The Indigenous Missionary Council’s (CIMI) annual report on violence against indigenous communities in Brazil in 2020 illustrates an expansion of human rights violations committed during Jair Bolsonaro’s second year of his presidency. Under the guise of the coronavirus pandemic, land exploitation continued while indigenous communities benefited from no state protection.

Increased illegal incursions into indigenous territory by miners, loggers, farmers and hunters contributed to the spread of Covid19 among indigenous communities, which resulted in 900 deaths – a loss in terms of indigenous history, memory and culture.

Furthermore, the Brazilian government’s encouragement of land exploitation, in particular the legal proposals to open up indigenous territory to industrialization, contributed to an increase in violent clashes over territorial rights, with an increase of 174 percent in 2020 over 2019.

Equally important, and in line with the previous statistics, is an increase in the number of indigenous people murdered in 2020, when compared to 2019, with 182 and 113 people killed in these respective years. Last year’s tally represents a 61 percent increase over 2019. Additionally, 304 cases of violence were recorded in 2020, in comparison to the 277 cases documented in 2019.

In 2020, heritage related crimes amounted to 1,191 cases, while suspended demarcations of indigenous territory remains a key component of Bolsonaro’s presidency with 64 percent of territory still awaiting identification.

Bolsosnaro was one of the world leaders purportedly committing to halt deforestation by 2030, but his track record indicates otherwise, particularly when reports called out the deterioration of Brazil’s environment. The intimidation exhibited towards institutions and agencies is also reflective of the violence employed towards indigenous communities in Brazil, whose indigenous status is ridiculed by the government and who are the last standing frontline in between the rainforest and Bolsonaro’s exploitative politics.

How does Bolsonaro, for instance, seek to reduce deforestation when agribusiness is one of Bolsonaro’s main electoral bulwarks?

At the COP26 conference in Glasgow, indigenous representatives highlighted the Brazilian government’s contradictions. “If there is no protection of indigenous territories and rights, there will also be no solution to the climate crisis, because we are part of that solution,” Sonia Guajajara, head of the Articulation of Indigenous Peoples of Brazil (ABIP), declared.

This is one core issue where Bolsonaro is intentionally failing, for profit. A recent report illustrates how indigenous reserves in Trincheira have been targeted by invaders who destroyed 20 hectares of forest area and planted grass, paving the way for additional pasture area and affecting 18 indigenous reserves. According to Global Forest Watch, this year’s deforestation in Brazil is already over 72 percent higher than the same period in 2020. Josiane Tavares dos Santos, leader of Trincheira, described the destruction as “becoming an island in the middle of farms.”

Clearly, the EU for example has failed to heed indigenous warnings. Commenting on Bolsonaro’s pledges to end illegal deforestation during a meeting with foreign affairs and environment ministers, EU Vice President Josep Borrell stated, “The will is there, because the ministers know that it will be good for Brazil to put an end to illegal exploitation of the Amazon Rainforest.”

In 2019, EU firms were among those benefiting from Brazil’s illegal logging business – an issue which ought to be investigated as part of the bloc’s complicity in abetting both the Brazilian government and illegal deforestation.

It is only the indigenous communities, however, who are clarifying the importance of their inclusion in political decision-making with regards to the environment. The international community makes an erroneous distinction between indigenous communities and their environment. CIMI’s report should serve as an eyeopener in terms of how indigenous communities require political protection, but the world would prefer to dissociate, thus associating politics with businesses and destruction with the humanitarian paradigm.

For the second consecutive year, Latin America has been established to be the most dangerous region for environmental activists. According to a recent annual report by Global Witness titled “Last Life on Defence”, 227 environmental activists and indigenous leaders were killed in 2020, with three out of every four killings occurring in Latin America.

Colombia once again led the statistics in the region with 65 environmental activists murdered, among them indigenous and afro-descent individuals, as well as small scale farmers. In Peru and Brazil, almost three quarters of the murders took place in the Amazon regions of the respective countries, indicating that indigenous populations remain in the crosshairs of attackers. Nicaragua’s increase in killings – from 5 in 2019 to 12 in 2020, made the country the most dangerous in the region per capita in terms of  environmental activists.

The report notes, “It may sound simplistic, but it’s a fact worth considering – the process of climate breakdown is violent, and it manifests not just in violence against the natural world, but against people as well.”

Over one third of the documented killings were linked to resource exploitation. This statistic is also reflected in the fact that indigenous activists accounted for over a third of fatalities, as the report notes, “despite only making up 5% of the world’s population.” The direct targeting of indigenous populations was noted in a 2012 report which stated, “All governments are chasing a dominant development paradigm in which today minorities and indigenous peoples don’t really have a place and that is a problem.”

For people not to have a place, dispossession is the outcome. The targeting of individual activists is the means through which to intimidate indigenous communities. Indigenous leaders remain a major target due to their presence, which stands as a main opposition to the exploitation of land and resources by governments and corporations.

In April this year, the Escazu Agreement came into force in Latin America. It is the first treaty in the region to deal with the environment and to offer protection for environmental activists. Notably, Chile, Costa Rica and Colombia have not signed the agreement, despite their initial involvement in the negotiation process which led to the agreement’s adoption in 2018.

The Escazu Agreement enshrines the provision of access to environmental information, public participation in the environmental decision-making processes, access to justice in environmental matters and the protection of human rights defenders in environmental matters.

Article 9 of the agreement calls upon the signatories “to prevent, investigate and punish attacks, threats or intimidation that human rights defenders in environmental matters may suffer while exercising the rights set out in the present agreement.”

However, the provisions set out in the agreement are in contradiction with the exploitative politics embraced in the region. Besides the fact that not all countries are on board – besides Chile, Costa Rica and Colombia, Guatemala, Brazil, Peru and Colombia have not ratified the agreement – the links between governments and multinational corporations take precedence, resulting in widespread impunity when it comes to the  political violence employed against both land and indigenous communities.

The Global Witness report calls out the culpability of business and governments in terms of violence, yet its recommendations testify to a recurring cycle that places responsibility to protect on the same entities which engage in exploitative business ventures against environment, activists and indigenous communities. The UN may be treated as distinct from governments, yet its composition brings together the same neoliberal practices which have destroyed land and people. With nothing to hold governments or the UN accountable, protection remains elusive when juxtaposed against the reassurance of neoliberal profit.

Ukrainian President Zelensky captured headlines once again with his reminder to the Washington Post and to the world that his country will never be a part of NATO. At least this much is what one can only infer from what was actually quite the complaint. The U.S. still won’t grant a membership path to Ukraine despite all it has sacrificed to be in the club. Washington says ‘no’, regardless of the many creative ways Ukraine tilts at windmills.

The latest rejection from Biden came with the reprimand that Ukraine still has too much corruption, and a highly insulted Zelensky deflected this, refraining from raising Biden’s personal role in Ukrainian corruption. Zelensky claims that not allowing Ukraine into NATO was a sign of Russia’s growing relative influence, a fair point and probably accurate. Of course for Russia’s influence to grow only at minimum requires the inverse corollary; that NATO’s influence is shrinking.

The antics in Ukraine with NATO are part of a broader pattern of events, no less recent, where the alliance exhibits an odd behavior with Turkey as well. It’s impossible to mention this without adding the collapse of the Afghan mission, and why the sudden pivot to Brazil can only be understood in this light.

These connected cases are all strong indicators of the decline and subsequent reorientation of NATO. The real ties that bind NATO aren’t ideological, but geopolitical. Behind geopolitical commitments lay economic entanglements.

Zelensky’s situation is very frustrating indeed. It was just in October 2019 that Jens Stoltenberg made a very well publicized visit to Ukraine, and addressed the Verkhovna Rada declaring, “As a sovereign nation, Ukraine has the right to choose its own security arrangements. NATO’s door remains open,”., only to hedge that by saying, “No outside country has the right to veto. The time of spheres of influence is over,” explaining that only NATO countries and applicants can decide on NATO membership. The problem is that NATO countries – at least the U.S. and likely Germany – do not want the Ukraine liability in the alliance.

And this is because the time of spheres of influence – through multipolarity – has returned.

North Atlantic or Latin America?

Courting Brazil is reflective of the U.S. re-orienting its hegemony and ‘right-sizing’ its military operations and supply-line security for the new reality. This case by itself may misrepresent that NATO is broadening its power projection in the world. We are in a period of disentangling from distant commitments where supply-line security cannot be guaranteed any longer, and so the U.S. moves to increase its hegemony in Latin America.

Global finance capital is entirely tangled up, a strength that also comes with grave liabilities, and the entanglements connect China to Europe in ways that work against U.S. hegemonic interest in Latin America.

While the U.S. ultimately wants to exclude European industrial concerns from Latin America, it must play at introducing NATO into Latin America so that European industrialists don’t push for an EU policy on Latin America that favors China over the U.S..

The particular offer to Brazil to join NATO from the U.S. through National Security advisor Jake Sullivan was conditioned on dumping China’s Huawei. This would be connected to a broader agenda against BRICS. When Trump promoted the idea in 2019, it was met with predictable ridicule in American press. Now that the same is promoted by the Biden administration, it receives due respect. As an aside, it’s interesting to see another case in point of the foreign policy of the Trump administration carrying forward into the “Biden administration”.

IMAGE: Brazilian Defense Minister Walter Braga Netto (L) and U.S. National Security advisor Jake Sullivan meet in Brasilia on August 5, 2021. (Photo by Reuters)

And this is why Trump was right when he said that NATO was obsolete, a statement that horrified the Deep State and the entire globalist banking and intelligence apparatus that supports it.

In that sense also, we may instead be seeing the transformation of NATO into something like a PATO, a Pan-American Treaty Organization. All of this points to a U.S. strategy of realizing its place as a very strong continental power upon the Americas within the framework of a multipolar world. It signifies that at the very least, the U.S. is hedging its bets on being a unipolar power of a single world order.

Turkey – Who needs enemies when you have friends like NATO?

None of the NATO armies have directly confronted Russia with live fire in a real operation except Turkey. NATO aspirant Ukraine for its part has, at least quite arguably so in the Donbas, so the message being sent from the U.S. is surely strange.

Turkey is undoubtedly the NATO member that isn’t. In the course of nearly escalating from a dog fight over the skies of northern Syria, that saw the downing of a Russian jet in 2015 and public uproar in Russia, Turkey stood at the precipice of a major armed conflict. The world waited to see if Turkey would try to petition NATO for a decisive action on Russia. But then cooler heads prevailed, and facts came to light that raised questions about the Turkish pilot’s relationship with Gulen. Was there a plot to draw Turkey and Russia into an armed conflict?

