Chavez versus Obama: Facing Presidential Elections in 2011Posted: November 21, 2011
Summary of Essay
Submitted by James Petras
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.
Measuring the Performance of Chavez and Obama in the Face of the Economic Crisis
Over the past three years, both presidents faced a deep socio-economic crisis 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 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.
Obama rejected any large scale long term public investments to create jobs: his “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. Obama increased military spending, multiplying overseas combat troops, 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 African and Indo-Venezuelans, Obama ignores the 50% unemployed big city young (18-25) African-Americans and Latinos in favor of serving white Wall Street bankers.
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. 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%.
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. 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.
As a result of the reactionary top down economics Obama 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.
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.
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.