One hopes that in the midst of the myriad conversations about “what Is to be done?” that are taking place in the hundreds of “Occupy Wall Street” sit-ins taking place throughout the U.S., at least some of the participants will discuss, with a view to finding solutions to the capitalist corruption in the U.S., what has already been done in one of the few countries in the world where the 99%ers actually rule: Venezuela.
To aid those discussions, it might be helpful to review a recent article by Professor James Petras, Bartles Professor Sociology at State University of NY at Binghamtom, who, for eleven years, worked with Brazil’s Landless Workers Movement, compares, in a recent issue of www.venezuelanalysis.com the relative effectiveness of the economic policies undertaken by U.S. President Barack Obama with those of Venezuela’s President, Hugo Chavez.
This writer, an American who has lived and taught in Venezuela for the last four years, has been in a position to observe, at first hand, the effects of Chavez’s socialist policies in meeting the challenge of the Banksters’ s corruption which has caused a world-wide economic crisis.
Chavez dealt with Venezuela’s fraudster bankers by immediately investigating their banks, closing some, nationalizing others and many of the banksters are now sitting in jail. The bank depositors whose savings were looted were made whole by the Venezuelan government virtually immediately.
Suffice it to say, I am very grateful to be living here in Venezuela right now, and not in the heart of the capitalist beast. Having dealt quickly with the fraudulent financiers, socialist Venezuela is surviving the world economic crisis with aplomb and is accelerating its economic growth. Petras explains why, below.
Chavez increased the minimum wage, social security and pension , increasing consumption among low income groups, stimulating demand and increasing revenues for small and medium size businesses. The state embarked on large scale infrastructure projects, especially highways and transport, creating jobs in labor intensive activities. The Chavez government sustained living standards by instituting price controls on food and other essentials, which sustained popular demand at the expense of profiteering by the owners of super markets. The Chavez government nationalized lucrative gold mines and repatriated overseas reserves in the course of financing its demand driven economic recovery program, eschewing tax concessions to the rich and bailouts of bankrupt banks and private businesses.
Petras contrasts Chavez’s massive investment in social development with Obama’s pattern of action:
Obama guided by his ideological commitment to corporate financial capitalism, pours billions into bailing out Wall Street speculators, focuses on reducing the public deficit and slashes taxes and offers government subsidies to business in the hope that the banks will lend, the private sector will invest. Obama hopes the corporate sector will start to hire the unemployed... Obama’s economic recovery and employment program depends wholly on the private sector, utilizing tax handouts to stimulate domestic investments which generate employment.
Obama has poured trillions into bailing out the elite financial institutions and pursuing two major wars and a handful of smaller ones. He has done little for the ten million Americans who have lost their homes and the many more who have lost their jobs or who are under-employed.
In contrast, Chavez has invested billions in a program to build a million new homes for the homeless or inadequately housed, a massive social investment which is generating millions of new jobs, both direct and indirect.
Obama’s new concession to the widespread joblessness, his proposed “Jobs for America” proposal will, according to Petras, “at best, temporarily reduce unemployment by less than five tenths of one percent.”
While the Obama administration has continued the Bush administration policy of under-calculating inflation in the cost of living by excluding rapidly rising medical and energy costs from the count, Chavez has pegged pensions and social security benefits to inflation and energized his price control of basic food staples while increasing the strength of the agency which polices markets for violation of price controls. This agency has sanctioned hundreds of markets here in Mérida for violating price controls by temporary, but well-publicized shut-downs.
President Chavez’s government has also increased the provision of government subsidized food stuffs through the nationalization of a large market chain and opening new government supported shops called “Mercals” where the entire population can purchase basic necessities, even stoves, refrigerators and washers, at minimal cost:
Chavez increased the minimum wage, social security and pension payments, increasing consumption among low income groups, stimulating demand and increasing revenues for small and medium size businesses. The state embarked on large scale infrastructure projects, especially highways and transport, creating jobs in labor intensive activities.
Rather than increasing Social Security benefits and lowering the age of eligibility, Obama has weakened the Social Security system by cutting payments to that fund, and has even made increasing the eligibility ages for SS benefits and Medicare a possible bargaining tool with Republicans, even without their requesting it. Medicaid for the poor and disabled is likewise subject to possible cuts.
While Obama’s possible attacks on social welfare programs accord well with the financial sector’s demands for protecting bond rates, these cuts in social welfare programs withdraw money from those who would actually spend it and accelerate demand, and thus jobs. Reducing benefits to the poor and middle class will cause more joblessness, not less. And even one of the biggest banks, Bank of America, to which Obama gave billions in virtually free money, is thanking him for the gifts by announcing it is shedding 30,000 employees. States and local governments, hurt by the decreased tax base in both income and property, need to lay off more workers and reduce their own benefit programs.
What have been the economic consequences of these contrasting policies? According to Petras:
The political and economic consequences of Obama’s “top down” and Chavez “bottom up” socio-economic polices are striking in every respect. Venezuela grew 3.6% in the first half of 2011 while the US stagnated at less than 2%. Worse still, during the second half of the year Obama and his advisers expressed fear that the US is heading toward a “double dip” recession – negative growth. In contrast the President of Venezuela’s Central Bank predicted accelerated growth for 2012.
What have been the political consequences of these contrasting policies? According to Petras:
As a result of the reactionary top down economics he practices and his overt threats to cut basic social programs like Medicare, Medicaid and Social Security, Obama’s popularity has fallen over the past three year from 80% to 40% and heading downwards....
In contrast President Chavez, riding the wave of economic recovery, based on positive programs of social expansion and public investments, has seen his popularity rise from 43% in March 2010 to 59.3% as of September 7, 2011.
Petras projects that, if conditions continue as they presently obtain in Venezuela, Chavez will re re-elected in 2012 in a landslide. This writer agrees. There is simply no credible opposition to Chavez here, either in potential candidates or in viable policies.
As to Obama, Petras concludes that he is “vulnerable to defeat”. But, as there are no credible opposition candidates at this point, and his Republican-based policies seem to mimic those of official Republican policies, it may be that the U.S. will re-elect the Republican-lite candidate, Obama, despite the dismal and continuing failures of his capitalist economic policies.
The American people desperately need the economic and social policies of a socialist like Chavez, but it doesn’t look as if they are likely to get them.... unless the Occupy Wall Street Wall continues to grow as it has in the last three weeks and sustains its momentum such that that the U.S. can truly bloom with the dramatic changes that wrought an Egyptian Spring in the coming autumn and winter.