The list of bad policies practiced by these countries is almost too long to list: massive government overspending; currency controls, featuring "official" exchange rates, special rates for friends of the government and extensive black markets; nationalizations of major companies, where the former owners may or may not get paid; outright theft of private pension funds; and all kinds of government handouts to favored constituencies.
Late last week, both Argentina and Venezuela suffered sudden violent economic shocks in the world financial markets. Their currencies are dropping like stones. According to the Wall Street Journal here, the Argentine peso slid 15% just last week. In Venezuela the currency has been plummeting for months and inflation seems to be running at at least 50% per year.
So you may be wondering, to what does the New York Times attribute the crisis in these countries? Nathaniel Popper reports on the front page of Saturday's print edition:
The ascent of developing countries over the last decade has been fueled by two global trends: the steady rise of China and the willingness of the Federal Reserve to stimulate the economy. Now, with both trends starting to retreat, investors have been heading for the exits in markets as far removed as Buenos Aires, Istanbul and Beijing, with effects spilling over into the rest of the world.
Right. In a lengthy article about the battering underway in third world markets including Argentina, not a mention of government overspending, of exchange controls, of expropriations, of crony capitalism, of defaults on debt. It's all caused by the slowing down of the "stimulus" of the U.S. Federal Reserve! Some things you just can't make up.