On Barack Obama’s comments about the redistribution of wealth: is he a Marxist?

Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

Seven years ago Obama expressed his dissatisfaction against the United States Supreme Court, considering that this institution has not ever been involved in the redistribution of wealth. And recently, Obama said that if elected president he would redistribute wealth.

These statements are now used by John McCain and his supporters to point out that Barack Obama is a Marxist. However, we have to say that these McCain’s attacks on Obama are not well founded.

The concept of "Redistribution of Wealth" or "Redistribution of Income" is not a socialist idea. It’s true that in theory the communists aspire to a more equal society, but that does not mean that socialism is the only ideology that includes the phrase "Distribution of Wealth" in its proposals.

The ideal of sharing the wealth is found in many political theories. It’s even implicit in ancient texts. The difference lies in how the redistribution is proposed. For example, there are those like us who think that taxes, education programs, opportunities for upward social mobility, charitable works and some state institutions can be used to reduce inequality. But there are also the socialists, who think that abolishing private property is the only way to redistribute wealth.

Therefore, Barack Obama´s remarks on redistribution of wealth are not sufficient to consider him a socialist. To do so it would be required that he affirm, or practice, ideas such as abolishing private property, dictatorship and centralization of power, support for communist guerrillas, attacks on Christianity, one-party system and elimination of individual freedoms.

So, it is wrong to assert that Barack Obama is a communist by believing in the Redistribution of Wealth. Rather, McCain made a big mistake accusing Obama of Marxist by expressing this idea. It could be misunderstood by the public as if the Republican candidate does not share the ideal of redistributing income.

Ironically, McCain also has a plan in his government’s program to combat inequality, but obviously he doesn’t know that such policies are based on the Redistribution of Wealth concept.

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Barack Obama's victory in 2008 would give a moral blow to the Latin American radical leftism

Authors:
José Alberto López Rafaschieri and Luis Alberto López Rafaschieri
www.morochos.net

Some people are worried because they believe that if Barack Obama wins the presidency of the United States, will not be as critical as McCain against the abuses of the Latin American radical leftism.

But if we see it from a different point of view, perhaps Barack Obama also represents advantages for those who are opposed to the communist project that Hugo Chavez and his imitators want for Latin America.

We believe this because Barack Hussein Obama II is not a neoconservative. By contrast, Obama is a critic of the hard-line Republican, so it cannot be accused of defending the oil companies, or be a spokesman of the United States major corporations.

In addition, Barack Obama has an Arab name and is African-American -his father was Kenyan- something that will prevent him from being linked to the Anglo-American elite.

And finally, Barack Obama has always been a critic of the George Bush style of government. Especially the lack of diplomatic achievements and the way Bush conducted the war in Iraq.

Characteristics that make Obama, a man who represents everything opposite of what the Latin American left say about the United States.

As a result, if Barack Obama becomes the next U.S. president, the leftist Latinos will receive a great surprise in finding that, although Obama is not a neoconservative, he will oppose, in a different way, to the authoritarian governments and to the antidemocratic proposal of the Latin American radical left.

An opposition that will be very detrimental to Hugo Chavez and his imitators, since it would mean for the Socialists being criticized by someone, that in spite of racism and not being the flagship of the United States dominant groups, knew how to succeed with intelligence and democratic ideas.

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The 2008 United States financial crisis: Origin, government action and ideological implications

Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

Due to the bankruptcy of four banks in the United States, the international radical left, and some people who don't know what they are talking about, say free market doesn't work and democracy should be replaced by socialism.

Over there we have seen people like Teodoro Petkoff in Venezuela, stating that "Milton Friedman must be rolling in his grave, because the State had to lend the market a hand." As if the free market theories suggest the government extinction.
After, we listened to Cristina Kirchner asserting "the financial crisis in United States shows that the Washington Consensus failed." As if the radical left ideas have had better results than the political models based on freedom.
And then we saw Hugo Chavez saying that "capitalism is the responsible for the United States financial crisis" and "the next U.S. president will receive a sinking ship." What shall we say then about socialism's achievements? the worst political model that humanity has known in the past one hundred years!
But we will go beyond words, look briefly what happened and realize the reality.

Origin of the crisis
During the years 2001 and 2002, the United States was on the brink of deflation. This forced the Federal Reserve's decision to put interest rates at 1%, trying to stimulate the economy.
At that time, financial institutions in the United States borrowed billions of dollars from the Federal Reserve, taking advantage of the low interest rate, and spread the funds in the American credit system, primarily in the mortgage markets.
Everything was going perfectly and banks made easy money, because the business was simple: borrow at 1% and lend at 5%.

But not only banks tried to take advantage of low interest rates. Like financial institutions, many middle-class buyers sought for loans to buy houses and enjoy cheap money.
Unfortunately, the happiness did not last long. Then came the years of great economic prosperity, from 2003 to 2006, and the Federal Reserve normalized its interest rate, placing it above 5%.
This meant that those who were over-indebted, now had to pay 400% more interest than before. As a result, many debtors could not pay their credits, delinquencies rose to historic levels, hundreds of people lost their properties, banks no longer had any way to get cheap money from the FED and losses reached the financial institutions.

