March 24, 2009
…and the Poor Get Richer? WTF?

No wonder the hopelessly incompetent Bushies mounted their failed 2002 coup attempt against Venezuelan President Hugo Chavez. This (via BoRev) is what terrifies the GOP about “socialism.”

“Changes in the structure of income distribution between 2002 and 2007 reveal three clearly distinct situations. Nine countries (Argentina, Bolivarian Republic of Venezuela, Bolivia, Brazil, Chile, El Salvador, Nicaragua, Panama and Paraguay) have significantly narrowed the gap between the groups at the extreme ends of the spectrum, both by increasing the poorer groups’ share of total income and by lowering that of the highest-income households.

“The most notable reductions in the two aforementioned indicators (36% and 41%, respectively) were recorded in the Bolivarian Republic of Venezuela. Significant improvements were also observed in Bolivia, Brazil and Nicaragua, where both indicators fell by about 30…”

What Cepal fails to point out, perhaps unsurprisingly, is the politics of all this. Hugo Chavez’ Venezuela as the fastest improver? A pile of centre-left governments (Evo Morales in Bolivia, Lula in Brazil and — ahem — Daniel Ortega in Nicaragua) following close behind? This is provocative stuff.

Don’t get too excited, though. These improvements only get us back to the level of the early 1990s, (though that’s no small achievement in a world where inequality generally goes in the opposite direction). Moreover, a lot of these positive trends are now under threat from the impact of the global crisis, which is cutting regional growth to zero (from 5%), hitting employment and wage levels and reversing the trend towards formalization. Sigh.


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Posted by Jerome Doolittle at March 24, 2009 11:40 AM
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So you mean those IMF structural adjustments and "free trade" didn't work? I'll have to rethink my weekly novenas to St. Milton of Friedman. Next thing you know they'll be telling us that tax cuts don't stimulate growth.

Posted by: Charles D on March 24, 2009 12:44 PM
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