PewDiePie, Nazi?

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Felix Kjellberg, aka PewDiePie

It’s hard to know which is more embarrassing to have to write: the words “YouTube star” or the silly name “PewDiePie.” As it happens, the latter is an example – indeed, the prime example – of the former: PewDiePie, a 27-year-old Swede whose real moniker is Felix Arvid Ulf Kjellberg, is the biggest of all YouTube stars.

It happened fast. A drop-out from a technology college, he tried unsuccessfully to get an apprenticeship at an ad agency. Then, six years ago, while working at a hot-dog stand, he posted the first of his homemade videos, of which he’s now made several hundred. By August 2013 he was the most subscribed user on all of YouTube. His videos routinely get millions, if not tens of millions, of views. He’s now accumulated a total of over 14 billion views. He makes tens of millions of dollars a year off of this stuff.

pewdiepie-400x240Now, many a discerning adult, if confronted with one of Kjellberg’s videos, might scratch his or her head over the young Swede’s success. It’s not exactly witty or sophisticated fare – and that’s putting it mildly. But his followers (largely teens and tweens) love him. In any case, his immense success led the folks at Disney to sign him in 2014 to a lucrative contract.

For a while there, he seemed to be moving from triumph to triumph.

pewdiepie-e1484319246136But his smooth ride hit a bump – at the very least – on February 14, when Rolfe Winkler, Jack Nicas, and Ben Fritz published a report in the Wall Street Journal about Kjellberg’s videos. Their investigation had been spurred by a recent incident that had caused a brief and limited flurry of controversy. On January 11, Kjellberg posted a video on which he explained that he had found two young Indian guys online who offered to display a message while dancing in the jungle – all for the price of five dollars. He sent them five dollars, and, doing what he had paid them to do, they danced and laughed on camera while holding up a banner reading “Death to All Jews.”

After showing the footage, Kjellberg told viewers: “I didn’t think they’d actually do it. I feel partially [!] responsible…” He then broke into giggles and said he had to give the guys “five stars” for doing what he’d asked. “Let me know if I should do more of these,” he said. “I don’t feel good….I’m not anti-Semitic…It was a funny meme…I swear I love Jews, I love ’em.” But the contrition, if that’s what it was, lasted two seconds. He did, after all, post the video – which to date has logged more than ten million views.

As the Journal reporters discovered, this was not an isolated case. Several of the videos posted by Kjellberg during the last six months, it turned out, contained “either antisemitic jokes or Nazi imagery.” If he had any real regret about the “Death to All Jews” incident, it had dissipated by January 22, when he posted a video showing “a man dressed as Jesus saying, ‘Hitler did absolutely nothing wrong.’” In another video, Kjellberg wears a Nazi uniform while watching a video of Hitler. At least once, he invited viewers to draw swastikas.

pewdiepieAfter the Journal‘s article came out, Disney cancelled its deal with Kjellberg. He didn’t have much to offer by way of a defense. All his “jokes,” he insisted, were offered in a spirit of innocent fun. The “Death to all Jews” thing was an effort to show “how crazy the modern world is.” One chilling revelation was that the neo-Nazi website The Daily Stormer, according to The Guardian, had “run a series of articles about the YouTuber, describing him as ‘our guy’” and praising his work because “it normalizes Nazism, and marginalizes our enemies.”

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Gustav V of Sweden

Is Kjellberg a Jew-hater? Maybe, maybe not. But the ease and reflexivity with which he resorts to Nazi and anti-Semitic tropes reflects a mindset that has prevailed in his country throughout its modern history. During World War II, Sweden, which was officially neutral, aided the Nazis in a number of ways. Also, while the wartime king of Denmark famously stood up for his Jewish subjects against the Nazi occupiers and his Norwegian counterpart, Haakon VII, went into exile in Britain for the duration, Sweden’s king, Gustav V, happily socialized with Hitler. Today, Swedish Jews are routinely terrorized by anti-Semitic Muslim immigrants, and many of those Jews are fleeing the country to save their skins – a disgraceful state of affairs that very few gentile Swedes bother to speak up about, and that the Swedish media largely ignore.

Which raises the question: does Kjellberg ever “joke” about Islam? We suspect not.

The economic Rasputin behind Venezuela’s collapse

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Alfredo Serrano Mancilla

On this website we’ve covered the ongoing and ever worsening nightmare that is chavismo frequently and from a number of angles. One name we’ve failed to mention so far, however, is that of Alfredo Serrano Mancilla, who was described recently as “the man behind Venezuela’s economic mess” – not exactly the most coveted label of our time. The Venezuelan newspaper El Nacional said that it’s “entirely” thanks to Serrano that the nation “continues to insist on the economic models of socialism in the 21st century, despite the queues, shortages, and inflation.”

