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Democratic socialism
Translations available in: English (original) | French | Spanish | Italian | German | Portuguese | Swedish | Russian | Dutch | Arabic

Reflections of Fidel:


I did not want to write a third consecutive reflection, but I can not leave this until Monday.

There is one accurate response to Bush’s "democratic capitalism:" Chavez’ democratic socialism. There couldn’t be a more accurate way to express the great contradiction that exists between North and South in our hemisphere, between the ideas of Bolívar and those of Monroe.

Bolívar’s great merit was having stated it at a time when modern means of communication did not exist — not even the Panama Canal. There was no U.S. imperialism. There were just the English-speaking Thirteen Colonies which, united, gained their independence in 1776 with the support of France and Spain.

The Liberator, as if he were capable of seeing through centuries ahead of his own time, proclaimed in 1829: "The United States seems destined by Providence to plague America with misery in the name of liberty."

Hugo Chávez is a Venezuelan soldier. In his mind, Bolívar’s ideas germinated naturally. Suffice it to observe the way in which his thinking went through different political stages, starting from his humble origin, school, military academy, his readings of history, the reality of his country and the humiliating presence of Yankee domination.

He was not a general; he didn’t have any armed institution under his command. He didn’t perpetrate a coup d’état; nor could he do so. He did not want to wait; nor could he. He rebelled; he took full responsibility for events and turned prison into a school. He conquered the sympathy of the people and gained their support for his cause while being out of government. He won the elections under a bourgeois Constitution. He took an oath under that agonizing document and swore allegiance to a new Constitution. He clashed with both right and left preconceived ideas and started the Bolivarian Revolution in the midst of the most difficult subjective conditions in the whole Latin America.

For 10 years, as president of his country, he has not ceased to sow ideas inside and outside his homeland.

No honest person should have any doubt that there is a true Revolution in progress in Venezuela, and there is also an exceptional struggle being waged against imperialism.

It is worth mentioning that Chávez does not rest, not even for a single minute. He struggles inside Venezuela and at the same time he systematically travels to the capitals of Latin American countries as well as to important nations in Europe, Asia and Africa.

He communicates, hour by hour, with the national and international press. He is not afraid to address any issue; he is listened to with respect by the main leaders in the world. He makes correct and efficient use of the real power his country has —the largest proven oil reserves in the world, in addition to abundant gas— and he is designing an unprecedented national and internationalist program.

With the signing of an association agreement between Russia’s Gazprom and Venezuela’s PDVSA for the prospecting and exploitation of hydrocarbons, he has created a consortium in that field that is equal to none in the world. His economic association with China and Russia, certain countries in Europe and others in Latin America and Africa with abundant resources, has released the liberating forces that will pave the way towards a multipolar world. He did not exclude the United States from the energy supply or the commercial exchange programs. That is an objective and balanced conception.

He thinks about a socialist revolution for his own homeland, without excluding important productive factors. At this historical juncture, after being hit by nature and the criminal ravages of the decadent empire, our country is truly privileged t be able to count on Chavez’s solidarity.

We have never heard a more internationalist and fraternal phrase than the one he said to our people: "The country of Venezuela is also your country!"

Imperialism is trying to get rid of him politically or eliminate him physically no matter the cost, without realizing that his death would be a disaster for Venezuela as well as for the economies and the stability of all other governments of Latin America and the Caribbean.

My conversations with him are characterized by one point of view I defend: at this point in time, the most important thing is to save Venezuela from the political onslaught of the U.S. government. During his last visit we discussed the magnitude of the assistance he is giving to us as well as the assistance he wishes to give to us, and our suggestion that he should concentrate the largest possible amount of resources on the domestic battle that he is waging today against the offensive launched by the media and the conditioned reflexes that imperialism has been creating for many years.

From now until November 23, the battle to be waged will be of great transcendence, and we don’t want his support for Cuba to be used as a pretext for damaging the Bolivarian Revolution.

