Venezuela: US Media Reacts to Chavez’s CANTV Announcement

  On January 8, Venezuelan President Hugo Chavez announced plans to re-nationalize the CAN-TV telecommunications company, which was forcibly privatized over the backs of everyday Venezuelans, back in 1991. What followed the announcement was a shameful journalistic onslaught in the US press to discredit Chavez and cast uncertainty on the re-nationalization plans.

In covering the story, mainstream U.S. journalists mimicked the party line of the media moguls and their investor enablers. In the estimation of this media critic, any semblance of objectivity in the English language press was discarded with the little umbrellas that accompany designer drinks in Caracas’ still-flourishing upscale hotels.

There was little background reporting on the matter. Most journalists relied on sensational price drops in stock values and found investment advisors to provide predictable quotes about uncertainty of CANTV’s future. Hard reporting was scant, but I found a few nuggets out there for the gold diggers of truth. I’ll get to those in a second.

The primary spin strategy carved out by editors on the CAN-TV story was straight from the investor’s playbook: "Chavez doesn’t have a plan, and chaos reigns." Not surprisingly, the bright light of uncertainty was cast on Chavez’ plans. MSNBC took charge in this regard. They select none other than CANTV’s own finance department director, Armando Yanes.

"We don’t know if the government considers that a majority stake in the company would constitute a nationalization and we really don’t want to speculate," he said.

I wouldn’t want to speculate much if my control of $1 Billion dollars of market capital was on the line. But there’s not much mention of the hundreds of jobs lost in the CANTV privatization in 1991. Most of those workers didn’t speculate either, they were just laid off.

Uncertainty rose again in the form of the Mexican telecom monopolist Carlos Slim, arguably the second richest man in the Americas behind Bill Gates. MSNBC and McClatchy’s Pablo Bachelet and others  mentioned Carlos Slim’s  planned buy-out of Verizon’s 28% chunk of CANTV shares–to the tune of $656 million–as he has done with virutally every other privatized telecom in Latin America.

According to the US media, we should be concerned that Slim, who also owns CompUSA and a lot of Saks Fifth Avenue, may reconsider the deal.

Any mention of Slim’s monopolization of the telecom sector throughout the region? The price gouging? The fact that he’s been cited by the SEC for a number of anti-trust violations? The anti-consumer practices? Labor violations? No. According to the US-based newsprint, the uncertainty of Slim’s attempt at a CANTV takeover is negligible compared to Chavez’s wholly savage move. Slim: who’s big prize was the buy out of TelMex, which he purchased in 1990  for about one third of its market value.

A short consultation at Wikipedia on TelMex:

“Although Telmex is now a private company it stills remains a monopoly. There are practically no other telephone companies in Mexico that would give consumers another option. Telmex offers poor customer service that is only available Monday through Friday, leaving customers helpless over the weekend. Telmex is also the 2nd most complained-about provider in PROFECO, the Mexican consumer agency.

And that’s just in Mexico, where they have a consumer agency.

You don’t have to look far in Guatemala, El Salvador, or Brazil to find other price gouged discontents. But does a tree fall if a reporter doesn’t leave the cushy hotels or the refreshments at the corporate press room to hear it?

The Nuggets (no Iverson)
An inadvertent gem popped into an AP wire story by Natalie Obiko Pearson–and it may be a  peek into what’s really behind Chavez’ announcement.

From Pearson’s report:

"The privatized CANTV has also provided another key benefit for Venezuelans — one of the few ways to get around currency exchange controls. Investors could buy its stocks in Venezuelan bolivars and sell them on the New York Stock Exchange to acquire dollars. A government takeover of CANTV would close down this option for preserving wealth in an economy where inflation has been running at 17 percent.

Does Ms. Obiko really think that vast amount of Venezuelans, where 49% live in  poverty, invest their expendable income in the stock market? How many does she think are "benefiting" from this arrangement? Wouldn’t it be correct to shut down what is essentially a money laundering scam for elite Venezuelan investors who want to avoid the economic risks that their poorer compatriots can’t? Can I get a witness? Or did high inflation begin with Chavez?

On another tack, Pearson’s correct citation of Venezuela’s 17% inflation seems shocking, especially when it isn’t put into context. But I didn’t have to search hard, but back in August reported that the minimum wage rose 15% between January and August of 2006. At the time of the report the site stated that the minimum wage was slated for a 25% annual increase. I little deeper search Keeping pace? Why didn’t Ms. Pearson report that? Maybe it would confuse her readers.

Rampant Sensationalism
If you believe all of the sensational omission, you might have branded CBS’ Marketwatch was downright socialist in its quoting of market analysts David Reidel and Cameron Brandt. First, Marketwatch lets Reidel hint that CAN-TV stock value was artificially inflated by news of the possible TelMex takeover. If that’s true, then maybe the drop had less to do with Chavez’s announcement and more to do with what some analysts call a “market correction.”

As if that wasn’t enough, MarketWatch let’s Brandt swim upstream against the literal and virtual sea of analysts predicting doomsday. Brandt, who is an editor at Emerging Portfolio Fund Research, did the opposite.

From the report:

“Brandt believes CANTV’s stock price fall was compounded by the low exposure that foreign investors have to the Venezuela market.

But he expects the stock to rebound in a short period of time.

"I would be surprised if it really stayed depressed."

So, investors are over-reacting and the market will smooth things out over time? Expressing that perspective had its consequences. The story was replaced three minutes later by Marketwatch editors, with the most blasphemous remarks carefully cut out, just to make sure we don’t feel too sure of ourselves in this clearly treacherous environment.

Check here to mark the difference in the stories.

MarketWatch 6:27 pm

MarketWatch 6:30 pm

These notes are the result of just a few hours of on-line perusal. I’m sure interested readers can find more. The promise of the American press witch hunt against Chavez seems endless. The the whoring of the truth for a cheap pro-capital viewpoint makes a victim of honest journalism. But hell, let’s save scrutiny and a taste for differing opinions for something important, like a war cry against a nation with weapons of mass destruction.

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