Archive for the ‘economics’ Category

Is Britain beginning the revolution we need ?

Saturday, August 30th, 2014

A “Seismic Shock is coming to the British political system.

Douglas Carswell, a prominent Conservative MP has announced he is switching to UKIP. a new political party that has been attacked as “racist” and has been attracting a larger constituency from the British traditional voters.

A new political party has appeared in Britain called UK Independent Party. It has been called racist and a number of other things that might sound familiar to Tea Party members here.

For example:

News reports about the rising primary school population in England fail to mention the ‘elephant in the room’, said MEP Paul Nuttall.

“It is accepted that primary schools have increasing numbers of pupils, which causes all manner of problems, but what is frequently not referred to is why we have such a boom in numbers.

“And the answer is unlimited immigration into this country. It hits some areas harder than others but there cannot be many primary schools in the country which have not been affected at all,” said Mr Nuttall, UKIP Education spokesman.

Why is this controversial ? In the 1990s, the Labour Party opened the floodgates of immigration from Pakistan. The Conservatives have mentioned reducing this but have done little about it.

Steven Woolfe, UKIP Migration spokesman, attacks Conservatives for ‘lying to electorate’ on promises to cut migration, adding that ‘it is no wonder their own MPs are losing faith in them and they are haemorrhaging support to UKIP.’

“These shocking figures today show that the Government does not have a handle on immigration. The Conservative Party promised to cut net migration to tens of thousands and yet it has shot up by a staggering 68,000 in just one year. It is quite simple. They lie to the electorate. They lie to try to keep votes. Well they are being found out.

This is one reason why UKIP is hated. For example, of the 1400 young girls made sex slaves by “Asian” men, several were taken from foster parents because they had voted for UKIP.

A couple had their three foster children taken away by a council on the grounds that their membership of the UK Independence Party meant that they supported “racist” policies. The husband and wife, who have been fostering for nearly seven years, said they were made to feel like criminals when a social worker told them that their views on immigration made them unsuitable carers.

Sounds like the Tea Party to me.

(more…)

Medicine is coming to be a government benefit.

Sunday, August 3rd, 2014

Obamacare is having serious trouble as I have discussed. The success stories, like California, are an example of what I have called Medicaid for All.

“It’s a total contradiction in terms to spend your public time castigating Medicaid as something that never should have been expanded for poor people and as a broken, problem-riddled system, and then turn around and complain about the length of time to enroll people,” said Sara Rosenbaum, a member of the Medicaid and CHIP Payment and Access Commission, which advises Congress.

Most of the new enrollees are Medicaid members and those enrolled in “private insurance” learn that they have severely restricted choice of doctor or hospital.

Now we have a new development.

(more…)

What next for health reform?

Saturday, July 26th, 2014

It looks to me that the Supreme Court will have little justification for continuing the Obamacare program as it exists. The Halbig decision should kill it off. It is clear that the IRS subsidies to federal exchange subscribers are illegal.

The only statement anyone has found in the legislative history that addresses this point comes from the Act’s lead author, who affirmed that Congress did intend to withhold tax credits in federal Exchanges. During a September 23, 2009, mark-up of his bill, which ultimately became the PPACA, Senate Finance Committee chairman Max Baucus (D-MT) refused to consider a Republican amendment regarding medical malpractice on the grounds it fell outside the Committee’s jurisdiction. Sen. John Ensign (R-NV) protested, asking how Baucus’ bill could do other things that lie outside the Committee’s jurisdiction, like direct states to create Exchanges. Baucus responded the bill creates tax credits, which are within its jurisdiction, and makes eligibility for those tax credits conditional on states creating Exchanges. Conditional necessarily means that Baucus intended to withhold tax credits in states that did not create their own Exchanges.

I just don’t see how the Court can ignore that history. The political left has been on a rant about Congressional intent since the decision was announced.

(more…)

An Update on Medical Reform

Monday, July 21st, 2014

Cash medical practice or, in the phrase favored by leftists critics, “Concierge Medicine,” seems to be growing.