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José Guerra

Who is Serrano? A native Spaniard, he studied economics in Barcelona and Quebec, then relocated to Latin America along with several other anti-capitalist economists in search of the opportunity of putting their theories into action. According to the Wall Street Journal, they were soon “advising leftist leaders in Bolivia and Ecuador on economics, setting up social programs and the drafting of new constitutions.” José Guerra, an opposition legislator and economist, told the Journal that “Serrano is a typical European leftist who came to Latin America to experiment with things no one wants at home: state domination, price controls and fixed exchange rates.” In 2014, Serrano “established a think tank in Ecuador called the Latin American Strategic Center of Geopolitic.” (Although its think tank identifies him as “a professor at eight universities across Spain and Latin America,” the Journal managed to establish that he was not on the staff of any of them.) He also reportedly holds the title of coordinator at a Spain-based group called the Center for Political and Social Studies (CEPS).

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Hugo Chávez

His contribution to the trainwreck of Venezuela began relatively recently. In his 2014 book, The Economic Thought of Hugo Chávez, he lavished praise upon the late president’s social and economic planning. His view, as summed up by the PanAm Post, is that “the socialist economic model of the 21st century is unquestionable, and that any failure is the result of attacks from the opposition.” Pause to contemplate that one for a minute: in 2014, by which time the writing was already on the wall for the Venezuelan economy, this guy – a professional economic consultant – was prepared to get up and say that the solution to the country’s problems lay not in changing course but in doubling down. It was beyond idiotic – but it impressed Venezuela’s president, Nicolás Maduro, himself an idiot, who has called Serrano “a man of great courage” and “a very intelligent, very qualified man who’s building new concepts for a new economy of the 21st century.” He’s even dubbed Serrano “the Jesus Christ of the economy.”

Venezuelan acting President Nicolas Maduro raises his fist during a campaign rally in San Carlos, Cojedes State, on April 4, 2013. The presidential campaign to replace Venezuela's Hugo Chavez formally kicked off Tuesday, with Maduro -- Chavez's hand-picked successor -- battling opposition leader Henrique Capriles for the forthcoming April 14 vote. AFP PHOTO / JUAN BARRETOJUAN BARRETO/AFP/Getty Images
Nicolás Maduro

Next thing you knew, Maduro was slavishly following every last one of Serrano’s aggressively radical prescriptions. Among them: the government expropriation of private property and seizure of private businesses, the promotion of “urban agriculture” on people’s apartment balconies, the inauguration of a Soviet-style system for supplying goods to consumers, and the Maoist-style practice of forcing city residents to work on state-owned farms.

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Grigori Rasputin in 1916

In addition to formulating all these suicidal policies, Serrano wrote speeches for Maduro in which the president vigorously defended them and refused to let humanitarian aid into the country (a position apparently rooted in a good old Stalinist-style desire to “hide the crisis” from the outside world). And while Maduro has followed this Rasputin’s advice, he’s utterly ignored other insiders who’ve urged him to undertake more conventional, market-friendly reforms to halt economic collapse. We can only hope that when Venezuelans finally do take their country back, Serrano – along with Maduro – will get the payback he deserves. Unfortunately, like so many other Western socialists who love enjoying their own prosperity and privilege as much as they love engineering other people’s poverty, he’ll probably get away with his destruction, beating a hasty retreat back to Spain, where he can continue to spread his terrible ideas in academic books and university lecture halls.

Will Samsung’s Lee be in handcuffs tomorrow?

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Samsung headquarters in Seoul

When we last left our South Korean friends in the Blue House and the chaebol boardrooms, the probe into Samsung’s cash transfers to foundations linked to presidential chum Choi Soon-sil – apparently in exchange for support for a merger between two Samsung subsidiaries – had entered a new phase. Documents had been confiscated at several locations, including the homes of several Samsung executives; the independent counsel had issued an arrest warrant for Choi’s daughter; and Samsung vice-chairman Lee Jae-yong, who is the firm’s de facto top dog and the son of its founder and chairman, Lee Kung-hee, had been barred from leaving the country.

