March 20, 2023

El País Apologizes for Printing Fake Chávez Photo

If authentic, it would have been a scoop, as Mr. Chávez has not been seen in public for over six weeks. But soon after the newspaper, El País, hit the streets, the photograph was revealed as a fake, prompting an apology from El País to its readers.

The embarrassing mistake brought a barrage of criticism from Venezuelan officials who have long accused the international news media, especially in Spain, of being biased against Mr. Chávez’s socialist revolution and eager to report unfounded rumors about his health and cancer treatment.

“Crisis of capitalism is not just economic,” the Venezuelan information minister, Ernesto Villegas, wrote in a Twitter post. “It also corrodes the ‘independent’ press, which long ago abolished limits to attack Chávez.”

He called the photograph “grotesque” and asked in another post if El País would print a similar photograph of a European leader or of its editor. Employing a pejorative term used in Spain for South Americans, he added, “Yellow journalism valid if the victim is a revolutionary ‘sudaca.’ ”

He also posted a link to a 2008 YouTube video of a man undergoing a medical procedure that appeared to be the source of the photograph.

A short article that appeared beside the photo was headlined, “The Secret of Chávez’s Illness,” but that turned out to be misleading, as no secrets were revealed. Quoting unidentified sources, it said the image was taken in Cuba some days ago, but it did not elaborate.

In a statement posted on its Web site later on Thursday, El País said that once it had ascertained that the man in the photograph was not Mr. Chávez, it stopped distributing the paper and sent out a new edition with a different front page.

The newspaper said it had obtained the picture from Gtres Online, a photo agency that it had worked with for several years. The Associated Press said that Gtres had also offered the photograph to it and another Spanish newspaper, El Mundo, but they both declined. El País did not explain how it realized that the photograph was fake, but it apologized to its readers and said it would investigate what went wrong.

A person who answered the phone at Gtres Online said no one was available to comment.

It did not say how many copies of the newspaper with the fake photograph made it into circulation. But Mr. Villegas posted a picture online of the copy of El País that arrived Thursday at the Venezuelan Embassy in Madrid, with the offending photograph on the front page.

El País also said that the photograph appeared on its Web site for about half an hour before it was taken down.

Mr. Chávez has not been seen or heard from since he had cancer surgery in Cuba on Dec. 11, and the Venezuelan government has given few details about his condition. Recently, officials have said his health is improving, but the relative secrecy has led to widespread rumors, especially on social media like Twitter.

Last week, Vice President Nicolás Maduro, who is running the government in Mr. Chávez’s absence, referred to El País and another Spanish newspaper, ABC, that has printed questionable stories about Mr. Chávez’s health as “this garbage press.”

“We have had to confront a really miserable media war over the president’s life, his health,” Mr. Maduro said in an interview with the Spanish news agency EFE. “You can’t even call this yellow journalism. This is journalism full of evil that has installed itself around the world, particularly in Spain.”

María Eugenia Díaz contributed reporting.

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A Capitalist’s Dilemma, Whoever Wins the Election

In many ways, the answer won’t depend on who wins on Tuesday. Anyone who says otherwise is overstating the power of the American president. But if the president doesn’t have the power to fix things, who does?

It’s not the Federal Reserve. The Fed has been injecting more and more capital into the economy because — at least in theory — capital fuels capitalism. And yet cash hoards in the billions are sitting unused on the pristine balance sheets of Fortune 500 corporations. Billions in capital is also sitting inert and uninvested at private equity funds.

Capitalists seem almost uninterested in capitalism, even as entrepreneurs eager to start companies find that they can’t get financing. Businesses and investors sound like the Ancient Mariner, who complained of “Water, water everywhere — nor any drop to drink.”

It’s a paradox, and at its nexus is what I’ll call the Doctrine of New Finance, which is taught with increasingly religious zeal by economists, and at times even by business professors like me who have failed to challenge it. This doctrine embraces measures of profitability that guide capitalists away from investments that can create real economic growth.

Executives and investors might finance three types of innovations with their capital. I’ll call the first type “empowering” innovations. These transform complicated and costly products available to a few into simpler, cheaper products available to the many.

The Ford Model T was an empowering innovation, as was the Sony transistor radio. So were the personal computers of I.B.M. and Compaq and online trading at Schwab. A more recent example is cloud computing. It transformed information technology that was previously accessible only to big companies into something that even small companies could afford.

Empowering innovations create jobs, because they require more and more people who can build, distribute, sell and service these products. Empowering investments also use capital — to expand capacity and to finance receivables and inventory.

The second type are “sustaining” innovations. These replace old products with new models. For example, the Toyota Prius hybrid is a marvelous product. But it’s not as if every time Toyota sells a Prius, the same customer also buys a Camry. There is a zero-sum aspect to sustaining innovations: They replace yesterday’s products with today’s products and create few jobs. They keep our economy vibrant — and, in dollars, they account for the most innovation. But they have a neutral effect on economic activity and on capital.

The third type are “efficiency” innovations. These reduce the cost of making and distributing existing products and services. Examples are minimills in steel and Geico in online insurance underwriting. Taken together in an industry, such innovations almost always reduce the net number of jobs, because they streamline processes. But they also preserve many of the remaining jobs — because without them entire companies and industries would disappear in competition against companies abroad that have innovated more efficiently.

Efficiency innovations also emancipate capital. Without them, much of an economy’s capital is held captive on balance sheets, with no way to redeploy it as fuel for new, empowering innovations. For example, Toyota’s just-in-time production system is an efficiency innovation, letting manufacturers operate with much less capital invested in inventory.

INDUSTRIES typically transition through these three types of innovations. By illustration, the early mainframe computers were so expensive and complicated that only big companies could own and use them. But personal computers were simple and affordable, empowering many more people.

Companies like I.B.M. and Hewlett-Packard had to hire hundreds of thousands of people to make and sell PC’s. These companies then designed and made better computers — sustaining innovations — that inspired us to keep buying newer and better products. Finally, companies like Dell made the industry much more efficient. This reduced net employment within the industry, but freed capital that had been used in the supply chain.

Clayton M. Christensen is a business professor at Harvard and a co-author of “How Will You Measure Your Life?”

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Economix Blog: Ask David Barboza About China’s Economy

David Barboza

David Barboza has been a correspondent for The New York Times based in Shanghai, China, since November 2004. In a series of recent articles, he has examined China’s system of government-managed capitalism in depth. He will be answering questions from readers in connection with these articles. Submit your question via the comments section below. Mr. Barboza will respond to a selection of questions in the days ahead.

In the most recent article in the series, he looks at a pattern of conflicts between China’s emerging private sector and its powerful state-run enterprises:

Some prominent Chinese economists are warning that the potentially corrosive effects of an approach that favors government companies at the expense of the private sector could eventually stifle innovation, saying it could stunt China’s long-term growth and quash the rising aspirations of the nation’s 1.3 billion people.

Earlier, Mr. Barboza examined how the Chinese economy relied on enormous infrastructure projects, financed with government debt that can be concealed from auditors.

Another article looked closely at a missing element in China’s boom: the Chinese consumer.

Read the full Endangered Dragon series.

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DealBook: Wall Street’s Long History of Protests

If there is a physical place that represents the intersection of democracy and capitalism in America, it is probably in Lower Manhattan at the corner of Wall and Broad. Protest movements have been drawn to Wall Street — both the physical location and the abstract idea — since the founding of the country.

DealBook spoke to the historian Steve Fraser, whose books include “Wall Street: America’s Dream Palace” and “Every Man a Speculator: A History of Wall Street in American Life,” about the groups that have gathered there in the past.

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