October 13, 2008  In today's WALL STREET JOURNAL, we read “Latin America ... can anchor its own ship. Serious Latin economies -- obviously we don't mean Argentina, Venezuela, Ecuador, Nicaragua, Honduras or Bolivia -- have spent the past two decades preparing for such a moment." In other words, Ecuador's manipulatively dishonest economic policies have prepared Ecuador for nothing but misery following closely its "new" constitution which happens to stand as possibly the most manipulatively deceptive document on the planet Earth. Manipulative behaviors always get one in to trouble- whether it be families, nations and their economies.
 
To be serious, any entity- human persons, families and governments- must act responsibly. Ecuadoreans revere and now legalize irresponsibility, claiming that this is the best they can do- when this is a lie. Ecuadoreans have done nothing to neither lift themselves up nor prepare for the future....except to go shopping as the tsunami of criminal cartels sweeps through Ecuador. Contrast Ecuador's future with the future apparent for Chileans, Mexicans, Peruvians and Colombians: their future is far more assured than Ecuador's for a reason: these nations are trying and Ecuador does nothing but.... go shopping. Read about it here:
 
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The Wall Street Journal
THE AMERICAS
OCTOBER 13, 2008
Latin America Can Weather the Storm
Every crisis is an opportunity.
By MARY ANASTASIA O'GRADY

 
On Sept. 18 Brazilian President Luiz Inácio Lula da Silva pronounced his country largely insulated from the troubles in U.S. financial markets. "The press keeps on asking me about the U.S. crisis," "Lula" told reporters. “I say, 'Ask Bush.' This is his crisis, not mine."

Within days, Lula was backing away from that view and on Sept. 29 he conceded that Brazil was somewhat exposed to events in the U.S. "It's important for the Brazilian people to know that a recessionary crisis in a country as important as the United States could cause problems in all the planet's countries," he said on his weekly radio program.

That has turned out to be a whopper of an understatement. The Brazilian currency, the real, has lost 40% in the past four weeks and the Bovespa stock index in Saõ Paulo has also taken a dive. It has fallen 45% since the end of the second quarter.

Brazil is not alone. A selling tsunami emanating from the U.S.-European panic has clobbered Latin currencies and stocks. The Mexican peso has lost more than 20% against the dollar since August and Mexico's Bolsa closed at a two-year low on Friday. Peru, Colombia and Chile are also getting slammed.

Given the magnitude of the selloff, some observers may be surprised to learn that the banking systems of these countries are not infected with the financial bird flu spreading through the G-7. Rather, investors are piling out of Brazil, Mexico, Chile, Peru and Colombia in a flight to quality. They are also fleeing because of the credit squeeze, the end of the commodity boom, and a slowdown in rich-country growth that will reduce demand for the region's output. Growth is expected to slow in most of Latin America.

Even worse is the damage being done in the arena of ideas. The region's most reform-minded countries are now under attack by socialists who claim that the meltdown is cause for abandoning market economics. Just the opposite is true.

Thanks to the reforms of the past two decades the most open Latin economies are in a much better position today than they were in the 1980s when Federal Reserve Chairman Paul Volcker tightened credit to attack inflation. They should not be allowed to backslide. This is the time to accelerate liberalization with an eye toward greater economic flexibility.

As Lula rightly noted, "all the planet's countries" now have problems as a result of government failure in the U.S. and Europe. Lax monetary policy at the Federal Reserve starting in 2002 and government policies designed to aggressively expand U.S. homeownership created an asset bubble in the G-7.

That bubble has burst and the explosion has scattered impaired assets like shrapnel throughout the financial system of Europe and the U.S. Banks need to be recapitalized, and government "help" may be making things worse. The handling of Treasury Secretary Hank Paulson's bailout plan seems to have lowered the market's confidence that a solution is near.

There is not much Latin America can do about the leadership vacuum in the U.S. or Europe. But it can anchor its own ship. Serious Latin economies -- obviously we don't mean Argentina, Venezuela, Ecuador, Nicaragua, Honduras or Bolivia -- have spent the past two decades preparing for such a moment.

Market reformers began their work in the late 1980s, though Chile started earlier. Over time their efforts put an end to profligate state spending and runaway inflation. Today dollar reserves are high, net foreign debt is low or nonexistent, and banks are healthy. State-owned firms have been sold and trade is more open than it has been in 80 years.

All of these factors -- changes that the Latin left resisted -- now form the foundation of the region's most promising economies. But it is not enough.

One reason capital flies out of emerging markets in crises is because it is seeking the safest port in the storm. Latin American central banks have been using their reserves to shore up confidence but they may have to resort to higher interest rates, which would further damage growth. A better way to get capital flowing back into these markets is by signaling investors that it will be well-treated.

To that end, the region has much work left to do. Brazil's entrepreneurs are burdened with punishing tax rates and complex regulation. Mexico restricts investment in energy, telecommunications and air travel, and in recent years it has increased protectionism. Colombia and Chile still fiddle with capital controls. Peru has insecure property rights, which discourage investment. Labor markets throughout the region are inflexible.

Every crisis offers opportunities and this one is no different. The region's reformers have already done much heavy lifting. Why not seize the moment and finish the job?

 
 
And just last week, we noticed these two postings about "the Marxist clown show in Bolivia and Ecuador at Investor's Business Daily Blogs:
 
FARC Terrorist Mines Kill 8 Colombian Soldiers (AP)
Wed Oct 08 18:23:19 UTC 2008
There's still a vile Marxist war going on in this allied country. Done by people with ties to the same board of directors at the Caracas-based Miranda International Center that Bill Ayers sits on.

EU Dumps Ecuador, Bolivia From Talks (Colombia Reports)
Wed Oct 08 17:54:58 UTC 2008
Fed up with the Marxist clown show in Bolivia and Ecuador, the European Union opted to dump the two of them from its ongoing free trade treaty with Andean States. Instead it will negotiate only with Peru and Colombia, two nations serious about becoming economic powers, not nuisance states. This was a smart move and will get the treaty done much faster. The US, unfortunately, isn't engaging in this same smart strategy - it extended Andean trade preferences, which drop tariffs in Andean goods in exchange for drug-fighting help to all four countries as if all four were alike. That sends a bad message to Peru and Colombia, suggesting that it doesn't matter if one is a friend or enemy, the payoff is always the same.
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Worse still, with the coming EU trade pact, Europe is going to eat America's lunch. American companies currently pay 35% tariffs on goods shipped to Colombia. Try to sell goods in Colombia with that ball and chain on the price while European goods sail in duty-free. The US is all but certain to lose whole markets from this setup. After all the blood and treasure America spent to help make Colombia a safe place, some $6 billion in aid, while Europe, despite its vast cocaine buying public, paid nothing, Europe is the one walking away with the nice new markets. That's what our $6 billion paid for! An opening of new markets for Europe! The Europeans can send their thank-you note to Nancy Pelosi who's responsible for this state of affairs.
 
 
The two most important newspapers in the world call Ecuador's finances unacceptable and as you can see, one writer calls Correa a Marxist clown. And that is the truth. We believe that Ecuadoreans can demand better- not more manipulations.
 
-Pedro Camargo for ECrisis