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Lee Jae-yong

The latest update came on Monday in the Wall Street Journal. The special prosecutors, reported Eun-Young Jeong, Jonathan Cheng, and Timothy W. Martin, were seeking an arrest warrant for Lee on charges of bribery, embezzlement, and perjury. In order to be able to issue the warrant, they need to solicit approval from a South Korean court, which is scheduled to hold a hearing tomorrow to entertain that request. If approval is granted, Lee – who spent 22 hours last week being interrogated – will be taken into custody while the prosecutors continue to pursue their investigation. Samsung was quick to reply to the prosecutors’ request for an arrest warrant, repeating previous denials that it had made contributions in exchange for favors or made any “improper requests related to the merger of Samsung affiliates or the leadership transition.”

Breakfast with Korean Business Leaders President Park Geun-hye clapping at a breakfast meeting with the Korean business leaders traveling with her at the Hay-Adams Hotel in Washington D.C. on May 8. 2013.05.08.(U.S. Estern Time) Cheong Wa Dae -------------------------------------- ¼öÇà°æÁ¦ÀΰúÀÇ Á¶Âù ¹Ú±ÙÇý ´ëÅë·ÉÀÌ 8ÀÏÇöÁö½Ã°££© ¿ö½ÌÅÏ D.C. ÇØÀ̾ƴ㽺ȣÅÚ¿¡¼­ ¿­¸° ¼öÇà °æÁ¦Àεé°úÀÇ Á¶ÂùÀ» ÇÔ²² ÇÏ°í ÀÖ´Ù. û¿Í´ë
Lee Kun-hee

The Journal noted that if Lee is indeed incarcerated for any length of time, the conglomerate “could face a leadership vacuum while smartphone maker Samsung Electronics Co. is also reeling from a massive recall of its Galaxy Note 7 device. It could also put on hold any further attempts to reorganize one of the world’s most complex business empires.” Indeed, it would almost certainly have a significant impact on the South Korean economy, given that Samsung alone, as the Journal pointed out, “accounts for nearly one-third of South Korea’s stock-market value.”

Meanwhile President Park Geun-hye’s fate also lies in the balance. Last month the National Assembly voted to impeach her, and the Constitutional Court is debating whether to unseat her from the office she has held since February 2013. If the evidence proves that Lee is guilty of the charges leveled against him, it is more likely that the same evidence will help convict Park as well.

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Park Geun-hye

It should be underscored that the current Samsung probe is far from the first to target one of the chaebol – the massive, family-run conglomerates that have formed the foundation of the postwar South Korean economy. Over the years, other chaebol executives – including Lee’s father, who reportedly pocketed $8.9 billion in Samsung funds – have been indicted and convicted on corruption charges. But almost all of them have received presidential pardons that kept them out of jail. The history of brazen, high-level corruption at the conglomerates has underscored the special privileges enjoyed by the clans that own and run them as well as the intimate, one-hand-washes-the-other relationship that has long existed between them and the office of the president.

This time, however, the story may take a fresh turn: the #1 man at the nation’s #1 company may end up going down for good, and when he does, he may very well take the president down with him. Stay tuned.

Gangnam steal

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Park Geun-hye

Things are moving fast in South Korea. Early last week we caught up with developments in that country, where a massive scandal is roiling the chaebols (i.e. Samsung, Hyundai, and the other conglomerates that are the cornerstones of the economy) and is threatening to bring down President Park Geun-hye – who stands accused of helping her longtime chum Choi Soon-sil shake the chaebols down to the tune of some $69 million.

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Samsung headquarters, Seoul

Since we ran those pieces, there’s been a major new development. Last Wednesday, prosecutors raided Samsung’s headquarters in the Gangnam district of Seoul, the offices of the national pension service, and the office of Hong Wan-sun, who until earlier this year was chief investment officer at the pension service. Last year, as Jonathan Cheng and Eun-Young Jeong wrote in the Wall Street Journal, the pension fund “cast a decisive vote in favor of a merger of two Samsung affiliates” – namely, Cheil Industries and Samsung C&T – “that strengthened the grip of vice chairman and third-generation heir Lee Jae-yong on smartphone maker Samsung Electronics Co., the crown jewel of the business empire.” The raids were reportedly part of a probe of that merger. One detail overlooked by the Journal, but emphasized by one South Korean news source, was that this was the third raid on Samsung in a month – an indication that prosecutors had “already made significant progress in their investigation.” The same source indicated that this time around the raid focused largely on the office of Choi Ji-sung, Samsung’s Future Strategy czar.

