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http://www.youtube.com/watch?v=08cD7-MYaJo

We all suspected this would come sooner or later. As it happens, Chavez struggled heroically against his cancer, confounding the intensive Schadenfreude and concerted death wishes of his loathsome detractors month after arduous month.

But this is what you can expect to get when you look out for your own countrymen and stand up to imperialism. Probably no other modern national leader apart from Putin has been quite as consistently and caustically vilified by the Western media.

They say that he managed to squander Venezuela’s oil wealth. I suppose he is guilty as charged, if by “squander” you mean spending it on ordinary Venezuelans as opposed to funneling it away to foreign bankster rats. During his rule, real GDP increased by 50%, poverty has halved, inequality was reduced to a very low level at least by Latin American oligarchic standards, infant mortality was greatly reduced, and virtually the whole array of other socio-economic indicators that states care to track, from access to clean drinking water to enrollment in higher education (which increased by a stunning 138%), saw great improvements. At the same time, contrary to the claims of the neoliberal propagandists, debt hasn’t increased; it was a modest 45% of GDP as of 2011 (IMF), which reduces to 25% if only central government debt is accounted for. The national accounts have on average been balanced.

venezuela-gdp

This was all achieved despite the real negative impacts of the 2002-2003 oil industry strikes, which occurred in tandem with an abortive CIA-backed coup, and the global Great Recession; not to mention Venezuela’s own legacy of corruption and backwardness inherited from previous regimes.

The traitorous cockroaches, including on my very blog, claimed Chavez “oppressed” them and stole the elections. They said he was a dictator for refusing to extend the license of their opposition RCTV channel. The irony is that in any actually democratic country it would have been instantly shut down and they’d have been locked away for decades for treason, if not lined up against the wall like the rabid scum they are. They materially supported a foreign backed coup against a legitimately elected national leader and then had the gall, the temerity, the sheer chutzpah to complain that one of their talking shops was taken away from them! Even though much of the media in Venezuela remains in oligarch pockets and continues to tell lies about pro-Chavez electoral fraud, when all the polls indicate that that is indeed the will of the people. Of course there’s nothing contradictory about that. The seditious vermin despise the Venezuelan people and would much rather dissolve them and elect another (as opposed to emigrating and parasiting off some other country).

The incorrigibly thievish liberals, no doubt full of projection, claim that Venezuela under Chavez has become one of the most corrupt countries in the world. They cite the loathsome Corruption Perceptions Index in support of this view – i.e. the perceptions of the same internationalist banksters and “experts” who have such a withering hatred for those countries that dare to stand up against Western imperialism. Asking ordinary people reveals quite a different picture: Fewer ordinary Venezuelans (some 20% of them) said that had to pay a bribe in the past year than in Colombia (24%), the Western puppet state next door.

latin-america-homicide-rates

Perhaps the only real failing of the Chavez administration is its inability to control violent crime. Venezuela now has one of the highest homicide rates in the world. But this was part of a general Latin American trend, and what’s more, could just as easily be attributable to a regrettable if admirable surfeit of humaneness in the Venezuelan criminal justice system (it has not had the death penalty since 1863).

Hugo Rafael Chávez Frías brought hope and a credible promise of a better tomorrow to a benighted country, and was the bane of the rootless cosmopolitans and comprador elites that hypocritically shrilled about his supposed corruption and selling out to Cuba even as they frantically shuffled their ill-gotten billions into Swiss vaults and dialed their CIA handlers for advice. Yes, he was loathed by the Latin American offshore aristocracy, the neocons, and the Guardianista-type, “humanitarian bomber” Pro War Left and Western chauvinists in liberal clothing. But he was also beloved of the millions of Venezuelans, who resisted oligarch media pressure and mafia-like “international community” and continued to give El Comandante – in some of the world’s cleanest and most transparent elections – term after term to implement his vision of a just and sovereign Latin America.

