Tag Archives: Argentina

New study: incomes of the poorest 20% of households are much lower than in 2007

Is Barack Obama focused on protecting the American people?
Does Barack Obama’s knowledge of policy match his confidence?

Now, many American voters like to think that if the President expresses concern about things like poverty and income inequality, then that means that whatever he does to “fix” it will automatically work to benefit the poor. Is it true?

Here is an article from Investors Business Daily, which talks about a study from the respected, leftist Brookings Institute.

Excerpt:

President Obama’s upbeat assessment of the economy is not likely to sit well with low-income families living in major urban or metro areas. For them, economic decline is a harsh reality, not “fiction.”

In his State of the Union speech, Obama declared that “anyone claiming that America’s economy is in decline is peddling a fiction.”

But a new report from the liberal-leaning Brookings Institution finds that incomes among the poorest fifth of households was significantly lower than it was in 2007. Of the 100 cities it examined, incomes fell an overall average of 12%, according to the report’s data. In some, the drop was huge — 34% in Stockton, Calif., 31% in New Haven, Conn., and 30% in Lakeland, Fla.

At the other end of the spectrum, the top 5% of households saw incomes climb, but not by much. The average income for this group was basically unchanged over those years.

As a result, income inequality has increased, but not — as Obama, Bernie Sanders and the chorus of liberal Democrats would have you believe — because the rich are getting richer.

“It’s really about the poor losing ground rather than these upper-class households pulling away,” Brookings senior fellow Alan Berube told AP.

[…]Added to this, many of the cities that saw the biggest increases in income inequality — like Boston; New Orleans; Providence, R.I.; New Haven, Conn.; San Francisco, Washington, D.C. — have been bastions of “spread the wealth around” liberalism.

Another example of this would be Obamacare. Obama got up in front of his teleprompters and told everyone that he was going to make changes to health care policy. He promised that it would not add one dime to the deficit, that we could keep our doctors, that we could keep our health plans and that our health insurance premiums would go down. Every single one of those promises were lies.

We don’t know if Obama knows that he is lying when he says these things. I prefer to think that he is just too stupid to know what he is talking about. He says things that make him feel good. Things that would have pleased his professors in college. But since he has no practical experience of achieving results in any of these areas, he fails again and again. He is confident because he assumes a knowledge of how to obtain results that he does not actually have, owing to his lack of experience. And yet we elected him, then re-elected him.

He is in his own little world, where the people around him carefully insulate him from a reality where all his confident prescriptions have failed to produce what he intended.

Could it be that the free enterprise system of economics that was “built in” to America at the founding actually works better than the failed systems of socialism and communism that Obama was taught in college? Could it be that if we just stuck with the free enterprise system that made us the most powerful economy in the world, that things would be better for the poor than in places where capitalism is rejected for socialism?

We don’t have to guess at what the economic policies of the left produce. You can see it with your own eyes in socialist countries like Venezuela, Cuba, North Korea, Argentina, and so on.

Good news: Venezuela and Argentina eject socialist governments

Political Map of South America
Political Map of South America

Investors Business Daily has some good news for us. The Democrat Party of Venezuela has been CRUSHED in a recent election.

Excerpt:

Venezuela’s voters delivered a sledgehammer blow to the country’s ruling Chavista socialists Sunday, winning a likely supermajority in the National Assembly. It’s a great awakening from a 17-year nightmare.

Given the past two decades of near-victories, electoral fraud, chicanery and fractious political opposition mistakes, many Venezuelans are still in disbelief at the scale of the victory in the nation’s legislative elections, which have decisively handed one of Venezuela’s leading governing bodies over to the democratic, pro-free-market opposition.

As this was written, the opposition, known by its Spanish initials MUD, had declared a 112-seat, or two-thirds, supermajority in the National Assembly as a result of Sunday’s vote. The Chavistas won just 46 seats.

It’s total victory in legislative terms and will enable the legislature to throw out politicized Supreme Court justices and appoint honest ones.

The new Congress can also boot corrupt election officials and appoint fair ones. And they will even be able to declare President Nicolas Maduro — the late dictator Hugo Chavez’s hand-picked successor — mentally unstable and unfit for office, or remove him for incompetence. They can also stop his executive orders dead.