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Lee Jae-yong

As the Journal‘s reporters noted, all this comes at a tough time for Samsung, which alone accounts for 17% of the South Korean economy. The discovery that Samsung’s Galaxy Note 7 smartphone could overheat and explode in a life-threatening conflagration led to two full recalls, cost over $5 billion, and caused the firm enormous embarrassment, leading to what may be long-lasting brand damage.

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Galaxy Note 7

The ultimate impact of this scandal, however, may be even more explosive than the Galaxy Note 7. As Bloomberg News observed in the wake of the Wednesday raids, it’s “raising fresh questions about decades of cozy ties between the nation’s big conglomerates and those in power.” While one president after another (including Park) has promised to limit the chaebols’ influence, each of those presidents has continued to play the same old game, exchanging favors, breaks, perks, etc., for cash on the barrel head. So far, it’s mostly been Park’s reputation that has suffered: once a popular leader, she’s now got an approval rating in the single digits. But as the South Korean public watches the country’s most powerful businessmen being paraded into police interrogation rooms like small-time crooks, and sees prosecutors raiding the offices of the nation’s largest and most prestigious company as if it were a Mafia operation, the chaebols – whose reputations have already been on the skids for years – are bound to lose even more of their luster. 

The only thing that’s sure here is that this story is just beginning to get underway. As the details of chaebol corruption continue to be investigated, uncovered, analyzed, and publicized, we’ll continue to monitor developments.

Kim conquers New York

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The Ureuk Symphony Orchestra on September 22

On September 22, the Merkin Concert Hall at New York’s Kaufman Music Center hosted a so-called “Peace Korea Concert” by an ensemble that calls itself the Ureuk Symphony Orchestra. The name of the event should have been a giveaway, but it came as a surprise to audience members – and, purportedly, to at least some of the musicians – when reporters for the Wall Street Journal informed them that at least three of the numbers on the evening’s program were paeans to the Kim dynasty in North Korea.

One of the works was Footsteps, “an inspirational ode to Kim Jong Un”; another celebrated the Kim dynasty; a third, according to the Journal‘s Jonathan Cheng and Timothy W. Murphy, “called for a unified Korea under the rule of Pyongyang.” (Immediately below is a video of the Ureuk group playing Footsteps; at the bottom of the page is a recording of the same tune, not by Ureuk, with subtitles translating the Korean lyrics into English.)

Informed of this fact, a cellist who’d played that evening acknowledged that the music had “seemed kind of militaristic.” A member of the audience recalled observing a group of “stern, well-dressed Korean men” in the audience. As it turned out, they were North Korean diplomats, led by Foreign Minister Ri Yong Ho. The day after the concert, Ri gave an address to the U.N. General Assembly that consisted of the usual hostile rants about America. So much for “Peace Korea.”

So what’s the deal here? How did the Kaufman Music Center end up hosting a performance of North Korean propaganda music?

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Ureuk’s September 22 program

Well, it turns out that the conductor of the Ureuk Symphony Orchestra is one Christopher Joonmoo Lee, who is a member of that most bizarre subgroup of useful stooges – namely, the Western admirers of the barbaric, deranged Kim regime, which terrorizes and tortures its subjects willy-nilly and operates prison camps currently inhabited by approximately 200,ooo enemies of the state. (This in a country of about 25 million people.) Lee lives in Teaneck, New Jersey, but, according to the Journal, is “a frequent visitor to Pyongyang who appears regularly in North Korean media under his Korean name Ri Jun Mu.” Earlier in September, Lee took to Facebook to rejoice in the latest North Korean nuclear test: “It was a morning where the cheer for a unified Korea was exceptionally loud and clear!” he wrote.

jeung10While this warped creature’s orchestra has apparently escaped widespread notice up to now, it has in fact been performing at the Kaufman Center several times a year for over a decade. Its concerts routinely open with classical standards by composers like Mozart, Tchaikowsky, Dvorak, Verdi, and Vivaldi, then sneakily segue into Korean tunes eulogizing the Kims. (One of its concerts last February was a commemoration of Kim Jong Il’s birthday.) The main point of these performances, one gathers, isn’t to propagandize New York audiences, but to enable Kim’s state-run media to inform his subjects that American audiences have applauded musical programs exalting their wonderful system and their beloved dictator.

