Argentina’s Slow-Motion Disaster
Meanwhile, many Argentines are still fuming over the tragic February 22 train accident that killed 51 people in Buenos Aires. Reports indicate that the accident was caused by official neglect. Argentina’s auditor general has said it was entirely preventable. So why didn’t the government take action sooner against the railway company that caused the crash? Blame corruption in general and the Kirchners (both Cristina and Néstor) in particular. “Over the past eight years,” noted one Argentina-based journalist, “the Kirchner government has repeatedly turned a blind eye to the deteriorating rail network, pumping millions of dollars into the system while demanding little in the way of upgrades or safety improvements in return.”
To be sure, Cristina Kirchner easily won reelection last October, garnering more than 54 percent of the vote. But she was competing against a weak and divided opposition, and in many ways she bought her victory through lavish, fiscally irresponsible government subsidies. “Irresponsible” is the best description of her economic policies, which include foolish import restrictions aimed at protecting Argentina’s foreign-exchange reserves. (Automakers such as BMW and Porsche have been forced to start exporting other products, including meat, leather, rice, and wine, in return for import permits from the Argentine government.) Don’t be misled by commodity-driven GDP growth: Kirchner is accelerating her country’s relative economic decline — which, admittedly, began long ago.
That decline is nothing short of remarkable. On the eve of World War I, Argentina was richer than France and Germany. But after World War II, it entered a period of populism and dictatorship, punctuated by political violence and hyperinflation. The Galtieri regime fell shortly after Argentina’s defeat in the 1982 Falklands war, but the return of democracy was not enough to help the country escape another episode of hyperinflation in 1989. Nor was it enough to prevent a historic debt default in late 2001.
According to the narrative promoted by Kirchner and her left-wing supporters, Argentina’s default was a result of free-market economic policies. But that’s nonsense. As journalist Michael Reid has explained, “What killed Argentina’s economy in 2001 was not ‘neoliberalism’ or the free-market reforms, but a fiscal policy incompatible with the exchange-rate regime, and a lack of policy flexibility.” Indeed, the policy mix that triggered the crisis “was in direct contravention of the Washington Consensus.”
Today, after several years of appallingly bad economic mismanagement, Argentina is facing yet another looming crisis. For now, high commodity prices are camouflaging a slow-motion disaster. But those prices won’t stay high forever. And in the words of Daily Telegraph commentator Jeremy Warner, the country “is once more an economic basket case.” Sooner or later, its next crisis will erupt.
Read this article in Spanish here.
One hundred years of trying to square the socialist circle will do that. It could be turned around so quickly with some sharply focussed reforms, but like drug addicts the people would not hear of it. History as tragedy and farce being played out in front of us.
Subsitute the word Kirchner for Obama and the United States for Argentina and you have what 4 more years will bring to us all.
Juan Peron = Barak Obama, if you look at the parallels it paints a very ugly picture.
And the bill collectors are after them…
“Argentina’s Economy Minister on Monday lambasted a U.S. judge who ordered the country to pay interest to a holdout creditor on debt it defaulted on a decade ago, saying the judge had changed tack and succumbed to pressure from so-called “vulture funds”.
NML Capital Ltd and other holdout creditors who rejected debt swaps in 2005 and 2010 are suing to recover the full value of their non-performing bonds after Argentina defaulted on some $100 billion in sovereign debt in 2002.
Argentina has yet to return to international capital markets but should it try to do so, it faces the threat that some of its assets could be seized as holdouts try to enforce multibillion-dollar court judgments against the country.
Argentine daily La Nacion reported on Monday that U.S. District Judge Thomas Griesa, who oversees U.S. litigation over the sovereign default, had ruled on Feb. 23 that Argentina must also pay NML any time it services its restructured bonds.”
http://www.reuters.com/article/2012/03/06/argentina-debt-ruling-idUSL2E8E609720120306
“Law suits over sovereign debt can also take years. Argentina still has not settled with some creditors who held out during its debt default a decade ago.”
http://www.reuters.com/article/2012/03/07/hedgefunds-greece-idUSL5E8E62KU20120307
Count me in as one who sees disturbing parallels between the Peronist political tradition, and Obama/the contemporary Democratic Party in general.
