Underperformance Down Under
In the most private recesses of their minds, some Labor figures are thinking the unthinkable: Could Kevin Rudd be a one-term prime minister, the first of the modern era? Rudd himself has warned that while the Government looks to have a healthy majority on paper, a good number of those seats are held by wafer-thin margins.
What is driving the pessimism, albeit still nascent, in Labor's ranks is the Prime Minister's style of political management, his apparently boundless appetite for so-called "gesture politics" and the increasingly fractured narrative created by a leader who consistently talks about the long term, but just as consistently acts as if his short-term political life depended on it.
Take this week's visit to Japan. First, Rudd was seen to have neglected Tokyo diplomatically by overreaching on the China relationship. Rudd was seen to have miscalculated and bruised Japanese sensibilities.
And this against a background of bellicose threats to take Japan to the International Court of Justice over its "scientific" whaling program, backed by the sending of an Australian observer ship to collect video evidence of the Southern Ocean slaughter.
This last "gesture" had enormous support in Australia. But by the time the Prime Minister reached Japan, any threat to drag Tokyo to court had been unceremoniously jettisoned.
Instead, Rudd said Australia would pursue the whaling issue through diplomacy. Given Japan's historic intransigence on the question, that's code for giving up.
And while Rudd tried to give the impression that he had never really sabre-rattled on the issue, Greg Hunt, the Opposition's environment spokesman, hoisted the Prime Minister on his own verbiage, producing 10 quotes from Rudd in which he either declared action through the International Whaling Commission useless (the path we're now pursuing), or advocated action through the ICJ.
Faced with the short-term necessity to shore up relations with Tokyo, Rudd completely abandoned his previous position.
The announcement of the so-called "Green Car" package, worth $35 million at Toyota's headquarters, was another piece of "gesture politics".
So almost immediately we found that: One, taxpayers are giving $35 million to the world's most profitable carmaker when it transpires that Toyota intended manufacturing a "Green Car" in Australia anyway.
Two, the decision was made without Cabinet approval out of a fund that has not even had its guidelines written.
Such behaviour is becoming habitual for the Prime Minister. When he thinks he needs to start his overseas tour to Japan and Indonesia with an intellectual bang, he hauls down a thought bubble about a European Union-style regional body with Australia at its heart.
It was immediately denounced as arrant nonsense by Paul Keating and Bob Hawke, the joint architects of APEC. Not far behind them was Peter Costello, who pointed out to colleagues that one of the main principles of the EU is the free movement of people across borders.
Costello observed that there would likely be a lot more people in Jakarta who want to come to Sydney, than Sydneysiders who wanted to move to the Indonesian capital.
It's likely we'll not hear very much more about Rudd's plan to rebuild the regional architecture. About as much, I suspect, as his plans to take Japan to the ICJ.
This kind of un-thought-through "gesture politics" is emblematic of Labor domestically as well.
The next piece lined up for unveiling will be "FoodWatch", Labor's promised website and the grocery equivalent of FuelWatch. Except it, too, is unlikely to do anything more than the supermarkets do now – monitoring and matching their competitors' prices.
And then we have the admission this week that the grandest piece of "gesture politics" of the election campaign – Labor's so-called "education revolution" – has slowed to become more of an "education evolution".
Julia Gillard moved this week to dampen that expectation of Government-provided laptops, saying only that it was a longer-term aspiration that probably would not be met during Labor's first term.
And then there's alco-pops, "gesture politics" aimed at parents who fail to address a binge-drinking problem that never existed while handily giving the Government $3 billion in extra revenue.
Which brings us to the Gippsland by-election where at least one big distiller is making the point that the alco-pop tax is also hitting the Bundy and Coke-drinking "ute man" demographic – a group that could prove vital to the outcome in Gippsland.
If Brendan Nelson snatches a convincing victory there later this month – and there is now some cautious optimism on this count inside the Liberal Party – he will have Rudd's flailing "gesture politics" to thank.
Underperformance Down Under
Coming just a week or so after Rep. Maurice Hinchey (D-NY) publicly said the U.S. government should nationalize the nation’s oil refineries, echoing a similar earlier threat by Rep. Maxine Waters (D-CA) to nationalize the entire industry, it is instructive to see what has happened in Venezuela where a Communist wannabe dictator, Hugo Chávez, nationalized that nation’s oil industry.