Becker is shifting to a new style of practice, sometimes called concierge or retainer medicine. With the help of a company that has been helping physicians make such shifts for over 13 years, he will cease caring for a total of 2,500 patients and instead cut back to about 600. These patients will pay an annual fee of $1,650. In exchange, they will receive a two-hour annual visit with a complete physical exam, same-day appointments, 24-hour physician phone access, and personalized, web-based resources to promote wellness.

The article suggest that all these doctors choosing to drop insurance and Medicare are primary care. Many are but I know orthopedists and even general surgeons who are dropping all insurance.

The concierge model of practice is growing, and it is estimated that more than 4,000 U.S. physicians have adopted some variation of it. Most are general internists, with family practitioners second. It is attractive to physicians because they are relieved of much of the pressure to move patients through quickly, and they can devote more time to prevention and wellness.

(more…)

Is Israel winning the Global War on Terror for us ?

Saturday, July 12th, 2014

Update: From Instapundit

UPDATE: Question: Come a real confrontation with Obama — which seems possible — could the Israelis flip and ally with Putin? The Soviets backed the Israelis pre-1967, and right now Putin’s siding with Assad against the Islamists. Israel would be a game-changing ally for Russia in the Middle East, especially with all the traditional Arab powers looking shaky — not only in terms of military assets, but more significantly in terms of intelligence assets.

Interesting as a game changing gambit although unlikely. Not even Obama is that stupid.

Hamas has attacked Israel, first with the kidnapping of three teenagers, now with rockets aimed, for example, at Tel Aviv and its airport.

GAZA: Islamist Hamas’ armed wing has warned airlines that it intends to target Israel’s Ben Gurion International Airport with its rockets from Gaza and has told them not to fly there, a statement by the group said Friday.

So far, Israel’s Iron Dome antimissile system has been successful in intercepting those that are a risk to populated places.

Israel’s astonishingly effective Iron Dome air defense has prevented Hamas from killing Israeli Jews and spreading terror in the civilian population. Ironically, though, the better Iron Dome works, the less sympathy the rest of the world has for a nation that remains under rocket attack.

That sentiment is to be expected as even the Presbyterian Church is anti-Isreal.

David Goldman, who has been writing as “Spengler” for years, reports on the situation in Israel.

the thumbnail version is that Hamas is making a demonstration out of weakness. Money is tight, 44,000 Gaza civil servants haven’t been paid for weeks, and the IDF did significant damage to its infrastructure on the West Bank after the kidnapping-murder of the three yeshiva boys. Netanyahu will look indecisive and confused, because he has to deal with an openly hostile U.S. administration on one side and his nationalist camp on the other. Time, though, is on Israel’s side: economically, demographically, strategically. The proportion of Jewish births continues to soar. The fruits of a decade of venture capital investing are ripening into high-valuation companies. And the Arab world is disintegrating all around Israel’s borders.

Israel has been in mortal danger for 50 years. They have survived and thrived. The Arab countries are collapsing into chaos. Iran is still a threat but its demographic future is grim.

There will be no Intifada on the West Bank: the Palestinian Arabs are older, more resigned and less inclined to destroy their livelihoods than in 2000. Syria and Iraq continue to disintegrate, Lebanon is inundated with Syrian Sunni refugees (weakening Hezbollah’s relative position), and Jordan is looking to Israel to protect it against ISIS. Egypt is busy trying to survive economically.

Israel is becoming a huge economic success under Netanyahu. Just think of our future had we elected his friend, Mitt Romney.

Obama promised a “pivot to Asia” but Israel may in fact be the one doing the pivot, leaving us in the dreary Socialist past.

Richard Fernandez notes that in the view of the world press and elites being rich makes you “white.” Everybody knows that white people, even if they are Asian like John Derbyshire’s Eurasian children, are the root of all evil.

(more…)

Mozilla steps in it.