If it is true that one gets to know a man by his friends and enemies, then he qualifies as one of the very greatest national leaders of modern history. He now shuffles off this mortal coil, leaving behind his struggles and haters, and ascending to the realm of God, where he can contemplate the crystalline tranquility of the cosmos; but the light of the Bolivarian Revolution that he ignited on this lower plane of existence will endure – and continue shining hope into the hearts of men all over the world unto the ages of ages.

PS. For more statistics and objective assessments of Chavez’ achievements, consult Mark Weisbrot’s classic, “The Chávez Administration at 10 Years: The Economy and Social Indicators.

(Republished from AKarlin.com by permission of author or representative)
 
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As with the previous such post, this thread will primarily serve as a meeting ground where S/O readers can discuss the impending US fiscal crisis. As usual, I try to provide some context and avenues for discussion:

1. On August 2nd, give or take a few days, the US Treasury will run out of money. Some commitments will have to be broken. As this article explains, first in line will be Treasury bond holders; frankly, the US sovereign reputation is so valuable that it will not want to risk it at almost any cost. Nor does either party want to see SS recipients, veterans, and soldiers not getting their salary. Once these are accounted for, little else will remain (the US borrows $1.40 for every dollar it now spends). If a deal isn’t reached, there will be massive furloughs and a shutdown of most non-”essential” government functions.

2. Though the current deficit of 10%+ of GDP is patently unsustainable, the immediate drop in spending the failure to raise the debt limit will represent will instantly plunge the US into deep recession (if not depression, if sustained; i.e. a cumulative GDP drop of more than 10%). The economy is very weak, with recent revisions showing the post-2007 drop in output to have been deeper than thought, and the subsequent recovery much weaker. With consumer spending hurt by deleveraging and high commodity prices; it is only being propped up by government stimulus.

3. The political ramifications. This is a risky bet on the Republicans’ part; whereas the Obama administration would have otherwise got the blame for a sluggish recovery, their perceived role in triggering a deep recession will erase that (nor can we take for granted that Republicans are able to logically perceive this; their Tea Party wing in particular has heavy ideological blinkers). In any case, it was the Republicans who got the blame for the previous government shutdown in 1995.

I went counter-consensus in the immediate aftermath of the Osama bin Laden killing by betting on a Republican win in 2012. This was on favorable odds, with all the commentators crowing that Obama has a victory locked up. Now I’m not sure this was such a good move. As of now, this is ALSO increasingly counter-consensus; in the last few days, many people have began to say Obama’s chances of winning are slipping. I disagree. The Republicans are volunteering themselves as free targets for the blame games that make up Presidential campaigns. If they go through and shut down government, then Obama will seize the opportunity to blame them.

4. So, in the end, what will happen? I think there is a high chance that the US will not go into formal default (that is practically impossible, for now) and that there will be a compromise, if not by August 2nd then within two or three weeks. But if the Republicans remain obstinate, then its back to deep recession.

5. The WSJ on what Russia thinks: Oil-Rich Russia Calm Ahead of U.S. Debt Deadline. I basically agree with it.

6. As in 2008, China will remain largely unaffected – even if the US slips into a deep recession. As I argued in my post on Top 10 Sinophobe Myths, the idea that China depends in any real way on manufacturing exports doesn’t hold water.

7. The PMI indicators show that large parts of Europe are slipping into zero growth or outright recession. But Germany remains solid, and Russia seems to be picking up its pace.

As soon as the US debt limit crisis is papered over, the focus will shift back to Europe. Italy’s budget deficit is small (relatively, anyway), but its debt to GDP ratio is huge and the average maturity of its bonds is only about five years. And needless to say, Italy is no Greece. That said, Europe’s overall fiscal position is better than that of the US, Japan, Britain (which is, despite a 13% of GDP budget deficit, becoming a mini safe haven) so the recent moves towards a German-controlled “eurobond” has diminished the risks of contagion.

STRATFOR provides food for thought with Germany’s Choice: Part 2.

