting back, it’s our responsibility to fight back as best we can.

In 1999 Hugo Chavez first took office, he won the election in 1998 because of a very huge failure of capitalism and of course that’s something you don’t hear. In fact, how often do you hear the opposite, that Chavez was elected when Venezuela was the richest country in Latin America? It was a prosperous place. Everything was wonderful but then the Chavistas came into power and turned everything around and destroyed everything. In fact, in 1999, despite being a major oil exporter for several decades (and having governments that had good relations with the United States) Venezuela had a poverty rate of about 50%. It had more than twice the child mortality rate of countries Cuba and Costa Rica that did not have that kind of natural wealth.

By 2001 there had been a brief honeymoon period between the United States and the Chavez government because so many times in Latin American history politicians have been elected advocating a left platform but then did the opposite once in power. By 2001 they figured out that Chavez was not going to be like that, that he was not a phony. It was also alarming to them that he was going to have an independent stance on foreign policy. One key point when the relationship sourced was when Chavez came out very strongly against the US invasion of Afghanistan – obviously for excellent reasons. Just consider that the US is still in Afghanistan today. At one point Chavez had to throw a US official out of his office who was being disrespectful towards him over that. That’s when the whole vilification campaign took off. Its intention…and it has been very successful – is to remove any moral and legal constraints on what US and its allies do to Venezuela.

So in 2002 there were two major events took place that were extremely important. One is the military coup of April 2002 in which Pedro Carmona, head of the largest business federation in Venezuela, takes over. The media constantly tries to write out of history – how obvious US support and involvement in the coup was.

The Bush administration at the time made it obvious that they welcomed the coup. They repeated word for word the story that Carmona was trying to sell about why the coup happened and how it happened. The New York Times editorial board – and they should never be allowed to live this down, very important when it comes to fighting back against the propaganda campaign – they came out with editorial that was even more uninhibited in praising the coup than the Bush administration. They depicted it as a victory for democracy, the “would be dictator” had been deposed, a “respected” business leader was now in power. The IMF immediately came out with a statement while Carmona was in power saying they were ready to help in any way they could. The IMF spokesman who said that was also a former US State Dept. and US Treasury Dept official.

Just those things alone show that the United States and the whole establishment behind it was ending this enormous green light to the perpetrators of the coup. Even though that coup failed, all of that sends a message to any potential coup perpetrators that if you pull it off we’ll back you 100%. We will be behind you financially, politically and obviously with the media we’ll be propagandistically behind you. That’s before you consider the fact that the U.S. State Department’s Office of Inspector General concluded that the US had funded groups involved with the coup – and they were funded before and after it took place.

To push back against the media campaign we cannot let that history be buried because the media constantly tries to bury that. The Guardian, for instance, I just got them to partially correct an article recently that depicted US involvement in the coup as a lie that Chavez had spread.

Again because of this giant green light that is sent to anyone who want to violently overthrow the government in Venezuela, several months later [after the 2002 coup] there was sabotage of the state oil company. Those two things combined – the sabotage of the oil industry and the coup – they caused a loss of about 20% of GDP. At that time (not today because of the current depression they are going through) but at the time that was the largest recession they had had in decades. It also spiked unemployment up to 14% and it spiked poverty to over 60%. Poverty had been 50% in 1999 when Chavez first took office. It then began to drop but then because of the coup and the “oil strike” it immediately spiked to over 60%.

The very important legacy that comes from all that is that it saddles Venezuela with an opposition that is largely insurrectionary. It knows it has the backing of the most powerful country in the world and its whole propaganda apparatus (allied governments, NGOs, media). It knows it will be backed to take power any way it can, through any amount of violence.

There is another important impact that is hardly ever discussed though Mark Weisbrot brought it up in an article, maybe a few articles, the fact that Chavez had changed the exchange rate system a few months before the coup took place. He went to “floating the currency” – the exchange rate was set by supply and demand. That actually worked despite the coup but then it was called off during the “oil strike”. They reverted back to a fixed exchange rate system which is what they stuck with from then on. That was the Achilles Heel of their economic policies. A few months before Chavez passed away that system blew up on them as I’ll explain.

That’s hugely important because that [exchange rate] system that Chavez had implemented but then retreated from, that system is what Bolivia has used very successfully under Evo Morales. It’s a system that would have helped them tremendously. In fact in 2010, Weisbrot again recommended that they switch away from that system. About 99% of the time Chavez was in office the fixed exchange rate system was causing problems but they were not very big.