Saturday, April 5th, 2014

Firefox has been a browser that I use going back to the time it replaced Netscape.

Netscape stock traded from 1995 until 1999 when it was acquired by AOL in a pooling-of-interests transaction ultimately worth US$10 billion. Shortly before its acquisition by AOL, Netscape released the source code for its browser and created the Mozilla Organization to coordinate future development of its product. The Mozilla Organization rewrote the entire browser’s source code based on the Gecko rendering engine; all future Netscape releases were based on this rewritten code. The Gecko engine would later be used to power the Mozilla Foundation’s Firefox browser.

The Netscape browser was the original interface for the World Wide Web. It all began with Mosaic, which was a project of Marc Anfdreessen when he was a grad student at the U of Illinois.

“In the Web’s first generation, Tim Berners-Lee (of CERN) launched the Uniform Resource Locator (URL), Hypertext Transfer Protocol (HTTP), and HTML standards with prototype Unix-based servers and browsers. A few people noticed that the Web might be better than Gopher.

In the second generation, Marc Andreessen and Eric Bina developed NCSA Mosaic at the University of Illinois. Several million then suddenly noticed that the Web might be better than sex.

In the third generation, Andreessen and Bina left NCSA to found Netscape…”

It was originally founded under the name Mosaic Communications Corporation on April 4, 1994, the brainchild of Jim Clark who had recruited Marc Andreessen as co-founder and Kleiner Perkins Caufield & Byers as investors. Clark recruited other early team members from SGI and NCSA Mosaic, including Rosanne Siino who became Vice President of Communications. Jim Barksdale came on board as CEO in January 1995.

The name change was a result of action by the University.

The University of Illinois was unhappy with the company’s use of the Mosaic name, so Mosaic Communications changed its name to Netscape Communications, and its flagship Web browser was the Netscape Navigator.

Then came Microsoft which saw Netscape as a threat, which it was.

Microsoft released version 1.0 of Internet Explorer as a part of the Windows 95 Plus Pack add-on. According to former Spyglass developer Eric Sink, Internet Explorer was based not on NCSA Mosaic as commonly believed, but on a version of Mosaic developed at Spyglass (which itself was based upon NCSA Mosaic). Microsoft quickly released several successive versions of Internet Explorer, bundling them with Windows, never charging for them, financing their development and marketing with revenues from other areas of the company. This period of time became known as the browser wars

The free browser from Microsoft was able to win “the browser wars” even though it was an inferior product.

Andreessen has become a famous investor and “angel” of Silicone Valley startups. He has also been involved in a bit of politics.

Andreessen endorsed Democratic candidate Barack Obama during the 2008 presidential elections. In 2012, however, Andreessen switched his allegiance to the Republican candidate Mitt Romney

Hmmm…

(more…)

Where is housing going ?

Sunday, March 9th, 2014

UPDATE: Megan McArdle has some doubts about house prices.

housing

The housing inflation seems to be limited to certain cities. How will this last in the poor (except District of Columbia) economy ?

I live in south Orange County and have noticed a huge amount of rental construction going on. This area has been mostly single family homes and condos since 1972 when I moved here. Now, we see big projects like this and others nearby that I don’t know the name of. These are big projects including hundreds and perhaps thousands of units. The builder is the Irvine Company which, in my previous experience, has built mostly homes and condos. Recently, I began to notice more rental projects in Irvine.

The Irvine Company Apartment Communities is dedicated to making it easy to find a home you’ll love with unsurpassed services meeting your every need. With approximately 122 exceptional apartment communities located throughout the prime California regions of Orange County, West Los Angeles, San Diego and Silicon Valley, we offer choices to fit every lifestyle and budget.

They seem to be going to rental property in a big way. Maybe this is the reason.

From reading the mainstream press all you hear are glorious signs of housing resurrection! Come one come all into the house of real estate where the almighty Fed will allow no harm to occur. Just sign and pray and the next thing you know you’ll be the next Donald Trump. The flipping, rehabbing, and housing shows are once again filling the space on a cable station near you. The perception of the Fed being this almighty protector of housing makes a bit of sense but where was the Fed in 2007?