Consider the meaning through this whole ordeal wherein we have a Turkey that now is a NATO member on paper only. Recall that after the conclusion of the Russia-Turkey row, the U.S. backed a failed coup in 2016 operationalizing its Gulen assets in the military to overthrow Turkey’s elected government. And it backed this coup in the middle of a Turkish military campaign against Syria, a campaign which the Obama administration had itself coordinated and urged Turkey to become involved in.

IMAGE: The aftermath of the failed U.S. backed Turkish coup in 2016 saw tens of thousands of soldiers detained

This is all very bad optics indeed, and a sign that NATO doesn’t create a reliable defense partnership. NATO stubbornly insists on sending all the wrong messages at all the wrong times, as if being able to get away with such antics might itself be a sign of stability and power.

Ukraine commits ritual seppuku to satiate the gods of NATO, but still no NATO membership. Turkey makes a high risk gambit which could have seen Kurdish dreams of a state realized, simply to satisfy the U.S. mandate to destroy the Syrian state. In response, the U.S. thanks Turkey by trying to overthrow the Turkish president. NATO seems to no longer be able to support or guarantee a new member-state like Ukraine, and more, can’t even manage to retain its current roster (Turkey) if it involves actual conflicts involving Russia, NATO’s raison d’être.

 A Fading Memory of a Bygone Era

A few short decades ago NATO suddenly metastasized into a former set of Warsaw countries in 1999. So what has changed? The world has changed, everything has changed. NATO’s strategists can see that any genuine security investment into Ukraine would be lost and even handed over to the Russian Federation in the forty-eight hours or so it would take for Moscow to complete a military occupation of Kiev. This isn’t to say that Moscow prefers this option, but sufficed to say, militaries do exist for reasons.

The overnight collapse of the U.S.-led occupation of Afghanistan has consumed the public’s imaginations for the past week, but how this reflects the general decline and incoherence of NATO is the broader and more interesting story. To wit, this recent geopolitical and military defeat handed to NATO – which was a part of the occupation under the rubric of the UN-mandated International Security Assistance Force (ISAF) and Operation Resolute Support – is only the most recent chapter reflective of its general period of decline.

NATO’s dance with Ukraine, Brazil, and member state Turkey, indicate that the project has run out of gas. So as NATO’s efforts in Afghanistan were ultimately and decisively ended by the eighty-thousand strong force of Taliban, who are now reestablishing their Islamic Emirate of Afghanistan, it becomes impossible not to connect this to what appear as endemic problems underlying the entire framework of NATO.

IMAGE: Jens Stoltenberg meets in Ukraine with Volodymyr Zelensky on October 30th, 2019

NATO once had a mission and once told a story. That story was important for the public to understand. It was a clear story of good versus evil, of freedom versus dictatorship, of democracy versus communism. In short, it was the narrative of the Cold War reified into a military alliance.

Naturally, once the USSR and the Warsaw Pact collapsed thirty years ago, one would have thought that the OSCE and similar, could have evolved into security treaty organization including both western European states and the former Soviet bloc countries.

But one would only think such a thing if one had believed that the Trans-Atlantic frustration with Russia was primarily driven by a crusade against communism.

The EU Army: The U.S. Views the EU as a Potential Threat

Trump’s declaration that NATO is obsolete was likely not just a reference to its inability to counter terrorism as he later amended, but rather a more overt declaration that the economic underpinnings of NATO – Trans-Atlantic banking – had come to an end. This is because that point much aligns with his ‘trade war’ against Germany and the EU by extension.

NATO and the EU are two quite distinct phenomenon, and while interdependence engendered mutual success in the post-war era, the period we have entered bears a different logic all together.

The one country’s leadership that has stood up and said, “come extract our resources, come take our labor supply, come IMF and lend to us, come America and put your bases on our soil,” has been the Ukrainian. Odd then that Ukraine finds itself out of luck with NATO and, quite separately, the EU.

The U.S. has typically incorporated EU states into NATO, which had long painted the illusion that the EU was fundamentally a NATO friendly project in its rationale and long-term goal. Rather, it’s better conceived as a touch-and-go series of negotiations between ‘frenemies’. Post-war Europe has sought to develop enough capital and technique through decades of rebuilding and later expansion into the regions first prospected by the German Third Reich, but until recently could only do so with the U.S.’ approval and supporot.

The words of NATO’s first Secretary General Lord Ismay are probably more to the point, when he said the NATO mission was to “Keep the Russians out, the Americans in, and the Germans down”.

But what if Germany no longer wants to be kept down?

While much of Europe’s financial concerns are tied up with a banking conglomeration which blurs national barriers even at the Trans-Atlantic level, the industrial concerns and, in plain terms, the physical economy of Europe is viewed as a competitor economy to the U.S.’. As all economic facts of life, they have profoundly political corollaries.

The EU’s premier states, Germany and France, have for the last five years quite audibly pronounced the need for an EU army. The Obama era response is that one already exists, called NATO. The Trump era attitude seemed warmer to the idea, even if superficially concealed with the language of NATO states paying more of ‘their share’ even if the New York Times put words in his mouth that may have been, in a strange twist, closer to the truth. Biden now appears to have inherited whatever Trump was able to establish. Whether the U.S. would just allow a parallel establishment which excludes it, to rise up, is a good question. So far, they have done little to counter it besides creating some information war confusion on the status of the question.

There is a precedence for a European defense organization, in fact it precedes NATO. Known then as the Western Union Defense Organisation (WUDO), this was the core of modern NATO sans the U.S.

The U.S. will continue to be a top-level regional hegemon, if it can better orient its productive and financial vectors. It also would need to invest in infrastructure and reduce the austerity imposed on its working class. We should expect to see the U.S. continue to downsize its commitments outside of the Americas, and we expect to see the U.S. increase its efforts to reintroduce a Monroe Doctrine 2.0 inside the Americas.

Brazilian President Jair Bolsonaro’s mismanagement of the coronavirus pandemic remains a news item. Testimony given during a recent senate inquiry by former Health Minister Luiz Henrique Mandetta exposes how Bolsonaro was aware of risking people’s lives to the point of death with his approach that ridiculed science. “I warned him systematically, with projections even,” Mandetta stated, as he explained that the fatality statistics prediction presented to Bolsonaro was close to the death toll in Brazil last year.

As the vaccine race started, Brazil engaged diplomatically with Russia, seeking to import the Sputnik V vaccine, which was authorised for use in Russia since August 2020. In April, Bolsonaro discussed purchasing the vaccine, with Russia acknowledging Brazil’s approach in a statement by the Kremlin. The statement noted Brazil’s approach towards Russia and the commitment by both countries to work towards a common goal in line with their strategic partnership. Registering the Sputnik V vaccine in Brazil was discussed, along with military, science and technological cooperation.

The Sputnik V vaccine is being used in 62 countries across the world, mostly sought by developing countries as these have been politically disadvantaged due to a lower threshold of diplomatic engagement. It is still pending official recognition by the World Health Organisation and the European Medicines Agency, yet a study by the leading health journal The Lancet, states that the Sputnik V vaccine has an efficacy rate of 91.6% after taking the first dose, in terms of preventing Covid19.

However, Brazil’s national health service agency, Anvisa, rejected the use of Sputnik V, citing a “lack of consistent and reliable data”, questions over vaccine production as well as Russia’s refusal, according to Anvisa, to allow Brazilian regulators to visit the vaccine production sites. Russia rejected the claims and described the decision as political, citing U.S. interference back in 2020 which advised Brazil to reject the Russian vaccine.

Meanwhile, Brazil has also reached deals with Israel, which Bolsonaro stated has “the real solution to treating COVID,” even though at the time of the announcement the anti-viral treatment had only been tested upon 35 people and not even reviewed in medical journals.

Adding to Brazil’s shambles is the lack of vaccines in the country, contrary to government propaganda which declared having secured 560 million doses. Having rejected Sputnik V, Brazil has now turned to the options used in the U.S. and the EU, notably AstraZeneca and Oxford, with Bolsonaro seeking deals to acquire surplus doses to make up for the country’s current shortages.

“We need to ensure equitable access to COVID-19 vaccines and in line with this we would like to call on those countries with extra doses to share them with Brazil as soon as possible so we can also broaden our vaccination campaign and contain the pandemic at this critical time, and avoid the proliferation of new variants,” Brazil’s Health Minister Marcelo Queiroga said during a WHO briefing.

Russia has been accused of vaccine diplomacy, a term which has not been used by the West in the case of Israel, for example, which reached an exclusive deal with Pfizer for unlimited vaccine supplies in return for sharing patient data with the company. The deal has enabled Israel to use its surplus of Moderna and AstraZeneca vaccines to bolster diplomatic support in the international arena.

The Biden Administration is also in a position to enter the vaccine diplomacy contest, in a move that is designated to create obstacles for Russia and China, both of which have supplied developing countries with vaccines while world powers scrambled over acquiring doses to the detriment of other countries in the developing world.

Vaccine diplomacy is indeed a reality, and one that is severely mismanaged to the benefit of countries that boast allegiances. Russia has supplied vaccines to countries which the West would have turned a blind eye to. Additionally, Russia’s vaccine rollout was met with derision, while the complications arising from AstraZeneca, particularly, have not been subjected to the same political scrutiny. A game of double standards has emerged, in which Brazil might find itself floundering, as it might have well recognised given its recent diplomatic efforts at restoring relations and collaboration over vaccines procurement with Russia again.

The U.S.-Brazil deal, touted by U.S. President Joe Biden as a possibility to induce Brazilian President Jair Bolsonaro to tackle deforestation has not materialised. Environmental activists and indigenous leaders had expressed themselves against the financial arrangement which would have seen $20 billion boosting the governmental offices protecting the entities responsible for the Amazon’s deforestation.

U.S. Senators, including Bernie Sanders and Elizabeth Warren, also cautioned against billions being awarded to Bolsonaro without any conditions, given that under his government, deforestation has soared. The 15 senators who penned a letter to Biden noted the Human Rights Watch (HRW) 2019 report which attributed deforestation to “powerful criminal networks that use intimidation and violence – with near total impunity – against those who seek to defend the rainforest.”

