AMY GOODMAN: Greg Grandin is a professor of Latin American history at New York University, author of Empire’s Workshop: Latin America, the United States, and the Rise of the New Imperialism. He also wrote The Blood of Guatemala: A History of Race and Nation. He joins me here in the firehouse studio. On the line with us, I’m joined by Steven Ellner. He has taught political science at the Universidad de Oriente in Venezuela since 1977, author of many books on Venezuela. His latest is called Venezuela: Hugo Chavez and the Decline of an Exceptional Democracy. We welcome you both to Democracy Now!

Steve Ellner, let’s begin with you. You just came up from Venezuela last week. President Chavez gives this major anti-Bush address in Argentina and continues his shadow tour, shadowing President Bush as he travels through Latin America. When did this relationship go so bad between Venezuela and the United States?

STEVEN ELLNER: Well, Amy, let me say that Chavez had decent relations with President Clinton. Chavez was elected president in December of 1998. So Clinton was, you know, in office for two years, Chavez’s first two years. And even though the United States State Department denied Chavez a visa to travel to the United States to explain his platform during the campaign in '97-'98, when he was elected president, he did meet with Clinton twice, and they had cordial relations. Even though there were some differences between the two countries, they were cordial relations.

Things started going sour after 9/11 in 2001 when Chavez criticized the bombing of Afghanistan, and the United States momentarily withdrew its ambassador in Caracas. And Colin Powell started attacking Chavez. Chavez, on the other hand, did not respond in kind. He had, you know, very moderate words for Bush and the Bush administration. He wasn’t polemical. That led into the coup against Chavez in 2002, which the United States supported and justified. And even after the coup and even after there was so much evidence of U.S. support for the coup, to the extent that the U.S. ambassador met with the coup leader the day after the coup, Chavez was very moderate in his language. It was only in 2003 that — after the general strike against Chavez that lasted two months, that he started using the term “anti-imperialism,” and things quickly deteriorated after that.

AMY GOODMAN: Greg Grandin, you’ve been following this trip of President Bush and the shadow trip of President Chavez. But start off with why Bush is in Latin America today.

GREG GRANDIN: Well, it’s been presented as a response to Chavez, and I think that may be its most immediate cause, but I think you also have to step back and look at it in the wake of Bush’s disastrous failed global foreign policy, particularly the mess in Iraq. The U.S. has a long history of turning to Latin America to regroup after crises limit its power to project its influence beyond its borders. In this sense, a better metaphor for Latin America, rather than the U.S.'s backyard, would be kind of United States's strategic reserve, the place where the United States turns to to regather its power, its energy, before turning back towards the world.

The first time the U.S. did this significantly was after the Great Depression, when Franklin Roosevelt turned to Latin America to elaborate the good neighbor policy, which became a kind of blueprint for liberal multilateralism, liberal internationalism, which then became the framework for U.S.’s global diplomacy after World War I — after World War II, excuse me.

Then in the 1980s, the Reagan administration turned to Latin America to kind of junk liberal multilateralism to rehabilitate American “hard power,” after the multiple crises of the 1970s. So here we are again at a kind of historical crossroads, a kind of recession of U.S. power in the world, caused by military overreach — crosses paths with a remobilized Latin America. And so, once again we have an administration turning its attentions to Latin America.

AMY GOODMAN: What about President Bush’s stressing ethanol? How significant is this, making an ethanol deal in Brazil, going to talk about it in Guatemala?

GREG GRANDIN: Yeah, I think this is the substance of the tour. I think the other stuff is really just fluff, as all of a sudden Bush has concern for social justice, that he feels Latin America’s pain. I mean, it’s a little — it’s kind of an anemic program that he’s offering. In many ways, it’s not Chavez that’s shadowing Bush, it’s Bush that’s shadowing Chavez, in terms of these social issues, the programs that he’s offering in terms of housing and education and healthcare — really minimal.

It’s the ethanol, which is key — ethanol and an attempt to kind of build up an alternative to Chavez in Brazil and in Uruguay. Ethanol is key to that because it solves a number of problems if it actually does advance. One is it clearly creates an alternative to oil, which is the base of Chavez’s power. But then, also, in order for the United States to meet its ethanol requirements, the goals that Bush laid out, it’s going to have to import most of the ethanol from foreign countries. If it relied just on corn production in the U.S., it would totally skew and throw off balance the United States’s complex food supply system. So it needs to turn to the Americas. So in many ways, when I say that Latin America is a strategic reserve, I’m not using it as a metaphor. It actually is, in terms of raw materials, when the United States is trying to turn Latin America into a supplier of ethanol.