The problem with a fixed exchange rate system is that it tends to create a black market. What happens is the government supplies “cheap dollars” to businesses [dollars sold at a very favorable exchange rate in local currency] to provide goods and services, but there are always some people who will take those dollars and flip them on the black market to make an enormous profit. This wasn’t a huge problem [for years] but then a few months before Chavez passed away the government cut back on the dollars it was supplying to private industry. That caused a spike in the activity in the black market. That caused an [upward] spiral in the value of the black market [exchange rate]. The problem with that is to the extent importers go to the black market for dollars, those importers then pass along their increased costs to the rest of the Venezuelan economy. One point too is that it is the highest cost producers who can stay in business who set the price, so even if they are a small percentage of the businesses who go to the black market for dollars they end up setting the price….so with the costs of imports going up that drives inflation. The government is losing money to the black market [for dollars] and tries to finance its losses by printing more local currency. But as people see their local currency drop in value, more and more they see the US dollar as a store of value. That causes them to run to the black market [for dollars] even more. You get this vicious circle going on where the black market [exchange rate] drives up inflation and inflation drives up the black market [exchange rate].

It [started] to get out of control a few months before Chavez passed away, but it really got out of hand during Maduro’s time in office. There were suggestions made from economists across the board, as Weisbrot said in 2010, to “float the currency”. There are probably many reasons why the Maduro government didn’t do it, but one is that they are stuck with an insurrectionary opposition, an opposition that knows it will be supported if it violently seizes power. That’s going to make the government apprehensive about doing something that isn’t necessarily popular with its own base, isn’t necessarily supported by people within its own ranks [in the administration], so it wasn’t done. Then oil prices collapse in 2014. It wasn’t really until about October of 2014 that the media started to talk about the major price decline and it was a sustained price decline that nobody predicted. Prices really stayed down for a long time. That made the whole black market exchange rate–inflation spiral that I talked about before get much worse. Now the government has fewer dollars [from oil revenues] so there is more scarcity of dollars. When something gets scarce its price goes up, so the black market rate for dollars increased even more… If the rational of the Maduro government was “let’s wait for better conditions before we change our exchange rate system” the conditions didn’t get better they got worse. They also had violent protests right after Maduro was [first] elected [in 2013] –outrageous protests disputing the results of the election which there was no basis for. Then they had another series of violent protests in 2014 shortly after Maduro and his allies had won a pretty resounding and demoralizing (from standpoint of opposition) victory in municipal elections, then again in 2017.

So with these economic problems and violent protests the propaganda campaigns against the government really went to another level. Then Obama implements so called targeted sanctions in 2015. The whole idea of targeted sanctions is pretty clever. They say “we’re not targeting the whole economy just those bad officials who did human rights abuses”. It caused a lot of problems for the economy. Alfred De Zayas sent me an op-ed he tried to get published in the media but it was rejected. He’s a UN investigator who did extensive investigation in Venezuela. He documented how the Colombia was blocking the sale of medicines to Venezuela. There was a lot of stuff like that going on because Obama is sending the message that “These are the bad guys. We are targeting them. They are on our hit list” so that encourages others to do the same knowing they are going to get away with it. They are just doing what the big superpower is doing. But also it puts fear into people who want to deal with Venezuela. They will worry about getting hit with legal trouble down the road, or just with reputational problems as a result of getting attacked in the media for dealing with Venezuela.

Another thing to mention about Obama’s sanctions of course is that they are illegal – under the UN charter, the OAS charter and even under US law. It’s pretty interesting how the media dealt with that. To implement sanctions Obama had to officially declare Venezuela an “extraordinary threat to the national security of the United States”. That’s absolutely ludicrous, but that’s the official basis for the sanctions, a total lie. But the media spun that as a “formality” that we don’t have to worry about – an outrageous lie is just a “formality”.

Then of course Trump took it to another level. With Obama’s sanctions the impact was a bit unclear and hard to calculate, hard to quantify. Things were going on but it was harder to nail down, but then Trump did something very extreme. He implemented financial sanctions on Venezuela which made it illegal basically for Venezuela to get any financing from the US financial system. That was devastating for two reasons. One is that all of Venezuela’s foreign currency dominated bonds that are outstanding are governed under New York state law. That alone gives the United States tremendous leverage against Venezuela if it is freed from any moral and legal constraints on what they can do. That’s what the propaganda campaign against Venezuela is all about. The other reason [Trump’s financial sanctions] were so devastating was because one of Venezuela’s major assets is a company named CITGO which is based in Texas. The sanctions Trump introduced in August of 2017 also made it illegal for CITGO to send profits and dividends back to Venezuela. Those had been averaging roughly $1 billion per year even during the crisis.

Those things made the sanctions very devastating. They also made it easy to calculate and determine the impact on the economy… Francisco Rodriguez wrote a piece in which he pointed out that from the moment Trump imposed financial sanctions sphere was a drastic decline in Venezuelan oil production.