Speaking at the climate summit held last week, Bolsonaro pledged to end illegal deforestation by 2030 and to double the funds for environmental reinforcement. However, Bolsonaro’s proposals were not novel. In 2015, former President Dilma Roussef had already set 2030 as the date by which Brazil aimed to reach “zero illegal deforestation.” By 2020, however, Bolsonaro had dropped the pledge from the updated strategy in terms of the country’s implementation of the Paris Agreement.

Three weeks ago, Bolsonaro’s son and lawmaker, Eduardo Bolsonaro, erroneously claimed that agribusinesss – one of the main culprits of deforestation – “generates clean energy and helps to conserve the forest that occupies 61% of Brazil’s territory.” Not only was the data proved statistically inaccurate. Deforestation has contributed to the Amazon rainforest being depleted by 20%.

In 2019, 99% of deforestation in Brazil was carried out illegally. Indigenous terrain accounted for 6% of the targeted land, while 11% including conservation areas. A 2020 report confirms agribusiness as the main culprit of deforestation. In 2018, Bolsonaro lamented the presence of indigenous communities preventing agribusiness exploitation.

The refusal to include indigenous communities and environmental organisations in policy making has been one of the main contentions raised to the U.S. government. “No talks should move forward  until Brazil has slashed deforestation rates to the level required by the national climate change law and until the string of bill proposals sent to Congress containing environmental setbacks is withdrawn. Negotiating with Bolsonaro is not the same as helping Brazil solve its problems,” the letter partly stated.

Deforestation and progress are only linked together by agribusiness companies and the Brazilian government, as in the case of Acre where 688 square kilometres were lost to deforestation. “Acre doesn’t have minerals. It has no potential for tourism. What it does have is some of the best land in Brazil. But this land has one problem: it’s covered in forest,”Assuero Doca Veronez, the President of the Acre Agriculture Federation stated in 2020. What Veronez was aiming at was the establishment of agricultural territory combined with industrial development.

Following the climate summit, Bolsonaro was not deterred, criticising external opinions about Brazil while once again requesting foreign assistance for the Amazon rainforest protection. Citing comparisons in global emissions, Bolsonaro claimed that scrutinising Brazil was “absurd”, while stating that since Brazil’s global emissions amounted to less than those of other countries including China and the U.S., less environmental restrictions should apply to the country. One main concern raised by Bolsonaro, once again, was tied to agribusiness. Countries seeking Brazil’s contribution on environmental protection, according to Bolsonaro pose a hindrance to agribusiness profit and expansion.

It remains to be seen whether the international community can curb Brazil’s neoliberal profit upon environmental exploitation. International warnings over trade deals with Brazil – the EU-Mercosur pact has not yet been ratified and this may have implications for Brazil which relies heavily on agricultural exports. However, if the deal goes through, it would not be the first time that the international community pays lip service to environmental concerns, while turning a blind eye when it comes to economic expansion.

In July 1963, the Kennedy administration decided it had to “do something about Brazil.” The U.S. role, at the time, was to destabilise the country, which is did through the Central Intelligence Agency (CIA) between 1961 and 1963, while considering the options to bring Brazil to a compliant approach with U.S. imperialist interests. President Joao Goulart could either purge the left-wing from this government, or else face a military coup, which by 1962 was already considered the preferable option.

On March 31, Brazil’s armed forces, backed by the U.S., staged a military coup which forced Goulart into exile in Uruguay. The U.S. immediately recognised the military government, which paved the way for widespread torture of opponents. Statistics indicate a lesser number of disappeared civilians in Brazil than Chile and Argentina, for example. However, the use of torture was rampant and the primary method used to quash out any resistance to the dictatorship. More than 50,000 Brazilians were detained and tortured, while 10,000 were forced into exile.

Under the current Brazilian President Jair Bolsonaro, the military dictatorship stirred up the country’s memory in a brutal manner. While in 2011, the Brazilian Congress voted in favour of a bill to set up a truth commission as a primary step towards justice and building the country’s collective memory, Bolsonaro has tried to emulate dictatorship tactics within a democratic framework through his policies, the political attacks upon the indigenous communities, education, as well as giving the right-wing the space to flourish once again in the country.

The recent commemorations of the coup by several Brazilian officials and influential individuals attest to the government’s normalisation of right-wing violence. “We are here to celebrate the expulsion of communists from the Brazilian government,” a businessman declared.

With no accountability so far in terms of establishing culpability over torture, Bolsonaro has exploited the vacuum that prevails in place of memory. In 1974, for example, the Brazilian President Ernesto Geisel gave the order to continue the “summary execution of dangerous subversives,” as detained in a memorandum to Henry Kissinger, the U.S. Secretary of State at the time. The document states that 103 Brazilians were executed by extra-legal methods in 1973.

Declassified documents presented in 2014 to former Brazilian President Dilma Roussef detail the torture and execution methods employed by the military dictatorship. One method used to eliminate identification of bodies was termed “sewing” – shooting a person from head to top with an automatic weapon. The dictatorship’s preferred cover-up for the elimination of its opponents was the fabrication of a shoot-out – claiming that prisoners were shot while attempting to escape.

Defence Minister Walter Braga Netto insisted upon the “right” to celebrate the coup, saying, “The armed forces ended up assuming the responsibility of pacifying the country, facing the challenges of reorganising it and securing the democratic liberties that we enjoy today.” But if the coup secured freedom, why would it have had to resort to oppression to annihilate what it allegedly procured?

While Bolsonaro himself refrained from making any remarks as opposed to previous years, the discourse of purported pacification from one of the country’s top officials is an embodiment of Bolsonaro’s constant praise for dictatorship crimes. Furthermore, it places obstacles to the people’s right to justice and memory by appealing to the younger generation’s right-wing glorification, thus setting the country up for a possible political rupture. And while Bolsonaro may have recently stirred a rift between the government and the military, any divergences or differences of opinion or strategy between both entities will still veer toward the right-wing ideology that Bolsonaro has promoted since his foray into politics, and more vociferously, since he was elected president.

China is rapidly surpassing the United States as the most influential nation across Latin America, in the U.S.’s own backyard. This is not a boast by the Chinese government. It is the considered assessment of the five star admiral who heads U.S. Southern Command (SOUTHCOM) in his testimony on March 16 to the SenatUe Armed Services Committee.

For almost 200 years since President James Monroe first adumbrated it in a regular message to Congress in December 1823, successive generations of U.S. policymakers and the American people have taken it for granted that the entire vast continent of South America, as well as giant Mexico, the small and much-put-upon nations of Central American and the Caribbean have been and should always remain the United States’ backyard, with all the supposedly evil and repressive powers of the Old World kept out of them — in the sacred names, of course, of Democracy, Freedom and Free Trade.

In fact, with the exception of a handful all too brief eras of genuine shining idealism and goodwill under Presidents Ulysses S. Grant (1869-77), Franklin D. Roosevelt (1933-45) and John F. Kennedy (1961-63), U.S. domination of the Spanish- and Portuguese-speaking Western Hemisphere has been characterized, not by benign neglect but rather by a monstrously malign attention.

The repressions and depredations that President Porfirio Diaz, with the enthusiastic support of Wall Street and the City of London inflicted on the Mexican people during his 35 year reign of terror from 1876 to 1911 now known as the Porfiriato defy belief: Almost 10 million peasants were driven off their land and national life expectancy crashed to only 30 years when it was 50 in the neighboring United States. At the same time, $1.5 billion in U.S. business investment (and these were 19th century dollars) flooded in.

A new era of holier-than-thou heavy-handed intervention came with America’s first systematically imperialist President Theodore Roosevelt. TR was a ludicrous joke as a soldier and military leader. He charged up San Juan Hill in Cuba in 1898 managing to avoid getting himself shot and then in the first years of World War I endlessly tried to embrace the United States in World War I from almost the start: He imagined that a San Juan Hill-style cavalry charge across the Western Front would break the German Army. Had he had his way, 2 million American boys would have been plowed under to fertilize the fields of Belgium and Northern France — for nothing.

But in the Western Hemisphere, TR was far more effective: He waged shameless aggression against the nation of Columbia carving out an entire secessionist state from it so that the United States could build and control the Panama Canal — an essential step on America’s rise to global sea power. And the first Roosevelt also established the dark 20th century precedent that the nations of Central and South America needed the guiding hand of U.S. imperialism to whip them (literally) into shape. He dignified this policy of aggression and imperial exploitation with the title “The Roosevelt Corollary.”

Woodrow Wilson, an ugly anti-African-American racist of the most deep and implacable nature, initiated a new era of catastrophic interventions in the hemisphere, first in Mexico and then across the Caribbean region as well. This state of affairs continued through the 1920s.

The now revered and deified President Dwight D. Eisenhower knowingly approved an open CIA war to topple the genuine democracy of President Jacobo Arbenz in Guatemala in 1954: It was an international crime that unleashed far worse — a generations-long Dark Age of genocide, mass rape and the slaughter and enslavement of children against the ancient Mayan peoples of the entire region. The late Irish political philosopher Conor Cruise O’Brien, before he became a neocon in his dotage, strikingly commented that continuing U.S. repression and crimes against humanity across Central America far exceeded anything the Soviet Union inflicted in establishing its security zone of friendly states in Central Europe after World War II.

President George Herbert Walker Bush’s no-nonsense toppling of the corrupt and genuine ugly but also small time thug Manuel Noriega set the tone for the generations since: The name Bush approved for the invasion “Operation Just Cause” perfectly reflected the combination of total, confident and unhesitating self-righteousness and instinctive readiness to ignore all standards of international law and fair play that successive U.S. leaders and policymakers have always felt about invading and toppling any government they like across Latin America.

However, all that was the story of the 19th and 20th centuries and already in this still young 21st century, things are finally changing at last: Overlooked in the entire U.S. Mainstream Media (MSM) SOUTHCOM chief Admiral Craig Feller’s honest, blunt and outspoken message to the Senate Armed Services Committee made this vividly clear. (Though in my long experience, almost all of the senators who heard it will have forgotten everything the admiral said after their three or four post-hearing martinis.)

One can certainly disagree with the tone of Admiral Fuller’s comments which focused on the advances and alleged iniquities of Russia and China rather than the ongoing disastrous bipartisan policies that that the George W. Bush, Barack Obama, Donald Trump and now Joe Biden administrations have all systematically and consistently followed to repress and undermine democracy across Latin America in nations both great (Brazil) and small (Ecuador, Peru and Bolivia) as well as those in between (Colombia and Venezuela).