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Hak-Soo Kim

Several of Lee’s soloists – including violinist Khullip Jeung, soprano Yuri Park, and tenor Hak-Soo Kim – are Korean or Korean-American. The Journal didn’t quote any of them, and we haven’t been able to find any indication online of what their political views might be. But they clearly know what’s going on – they know exactly what they’re a part of. The vocalists certainly understand every word they sing in praise of the Great Leader, Dear Leader, and Sonny Boy. Somebody in the media should hunt these artists down and ask them – just for starters – how they manage to sleep at night. 

gillogly4It appears, though, that most of the instrumentalists on Lee’s payroll are Americans who don’t know any Korean. While at least one or two of them were reportedly surprised when the Journal reporters explained to them what the Korean songs were about (unlikely though that may seem), others admitted to knowing full well that they were participating in a public-relations effort on behalf of the world’s most abominable totalitarian state.

But, hey, a gig is a gig! The show must go on! That’s entertainment! Adorable violinist Samantha Gillogly denied having the slightest concern about the repulsive lyrics to the Korean songs: “The art on its own does not hurt anyone,” she told the Journal.

Perhaps not. Or perhaps every insidious effort to normalize the truly evil North Korean regime in the West is a dangerous step in the wrong direction, and anyone who contributes to that effort needs to examine his or her conscience.

Exit Rousseff

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Dilma Rousseff

Well, it’s over. On Wednesday, Brazilian president Dilma Rousseff was removed from office.

Back in January, we wrote about the increasing calls for Rousseff’s impeachment by ordinary Brazilians who had lost faith in her government’s disastrous socialist policies, who were disgusted by the massive scandal surrounding the government oil firm, Petrobras, and who – bottom line – were determined not to let her turn their country into another Venezuela.

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Olavo de Carvalho

Brazilians, commented Romanian-American political scientist Vladimir Tismaneanu, were turning out to be less susceptible to utopian promises than their neighbors in Venezuelan and Argentina. Philosopher Olavo de Carvalho observed that Brazilians weren’t just rejecting Rousseff – they were rejecting “the whole system of power that has been created by the Workers’ Party, which includes intellectuals and opinion-makers in the big media.”

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Dilma the terrorist: a mug shot

Today, on the other side of the Brexit vote and the GOP’s nomination of Donald Trump, it’s hard not to wonder whether the grassroots Brazilian effort to oust Rousseff is part of a spreading global thumbs-down for corrupt, supercilious socialist elites. If so, good show. 

As it happens, we spent that whole week in January on Rousseff, recounting her beginnings as a rich girl who joined a revolutionary terrorist group called COLINA; her entry into politics (a career in which, from the outset, she distinguished herself by her combination of administrative incompetence and genius for making and exploiting connections); and, finally, her increasingly disastrous tenure as president, capped by the Petrobras scandal, described by the Wall Street Journal as “the biggest corruption case ever in a country with a long history of scandals.”

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Kim Kataguiri addressing an anti-Rousseff rally

We also profiled one of the leaders of the anti-Rousseff movement, 20-year-old Kim Kataguiri, whose activism was spurred when one of his college teachers praised the socialist policies of the ruling Worker’s Party. Kataguiri responded by making a series of You Tube videos promoting free-market capitalism and founding the Free Brazil Movement, which has grown like kudzu.

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Rousseff with Lula

In March, we noted the arrest of a Rousseff sidekick, the imprisonment of two more of her cronies, and the resignation of her justice minister; in April, we reported on a government raid on the home of former president – and fallen saint – Luiz Inácio Lula da Silva. (We also noted Rousseff’s unsuccessful, and patently ludicrous, attempt to shield him from prosecution by naming him as her chief of staff.) Not long after, we reported that Marcelo Odebrecht, the CEO of Brazil’s biggest construction firm – and, naturally, a close associate of Rousseff’s – had sentenced to 19 years for bribing authorities in connection with Petrobras contracts.

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Glenn Greenwald and David Miranda

Later in April, we learned that notorious journalist Glenn Greenwald (of Edward Snowden scandal fame) and his husband, David Miranda, were on Team Rousseff, with Miranda signing his name to a Guardian op-ed accusing Rousseff’s opponents of seeking to engineer (what else?) a “right-wing coup.” In a July profile of callow, reliably far-left Salon columnist Ben Norton, we pointed out that he’d used the same exact words as Miranda, calling Rousseff the victim of a would-be “right-wing coup.”

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Evo Morales

And now – well – here we are. She’s out. Congratulations to the people of Brazil. Needless to say, this doesn’t mean an instant turnaround for their country –that’ll take serious, comprehensive reform – but it’s a necessary start. 