8. Where can investors go? In the past few days, we’ve had the bizarre sight of investors, frightened by the rising turbulence and concerns about low growth, scurrying into the “safe haven” of US Treasuries; issued by the same institution that will not have money to pay the bills in a few days! Well, what can I say… Investors aren’t rational creatures. And it does illustrate the massive reputational advantage still held by the US… a reputational advantage that brings it massive benefits (very low interest rates, most of the international trade in commodities being denominated in its currency, etc) that its more rational politicians will be very unwilling to squander.

Nonetheless, this doesn’t change the fact that no matter how this debt limit issue is going to be resolved in the coming days and weeks, in the longer term US hegemony is unsustainable. That is because its fiscal position is unsustainable, and it is unsustainable because its political system is fundamentally dysfunctional. The Republicans want cuts in spending, but not enough to wipe out the deficit (since some influential lobbies like the MIC, Big Oil, agriculture, etc. are to be protected); the Democrats want to keep entitlements spending and military spending largely as is but increase revenues, but the Republicans are unwilling to raise taxes an iota, not even on natural resource companies and high income earners. It is an idiot’s limbo whose only foreseeable resolution is through a debt trap / default or massive inflation.

The only thing the current antics are doing is, by giving cause to doubt the creditworthiness of the US (previously unthinkable), the politicians are merely bringing forward the day of reckoning.

9. Whither commodities? It will basically be a race between these two forces:

  • Recession – and hence falling demand – in the fiscally bankrupt Western nations.
  • Stagnant oil supplies (or the onset on rapid decline); rising demand from China to fill any gap left by falling consumption in the West; and investors fleeing from stock-markets and indebted government-issued papers for commodities, where the long-term trend is now certainly for prices to go up.

Which one will win out in the next few months? I don’t have a fucking clue. If I did, I’d be out there gambling on the commodity markets.

One thing I would (still) recommend doing is investing in US credit default swaps; even if the debt limit crisis is amicably resolved, it is still a great long-term play.

us-cds

10. One final article: Emerging markets could be the new safe haven for investors.

It is bizarre that Russia, a country with almost zero debt and a tiny budget deficit, or China, or dozens of other fiscally sustainable countries are rated much worse (and have higher CDS spreads on their bonds) than a country like the US or the UK. Arguably even Argentina is a less risky investment at this point.

(Republished from Sublime Oblivion by permission of author or representative)
 
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So news is in that Britain’s next government is going to be a Tory-Lib Dem coalition, bringing an end to thirteen years of New Labour dominance. At a time of profound economic uncertainty and the imminent return of Great Power politics, it is pollyannish to believe that any British government could resolve Britain’s manifold problems without incurring big social costs. That said, this coalition is likely the UK’s best chance of pulling through in salvageable shape.

Let me recap. First, the UK has a budget deficit of 13% of GDP and a debt to GDP ratio of 80% for 2010. (For comparison, the figures for defaulting Argentina in 2001 were 6.4% and 62%, respectively). According to PricewaterhouseCoopers, “Britain would have to make across-the-board budget cuts of 5% a year to come close to cutting the deficit in half by 2014″ – and that assumes an economic upturn that may not materialize due to Britain’s deindustrialization, high energy costs, and the growing crisis in the Eurozone. (If Britain doesn’t make deep cuts soon, a descent into a Greek-style compound debt trap is inevitable). Second, the UK’s abysmal energy policy under New Labour – ignoring the depletion of the North Sea gas fields, declining to invest in new generating capacity, and not concluding long-term gas supply contracts – has made chronic electricity shortages all but inevitable by 2015. Third, separatist undercurrents are ever present. Not very visible now, granted, but that tends to change when a state comes under severe socio-economic pressure. Overall, I would say all this qualifies as a “bad situation” for Britain.

But why is a blue-yellow coalition going to make the best of it? For the simple reason that combined, their set of priorities is near optimal, and each will hopefully be able to check the other’s less savory tendencies. I will be drawing from this excellent website explicating the positions of British party candidates on major issues (h/t Fistful of Euros).