Official inflation stats that badly understate real inflation? Check.
Hand-in-glove relationship with thuggish unions? Check.
Contempt for constitutional and legal limits on power? Check.
Official tolerance of large-scale left-wing public lawlesness? Check. (“Piqueteros” in Argentina, OWS in the US.)
I called Barry the Ivy league Huey long before you did.
Here’s a money saving opportunity – let the BLS compute the Argentinian inflation numbers. Why have to two agencies fabricate numbers when one will suffice? Heck, they could even use the same number for both US unemployment and Argentinian inflation.
The parallels between the path the USA is taking and what destroyed Argentina economically are stark and very alarming:
Does anybody believe the US Govt.figures for employment or inflation?
Obama thinks he is so smart he can pick the industries that will be winners, in his case it is idiotic “green” BS, hundreds of billions of dollars flushed down the “Govt. Investment” toilet.
There is the massive and wasteful military spending. The fusion of corporate and political elites as the well connected gather to feast on the national carcase. As Peron did and Obama does; cultivate the public sector unions and set them up with bloated salaries and conditions, another pillar of the socialist corporate state. Does anybody doubt that the Washington political/bureaucratic elite is incurably corrupt?
I remember a fascinating conversation I had with a seniour partner of an international economic consulting group who had presented an unsolicited bid to the Govt. of Argentina with reccomendations as to how to fix the economy; only to be waved away with the response “We know what we have to do, but it is politically impossible to do it”. Which is exactly where the US is now.
God help us if he gets another term, although honestly he isn’t the only guilty one.
The Argentinians may want the Falkland Islands, but there really isn’t much they can do about it. They don’t have nearly enough military strength to recapture them again and Britain has veto power on the UN’s Security Council to stop any motion against them. Britain has also finally wised up and has deployed more troops and aircraft to the Islands, making them even harder to attack. So let the Argentinians gripe. The Falklands will remain British as long as the people living on the Islands want to remain British.
The Argentinians can’t win the Falklands because they can’t afford a real military. They haven’t replaced their losses since the last war because they are too broke – and their international credit is worthless.
If it was Chile that wanted the Falklands, the Brits would be in serious trouble.
Those ‘Brits’ have nuclear submarines, Tornado fighter bombers and the most advanced Destroyers in the world. Alln deployed right now in the South Atlantic.
Chile doesn’t.
The whole of the South American continent could come together in a huge alliance to conquer the Falkland Islands and they still wouldn’t be able to touch them.
When it comes to the South Atlantic, Britain very much does, Rule the Waves.
Formerly Great Britain has 4 Eurofighter Typhoons and a single destroyer based in the Falklands – and no aircraft carriers and not much of a Navy of any sort to retake the islands if those forces were overwhelmed.
Chile has 46 F-16 including some brand new C and D models. They also have an economy that would allow them procure more if needed.
If Argentina hadn’t fallen down the socialist peronist rat-hole, the Brits would be toast.
Amusing to see the bile dribbling out of your post.
It must really stick in your craw that Great Britain won the Falklands war. It must stick in your craw even more that Great Britain could hold off Chile and Argentina and Brazil with one hand tied behind its back. And i’d really love to see the Chileans try to deal with some of the British nuclear submarines!
Still, don’t let reality get in the way of your anti-British prejudice……
I’ve trained with Royal Marines, fought alongside the 1st Armoured Division, and drank with the Home Guard. The British fighting men are amazing. My only resentment is what the UK government has done to its military.
The defining moment was last year – as they towed their last aircraft carrier past Libya to be scrapped in Turkey, while crying to us that they have no assets for their campaign in Libya.
Eurofighter can take on F-16′s on a 2 to 1 basis even with American pilots, with Chilean pilots more like 5 to 1. Eurofighter matches F-22 no problem. Add in nuclear submarines with cruise missiles the whole of South America is f****d if they join the Argies, which they won’t. Chile has long and deep relations with Britain, my own great-great grandfather is buried there having died of fever while working on their railroad. Chile damn near had a war with Argentina over land claims in Tierra Del Fuego. This is all horse feathers, Kirchner is trying to deflect attention from her own failures.
