- Introduction
-
- Two incumbent presidents are running for
re-election in 2012, Hugo Chavez in Venezuela and Barack Obama in the United
States. What makes these two electoral contests significant is that they
represent contrasting responses to the global economic crises: Chavez
following his democratic socialist program pursues policies promoting large
scale long-term public investment and spending directed at employment,
social welfare and economic growth: 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. Chavez's economic strategy is directed toward
increasing popular demand by increasing the social wage. Obama's strategy
is directed toward enriching the elite, hoping for a "trickle down"
effect. Chavez's economic recovery program is based on the public sector,
the state, taking the lead in light of the capitalist market induced crises
and the failure of the private sector to invest. Obama's economic recovery
and employment program depends wholly on the private sector, utilizing
tax handouts to stimulate domestic investments which generate employment.
-
- According to the experts and politicians,
the socio-economic performance of each President will be decisive in determining
whether either President will be re-elected in 2012.
-
- Measuring the Performance of Presidents Chavez and Obama
in the Face of the Economic Crises
-
- Over the past three years, both presidents
faced a deep socio-economic crises resulting in increased unemployment,
economic recession and popular demands for political leadership in formulating
an economic recovery program.
-
- President Chavez responded via a large scale
program in public spending on social programs. Billions were allocated
in a massive housing program designed to create one million homes over
the next several years. Chavez lessened military tensions and reduced
frontier conflicts by negotiating a political agreement with the rightwing
Santos regime in Colombia.
-
- 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.
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.
-
- Obama rejected any large scale long term
public investments to create jobs: his proposed "Jobs for America"
proposal will at best temporarily reduce unemployment by less than five
tenths of one percent. In pursuit of policies benefiting Wall Street bondholders,
Obama became deeply involved in deficit reduction, meaning large scale
cuts in public spending especially in social expenditures. Obama in agreement
with the extreme rightwing agreed to regressive proposals to reduce tax
payments for popular Medicare, Medicaid and Social Security programs.
His proposals to fund "Jobs for America" depends on cuts in the
Social Security tax which ensures a reduction in payments and a deficit
or worse, which would facilitate privatization handing social security
to Wall Street, a trillion dollar plum.
-
- Obama ignores mortgage foreclosers of over
10 million families increasing homelessness and habitation downgrades,
in favor of bailing out banks and home mortgage swindlers.
-
- Obama increased military spending, multiplying
overseas combat troops, clandestine terror operations and the domestic
spy apparatus, increasing the deficits at the expense of productive investments
in education, technology skill upgrades and export promotion.
-
- Unlike Chavez who makes a point of highlighting
positive job and education policies for Afro and Indo-Venezuelans, Obama
ignores the 50% unemployed big city young (18-25) Afro-Americans and Latinos
in favor of serving white Wall Street bankers.
-
- In contrast to Chavez who pegged pensions
and wages to inflation and enforced price controls, Obama froze federal
salaries and social security payments resulting in a seven percent decline
in real income over the past three years.
-
- According to the latest US Census Bureau data
(September 2011)under Obama over 46.2 million Americans live in poverty,the
highest figure ever.Median household income dropped 2.3%between 2009-2010.The
number of Americans in poverty increased from 13.2%in 2008 to 15.1%in 2010.Nearly
one out of four children live in poverty in 2010,as over 2.6 million more
US citizens were impoverished in a single year.In contrast,and in line
with Obama's trickle down
-
- economic policies,the number of wealthy Americans earning
over 100,000 dollars- have suffered little or no impact: luxury specialty
stores ,like Tiffenys report a 15% increase in sales.
-
- The lowest 10%of the population suffered the most,a fall
in income of 12.1% between 2009-2010 while the 10%with the highest
income saw a decline of 1.5%.Of the 34 members of the OCED the US along
with Mexico,Chile and Israel has the worst social class inequalities.Obama's
top down stimulus policies saved the bankers by sacrificing the working
and middle class
-
- Political and Economic Consequences of Top Down and
Bottom Up Economics
-
- 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.
-
- While US unemployed remains above 9% and
combined with underemployment rose to over 19%, Venezuela's vast public
housing and infrastructure investments are generating jobs and lowering
the numbers of un and under employed in the formal and informal labor market.
Obama's pandering to Wall Street bankers and deficit reduction hawks and
his vast increase spending on overseas wars and the domestic security apparatus,
has bankrupted the treasury. In contrast, Chavez has nationalized lucrative
private sector mines, banks and energy enterprises and decreased military
tensions increasing resources for social programs such as food subsidies.
Obama's deficit reductions have led to massive firings in education and
social services.
-
- Chavez social expenditures have augmented
the number of public universities, secondary and primary schools and clinics.
Millions have lost their homes as Obama ignored the forced evictions of
the mortgage banks, while Chavez has made a start in solving the housing
deficit via one million homes.
-
- Obama lends at virtually no interest to private
banks who fail to lend to productive enterprises to create jobs, preferring
overseas speculation in overseas (Brazilian) bonds with higher interest
rates. Chavez invests directly in productive labor intensive infrastructures
programs, agricultural self-sufficiency projects and developing downstream
processing plants,refineries and smelters.
-
- 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. Moreover, his pro-Wall
Street fiscal and militarist policies deepening an extending Bush
and Rumsfeld's wars and terror operations has turned the US political
climate further toward the extreme right. As of the last quarter of 2011,
Obama appears vulnerable to electoral defeat.
-
- 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. The US backed opposition is fragmented,
weak and unable to challenge the overwhelmingly positive popular perceptions
of the housing and infrastructure projects benefiting the mass of workers,
construction companies and contractors.
-
- Chavez is vulnerable on issues of personal
security, administrative corruption and inefficiency. But he is seen to
have taken important steps to correct these problem areas. Graduates of
a new police academy provide honest, efficient community linked policing,
which, in pilot projects have reduced violent crime by 60%. Efforts to
end bureaucratic corruption and inefficiency are still pending.
-
- Conclusion
-
- Comparing Chavez and Obama's presidency presents
a sharp contrast between a successful bottom up socialist informed economic
recovery program and a failed top down capitalist stimulus program. While
the American public expresses its hostility to private banking's pillage
of the treasury, government threats to the last remnants of the social
safety net and Obama's failure to lower persistent high levels of un and
underemployment, Chavez's popularity rises along with the positive "good
feeling" among three-fifths of the electorate to his presidency.
If the Chavez government continues and deepens his 'bottom up' economic
stimulus program and the economy continues to expand and he recovers from
cancer he will in all likelihood be re-elected by a landslide in 2012.
-
- In contrast if Obama continues to truckle
to the corporate and financial elite and slash and burn social programs
he will continue his downward slide into well-deserved defeat and oblivion.
-
- Venezuela's economic recovery via advanced
social programs is a powerful message to the American people: there is
an alternative to regressive 'top down' economic policies: it's called
democratic socialism and its advocate is President Chavez, who talks to
and works for the people as opposed to the con-man Obama who talks to the
people and works for the rich.
-
-
|