I see lots of housing flips in southern California, not in Orange County so far.

foreclosure-completions

Even in 2013 we had 1.4 million properties with notice of defaults, scheduled auctions, and full on REOs taken on. Early in the crisis these stories were common since they were a novelty to the press. Now however, many of these properties are shifting over to large investors pushing inventory up. A clear consequence of this is a large pool of potential buyers that are unable to buy.

These may be the renters.

first-time-home-buyer

Yup. The would-be first time buyers have student loans and bad credit. They are renting.

The number of first time buyers is pathetic because household formation is weak and many young Americans are living at home with mom and dad. Forget about buying, they are having a tough time paying higher rents to the new feudal landlords. You would expect with the rapid rise in prices that existing home sales are off the charts but they are not.

Housing prices do NOT mean buyers who will be occupants. Look at mortgage applications !

mortgage-apps-for-purchase

Wow ! We are back to levels last seen nearly 20 years ago! Only difference is that we have 50,000,000 more people today walking the streets of the U.S. of A. than we did back then. Since access to middle class living is getting tougher thanks to weak income growth, more people are opting to rent:

rentals-vs-households

This is what I am seeing in Orange County. I have been looking in San Pedro for a small house near the ocean. I can no longer afford Orange County except condos. I sold my house four years ago and bought a house in the mountains. That was a bad move. I found that I could not tolerate the altitude. I had to sell into the bad market of 2012. That cost me a lot. Now, I have to lower my sights and may just stay a renter for a while. At my age, it may make better sense.

Putin, Crimea and Ukraine

Wednesday, March 5th, 2014

UPDATE: Michael Totten has an update on Crimea.

The new ruler is a former gangster whose street name was “Goblin.”

Lawmakers were summoned, stripped of their cellphones as they entered the chamber. The Crimean media was banished. Then, behind closed doors, Crimea’s government was dismissed and a new one formed, with Sergey Akysonov, head of the Russian Unity party, installed as Crimea’s new premier.

It if was a crime, it was just the beginning. Akysonov’s ascent to power at the point of a gun presaged all that has happened since — the announcement of a referendum on Crimean independence and the slow, methodical fanning out of Russian forces throughout the peninsula, ostensibly to protect Russians here from a threat no one can seem to find.

But here’s the most interesting bit: Aksyonov’s sudden rise as Moscow’s crucial point man in Crimea has revived simmering allegations of an underworld past going back to the lawless 1990s, when Akysonov is said to have gone by the street name “Goblin,” a lieutenant in the Crimean crime syndicate Salem.

Putin is dealing from a weak hand but Germany was near bankruptcy when Hitler invaded Poland. Holman Jenkins at WSJ, has a nice summary of where we are.

Vladimir Putin probably would not have spent 90 minutes on the phone with President Obama on Saturday if he intended to make a grab for eastern Ukraine. He would not have jawed twice on Friday and Sunday on the phone with German Chancellor Angela Merkel, who subsequently doubted his grip on reality.

He is not going to try to annex the eastern Ukraine where Russian speakers are alleged to be crying for rescue from The Ukraine.

He is even using fake videos like the Palestinians have done before to make his argument. The Russian speakers are not buying.

The Russian speakers are only about 17% of the whole Ukraine population.

350px-Russians_Ukraine_2001

They are concentrated in the eastern portions which are also the poorest and least productive. Ukraine could do without them except for the precedent set.

Western leaders are a risk-averse, short-term-minded lot, but if their decisions are dictated by a conviction of Mr. Putin’s iron grip on Russia, they make a mistake. Many sanguine voices, in fact, already note how the U.S. shale revolution has weakened Mr. Putin’s hand. If Western leaders were so inclined, they might surprise themselves at how vulnerable Mr. Putin’s petro-dependency makes him.