“If it was Chile that wanted the Falklands, the Brits would be in serious trouble.”
I concur.
BHO = Juan Perón? Pretty good comparison.
Let’s see . . . Bush succeeded by Bush . . . Clinton succeeded by Hillary . . .
So in 2016 we’ve got Michelle, right?
I’d take that to the bank given the stupidity of the American public.
“……stupidity of the American public.”
I’ll second that. Absolutely right.
Yeah. It’s a pity what 40 years of Democratic control of the educational system has done.
What is PriceStats calling the United States inflation rate? The U.S. is just like Argentina, with the government spouting forth some absurdly low inflation rate that doesn’t even factor in gas and food.
It is amazing that the Argentine voters still fall the old Peronist circus, time and again. Are they left wing or right wing? Fascist or socialist? Yeah, they are all that and the one thing you can always count on is that they destroy the economy of a very very rich nation every time they come to power. This is the curse of the nation. Right now it’s two neighbors are making progress economically, socially and politically to the point where they are acting like mature democracies with parties that alternate in office and no matter center left or center right improve their economies, their social and educational systems and their societies. It seems every time Argentina recovers from its last Peronist economic mismanaement the voters get impatient and reelect the latest holders of the tradition of Juan and Evita Peron. Perhaps some day the shabby allure of this political and economic tradition of empty promises and eventual ruin will fade away. As the write points out up to and after WW II Argentina had an economy that surpassed most European nations and was not far behind the US and Canada. Today it is having trouble keeping up with it’s neighbors.
In Australia, we also though it was amazing when you elected BHO. I am glad to say he would not have a chance down under.
This is so very tragic for the people of Argentina. Power and control by the Leftist ruling elites is considered far more important than a healthy economy and a content, happy, well fed populace. Argentinians deserve better.
No, they do not!
It may be slow motion now, but when the end comes it will be muy rapido.
obiter dicta; Sean Penn, the all wise all knowing American aristocrat has come out swinging in support of the Argentinian regime; of course he is also a big supporter of the commnunist dictatorships in Cuba, Venezuela, and Bolivia. The Communist State of California is very proud of its soldiers for socialism.
Amusing to see the bile dribbling out of your post.
It must really stick in your craw that Great Britain won the Falklands war. It must stick in your craw even more that Great Britain could hold off Chile and Argentina and Brazil with one hand tied behind its back.
Still, don’t let reality get in the way of your anti-British prejudice……
I read it more as a slam at Argentina, which at one time was one of the worlds most advanced countries with one of the highest standards of living. Until the crooks got elected.
Argentina/UK redux: As I remember it was 1981 and a guy named, I think, “let’s call him Bob” from Cleveland, was looking for a place to relocate his family for the purpose of having a safe, friendly, earnest, well spent life. He searched HI and LOW and then in late 1981 he moved his wife and kids to the Falkland Islands having determined that this was the safest place to be in a world then looking ever more dangerous. They landed in the Falklands to begin their new life and the rest is history.
Wow, a naval war between the UK and Argentina over worthless real estate. The first naval war between two countries without navies. If only it would come to pass.
PriceStats calculates that annual inflation in Argentina is now over 24 percent, and that the country’s cumulative inflation since 2007 has been a staggering 137 percent.
As a former resident of Argentina, I purchase a kilo of yerba mate tea every month. The price has gone from $4/kilo to $6-$7 a kilo, which gives a mate inflation rate of 50-75%. Most of the increase has been in the last year.
people don’t fight over a windswept piece of land …ever!
they fight for home and country …if they believe in home and country. that is why the west won past wars and why socialists didn’t.
now people don’t believe in home and country and the marxist just become squatters in the squalor that is remaining.
The writer, commentators, and agreeing readers of this piece of fiction are one word….. Pathetic. You 1 percentors and your brain washed zombie acolytes long for the past. News flash, no matter if it’s Argentina or the US, in the Age of Social Media voters in democracies are voting for candidates that are not willing to rape their fellow citizens to make profits for investment bank hacks, monopolies, and pseudo-fascists.
Sorry, you rich, privileged, aristocratic snobs. The gravy train is coming to an end. As a class, you raped national wealth and resources for too long and people have become educated enough to put a stop to it.