You can see from the graph. And this comes from Francisco Rodriguez, a Venezuelan economist. He is with the opposition. He was the key economic advisor to Henri Falcon, the main opposition presidential candidate who ran against Nicolas Maduro in May. The blue line is Venezuela’s oil productions and the red line is Colombia’s. In January of 2016 when oil prices hit about $30 a barrel, their lowest point in about a decade or more, there was drop in investment, which makes sense, and therefore a drop in production. You can see Colombia and Venezuela following a similar pattern from that time. But then you see when Trump’s financial sanctions come in Venezuela’s oil production falls drastically – just falls through the floor – while Colombia’s stabilizes. So with that information I was able to do a calculation of how much revenue Venezuela lost as a result of Trump’s financial sanctions.

And by the way, a few things about that. One is I did not assume that without the sanctions Venezuela’s oil production would also have stabilized. I assumed it would have continued to go down but at the same rate it was going down before which corresponds to the worst case estimates [forecasts] that had been made. I compared that to what actually happened because of Trump’s sanctions. The value I came up [difference between the two cases] was $6 billion. I passed these calculations by Francisco Rodriguez and Mark Weisbrot and they both basically agreed that they were valid.

So $6 billion, to put that in perspective, right now that is equivalent to about 6% of Venezuela’s GDP. Most Latin American countries spend about %7 of GDP (that’s combined public and private spending) on health care. In Canada we spend 10% of GDP combined public and private spending on heath care, so 6% of GDP for any country at any time is a massive hit to take in a year. And for Venezuela that is especially true because it is in the middle of this horrible crisis. It’s not able to do what countries can do under normal situations if they get hit with a $6 billion dollar bill. They say “ok we’ll go to financial markets, raise money and we’ll really just have to worry about paying off interest. When the principal come due we’ll just issue more bonds and worry about the interest.“ Venezuela can’t do that – largely because of Trumps sanctions. It’s illegal for them to raise money in the US financial system.

One last point I want to make is that the media loves to cry crocodile tears about the impact of Venezuela’s economic crisis, but they absolutely hate if you bring up that Trump has obviously, deliberately, made the situation much worse with the intention of making the government fall. I had a lively exchange recently with this journalist Evan Dyer of the CBC. They really hate when you bring that up because they don’t like to accept responsibility for what their propaganda campaign has enabled the United States to do to Venezuela.

There is one article I have to mention quickly. It was by Stephanie Nolen of the [Toronto] Globe and Mail. It’s actually from a while ago, I think from a year or so ago. It is striking because these journalists, some of them, they identify so completely with US goals and objectives (and those of their allies) and sometimes they are honest, inadvertently, because they don’t understand how immoral what they are saying is. She wrote this very long article about Venezuela and it had the standard distortions, totally biased against Maduro’s government. But near the end show wrote (and I quote) “The opposition’s chief hope is that Maduro regime finally will go completely broke. When the food runs out entirely, the thinking goes, the streets will fill and people won’t go home until he leaves.”

So she is saying bluntly that United States and its allies back the side that wants to starve the country into rebellion. There is no reflection on the incredible immorality of that. When you consider what the US and its allies have done to countries all over the world it really isn’t surprising. Like I said at the beginning of this talk, it is a very dangerous propaganda system and it’s our responsibility to combat it as best we can.

Q&A session

QUESTION: Can you speak to the recent change in currency used for oil sales?

ANSWER: It looks like has at least unified it exchange system. It used to have a multi rate system. Oil sales are now officially based on the Petro but it remains to be seen if that eventually inspires any confidence. One recent development that is important. I mentioned that people turn to the black market for dollars because want a store of value. It seems like that is no longer that case. It seems like the hyperinflation, for now, is running out of steam [slowing down], but it remains to be seen if that will continue. The big question is if they can get significant financing, I would hope, from China or Russia to offset the impact of US sanctions.

QUESTION: Do you see similarities with the US strategy for regime change in Nicaragua?

ANSWER: One major similarity I see is just an insurrectionary opposition that would never be tolerated in the United States, Canada or the EU. Killing police officers, blocking roads, trying to strangle the economy. That just isn’t tolerated. If you have public sector workers in Canada go on strike for a few weeks the courts will be forcing them back to work within weeks and the union leaders will be facing jail terms and massive fines. It would never be tolerated.

One way to see that is the Russiagate hysteria. There has been so much hysteria over supposed Russian meddling in the US electoral process through some hacking or leaking of emails. There is no comparison with what the United States has done in Nicaragua and in Venezuela. That level of interference, openly supporting, even if it was just propaganda support for protesters in the streets killing people, damaging property, doing major harm to the economy. That really would be an act of war. Just consider that the whole Russiagate thing in the United States has been called the equivalent to Pearl Harbor.

They support violent insurrection in other countries. They kind of activity isn’t “dissent”. That is not what we’d call it if it happened in our own countries.

QUESTION: Has the government been hampered by violent protests in plan to confiscation and fining companies for excessive profits?

