[lbo-talk] India inflation eases to 4.80 pc

Yoshie Furuhashi critical.montages at gmail.com
Thu Jul 5 06:22:53 PDT 2007


On 7/4/07, Doug Henwood <dhenwood at panix.com> wrote:
>
> On Jul 4, 2007, at 11:39 AM, Yoshie Furuhashi wrote:
>
> > There are orthodox capitalist instruments for controlling inflation:
> > raise interest rates, remove state interventions (such as duties on
> > certain food imports), and let the market do its work (though orthodox
> > capitalist policy over all can help guerrilla insurgency against the
> > government grow: "India's Hidden War," 27 October 2006,
> > <http://www.channel4.com/news/articles/ontv/unreported_world/india
> > +indias+hidden+war/248548>).
> > Would Doug recommend them for Iran and Venezuela, which are
> > pressured to implement them by their own capitalists as well as
> > the ruling-class media worldwide?
>
> Progressive governments should be concerned about inflation; it puts
> a real strain on working people, and can undermine political support
> over time. It matters where the inflation is coming from - if it's
> coming from loose monetary policy, big deficit spending, and
> stretching resources then something is going to break. Obviously
> orthodox capitalist policies are not the way to deal with the
> problem. I don't really know what the answer is,

You see, the governments of Iran and Venezuela are aware of the problem. What they want to know is an answer that is not what is recommended by their capitalists and orthodox economists, as well as the ruling-class media worldwide. But essentially leftists, not just you, have no answer to it.

Why don't we study how to run a mixed economy, based on each country's existing strengths and weaknesses?


> but promising things
> you can't deliver and then pushing inflation higher in your attempt
> to try is politically suicidal.

Of course, you can promise little and deliver less to the poor, like the governments of India, Brazil, South Africa, and so on. Promising little and delivering less can be a viable policy for the parties in the relatively prosperous North -- the Democratic Party in the USA is a good example -- but it is very much destructive and can eventually become self-destructive in the South.


> Since I have less than nothing
> invested in the Iranian regime, I'm not going to worry about their
> fate, but I do have a lot of hope for Venezuela, so I'm really
> nervous about seeing prices rise there.

Your view of the world is atomistic, each country for its own in isolation from others, and abstracted from the balance of power of global capitalist imperialism, but that's not the way those who run the government of Venezuela see it, and if they saw it the way you do, they wouldn't stay in power for long. They don't want to go in the direction of "First, imperialists came for Ba'athists, but I did nothing as I was not a Ba'athist; second, they came for Islamists of Iran, Hamas, Hizbullah, and the Muslim Brotherhood, but I did nothing as I was not an Islamist; when they finally came for me, emboldened by the elimination of their enemies in the Middle East, there was no one left to check the empire." The stronger Iran's economy is, the better Iran's government can stand up to the empire, the better it constrains the empire's options and helps Venezuela, Cuba, etc. indirectly, and vice versa. That's the way the Venezuelan as well as Cuban government thinks. Such is the strategic perspective that leftists in the West, many of them congenital atomizers, have yet to master.

If they did, they would notice that almost all the governments of Latin America, including most of the ones run by center-left parties, are not as good a friend of the Venezuelan government as the Iranian government:

<http://www.reuters.com/article/bondsNews/idUSN0427923220070704> Venezuela's Mercosur entry unlikely-Brazil senator Wed Jul 4, 2007 12:51PM EDT

BRASILIA, July 4 (Reuters) - Brazil's Congress is unlikely to approve Venezuela's entry into the South American trade bloc Mercosur within a deadline set by Venezuelan President Hugo Chavez, the head of the Senate Foreign Relations Committee said on Wednesday.

"I don't see much possibility of approving the Venezuelan request within three months," Heraclito Fortes, head of the Senate committee, told Reuters.

"Venezuela hasn't met the criteria for entry and Chavez is trying to put the blame on somebody else," Fortes added.

Chavez told Mercosur nations on Tuesday they must approve Venezuela's membership in the trade bloc within three months or he would withdraw the request to join it.

Venezuela last year quit the Andean trade bloc to join political allies Brazil and Argentina in Mercosur.

But industry leaders in Brazil have repeatedly warned that Chavez wants to use the group as a regional platform for his political agenda and would undermine their trade interests.

They are also concerned that Chavez's nationalization of key industries and growing controls over media could prevent the European Union from relaunching trade talks with Mercosur.

Brazil's government recently urged Chavez to make a "gesture of good will" following a spat between the leftist leader and Brazil's Senate, which criticized Chavez for the recent closure of an opposition television station.

"He has to comply not only with trade norms but also with democratic norms," said Fortes, who is a member of the opposition Democratas party.

<http://www.iht.com/articles/ap/2007/07/04/business/LA-FIN-Venezuela-Mercosur.php> Chavez says Venezuela will withdraw Mercosur bid if lawmakers don't act soon

The Associated Press Tuesday, July 3, 2007

CARACAS, Venezuela: President Hugo Chavez said Tuesday that Venezuela will withdraw its bid to join South America's trading bloc if Brazilian and Paraguayan lawmakers do not approve his country's membership before September.

Chavez — a self-described socialist — sees Mercosur as a means for South American nations to unite against U.S. economic and political influence in the region. But he said Mercosur member countries appear unwilling to break with U.S.-style capitalism.

"We are not desperate to enter Mercosur and much less so when we feel that there's little willingness within Mercosur for change," Chavez said in a nationally televised speech.

Brazilian lawmakers have demanded Venezuela apologize for recent statements in which Chavez compared them to a "pirate's parrot," suggesting they were echoing U.S. criticism of his government's decision last month not to renew the license of an opposition-aligned TV station.

"Venezuela does not have to present an apology," Chavez said.

Mercosur leaders have approved Venezuela's entry into the bloc, but the deal must still be approved by Brazilian and Paraguayan lawmakers. The legislatures of Argentina, Uruguay and Venezuelan already have given their approval.

Senator Sergio Zambiasi, president of the Brazil's Mercosur Parliamentary Committee, said that lawmakers in Brasilia were unlikely to approve Venezuela's entry before September.

"We are making an effort to speed it up ... but I cannot guarantee that it will be approved before September," Zambiasi said.

"No one is going to set a deadline for any nation. Not even us," said Dilma Rousseff, chief of staff to Brazilian President Luiz Inacio Lula da Silva, according to the Agencia Estado news agency. "No one establishes a deadline for us and we don't establish a deadline for anyone."

Government opponents accuse Chavez — a close ally of Cuban leader Fidel Castro — of putting anti-U.S. sentiment and leftist ideology before Venezuela's economic interests. __

Associated Press writer Vivian Sequera contributed to this report from Brasilia, Brazil.

-- Yoshie



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