And it’s not just Brazil. I think his trip to Guatemala, his including Guatemala in his itinerary, is telling, because Guatemala has one of the most advanced sugar industries in, not just in Central America, but in Latin America. It’s very competitive, very productive. And one of the things that has irked Guatemalan sugar producers is the tariffs that the U.S. continues to place on sugar imports from Latin America. This is a way, I think, of trying to kind of consolidate that, the sugar production, but specifically for ethanol and specifically as a way of importing ethanol in order not to throw off balance corn production and raise the price of grain in the United States.

AMY GOODMAN: Greg Grandin, I wanted to ask you, on a slightly separate issue, but this issue of the Salvador Option that is always talked about for Iraq, that includes the very same people, the military officer, Steele, who was in El Salvador in the 1980s, the training of the Green Berets, the secret working with the death squads of El Salvador, and talking about it as an option today in a positive light in Iraq.

GREG GRANDIN: Yeah. Well, I think it’s a euphemism for the imperial use of force and repression in order to restore order. The United States could talk all it wants about bringing democracy and meaningful development to the world. But the fact is that when opposition to its ambitions manifests itself, as an empire, as a superpower, it will resort to force and violence, often through proxies. That’s the Salvador Option. That’s what they mean by the Salvador Option: the use of repressive paramilitaries, repressive mercenaries, in order to establish authority, establish stability in the imperial periphery. And that’s what it means, and obviously it comes from El Salvador, a country most closely linked, identified with death squads. But it wasn’t just El Salvador. It was Chile and Argentina and Guatemala and many other countries in Latin America that resorted to the use of death squads often with the encouragement or tacit approval of the United States.

AMY GOODMAN: Steve Ellner, President Bush refusing to say Chavez’s name, something that Hugo Chavez commented on in this mass rally in Argentina, can you take us forward from Clinton’s relationship with Bush to the attempted coup against Chavez in 2002, and the role of the United States?

STEVEN ELLNER: Yes. The United States has openly, financially and politically supported the opposition to Chavez, and it has to be kept in mind that the opposition to Chavez is what political scientists call a “disloyal” opposition. That means an opposition that does not recognize the legitimacy of the government. It criticizes everything the government says and does without supporting any of the measures that might be considered positive for the country. It’s an intransigent opposition, and that opposition has received millions of dollars from the National Endowment for Democracy.

And this has had repercussions in Venezuelan politics. One of the things is that the opposition has become very closely identified with the United States. That is a negative for the Venezuelan opposition that Chavez has exploited. And the opposition has laid itself open to this kind of accusation. The opposition supports a lot of the things the Bush administration does. When the Bush administration denounces the violation of human rights in Venezuela, the opposition harps on that as if the United States is the authority on that issue, so that I think that the U.S. support for — open support for the Venezuelan opposition has really done the opposition a lot of harm.

AMY GOODMAN: And today, right now in Venezuela, one of the parts of the speech we didn’t play of Chavez, as he was talking about the fifth column, he was talking about those who ally themselves with North America in his own country, serving — what he talks about — North America as the United States’s interest. What about those classes in Venezuela?

STEVEN ELLNER: Well, yeah, I think that Chavez has exploited this issue of the close connection between not only the opposition parties but also specific interests in the U.S. government, and it just seems that every time that Chavez makes a statement against the opposition, criticizes the opposition, that the U.S. government is the center of attention, and that polarizes Venezuela even further. And this is true with the Venezuelan media industry, with the business organizations, with the church, all of which have clashed with Chavez. And the United States has openly supported the anti-Chavez position in each case.

AMY GOODMAN: Greg Grandin, how has Venezuela shaped the U.S.'s entire approach now to Latin America? And do you believe that the U.S. is doing the same kind of thing to Chavez that it did to Castro for — well, for decades? We know about — what was it? — we're not talking about scores of, we’re talking about hundreds of attempts of assassination. This has all now been documented.

GREG GRANDIN: Well, Venezuela is certainly shaping the United States’s approach. Just you see it in this tour, where Bush has parroted the concern for social justice. And you’d be hard-pressed to say that that isn’t a response to the success of Chavez, to the popularity of Chavez, to the success of Venezuela’s social programs and diplomatic financial aid to Bolivia and Nicaragua.