One would think it was bad enough that Sen. Barack Obama and the Democrats want to enact a windfall profits tax on U.S. oil industry, the same action that in 1980 effectively has reduced exploration and production in the U.S. by nearly sixty percent, but Venezuela’s takeover of its oil industry is a case history example of why so many of the world’s national oil companies are badly managed and under-performing.
Venezuela has a long history of problems with its various governments dating back to the 1800s when Simon Bolivar fought for its independence from Spain. What followed “was characterized by coups, civil wars, and battle after battle,” says Kyle D. Guerrero, an academic who has lived in both Venezuela and the United States.
The June issue of Energy Tribune is devoted to Venezuela because, as its editor Michael J. Economides points out, it has the Western hemisphere’s largest oil reserves. Don’t bother looking for Newsweek or Time to provide the real story because they are still telling Americans that global warming is real and “fossil fuels” are bad, bad, bad.
Consider instead that, aside from its oil, Venezuela with a population of twenty-six million, most of whom reside in its cities, could comfortably fit its 352,145 square miles into the State of Alaska’s 663,267 square miles. Despite the billions president Chavez is spending on arms for its army of 120,000 soldiers, claiming that the U.S. intends to invade, the truth is that the U.S. is wisely waiting for the inevitable ouster of this jackass.
Economides says that “Hugo Chávez is in free-fall” and warns that “the uncertain transition that will follow him bodes ill for the stability of the country.” This is worrisome for the United States because by 2006 our Venezuelan crude oil imports amounted to about eleven percent of our needs. They represent 60 percent of Venezuela’s total exports. This mutual dependency stands in vast contrast to the diplomatic relationship between our two nations.
Chávez,” says Economides, “would be a comical character were it not for the $100-plus oil prices which have papered over his shortcomings and prolong the eventual day of reckoning.” It is astonishing to see the way he has devastated the industry that permits him stay in power. In 2003 he fired more than 18,000 highly trained oil workers who went on strike against him. This set in motion a huge brain-drain as ten thousand of them have left the country. An estimated two-thirds of the rest of the population wants to leave as well.
Proving once again that Communism is the worst possible political and economic system known to man, Chávez's only friends these days are people like Cuba’s Fidel Castro, and thugs like Iran’s Mamoud Amadinejad, Zimbabwe’s Robert Mugabe, and the FARC guerillas in neighboring Colombia. The one thing they have in common is the way they have destroyed their nation’s economies and spread misery among their captive citizens.
In 1992 Chávez led a military coup against the government of Carlos Andres Perez. In 1994 he was pardoned and, in 1998, he was elected president of Venezuela. If that sounds improbable, one has to consider the long history of coups and other difficulties endemic to the governments and economies of South American nations. The Chávez platform was one of “change” that would redistribute the wealth of the nation based on a variety of “free” programs of medical care, price controls, and other giveaways. It this sounds a lot like a certain Democrat candidate, it is not a coincidence.
The result has been the highest rate of inflation in Latin America, 23 percent last year and still increasing. The breakdown of society is reflected in the way Venezuela in 1988 had 4,500 murders and, during the Chávez regime from 1999 to 2007, this increased to over 105,000. There is virtually no foreign investment and domestic businesses have suffered. Its health system reflects his “reforms” as childbirth mortality rates rise and cases of malaria have doubled.
Poverty is the only growth industry in Venezuela. Aside from oil, its position as a place for illegal drug transit keeps the money flowing, but only for those in charge.
This is a nation that choose Communism at a time when the Soviet Union had already collapsed, whose citizens preferred a typical Latin American “strongman” over democratic reform, and who will suffer far more as the price of a barrel of oil inevitably and eventually returns to a more realistic level.
The real question will be what kind of transition will follow the fall of Hugo Chávez and his followers and the odds are the answer will be very ugly.
U.S. lurches away from conservative traditions
If all it takes to win the U. S. presidency is oratorical style and the ability to lift a stadium audience off the floor, Barack Obama today holds the keys to the White House. With little apparent effort, Mr. Obama routinely brings people to their feet and awe to their hearts. He performs this small miracle with a blend of soaring evangelical cadence laced with hard-boiled liberal policy pandering. Call it salvation leftism.
