The great failure of economic stimulus measures implemented by Barack Obama and George W. Bush

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

In a previous article we explained how the current economic crisis in the U.S. was originated mainly when millions of mortgage borrowers were unable to pay the debts they had with the banks, due to the greatly increased interest rates.

That left many banks and large companies on the verge of bankruptcy and caused the economy to collapse. So, since last year, the Bush administration implemented several measures to counter the situation, which includes multi-million dollar bailout plans for several banks and automakers in trouble.

Then, when Obama assumes the presidency, he offers an economic stimulus package of 787 billion dollars. Money that will go mainly to public spending, tax cuts and assistance for some companies.

However, both leaders have committed the same error, they have invested many millions in major corporations and public spending, but since the recession began they have used very little to minimize the cause of the crisis, this is, to solve the inability that millions of middle-class families have to pay their mortgages. According to government figures, an estimated of 4 million home owners are at high risk of losing their homes, and nearly 9 million families are struggling to cope with their mortgage payments.

Despite this, the only thing that Bush's government and Congress did was pass a law that protected an estimated 400 thousand debtors -we refer to the “Housing and Economic Recovery Act"- and create the "Hope Now Alliance” plan, which has been calculated only help less than 15% of borrowers at risk.

For his part, it was only on February 18 when President Obama introduced a plan to help these families, the "Homeowner Affordability and Stability Plan," which is a program of $75 billion that is just in draft and has not been discussed. Indeed, in his last speech -presidential address to Congress February 24- the plan was barely mentioned.

Meanwhile, the U.S. economic crisis has several months causing problems in families that have not been sufficiently supported by the government -neglecting the real cause of the problem- with the American politicians focusing the debate on giving more money to large corporations or tax cuts.

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El Salvador presidential elections, March 15, 2009: Polls

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

The next March 15th Salvadorans will come to the polling stations to elect a new president. Following are the studies about the preferences of voters for this election:

According to a poll by Consulta Mitofsky released on February 07, 2009. 37.7 per cent of respondents would vote for Mauricio Funes of the Farabundo Martí National Liberation Front (FMLN), while 35.1 per cent would support Rodrigo Ávila of the ruling Nationalist Republican Alliance (ARENA) and 18,9 per cent are not sure. This survey was made using face-to-face interviews with 1,000 Salvadoran adults, conducted from Jan. 23 to Jan. 25, 2009. The margin of error is 3.2 per cent.

But a more recent survey carried out between 12 and 16 February by Jabes Market Research, had the following results: Rodrigo Avila 40%, Mauricio Funes 37% and 23% do not know who to vote for, with a margin of error of 2,75%. The study was conducted among 1501 voters. This is the first time the ARENA's candidate are leading a poll.

Update of March 3, 2009

Borge & Asociados made a new survey from February 16 to February 22, 2009. The results were: Rodrigo Avila 40,9%, Mauricio Funes 40,0%, Undecided 19,1%. Sample size of 1200 Salvadorans. Margin of error of 2,8%.

Click on the image to enlarge it

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A comment on the Obama's decision to close Guantanamo

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

With the closure of the Guantanamo prison camp, Barack Obama seeks to give a new international image to the U.S. government, trying to show how different is his administration from the government of George W. Bush.

But Obama's plan for Guantanamo does not specify what will be done with the more than 200 people arrested for their links with Al Qaeda, where they will be brought, what are their names, which legal system applies and under what charges they were arrested.

Accordingly, the Obama's decision to close Guantanamo, what appears is simply a symbol that does not solve the real flaws of these arrests.

Closing Guantanamo, without legalizing the status of its detainees, is not exactly what we would call a change in the Bush's methods and take into account the views of the rest of the world, as Obama promised in his campaign.

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The Hispanic vision of the United States 2008-2009 financial crisis is different from that in other parts of the world

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

The U.S. Financial crisis has caused a great stir in the media worldwide. At any time, any TV channel or newspaper, is referring to the topic in some way. And it's easy to notice that the different countries' media coverage of the fact, it is often determined by the cultural biases of each region.

