Wednesday, June 25, 2014

Mark Weisbrot on Argentina's battle with the vulture funds

Mark Weisbrot of the Center for Economic and Policy Research writes about the vulture funds financial war on Argentina in Who Shot Argentina? U.S. News & World Report 06/24/2014. He raises an intriguing question about just what the real position of the Obama Administration and the IMF is in this conflict:

To this day [since 2001], there is no love lost between the IMF and Argentina, since the fund presided over Argentina’s terrible economic collapse of 1998-2002, as well as numerous failed policies in the years prior. But when the U.S. Court of Appeals for the Second Circuit ruled in favor of vulture funds trying to collect the full value of Argentine debt that they had bought for 20 cents on the dollar, even the IMF was against the decision.

So it surprised many observers last Monday when the U.S. Supreme Court refused to even review the appellate court’s ruling. ...

So why didn't the Supreme Court hear the case? It could be that the court was influenced by a change of position on the part of the U.S. government, which may have convinced it that the case was not that important. Unlike France, Brazil, Mexico and Nobel Prize winning-economist Joseph Stiglitz, the U.S. government did not file an amicus brief with the Supreme Court, despite its filing in the appellate case. And – here is the big mystery – neither did the IMF, even though it has publically [sic] expressed concerns about the impact of that ruling.
And he points to the influence of "Miami," the anti-Castro lobby, and their hostility to Argentina's government:

It could be that all of the suspects were involved, as in “Murder on the Orient Express.” But one important clue may be this grilling of U.S. Treasury Secretary Jacob Lew by Florida Rep. Mario Díaz-Balart. A nephew of Fidel Castro’s first wife, he is part of the hardline anti-Cuba lobby which, like the neocons generally, sees all of the left governments in Latin America as enemies that would look much better out of power. Now it is pretty clear that Mexico would not have filed an amicus brief at the Supreme Court without at least a wink and a nod from Treasury. In an aggressive interrogation in the House of Representatives, Diaz-Balart tried to get Lew to admit that Treasury was guilty of the crime of getting Mexico to file a brief in support of Argentina.

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