ANSWER: I think the main thing that hampered the government throughout is that it hasn’t been able to bring down the black market exchange rate. One thing about the black market exchange rate is that it is a small percentage of importers who use it – from 2013 to 2017 – but because of the way supply and demand works they end being the ones who set the price. So even the businesses who are getting the dollars at preferential rate are not engaging in illegal speculation themselves they can sit back and get a huge profit. That’s been thing the government has not been able to control.

NOTE: I should have added that other efforts to clamp down on business – price controls, fines etc,,- are ineffective a long as black market rate for dollar doesn’t come down. People will sell price controlled products on a black market for goods for example as long as prices are being driven by a black market in dollars.

QUESTION: Can you comment on early impacts of Maduro’s monetary reform on inflation?

ANSWER: It looks like the dollar is no longer seen [as much] as a store of value. Things have basically improved. I read Francisco Rodriguez [the opposition economist I mentioned before] his latest says that as of right now there has been improvement – hyperinflation running out of steam – and the whole idea of going to the black market for a store of value seems to be going away because of recent changes that have been made. There has been some improvement. You can also see that from Datanalisis – an opposition-aligned pollster – they show an increase in support for Maduro recently and decrease in support for core opposition leaders.

There seems to be some improvement but in the background you have some dangerous developments. Just look at Brazil. The US still has other cards it can play, not just a military attack, but even an oil embargo. They could do a lot of crazy things so it is still very dangerous.

There has been some improvement but I don’t know if it is sustainable.

QUESTION: Will Venezuela be involved in the “belt and Road” initiative with China?

ANSWER: I honestly don’t know. I wish China would help Venezuela more. Some people in the audience probably know more about this than I do. I think that will be crucial if Venezuela can get more help from some of the countries that Trump is provoking. China and Russia are two obvious countries but there are many others. Russia is interesting because Trump has been hammered so much for being “Putin’s puppet” but his [Trump’s] recent withdrawal from an important arms control treaty shows that he has inflamed tensions with Russia – and is surrounded by people who want to inflame tensions like John Bolton. As the United States provokes other countries maybe that will open up opportunities for Venezuela. I hope so.

QUESTION: How do you have predictions and comments the Venezuelan [municipal] elections in December?

ANSWER: Surprisingly, it seems for now Maduro ‘s allies are likely to do well in those elections. The US-backed opposition is very divided. None of their main leaders have high levels of support, even according to an opposition-aligned pollster like Datanalisis. I think for the short term Maduro’s allies are likely to do very well in any elections.

QUESTION: Why is the US and Canadian media so biased against Venezuela and what is the best way to combat it?

ANSWER: I think the best way is just to point out the facts and arguments that they ignore. Just one I mentioned – that in 1999 Venezuela has a poverty rate of 50%. That’s when Chavez first takes office, yet the media portrays Venezuela as this rich country that was great until Chavez came along….You just have to push back and keep alive the history they want to bury like US support for the coup and all those things.

As for why, the Canadian governments are ideologically tied to the United States. They have the same world view. They think they have the right to determine who is a democracy and who isn’t. Who gets to be supported and who doesn’t, and they have very little regard for human life. Glenn Greenwald has this line that Saudi Arabia is “one stop shopping for exposing Western hypocrisy”. Canada continues to sell arms to Saudi Arabia and has this $15 billion deal it refuses to cancel. That’s $15 billion over 15 years so it’s $1 billion per year. For a country like Canada that is not very much, but it is committed to arming the most brutal and backward government on earth. They [Canadian government] just aren’t civilized. They don’t regard human life very highly and they are willing to do terrible things all over the world because the media supports that.

QUESTION: What are some crazy things the US might do [against Venezuela]?

ANSWER: Trump has made it obvious. He is constantly threatening. Even now OAS chief Almagro was saying recently “we mustn’t rule out military intervention”. The new Colombian president (or some official) just said if Brazil were to take military action against Venezuelan then Colombia would be behind them. Pompeo and Tillerson back when he was with the [Trump] government have been openly (really unprecedented) in encouraging – basically saying to the [Venezuelan] military “come on overthrow the government and we’ll be behind you”.

By the way, I asked Amnesty International if they would denounce Trump’s economic sanctions against Venezuela and even if they would denounce the remarks that Trump and his officials have been making to encourage a military coup in Venezuela and Amnesty refused. The big NGOs are on board with crushing whoever the empire wants crushed.

QUESTION: Who do your recommend we follow for news on Venezuela?

ANSWER: Venezuelanalysis.com. I think they are the best source. They are base din Venezuela doing the work that needs to be done.

QUESTION: Are the NGOs in Venezuela receiving NED money as in Nicaragua?

ANSWER: That’s been exposed for a long time – from USAID, from NED and from Miami where there is a very extremist sector of the Venezuela opposition. It is very well known.

The views expressed in this article are the author's own and do not necessarily reflect those of the Venezuelanalysis editorial staff.