The 92 Venezuelan construction workers who are members of the Socialist Voluntary Work Brigades sent to build houses in Pinar del Río are a real symbol of our times.

We are living through very important moments. The popular referendum to approve the new Constitution in Ecuador the day after tomorrow will be of great significance. Chávez will meet with President Lula in Brazil on Monday. Tonight there is a televised debate between Obama and McCain. All of this is important news.

That is why I did not want to leave writing these lines for Monday. Tomorrow, Saturday, Chávez will be back in his country and on Sunday he will address his people. He always uses something from these reflections in his battle.



Fidel Castro Ruz

September 26, 2008

5:56 p.m.

(Translated by ESTI)

September 30, 2008 | 6:57 PM Comments  0 comments


US debates bailout as crisis worsens
Translations available in: English (original) | French | Spanish | Italian | German | Portuguese | Swedish | Russian | Dutch | Arabic

BY: ASIM ERDİLEK:




The US Treasury’s sweeping bailout plan hastily presented to the US Congress last Monday to end the global financial crisis has unleashed a furious debate, stalling congressional approval of the plan.

This welcome debate, after Congress commendably refused to give the Treasury a blank check, was waged over the plan’s potential winners and losers as well as about its effectiveness in ending the crisis, which continued to worsen last week. As a result of the often acrimonious debate in the marathon congressional negotiations, the Treasury had to agree to several substantive changes in its initial financial rescue plan, which was to last two years and to require up to $700 billion in taxpayers’ money. A newly assertive Capitol Hill proved its mettle by not allowing the Bush administration to push it into rubber stamping such a critical, costly and initially ill-conceived mega bailout proposal to avert a feared financial Armageddon.

The revised plan, called the Troubled Asset Relief Program (TARP), was expected to be approved by congressional leaders by the end of last weekend and by Congress early this week. It might help to lessen the severity of the financial crisis by letting troubled financial institutions get rid of their illiquid and distressed assets, but it will not solve their other critical problem of equity capital deficiency, requiring recapitalization. In fact, solving the first problem could exacerbate the second. The bailout will also not stop falling home prices, which is the root cause of the housing crisis -- i.e., rising mortgage defaults and foreclosures -- that has developed into the global financial crisis. Moreover, the Treasury’s intention to have other countries affected by the financial crisis come up with similar bailout plans of their own is unlikely to prove successful, whether or not foreign-owned financial institutions operating in the US are covered by the US plan.

The heated debate on the bailout plan (see last week’s column, “Uncle Sam to try cutting the Gordian knot”) occurred at different levels, drawing in politicians, including President Bush and the two presidential candidates, Senator John McCain and Senator Barack Obama, economists, journalists, business leaders and a surprisingly large number of angry and frustrated constituents, who called or wrote to their representatives in Washington to protest the bailout of Wall Street by Main Street. In fact, much of the debate in Congress reflected the opposition to the bailout plan by the majority of the US public, which clearly saw that it would privatize the gains but socialize the losses from the crisis, potentially costing the US taxpayers billions of dollars. The arguments by the architects of the bailout plan that the public would fare even worse in a deep depression that would be caused by the collapse of the financial system did not prove to be persuasive. President Bush’s prime time national TV address defending the bailout was ineffective.

Within Congress itself, the most vociferous opposition to the original Treasury plan to purchase toxic mortgage-related securities by spending up to $700 billion came surprisingly from Republican members. Many of them, especially in the House of Representatives, openly rebelled -- on both ideological grounds and political concerns about their re-electability next November -- against their congressional leaders and against the unpopular lame-duck Republican president who supported the plan. Protesting the violation of the “free market principles” under the original plan, which some of them labeled “trickle-down communism,” they proposed an alternative scheme that would have provided premium-based government insurance for bad loans to troubled financial institutions to help them get back on their feet. This insurance program proposed to replace the Treasury’s bailout plan did not get very far, although some of its elements could be included as an option in the finalized package.