However, the sense of challenge, danger and alarm that the admiral tried to convey comes across all too clearly:

“I feel an incredible sense of urgency,” he said. “This Hemisphere in which we live is under assault. The very democratic principles and values that bind us together are being actively undermined by violent transnational criminal organizations (TCOs) and the PRC and Russia. We are losing our positional advantage in this Hemisphere and immediate action is needed to reverse this trend.”

China is building, has bought or now controls outright 40 major ports across Latin America, the SOUTHCOM commander said. And now, in addition, COVID-19 is wrecking political stability across the continent, the admiral said.

“There is an accelerating spiral of instability gripping the region as the pandemic has increased the region’s fragility. Latin America and the Caribbean have suffered among the highest COVID-19 death rates in the world,” Feller said. “According to the International Monetary Fund (IMF), per capita income in Latin America will not recover from the pandemic until 2025.”

To America’s strategic horror, China has launched a $1 billion COVID-19 aid offensive across Latin America to build influence in the region and is already rapidly advancing toward their goal of economic dominance in the region within the next 10 years, the admiral said.

“In 2019, the People’s Republic of China surpassed the United States as the leading trade partner with Brazil, Chile, Peru, and Uruguay and is now the region’s second-largest trading partner behind the United States. From 2002 to 2019, PRC trade with Latin America soared from $17 billion to over $315 billion, with plans to reach $500 billion in trade by 2025,” the admiral said.

China’s economic rise in Africa has been much commented upon and studied in the West. However its parallel rise in trade, business and influence in Latin America has been comparatively ignored. But it is happening. It is real. And it is changing the destiny of a continent.

While research has indicated the importance of indigenous conservation of land, the G7 countries are driving deforestation worldwide through consumption patterns targeting less developed countries. Tropical forests remain among the most targeted areas, with 46-57 percent of imported material deriving from such areas. More than 4.2 million hectares of primary tropical forests was lost in 2020 to deforestation; 1.7 million hectares forest loss were incurred in Brazil’s Amazon alone.

Brazilian President Jair Bolsonaro certainly has failed to impress with his track record of exploiting indigenous terrain. Since the start of his presidency, he prioritised the industrialisation of the Amazon rainforest, home to indigenous communities and over 100 uncontacted tribes. Not in Bolsonaro’s language, however, who refuted the indigeneity and declared the communities as favourable to industrialisation of their land.

In 2019, the world witnessed a grotesque spectacle as the Amazon rainforest burned and Bolsonaro bided his time to save the terrain, while blaming environmental activists for the destruction, claiming arson attacks. Yet one of Bolsonaro’s first policies, enacted within hours of his taking office, was to subject the regulation of indigenous lands to the Ministry of Agriculture.

Another gimmick hand involved Bolsonaro’s rejection of the G7’s offer $20 million in aid to fight the Amazon fires – rhetoric he later retracted. The spectacle of exploiters offering aid to halt the fire spread illustrated nothing in terms of environment protection; rather it portrayed the vested interests of saving the forests to exploit through other means. The indigenous populations, for whom the Amazon is a home, existed in a realm far from capitalist consciousness. And in such reasoning, Bolsonaro and the G7 were on the same page.

For Bolsonaro, a leader enamoured with the dictatorship era, there were no qualms about militarising the Amazon. Allowing the military to occupy key positions in environmental matters had precedents during the years of the Brazilian dictatorship from 1964 to 1985, which ushered in the country’s industrialisation, even as indigenous communities were displaced and killed for their resistance. Brazil’s National Truth Commission report estimates that 8,350 indigenous people were killed during the dictatorship.

With a history of being in favour of industrialising the Amazon, Bolsonaro’s purported solution to preserving the terrain has turned out to be a recipe of oppression for the indigenous communities, and an avenue for exploitation to take place. A recent report by Reuters quotes former left-wing environment minister Izabella Teixeira stating, “The current Brazilian government has a 1970s mentality related to natural resources. That to control the forest means to cut it down.”

In January this year, indigenous leaders and human rights groups requested the International Criminal Court to investigate Bolsonaro for crimes against humanity as a result of his policies and violations of indigenous rights. A detailed report by Brazil’s Climate.

Observatory highlights the government’s refusal to engage in public debate, noting that 593 regulatory changes were signed in 2020 alone.

Furthermore, outsourcing the Amazon’s protection to the military resulted in an increase in fires and higher deforestation, which substantiates claims that the military and the government see eye to eye when it comes to indigenous exploitation. According to the report, one recurring tactic used by Bolsonaro is the purported collusion between non-governmental organisations and foreign governments. This is an attempt to obscure the true damage that is leaving a disastrous environmental impact as a result of agribusiness and deforestation – the former a strong lobby and vociferous support of Bolsonaro’s policies.

Bolsonaro has asserted the existence of “international greed” when it comes to the Amazon. However, such a statement leaves out the Brazilian government’s complicity in the mentioned greed – it was, after all, a prominent policy of Bolsonaro’s to open up the Amazon for international exploitation. An example of how, despite the centrality of indigenous peoples to sustainable environments, governments and corporations are doing the utmost to ensure indigenous erasure.

When governments were have expected to have stood up and displayed leadership during a catastrophic pandemic, certain leaders not only ignored the threat posed by the Covid-19 virus but advocated dangerous and ineffective “cures” and therapeutics that drove up an already astronomically high death toll. There are growing calls for criminal manslaughter charges to be brought against certain leaders in countries subjected to such nefarious and deadly Covid-19 actions. There have also been suggestions that because Covid-19 is a worldwide pandemic, those leaders who helped spread the virus through their malfeasance and inaction should be brought before an international tribunal.

At the top of the suspect list for facilitating a public health emergency that, at last count, saw 2.79 million deaths worldwide, with the United States topping the list at 549,000 and Brazil placing second at 312,000, are the respective leaders of those countries at the outset of the virus breakout. The actions of lack thereof by former U.S. President Donald Trump and Brazilian President Jair Bolsonaro enter the legal realm of criminal negligence and manslaughter, if not medical genocide, on a massive scale.

Among those calling for prosecuting Trump and others in his administration for criminally-negligent manslaughter is Democratic U.S. Representative Ilhan Omar of Minnesota. In December 2020, Omar reflected on how Trump’s criminal neglect affected her own family. She told MS-NBC, “My dad was in Kenya. He came back into the United States when COVID hit because he thought he was going to be safer here,” adding, “I know that my father and over 300,000 people have lost their lives to COVID because of dangerous criminal neglect by Trump and his administration.”

Those calling for Trump’s prosecution point to his February 7, 2020 remarks to Washington Post reporter Bob Woodward, in which Trump said that Covid-19 was “ deadly stuff,” and “five times more deadly than even your strenuous flus.” Yet, even after privately admitting the lethality of Covid-19, Trump told the public on February 27 that Covid-19 was “the same as the flu.” On July 4, 2020, Trump stated that “99 percent” of the Covid cases were “totally harmless,” another lie. Trump’s more ardent political supporters refused to socially distance, practice hygiene, and continued on as if there was no pandemic. That resulted in the United States having the world’s highest death count, something that points right back to Trump’s criminally negligent policies and false statements.

In July 2020, the UNISaúde network, an alliance of over one million Brazilian health care professionals, filed a complaint with the International Criminal Court in The Hague against Brazilian President Jair Bolsonaro. The complaint accused Bolsonaro of committing a crime against humanity by treating the Covid pandemic with “contempt, neglect, and denial.” It further contended that Bolsonaro’s urging Brazilians to take ineffective drugs like chloroquine and hydroxychloroquine, along with urging them to not wear masks, directly contributed to Brazil’s high death count, only second to that of the United States. In addition to the health care professionals, over 150 Roman Catholic bishops in Brazil signed an open letter that cited Bolsonaro for “systematically using unscientific arguments… to normalize a COVID-19 plague that is killing thousands, and to treat this as if it was an accident or divine punishment.” Bolsonaro and Trump, who have in common far-right politics and opinions, triggered what constitutes grounds to be charged with second degree murder. That is, a “depraved indifference to human life,” according to many criminal statutes.

If Friedrich Engels were alive today, he would likely define the criminal neglect of Covid-19 by the like of Trump and Bolsonaro as “social murder,” a term he coined in his 1845 opus, “The Condition of the Working-Class in England.”

Engels’s words in 1845 certainly describe the actions of Trump, Bolsonaro, and their advisers and administration members with regard to the present day:

“When one individual inflicts bodily injury upon another such that death results, we call the deed manslaughter; when the assailant knew in advance that the injury would be fatal, we call his deed murder. But when society places hundreds of proletarians in such a position that they inevitably meet a too early and an unnatural death, one which is quite as much a death by violence as that by the sword or bullet; when it deprives thousands of the necessaries of life, places them under conditions in which they cannot live — forces them, through the strong arm of the law, to remain in such conditions until that death ensues which is the inevitable consequence — knows that these thousands of victims must perish, and yet permits these conditions to remain, its deed is murder just as surely as the deed of the single individual; disguised, malicious murder, murder against which none can defend himself, which does not seem what it is, because no man sees the murderer, because the death of the victim seems a natural one, since the offence is more one of omission than of commission. But murder it remains.”

While Trump and Bolsonaro appear to be guilty of social murder, at least in the second degree, if not the first, what about other leaders who prescribed various ineffective tonics and other herbal remedies to combat Covid-19? A case of manslaughter against them might be successfully argued in a court.

Madagascar President Andry Rajoelina urged people to drink an herbal tonic called “Covid-Organics,” which is produced in his country from the Artemisia annua plant. Planeloads of Covid-Organics were delivered to Tanzania, Guinea-Bissau, Equatorial Guinea, and Liberia. Tanzanian President John Magufuli was one of the tonic’s proponents. He told the Voice of America in May 2020, “Now when the Madagascars [sic] claim that they have the medicine for coronavirus… now, the debate is: ‘Why should [we] not just support this innovation from our own continent?’ ”Magufuli’s question was answered on March 17, 2021, when he died from what was suspected to have been complications from Covid-19. At the very least, Rajoelina might be found guilty by a court of negligent manslaughter. But he would not be alone. Japanese Prime Minister Shinzo Abe pushed the anti-flu drug Avigan, which is produced by Toyama Chemical Company, a subsidiary of Fujifilm Holdings Corporation of Japan. The drug, also known as favipiravir, is known to cause birth defects and other serious side effects. In August 2020 and during a surge in Covid-198 cases in Japan, Abe suddenly resigned from office, citing his suffering from ulcerative colitis. One of the properties of Covid-19 is that it can exacerbate pre-existing conditions like colitis.