Oh, and then there’s this news. In reaction to the “right-wing coup” in Brasilia, three of Rousseff’s fellow socialist economy-destroyers – Rafael Correa of Ecuador, Nicolás Maduro of Venezuela, and Evo Morales of Bolivia – all recalled their ambassadors. Well, birds of a feather and all that. Let’s hope their days in power are numbered, too.

Marcelo’s way

The Odebrecht Group is one of those conglomerates whose international reach and level of diversification make one’s head spin. It’s the largest construction outfit in Latin America; Braskem, one of its innumerable subsidiaries, is Latin America’s biggest petrochemical producer.

“They are more than a company,” a Brasilia-based consultant, Thiago de Aragão, told the Wall Street Journal recently; “they are a symbol of modern Brazil.”

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American Airlines Arena

Indeed. It’s Odebrecht that is responsible for Miami’s $213-million American Airlines Arena, where the Miami Heat play. It’s Odebrecht that is Angola’s top private employer, with over 24,000 employees in that country alone. At this moment, among many other projects, Odebrecht is building a highway in Ghana that will connect the capital, Accra, to remote eastern regions of the country; it’s expanding and adding bridges to a highway that links Guatemala’s main ports with the Mexican border; it’s upgrading a major airport in Mozambique; it’s constructing an elaborate hydroelectric facility in Portugal; it’s installing “the world’s deepest and most complex sewage pump station” in Abu Dhabi. In 2014 the group celebrated its seventh decade in business.

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Marcelo Odebrecht

On March 8, the firm marked another milestone. That was the day on which its CEO, Marcelo Odebrecht, the grandson of the company’s founder, was sentenced to 19 years in prison after being convicted of paying $30 million in exchange for contracts and influence at Petrobras, the state-owned Brazilian oil firm that is at the center of the massive corruption probe known as Operation Car Wash. According to prosecutors, Marcelo’s firms “used Swiss bank accounts to launder nearly $270 million in bribes” between 2006 and 2014.

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Judge Sergio Moro

The presiding judge, Sergio Moro, said Marcelo Odebrecht was “directly involved” with this systematic bribery and money-laundering and “guided the work of others.” This intimate involvement was demonstrated by (among other things) incriminating messages stored on eight cellphones found at Marcelo’s home. While other construction executives nabbed in the probe have bought themselves shorter sentences by turning state’s evidence, Odebrecht refused to spill the beans, saying that he would punish his own kids more harshly for tattling than for cheating.

Marcelo Odebrecht in happier times, with Dilma Rousseff and Raúl Castro

Given the conglomerate’s dimensions and its importance to the Brazilian economy, the arrest and conviction of Marcelo – who took over the reins of the family firm in 2008, at age 40, and whose nickname is “Prince of the Contractors” – is of obvious significance. According to the Journal, Marcelo’s arrest in June of last year caused an economic earthquake, contributing to the onset of Brazil’s current recession. But what makes these developments even more momentousness is Marcelo’s intimate relationship with the Rousseff administration. When the president met with business leaders, Marcelo was invariably present. “Some of the other executives,” one São Paulo businessmen told the Journal, “were jealous that he always got invited and they had to fight for a seat at the table.”

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Lula

Marcelo is close not only to Dilma Rousseff but to her predecessor and mentor, former President Luiz Inacio Lula da Silva, who is himself being investigated for allegedly accepting illegal funds from Odebrecht.

One thing about having global reach is that when you get in trouble, the investigations, too, will have a global reach. Swiss and Portuguese authorities are now looking into charges of wrongdoing by Marcelo, and several other countries are considering similar probes.

Venezuela: Weimar redux

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A Caracas food line in January

Venezuela is blessed with magnificent natural resources and great promise, but thanks to chavismo, the reality-challenged socialist system imposed upon it by the late egomaniac Hugo Chávez and his torpid successor, former bus driver Nicolás Maduro, it has recently become, as we saw yesterday, the worst economy on earth. Inflation is so high, as Kejal Vyas reported on February 3 in the Wall Street Journal, that the government has been shipping in planeloads of newly printed money – at least five billion bank notes in all. The demand for more bolivars has been so urgent that the Venezuelan government has been forced to split the print job among several major international firms – including a subsidiary of Giesecke & Devrient, “which printed currency in 1920s Weimar Germany, when citizens hauled wheelbarrows of cash to buy bread.” In an unsettling echo of those days, Venezuelans are now carrying around giant rolls of cash, with supper at a fine restaurant costing “a brick-size stack of bills.”