The Congress also will have the power to free the 71 or so political prisoners now rotting in Chavista dungeons without trial, including top opposition leader Leopoldo Lopez. And Venezuela’s central bank will stop destroying the country’s money, now nearly worthless.

[…]Most important, the leftist government’s mismanagement of the economy — through currency controls that prevented imports of spare parts, created shortages of basics such as toilet paper and devastated the health care system — and the central bank’s infamous money-printing spree, which has pushed Venezuelan inflation to near 700%, made ordinary life for Venezuelans hellish. There also was corruption, with as much as 1 trillion dollars in oil earnings stolen or misappropriated over the years by high-living Chavista elites, whose lavish lifestyles mocked ordinary, poor Venezuelans.

Top it with the monstrous infiltration of the country by the drug lords, and the likelihood of an electoral housecleaning was perfectly clear.

Still, an element of disbelief remains, given how dirty the Chavista rulers have played their democracy game.

They have broken election rules, violated ballot secrecy, shut voters out and banned popular candidates from running. Many of those dirty tricks were evident in this election, too — the Chavistas illegally extended voting hours and campaigned at polling stations, to cite just a couple of examples.

But the opposition won anyway — with turnout so high, at 74.5%, and margins of victory so wide that the election was impossible to steal.

It helped that the the opposition had the wind at its back with the disastrous result of socialism. But it also helped that MUD had improved its electoral game over the years, learning from each near-miss election.

It also helped that MUD had strong leaders such as Maria Corina Machado and put out strong candidates with a clear, unified message — often summed up as “Down with the left.” And with all the pain of 17 years, it helped most of all that they never lost heart.

There is literally no different between the socialists of Venezuela and the Democrat Party in the United States. They are in lock step on every issue. Should the Democrat Party continue to hold power in America, we can look forward to a reckoning like this one in the future.

Two socialists shake hands: Barack Obama and Hugo Chavez
Two socialists shake hands: Barack Obama and Hugo Chavez

The Wall Street Journal says that the whole country is basically in the grip of ignorant socialists at every level, so there is lots to do.

Excerpt:

Pulling out of that death spiral, economists say, will require a series of painful and unpopular adjustments, rolling back more than a decade of populist and statist policies. Among the measures needed is raising the price of the world’s cheapest gasoline—which goes for less than one U.S. penny a gallon—overhauling a cumbersome and inefficient foreign-exchange system, and cutting generous social programs on which Venezuela’s poor depend.

[…]The government still controls more than 20 governorships, hundreds of mayors, the judiciary, much of the press and all auditing agencies. It will be up to Mr. Maduro whether to take steps to stabilize the economy, like loosening currency or price controls.

It’s not just Venezuela that has hit bottom under socialism. Recently, the people of Argentina also threw out their socialists after years and years of disastrous leftist policies.

The Chicago Tribune reports on last month’s election in Argentina.

Excerpt:

Under the current president, Cristina Fernandez, Argentina has become an international financial pariah. The country defaulted on debt last year in a long-running feud with hedge funds — remarkably, that was the eighth default in Argentina’s history.

Fernandez refused to settle. That’s left the country to squeak by in isolation, using protectionism and capital controls in a quixotic battle with globalism. The economy is stagnant, foreign currency reserves are dwindling and the inflation rate is around 30 percent. Last week, American Airlines said it stopped accepting pesos for ticket sales because it was tired of collecting revenue it couldn’t convert to dollars.

At times Argentina has embraced trade and economic openness, only to slip back into bad habits thanks to populist Peronistas like Fernandez. Macri, a conservative, wants to re-establish free market principles, but there are a lot of details he didn’t fully explain before his November victory because they will require some short-term pain, and he wanted to win the election.

Everything Macri is talking about makes sense. He says he will lift the capital controls that have wrecked the peso’s credibility. Like other backwaters it shouldn’t resemble, Argentina has a thriving black market because the government insists the peso is worth a lot more than its actual value. Freeing the currency would devalue it, a first step toward making Argentina more competitive.