Among its many other crimes, the Central Intelligence Agency-installed military junta that ruled Bolivia from November 2019 to October 2020 promoted another unproven drug, ivermectin, as a cure for Covid-19. Ivermectin is an anti-parasitic worm drug that is mainly used to treat animals. After ivermectin was touted as a Covid-19 cure by the right-wing Bolivian regime’s Health Ministry, it found other enthusiasts in other Latin American countries governed by right-wing regimes, namely Brazil, Guatemala, and Peru.

Considering all of the possibly criminally negligent policies enacted by right-wing regimes to deal with Covid-19, the international court’s docket in The Hague could become as crowded as that in Nuremberg when the German Nazi leadership was brought to justice for their crimes against humanity.

Pepe ESCOBAR, Michael HUDSON

Michael Hudson: Fifty ago, I wrote Super Imperialism about basically how America dominates the world financially and gets the free ride.

I wrote it right after America went off gold in 1971, when the Vietnam War, which was responsible for the entire balance of payments deficit, forced the country to go off gold. And everybody at that time worried the dollar was going to go down. There’d be hyperinflation. And what happened was something entirely different.

Once there was no gold, America strong-armed its allies to invest in U.S. Treasury bonds because their central banks don’t buy companies. They don’t buy raw materials. All they could buy is other central bank’s treasury bonds. So, all of a sudden, the only thing that other people could buy with all the dollars coming in were U.S. Treasury securities.

And the securities they bought essentially were to finance yet more war making and the balance of payments deficit from war and the 800 military bases America has around the world. And the largest customer, I think we discussed it before, are the Defense Department and the CIA that looked at it [Super Imperialism] as a how-to-do it book. Well, that was 50 years ago.

 

And what I’ve done is not only re-edit the book and add more information that’s come out, but I’ve picked up the last 50 years and how it’s absolutely transformed the whole world. And it’s a new kind of imperialism.

There was still a view 50 years ago that imperialism was [essentially] economic. And this is the view that there’s still a rivalry for instance, between America and China or America and Europe and other countries.

But I think the whole world has changed so much in the last 50 years that what we have now is not really so much a conflict between America and China or America and Russia, but between a financial system economy run by finance and an economy run by governments — democratic or less democratic, but certainly a mixed economy.

Well, everything that made industrial capitalism rich, everything that made America so strong in the 19th century, through its protective tariffs, through its public infrastructure investment all the way down through World War II and the aftermath. We had a mixed economy in America, and that was very balanced. Europe had a mixed economy. Every economy since Babylon and Rome has been a mixed economy, but in America you’ve had since 1980 something entirely different. That was not foreseen by anybody because it seemed to be so disruptive.

And what that was, was the financial sector saying we need liberty and by liberty, meaning we have to take planning and subsidy and economic policy and tax policy out of the hands of government. And put it in the hands of Wall Street.

And so, libertarianism and free market is a centralized economy that is centralized in the hands of the financial centers, Wall Street, the City of London, the Paris Bourse. And what you’re having today is the attempt of the financial sector to take the role that the landlord class had in Europe, from feudal times through the 19^th century.  It’s a kind of resurgence.

If you look at the whole last 200 years of economic theory — from Adam Smith and, Henry George and Marx, onward — the whole idea was that everybody expected a mixed economy to become more and more productive and to free itself from the landlords, to free itself from banking to make land a public utility.

That was the tax base to make finance basically something public, and government would decide who gets the funding and thus, the idea of finance in the public sector was going to be pretty much what it is in China. You create bank credit in order to finance capital investment in factories. It means the production of machinery, agricultural modernization, of transport, infrastructure of high-speed trains of ports and all of that.

But in the United States and England, you have finance becoming something completely different.  Banks don’t lend money to factories. They don’t want money to make means of production. They make money to take over other assets. Eighty percent of bank loans are mortgage loans to transfer the ownership of real estate. And of course that’s what created a middle class in the United States.

The middle class was able to buy its own housing, it didn’t have to pay rent to landlords or absentee owners or warlords and their descendants in England and Europe. They could buy their own. What nobody realized is that if you borrowed the money to take a mortgage, there’s still an economic rental value that is not paid to the landlords. It’s paid to the banks. And so, in the Western civilizations in America and Europe, the banks have played the role that the landlords played a hundred years ago.

And just as the landlord is trying to do everything they could through the House of Lords in England and the upper houses of government in Europe, they’re trying to block any kind of democratic government. And the fight really is against government that would do anything that is not controlled by the 1 percent, by the banks. Essentially the merger between finance insurance and real estate; the FIRE sector. So, you have almost a relapse of capitalism in the West back into feudalism, but feudalism with a financialized twist much more than it was in medieval times.

The fight against China, the fear of China is that you can’t do to China, what you did to Russia.  America would love for there to be a [former Russian President Boris] Yeltsin figure in China to say, just give all of the railroads that you’ve built, the high-speed rail, the wealth, all the factories to individuals. And let the individuals run everything and, then we’ll lend them the money, or we’ll buy them out and then we can control them financially.

And China’s not letting that happen. And Russia stopped that from happening. And the fury in the West is that somehow, the American financial system is unable to take over foreign resources, foreign agriculture. It is left only with military means of grabbing them as we are seeing in the near East. And you’re seeing in the Ukraine right now.

Chinese President Xi Jinping, left, with Russian President Vladimir Putin during a state visit to Moscow. (Kremlin)

Pepe Escobar: Well, as an introduction, Michael that was perfect because now we have the overall framework — geo-economic and historically — at least for the past 70 years.

I have a series of questions for you. I was saving one of these for the end, but I think I should start really the Metallica way. Let’s go heavy metal for a start, right?

So considering  what you describe as a new kind of imperialism and the fact that this sort of extended free lunch cannot apply anymore because sovereigns around the world, especially Russia and China, I tried to formulate the idea that there are only three real sovereign powers on the planet, apart from the hegemon; Russia, China, and Iran, these three, which happen to be the main hub and the main focus of not only of the New Silk Roads but of the Eurasia integration process, they are actively working for some sort of change of the rules that predominated for the past 70 years.

So my first question to you would be, do you see any realistic possibility of a, sort of a Bretton Woods 2.0, which would imply the end of the dollar hegemony as we know it, and petrodollar recycling on and on and on, with the very important presence of that oily hacienda in the lands of Arabia. And do you think this is possible considering that President [Vladimir] Putin himself only a few days ago reiterated once again that the U.S. is no longer agreement- capable?  So that destroys already the possibility of the emergence of the new rules of the game. But do you think this is still realistically possible?

Michael: I certainly do not see any repetition of a Bretton Woods because as I described in Super Imperialism, the whole of Bretton Woods was designed to make American control over Britain, over Europe total. Bretton Woods was a U.S.-centered system to prevent England from maintaining its empire. That’s okay. To prevent France from maintaining its empire and for America to take over the sterling area and, essentially with the World Bank, to prevent other countries from becoming independent and feeding themselves, to make sure that they supported plantation agriculture, not land reform. The one single fight of the World Bank was to prevent land reform and to make sure that America, and foreign investors, would take over the agriculture of these countries.

And very often people think of capitalism, certainly in the sense that Marx described in Volume One, capitalism is the exploitation of wage labor by employers. But capitalism also is an appropriation of the land rent, the agricultural rent, the natural resource rent, the oil and the mineral rent. And the idea of Bretton Woods was to make sure that other countries could not impose capital controls to prevent American finance coming in and appropriating their resources, of making the loans to foreign governments so that governments would not create their own money to promote their own social development but would have to borrow from the World Bank and the IMF, which essentially meant from the Pentagon and the State Department, in U.S. dollars.

World Bank headquarters in D.C. (Bruno Sanchez-Andrade Nuño, Flickr)

 

And they would dollarize their economies and the economies would all be sucked. The economic rents from oil, agriculture, mining would all be sucked into the United States. That kind of Bretton Woods cannot be done again. And since Bretton Woods was an idea of centralizing the world’s economic surplus in a single country, the United States, no, that can never be done again.

What is happening? You mentioned the world of free, free lunch, and that’s what was a theme of Super Imperialism, when America issues dollars, for these all end up in central banks and they hold the dollars as a surplus. That means what can they do? All they can do is really lend them to the United States. America got a free lunch. It could spend and spend on its military, on bumping up corporate takeovers of other countries. The dollars have come in and foreign countries couldn’t cash them in for gold. They had nothing to cash them into. And all they could do is finance the U.S. budget deficit by buying Treasury bills.

That’s the irony now, what has happened in the last few years in the fight against Russia and China is America has killed the free lunch because it said, okay, now we’re going to have sanctions against Russia and China. We’re going to all of a sudden grab whatever money you have in foreign banks like we grabbed Venezuela’s money. Let’s go, we’re going to excommunicate you from the bank clearing system. So, you can’t use banking. We’re going to put sanctions against banks that deal with you.

So obviously Russia and China said, okay, we can’t deal with the dollar anymore, because the United States just crammed them. And if we do have dollars, we’re just going to hold everything in reserves and lending to the United States, the dollars that it’s going to spend building more military bases around us to make us waste our money on monetary spending. And so, America itself by the way, in fighting against China and Russia, has ended the free lunch.

“In America you’ve had since 1980 something entirely different. That was not foreseen by anybody because it seemed to be so disruptive.”

And now, Russia and China as you pointed out, are de-dollarizing, they’re trading in each other’s currency. They’re being the exact opposite of everything that Bretton Woods tried to create. They’re trying to create independence from the United States.

If Bretton Woods is this dependence on the United States, a centralized system dependent ultimately on Wall Street financial planners then, what China and Russia are trying to create is an economy that’s not run by the financial sector, but it is run by, let’s say, industrial and economic engineering and saying, what kind of an economy do we need in order to raise living standards and wages and self-sufficiency and preserve the environment, what is needed for the ideal world that we want?

Well, in order to do that, you’re going to have to have a lot of infrastructure. And in America, infrastructure is all privatized. You have to make a profit. And once you have infrastructure, a railroad or electric utility, like you see in Texas recently, it’s a monopoly. Infrastructure, for 5,000 years, Europe, the near East, Asia was always kept in the public domain that goes, if you’ll give it to private owners, they’ll charge a monopoly rent.

Well, the idea that China has is, “OK, we’re going to provide the educational system freely and let everybody try to get an education.” In America if you have an education, you have to go into debt for the banks for between $50,000 and $200,000. And whatever you make you’re going to end up paying the bank while in China, if you give free education, the money that they earned from the education will be spent into the economy, buying the goods and services that they produce, and the economy will be expanding, not shrinking, not having it all sucked out into the financial banks that are financing the education, same thing with the railroads, same things with the healthcare.