A bearish market makes things worse
Complicating the matters, the U.S. housing market was full of foreclosed properties, which were being liquidated below their natural price.
This means that those who sell receive less money than they paid for. Furthermore, it takes a long time to close deals, due to the amount of offers generated by a lot of people with the same problem.
And as the number of debtors and banks affected is so great, the problem became a crisis.

The government intervenes because democracy is not anarchy

Faced with this situation the government intervenes, because it is the responsible of ensuring economic stability in a democratic nation like the United States. However, those who have a misconception about the free market theories -like Teodoro Petkoff- think that the "invisible hand" of Adam Smith seeks a country where actors perform without regulations.
But simply observing democratic societies where free market has flourished, we can realize that these are the world’s countries with more regulations on the private sector. Clarifying that in democracy, these regulations maintain the private sector linked to the legal system. Quite the opposite of what happens in socialist nations, where governmental action seek to exterminate the private sphere.
It was in democracy and in the countries with free market, where the Rule of Law born and the legal theories reached their maximum progress.
Those who believe that liberalism is proposing a free society without law and government are wrong. That would not be liberalism but anarchism.
Free market cannot exist without the government's supervision. Therefore, the intervention of the U.S. authorities to assist borrowers and banks in trouble is a measure that fits perfectly within the free market paradigms, because democracy implies the existence of a sovereign government, pledged to make everything necessary to help their citizens.

Democratic transparency
Indeed, during this crisis we have seen one of the biggest differences between democracy and dictatorial models.
We see the problem recognition by the U.S. government and the freedom with which the media disseminates news, including criticisms that inform the public.
On the other hand, if this crisis occurred in countries such as Cuba or Venezuela, the government would deny the existence of a financial problem. The journalists with unofficial information would be jailed and the independent media would be accused of conspiracy.
Furthermore, no government official in Cuba or Venezuela would try to resolve anything, because no one could pretend to solve what for them does not exist. This would make things worse, as always happens in dictatorial regimes, enemies of transparency.

Nothing new in this crisis
But back to the United States, the current financial crisis doesn’t represent anything new to democratic societies. As an example remember the risk of deflation in the United States during the years 2001 and 2002. A similar crisis that caused huge losses in the stock market and annihilated giant companies like Enron and Adelphia.
At that time, the enemies of freedom said the same arguments they use now: Free market collapsed and democracy should be replaced by socialism.
Then 2003 came in, economies recovered and democracy once again showed better results than the leftist thought.

Is this the end of the U.S.?
So far, there has been no human power capable of challenging the time. Therefore, we must assume that the United States reign will someday be surpassed. But unfortunately for those who expect the Yankees’ collapse, for now we have to recognize that the United States remains the world's leading power, with no opponent close enough.
Economically, we must consider that 70% of the world's savings are denominated in U.S. dollars, with the American founding fathers images on them. Furthermore, to have an idea of its magnitude, the U.S. economy is equivalent to that of the entire European Union. And it’s the world’s most competitive and innovative economy.
However, for those who still believe that the U.S. economy went bankrupt, or that democracy has come to an end, we present a quite eloquent chart.
Here are the historical records of the Dow Jones industrial index from 1900 to the present. Look at the fall today, it's just a scratch in the meteoric rise that the U.S. economy has experienced over the past hundred years.
Forget leftist fantasies! Democracy and free market continue irrefutably being superior to socialism and leftist ideas.

Click on the image to enlarge it

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Analysis of the OPEC meeting scheduled for Oct. 24, 2008

Authors:
José Alberto López Rafaschieri and Luis Alberto López Rafaschieri
www.morochos.net

Due to the big fall that have taken crude prices in recent months, the Organization of Petroleum Exporting Countries, which controls about 40% of the world's crude production, decided last Monday to call an emergency meeting for the coming Oct. 24.

At this summit, the cartel will analyze the current situation in the oil market, where crude oil, after marking nearly $150 per barrel last July, has been losing about 50% of its value, even falling below $75. It will discuss also the projections for oil demand this year and next, whereas today's OPEC lowered expectations for consumption at 550,000 barrels of crude a day.

In this context, it is expected that OPEC decided to encourage its members to cut one million barrels a day to its production, with the intention of lifting the international oil prices.

We believe that the cut is necessary, because the producers were pressured to produce at maximum capacity during the first half of the year, trying to cope with the uncontrolled escalation in crude prices. It is therefore logical that in this new scenario of low prices, the oil producing countries seek the market rebalance. The difference is that this time they will attempt to contain the fall in prices.

Unfortunately for oil exporters, the world economy is experiencing a crisis that affects with forcefulness the energy consumption, so we do not believe that this OPEC measure will have the enough effect to return the oil to record levels in the coming months. However, a shortage of supply itself may help oil prices fall with less intensity.