May 30, 2016
Five years ago, future Democratic presidential contender Bernie Sanders described Socialist-ruled Venezuela as a more suitable exemplar of the American dream than the United States.
In an essay lamenting what he described as the intractable income inequality of the American economy, Senator Sanders declared: “These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today than they are in the land of Horatio Alger.”
Despite receiving trillions of dollars in oil revenue over recent decades, Venezuela is in the midst of an unprecedented economic collapse, owing precisely to the redistributionist programs that Sanders has extolled as a model for the U.S. economy. Grocery store shelves are barren, hospitals have no access to vital medicines, rationing is under way, and riots have begun to coalesce in the streets of Caracas.
Ecuador’s President, Rafael Correa, is preparing to leave a country mired in a deep recession and facing a currency crisis. Like Venezuela, Ecuador has been ruled by a socialist government that was able to subsidize its social engineering projects through oil revenues. The end of the oil boom has left the government without the means of paying for its programs, and as Correa prepares to leave office – most likely turning it over to Vice President Lenin Moreno – he used a recent earthquake as a pretext for a huge tax increase.
Argentina, the third of Sanders’ economic role models, is a country with immense natural and industrial wealth that has seen its economy strip-mined by a kleptocratic government. Under President Cristina Fernandez de Kirchner, the government’s official statistics agency, Indec, released a steady stream of fabrications to disguise the country’s decline – which were accepted at face value by credulous people like Bernie Sanders. Now that Kirchner is out of office, Indec has corrected the statistics, and the story they tell of the country’s economic reality is frightening.“Commiserations Argentines, ”began a recent essay in the Financial Times. “You are now poorer than the Chinese, Bulgarians, Azerbaijanis, Turkmen, Mexicans, Malaysians and Gabonese, not to mention your beloved neighbours in Brazil. All is not lost, though. You are still a smidgen better off than those in Botswana and war-torn Libya.”