If you provide healthcare freely then the employers do not have to pay for the healthcare because that’s provided freely. In the United States, if the  corporation and the employees have to pay for healthcare, that means that the employees have to be paid a much higher wage in order to afford the healthcare, in order to afford the transportation that gets him to work, in order to afford the auto loans, in order to drive to work, all of this is free, or subsidized in other countries, who create their own credit.

In the United States and Europe, governments feel that they have to borrow from the wealthy people in a bond and pay interest. In China they say, “we don’t have to borrow from a wealthy class. We can simply print the money.” That’s Modern Monetary Theory. As Donald Trump has explained in the United States, we can print whatever we want. Dick Cheney said, deficits don’t matter. We can just print it.  And of course, Stephanie Kelton and my colleagues in MMT at Kansas City for many years have been saying.

“The economy has been saturated and Reaganized and the result is a fight of economic systems against China and Russia.”

The banks fear this because they say, “Wait a minute, Modern Monetary Theory means it’s not feudal monetary theory. We want feudal monetary theory. We want the rich people to be able to have a choke point on the economy that you can’t survive unless you borrow from us and pay us interest. We want the choke points.” That’s called economic rent.

And so, you have the West turning into a rent-extractive economy, a rent-seeking economy. And you’ll have the whole ideal of Russia, China, and other countries being the ideal of not only Marx, but Adam Smith, John Stuart Mill, Ricardo. The whole of classical economics was to free economies from economic rent. And the American economy is all about extracting rent through the real estate sector, the financial sector, the health insurance sector, the monopolies and infrastructure sector.

The economy has been saturated and Reaganized and the result is a fight of economic systems against China and Russia. So, it’s not simply that, there’s a fight between who makes the best computer chips and the best iPhones. It’s: are we going to have a fallback of civilization back into feudalism, back into control by a narrow class at the top of the economy, that 1 percent? Or are we going to have the ideal of democratic industrialization that used to be called socialism but it was also called capitalism. Industrial capitalism was socialism; it was socialized medicine, it was socialized infrastructure, it was socialized schooling. And so, the fight against socialism is a fight against industrial capitalism, a fight against democracy, a fight against prosperity.

[See previous coverage:  The Consequences of Moving from Industrial to Financial Capitalism]

That’s why what you’re seeing now is a fight for what direction civilization will go into. And you can’t have a Bretton Woods for a single kind of organization because the United States would never join that civilization. The United States calls a country trying to make its labor force prosperous, educated and healthy instead of sick with shorter lifespans, they call it communism or socialism.

Well, it can call it whatever it wants, but that’s the dynamic we are talking about.

Pepe:  Well, you put it very, I would say starkly. The opposition between two completely different systems, what the Chinese are proposing, including, from productive capitalism to trade and investment all across Eurasia and beyond, including Africa, parts of Latin America as well. And the rentier obsession of the 0.01 percent that controls the U.S. financial system. In terms of facts on the ground, are we going slowly but surely and ominously towards an absolute divorce by a system based on rentier, ultra-financialization, which is the American system, not productive capitalism at all.

May 14, 1984: Pop superstar Michael Jackson, center, with President Ronald Reagan and First Lady Nancy Reagan. (Pete Souza, White House)

I was going through a small list of what the U.S. exports, it’s not much as you know, better than I do. Agricultural products but always privileging U.S. farmers.  Hollywood, we are all hostages of Hollywood all over the world. Pop culture? That’s not the pop culture that used to be absolutely impregnable and omniscient during the ‘60s, the 70s, during the Madonna, Michael Jackson era in the ‘80s, right? Infotech. And that’s where a big bet comes in. And this is maybe the most important American export at the moment because American Big Tech controls social networks all over the planet. Big Pharma. Now we see the power of Big Pharma with the whole Covid operations, right?  But Boeing prefers to invest in financial engineering instead of building decent products. Right?

So, in terms of a major superpower, the hyperpower, that’s not much, and obviously buyers all over the world already noticed that. So, China is proposing the New Silk Roads, which is a foreign-policy strategy, and a trade, investment and sustainable development strategy. [It’s] applied not only to the whole of Eurasia, but Eurasia and beyond to grow a great deal of the Global South and that’s why we have Global South partners to the New Silk Roads — 130-and-counting as we speak.

So, the dichotomy could not be clearer. What will the 0.001 percent do? Because they don’t have anything seductive to sell. To all those nations in the Global South to start with; the new version of the Non-Aligned Movement, NAM, the countries that are already part of New Silk Road projects, not even to Europe and this, we could see by the end of last year when the China-European Union agreement was more or less sealed. It’s probably going to be sealed in 2021 for good.

And at the same time, we had the Regional Economic Comprehensive Partnership, RCEP, with the ASEAN 10, my neighbors here, the Association of South East Asian Nations, China, Japan, South Korea, Australia, and New Zealand. So, when you have the China-EU deal, and when you have RCEP, you have China as the number one trade partner on the planet, no competition whatsoever.

And obviously every one of these players wants to do business with China. And they’re privileging doing business with China to doing business with the U.S., especially with a country that once again, according to President Putin, is non-agreement capable. So, Michael, what is your key geo-economic view of the next steps? Are we going towards the divorce of the American financialization system and the Eurasia-and-beyond integration system?

Sept. 25, 2015: Vice President Joe Biden, center, raises a toast in honor of Chinese President Xi at a State Department luncheon. U.S. Secretary of State Johh Kerry on right. Jill Biden lower left. (Wikimedia Commons)

Michael: Well, you you’ve made the whole point clear. There is incompatibility between a rentier society controlled by the finance and real estate interests and military interests and an industrial democracy.

Industry in England and Europe in the 19th century — the whole fight for democratic reform to increase the role of the House of Commons against the House of Lords in England and the lower house in Europe — was a fight to get labor on the side of industry [and] to get rid of the landlord class. And it was expected that … capitalism [would then be] free of the landlord class, free of something that wasn’t really capitalism at all, it was a carry-over from feudalism. Once you free capitalism, you wouldn’t have this overhead of the idle 1 percent, only consuming resources and going to war, anymore.

And then World War I changed all of that . … Already, in the late 19th century, the landlords and the banks fought back, and they fought back largely through the Austrian School of individualism and the English marginalist and they called it freedom. They call it free markets. Free market meant giving power to the monopolists, to the oppressors, to violence. A free market was where armies can come in, take over your country, impose a client dictatorship like [Gen. Augusto] Pinochet in Chile or the neo-Nazis in the Ukraine. And you call that a free market.

Poster of the mongrel dog symbol of social protests in Chile since the student demonstrations of 2011. (Carlos Teixidor Cadenas, CC BY-SA 4.0, Wikimedia Commons)

The free world was a world centrally planned by the American military and finance together. So, it’s Orwellian, and the dynamic of this world is shrinking because it’s polarizing and you’ve seen with the Covid pandemic in the United States, the economy has polarized much more sharply than ever before between the 1 percent, the 10 percent and the rest of the economy.

Well, as opposed to that here, you have economies that are not run by a rentier class, that do not have a banking class and the landlord class controlling the economy, but a partnership. The kind of thing you had in Germany in the late 19th century, government industry and labor, all working together to design how we provide the financing for industry so that it can provide not only industrial capital formation, but public funding for us to build infrastructure and uplift the population.

What China is doing is what made America rich in the 19th century, what made Germany rich. It’s exactly the same logical engineering plan. Now, this plan because it’s based on economic expansion, and environmental preservation and economic balance instead of concentration, this is going to be a growing economy. So, you’re having a growing economy outside of the United States and a shrinking economy in the States and its satellites in Europe.

“What China is doing is what made America rich in the 19th century, what made Germany rich.”

Europe had a choice; either it could shrink, and be American, or it could join the growth. Europe has decided unanimously, we don’t want to grow. We want to be constant. We want our banks to take over just like in America. That’s a free market because Americans have found out, and I’m told by American officials we just buy the European politicians, they’re bribable. That’s why when president Putin says, America and Europe are not agreement capable, it means they’re just in it for the money. There is no ideology there. There is no idea of the overall social benefit. The system is “how can I get rich, and you can get rich by being bribed?” That’s why you go into politics. As you can tell in America with the Supreme Court law saying politics can be personally financed.

So, you’re having two incompatible systems and, they’re on different trajectories and if you have a system that is shrinking like the West and growing in the East, you have resentment.  People who obtain their wealth in crooked ways, or without working — by inheritance, by crime, by exploitation — they will fight like anything to keep that. Whereas people who actually create wealth, labor, capital, they, they’re not willing to fight, they just want to be creative. So you have a destructive military force, in the West. And, basically a productive, economic growth force. And in Eurasia, the clash now is occurring largely in Ukraine. You’re having the United States back the neo-Nazis.

Pepe: The old Nazi movement!

Michael: It’s the same swastika-carrying group that threatened Russia in World War II. And this is like waving a red flag before a bull. Putin continues to remind the Russians. We know what happened with the 22 million Russians that died, in World War II with Europe coming in. We’re not going to let it happen again.

And you can be certain Russia is not going to be sucked into invading the Ukraine. The United States has its military advisers in the Ukraine. Now, the Vineyard of the Saker has a very good report on that. America’s trying to needle Russia into fighting back against the terrorist groups and Russia has no desire at all to. There’s nothing that Russia has to gain by taking it over. It’s essentially a bankrupt country.

The United States is trying to provoke a response so it can say Russia is attacking the West.  The result will probably be that Russia will very simply provide arms to the Eastern Ukrainians to fight back the invasion. And you’re going to have a wasteland in Western Ukraine and Poland. And this wasteland will be the new buffer state with Europe. Already you have, maybe 10 percent of the Ukrainians having moved to Russia and the east. [Another] 10 percent are now plumbers in England and Europe, working. They’re beginning to look like Latvia and other neo-liberalized countries. Neo-liberalized countries? If you want to see the future, look at Latvia, Estonia. Look at Greece. That’s the American plan. Essentially, an emigration of skilled labor, a sharp reduction of living standards, a 20 percent decline in population. And although it may appear to have more income, all of this income and GDP is, essentially, interest collection and rents to the FIRE sector.

All the American GDP growth is essentially payment to the bank, to the landlords and the monopolist, it’s not, the population, the employees are not sharing in the GDP. It’s all concentrated at the top. They make a desert, and they call it growth.

