GOP to Press for Social Agenda in Debt Ceiling Negotiations

Via Politico:

One day after being named to a presidential task force to negotiate deficit reduction, House Majority Leader Eric Cantor fired off a stark warning to Democrats that the GOP “will not grant their request for a debt limit increase” without major spending cuts or budget process reforms.

The Virginia Republican’s missive is a clear escalation in the long-running Washington spending war, with no less than the full faith and credit of the United States hanging in the balance.

In the most recent budget battle — over a six-month spending bill — Republican leaders carefully avoided threatening to shut down the government. Now, Cantor says he’s ready to plunge the nation into default if the GOP’s demands are not met. People close to Cantor say that he hopes to make clear that small concessions from Democrats, including President Barack Obama, will not be enough to deliver the GOP on a debt increase.

You can rest assured when the GOP talks about "major spending cuts," they really mean elimination of the social safety net of programs like Social Security, Medicare/Medicaid, and Unemployment Insurance that the American Liberal Republic of 1933 through 1969 had the foresight to enact. Major spending cuts is GOP-speak for the repeal of the 20th Century.

The Republicans are playing a dangerous and irresponsible game that will have global repercussions should the debt ceiling not be authorized. It is seems bizarre but today's GOP seems so willingly ready to collapse the global economy to test economic theories that were discredited repeatedly throughout the Age of Economic Liberalism, the 115 year period from 1815 through 1929 that saw the rise of industrial capitalism and laissez-faire state.

Financial panics struck the global economy in 1819, 1837, 1857, 1873, 1894, 1907, and 1929.  It was only through the financial regulations and the social insurance programs that began to be enacted in response of the last of these great crises that the modern world took shape. This world has been under threat since the rise of Reaganism but not even Ronald Reagan was foolish enough to risk a collapse of the established world order.

The argument to "just let markets function" assumes political stability and social peace. But a system where the gains are concentrated among a few winners, as they have been in the US now for 30 years, won't remain stable. The experience of Latin America has been very clear. In periods where there is a narrowing of social inequality, there has been marked social peace and cohesion. But when the region flirted with either laissez-faire capitalism or its bastardized descendent of neo-liberalism, the region has convulsed. 

Buckle up, we're in for a bumpy ride.

Elections in Perú

Peruvians went to the polls on Sunday to choose a successor to outgoing Alan García, whose neo-liberal policies generated uneven growth during this his second term in office deepening the social chasm. So unpopular was García that his APRA party, Perú's oldest and most established political party, did not even field a candidate. Instead Peruvians chose amongst a crowded field of 11 with five main candidates vying for the post.

Preliminary results from the Office of National Electoral Processes (ONPE) with 72 percent of the votes counted gave the leftist nationalist candidate Ollanta Humala 29.3 percent, followed by the right-wing Keiko Fujimori, daughter of the jailed former President, with 22.9 percent and the neoliberal former Prime Minister Pedro Pablo Kuczynski with 21.1 percent. Former President Alejandro Toledo finished fourth with 15.2 percent. Former Lima Mayor Luis Castañeda finished fifth with 10.9 percent continuing a trend since 1912 in which no former mayor of Lima has won the presidency. It will likely be days before a final tally is known as votes trickle in from remote regions in this Andean nation.

With no candidate winning a 50 percent plus 1 share of the vote, the top two vote getters will head to a run-off on June 5th. Exit polling seems to suggest that Keiko Fujimori is likely the better positioned to take second place and face Ollanta Humala. Fujimori did especially well in the north, formerly an APRA stronghold while Humala carried the south. The race sets up a very divergent ideological contest.

Exit polls in Perú's elections also show political parties led by Ollanta Humala and Keiko Fujimori winning the most seats in Perú's Congress. Of the 130 seats to be filled for the new Congress that opens on July 28, Gana Perú, the party led by Ollanta Humala, will get 39 seats, according to exit polls by CPI. Fuerza 2011, led by Keiko Fujimori, will get 31 seats. Perú Posible, Alejandro Toledo's party, seems set for 23 seats while the Alianza por el Gran Cambio, the party of Pedro Pablo Kuczynski, looks to gain 16 seats. APRA is headed for its worst showing ever since it was allowed to contest elections in the 1980s (the party was banned for most of its existence) with only six seats. Another party Solidaridad Nacional, the party of former Lima mayor Luis Castañeda, won 15 seats.