For example, when we see how the US, European and Asian media cover the current financial crisis, we noted that their commentators analyze the risks for savers, the consequences for small investors and those with retirement accounts. Some are also wondering about the best use of money in such circumstances and what are the economic effects for the middle class. While others argue about what should be the government's actions to deal with the crisis.

However, when we see the Latin American media, we found a relatively unanimous opinion among analysts, journalists and bloggers. The Latino commentators mostly agree that this is the end of the capitalistic financial system and the death of the free market as the best proposal for economic development.

Almost all Latino analysts repeat phrases like these: "The capitalist model as we know it is dead, the financial system that existed since the year xxxx is over", or "the free market theory is no longer valid". Words that are pronounced as if they were proclaiming religious phrases.

In this sense, the general opinion of Latin America's experts says that the current crisis in financial markets is to capitalism, which was the Berlin Wall's fall to socialism. And famous Latin Americans advised to discard the theories of free markets, to find the solution to the financial crisis in the United States in the most recent meeting of the Socialist International.

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Venezuela Amendment 2009: Analysis of the results of the February 15th referendum to approve the indefinite reelection

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

On February 15th, the CNE announced that the Venezuelans approved the indefinite reelection for all popular elected officials with a vote of 54.36% for the "Yes" and 45.63% for the "No". In this event, we believe that there are a number of conclusions that should be evaluated by chavists and opponents.

First, it is a fact that for the next presidential election -2012- the government's candidate will be Hugo Chavez again.

Second, although Chavez has won the right to run for reelection indefinitely, he did it by a margin of just 8.7%, which means that technically the Venezuelans are split in half . This is important because it indicates that the opposition has enough chance to beat the current Venezuelan president in 2012, considering that Chavez will lose popular support during the next 4 years, because he will not solve the problems of crime, political corruption, inflation and homelessness experienced by Venezuelans.

Third, assuming the recent election results, what will happen if the opposition takes at least 45% of parliamentary positions in the National Assembly elections scheduled for 2010? In this scenario the opposition would have more opportunity to counterbalance the government and continue conquering space, as happened with the governorships of major states in the regional elections of 2008.

Fourth, with only half of the country ready to follow him, can Chavez radicalize his policy agenda to transform Venezuela into a Cuba-style socialist republic? We think not, because for that he will need much more legitimacy.

So, we think that even with the amendment's victory, the future has more difficulties than opportunities for the Chavez revolution. Principally because of the new economic reality: Oil prices below $40 a barrel, inflation at 30%, the public deficit widening, higher taxes, devaluation and drastic cuts in social programs.

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Venezuela Amendment 2009: The “Yes” won. CNE's official results

According to the official results released by the CNE to Venezuelans, the vote to see if people wanted to enact the indefinite reelection to all popular elected offices, was as follows:

"Yes" 54,36%

"No" 45,63%

This puts Venezuela and Cuba as the only Latin American countries where their popular elected leaders can repeat period after period without any limit. Unfortunately, this step is negative for the Venezuelan democracy because its political system is now more centralized and the government continues accumulating power on the figure of a man, which goes against the democratic principles of alternation in power and citizen participation.

Study: "Peak and License plate” program in the Miranda State, Venezuela

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

On February 10, 2009, we did a focus group to research the views of citizens involved in the implementation of the "Peak and License Plate" pilot plan of the Panamericana Highway, in Miranda State, Venezuela. This pilot test for the "Peak and License Plate" began on February 2, so for the time of this study the plan already had more than a week of implementation, which allowed users to form an opinion about it.

The groups that participated in our research were composed solely by Miranda State residents that use the Panamericana Highway on a regular basis, and who had the opportunity to experience the plan in question. Following are the results of the study.

The focus group participants:

1) Expressed a generally positive attitude towards the “Peak and License plate” plan. They particularly highlighted the fact that such measures may improve their quality of life.

• “Creating public awareness about the need to improve the quality of life by leaving your car at home, one day a week, is very positive."

2) Said they have experienced less time in traffic and noticed a decrease in the major bottlenecks. For most, the measure is useful in combating the transit problem.

• "It works because it improves things."

3) They are very clear that this measure is for the short term, everyone agrees that the most effective and lasting solution is the construction of new roads, expanding existing or the development of underground projects.