The next big step would be to negotiate a settlement with the hedge funds that bought up Argentina’s debt after its previous default in 2002 and demand repayment. Fernandez got political mileage from attacking the “vultures,” but Macri seems to understand Argentina can’t get unstuck when it’s essentially shut out of international capital markets. He sounds like he wants to do a deal.

Macri’s got a tremendous balancing act to pull off: He’ll need to cut spending and reduce taxes without destroying the country’s big social safety net, while walking the country through a devaluation.

This is how countries that are ruled for a prolonged period by the political left eventually end up. I know so many of you lose heart and think that there is no hope, but there is hope. Even in countries where the left is running everything from the universities, to the judiciaries, to the mainstream media, there is hope.

Over the last 7 years, Obama added $10 trillion to the national debt. And although few of his Democrat low-information voters know about that, they will be able to tell the difference between prosperity and poverty when the United States reaches the Venezuela / Argentina tipping point. There comes a time when there are no more bailouts for the economics deniers. Reality wins in the end.

How well are Democrat economic policies working in Venezuela and Argentina?

Are Barack Obama and Hugo Chavez very different?
Are Barack Obama and Hugo Chavez very different?

I have been reflecting sorrowfully on some of the outright lies spoken by the President in his recent State of the Union address. I am thinking specifically of lies that are almost universally rejected by economists across the ideological spectrum – lies so obvious that you would have to be an illiterate peasant living in a village in Venezuela or Argentina in order to believe it.

Three of his lies stand out – the minimum wage lie, the global warming lie and women pay gap lie. Each of these lies is as false as saying that the Sun goes around the Earth, or that the Earth is flat. What bothers me is not that the President spoke them, because I expect someone with no scientific background and no private sector experience to say things that are not true. But what bothers me is that the American electorate is now incapable of identifying such obvious lies.

Let’s take a look at this article from the leftist Washington Post.

Excerpt:

On aisle seven, among the diapers and fabric softener, the socialist dreams of the late Venezuelan president Hugo Chávez looked as ragged as the toilet paper display.

Employees at the Excelsior Gama supermarket had set out a load of extra-soft six-roll packs so large that it nearly blocked the aisle. To stock the shelves with it would have been pointless. Soon word spread that the long-awaited rolls had arrived, and despite a government-imposed limit of one package per person, the checkout lines stretched all the way to the decimated dairy case in the back of the store.

[…]Pathetic, in a country with the world’s largest petroleum reserves and oil prices at nearly $95 a barrel, yet unable to supply basic goods because of its crumbling local currency and a shortage of U.S. dollars.

[…]Nearly a year after Chávez’s death of complications from cancer at age 58, his hand­picked successor, Nicolás Maduro, is struggling to contain food shortages, spiraling inflation and rampant crime.

The arrival of basic staples such as cooking oil, chicken, flour or milk brings Venezuelans running to supermarkets and touches off surreal mob scenes, even as the government imposes price caps and rationing to prevent hoarding.

Maduro squeaked past opposition candidate Henrique Capriles in April’s presidential election, and Maduro’s United Socialist Party won enough races in Dec. 8 local elections to push back against perceptions that Chávez loyalists were deserting him. Just before the vote, with television cameras rolling, he sent soldiers into an appliance store accused of price gouging and ordered huge markdowns on televisions and microwaves. Apparently it gave his party a final boost at the polls.

There’s not a dime worth of difference in terms of vision between the Democrats in the USA and the socialists in Venezuela. The same people who think that sending armed troops to nationalize industry in Venezuela are nationalizing health care in this country right now. We will eventually see the same lines for health care that form in Canada and the UK. When you tax, regulate, and even attack those who provide services and products, you get shortages. Period. And yet big government redistribution of wealth seems to be winning over low-information voters in Venezuela and in the United States.

Are Barack Obama and Cristina Kirchner very different?
Are Barack Obama and Cristina Kirchner very different?

Venezuela has 56% currency inflation right now thanks to “stimulus” spending, but that is not the only place where Democrat policies are in force. Consider this article from the leftist Guardian about Argentina, where Democrat “stimulus” spending policies have led to rising prices of consumer goods.