Ukraine has signed contracts with western oil firms to explore what seems to be a large area of oil shale. This is a big threat to Russia’s sole export and prop of its declining economy.

Withdraw Europe’s support for pipelines Mr. Putin wants to build. These, by way of the Black Sea and the Baltic Sea, aim to reduce Ukraine’s leverage as transit path for gas exports that generate much of his regime’s income. Mr. Putin might like to shut off the gas but he can’t. He needs the money.

Get moving on the pending U.S. trans-Pacific and trans-Atlantic trade partnerships, which grant member countries automatic approval of U.S. liquefied gas exports. The mere prospect of U.S. exports has already eroded Russia’s pricing power.

Let Exxon and other Western oil firms queuing up to explore Siberia and Russia’s Arctic know their efforts are not currently appreciated. A single caustic hearing on Capitol Hill should do it.

They could do as well in Ukraine.

Ukraine, with its control of strategic pipelines, moving toward energy independence and even energy competition with Russia (it recently signed shale deals with Shell and Chevron ) was not acceptable.

Most of all, “Putin lost Ukraine” would have been a powerful meme in the hands of his enemies, who are numerous and don’t actually care about Ukraine.

The West followed down his path, which bears passing resemblance to the petro-regime of Saddam Hussein, because Russia has nuclear weapons and Mr. Putin seemed preferable to chaos. The West may eventually get chaos anyway. Secretary of State John Kerry managed to put his finger on a truth. Mr. Putin knows no more about the true sources of 21st-century wealth and power than a swordfish knows about macramé. No, the Cold War is not returning. Russia does not have the heft to sustain a Cold War even against placid Europeans or a strategically listless President Obama. His current Western enablers just hope Mr. Putin self-destructs on somebody else’s watch.

The Russian speakers in east Ukraine are not convinced this is the right course.

But in Monday’s survey, 82% of his party’s loyalists rejected any such generosity. Even the adherents of the Communist Party, who tend to feel entitled to all of Russia’s former Soviet domains, said with a broad majority — 62% — that Russia should not jump into Ukraine’s internal crisis.

Putin’s captive media in Russia can convince Russians in Russia that the west was behind the coup in Ukraine.

Moreover, 45% blamed western influence for bringing people on to the streets of Kiev, where the “Euromaidan” protests that were originally in favour of further European integration later turned into a general condemnation of the corrupt regime.

The results are still in doubt.

Ukraine

Saturday, February 22nd, 2014

UPDATE: Max Boot, who I also respect, adds some thoughts.

The Orange Revolution failed because of corruption and inertia in the economy. What now?

This is, after all, the second popular uprising against Yanukovych, the first being the Orange Revolution of 2004-2005. Although thwarted in his attempt to steal that election, Yanukovych returned to power in 2010, managing to win a fair election after his political adversaries failed to show results while in office.

This is a second chance for the pro-Western parties in Ukraine to deal with the deep-seated malaise of the economy, the pervasive corruption, and all the other ills that afflict this troubled land. They had better do better than last time–and all the while fending off what are sure to be determined attempts at sabotage emanating from Moscow.

What to do about Ukraine ? Michael Totten has some ideas.

Ukraine's Day Infamy

He has several suggestions about other sources. I pretty much rely on him as he has been all over and has a good eye.

I spent a week in Ukraine a few years back when I traveled by car from the Polish border through Lviv to Kiev and down to Odessa and Yalta. I wrote about it at length in my book, Where the West Ends. So I feel obligated to write about it now that the capital is on fire.

Kiev is a magnificent city, and it pains me to see it like this, but I should not be surprised. Almost every country I’ve ever written about is either in hell, has only recently recovered from hell, or is on its way to hell. I hoped when I visited Ukraine that it was on its way out, but I did not have a good feeling about it, as you’ll recall if you read my book.

