Hugo Chavez: 'Capitalism needs to go down'

AP Photo/ISNA, Mona Hoobehfekr)
from Breitbart.com
By NASSER KARIMI
Associated Press Writer

TEHRAN, Iran (AP) - Venezuelan President Hugo Chavez on Friday ridiculed the G-20 summit's attempts to deal with the global financial meltdown, saying that capitalism is in crisis and must end.

Chavez criticized the G-20 nations' pledges of more than a trillion dollars for lending to struggling countries at Thursday's summit in London, calling it "the same medicine that's killing the patient—a trillion dollars ... more money for a bottomless pit."

Speaking during a visit to Iran, the Venezuelan leader said the plans by the Group of 20 industrial and developing countries would strengthen "one of the great guilty ones behind the crisis: the International Monetary Fund."

The IMF and the World Bank are "tools of imperialism" and must be eliminated, Chavez said.
In earlier remarks, he also blamed the United States and Britain, calling them "the most guilty" for the financial crisis sweeping the globe because of the financial model "they've been imposing for years."

"It's impossible that capitalism can regulate the monster that is the world financial system, it's impossible," Chavez told Venezuela's state TV late Thursday. "Capitalism needs to go down. It has to end. And we must take a transitional road to a new model that we call socialism."

Iran's president, Mahmoud Ahmadinejad, shared that critique, saying "some decisions by the world leaders cannot restore dead imperialism."

The two leaders, appearing Friday at the inauguration of joint commercial bank, referred to their nations as the "G-2." In recent years, Chavez and Ahmadinejad—both well-known for their anti-U.S. rhetoric—have boosted economic and political ties.

The G-20 leaders on Thursday promised $1.1 trillion for lending to struggling countries. They also vowed major efforts to clean up banks' tattered balance sheets, get credit flowing again, shut down global tax havens and tighten regulation over hedge funds and other financial high-flyers in the U.S. and elsewhere.

Chavez said the summit's efforts were not what the world needs "in the face of the great crisis of global capitalism."

Chavez's own economic program to institute socialism in Venezuela could slow as his country's oil-dependent economy suffers from falling crude prices. Inflation there has soared above 30 percent, eroding Venezuelans' salaries.

In his decade in power, Chavez has boosted state control over the economy and spent heavily on social programs meant to increase his popularity. [sounds like what Obama is doing!]
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The Quiet Coup

Image credit: Jim Bourg/Reuters

from The Atlantic

One thing you learn rather quickly when working at the International Monetary Fund is that no one is ever very happy to see you. Typically, your “clients” come in only after private capital has abandoned them, after regional trading-bloc partners have been unable to throw a strong enough lifeline, after last-ditch attempts to borrow from powerful friends like China or the European Union have fallen through. You’re never at the top of anyone’s dance card.

The reason, of course, is that the IMF specializes in telling its clients what they don’t want to hear. I should know; I pressed painful changes on many foreign officials during my time there as chief economist in 2007 and 2008. And I felt the effects of IMF pressure, at least indirectly, when I worked with governments in Eastern Europe as they struggled after 1989, and with the private sector in Asia and Latin America during the crises of the late 1990s and early 2000s. Over that time, from every vantage point, I saw firsthand the steady flow of officials—from Ukraine, Russia, Thailand, Indonesia, South Korea, and elsewhere—trudging to the fund when circumstances were dire and all else had failed.

Every crisis is different, of course. Ukraine faced hyperinflation in 1994; Russia desperately needed help when its short-term-debt rollover scheme exploded in the summer of 1998; the Indonesian rupiah plunged in 1997, nearly leveling the corporate economy; that same year, South Korea’s 30-year economic miracle ground to a halt when foreign banks suddenly refused to extend new credit.

But I must tell you, to IMF officials, all of these crises looked depressingly similar. Each country, of course, needed a loan, but more than that, each needed to make big changes so that the loan could really work. Almost always, countries in crisis need to learn to live within their means after a period of excess—exports must be increased, and imports cut—and the goal is to do this without the most horrible of recessions. Naturally, the fund’s economists spend time figuring out the policies—budget, money supply, and the like—that make sense in this context. Yet the economic solution is seldom very hard to work out.

No, the real concern of the fund’s senior staff, and the biggest obstacle to recovery, is almost invariably the politics of countries in crisis.

Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders

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