Must Watch

Will Snowden Come Between the U.S. and Latin America? – Council on Foreign Relations

Are you happy now Anderson??

Are there any concrete consequences for U.S.-Latin American relations? Rousseff recently said the leaks would not affect her planned October trip to Washington.

The practical implications will be minimal, in part because the United States has such a multifaceted relationship with these countries on everything from immigration to education, cultural exchanges, and economic ties. Those things reflect a very diverse relationship that goes far beyond the diplomatic government-to-government activities.

via Will Snowden Come Between the U.S. and Latin America? – Council on Foreign Relations.

 

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Civil unrest: Is Mexico next? | via the Baker Institute Blog

And now, for the Mexico civil uprising card of the day… the lab is doubtful about the veracity of these claims, but still an interesting take on the reforms of the Nieto government from Rice’s Baker Institute. But it’s Rice after all, what more can we expect.

This combination of elements makes for a volatile environment and, while we cannot underestimate the ability of the Mexican people to withstand severe political and economic crises with the patience and devotion of a medieval saint, the level of frustration is rising. Any event could trigger impassioned public demonstrations: the federal government’s suggestion that it will open national oil company PEMEX up to private investment; the unwillingness of judicial institutions to hold accountable a deeply corrupt set of governors and mayors; the inability of the major public universities to absorb the country’s high school graduates, who are turned away by the hundreds of thousands every year; or even something as mundane as a hike in transportation prices, as happened in Brazil.

What has so far kept Mexico together is a pact between the three major political parties: the Institutional Revolutionary Party (PRI), the National Action Party and the Democratic Revolution Party. This congressional coalition has been able to pass through important reforms, including in labor, education and telecommunications. This has enabled the Mexican economy to roll with the punches. But Mexicans are politically and economically savvy and understand that politicians are in it for themselves, and that big business has essentially held the economy hostage to its massive monopolies that extract resources from every Mexican, every day, with every transaction.

For a while, the middle class thought that voting for another party would solve Mexico’s problems. Then, they thought that bringing the PRI back would do it. Now they are outright disaffected. If the government does not act quickly to assuage its citizens’ concerns and allow a greater number of outlets for their anger, this could give the middle class the perception that they have no options but to take to the streets.

via Civil unrest: Is Mexico next? | Baker Institute Blog | a Chron.com blog.

Thinking about deadweight loss

Another great Venezuela Post

Caracas Chronicles

This post from the UC Berkeley Energy Institute got me thinking that we’re not grasping the fullness of Venezuela’s crazy gasoline subsidy.

The post is about Indonesia, and how it recently raised the price of gas without the streets lighting up in protests. In the post, they explain the concept of deadweight loss in the context of this market.

The basic point of deadweight loss is the following. Let’s say you’re selling Toddy, and you’re a Toddy monopolist. The Toddy costs BsF2 to produce, but since you’re a monopolist, you sell it at BsF10. There are people who value the Toddy at, say, BsF5 who will not be able to buy the Toddy because you are charging BsF10. See, if something is worth 5 to me, and the price is 10, I don’t buy it.

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