From his recommended source,

First let’s consider the bad reasons for a breakup—Ukraine’s diversity in general and the regional, ethnic, confessional, and cultural divisions between its “West” and “East” in particular. A good place to start is a recent article by Orlando Figes, professor of history at Birkbeck College, University of London, “Is There One Ukraine?” Figes, who should know better coming from the UK, writes about Ukraine’s divisions as if they were unique and as if diversity alone justified or led to breakup. He’s wrong on both counts. Ukraine’s diversity is pretty much the norm for all stable states everywhere.

He has some excellent points. One is about The Party of Regions.

What is unusual about contemporary Ukraine is that it’s exploited by a criminal gangster regime—Yanukovych’s— in cahoots with another criminal gangster regime—Putin’s. Many countries have the misfortune of being misruled by homegrown camarillas. Many countries have the misfortune of being dominated by predator states. Ukraine has the double misfortune of being misruled at home and “mis-dominated” abroad.

The president, who has now fled Kiev, is described a a “criminal madman.”

Remove the southeast and Ukraine’s treasury experiences an immediate boon; its demographics, energy consumption, and health improve; and its politics automatically become more democratic and less corrupt.

Although lopping off the Donbas would benefit the rest of Ukraine, Yanukovych’s mafia regime desperately needs Ukraine to be whole. If Luhansk and Donetsk were to split away, their rust-belt economy would collapse without Kyiv’s financial support and the Regionnaires, trapped in their polluted bailiwick, would have nothing to steal. And what would Yanukovych’s multibillionaire pal, Rinat Akhmetov, do without easy access to Ukraine’s resources?

There appears to be no good solution to Ukraine, including partition although that may be what will happen.

The moral for the democrats is simple. If and when they return to power, the democrats should call the Regionnaires’ bluff. Next time the Regionnaires threaten to leave, the democrats should point to the door, and say, “Don’t call us. We’ll call you.”

The same might apply to Quebec.

The Wall Street Journal had a good piece yesterday comparing Ukraine with Georgia 5 years ago.

The West dragged its feet on financial sanctions against the Yanukovych circle, but on Thursday last week a move by the EU—after 77 protesters were shot dead in broad daylight—helped bring down the Ukrainian leader. Fearing for their assets and visas, his cronies quickly dropped him.

and: At every opportunity, Mr. Saakashvili says that Ukraine’s best defense against Russian pressure is a successful move to European-style rule. This is what the revolution was about. “Change must come fast,” he says. “I’m worried about Crimea, but I’m more worried about Kiev. If Kiev goes into protracted political crisis, then everything else will explode.”

If Ukraine starts to go after its oil and gas reserves with fracking, a lot may change.

Is Venezuela collapsing ?

Friday, February 14th, 2014

UPDATE: More on the role Cuba is playing in Venezuela now.

Belmont Club has a good post today on the collapse of Venezuela. The car manufacturers have announced they are closing their plants.

Toyota Motor Co. said it would shut down its assembly operations in Venezuela due to the government’s foreign exchange controls that have crippled imports and made it impossible to bring in parts needed to build its vehicles.

The country’s other car manufacturers, including General Motors and Ford, haven’t even started operations this year, while waiting for needed parts to arrive.

The oil field workers left years ago when the Chavez government cut oil workers’ pay.

Workers’ protests continue at Venezuela’s Puerto La Cruz refinery, in the northeastern state of Anzoátegui. The oil workers are requesting the payment of their contractual benefits. Workers gathered and had some meetings in the refinery and handed out fliers. These actions will continue until the authorities of state-run oil company Petróleos de Venezuela (Pdvsa) meet each of their requests. Oil workers complained that the oil industry has violated 80% of the current collective bargaining agreement.

Army officers had no such limit on pay raises.

[They] got a 40 % raise last year. So let’s see, they get a 40 % raise in 2010, and a 50 % raise in 2011, and meanwhile oil field workers, the ones who create the wealth the government uses to give these obscene pay raises to the military, are protesting low pay and lack of legal payments they are supposed to get.

