Daniel Greenfield, a Shillman Journalism Fellow at the Freedom Center, is an investigative journalist and writer focusing on the radical left and Islamic terrorism.
Raising the corporate tax rate and the minimum wage aren’t just hot leftist ideas in America. Forget the “Fight for $15”. Venezuela just raised its minimum wage by 3,000%.
That adds up to $30 a month.
At least if you trust Venezuelan exchange rates. Which no one in the failed socialist state does.
"I want the country to recover and I have the formula. Trust me," President Maduro, the union boss turned incompetent dictator, declared, touting his "monetary reconversion and integral economic reconversion."
The formula, meant to save a country whose people are fleeing massive gang violence, hunger, lack of food, water, power, and medicine, includes a higher corporate tax rate and a higher minimum wage. The latest currency devaluation pegs its worthless money (expected to hit 1 million percent inflation) to its dubious cryptocurrency which is pegged to Maduro’s hallucinatory version of revolutionary socialism.
Venezuela’s economic collapse is not an outlier. Nicaragua’s Daniel Ortega, the Marxist terror boss whom every 80s leftist, from John Kerry to Bernie Sanders, had a crush on, touched off another mess.
Unemployment has nearly doubled as 86,000 jobs vanished. A contraction of 6% is being predicted. The country’s $13 billion economy depends on under a billion in tourism and $725 million in remittances. Venezuela is starving, and though its government is still subsidizing Cuba, it can’t also afford to keep floating his Sandinista Marxist allies.
The direct reason for this crisis can be found in the violent riots tearing apart Nicaragua. But the reason for the rioting is that Nicaragua’s social security fund was running out of money. The Nicaraguan Social Security Institute (INSS) offered very generous retirement benefits beginning at 60. Nicaraguan governments were repeatedly warned that INSS was unsustainable because of the small number of people paying into it and the generous payouts. Even for a socialist, there was no choice except raising payroll taxes and cutting benefits. Either that or Nicaragua would be forced to default on its loans.
But it was too little, too late.
The Sandinistas controlled too much of the government. The last-minute reforms infuriated the public. The socialist paramilitary thugs cracked down violently on protesters turning economic protests into a call to overthrow the government. And the economic collapse means that there won’t be enough money for the economy, the country, and social security. Like Venezuelans, Nicaraguans are flooding into other countries, where they’re being attacked by the local population which isn’t interested in illegal aliens.
American lefties paint a nightmarish picture of the ICE “terrorizing” Latin Americans. But in Brazil and Costa Rica, local mobs are attacking Venezuelan and Nicaraguans who have crossed into their country.
And the devastation is spreading.
The Trump administration’s decision to end Temporary Protected Status for economic migrants from El Salvador is hitting it hard. The American money that they send back to El Salvador makes up some $4.57 billion in remittances of a $27 billion economy. Lefties have praised El Salvador’s income equality and unfavorably compared the “income inequality” in the United States to one of the poorest countries in the region. But it’s easy to have income equality when what’s left of your middle class is sending money back from America by working the lowest types of jobs.
Income equality doesn’t mean everyone rises. It means that everyone falls down and stays there. America’s “unequal” society offers more opportunities, even at the bottom, than “equal” poor societies.
Meanwhile over in Turkey, the Islamic tyranny’s bonds have been reduced to junk. Its attempt to trade American hostages, most notably Pastor Brunson, for relief from the billions in fines leveled on Halkbank, led to an economic war with President Trump that its tyrant, Erdogan, is losing badly.
Halkbank, or The People’s Bank, is a state-owned bank closely linked to Erdogan, and was used to help Iran bypass sanctions. The investigation into Halkbank nearly brought down the Islamic tyrant as part of a pressure campaign that led him to launch a Reichstag fake coup in order to shut down what was left of Turkey’s independent judiciary and law enforcement.
Obama chose not to enforce penalties against Halkbank, but Trump hasn’t given Turkey a pass. Nor, like Obama, has he been willing to trade billions for Islamic hostages.
The Halkbank scandal, which entangled the family members of top Erdogan officials, served as a useful reminder that Turkey’s economy is a free market in the same way that it’s a democracy or a NATO ally. Turkey’s current finance minister is Erdogan’s son-in-law even as the economy is tumbling, its lira currency is down 85% this year and its stocks meltdown.
Qatar, Turkey’s fellow Islamist ally and an alleged interface with Iran, has poured $15 billion into Turkey. But $15 billion might as well be 15 cents. Turkey’s external debt tops $450 billion. European banks invested heavily in Erdogan’s new Islamic Turkey. And Erdogan used a surge of economic prosperity to dismantle the Republic of Turkey and replace it with an Islamic tyranny. Now the international financiers of that corrupt crony tyranny are reaping the whirlwind.
Turkish crony financial institutions and companies connected to the regime are in for a hell of a ride. Erdogan keeps howling about the lira because he knows exactly how impossible it will be for his friends to repay their debts or retain control of their companies if Turkey’s currency keeps falling.
Picking a fight with Trump has proven to be a very expensive distraction.
“We will pay nothing for the release of an innocent man,” President Trump declared. Instead, Turkey is paying even more for taking American hostages as the sanctions and tariffs begin raining down.
Meanwhile, on the other side of the terror pipeline, Iran’s economy is in even worse shape. Massive domestic protests have badly panicked the regime. Some parliamentarians have tried to launch impeachment proceedings against Iran’s finance minister. The central bank governor was already served up as a scapegoat. But arresting bankers can’t save Iran from its real problem. Like Turkey, Iran is an Islamic tyranny out front and a crony operation out back. The regime marries murderous Islamic fanaticism that may destroy the region with a horde of cousins and brothers-in-law cashing in.
The Islamic Revolution doesn’t just mean women being beaten for showing their hair or dancing in the street. It means that Islamic clerics, terrorists and their extended family networks control the wealth. Just like in Venezuela, the terrorism, the tyranny, and corruption was financed by oil money.
And there was no Plan B.
The oil earthquake shook up Saudi Arabia badly enough to rethink Wahhabism, but Iran’s Islamic leaders and Venezuela’s socialists are sticking to their guns even as their people starve and riot in the streets.
Even as the Democrats embrace socialism and Islamism, they are losing out to capitalism. Lefties point to ideal examples. But not all that long ago, Venezuela and Turkey were among their ideal examples. The Obama administration saw Turkey as a model. Bernie Sanders had praised the Sandinistas. Hugo Chavez was feted by Michael Moore fans. And then the economic reality kicked in.
Socialism is losing everywhere except among the Democrats. And the Islamic flavors of socialism and cronyism are losing along with them. When it comes to economics, America is still the future.