Street in Detroit in 2009. (Bob Jagendorf, Flickr, (CC BY-NC 2.0)

It hasn’t changed.  Rome was a predatory economy held by military force that ultimately collapsed and America is on the same trajectory as Rome. And it knows this, I have spoken to American policymakers and they say, “you know, we we’re going to be dead by then. It doesn’t matter if the West loses. I’m going to get rich. I’m going to buy a farm in New Zealand and make a big bomb shelter there and live underground, you know, like a cave dweller.”

The financial time frame and the predatory rentier time frame is short term. The Eurasian time frame is long-term. So, you’ve got to have the short-term burning what wealth it has as opposed to the longer-term building up.

[Consider the Biden Covid relief measure.] They call it a stimulus bill, but if you’re starving, if you haven’t been able to pay your rent, if you’re six months behind in your rent and you get enough money to pay the landlord, at least one month back rent, that’s not a stimulus, that’s a survival.  And it’s a one-time payment. This kind of stimulus checks that America’s sending out are sent out every month in Germany and parts of Europe.

“All the American GDP growth is essentially payment to the bank, to the landlords and the monopolist.”

The whole idea in Europe is: OK, you have a pandemic, you have business interrupted. What we’re going to do is we’re going to have a pause. You don’t pay the rent, but the landlords are not going to pay the banks. And the banks are not going to be in arrears. We’re just going to have a pause so that when it’s all over people will go back to normal. Well, China and Russia are already pretty much there and where you are [in Asia], and especially in Thailand, are already back to normal.

People in Guangzhou, China in February 2020, during the Covid-19 pandemic. (Zhizhou Deng, CC BY 2.0, Wikimedia Commons)

But in America anybody who’s renting or who’s bought a house on mortgage credit or who has credit card debt or personal debt or automobile debt they’re way behind. And all of these stimulus checks are just being used to pay the banks and the landlords not to not to buy more goods and services.

All they’re trying to do is, is get out of the hole that they’ve been dug into in the last 12 months. That’s not a stimulus that’s a partial, desperation payment. This problem never existed in other civilizations. You have the whole tradition of Greece, Babylonia that’s what my book Forgiving the Debt is all about. The whole idea is when there is an economic interruption, you have an interruption, you don’t have people into debt. You wipe out all of the arrears that have mounted up. You wipe out the tax arrears, the rent arrears, the debt of payment arrears. So once the crisis is over, you can start from a normal position again.

There’s no normalization in America, there’s no normal position to start. You’re starting from a position, even more behind the financial problems than you were when you went in. The foreign economies of China and Russia don’t have that kind of problem, they don’t have any kind of deficit. So, the West is beginning with 99 percent of the population deeper and deeper into debt to the 1 percent.

Protesters with Occupy Wall Street in NYC, Nov. 17, 2011. (Z22, CC BY-SA 3.0, Wikimedia Commons)

Where is that whole polarization between the 1 percent and the 99 percent? It doesn’t exist certainly in China and in Russia, Putin is trying to minimize it, given the legacy of the kleptocracy that the neo-liberals put in he’s still trying to deal with that, but you really have that. It’s a difference in economic systems and the direction in which these systems are moving in.

Pepe: I’m really glad that you brought up Ukraine, Michael, because this, let’s say U.S. foreign policy, even, before Trump and now with the new Biden-Harris administration, basically more or less what it boils down to is sanction sanctions, sanctions, as we know, and provocations, which is what they’re doing certainly in Syria with that recent bombing.

And, in the case of Ukraine and Donbass, it’s absolutely crazy because NATO so-called strategists, when you talk to them in Brussels, they know very, very well about each state or whatever they weaponize and financialize to profit Kiev to mount some sort of offensive against the Donbass and even if they would have like 300,000 soldiers against like 30,000 in Donbass.

If the Russians see that this is going to get really heavy if they intervene in directly, with their bombing, with their super missiles, they can finish this story in one day. And if they want it, they could finish the whole story, including invading Ukraine in three days, like they did in 2008 with Georgia and still they keep the provocations, loosely acted on by  people from inside the Pentagon.

And so, we have sanctions, we have nonstop provocations, and we have also a sort of introducing a Fifth Column — elements inside or at the top of government — which brings me to, and I would love to have your personal analysis on the role of Mario (Goldman Sachs) Draghi now in Italy, which is something I had been discussing with my Italian friends. And there’s more or less a consensus, among very well informed, independent Italian analysts that Draghi may be the perfect Trojan horse to accelerate the destruction of the Italian state, which will accelerate the globalist project of the European Union, which is absolutely non-state centric.

Let’s put it this way, which is also part of the Great Reset so if you could briefly talk to us about the role of Super Mario at the moment.

Mario Draghi, right, with Italian President Sergio Mattarella at the Quirinal Palace, Feb. 3. (Presidenza della Repubblica, Wikimedia Commons)

Michael: Well, Italy is a very good example to look at. It had strings for a long time. When you have a country that needs infrastructure, that needs public, social democratic spending, you need a government to create the credit. But when Americans and specifically the University of Chicago free market lobbyists created the European, the Eurozone financial system, their premise was that governments cannot create money. Only banks can create money. Only banks owned by the bond holders can create money for the benefit of their owners and bond holders. So, no European government, first of all, can run a budget deficit sufficient to cope with the coronavirus or with the problems that have been plaguing Italy for a decade. They can’t create their money to revive employment, to revive infrastructure, to revive the economy. The European Central Bank only lends to other central banks.

It’s created trillions of euros just to buy stocks and bonds, not to spend into the economy, not to hire labor, not to build infrastructure, but just for the holders of the stocks and bonds. The 1 percent or 5 percent of the population gets richer. The function of the European Central Bank is to create money, to save the wealthiest 5 percent from losing a single penny on their stocks and bonds.

And the cost is to impoverish the economy and to basically make the economy end up looking like Greece, which was sort of the dress rehearsal for how the Eurozone was going to just essentially reduce Europe to debt dependency, just like in feudalism everybody had to have access to the land by becoming a serf.

Well now you’re in debt peonage. It’s the modern, finance capital’s version of serfdom. And so, in Italy we’re going to need government spending. We’re going to need to do in our way what China’s doing in its way and what Russia is doing in its way. We’re going to have some kind of government program. And we can’t have the economy being impoverished just because the University of Chicago has designed a plan for Europe to prevent the euro ever from being a rival to the U.S. dollar. If there’s no European central bank to borrow, to pump euros into the world economy, then, only dollars will be left for central bank reserves. The United States doesn’t ever want a rival. It wants satellites and so that’s what it’s basically turned Europe into. And I don’t see any response outside of Italy for an attempt to say we can’t be a part of this system. Let’s withdraw from the euro.

I know that the Greeks, when I was in Greece years ago, we all thought can’t we join with Italy and Portugal and Ireland and say look, the system isn’t working. Everybody else no, no, the Americans will just simply get us out of office one way or another. And in Italy, of course, if you look at what happened after World War II, the great threat was Italian communism.  You had the Americans essentially say well, we know the answer to communism, it’s fascism and, you saw where they put the money. They essentially did every dirty trick in the book in order to fight any left- wing group in Italy, just as they did in Yugoslavia, just as they did in Greece, wiping out the partisans, all the leading anti-Nazi groups from Greece to Italy to elsewhere. All of a sudden they were all either assassinated or moved out of office and replaced by the very people that America had been fighting against during World War II.

Well, now Italy is finally coming to terms with this and trying to fight back and you’re having what’s happening there, between Northern Italy and Southern Italy. You’re having the same splits occur in other countries.

Pepe: Yeah. Well, I’m going to bring up, perhaps an even more extreme case now Michael, which is the case of Brazil, which at the moment is in the middle of an absolutely out of this world mix of telenovela and Kabuki theater that even for most Brazilians is absolutely incomprehensible. It’s like a fragmentation bomb exploding over and over again, a Groundhog Day of fragmentation bombs.

In fact, it’s completely crazy. Lula [former President Luiz Inácio Lula da Silva] is back in the picture as well. We still don’t know under which terms, we still don’t know how the guys who run the show, which are the Brazilian military, are going to deal with him or instrumentalize him, et cetera.

In 2007, President Luiz Inácio Lula da Silva (Lula) and his wife Marisa Letícia review troops during the Independence Day military parade. (Ricardo Stuckert, Agência Brasil, CC BY 3.0. Wikimedia Commons)

In 2007, President Luiz Inácio Lula da Silva (Lula) and his wife Marisa Letícia review troops during the Independence Day military parade. (Ricardo Stuckert, Agência Brasil, CC BY 3.0. Wikimedia Commons)

I bring up this case because … essentially it has convulsed Brazil completely and large parts of Latin America. It is a telenovela with one cliffhanger after another, sometimes in a matter of minutes, but it encompasses all the basic themes of what really interests the 0.01 percent, which we can identify for instance as a class war against labor which is what the system in Brazil, since the coup against Dilma [Former President Dilma Vana Rousseff] has been waging. A war against mixed economies, economic sovereignty, which is something that the Masters of the Universe of the 0.01 percent cannot wage against Russia and China. But that was very successfully waged against Brazil and implemented in Brazil. In fact, in a matter of two years, they completely devastated the country in every possible sense, industrially, sociologically, you name it…

And of course, because the main objective is something that you keep stressing over and over again, unipolar rentier dominance, in fact.

Brazil, I would say is the extreme case in the world not only in the Global South, but in planetary terms of let’s say the last frontier of the rentier economy, when you manage to capture a country that was slowly emerging as a leader in the Global South, as an economic leader. Don’t forget that a few years ago, Brazil was the sixth-largest economy in the world and on the way to become the fifth. Now it’s the 12th and falling down nonstop and controlled by a mafia that includes not by accident, a Chicago Boy Pinochetista, Minister Paulo Guedes, who is implementing, in the 21st century, something that was implemented in Chile in the ‘70s and ‘80s. And they were successful. Apparently, at least so far.

Brazil’s Economy Minister Paulo Guedes in 2019. (Presidente da República, Alan Santos)

Brazil is so disorganized as a nation, so shattered, so fragmented and atomized as a nation that basically it depends on the re-emergence of a single political leader, in this case, Lula to try to rebuild the nation from scratch. And even in a position where he cannot control the game he can interfere in the game, which is what happened, like you know, … when he gave a larger-than-life press conference, mixed with a re-presentation of himself as a statesman and  said, “Look  the whole thing is shattered, but there is some light at the end of the tunnel.”