A few words on Ollanta Humala since the American media is likely to paint him as another Hugo Chávez. This is his second run for the presidency having finished as the runner up to Alan García in 2006. Humala, 48, is a former military officer who like Chávez led an abortive military uprising in the waning days of the Fujimori regime. But Humala, especially in the five years since his 6 point loss to García, has spent time allying himself to the more pragmatic Latin American left. Indeed, in this campaign his primary advisors was the Brazilian team that help elect Luiz Ignácio Lula da Silva.

Humala is promising a "grand transformation" in Perú and no doubt will seek to undo the neo-liberal policies that Fujimori and García governments have set in place. Humala wants to increase taxes on mining companies, stop natural-gas exports, increase state control over certain sectors of the economy and better protect indigenous communities from logging and oil extraction industries. 

Elections in Perú

Peruvians went to the polls on Sunday to choose a successor to outgoing Alan García, whose neo-liberal policies generated uneven growth during this his second term in office deepening the social chasm. So unpopular was García that his APRA party, Perú's oldest and most established political party, did not even field a candidate. Instead Peruvians chose amongst a crowded field of 11 with five main candidates vying for the post.

Preliminary results from the Office of National Electoral Processes (ONPE) with 72 percent of the votes counted gave the leftist nationalist candidate Ollanta Humala 29.3 percent, followed by the right-wing Keiko Fujimori, daughter of the jailed former President, with 22.9 percent and the neoliberal former Prime Minister Pedro Pablo Kuczynski with 21.1 percent. Former President Alejandro Toledo finished fourth with 15.2 percent. Former Lima Mayor Luis Castañeda finished fifth with 10.9 percent continuing a trend since 1912 in which no former mayor of Lima has won the presidency. It will likely be days before a final tally is known as votes trickle in from remote regions in this Andean nation.

With no candidate winning a 50 percent plus 1 share of the vote, the top two vote getters will head to a run-off on June 5th. Exit polling seems to suggest that Keiko Fujimori is likely the better positioned to take second place and face Ollanta Humala. Fujimori did especially well in the north, formerly an APRA stronghold while Humala carried the south. The race sets up a very divergent ideological contest.

Exit polls in Perú's elections also show political parties led by Ollanta Humala and Keiko Fujimori winning the most seats in Perú's Congress. Of the 130 seats to be filled for the new Congress that opens on July 28, Gana Perú, the party led by Ollanta Humala, will get 39 seats, according to exit polls by CPI. Fuerza 2011, led by Keiko Fujimori, will get 31 seats. Perú Posible, Alejandro Toledo's party, seems set for 23 seats while the Alianza por el Gran Cambio, the party of Pedro Pablo Kuczynski, looks to gain 16 seats. APRA is headed for its worst showing ever since it was allowed to contest elections in the 1980s (the party was banned for most of its existence) with only six seats. Another party Solidaridad Nacional, the party of former Lima mayor Luis Castañeda, won 15 seats.

A few words on Ollanta Humala since the American media is likely to paint him as another Hugo Chávez. This is his second run for the presidency having finished as the runner up to Alan García in 2006. Humala, 48, is a former military officer who like Chávez led an abortive military uprising in the waning days of the Fujimori regime. But Humala, especially in the five years since his 6 point loss to García, has spent time allying himself to the more pragmatic Latin American left. Indeed, in this campaign his primary advisors was the Brazilian team that help elect Luiz Ignácio Lula da Silva.

Humala is promising a "grand transformation" in Perú and no doubt will seek to undo the neo-liberal policies that Fujimori and García governments have set in place. Humala wants to increase taxes on mining companies, stop natural-gas exports, increase state control over certain sectors of the economy and better protect indigenous communities from logging and oil extraction industries. 

