Honduran dictatorship, day 71

Via Adrienne, a 10 minute documentary by Jesse Freeston of The Real News… starring Adrienne Pine (among others)!

However, RAJ points out that Jesse’s view of how many countries have recognized Honduras is misleading. Even the US has not yet accepted the credentials of the man Honduras named as its ambassador. The countries that have fully normalized relations are Taiwan, Israel, Panama, Colombia, Costa Rica, Peru, El Salvador, Guatemala, and the Dominican Republic. A number of other governments are sending or have sent ambassadors, but this may not represent full normalization. These include France, Spain, Finland, Germany, the United Kingdom, Belgium, the Czech Republic, and India.

Another member of the Bajo Aguan farmers’ association, MUCA, has been murdered, according to Vos el Soberano (no direct link). Thirty five year old Jose Leonel Alvarez Guerra was shot as he arrived home by two people on a red motorcycle.

Tiempo says the half-Truth Commission will be constituted on the 29th of April. The members will be The Rector of the Honduran National University (UNAH), Julieta Castellanos; the ex rector of UNAH Jorge Omar Casco, the ex-vicepresident of Guatemala, Eduardo Stein, the ex-ambassador from Canadá to the US and Cuba, Michael Kerlin and maybe the ex-ministress of Peruvian justice, María Amadilia Zavala Valladares.

As proof that no good deed goes unpunished, Tiempo says that Spanish judge Baltazar Garzón, has himself been haled before a court by ultra-right forces for having investigated disappearances under the Dictator Francisco Franco. They’ve dug up a number of the bodies, so it’s not like there’s any doubt about the crimes– but the ultra-right says that Garzón lied in order to open the investigation. Since Garzón was the only person likely to actually hold the Honduran dictatorship (or the Bush Administration) to account, one can pretty well count out any reckoning for world leaders. Can the world actually get more corrupt than prosecuting the man who single-handedly brought Pinochet and Franco (in permanent absentia) to account?

The kabuki of government

Via Barry Ritholtz, a very interesting article with lessons on how governments really work by Paul Jackson titled, “Who Controls the Bank of Japan?” He asks:

When Japan’s finance minister says jump and the Bank of Japan responds, does that mean its independence is a sham? Or is the real show being directed by the bank itself?

According to economist Richard Koo, moves by the Bank of Japan may be part of a larger game. He said it was:

the US Federal Reserve that was panicking over the future of its independence, and suggests that Fed Chairman Ben Bernanke may have adjusted his views to fit in with Koo’s during recent congressional testimony to avoid a confrontation that might have further threatened the bank’s status

He also says that the people running the finance system have forgotten the basic lesson of the Great Depression: if no one is willing to borrow, because of fear or because of debt, economic growth can only be re-started by giving people work. Monetary policy, in which the Fed provides money to banks at low interest rates, only works in business cycle recessions, in which one area has grown too fast and there has to be a correction. In balance sheet recessions, in which money has simply vanished, only end through fiscal policy– spending real money to give people work. For some reason, Jackson and Koo this is a new idea… but it’s the basic gospel of any New Dealer. What are income security programs from a public policy perspective except a way to minimize hoarding in the present by guaranteeing income in the future?

This interesting bit of history:

It might not look as if fiscal policy helped Japan much after the bursting of its economic bubble, but the alternative would have been catastrophic, Koo says. He calculates that 1.5 quadrillion yen was wiped off Japanese assets in the wake of the bubble—that’s 3 times the size of the nation’s economy. Without fiscal stimulus, Japan’s GDP should have shrunk to between a half and a third of its size, he claims. But in fact, GDP did not fall below its bubble peak, something he describes in the book as ‘nothing less than a miracle.’

The important take-home message is that Koo believes that if the US starts deficit reduction too soon, it will lapse back into recession, just as Japan did. This, of course, is not news to people who read Paul Krugman. Unfortunately, the right does not read Paul Krugman– which is why they must be prevented from gaining power in Congress in 2012.