Take taxes and spending. The former will have to rise, the latter will have to fall. This is not an ideological statement, it is a matter of fact. The alternative is default, either outright or inflationary, and a forced readjustment. And the ruling parties are in tune with this reality. Only 28% of Tory and 41% of Lib Dem candidates believe that “Britain should increase spending on public sector services” despite the recession, compared with 61% of Labour candidates. This isn’t because they are nasty neoliberals. Some 76% of Lib Dems and even 60% of Tories believe that any tax increases should be “disproportionately” paid by higher earners. Big majorities in every British party are averse to higher inequality. In today’s Britain, we are all social democrats. ;)

The Lib Dems and Tories are also the best bet for a balanced foreign policy. Elements of the Conservative Party (including one “e-friend” and successful local candidate) have expressed an interest in improving relations with Russia, which is a very wise move considering its bleak natural gas and energy outlook. Nick Clegg, the leader of the Lib Dems and to be Deputy PM, “has worked extensively in the post-Soviet bloc”. This will be a welcome change from New Labour’s Russophobia. What isn’t so good is that the Tories are one of the most bellicose parties, with only 39% of them saying they would not support a strike against Iran and 67% supporting British troops staying on in Afghanistan “as long as they are needed” (which is historically synonymous with “until you go bankrupt”). That said, their views on these matters are in line with all the other mainstream parties. The only pacificists are on the fringes – the Green Party (good intentions, no realism) and the BNP (which views these wars as Zionist projects).

Only 6% of Lib Dems and 30% of the Conservatives (that is, their reactionary wing) support beginning negotiations to exit the European Union. That would be an idiotic idea. Now I’m not saying that Britain should integrate further with a European Union that is being riven apart by economic crisis and self-interested nationalisms. But maintaining a foothold in it (and a veto!) is a very useful mechanism for sabotaging moves towards European federalism and manipulating the balance of power on the mainland on the cheap, not to mention the markets it provides. To their credit, most Tories realize this.

In this section I should warn you that my views here are colored by a social liberal bias. (But this isn’t critical – the most important issues that will define Britain’s near future are in how it handles its economic, fiscal, and energy predicament, not on how many gay rights or CCTV cameras it acquires). I should stress that the modern Conservatives are not a party of social reactionaries, Labour propaganda to the contrary. Now there is certainly a large undercurrent of social conservatism there, in contrast to the three “progressive” parties – Labour, the Lib Dems, and the Greens. But these reactionary tendencies on immigration or climate change will be countered by the Liberal Democrats. And with the sole exception of New Labour, all parties agree that there “are too many CCTV cameras in Britain”. In my opinion, not only is the UK’s surveillance culture insidious, it is also a waste of money and resources.

Finally, and most importantly, a blue-yellow coalition really is the best of all possible worlds. It kicks out Labour, just like the voters wanted to. It prevents the Conservatives from becoming entangled with the national-ethnic parties or kooks like the UKIP and the BNP. It presents the possibility of electoral reform to modernize Britain’s outdated “first past the post” system. It offers a (kind of) credible commitment to fiscal stabilization, without connotations of Thatcherite social injustice and insufferable moralism. Their foreign policy is moderate and well-tailored to Britain’s national interests. Most importantly, the two parties balance each other out – the Liberal Democrats will be able to nullify the global warming denying, viscerally anti-EU and anti-immigrant Tory reactionaries, while the Conservative mainstream will be able to squash the dafter Lib Dem ideas like getting rid of Trident.

All in all, a good match – and if it holds together, one that may just bring Britain in decent shape through its biggest crisis since the Second World War.

(Republished from Sublime Oblivion by permission of author or representative)
 
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Anatoly Karlin
About Anatoly Karlin

I am a blogger, thinker, and businessman in the SF Bay Area. I’m originally from Russia, spent many years in Britain, and studied at U.C. Berkeley.

One of my tenets is that ideologies tend to suck. As such, I hesitate about attaching labels to myself. That said, if it’s really necessary, I suppose “liberal-conservative neoreactionary” would be close enough.

Though I consider myself part of the Orthodox Church, my philosophy and spiritual views are more influenced by digital physics, Gnosticism, and Russian cosmism than anything specifically Judeo-Christian.