Also, just to drive the point home, Europe is under the control of fiscal conservatives. Argentina is under control of fiscal liberals. Who didn’t have a recession recently and continues to experience experience growth? O Yeah, it’s Argentina; you’re just mad that your workers are starting to get a little of the pie, instead of MBAs. Lastly, the rich never grow the pie, hardworking 99ers do. The rich simply horde capital, and delude the uneducated. How nervous you elitist snobs must be to know the game is coming to a close.
Viva la Revolution! heh
Your current “beliefs” lead only to breadlines and death camps with complete societal misery for all. You’ll learn some day… if you’re lucky.
no matter if it’s Argentina or the US, in the Age of Social Media voters in democracies are voting for candidates that are not willing to rape their fellow citizens to make profits for investment bank hacks, monopolies, and pseudo-fascists.
Funny you should mention “pseudo-fascists,” as the Peronista Party in control in Argentina has some “pseudo-fascist” roots as shown by this hymn of adulation to its namesake and founder, Colonel Juan Domingo Perón. You remember good old Juan Domingo, who before he became President in 1946 was a significant player in the coup that brought the military to power in 1943, and also was Interior Minister in that military government from 1943-46. Who does coups? Some say that Fascists do coups.
Back in the 1960s and the 1970s, there was a Peronist publication titled El Caudillo. Who was El Caudillo [the Chief]? Good old Juan Domingo, of course. Francisco Franco, a leading Fascist, was another leader known as El Caudillo. Had Juan Domingo and his followers not wanted such a Perón-Franco-fascist connection, they certainly could have chosen another name for their publication.
Yes, there was definitely a whiff of Fascism to Juan Domingo Perón, the founder and namesake of the Peronista Party.
Kolewelsh wrote: “Sorry, you rich, privileged, aristocratic snobs. The gravy train is coming to an end.”
What’s coming to an end is the left’s gravy train of unlimited benefits for no work. The reason leftists like Kolewelsh are ranting is they can see the end of ‘easy-money-no-work’ lifestyle…
They realize the country is broke, and unions and government are headed for some very lean days. The few rich, privileged ‘snobs’ will do just fine,it’s Kolewelsh and his ‘hardworking 99′ers’ who will now pay the price for advanced liberalism.
The truly depressing situation in Argentina shows what happens when an ignorant electorate votes for those who promise to provide more handouts, more freebies and more favors.
Of course, the same exact thing is happening here in the USA. Obama still has about 50% of the electorate in his favor. This is simply unbelievable.
When you combine a citizenry that is ignorant and eager to receive “freebies” then clearly, a free nation can no longer survive.
Argentina and Greece are previews of what is happening here; all because the AMERICAN VOTER elects those who sole goal is power and riches.
The USA is toast – literally – if Obama gets re-elected.
Greece and Argentina are the previews.
Here’s a great insight into Argentina and what it takes to survive when your country is ruined by unrestrained political spending. The book is “The Modern Survival Manner: Surviving the Economic Collapse” by Fernando Aguirre, twenty bucks or so on Amazon. Quite an eye opening to what our future WILL be if obama is re-elected.
Don Jaime thank you for pointing out what I have tried to explain in other venues.
My mother was a blond and green-eyed Argentinian.
Many years ago when I was a young economist in Washington, D.C. I wrote the economic section on Argentina: A Country Study for the Department of Defense.
At Johns Hopkins SAIS I received a solid grounding in the politics of Argentina having studied under a previous leader of the Union Civica Radical(UCR).
I have not returned to Argentina since I experienced the unnerving jostling from Argentina shock troops of Los Desaparecidos fame in the mid-1970s, however.
Argentina is an amazing country but its populace has been subjected to creeping leftist corporatism since the Peron era. As surely as the sun will again rise, Argentina has always been buffeted by a national pendulum that recurs with frequent swings from left to right.
Whenever I see the Falkland card played I experience this subconscious move to ensure my wallet is still in my back pocket. I believe that once again the labor minions are being stirred up into a nationalistic frenzy to rail against foreign control of the Falkland Islands.
Like President Obama’s dependence on playing the racist card to deflect unwanted attention, Argentina is assuredly using the Malvinas ploy to misdirect untoward economic realities.