A perfect sample of the Obama style swept out over an arena of voters -- and millions of television viewers Tuesday night -- from his final primary season event in St. Paul, Minnesota. As he ended his speech, Mr. Obama soared into the final flourish:
The journey will be difficult. The road will be long. I face this challenge with profound humility, and knowledge of my own limitations. But I also face it with limitless faith in the capacity of the American people. Because if we are willing to work for it, and fight for it, and believe in it, then I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on Earth. This was the moment -- this was the time -- when we came together to remake this great nation so that it may always reflect our very best selves, and our highest ideals.The religious tones are unmistakable. In the sequence surrounding the standard, even hackneyed, political promise of "good jobs," he bridges immediately into the miracle claim that, like the parting of the Red Sea, this week marked the moment when "the rise of the oceans began to slow." And then he suggested, in another miracle, "our planet began to heal."
With this uplifting promise of healing and transformation and change, Mr. Obama lifts the soul, but not without also filling the pocketbook. He promised to bring in universal health care, more school funding and to recruit an army of new unionized teachers "and give them better pay."
Has there ever been a U. S. presidential candidate so firmly entrenched in the union camp? For a man officially dedicated to bringing unprecedented change, Mr. Obama promises to dig the
United States back into a policy trench that Ronald Reagan led the country out of when he stood up to the air traffic controllers.
Mr. Obama's first public task yesterday, as likely Democratic leader, was to deliver satellite comments to the annual convention of the Service Employees International Union in Puerto Rico. The SEIU's Web site is dominated by an Obama image, as might be expected with a union that, under leader Andy Stern, has just moved to consolidate local funds under central control, the better to send millions to the Obama campaign.
The union pandering continues with promises to rework or even rescind free-trade agreements, including NAFTA. Mr. Obama supports a range of legislative changes to enhance union bargaining and organizing powers.
Mr. Obama's salvation leftism promotes deliverance from standard politics in Washington through the adoption of some of the most standard liberal policies. His speeches are peppered with references to corporate devils -- Wall Street, big corporations and CEOs. He promises tax breaks for the middle class, but tax hikes for others, and more regulation on business, forcing auto-makers to raise fuel standards and oil companies to invest in energy projects "that will create millions of new jobs that pay well and can't be outsourced."
Speaking yesterday in Washington, Mr. Obama played again with a dangerous theme he has advanced in the past. "We must free ourselves from the tyranny of oil. The price of a barrel of oil is one of the most dangerous weapons in the world. Petrodollars pay for weapons that kill American troops and Israeli citizens." The illogic of such claims -- that the price of oil is a weapon used by foreigners against America -- can only foster foreign and economic policies that are even more illogical and threatening to world peace and economic stability.
Salvation leftism has so far given Mr. Obama what appears to be a better chance at winning the presidency than John McCain. The question is whether the salvation part of Mr. Obama's appeal is strong enough to overcome the radicalism of his platform. America is a complex political and ideological place, but it is not a place that in the recent past has taken well to extreme liberalism in its leaders.
On Sunday Barack Obama urged graduates of Connecticut's Wesleyan University to devote themselves to "collective service." This is not an unusual theme for a commencement address. But it was interesting how long he went on discussing various kinds of nonprofit activism without ever mentioning the virtues of commerce or of individual achievement.
He also did not cite the military as an example of service to one's country. This is a surprising omission in a Memorial Day weekend speech to college-age students by a man seeking to be entrusted with the defense of the U.S.
Sen. Obama told the students that "our individual salvation depends on collective salvation." He disparaged students who want to "take your diploma, walk off this stage, and chase only after the big house and the nice suits and all the other things that our money culture says you should buy."
The people Mr. Obama is sneering at are the ones who built America – the traders and entrepreneurs and manufacturers who gave us railroads and airplanes, housing and appliances, steam engines, electricity, telephones, computers and Starbucks. Ignored here is the work most Americans do, the work that gives us food, clothing, shelter and increasing comfort. It's an attitude you would expect from a Democrat.
Or this year's Republican nominee. John McCain also denounces "self-indulgence" and insists that Americans serve "a national purpose that is greater than our individual interests." During a Republican debate at the Reagan Library on May 3, 2007, Sen. McCain derided Mitt Romney's leadership ability, saying, "I led . . . out of patriotism, not for profit." Challenged on his statement, Mr. McCain elaborated that Mr. Romney "managed companies, and he bought, and he sold, and sometimes people lost their jobs. That's the nature of that business." He could have been channeling Barack Obama.
"A greater cause," "community service" – to many of us, these gauzy phrases sound warm and comforting. But their purpose is to disparage and denigrate our own lives, to belittle our own pursuit of happiness. They're concepts better suited to a more collectivist country than to one founded in libertarian revolution – a revolution intended to defend our rights to "life, liberty and the pursuit of happiness."