The U.S., certainly — what’s interesting is actually what it’s not able to do, in comparison with Castro, where during the Cold War, the U.S. was able to isolate and get Latin America as a whole to quarantine, to sequester Castro in Cuba. It hasn’t had that success with Chavez, and that’s what’s interesting about the current moment and the weakness of the U.S.'s position. It may mean that they will fall back on more hard power options like coups and covert activities, but in the meantime what's interesting is just the refusal of even allies like Uribe in Colombia — these are conservative governments — to isolate and criticize Chavez. Certainly Bachelet, Michelle Bachelet in Chile, Lula in Brazil, these countries have refused to work with Washington’s attempt to divide and rule in Latin America.

I think that actually speaks to the weakness of U.S. position in Latin America for a number of different reasons. One is, there’s an incredible amount of alternative sources of capital and investment. Latin America is no longer relying just on the IMF and just on New York creditors and United States financial institutions. There’s an incredible amount of capital built up in Asia, in Russia, in Europe, in the Middle East, that Latin America now has access to, this diversification of markets in Europe and these other areas that I just talked about, but also among the Latin American nations. So these countries aren’t as dependent on U.S. capital or U.S. market as they were in the past.

And that’s allowed an interesting degree of political independence among Latin American nations. They’ve roundly rejected — most countries — not only the invasion and occupation of Iraq, but the kind of ideological premise behind the war on terror, have refused to kind of substitute the war on terror for the Cold War. The Cold War served as a kind of organizing principle, which justified U.S. leadership. They’ve rejected the premises behind the war on terror. Even countries like Ecuador, prior to the recent election, which was ruled by a close ally of the U.S., and Colombia refused to sign onto the exception to the International Criminal Court that Washington has been asking Latin America to sign onto. This is an unprecedented degree of political autonomy from Washington’s leadership, and this is one of the reasons why I think Bush has resorted to a divide-and-rule strategy in Latin America, as opposed to marshaling the region collectively, as past administrations have tried to do.

AMY GOODMAN: Steve Ellner, do you think Iraq saved Latin America?

STEVEN ELLNER: Did what?

AMY GOODMAN: Did Iraq save Latin America?

STEVEN ELLNER: Did Iraq save South America?

AMY GOODMAN: Did Iraq save Latin America?

STEVEN ELLNER: OK. I think that it did take some of the pressure off. The United States undoubtedly would have backed up its hostile words for Chavez with more action after the coup in 2002 had it not been for Iraq. It’s impossible to say really what form that action would have taken. But in any case, I think that there was a period there in which Chavez still had not consolidated his power. Between the coup and the recall election that took place in August of 2004, Chavez’s position was not that solid, and the opposition in Venezuela was calling for Chavez’s overthrow or ouster, and that happened at the time of the general strike and then the recall campaign, so that during that two-year period, I think the United States might have played a more forceful role in opposition to Chavez, and that might have weakened his position.

But one thing to keep in mind, Amy, is that since 2004 Chavez is solidly in control, and the U.S. options are extremely limited. There is nothing the United States can do in order to destabilize or weaken Chavez’s position in Venezuela at this point. Things might change if the price of oil goes down or a number of other factors take place. But at this point Chavez is in solid control, in part because the opposition in Venezuela is so discredited and divided, as a matter of fact, at this point, so that the United States really can do very little to weaken Chavez’s position.

But it is true that during that crucial period, between the time of the coup, when the United States did actively support the effort to overthrow Chavez, and the recall election two-and-a-half years later, the United States may have been more effective in opposing Chavez, had it not been for our commitments in Iraq.

AMY GOODMAN: Greg Grandin, your response to that question? Did Iraq save Latin America?

GREG GRANDIN: Oh, I agree completely with what Steve just said. Iraq was part of a larger kind of confluence of events that have led to this deterioration of the U.S.'s standing, and it's not just that Iraq diverted the U.S.'s attention, which it did that also, but it also led to the decline in the U.S. dollar, which means the access to U.S. markets aren't as important as they were for Latin American economies in the past. The ability of the rise in price of oil, which is very — in a complex way related to the disaster of our foreign policy in Iraq, has led to the strengthening of this bloc that has allowed Chavez to serve as an alternative source of credit to Latin American nations, to Argentina and Ecuador and Brazil, weakening in turn the IMF.

I think there’s a lot of ways in which this disaster, this military overreach and kind of imperial hubris in Iraq, led to a kind of breathing space for Latin America, but I also think there are real structural changes taking place in the world that has led to the deterioration of the United States. Latin American nations have been very good recently at leveraging the kind of centrifugal forces of globalization in order to break free, give themselves some wiggle room, vis-à-vis Washington, vis-à-vis United States economy. I think this would have happened even without Iraq. I think Iraq maybe accelerated things.