Excerpt:

Every morning around 8am, the stern-faced cabinet chief Jorge Capitanich stands behind a podium at the Casa Rosada presidential palace for a televised verbal blast at the perceived enemies of the “victorious decade” presided over by the current president and her husband, the late Nestor Kirchner. Without naming them, Capitanich lashes out against the “visible and invisible” politicians, labour representatives, businessmen and journalists he blames for the sudden collapse of the peso and the explosive price increases that followed the forced devaluation.

Argentina’s economic earthquake has placed a huge question mark over the political future of the stateswoman so powerful she is referred to as Queen Cristina by both the opposition press and her supporters. In the past week, Capitanich has attempted to pin the price lurch on faceless foreign speculators, whom he accuses of a “strategy of domination” to gain control of Argentina’s oil and freshwater reserves, pandering to the widespread belief here, often underlined by the president in her speeches, that “vultures” of the leading industrial countries harbour secret plans to siphon off natural reserves from this resource-rich South American nation.

Capitanich has also blamed “anti-patriotic” farmers and large retailers, allegedly in league with independent, corruption-probing journalists, of fuelling price rises by “generating psychological action of permanent destabilisation” against Fernández de Kirchner.

But critics of the government point to inept administration and populist spending by a government that considers itself to be leading a revolution against Argentina’s erstwhile oligarchy.

Just like Obama, the socialists in Argentina are always looking to blame others for the problems they cause with their own policies. The problem is never bad policies that attack job creating businesses, it’s always a lack of loyalty and patriotism. We are disloyal to our economically-illiterate elites who only want to help us, they say. Leftist economic policies can work if we just believe in the leader, they say. And many ignorant peasants believe that, even when the failure is right in front of them.

Not just in Venezuela and Argentina

Of course in America, we have a different kind of policy failure. We have Obamacare. Conservatives warned the public about it for years, but our peasants went ahead and voted for it anyway when we re-elected a know-nothing in 2012. He said that we could keep our health care plans and that we could keep our doctors. He said he would reduce the cost of health care. And we believed him. We believed him because the uneducated stand-up comedians we watched on the Comedy Channel made us believe him.

Take a look at the peasants realizing that not every piece of happy talk read from a teleprompter by a celebrity is automatically true:

Human Events explains the story behind that video.

Excerpt:

All of Barack Obama’s phony rhetoric about how wonderfully the Affordable Care Act is chugging along means less than nothing compared to the cold reality that awaited the employees of a Pennsylvania company, as a local news station captured their stunned reactions to ObamaCare price hikes in real time.

[…][They] learned they’d be facing premium hikes of over 30 percent, with higher deductibles.  Even their co-payments for doctor visits have doubled.  And the numbers hitting these good people aren’t as bad as the premiums and deductibles slamming into other ObamaCare victims around the country.  The great second wave of damage in the larger group insurance market is about to get under way.

“I don’t know how President Obama thinks he’s helping us,” one employee sighs, “because we can’t afford this, we can’t afford to pay these co-pays, to pay these deductibles on what we’re making.”

Another repeats the sarcastic but accurate observation made by ObamaCare critics since day one: “there’s nothing affordable” about the Affordable Care Act.  It is observed that average people can’t just cough up three hundred dollars a month, because that’s a big chunk of a rent check or mortgage payment.  One shell-shocked woman, looking at a $400 monthly premium increase plus a $4000 deductible, confesses she has no idea how she’s going to pay it.

[…]Needless to say, none of these people will be invited to come on stage with President Obama and talk about their ACA experiences.  They’re learning the hard way that political control of an industry means distant commissars picking winners and losers.  You can do everything right and still get socked by the biggest middle-class tax increase in history, because the imperial President and his court have decided other people need lower premiums, and you must be squeezed to pay for it.

We have a generation of people who have been educated to value rhetoric from celebrities over the Constitution and sound economics in general. We must not think that we can be as ignorant as South American peasants now and avoid the consequences of that ignorance. We need to turn off the TV and pick up the Thomas Sowell book.

Related posts

Socialist Argentina follows-up runaway inflation with price controls on groceries

Take a look at this article from the leftist Washington Post, which reports on how the socialists in Argentina have imposed price controls in order to minimize the impact of runaway inflation caused by money printing.

Excerpt:

Argentina announced a two-month price freeze on supermarket products Monday in an effort to stop spiraling inflation.