Of course, the perception of an economically challenged and weakened military in the UK provides the opportune moment to raise the issue anew. I would not be surprised if the vastness of potential oil, natural gas and mineral resources surrounding the Falkland Islands might be of additional attraction to domestic Argentine interests.
Makes me wonder exactly what they’d do if the Brits handed the islands over.
I have seen what populism and socialistic practices made to Greece
Andreas Papandreou destroyed completely the country
19. Kolewelsh
News flash, no matter if it’s Argentina or the US, in the Age of Social Media voters in democracies are voting for candidates that are not willing to rape their fellow citizens to make profits for investment bank hacks, monopolies, and pseudo-fascists.
Interesting that you should use the term “pseudo-fascist” to describe those who criticize current policy of Argentine President Evita III Kirchner, of the Justicialista Party. Who was the founder of the Justicialista Party? Colonel Juan Domingo Perón, who later was elected President three times. There is a reason why the Kirchners are called Peronistas.
You remember Colonel Perón, who played a significant role in the 1943 coup that established a military government in Argentina. Colonel Perón became Interior Minister in the military government. Fascist is a label often applied to those who take part in military coups.
In the 1960s and 1970s, there was a Peronista publication “El Caudillo” – the chief. Who else is known as “El Caudillo?” Francisco Franco, the fascist General who ruled Spain with an iron hand for over three decades. If Colonel Perón and his acolytes didn’t want people to make the Perón-ElCaudillo-Franco-Fascist connection, they would have chosen another name for the publication.
(Google “revista el caudillo.” I do not include the link, because the spam eater blocked my previous post.)
Colonel Perón had served as a military observer in Mussolini’s Italy, and later expressed admiration for Mussolini. As President, Colonel Perón had given refuge to various Nazis. But like Franco and Mussolini, Colonel Perón did not share Hitler’s anti-Semitic fervor. A number of Jews were members of Perón’s governments.
The best-known song of the Peronists, the Marcha Peronista, a.k.a. Peronist March, shows some elements of fascism, such as ultra-nationalism and worship of the charismatic leader. Some excerpts follow.
Porque la Argentina grande
con que San Martín soñó,
es la realidad argentina
que debemos a Perón.
¡Perón, Perón, qué grande sos!
¡Mi general, cuanto valés!
¡Perón, Perón, gran conductor,
sos el primer trabajador!
My translation:
Because the great Argentina
Which was San Martín’s dream
Is now the reality in Argentina
That we owe to Perón.
Perón., Perón how great you are.
My general, how much you’re worth
Perón, Perón, our great guide
You’re the number one worker.
There was a definite tinge of Fascism to President/Colonel Juan Domingo Perón, the founder of the Justicialista Party, the ruling party in Argentina.
@gringo
The Kirchner version of “neo-Peronism” derives inspiration from the Montoneros (Movimiento Peronista Montonero-MPM) who were a radical direct action urban movement opposed as much to the establishment Peronista syndicalists as the right wing USA supported Dictatorships. The Kirchners have sought to trade on that legacy calling their economic/social policies “Movemiento K”. Somewhat ironic if you happen to remember your Kafka by the way.
On the return of Person to Argentina in 1973 with the ground prepared for his third term as President there was that infamous pitched battle between the radical left and establishment right outside BA’s international airport as the thugs from both extremes set about each other (Masacre de Ezezia. Later on the Montoneros became involved with kidnapping, extortion and assassination. Thuggish behaviour is a common characteristic of both left wing and right wing Peronism and there are a number of recent examples in the current Argentine cabinet – commented on in the Economist Articles a couple of weeks ago.
Simply trying to identify Peronism, as it has developed post the 1970′s as the dominant political philosophy in Argentina, as “fascist” is inaccurate and falls into the trap of slinging “Boo” words around which is paradoxically another defining Peronista characteristic. As a spanish speaker can observe in Peron’s famous speeches (available on Youtube) all the way through to Christina’s tedious invective … and transferred into English by our friend Kolewelsh!