One gets the sense that Mr. McCain would like to see us all in the armed forces. In a Washington Monthly essay published in October 2001, his vision of national service sounded militaristic. He wrote with enthusiasm for programs whose participants "not only wear uniforms and work in teams . . . but actually live together in barracks on former military bases, and are deployed to service projects far from their home base," and who would "gather together for daily calisthenics, often in highly public places such as in front of city hall."
Mr. Obama wouldn't send us into the military. All he wants is our souls. As his wife Michelle said at UCLA on February 3, two days before the California primary, "Barack Obama will require you to work. He is going to demand that you shed your cynicism. . . . That you push yourselves to be better. And that you engage. Barack will never allow you to go back to your lives as usual, uninvolved, uninformed."
There is a whiff of hypocrisy here. Mr. Obama, who made $4.2 million last year and lives in a $1.65 million house bought with the help of the indicted Tony Rezko – and whose "elegant suits" and "impeccable ties" made him one of Esquire's Best-Dressed Men in the World – disdains college students who might want to "chase after the big house and the nice suits." Mr. McCain, who with his wife earned more than $6 million last year and who owns at least seven homes, ridicules Mr. Romney for having built businesses.
But hypocrisy is not the biggest issue. The real issue is that Messrs. Obama and McCain are telling us Americans that our normal lives are not good enough, that pursuing our own happiness is "self-indulgence," that building a business is "chasing after our money culture," that working to provide a better life for our families is a "narrow concern."
They're wrong. Every human life counts. Your life counts. You have a right to live it as you choose, to follow your bliss. You have a right to seek satisfaction in accomplishment. And if you chase after the almighty dollar, you just might find that you are led, as if by an invisible hand, to do things that improve the lives of others.
- David Boaz is executive vice president of the Cato Institute and author of "The Politics of Freedom" (Cato, 2008).
Related story: "Collectivist Councilwoman holds sway"
As neighborhood residents were trickling into the Alum Rock Youth Center on Thursday, San Jose City Councilwoman Nora Campos grabbed the microphone to welcome them. "This is your meeting," she boomed.
Actually, it was Mayor Chuck Reed's meeting - a meeting of his Gang Prevention Task Force, and the agenda had called for him to welcome the crowd. And when Reed hurried from the back of the room to stand at Campos' side, the power of her maneuver became clear: Campos had managed to upstage the mayor again.
Mostly quiet during her first seven years on the city council, Campos is gaining a lot of attention lately, often at Reed's expense.
With a young team of hotshots newly installed in her office and the backing of the powerful South Bay Labor Council, Campos in the past six months has let no chance slip to blast Reed on everything from budget minutiae to his attitudes on gang violence to his overall vision for San Jose.
While clumsy at times in her approach, Campos has emerged as the mayor's most vocal and prominent foe.
In Reed's most notable council defeat, Campos outfoxed him in the fall on whether to rebuild Fire Station 2 in her East San Jose district. Reed had wanted a remodel to save taxpayers $2.3 million, but Campos convinced a council majority that the full rebuild was necessary - and implied it was time for the oft-slighted East Side to get its due.
Yet despite her recent shows of moxie, Campos hasn't yet perfected her public makeover. She has trouble communicating off the cuff during council meetings. She comes off occasionally as scripted, even coached.
With only two years left before Campos is termed-out of office representing District 5, her attempts to raise her profile have people buzzing over whether she will run for state Assembly - or even challenge Reed head-on in 2010.
"To be blunt, the mayor and I have very different value systems," Campos said recently from her 18th floor City Hall office. "I look at the city of San Jose through an entirely different lens."
She believes Reed sees the city as a business, with himself as the CEO focused on the bottom line. While he looks at numbers, Campos says, she thinks of people.
Mayor takes issue
Reed, who has mostly taken the high road in his quarrels with Campos, disputed her judgment of his values.
"She is wrong," he said sharply. "Public safety is our No. 1 priority. I am actually doing stuff" - such as calling for the hiring of 30 new cops over two years.
Reed said he takes Campos seriously but is not threatened.
Campos counters that she is used to long fights.
As a girl, she and her parents marched alongside farm-worker activist Cesar Chavez. Now 42, she's the only Latina on the council, representing a district where nearly six out of 10 residents are Latino.
Prior to winning a council seat in 2001, she worked as an aide to former district Councilman Manny Diaz. Politics runs in her family; she is married to Neil Struthers, head of the politically connected Building and Construction Trades Council. Her brother, Xavier, is a member of the city's planning commission.
