Editor's Note: Please keep in mind, this is political satire! - LMB

Thursday, April 1st, 2010

Markets reacted favourably in early trading to President Obama's announcement Wednesday that the United States may seek to join the ALBA trade framework lead by Cuba and Venezuela. The Dow-Jones industrial index rose over 200 points, with energy and mining stocks benefiting most. Unofficial sources acknowledged that the controversial move stems from the Obama administration's wider radical policy review mooted earlier this year in the President's State of the Union address.

Following the president's announcement, Secretary of State Hillary Clinton held a joint press conference with Venezuelan Foreign Minister Nicolas Maduro on Wednesday evening. Clinton declared, “We owe it to the people of the United States not just to act promptly to turn the economy around as effectively as possible but, in the longer term, to take advantage of the proven success and resources of the ALBA model to help us rebuild our infrastructure, regenerate disadvantaged sectors of our education and health care systems and especially, through innovative low-cost credit programs, to help bring new dynamism to the small and medium sized business sectors that are the backbone of our economy. This move is just one component of the wider package of imaginative measures announced by the President on March 15th”

Nicolas Maduro observed, “Solidarity, cooperation and reciprocity have always been the fundamental principles driving ALBA. While it is certainly the case that we have plenty to offer the people of the United States, for our part too, we are anxious to get the benefit of US business and technological knowledge and experience, so as to better ensure sustainable prosperity, for the countries of ALBA, certainly, but also ultimately for all the peoples of our Americas.” Maduro confirmed that a high-level US delegation will participate as observers at the next ALBA summit scheduled for late May in Caracas.

Among many other leading critics of the government, former Vice-President Dick Cheney has bitterly condemned the Obama administration's dramatic recent policy changes which have seen violent reaction on the streets from some sectors of the Cuban exile community in Florida. In an interview on Fox News this morning Cheney argued, “This incredibly reckless and humiliating announcement only deepens the foreign policy hole President Obama is digging, not just for himself and his administration, but for the whole country. In February we had the pardon of the five Cuban heroes ....um, spies. That was followed up by direct ministerial level talks with the Cuban government and cutbacks in the personnel necessary to adequately sustain our crucially important sanctions regime. President Obama turns out to have been the Manchurian Candidate, or rather, more precisely, the Caracas-Havana candidate. This is all of a piece with Democrat policy to sell off our country to foreigners. Remember it was Hillary Clinton who was asked how we could get tough with China. She answered 'how d'you get tough with your banker?' A covert socialist Democrat President betraying the United States is nothing new.”

Support for the President's announcement came from some surprising quarters. Representative Ron Paul of Texas told CNN, “At long last we may be getting some common sense into our country's foreign policy. And that may mean some benefit too for the country's economy. We need to end the fruitless damaging foreign wars and focus on the needs of our own people here in the United States. Increased trade with Cuba and the other ALBA countries  - that's some 80 million people - can only be good for our farmers and for our crippled business sector. Cutting back on useless expenditure will help our budget deficit and so will ALBA investment in infrastructure, in health and education. The concessionary terms Venezuela is proposing for their oil will also go some way to helping us address our crazy, completely unsustainable levels of government debt. You just have to realize that 50 per cent of our oil from Venezuela can be paid at 2% interest over 25 years. We'd be crazy to turn that down...”

Bill Gross head of Pacific Investment Management Company noted, “The balance of payments benefits for the United States of any favourable deal with ALBA are likely to be pretty positive. We'll sell more and we'll get better terms of trade especially for our energy imports. In terms of the overall US economy perhaps the immediate GDP difference will be quite small but the cumulative effects in terms of goodwill in the short term could make a dramatic positive difference to the US current account medium term with the associated benefits that would bring, a more stable dollar, greater faith in US Treasury paper, greater investor confidence generally. I think we may be moving into a phase where the markets are suffering from volatility-fatigue. After the roller coaster of recent years, a period of greater stability and certainty should see more investors returning both to stocks and bonds. This morning's sharp drop in the gold price perhaps indicates something along those lines. Overall, in market terms, I think the announcement is certainly positive”

Respected currency specialist Chuck Butler of the Daily Pfennig remarked, “But what does that mean for the dollar, folks? The ALBA common currency unit - the Sucre – is tagged to turn into real money most likely in the next six to eight years. Are we getting ready to say goodbye to the dollar? ….This could be the last time, it may be the last time, I don't knnoooow...but seriously. I wonder if Tim Geithner and his Treasury high finance honchos have looked as hard at this as they might. But, as usual, that's just my opinion.... In the markets, I'm looking at the screen and as I type, the Big Dog, the Euro, that was snapping at the dollar's heels all last week, looks as though it's headed back to the porch with the dollar stealing back to the 1.54 handle...”

