Sunday, May 10, 2009

Chavez vs Obama

Obama Invests in Banksters, Chavez Invests in Food and Jobs.

A diary at FDL/Oxdown Gazette by Justinajustice, Saturday May 9, 2009

As an American living in Venezuela, I read the news that the Obama administration is funneling several trillion dollars of taxpayer's money into the U.S. biggest financial institutions. I see that millions of Americans are losing their jobs, their homes, their health insurance and lining up at charity foodbanks to get food. What good is that government money doing for the vast majority of Americans?

In contrast, here in Venezuela, unemployment decreased last quarter, Chavez increased the minimum wage, already the highest in South America, by 20% on May 1st, and the government is taking strong measures to insure that everyone has their basic needs met.

Living in Venezuela, I now directly benefit from policies of the Chavez government: I can go to a doctor, at no cost, whenever I need to and I can purchase basic foodstuffs at very low cost at the government-run "Mercals" in my neighborhood.

This week at my local Mercal, I purchased a kilo (2.2 lbs) of rice, a kilo of sugar, a half kilo of coffee, a kilo of powdered milk and two quarts of yogurt, and a two foot loaf of bread for about $6.00 U.S. In my home state of Hawaii, that $6.00 would not have paid for the milk, let alone anything else.

Under the Chavez government's drafted Constitution, passed by a national referendum in 2000, citizens have a constitutional right to adequate nutrition. The government insures this right by controlling the cost of basic foodstuffs and providing extremely low cost government markets (Mercals) such as the one I visited this week, as well as restaurants (Comedores) where an ample three course meal (soup, entre, dessert) and beverage can be obtained for about $2.00.

While Obama's economic team of Geithner and Summers respond to the current economic crisis, which their deregulation efforts helped to create, by funneling several trillion dollars of tax payer funds to the big financial institutions to insure their continued operation, Venezuela, although hit hard by the reduction in oil prices from $150 a barrel to circa $50 a barrel, has reacted in a more directly productive fashion for its citizens.

Chavez has recently redoubled efforts to insure that the prices and availability of basic food stuffs, whose prices are regulated by the government, are strictly enforced. Companies who attempt to avoid price regulation by "enriching their products to remove them from the realm of price controls, are being warned that they face expropriation by the government if they deliberately avoid price controls. This is not mere idle talk.

Chavez recently sent soldiers into the factories of Arroz Primor, a rice-producing subsidiary of the huge Polar company, after it was discovered that factory was under-producing rice by thousands of tons a month and producing flavored rice instead of basic rice in order to sell at a higher, un-regulated price.

Large companies, whose owners tend to support opposition efforts to dismantle the Chavez government, have frequently held back the distribution of needed goods in order to create the appearance of shortages, in the attempt to foment anger against Chavez. Thus, last year, sugar, which Venezuela produces in abundance, was missing from the stores for several weeks.

Previously, the Chavez government countered efforts to hold back food from the markets by using its massive oil profits to purchase foodstuffs from neighboring countries. With the enormous reduction in oil prices, importing food has become a luxury. Now companies, such as Polar, who deliberately under-produce goods or who seek to avoid controls by "enriching" their products, face direct nationalization by the government.

In the past, the Venezuelan government paid hard cash to the owners of companies it nationalized at fair market value, but now President Chavez has announced that owners will be paid in government bonds rather than cash. This bond method of payment will not only protect the government's cash reserves in face of this world crisis, but also may provide an incentive to such owners to oppose efforts to de-stabilize the government. Such de-stabilization efforts, if successful, would reduce the value of their government bonds.

President Chavez has vowed that the world economic crisis and the reduction in the price of oil will not interfere with Venezuela's commitment to improve the living standards of its citizens.

Venezuela's latest government budget continues support for the provision of free medical, dental and eye care, for the literacy and high education programs, for the building of new homes and apartment to replace the decades old slums. It also calls for the reduction in government salaries and bonuses at the managerial level and the elimination of un-necessary travel, cars and similar extraneous expenses.

Looking ahead to the time when the world may not need Venezuela’s oil, Chavez’s government is investing in new businesses, such as a cell phone company which is producing a well-equipped cell phone that costs $14.00.

This past week President Chavez inaugurated a new generic drug production company which will reduce the need for expensive imports while allowing Venezuela to export cheap generics elsewhere in the world. Chavez anticipates creating several more such drug companies. In partnership with a Chinese company, Venezuela is now producing inexpensive desk-top and laptop computers which cost 40% less than equivalent imported models.

All of these new government created businesses are producing new jobs for Venezuelan workers while filling the real needs of its citizens.

Would that Obama would take those trillions of dollars he is funneling down the deep, dark hole of bankster’s pockets and use it to invest in job production and the real economy in America. We need government investment in improved infra-structure, renovated schools, alternative energy development, and the like.

It is time the U.S. put the taxpayers’ money to work filling human needs rather than creating more profits and bonuses for the ultra-wealthy.

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