As for the word “Caudillo” this has been around in the spanish speaking world for a lot longer than Franco. A better translation is “great leader/war lord” and was ascribed to the legendary El Cid by the classical Spanish authors of the 16th Century as the embodiment in one person of national aspiration. It is not in itself a derogatory term even though Anglo-Saxons find them difficult to deal with when up against them – people such as Chavez, Castro and the french equivalents De Gaulle and that other bloke Nap something who in spanish are described as caudillos.
What is most unusual about Argentinian politics is the historic failure of the “Radical” party to provide a non-violent left wing alternative to Peronism and the total inability of Marxist Socialism to gain any foothold with the large and organised urban industrial working classes in contrast with many other parts of Latin America. We should all know the history of “El Che” who died close to the international boundary failing to instigate armed insurrection in his homeland against one of the many US supported Military Dictatorships that arose with CIA backing in Argentina and which had elsewhere been such an influential recruiting ground for Marxism elsewhere in the south and central Americas. The left wing brand of Peronism had already got that base covered in Argentina.
It is these Dictatorships who share responsibility with Peronists for the failure of Argentinian economic and social policy since 1943. Menem was a Peronist who subscribed to the Washington consensus leading directly to the crisis of 2001 out of the ashes of which developed Moviemiento “K” a radical non marxist anti-democratic left wing elite determined to hang on to power with whatever legitimate and illegitimate means can be mustered.
Argentina has used up its argent, so it should change its name to simply Ina.
26. Bigdeepblue
Simply trying to identify Peronism, as it has developed post the 1970′s as the dominant political philosophy in Argentina, as “fascist” is inaccurate and falls into the trap of slinging “Boo” words around which is paradoxically another defining Peronista characteristic.
Several points. First: Kolewelsh @ #19 introduced the fascist label into the conversation, where he stated that the Kirchner government pursued policies that were against “pseudo fascists.” I was pointing out the irony of this, given that there were some fascist elements in the makeup of Colonel Juan Domingo Perón, the founding father of the Justicialista Party and of Peronismo.
Second: I said that there was a “tinge” of Fascism to Colonel Perón. My point was that there were some Fascist roots to the whole Peronista movement. That is undeniable. Regarding how the Peronista tree has grown from the 1970s on, I made no such statements. As you point out, given the “left wing” and “right wing” elements of Peronismo from the 1970s onward, it can be problematic to use the “Fascist” label.
Evita III’s autocratic methods, while they may be labeled as those of a left-wing autocrat, also recall the autocratic methods of Colonel Perón during his years as President. That also points out the difficulty of putting Fascism into the left-right spectrum, and of how we label things.
A Peronista who makes statements against Fascism, but who also reveres the memory of Colonel Perón is akin to someone who states that the KKK disgusts him but who also considers Nathan Bedford Forrest a hero- including the post-Civil War Forrest. [Nathan Bedford Forrest was one of the founding fathers of the KKK.]
Regarding your exposition on “El Caudillo,” you are correct that the man on horseback has a long history in the Spanish-speaking world. That the man on horseback has a long history predating Fascism does not contradict the fact that the man on horseback is a prime element of Fascism, from Mussolini on.
The milicos in Argentina have long had a tendency to interfere in politics. The 1930 and 1943 coups couldn’t have been backed by the CIA, because the CIA wasn’t in existence. Moreover, there was a pro-Axis – and thus anti-American- tinge to the 1943 coupsters. Three decades later, President Carter spoke out frequently against the human rights violations of the Videla regime. [The regime considered that “interference” in internal Argentine affairs.] Recall that Jacobo Timmerman, later tortured by the Videla regime, had initially called for a coup against Evita II, a.k.a. Isabel Perón. No CIA plant, Mr. Timmerman. Given that history, I am very skeptical about any claim about “many US supported Military Dictatorships that arose with CIA backing in Argentina.”
The discovery of 500 million barrels of oil in the region will surely ignite the conflict once again. the Malvina’s are 300 milies off the coast of Argentina, the Falkland’s are 8000 miles off the coast of Britain, enough said.
Despite the morality of using violence to achieve personal or political aims, the fact remains that Countries exist because of wars fought against their neighbours or rivals. Independence is largely secured through the employment of armed forces and the willingness to fight if threatened, this alone prepares us all for such an eventuality.
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