• "The plan would be one of several to be made, there are more things to do, especially the national government should build more highways and roads."

• "What we must do here in Venezuela is to build large highways. In less than 5 years, maybe a little more, the Peak and License Plate will be no longer valid."

4) They are realistic in the sense that despite being convinced that the solution is more roads, they see the Peak and License Plate plan as a temporary solution. They are aware that motorways construction takes time and that the problem of vehicular traffic also needs a short-term measure.

• "I do not think that building new roads is so rapid as to alleviate the traffic now, as this method."

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Venezuela Amendment 2009: Most likely scenario for the February 15th referendum

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

According to our surveys and opinion polls we have consulted from other organizations, the “No” option has an advantage over the "Yes" of 15 points. Indicating that the majority of Venezuelans are not in favor of the reelection amendment.

This gives us an overview of the situation regarding the coming referendum, which is explained by the Venezuelan's strong democratic sense and for the excellent work that students have done in opposition to the amendment. Moreover, other studies show that many Venezuelans are starting to want a new President, for the current government's failures in fighting inflation and crime.

However, we cannot overlook that Hugo Chavez' government will use its political machine and institutional power to try to win the referendum. Already in the past the regime has used intimidation strategies: Tascon's list, Maisanta's list and threats of the PDVSA's president to employees are some of the most infamous. Besides, populist moves have been implemented, as the distribution of student subsidies, appliances, work and money to conquer the will of those who do not want the option of the government. Not to mention the advertising deployment of the public bureaucracy in favor of Hugo Chavez.

The government will also seek to mobilize their voters early to reduce abstinence that harm it in the Constitutional referendum of 2007. To do this, it will use thousands of public and private vehicles, as well as house-by-house pressure from their district leaders.

This leads us to infer that, despite the considerable advantage that the "No" option has in the polls, on election day the CNE may announce a victory of the "No" over the "Yes" of one or two points of difference. That is, the result that we believe to be the most probable is that the CNE will show figures of 51% for the "No" and 49% for the "Yes".

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Disadvantages of consecutive presidential reelection: Factors that favor the President-candidate

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

As a general rule, in countries where consecutive presidential reelection is allowed, the current President is likely to be reappointed for a further period -if applicable- But this does not happen by chance, this trend has a rational explanation:

To begin, the President is a special citizen, which has the direct administration of the most important national resources and, by law, the bureaucracy's loyalty.

Especially in presidential countries, employees and entrepreneurs who depend on the national government, are aware that a fanatical loyalty to the nation's president can generate huge profits, which encourage patronage and create interest groups that need the same President in power.

Moreover, no other person like the President enjoys a massive media exposure without spending a penny, and often participates in events that are broadcast throughout the nation. Two things that can eventually turn a nobody into a celebrity of politics.

And these are advantages that a president-candidate enjoys even without intention, because interest groups and publishers are always trying to reach the President by their own. But experience has shown that presidents seeking reelection purposely use these favorable conditions and most of them blatantly abuse of their power to take advantage.

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Disadvantages of consecutive presidential reelection: U.S. Example

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

Since Franklin D. Roosevelt -1933 - until now, any new U.S. President who has exercised his right to run for one consecutive reelection, always has reached a second term, with the sole exceptions of Jimmy Carter and George Bush senior.

If we convert this into a statistic, any U.S. president who is in his first term, has a 83% chance of being reelected for a second presidential mandate.

We might think that these candidates were efficient Presidents and, therefore, they were awarded with a second term. But it would be inconsistent to assume that so many different presidents, with different personalities, with different problems and in different times, have been so prominent successively to produce this high probability of being reelected in the United States.

In consequence, what these numbers show is that, in the United States, it is a tremendous advantage to be President and candidate at the same time. And this break the equal conditions that should exist in free elections, because who holds the nation's presidency has at his disposal special resources not available for their electoral opponents.

And this happens in a country like United States, where institutions work better than in most nations on the planet, and where consecutive presidential reelection is limited to only once.

Imagine then the Presidents-candidates' advantages in less developed countries and when consecutive presidential reelection has no limits.

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