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Waiting on line for price-controlled toilet paper

Venezuela’s currency was already close to worthless; this influx of fresh bolivars is virtually guaranteed to reduce the value of the bills even further, increasing inflation (which is already expected to hit 720% this year, currently the highest rate on earth) and sending Venezuela’s economy totally down the tubes. As of early February, the bolivar, which seven years ago was worth about fifty cents, had dropped to a tenth of a penny on the black market. “The flood of money has led some sectors of the economy,” notes Vyas, “to effectively price their goods in U.S. dollars,” in violation of Venezuelan law. Even criminals have switched to greenbacks, with “professional kidnap-and-ransom teams often demand[ing] U.S. currency instead of bolivars.”

CNN’s Patrick Gillespie, in another February 3 report, threw in an additional tidbit. How screwed up is Venezuela? So screwed up that although it has 298 billion barrels of proven oil reserves, more than Saudi Arabia or Iran and eight times the reserves held by the U.S., the country is now importing oil. Its oil sector is so incompetently run that it’s not capable of profitably refining its own crude So it’s been shipping in oil from Russia, Angola, Nigeria, and the U.S.

The former bus driver, driving his country off a cliff

Is Maduro taking urgent action to pull his country up out of its economic nightmare? Of course not. That would mean recognizing the folly of the current economic policies. And for the true believer in the Bolivarian Revolution, that’s simply not an option. Better to betray the people than abandon chavismo. Better to blame Venezuela’s economic woes on capitalist conspiracy, presumably masterminded by the U.S., than to acknowledge that socialism is a formula for self-destruction.

Thus Maduro “has changed the law so the opposition-controlled National Assembly can’t remove the central bank governor or appoint a new one.” Also, he’s “picked someone who doesn’t even believe there’s such a thing as inflation to be the country’s economic czar.” How can this be? How can someone not believe in inflation? According to this new “czar,” when prices go up, it’s not inflation; it’s profiteering by “parasitic” businesses.

In short, the Venezuelan people are at the mercy of rulers whose devotion to chavista thought compels them to deny the basic laws of economics. For them, ideology trumps reality. Better a mind crammed with utopian ideas than a full stomach.

 

Venezuela: still plummeting

For years, many members of the U.S. news media treated the chavista regime in Venezuela with far more respect than it deserved. Hugo Chávez, Americans were told, might not be perfect – he might not, for example, be as devoted to democratic principles as some of us might prefer – but he was a true hero, using his power (albeit quite ruthlessly at times) to bring fairness and equality to his country.

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A cockatoo in every pot?

If there’s anything good about the current economic decline of Venezuela, it’s that such glowing reports are now rather thin on the ground – almost as thin, indeed, as many an indigent Venezuelan who goes to bed hungry every night because there’s nothing on the grocery shelves.

One prominent instance of the new media frankness about Venezuela was a January 29 article in the Washington Post, in which Matt O’Brien explained that both that country’s government and its economy “are well into their death throes.” Experts, he noted, now “expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.” This, even though it has “the largest oil reserves in the world.” But as O’Brien pointed out, that’s the genius of chavista socialism.

The recipe for this disaster? Hand out freebies you can’t pay for. Replace skilled officials at the state-owned oil company with incompetent friends of the regime. And when the money runs out, just start printing more. Quoth O’Brien: “Lenin was wrong. Debauching the currency is actually the best way to destroy the socialist, not the capitalist, system.”

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At least the supply of grocery carts seems undiminished.

Thanks to the wisdom of chavismo, Venezuela’s supermarkets have empty shelves, the breweries don’t have “enough hops to make beer,” its factories have insuffienct “pulp to produce toilet paper,” and so on. “The only thing Venezuela is well-supplied with are lines,” wrote O’Brien. Long, long lines of people waiting to buy things that are in short supply – if they’re in stock at all. Readers will recall that we’ve already discussed this socialist triumph on this site; the one new twist here, identified by O’Brien, is that the Venezuelan government has actually started rationing spots on those grocery-store queues, “kicking people out of line based on the last digit of their national ID card.” 

A February 3 article by Kejal Vyas in the Wall Street Journal provided some more illuminating details.“Millions of pounds of provisions, stuffed into three-dozen 747 cargo planes, arrived here from countries around the world in recent months to service Venezuela’s crippled economy,” reported Vyas from Caracas. But the “provisions” to which Vyas was referred weren’t food items or medical supplies – they were shipments of currency, “at least five billion” freshly printed bank notes, which reportedly doubled the amount of cash in circulation.

What does this stunning development portend? We’ll talk about that tomorrow. 