Yet she traces her recent emergence to a chilly Friday evening in September, when she walked along King Road with a candle in her hand, alongside mothers pushing babies in strollers. It had been a little more than two weeks since the gangland-style slaying of two men on Poco Way had seared the neighborhood.
For Campos, who grew up in San Jose, the dreary vigil was both sorrowful and infuriating.
"I heard their despairs," Campos said. "I heard their concerns. I heard their hopes. At that point, I realized that no one was listening to this community crying out. I knew as a council member that I had to take the responsibility of leadership."
With no council opposition leader to Reed, who took office last year after routing labor-backed Cindy Chavez, Campos and her allies saw an opening.
The timing was ideal in another way. Last year, she hired two young political sidekicks she says have "re-energized me" - chief of staff Ryan Ford and spokesman Rolando Bonilla.
On the surface, the two couldn't be more different. Bonilla, burly and bald, grew up in San Francisco's Mission District. The 6-foot-6 30-year-old favors pinstripe suits and sounds like an old-fashioned, fast-talking fight promoter when speaking about his boss.
Ford, 26, a former college water polo star at Johns Hopkins University with wavy brown hair and piercing eyes, balances out Bonilla's high energy. His parents emigrated from South Africa when he was 6 months old, and he dreamed in college of working on Wall Street.
Bonilla, who also is in law school, once ran unsuccessfully for San Francisco County supervisor. Ford worked for former San Jose Councilman Ken Yeager and then for Councilman Pierluigi Oliverio, but bolted to Campos' office late last year.
The team has been behind Campos' newfound strategy to go after the mayor. But their attacks have sometimes overreached.
Last month, Campos called an "emergency meeting" to announce the "release of $200,000" held in a reserve account by the Mayor's Gang Prevention Task Force. Campos, whom Reed kicked off the task force last year, in fact didn't have the authority to release the funds.
Her own worst enemy?
Her critics contend that Campos in the long run is doing herself more harm than good by hounding the mayor.
"I haven't seen any change in direction as a result of the issues she has stepped out on," said Pat Dando, a former vice mayor who is now president and CEO of the San Jose Silicon Valley Chamber of Commerce. "The way you make change is generally in a collaborative manner."
As for safety and gang violence, "every single council member is concerned about that," Dando said. "There isn't anyone who has a lock on that concern."
Campos' defenders contend she's only doing what she believes in. They credit her with stands like refusing to cross a picket line when city building inspectors went on strike late last year.
"It is very hard as a single council member to be bold enough to take on a mayor or a majority of the council," Chavez said. "It is important for elected officials to take strong positions."
Looking ahead, Campos said it's time to start working on citywide issues. She hasn't ruled out a run for mayor in two years against Reed.
"At this point in my life, I am riding the wave and I am not going to close any door," she said. "I want to serve."
Nine months from now, the 44th president will be inaugurated. Looking at the debates, votes cast and money raised in this year's presidential primary races, the next president may not only be a Democrat, but Barack Obama, the most liberal of the 100 members of the U.S. Senate.
Add the announced retirement of six Republican senators and 29 Republican House members (compared with just seven House Democrats) and the Democrats are likely to control both the House and the Senate with much bigger majorities than they do today.
So both the next president and the new congressional majorities will be much more liberal than the officeholders they have replaced, and that will result in a broad-reaching, socialist-leaning, greatly expanded American government.
* * *
Four significant public policy changes are certain: the size, scope and spending of the federal government will substantially expand; income taxes will go up; protectionism will replace free trade; and a commitment to global internationalism will saddle America with a broad Kyoto global warming agreement that, according to the U.N. Climate Treaty Secretariat, should exempt China and India.
Hillary Clinton and Barack Obama have proposed increasing annual federal spending, respectively, by $226 billion and $303 billion – the Obama total being about a 10% increase. Neither of them as president would likely limit any spending – not entitlements, not earmarks, not farm subsidies.
In the past four years, income tax cuts have been good for the American economy, raising government tax revenues by $785 billion, reducing the deficit, and helping to create more than eight million new jobs and 52 consecutive months of job growth prior to the slowdown at the beginning of this year. A Democratic administration's tax increases are likely to be substantial: Mr. Obama proposes raising top income tax rates to 39.6% from 35%, capital gains tax rates to perhaps 28% from the current 15%, dividend tax to 39.6% from 15%, and top estate tax rates back up to 55%. And he wants to raise substantially or abolish the $102,000 cap on wages subject to the Social Security payroll tax. "He is indeed a redistributionist," said blogger and Obama supporter Andrew Sullivan after watching Mr. Obama's answer to a tax question in last week's presidential debate.