I mean, Latin American leftists and even nonleftists, there’s a lot of differences in style and policy, which kind of mainstream commentators like to point out in showing that Chavez’s influence is limited, but I think they share a common set of — a common agenda that transcends those differences. One is, as I talked about, looking for a diversification of capital, a diversification of markets, regional integration, and then strengthening the role of the state in the economy to lessen inequality.

Going back to one of your earlier questions about Chavez setting the agenda for the United States is, one of the things that’s interesting about Bush’s rhetoric is his attention not just to growth, economic growth, but economic inequality. And this, I think, is one of the key shifts that the Latin American left can take credit for, is shifting the terms of the debate away from just growth to the deep, deep inequality of Latin America.

AMY GOODMAN: We’re going to come back to this conversation. We’re talking to Greg Grandin. He’s a professor of Latin American history at New York University, NYU. He also is the author of Empire’s Workshop: Latin America, the United States, and the Rise of the New Imperialism. Steve Ellner is also with us. He’s co-author of the new book called Venezuela. This is Democracy Now! We’ll be back in a minute.

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AMY GOODMAN: — Grandin, professor of Latin American studies at New York University. His book is called Empire’s Workshop. We’re also joined by Steve Ellner, just up from Venezuela, where he has taught for many years political science at the Universidad de Oriente in Puerto La Cruz in Venezuela, and he is co-author of the book Venezuela: Hugo Chavez and the Decline of an Exceptional Democracy.

Professor Grandin, I wanted to ask you about this 20th anniversary that we just passed, the 20th anniversary of Iran-Contra, and what that has to do with Latin America and Iran today. And for people who are not familiar with what happened in November of 1986, explain it briefly.

GREG GRANDIN: Oh, in November 1986, the Iran-Contra scandal broke in the press. A small article in a Lebanese newspaper reported that the U.S.'s rogue agents within the National Security Council of the U.S. sold missiles to Iran illegally, and then later on it was reported that the money was diverted to support the Contras, bypassing a congressional law prohibiting funding of the anti-communist mercenaries, which were set up to destabilize the Sandinista government. And a scandal went on for years and led to multiple investigations. But it kind of petered out in many ways. It didn't really damage the Republicans. George H.W. Bush was elected, I think, a month after the Senate report was released. He went on to pardon everybody who was convicted under Iran-Contra, including Elliott —- including a number of people in the current administration. What it has to do -—

AMY GOODMAN: Elliott Abrams.

GREG GRANDIN: Elliott Abrams and a number of other people. What it has to do with the current moment is that Iran-Contra and Reagan’s Central American policy more broadly goes back to the point that I made earlier, that the United States turns to Latin America to regroup after crises, after global crises. And this was the Reagan administration, the rising new right, the rising conservative movement coming to power in early 1981, turning to Latin America to respond to the serial cascading crises of the 1970s — economic, political, a moral crisis, which really discredited American power in the world.

And Central America really becomes the crucible that brings together the different foreign policy constituents, which make up — which kind of stand behind George Bush’s post-9/11 kind of revolution in diplomatic affairs. In particular, it brought together for the first time first generation of neoconservative intellectuals and the religious right, and these are the two groups which give Bush’s pre-emptive warfare doctrine both its legal and intellectual legitimacy — that’s the neoconservatives — and its grassroots energy — and that’s the religious right. That alliance kind of comes apart after the election of George H.W. Bush and then obviously during the Clinton administration, but after 9/11 it reforms.

Iran-Contra really is about the conservative movement’s first sustained attempt to the restore the power of the imperial presidency to wage unencumbered, unauthorized war vis-à-vis the congressional and judicial branch, this kind of theory of strong executive power that’s now in the news that the Bush administration has been a staunch defender of. This really goes back in many ways to Iran-Contra as the first kind of sustained attempt to kind of roll back all of those restrictions placed on the executive branch in the wake of Vietnam and the wake of Watergate. And that’s what Iran-Contra was.

AMY GOODMAN: Well, Greg Grandin and Steve Ellner, I want to thank you both very much for joining us. Greg Grandin, the author of Empire’s Workshop: Latin America, the United States, and the Rise of the New Imperialism, and Steve Ellner, who teaches political science in Venezuela and is co-author of the new book, Venezuela: Hugo Chavez and the Decline of an Exceptional Democracy.