Dilma Rousseff: decline and fall?

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Dilma Rousseff

Last week we explored the presidency of Brazil’s Dilma Rousseff, who in recent months has seen her throne shaken by the Petrobras scandal – described by the Wall Street Journal as “the biggest corruption case ever in a country with a long history of scandals.” Even Rousseff’s predecessor as head of state, Luiz Inácio Lula da Silva (whose own administration was almost brought down by the 2005 Mensalão scandal), has been under scrutiny in this season of scandal, with authorities looking into shady financial activities involving both Lula and his son as well as into accusations that the former president had lobbied illegally (and profitably) for Odebrecht, a huge Brazilian conglomerate.

In this photo provided by Brazil's Presidency, Brazil's President Luiz Inacio Lula da Silva, left, and Brazil's newly elected leader Dilma Rousseff, make a sign of victory, at the Alvorada palace, in Brasilia, Brazil, Monday, Nov. 1, 2010. (AP Photo/Brazil's Presidency, Ricardo Stuckert) NO SALES
Lula and Dilma, 2010

Even as the Petrobras probes were widening and arrests adding up, Brazil’s economy was in free fall. Brazil’s GDP, which had experienced annual growth of over 5% during the century’s first decade, sunk below 3% in 2012 and 2013 and to 0.1% in 2014. On September 9, 2015, Standard and Poor downgraded Brazil’s credit rating to junk status. Over the course of 2015, Brazil’s economy actually shrunk by 2.7%. Meanwhile, Rousseff’s numbers also dived. In December 2014, her approval rating was at 80%; by March 2015, it was at 34%; by August, 8%. In that month, protesters around the country called for her impeachment. By September, she’d become “Brazil’s most unpopular president in recent democratic history.”

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João Vaccari Neto

In that same month, party treasurer João Vaccari Neto was sentenced to over 15 years in prison for corruption and money-laundering, the latter of which involved over $4 million. Sentenced to prison alongside Vaccari was Renato Duque, who received a more than 20-year term for “inflating contracts at Petrobras” and funneling the excess profits into the coffers of Rousseff’s Workers’ Party. 

RJ - OPERA«√O LAVA JATO/DUQUE/PRIS√O/ARQ - GERAL - Foto de arquivo de 23/06/2005 do ex- diretor de ServiÁos da Petrobras, Renato Duque, durante entrevista na sede da empresa, no centro do Rio de Janeiro. Ele foi preso esta manh„, pela PolÌcia Federal, em nova fase da OperaÁ„o Lava Jato. … a sÈtima etapa da operaÁ„o que investiga um esquema de lavagem de dinheiro suspeito de movimentar R$ 10 bilhıes. A PF tambÈm prendeu executivos e faz busca e apreens„o em cerca de cinco das maiores empreiteiras do PaÌs, o braÁo financeiro do esquema de corrupÁ„o na estatal. 23/06/2005 - Foto: MARCOS DE PAULA/ESTAD√O CONTE⁄DO
Renato Duque

Not long ago, in response to state employees and business executives who’ve blown the whistle on the massive government corruption on her watch, Rousseff famously said: “I do not respect informants.” She cited with pride her refusal, back in her Marxist guerrilla days, to rat on her comrades under torture. Her remarks, of course, reflect a curious attitude (to put it mildly) toward corruption – and, indeed, toward the very concept of public service and stewardship of the people’s resources. In October 2015, maintaining that the mounting accusations against her in connection with the Petrobras scandal were utterly false, she declared: “I do not intend to leave power.”

dilma_lulaTo be sure, on October 19, a parliamentary commission (consisting mostly of pro-government legislators) issued a report purportedly clearing Rousseff and Lula of personal involvement in Petrobras-related crimes. But that report didn’t end the controversy, and nobody expected it to. Rousseff remains under a cloud, and continues to hold on to power by a thread; in late December, Reuters reported that the lower house of Brazil’s Congress would probably decide by March whether to recommend Rousseff’s impeachment.

Meanwhile her administration’s corruption has dramatically altered Brazil’s image on the world stage. Writing in Forbes on October 22, Kenneth Rapoza summed up  the whole messy situation by noting that while Brazil, according to Transparency International, had been the “least corrupt” of “the big four emerging markets” (not really much of an accomplishment, given that the other three are Russia, China, and India), “2015 has shaped up to be the year that threw all that off a cliff.” The Petrobras scandal, wrote Rapoza, had “made Brazilian politics into Latin America’s Greece.”