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Oct 23, 2013 0 Comments

Freedom Is Not Free: How Should Think Tanks Address The National Security Question? Articles / Opinion Editorials

Authors: ALEX CHAFUEN

The unhindered movement of money, goods and people are essential aspects of economic freedom. These same freedoms, however, can be used for violent purposes by national or international aggressors. The same freedom that allows the government to pull back money from a country known to seize private deposits, can be used to launder money from kidnappings or terrorist activities. The same smuggling, that helps one avoid customs when buying something, can be used to smuggle a shoulder missile. Security is key component of economic freedom.

The 9/11 attacks, a failure in national security, changed the dynamics of the economic discussion in the United States. We are still paying the costs. I followed this impact on immigration, trade and monetary policy. Former Mexican President Vicente Fox was in the U.S. days before the attack to help consolidate an immigration reform policy. The U.S. was advancing to push free trade in the Americas. A high level Argentinean delegation was also in Washington to help seal an agreement. After 9/11, major concerns of war creating a possible recession encouraged the continuity of an easy monetary policy. These policies, kept in place because of failed national security, fueled massive spending and enabled the 2008 bubble.

Other mishaps in national security can completely shift the economic debate. Take for exampleBitcoin, the electronic payment system which is out of reach of central authorities. Just imagine the impact of a terrorist organization taking advantage of one of its features to pass money to finance a major operation.

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Oct 9, 2013 0 Comments

Good Money After Bad Articles / Opinion Editorials

Authors: FERNANDO MENÉNDEZ

Venezuela’s President Nicolás Maduro recently returned from Beijing with a $5 billion line of credit from the China Development Bank (CDB).  This comes at a very difficult time for Maduro, whose regime’s support is at an all time low since his predecessor, Hugo Chávez, first came to power 15 years ago.  For Maduro things abroad look better than things at home. 

A former bus driver, named as successor to the late, charismatic Chávez, Maduro is driving his country’s economy into a ditch.  Instead of correcting his path, he has been shifting blame for his mismanagement on to others. 

The Broken Record 

Despite one of the largest oil booms in history, yielding over $90 billion a year to the Venezuelan government, Maduro runs one of the worst performing economies in the Americas. 

Since coming to power in April, after a hotly contested election in which he claimed to receive just over fifty percent of the vote, Maduro has presided over recurrent national electricity blackouts, one of the highest murder rates in the world, shortages of basic goods such as rice, oil, butter, flour, and even toilet paper. 

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Sep 7, 2013 0 Comments

Is the China-Latin American Fiesta Over? Articles / Opinion Editorials

Authors: FERNANDO MENÉNDEZ

The recent deceleration in China’s economic growth rate has sent waves of speculation among many commentators.  Most recently, concern is being voiced that China’s slowdown will have a negative impact on Latin America’s emerging markets. The Miami Herald’s Andres Oppenheimer, for example, declared that the “China-Latin American fiesta is over.”  None other than Nobel Laureate Paul Krugman has argued “China is in big trouble.” 

For Oppenheimer signs of the fiesta’s end are China’s lowered growth rates, its decreasing raw material purchases in the region, as well as a lack of diversification in exports and infrastructure spending by Latin American countries. 

There are two things to examine here.  One is China’s shifting economic priorities.  The other concerns trade policies in different Latin American countries. 

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