Elections in Perú

Peruvians went to the polls on Sunday to choose a successor to outgoing Alan García, whose neo-liberal policies generated uneven growth during this his second term in office deepening the social chasm. So unpopular was García that his APRA party, Perú's oldest and most established political party, did not even field a candidate. Instead Peruvians chose amongst a crowded field of 11 with five main candidates vying for the post.

Preliminary results from the Office of National Electoral Processes (ONPE) with 72 percent of the votes counted gave the leftist nationalist candidate Ollanta Humala 29.3 percent, followed by the right-wing Keiko Fujimori, daughter of the jailed former President, with 22.9 percent and the neoliberal former Prime Minister Pedro Pablo Kuczynski with 21.1 percent. Former President Alejandro Toledo finished fourth with 15.2 percent. Former Lima Mayor Luis Castañeda finished fifth with 10.9 percent continuing a trend since 1912 in which no former mayor of Lima has won the presidency. It will likely be days before a final tally is known as votes trickle in from remote regions in this Andean nation.

With no candidate winning a 50 percent plus 1 share of the vote, the top two vote getters will head to a run-off on June 5th. Exit polling seems to suggest that Keiko Fujimori is likely the better positioned to take second place and face Ollanta Humala. Fujimori did especially well in the north, formerly an APRA stronghold while Humala carried the south. The race sets up a very divergent ideological contest.

Exit polls in Perú's elections also show political parties led by Ollanta Humala and Keiko Fujimori winning the most seats in Perú's Congress. Of the 130 seats to be filled for the new Congress that opens on July 28, Gana Perú, the party led by Ollanta Humala, will get 39 seats, according to exit polls by CPI. Fuerza 2011, led by Keiko Fujimori, will get 31 seats. Perú Posible, Alejandro Toledo's party, seems set for 23 seats while the Alianza por el Gran Cambio, the party of Pedro Pablo Kuczynski, looks to gain 16 seats. APRA is headed for its worst showing ever since it was allowed to contest elections in the 1980s (the party was banned for most of its existence) with only six seats. Another party Solidaridad Nacional, the party of former Lima mayor Luis Castañeda, won 15 seats.

A few words on Ollanta Humala since the American media is likely to paint him as another Hugo Chávez. This is his second run for the presidency having finished as the runner up to Alan García in 2006. Humala, 48, is a former military officer who like Chávez led an abortive military uprising in the waning days of the Fujimori regime. But Humala, especially in the five years since his 6 point loss to García, has spent time allying himself to the more pragmatic Latin American left. Indeed, in this campaign his primary advisors was the Brazilian team that help elect Luiz Ignácio Lula da Silva.

Humala is promising a "grand transformation" in Perú and no doubt will seek to undo the neo-liberal policies that Fujimori and García governments have set in place. Humala wants to increase taxes on mining companies, stop natural-gas exports, increase state control over certain sectors of the economy and better protect indigenous communities from logging and oil extraction industries. 

US-Latin American Relations Heading South

The US Under-Secretaty of State for Latin American Affairs Arturo Valenzuela has set off a firestorm in Buenos Aires when making remarks critical of Argentina's legal protections for foreign investment. The remarks have so angered the Argentines that Foreign Minister Jorge Taiana sought out Secretary of State Hillary Clinton on the margins of the World Climate Conference in Copenhagen to lodge a protest.

What set off the fireworks were comments by the Under-Secretary in Buenos Aires as his initial trip to region since being confirmed was wrapping up Wednesday. Valenzuela relayed some criticism he had heard from the representatives of US companies doing business in Argentina about the local investment climate.

"I noticed a change: In 1996 there was much more enthusiasm and intentions to invest; today I heard concerns about legal insecurity and concerns about economic management; unless there are changes, the expected investments can't be carried out," he told local press on Wednesday. Valenzuela was also the Under-Secretary for Latin American Affairs during the Clinton Administration, the hey-day of the neo-liberal Washington Consensus when free markets economic policies were all too often rammed down Latin America's throats.

That comparison to 1996 and the criticism of legal protection regime for foreign investment (inseguridad jurídica) is what triggered a ferocious response not just from the Argentine government of Cristina Fernández de Kirchner but from various sectors within Argentina that has been front-page news for the last two days.

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