Maybe a little ‘capitalismo’ is what Latin America really needs

(My new American Thinker post)

We just had two important elections in Latin America.

In Venezuela, the center-right opposition took over the legislature. They plan to challenge, and perhaps, reverse President Nicolas Maduro’s populism. To be fair, there was more to that election than ideology. In other words, corruption, crime, chaos and simple bureaucratic arrogance were behind the anger in Venezuela.

In Argentina, newly-elected President Mauricio Macri is committed to moving the country to the right and improving the damage that left-wing policies have done to Argentina.

Will the trend continue? Yes and my guess is that “king of crony capitalism” Brazil is next! How can the 8th largest GPD in the world be so inefficient and corrupt? More and more Brazilians are asking that question!

I think that the Latin America middle class is finally figuring out that “populismo” is a scam and not a good economic development policy. It benefits three groups: big business, corrupt public sector unions and the politicians who carry their water!

Maybe the time has arrived to give “capitalismo” a chance, as James Pethokoukis reminds us.

The bad news is that there are entrenched interests from Mexico to Argentina to protect “crony capitalism”. We saw the left’s reaction in Mexico when President Enrique Pena-Nieto tried to reform PEMEX and the teachers’ union. We saw in Mexico the same kind of childish demonstrations that Governor Scott Walker faced in Wisconsin.

The good news is that voters in Venezuela and Venezuela turned the ships of state. In Peru, President Ollanta Humala, a former leftist, is talking sense with economic reforms intended to invite more foreign investment.

We see small steps but steps in the right direction.

P.S. You can listen to my show (Canto Talk) and follow me on Twitter.

December a bad month for the Latin American left

Two weeks ago, the people of Argentina made a peaceful turn to the right.  Yesterday, Venezuela made a sharp turn away from “Chavizmo”.

The turnout was huge, according to news reports. The final results put the opposition somewhere between 99 and 110 in the 167-seat legislature.

Socialism has not been good for Latin America.  It has created bloated governments, corrupt public sector unions and high taxes.  The net result is an underachieving economy.

Like Cuba, socialism in Venezuela was also anti-democratic.   It put the opposition in jail, closed media and intimidated voters.

Congratulations to our friends in Venezuela.   They put a fatal dagger in “Chavizmo”.

P.S. You can listen to my show (Canto Talk) and follow me on Twitter.

Cambio en Argentina……but it won’t be easy

(My new American Thinker post)

Argentina made an important right turn on Sunday. Mauricio Macri, the opposition candidate, won Sunday’s election. He is not perfect but offers a more realistic option than the misguided populist policies of the incumbent party.

At the same time, “argentinos” longing for change will have to be patient because Mr. Macri is inheriting a mess of huge proportions, as we read in Bloomberg:

“Neither candidate has addressed the elephant in the room: the reforms needed to reduce inflation, fix a fiscal deficit of 7.2 percent of gross domestic product – the largest in over 30 years – and lure back investment dollars which have stayed away due to currency controls, a lack of regulatory predictability and a decade-long dispute with holdouts from the 2001 default.”

Macri’s victory is also a huge defeat for “the Kirchner way”, the populist philosophy that guided Argentina for a decade. John Fundhas a good analysis about this point:

Argentina’s election on Sunday represented the starkest choice the country has faced since the uthoritarian era of Juan and Evita Peron began in the 1940s.

The seven-point victory of center-right candidate Mauricio Macri may herald a real shift towards more sensible economics and less anti-U.S. policies in Latin America.

Defeated Peronist candidate Daniel Scioli was a hand-picked defender of the interventionist economics of his party’s retiring President Christina Fernandez de Kirchner.

In a recent TV interview, Scioli summed up the differences between him and Macri simply: “I defend the role of the state and he defends the role of the market.” He accused Macri, a leading businessman and mayor of Buenos Aires, of representing policies of “savage capitalism” that would devastate the poor.

Argentina’s voters have often fallen for such rhetoric, but not this year.

The record of Kirchner and her Peronist party was a disaster and not easily ignored.

It won’t be easy but Mr. Macri is a better option.  He has a better chance of attracting the kind of foreign investment that the country needs to create jobs and help the struggling middle class.

Good luck to Sr. Macri.

P.S. You can listen to my show (Canto Talk) and follow me on Twitter.