The price freeze applies to every product in all of the nation’s largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains. The companies’ trade group, representing 70 percent of the Argentine supermarket sector, reached the accord with Commerce Secretary Guillermo Moreno, the government’s news agency Telam reported.

[…]Economist Soledad Perez Duhalde of the abeceb.com consulting firm predicted on Monday that the price freeze will have only a very short term effect, and noted that similar moves in Argentina had failed to control inflation. Consumers shouldn’t be surprised if the supermarkets are slow to restock their shelves and offer fewer products for sale, she added.

A more effective way to contain inflation would be to “reduce government spending, which is financing an expansion of the money supply, and to have a credible price index.”

Isn’t ironic that the United States is pursuing the exact same policy of printing money and overspending as Argentina has? Excerpt we are a little further along.

So what happens next in Argentina? Zero Hedge explains:

What consumers will certainly do is scramble into local stores to take advantage of artificially-controlled prices knowing very well they have two short months to stock up on perishable goods at today’s prices, before the country’s inflation comes soaring back, only this time many of the local stores will not be around as their profit margins implode and as owners, especially of foreign-based chains, make the prudent decision to get out of Dodge while the getting’s good and before the next steps, including such measures as nationalization, in the escalation into a full out hyperinflationary collapse, are taken by Argentina’s female ruler.

[…]So to summarize: first capital controls, then a currency crisis, then expectations of sovereign default, then a rise in military tensions, and finally – price controls, after which all out chaos usually follows.

Study this sequence well: it is coming to every “developed” country near you in the months and years ahead.

Just to be clear, price controls are a clear signal to suppliers to stop supplying, since they cannot make any money if prices are held low by government decree. Price controls lead to shortages, necessarily.  And that’s what’s in store for Argentina once the private sector food suppliers (and other companies) pull out of there when they can’t make a profit. There are other places they need to be.

Imagine if America elected a charismatic, incompetent fool to run our country like socialist dictators do in Argentina or Venezuela. Imagine if the mainstream media, with their non-quantitative degrees and lack of real-world experience, covered for his every blunder. Where would we be then?

Why is it so cold in South America? Is it global warming?

Consider this post from Watts Up With That.

Excerpt:

A brutal and historical cold snap has so far caused 80 deaths in South America, according to international news agencies. Temperatures have been much below normal for over a week in vast areas of the continent. In Chile, the Aysen region was affected early last week by the worst snowstorm in 30 years. The snow accumulation reached 5 feet in Balmaceda and the Army was called to rescue people trapped by the snow.

In Argentina, the snow in the region of Mendoza, famous for its winery, was described by local meteorologists as the heaviest in a decade. The temperature in the morning of July 16th was the lowest in the city of Buenos Aires since 1991: -1.5C. The cold snap caused a record demand for energy and Argentina had to import electricity from Brazil. Many industries in Argentina were shut down due to gas shortage.

It snowed in nearly all the provinces of Argentina, an extremely rare event. It snowed even in the western part of the province of Buenos Aires and Southern Santa Fe, in cities at sea level.

And more from a different Watts Up With That post. A map!

It’s global warming!!!

A brutal and historical cold snap has so far caused 80 deaths in South America, according to international news agencies. Temperatures have been much below normal for over a week in vast areas of the continent. In Chile, the Aysen region was affected early last week by the worst snowstorm in 30 years. The snow accumulation reached 5 feet in Balmaceda and the Army was called to rescue people trapped by the snow.

In Argentina, the snow in the region of Mendoza, famous for its winery, was described by localimagemeteorologists as the heaviest in a decade. The temperature in the morning of July 16th was the lowest in the city of Buenos Aires since 1991: -1.5C. The cold snap caused a record demand for energy and Argentina had to import electricity from Brazil. Many industries in Argentina were shut down due to gas shortage.

It snowed in nearly all the provinces of Argentina, an extremely rare event. It snowed even in the western part of the province of Buenos Aires and Southern Santa Fe, in cities at sea level.

The most famous beach of Argentina, Mar del Plata, was whitened by the snow in the morning of July 15th, a scene only seen in recent memory in 1991, 2004 and 2007.