The oil workers who could, all left for Canada. That was about the time that the Alberta oil sands fields were coming on line. Those workers, and especially the engineers, are not going back to Venezuela any time soon.

Welcome to Hugo Chavez’s Venezuela, a country with the fifth largest oil reserves in the world and absolutely broke. It’s a remarkable achievement for Chavismo. A just-wow moment. Socialism is useless at everything except for smashing things in record time. There it excels. It’s hard to imagine that as late as the 1980s Venezuela had the highest standard of living in Latin America. But then in 1960 Detroit was the richest city in the world in per capita income. Now it’s well … Detroit.

Cuba is helping the post-Chavez government to cope.

The violence against unarmed citizens is reminiscent of the April 11, 2002, bloodletting, when 17 individuals who were part of a peaceful opposition march in the streets of Caracas were similarly gunned down by snipers. That was the day the head of the military told Hugo Chávez that he would not move against the crowd and that he was removing Chávez from office. Chávez prevailed, in part due to U.S. dogma against “a coup” and in part because the opposition bungled what ought to have been a transition to democracy.

Obama is a friend of Venezuela and will oppose any attempt to overturn the tyranny. He showed his true colors in El Salvador by rewarding the bad behavior of the current government.

What we see today in El Salvador is a government heading in the opposite direction from those core principles. In 2000, El Salvador was ranked as the 11th-freest economy in the world, according to the annual Index of Economic Freedom co-published by The Heritage Foundation and The Wall Street Journal. Today, it is 53rd and has registered declining scores in six of the 10 economic freedoms, including investment freedom, the management of public spending, labor freedom, and freedom from corruption. El Salvador’s performance in other world economic indices has also plummeted.

Obama’s friends seem to have dodgy records on civil liberties.

The deterioration in central and south America continues apace . There is an interesting pattern.

‘There are two Latin Americas right now. The first is a bloc of countries—including Brazil, Argentina and Venezuela—that faces the Atlantic Ocean, mistrusts globalization and gives the state a large role in the economy. The second—made up of countries that face the Pacific such as Mexico, Peru, Chile and Colombia—embraces free trade and free markets.’

The results are becoming clear.

Stifling bureaucracy, protectionist trade barriers, widespread corruption, lack of investment in infrastructure and the limited scope of economic reforms have been piling up like wood on a bonfire for a number of years. Inflation and weak government finances have provided the starter fluid and it maybe that lower demand for commodities will be the spark.

The divide has been developing for years. As Luhnow reports, ‘ A key moment in creating the two Latin Americas came in 2005, when Brazil, Argentina and Venezuela (then led by Mr. Chávez) lined up to kill the proposed Free Trade Area of the Americas—a free-trade zone stretching from Alaska to Patagonia and promoted by President George W. Bush. Troubled by the FTAA’s demise, the Pacific Alliance set out to create its own free-trade area, eliminating tariffs on 90% of goods and setting a timetable to eliminate the rest.’

Obama seems more interested in the Atlantic states.

The genius of the Left — Chavez’s for example — is that it destroys things from the inside out. They pervert religion, collapse the mores, abolish the family, shred the constitution and gradually expropriate the property. The differences from one day to the next are apparently imperceptible, but it is harder and harder to go back until finally there is no reversal of ‘progressive gains’ possible at all. The public is finally faced with the stark choice between chaos or authoritarianism. And most people will chose the Boss over the Mob.

Does any of that sound familiar ?

Most people are spurred into resistance by a crisis. But they remain lulled into complacency while the crisis remains imperceptible. Progressive tyranny benefits from image management, and takes great pains to keep crisis from view. The most insidious thing about a secret police is its very secrecy, because the mayhem it wreaks is upon the intangibles, among things we call legitimacy. So it goes until only a facade is left. Until the day of death the victim is largely asymptomatic, except for a gradual weakening. When the onset comes he discovers that his immune system is completely gone and the end is sudden.

And Iran is allying itself with Venezuela.