Dominique Strauss Kahn, Director General of the International Monetary Fund gave a cautious welcome to the announcement. “Any move by the US authorities to address the crucial issue of the country's budget deficit is good for international confidence and is helpful for the global economy. Whether the US system can accommodate the less orthodox components of the ALBA model is an open question. Still, the IMF welcomes any dialogue that contributes to stable global markets, broader trade, responsible development and sustainable growth.”

In contrast to the neutral remarks of the IMF, Jose Manuel Barroso, President of the European Commission, expressed scarcely concealed scepticism about the US move. Speaking in Brussels, Barroso observed, “It's hard to see how any deal with the ALBA countries can be of lasting benefit to the United States. As a long shot, it may provide some short term relief for the US budget deficit and the oil component of the trade deficit. But in the broader picture I view the decision to open negotiations with the ALBA countries with some concern. The move seems to run counter to our joint efforts with the United States and other countries to consolidate the role of the International Monetary Fund and of the Financial Stability Board.”

By contrast, Congresswoman Maxine Waters emphasized the positive impact on employment in the United States. “It's long past time in this country for the government to make getting people back to work the very highest priority. Last month the BLS unemployment figures printed at 12 per cent. We cannot just abandon ordinary people in this way. I don't know the details of the discussions so far with the ALBA countries, but I do know we can't just carry on the failed pro-Wall Street policies that many people hope can now at long last be reversed. Larry Summers' departure as the President's Chief Economic Adviser last month makes me think we have a real chance now of prioritizing America's working people over the banksters who got us into this mess.”

Many observers suggested that President Obama's decision to fire Larry Summers, referred to by Congresswoman Waters, would mean a bigger role for former Federal Reserve Chairman Paul Volcker. In fact, President Obama stunned Washington insiders by setting up a collegiate advisory group made up of Dean Baker of the Centre for Economic and Policy Research, Nouriel Roubini, Professor of Economics at the Stern School of Business at NYU and the widely respected financial commentator  Henry C.K.Liu. Progressive economist Michael Hudson, commented, “This augurs well for long overdue structural reforms in the US financial system. The question is how to make our market system work for the majority? How do you halt the drive towards debt-peonage and a toll-booth economy, and not just halt it but turn it around? The move towards possible US membership of ALBA makes sense in terms of increasing the kinds of tools available to the government to address its crippling deficits. But it won't count for much without other budget-focused measures, like cutting back our insane military spending.”

US civil society organizations expressed delight and disbelief at President Obama's decision. Medea Benjamin of San Francisco based Global Exchange opined, “Finally we are seeing the true potential of this Obama administration. Clearly much of the credit for this potentially epoch making decision to start talks about US membership of ALBA must go to tireless organizing and mobilization of grass roots opinion by civil society here in the US. But it's also an encouraging high-level recognition that times have changed and we as a country need to adapt to a more sustainable and participatory way of handling not just our economic problems but our international relations as a whole. President Obama's decision means we may still be in time not just to catch up with the most creative economic model in the world today but to contribute to shaping it into a model that is truly global.”

Among Latin American political leaders comment tended towards agreeable surprise. Brazilian President Ignacio da Silva, hailed President Obama's announcement as “a brave decision with huge implications for all of Latin America.” President Alvaro Uribe of Colombia said in Bogotá, “We welcome this sign of US commitment to Latin America. Of course we have our reservations. But so far things are at a very preliminary stage and we expect the US government to engage with the ALBA countries in a way that will emphasize reciprocity. The ALBA countries stand to benefit hugely from the kinds of changes engagement with the United States may entail. Let's see what results from the upcoming negotiations.” Just a few days ago, Venezuela's President Chavez had declared on a special edition of his legendary “Aló Presidente” programme, “the next few days may bring an interesting surprise for all of us.” Stay tuned.


Note: all the quotes in this article are fictional inventions for the prupose of the overall satirical intent of this piece.

Tortilla con sal