Neoliberalism Raises Its Ugly Head in South America: Washington Targets Venezuela, Brazil and Argent

[Judi Lynn]

January 8, 2016
Neoliberalism Raises Its Ugly Head in South America: Washington Targets Venezuela, Brazil and Argentina

by Jack Rasmus

After 9-11, the United States focused its most aggressive foreign policy on the Middle East – from Afghanistan to North Africa. But the deal recently worked out with Iran, the current back-door negotiations over Syria between U.S. Secretary of State John Kerry, and Russia Foreign Minister Sergei Lavrov, and the decision to subsidize, and now export, U.S. shale oil and gas production in a direct reversal of U.S. past policy toward Saudi Arabia – together signal a relative shift of U.S. policy away from the Middle East.

With a Middle East consolidation phase underway, U.S. policy has been shifting since 2013-14 to the more traditional focus that it had for decades: first, to check and contain China; second, to prevent Russia from economically integrating more deeply with Europe; and, third, to reassert more direct U.S. influence once again, as in previous decades, over the economies and governments in Latin America.

Following his re-election in 2012, Obama announced what was called a ‘pivot’ to Asia to contain and check China’s growing economic and political influence. In 2013-14, it was the U.S.-directed Ukraine coup – i.e. a pretext for sanctions on Russia designed to sever that country’s growing economic relations with Europe. But there is yet another U.S. policy shift underway that is perhaps not as evident as the refocus on China or the U.S. new ‘cold war’ offensive against Russia. It is the U.S. pivot toward Latin America, begun in 2014, targeting in particular the key countries and economies of South America – Venezuela, Brazil, and Argentina – for economic and political destabilization as a fundamental requisite for re-introduction of Neoliberal policies in that region.

Venezuela: Case Example of Destabilization

Economic destabilization in its most recent phase has been underway in Venezuela since 2013. The collapse of world oil and commodity prices, a consequence in part of the United States vs. Saudi fight that erupted in 2014 over who controls the global price of oil, has caused the Venezuela currency, the Bolivar, to collapse. The United States raising its long term interest rates the past year has intensified that currency collapse. But U.S. government and banking forces have further fanned the flames of currency collapse by encouraging speculators, operating out of Colombia and the ‘DollarToday’ website, to ‘short’ the Bolivar and depress it still further. U.S. based media, in particular the arch-conservative CATO institute in Washington, has joined in the effort by consistently reporting exaggerated claims of currency decline, as high as 700 percent, to panic Venezuelans to further dump Bolivars for dollars, thus causing even more currency collapse. Meanwhile, multinational corporations in Venezuela continue to hoard more than US$11 billion in dollars, causing the dollar to rise and the Bolivar to fall even more. The consequence of all these forces contributing to collapse of the currency is a growing black market for dollars and shortages of key consumer and producer goods.

More:
http://www.counterpunch.org/2016/01/08/neoliberalism-raises-its-ugly-head-in-south-america/

[COLGATE4]

1. The response of some people to recent election results

in Venezuela and Argentina is fascinating. In their minds, the voting populace of those countries are simply mindless children whose attention is easily distracted and (mis)lead by nefarious entities in foreign countries, principally the U.S. None of the economic fumbles and bumbles brought about by the now deposed idolized socialist regimes had anything to do with the enormous discontent and economic shambles which brought about the popular discontent which replaced these regimes - it's only happening because of outside foreign pressure and interference.

Not unlike the old-time colonial precept that had no faith in the little people of these little countries to actually be able to determine what their system of government should be. Fortunately, these unfortunate souls have the brave socialists, most of whom have never set foot in their countries nor speak a word of their language who are always ready to tell them what they should have done.

[Marksman_91]

4. They must think South American populations are stupid and easy to manipulate

They somehow think they aren't smart enough to say "no" to the "fascist alternative" if an economic crisis befalls them. It's almost like Judi and company think that the people of South America aren't smart enough to realize that their countries' problems are (allegedly, of course) caused by dirty US imperialist hands. It's actually kind of insulting.

[COLGATE4]

5. They are 'taking up the white man's burden', 21st Century

style. The poor little brown people are easily manipulated and not very wordly so they need the help of gringo 'intellectuals' to tell them what's really best for them.

[forest444]

2. Like the GOP in recent decades, Argentina's "pro business" regimes have always been bad for business

Why? Because they work at the behest of a sector that does not want development and growth (large landowners) and of one (the non-bank finance sector) that pretty much only prospers at the expense of everyone else - including most of the job-creating business sectors. This nuance is almost always missed by the "left-is-bad-right-is-good" crowd.

The elite landowning sector in Argentina, for the most part, resents having been overshadowed by commerce and industry - to say nothing of labor unions and the middle class. They mostly view each of these groups as undeserving upstarts who have "stolen" what they believe to be rightfully theirs: economic and political control of Argentina, as a fief.

The non-bank financial sector, on the other hand, has been a serious problem in Argentina for the last 40 years because of its business model - which with some exceptions, is basically predicated on fraud. Their job is to help their clients evade as much of their taxable income as possible; hide as much national income as possible offshore; and promote the kind of government that will gladly pass their speculative losses along to the public at large.

The difference between the crises they periodically create in Argentina and the Wall Street vs. Main Street paradigm in the U.S. is that the Fed has a virtually unlimited capacity to paper over the losses created by high finance heists; Argentina, like most countries, does not.

Consequently every time these two groups (who share many ideological and even personal connections) have succeeded in imposing their people and their policies in Argentina (deregulation, privatization, shock devaluations), the results have been a disaster for both the public at large and business - sometimes catastrophically so, as was the case in 1981 and 2001.

Argentina is already feeling the effects of having these people back in power: most visibly by way of shock devaluation and excessive export tax cuts, which have led producers to deliberately depress domestic demand through a sharp run-up in wholesale prices (30% on average in just a month; but as much as 100% on key food staples such as flour and beef).

True to form, each of these changes, as well as others designed to stifle dissent, have been made by decree with no congressional oversight whatsoever.

The Argentine consumer comes out losing; but the retail and industrial business sectors (the epitome of the "undeserving" businessman, in the view of many large landowners) even more so.

[Judi Lynn]

3. Deep change in one month. Not change for the better, either.

It's clearly not because the "opposition" is trying everything under the sun to create failure for this President, either.

The poor lack the resources, clearly!

Heckuva job, Macri.