But still he cannot confront the real Masters of the Universe that have allowed this to happen in the first place. So just to give an example to many of you who are not familiar with some details of the Brazilian case, and it involves directly the Obama-Biden scheme or the Obama-Biden larger operation.  When Biden was vice president in 2013, in May 2013, he visited Brazil for three days and he met with President Dilma.

They discussed very touchy subjects, including the most important one, the absolutely enormous, pre-salt oil reserves, which obviously, the Americans wanted to be part of the whole thing, not by accident. You know what happened one week later? The start of the Brazilian color revolution, in fact, and this thing kept rolling and rolling and rolling.

Brazil’s Dilma Rousseff receiving presidential sash from Luiz Inácio Lula da Silva, Jan. 1, 2011. (Fabio Rodrigues Pozzebom, Agência Brasil, CC BY 3.0 br, Wikimedia Commons)

We got the coup against Dilma in 2016, we got to the Car Wash operation landing Lula in jail. And we got to the election of [President Jair] Bolsanaro. And now we are in a place where even if the military controls this whole process, even if Bolsanaro is becoming bad for business will he become bad for the rentier class business, for the 0.01 percent in the U.S. that has all the connections in their new, large neo-colony in the tropics, which has enormous strategic value, not to mention, unforeseen resources, wealth resources, right? So, this is an extreme case and I know that you follow Brazil relatively closely. So, your geo-economic and geopolitical input on the running telenovela I think would be priceless for all of us.

Michael: Well, this problem goes back 60 years. In 1965, the former president of Brazil came to New York and we met. He explained to me how the United States essentially got rid of him because he wasn’t representing the banking class. And he said that they built Brasilia because it’s apart from the big industrial cities, they wanted to prevent industry and democracy and the population from controlling the government.

So, they built Brasilia. He said maybe they’ll use it as an atom bomb site. It certainly doesn’t have an economic thing. Well, fast forward, in 1980, after Mexico defaulted on its foreign debt in 1972, nobody would invest in Latin America. And by 1990, Brazil was paying 45 percent interest per year to borrow the dollars to be able to finance its deficit, which is mainly flight capital by the wealthy. Well, I think I’d mentioned before here, I was hired by Scudder, Stevens and Clark for the Third World bond fund. Forty five percent: I mean, just imagine that. That’s a fortune every year. No American would buy it, no European would buy it. Who bought it? The Brazilians and the Argentineans bought, and I get it, they’re the government, they’re the central bankers. They’re the president’s family. They’re the 1 percent, they’re the only people that are holding Brazil’s dollar debt.

Entrance to the Cathedral of Brasília. (Rodrigo de Almeida Marfan, CC BY-SA 4.0)

So when Brazil pays its foreign dollar debt, it’s paying to its own 1 percent who are holding, who are saying well, we’re holding it off shore in the Dutch West Indies where the fund was located for tax-exempt purposes and pretending to be American imperialists, but actually being local imperialists.

Well then, just towards the end of Lula’s reign, the Council of Economic Advisors brought Jamie Galbraith and Randy Wray and me down for a discussion. How do we, you know, we’re, we’re really worried because, Lula in order to get elected, had to meet with the banks and agree to give them what they wanted.

They said, look, we can see that, you know, you have the power to be elected. We don’t want to have to fight you in dirty ways, but will let you be elected, but you’re going to have to do the policies and certainly the financial policies that we want and Lula made a kind of a devil’s agreement with them because he didn’t want to be killed and he wanted to do some good things.

So, he was sort of like a Bernie Sanders-type character. Okay, you have to go along with a really bad system in order to get something good done, because Brazil really needs something good done. Well, the fact is that even the little bit he did the finance couldn’t take because one of the characteristics of financial wealth is it’s addictive. It’s not like diminishing marginal utility. If you give more food to an employee or to a worker you know, at the end of the meal, you’re satiated, you don’t want much more. If you give enough money you know, OK, they buy a few luxuries and then, OK, they save it. But if you give more money to a billionaire they want even more and they grow even more desperate. It’s like a cocaine-addicted person and the Brazilian ruling class wanted it so desperately that they framed up and controlled the utterly corrupt judiciary.  The judiciary in Brazil is almost as corrupt as it is in New York City.

Pepe: More, even more.

Michael: They framed them up and they want totalitarian control. And that sort of is what free market is. Totalitarian control by the financial class. That’s freedom for the financial class, if the freedom to do what they want to do to the rest of the economy, that’s libertarianism, it’s a free market, it’s Austrian economics.

It’s the right wing’s fight against government, it’s a fight against any governments for long enough who resist the financial and real estate interests. That’s what the free market is. And Brazil is merely the most devastating example of this because it takes such a racial term there. Not only does Brazil want to make a fortune, tearing down the Amazon, cutting up the Amazon, selling the lumber to China, turning the Amazon into soy production to sell to China. But for that, you have to exterminate the domestic population, the indigenous population that wants to use the land to feed itself. So you see the kind of race war and ethnic war that you have, not to mention the war against the blacks in the Brazilian slums that Lula tried so much to overcome.

So you have a resumption of the ethnic war there, and on Wall Street, I had discussions with money managers back in 1990. Well I wonder whether that’s going to be a model for what’s happening in the United States with the ethnic war here.

Essentially, it’s a tragedy what’s happening in Brazil, but it’s pretty much what happened in Chile under Pinochet which is why they have the Pinochetistas and the Chicago boys that you mentioned.

Pepe: Absolutely. Coming back to China, Michael, and the [recent] approval of the Five-Year Plan, which is not actually the five-year plan. It’s actually three five-year plans in one because they are already planning 2035, which is something absolutely unimaginable anywhere in the West. Right?

So, it’s a different strategy of productive investment, of expansion of social welfare and solidifying social welfare, technological improvements.  I would say by 2025 China would be very close to the same infotech level of the U.S., which is part of “Made in China 2025,” which is fantastic. They stopped talking about it, but they are still implementing it, the technological drive in all those standard areas that they had codified a few years ago. And of course, this notion, which I found particularly fascinating because it is in one sense socialism with some Confucianist elements, but it’s also very Taoist: The dual development strategy, which is inversions and expansion of domestic investment and consumption and balancing all the time with projects across Eurasia, not only affiliated with the Belt and Road, with the New Silk Road, but all other projects as well. So, when you have a leadership that is capable of planning with this scope, amplitude breadth and reach, and when we compare it to the money managers in the West, which basically their planning goes, not even quarterly in many cases, it’s 24 hours.

So our dichotomy between rentier capitalism, financialization, or whatever we want to define it, and state planning with the view of social benefit is even starker in fact, and I’m not saying that the Chinese system can be exported to the rest of the world, but I’m sure that, all across the Global South, when people look at Chinese policies, long-term, how they are planning, how they are developed and how they are always fine tuning what they developed and discuss…. As you said in the beginning, this is a frontal shock of two systems and sooner or later we’re going to have the bulk of the Global South including nations which nowadays are still American vassals or satrapies or puppets or poodles, et cetera.

They’re going to see which way the wind is blowing. Right?

Michael: Why can’t the Chinese system be exported to the West? That’s a good question…. How would you make American industry able to follow the same productive path that China did? Well for one thing the biggest element in workers’ budget today is housing, 40 percent. There was one way to get rid of it, get rid of the high housing prices that essentially, or whatever a bank would lend. And the banks lend essentially the economic rent. There’s a very simple way to keep housing prices down. You tax the land rent, you use your tax system, not on taxing labor, that increases the cost of labor, not increasing capital, that leaves less, industrial capital, but your tax of the land and the real estate and the banks.

Well, suppose you were to lower the price of housing in America from 40 percent to 10 percent like China has, and this is the big element in the cost structure difference. Well, if all of a sudden people only had to pay 10 percent of their income for housing, then all the banks would go under because 80 percent of the bank loans are mortgage loans.

The whole idea is that the purpose of housing is to force how many buyers and renters go into debt to the banks so that the banks end up with all of the lend rent that the landlord class used to get. This is what’s preventing America from being like China. What if America would try to develop a high-speed railroad like China?

Well, then you need the right of way. You’d need to have the railroads go in a straight line. … They need a right of way and it doesn’t have a right of way because that conflicts with private property and most of the right of way is a very expensive real estate.

So, you can’t have high-speed rail in the United States, like in China.  Suppose you would have a low-cost education. Well then, you get rid of the whole means of siphoning off labor’s income to pay for education loans. You could go, suppose you had private healthcare and prevent Americans from getting sick like they do in China and Thailand, where you are.

High speed electric train arrives at a Shanghai rail station. (Wikimedia)

Well, then the health insurance companies and the pharmaceutical companies wouldn’t be able to make their rent. So you could not have America adopt a China type industrial program without what would be really a revolution against the legacy of the monopoly of private banking, of finance and all of the fortunes that have been built up financially really in the last 40 years since 1980.

Pepe: So, what’s going to happen in the, let’s say, short to mid-term in the U.S.? Michael, we are seeing the corrosion of the whole system, not only externally in terms of foreign policy and the end of the free lunch, but internally with those 70-million-plus “deplorables” being literally canceled from public debate, the impoverishment of the middle classes, with over 50 million people in America who are practically becoming literally poor. And obviously the American dream ended a few decades ago, maybe, but now there’s not even a glimpse of it, that there could be a renewal of the  American dream. So we have a larval civil war situation, degrading on a daily basis.  What’s the end game in fact? And what exactly does Wall Street, the American ruling class —the guys who have those lunches at the Harvard club — what do they ultimately want?

Michael: Well, what you call a disaster for the economy, isn’t it a bonanza for the 1 percent?  This is a victory of finance. You look at it as a collapse of industrial capitalism. I look at it as the victory of rentier finance capitalism.  You’re having probably 10 million Americans that are going to be thrown out of their apartments and their homes in June when the moratorium on rents and mortgages ends. You’re going to have a vast increase in the homeless population. That will probably represent an increase in people who use the subways. Where else are they going to live? And all of this, there’s an immense amount of private capital firms that have all been created in the last year of just wealth accumulations and they’re saying there are going to be such great opportunities to pick up real estate at bargain prices, all of this for the commercial real estate, that’s broken, all the buildings and the restaurants that have to be sold because they can’t meet their mortgage payments and their rents, all the houses that are going to be under, private capital can come in and do what was done after the Obama evictions.

We can do what Blackstone did. We can buy them all out for pennies on the dollar. So, for them, they’re looking at their own 20-year plan. And their 20-year plan is to grab everything!

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