The Democrats, on the other hand, supported the Treasury plan in principle but, after loudly blaming the administration for the global financial crisis, forced the plan to be revised significantly to include broad congressional oversight, gradual release of the $700 billion in tranches, audits and transparency to prevent abuse and waste, safeguards against conflicts of interest and concessions to Main Street in terms of caps on the compensation of the executives of troubled financial institutions that would sell their rotten securities to the government. The Treasury also agreed in principle to the demands of Congress that Uncle Sam should receive mandatory equity warrants toward a partial ownership stake in the troubled financial institutions whose toxic mortgage-related securities it would buy in reverse auctions. It seems, however, that the Democrats could not persuade Republicans, as part of the bailout package, to allow judges to rewrite mortgages to enable bankrupt homeowners to avoid foreclosure. Although Democrats control both houses of Congress, they understandably do not want to approve the bailout, which is opposed by most of the US public and is perceived as politically lethal, without Republican support.

In the first of the three presidential debates last Friday, McCain and Obama both voiced general support for the bailout, although they disagreed on who was to blame for the crisis. However, even after being pressed repeatedly by the debate’s moderator, they failed to specify how after becoming president they would deal with the costly consequences of the bailout. Prior to the debate both had become conspicuously involved in the congressional negotiations, following the impetuous insistence of “maverick” Senator McCain, who even wanted to postpone Friday’s debate presumably to give his full attention to the bailout, after having briefly suspended his campaign to that end. Senator Obama reminded his rival -- whose blatant injection of presidential politics into the bailout debate raised questions about his judgment -- that presidents should be able to multitask.

As the bailout debate raged last week, the financial crisis continued to worsen and the prospects for the US real economy deteriorated. We witnessed the collapse of Washington Mutual Inc. (WaMu), the largest bank failure in US history, which the proponents of the bailout argued should help Congress focus on the urgency of government intervention to avoid a total collapse of the US financial system akin to that of the 1930s. After losing $16.7 billion in deposits in 10 days, WaMu, with assets of $307 billion but deposits of $188 billion, was seized by the government. JP Morgan Chase & Co. bought the bulk of WaMu’s assets for $1.9 billion, with a $31 billion write-down for the toxic securities. Two other major banks, Wachovia Corp. and National City Corp., came under increasing pressure as their share prices plummeted.

The era of independent investment banking came to an end last week. Morgan Stanley and Goldman Sachs, the only major US investment banks left in the devastation of the financial crisis, became bank holding companies. As commercial banks, they will broaden their funding base by taking deposits in order to survive but at the price of being regulated by the Federal Reserve Bank and earning lower returns. Also, the Federal Bureau of Investigation (FBI) began investigating possible fraud by four of the financial institutions deeply embroiled in the financial crisis, the mortgage giants Fannie Mae and Freddie Mac, insurance giant AIG, which were all bailed out by the government earlier this month, and the investment bank Lehman Brothers, which went bankrupt.

As for the bad news about the real economy, the Department of Commerce revised downward its earlier 3.3 percent annual real gross domestic product (GDP) growth rate for the second quarter to 2.8 percent. It reported that in August orders for durable manufactured goods dropped by 4.5 percent, with new home sales falling by 11.5 percent to the lowest level in 17 years. It also reported that sales of single-family homes shrank by 11.5 percent in August to its lowest seasonally adjusted annual rate since January 1991, with the median price of a new home falling by 6.2 percent since August 2007. The US Department of Labor reported that new claims for unemployment benefits jumped in the previous week to their highest level in seven years, following the rise of the national unemployment rate in August to 6.1 percent, its highest level in five years. It seems increasingly likely that real GDP will shrink in the last quarter of this year and the first quarter of 2009, saddling the US economy with an output recession as well as a jobs recession. The global financial crisis has already begun to take a serious toll on the US real economy. As I concluded in my last column, even if Uncle Sam succeeds in cutting the Gordian knot of the global financial crisis with a mega bailout, the US, as well as the rest of the world, will have to reckon later with many unintended and unpleasant consequences, which I hope to discuss in another column.


todayszaman