Protectionism will replace free trade as American policy, even though trade creates domestic jobs. Foreign-owned companies operating in the U.S. employ five million people (think Honda's 16,000 or Nokia's 6,000), and America's exports of goods and services employs another 11 million. But earlier this month Speaker Nancy Pelosi blocked a vote on the Colombia Free Trade Agreement by suspending the requirement that Congress vote up or down for such a treaty. Both Mrs. Clinton and Mr. Obama want to repeal or significantly modify Nafta, which Mr. Obama says has never "been good for America." Their protectionist America would limit international trade agreements, likely leading to anti-American protectionism by other nations.
Of course higher taxes and broad protectionism are not new ideas, they were tried by Herbert Hoover and led to the Great Depression.
* * *
Then will come dramatic public policy changes in the areas of labor law, free speech, election laws and national energy policy.
Significant labor law changes will likely start with the elimination of secret ballots for union organizing elections, so that unions can verbally "ask" workers if they would like to join (read: intimidate them into saying yes). Then may come repeal of the 1947 Taft-Hartley Act provision that allows states to enact "right to work" laws – 22 of them have done so – that allow workers to take jobs even if they decide not to join a union.
Next would come some free-speech changes, like the reinstitution of the "fairness doctrine" that requires broadcast radio and television stations to give equal time to both sides of any public policy on-air discussions. There was such a Federal Communications Commission rule that was abandoned 20 years ago, but liberals want it back in order to stifle conservative talk radio. Such a return of government regulation of free speech would create a very different First Amendment America.
* * *
Finally would come a vast energy and global-warming-oriented policy that would begin limiting the energy resources America needs to prosper. U.S. domestic crude oil field production has fallen by nearly half since 1970, but additional offshore oil and gas drilling would continue to be prohibited, for Mr. Obama even opposes existing Gulf of Mexico oil drilling. Off the east and west coasts there is a 19-year supply of natural gas and enough oil to replace our oil imports for 25 years, but access to it will not be permitted. No new nuclear power plants have been approved since the 1970s, and liberalism's antinuclear sentiment bodes ill for any significant new ones.
Perhaps the best example of the new energy liberalism is its attitude toward coal. Kansas needs additional electricity, but the state government recently banned the construction of two new electricity generators in an existing coal fired plant, the reason being the additional greenhouse gasses the plant would emit. The state Legislature overrode the ban, but Gov. Kathleen Sibelius, a Democrat, vetoed the bill, thereby validating America's first substantial step to stop the use of the coal-based power that supplies about half of our electricity.
So America's energy policy in the new administration may be no additional nuclear, coal, or oil and natural gas power generation, which leaves us with only windmill, solar, biomass, and geothermal for additional power needs. Those sources combined provide about 2.4% of our electrical generation sources.
* * *
With such policies, we would be a far more regulated, far less prosperous nation offering far less opportunity. The 23% of Americans who identify themselves as liberals may applaud, but for the rest of us it would be an unfortunate outcome.
Venezuelan President Hugo Chávez criticized Washington on Friday after a U.S. aircraft carrier allegedly sailed close to the South American country border without permission.
"When Americans appear with their fleet - the George Washington - near our shores, then one must not forget, that this is happening at a time when, together with Brazil, we are establishing a defense council in South America," he told a public meeting.
"This century, we will bury the old U.S. empire and will live with the American people as brothers, as over 40 million U.S. citizens live on the edge of poverty," the president said.
He also said that Latin America had entered a new era, marked by the creation of a bloc of leftist governments, which included Argentina, Bolivia, Cuba, Venezuela, Ecuador, Nicaragua, Chile and Brazil.
The USS George Washington and the George Washington Carrier Strike Group arrived in Brazil April 22 to participate in Unitas 49-08 naval exercises.
Unitas is 49-year-old annual exercise which aims to train participating countries' navies to operate as part of a multinational force employing a variety of maritime scenarios. Argentina and Brazil are also taking part in the naval exercise with Chile and Ecuador acting as observers.
The USS George Washington left its home port of Norfolk in the U.S. en route to its eventual new home in Yokosuka in Japan, where it will replace the USS Kitty Hawk.
The USS George Washington's flight deck is 4.5 acres and has a crew of up to 6,000.