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Sunday, September 21, 2008

THE FAILURE OF DEREGULATION : A SOUTH AMERICAN ALTERNATIVE

                          By John Laun
 
 
         The week of September 15 – 21 brought a basic change in the approach of the U.S. government. The Bush administration, having mismanaged the economy spectacularly by eschewing regulatory oversight of the financial markets, decided on a 180 degree change  to "save" the US economy. As the stock market sank and banks appeared more and more threatened, Bush and his advisers abandoned their supposed philosophical distrust of "big government" and presented the U.S. Congress with a "bailout" plan which will ( if Congress accepts it,  which with a few changes on the periphery it almost certainly will) effectively nationalize the US financial system, making private enterprise dependent upon government investment for its survival.  Now many of those who opposed regulation yesterday are praising it as essential today. For instance, a befuddled John McCain announced one day his opposition to the government bailout of the insurance behemoth  AIG, only to praise it the next day when Bush and company decided it was necessary.
 
         What we may clearly observe here is the bankruptcy, not just of  fraudulently and carelessly run business and financial institutions, but of the Bush administration's approach to the economy itself. The question for us now is how will this gigantic failure affect US foreign policy. If we have learned one thing from the spectacular failure of economic policy in the U.S. it is that a policy which trusts "market forces" by themselves to bring prosperity to everyone with a minimal of regulation, has been empirically shown to be flawed. An economic policy which celebrates a system in which the CEO's of major financial institutions and businesses can take for themselves huge salaries while the institutions they lead are losing money, is a policy which will fail.  We now know that an economic policy which promotes income inequality and ignores the basic needs of its citizens for food, shelter, health care and education is doomed to failure. The Reagan Revolution's prime principle that "that government is best which governs least" and "government is the problem" has been totally discredited..
 
         The new artifice in this country should focus on the providing of basic needs at reasonable cost to all of this country's residents. Upon that basis a strong economy not subject to the vicissitudes of unregulated market capitalism can be built.
 
         Interestingly, several countries in South America have come to that same conclusion and are building a multilateral structure through which the governments in those countries ---Argentina, Bolivia, Brazil, Chile, Ecuador, Paraguay, Uruguay and Venezuela---can implement economic policies which seek to answer the needs of the poor and the middle classes, and not to line the pockets of the rich and politically powerful. Instead of dismissing the economic policies of the governments of Evo Morales in Bolivia and Hugo Chavez in Venezuela, each declaredly "socialist", US policy makers would do well as they implement government bailouts ( a type of "socialism" one might say) to follow the lead of these countries in developing programs aimed at guaranteeing a certain basic standard of living for all of the country's residents.
 
         In light of this it was striking to see President Bush welcome to the White House the President of Colombia, Alvaro Uribe Velez, the principal ( and perhaps only) South American defender of the capitalist model which has brought the U.S. financial system and many, many U.S. citizens to the edge of the abyss. Alvaro Uribe has presided over the displacement of millions of peasants, Afro- Colombians and indigenous peoples as he promotes large-scale export agriculture and a  bilateral Free Trade Agreement (FTA) with the U.S. which will enshrine  the interest of the rich and powerful as it decimates the rural poor. And his policies have undercut social security programs and dismantled unions, while continuing to place union members' lives at risk from paramilitary threats. As evidence continues to mount of the close ties of President Uribe's advisors and his party to paramilitaries, one would hope that, given these revelations, Colombians would reject implementation of the FTA and instead replace alliance to Bush with active participation in the new South American alliance. 

September 21, 2008

Sunday, September 14, 2008

Dear Candidates : The Field of Play Has Changed

The news media reported this week that both Barack Obama and John
McCain have criticized Bolivia's President Evo Morales for expelling
the U. S. Ambassador to Bolivia, Philip Goldberg. Ambassador Goldberg
was reportedly involved in meetings with separatist elements seeking
regional autonomy from the Bolivian government while trying to
undermine Morales' authority. Remarkably, President Morales' swift
expulsion of Ambassador Goldberg has received near unanimous support
from other Latin American governments.

While we do not know (and our government certainly is not going to
tell us) what precisely Ambassador Goldberg was doing in Bolivia, we
can be fairly certain that he was supporting the opposition to the
Morales government, an opposition which U.S. policy-makers see as a
capitalist alternative to the socialist model which President Morales
has promised to implement. For U. S. policy toward Latin America
nothing is more important than the promotion of market capitalism,
with the concomitant access to natural resources and consumer markets
in the Latin American countries.

Besides an effort to frustrate and defeat a socialist model, U.S.
policy seeks to divide Latin American nations against each other---a
21st Century implementation of the strategy of divide and rule. By
playing Colombia off against Venezuela, for instance, the U. S. seeks
to prevent the emergence of an alliance of Latin American nations,
which might, for example, implement new measures to increase royalty
payments to the government by multinational corporations engaged in
mining or oil production, thus jeopardizing the multinationals'
hugely favorable terms of trade in these commodities, terms of trade
which also benefit the countries in which these corporations are
based, particularly the United States.

And there is one other matter of concern to the U. S. Since the end
of World War II the U. S. government has sponsored training programs
for Latin American militaries and provided very substantial funding
for them as a means of controlling political developments in these
countries. As those of us who have focused our attention on Colombia
know very well, the military structures in these countries have
traditionally stood a short step behind the civilian governments,
exerting great influence upon government policies. The U. S.
government has even promoted the development of paramilitaries to
collaborate with the militaries, as it did in the report of the
Yarborough Commission to Colombia in 1962. In Colombia the
paramilitaries have engaged in massacres and other barbarous acts
when public or international focus on the military made it
inconvenient to have the Armed Forces carry out these actions
directly---actions which typically have sought the forcible
suppression of popular movements or the forced displacement of
peasant, indigenous and Afro-Colombian populations.

Evo Morales has not only pledged to bring a socialist system to his
country, he has ended the sending of Bolivian military officers to
the U. S. for training and opposed a U.S. military presence in his
country. Something important is at stake here. President Morales is
looking to cut his country's dependence upon foreign companies and to
reduce U. S. military influence in the region. With President Hugo
Chavez of Venezuela, President Rafael Correa of Ecuador and President
Luis Ignacio Lula da Silva of Brazil, among others, he is striving to
develop strong ties among Latin American countries, making them less
dependent upon the United States and less vulnerable to the effects
of U.S. policy decisions.

A short-sighted approach by the next President of the United States
might try to turn the clock back---to re-establish dependence upon
U.S. military aid, to throw the country's backing behind the old
savage capitalist model, and to oppose expressions of pan-Latin
American solidarity. The recent comments by candidates Obama and
McCain suggest they are still trapped within that model. But times
have changed. Sentiments of unity among the Latin American countries
to protect their common interests are stronger than ever before. And
what candidate Obama and candidate McCain need to realize is that
real stability (has any U.S. government ever said it was not seeking
"stability" in foreign relations as a prime goal?) in the region
depends upon the Latin American societies becoming more equitable and
upon their leaders joining to protect the emerging model which
promises a broad-based prosperity and, as a result, peace.

John I. Laun
September 13, 2008

 

 

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