Monday, December 04, 2006

Chavez Wins!

Really good news.

Green Left report:

The wealthy elite, which back the opposition and own the media, are terrified of the growing radicalisation of Venezuela’s working people. Chavez explicitly made the elections a referendum on his stated goal of constructing a “socialism of the 21st century”, and dramatically deepening the revolutionary transformation of the country. Yet again, the working people sent a powerful message: there should be no return to the past — the revolution must continue.

The elite are running out of options.

Note the ominous tone of that last line, though.


Larry Elliott has a piece in today's Guardian about the gathering financial crisis in the US. He suggests that the only real option the Federal Reserve has is to cut interest rates and risk higher inflation. This should have the happy effect of cutting the price of US exports, leading, therefore, to increased US manufacturing competitiveness. But, surely, there is a reason why the Federal Reserve has refused to take this step for such a long time - one which, as far as I can make out, neo-classical orthodoxy would recommend (because market forces, supply and demand, tend, spontaneously, towards equilibrium innit). Elliott doesn't mention this, but (in my limited understanding) US global hegemony depends, in great part, on its financial clout - on Wall Street's centrality to the whole financial system and on the dollar's status as the world's preferred trading and reserve currency. Peter Gowan refers to the system of US hegemony the 'Dollar Wall Street Regime' for good reason. If the dollar is weakened significantly then so is the DWSR and so, in turn, then, is US power. Maybe I've got this all wrong - but the current crisis isn't just some technical concern with exchange rates, inflation and manufacturing competitiveness. The crisis runs much deeper than that - the dilemma the Federal Reserve faces incorporates extremely important geopolitical and hegemonic concerns. That's why the Federal reserve is dithering, it seems to me.

Dislaimer: of course, you shouldn't listen to me because I'm not a trained economist and I don't really know what I'm talking about.

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