There has been a political earthquake in South America, and it started in China.

In just the last few weeks, Argentina and Venezuela's left-wing governments have lost at the polls and Brazil's is looking wobbly. That's what happens when the commodity boom that had fueled your social spending turns to bust—due, in large part, to China's slowdown. The question, though, is whether the continent's right-of-center parties can do any better.

Well, at least in Argentina and Venezuela, they can't help but to. Both those countries had embraced what economists Rudi Dornbusch and Sebastian Edwards called "macroeconomic populism," basically the belief that since printing money and running deficits are sometimes good ideas, that they always are. That has turned what would have already been tough times into borderline catastrophic ones.

Why would they do that? The question answers itself: because it had worked before. Take Argentina. In the 1990s, it became much more market-oriented and cured its congenital inflation by pegging its peso to the dollar. But this stability came at the cost of giving up its ability to fight recessions by, yes, printing money or running big deficits. So when its economy did get hit by a big shock in 1998, there was nothing its government could do about it. Things got bad enough that investors started pulling their money out of the country in case it did ditch its dollar peg, which, in turn, made it more likely to do so since the only alternative was to raise rates to try to convince people to keep their money there—making its recession even worse in the process.

Argentina actually stuck it out for a few years as it spiraled down into a Depression-level slump, but, after a bank run destroyed what little was left of its economy, it had no choice but to default on its debt and devalue its currency. At which point it recovered fast. Now, it didn't hurt that Argentina's exports got a boost from China's then-insatiable demand for commodities, but by far the biggest part of its bounce back was the fact that its government had the freedom to help the economy, rather than being forced to hurt it. In other words, it was the right time for a little populism. You can see, though, how this could become a problem. The government took this success as a sign that it should keep doing what it was—printing money to pay its bills—even when that didn't make sense anymore. It tried to deny this reality by doctoring its inflation stats and preventing people from turning their pesos into dollars, but, as growth has slowed down, it finally caught up to them at the polls.

It was a slightly different story in Venezuela. It never really "needed" populism like Argentina did. Instead, the Chávez regime had the, well, revolutionary idea of taking the country's oil money—it has the largest reserves in the world—and giving it to the poor. And for a while it worked. As the Center for Economic and Policy Research points out, Venezuela's poverty rate actually fell by 40 percent between the time Chávez took power in 1999 and 2011.

The only problem is you need to actually have an economy to make this work, and Venezuela doesn't anymore. That's because the Chávez regime wanted to control not only the oil money but rather all the money in the economy. It tried to do that first by telling businesses how much they were allowed to charge, and second by telling businesses which of them were allowed to even restock their shelves. That last part was the result of the Byzantine currency system the government set up, where certain companies were given cheap dollars that they were then supposed to use to buy the imports they needed. By and large, though, they didn't since they could make more money reselling their dollars in the black currency market than they could reselling their imports to customers. So it's not profitable for unsubsidized companies to stock their shelves and not profitable enough for the subsidized ones to do so either. And that's why Venezuela has shortages of everything from food to butter to even toilet paper.

Now, Venezuela's government could keep this dysfunction to at least a livable level as long as it had enough oil money to throw at the problems it was creating. But it doesn't have that anymore, either. It mismanaged the state-owned oil company, which had previously enjoyed a fair amount of autonomy, by cutting back on the investment it needed to keep wells online and replacing people who knew what they were doing with ones who didn't and wouldn't complain about this. The result was that, by 2013, Venezuela's oil production was about 25 percent lower than it was in 1999. But far worse has been how far oil prices have fallen the past year. Venezuela depends on oil revenue for 95 percent of its exports and can't get the dollars it needs to buy much of anything with oil at less than $40 a barrel.

Nor can the government afford to pay out all the benefits it has promised, not without just printing the money—which, of course, is exactly what it has done. That has turned into at least 68 percent inflation—that was how high it was when the government stopped reporting the figures a year ago—and, according to the International Monetary Fund, as high as 204 percent next year. And on top of that, the economy is probably shrinking something like 10 percent right now. It's no surprise, then, that Venezuela's government lost the latest legislative elections despite the fact that it controls the media, has jailed opposition leaders, and even tried to trick voters by putting a fake party on the ballot that sounded just like their opponent's name. Still, it's not clear if the opposition has enough seats to change things or if the regime will abide by that if they do.

Then there is Brazil. It has been comparatively well managed, but still finds itself staring into an economic abyss. Now, like Venezuela, it had fought persistent poverty by just giving people money, but, unlike Venezuela, it did that in the context of market-friendly policies that kept its economy growing—at least until now. It is facing not only the global commodities bust but also a wider credit bust at home. Investors, you see, had poured a lot of money into the country in search of higher returns, especially after the Federal Reserve began buying bonds in 2010, and that had set off a lending boom. And, like most of them, it has turned out badly. That has made Brazil's economy contract 4.5 percent the past year, its worst performance since the 1930s, at the same time that its currency has plummeted by 50 percent against the dollar as money is now moving out of the country. That, in turn, has left it with 10 percent inflation even though unemployment is spiking. That would be enough to sink even the most popular politician, but new president Dilma Rousseff is far from that. She's being impeached as part of a corruption scandal.

In other words, a butterfly flapped its wings in China and caused a political hurricane in South America. Between 2000 and 2014, China's demand for raw materials of every kind was so great that prices soared and the coffers of commodity-based economies did, too. That gave South American governments the money they needed to redistribute to their poor, and they did. But a combination of bad luck and bad management has left them without much margin for error today—which they need now that commodity prices have come down as a result of China slowing down.

In a global economy, politics is, too.