With left-leaning governments ousted in the recent past in Argentina, Brazil and Paraguay, a conservative turn in the Chilean local elections in October, and massive political pressure on Nicolás Maduro's government in Venezuela defenders of the neoliberal Washington Consensus are feeling pretty content at the moment. Talvi seems to be in a we're-living-in-the-best-of-all-possible-words mood, concluding in his final paragraph:
Most likely, they will continue the evolutionary process, by preserving some of the basic Washington Consensus tenets, while pursuing new redistribution policies when feasible. But resources will be scarce, so they will need to redesign social-spending programs and infrastructure projects to maximize efficiency and get more bang for their buck. I call this new paradigm “intelligent austerity.” If Latin American governments implement it successfully, they truly will deserve to claim credit for the economic gains that result.One suspects that "intelligent austerity" is not substantively different from "expansionary austerity" of recent notoriety. There are many names for Hebert Hoover/Heinrich Brüning economics. The results, though, are remarkably consistent. (See Paul Krugman, The Expansionary Austerity Zombie New York Times 11/20/2015.)
Talvi smugly argues in his brief column that Keynesian economics and capital controls to protect their countries from financial speculation had nothing to do with the long stretch of prosperity of the 2000s, even in the face of the North Atlantic Great Recession. No, it was all the result of commodity prices. "Latin American governments had again convinced not only themselves, but also voters, that their policies were behind the previous boom," he scoffs.
Since he declares rather than explains this more-than-dubious contention, I'll just not that it's an enormous generalization that throws a petrostate like Venezuela in with far more diversified economies, and lumping large and small countries together. Not to mention the stereotypical imperial-minded dismissal of developing countries as incapable of doing anything right for themselves. So they should just faithfully implement the Washington Consensus as their betters instruct them.
The article of his own to which he links in the quote above is Time for intelligent austerity Brookings Insitute 03/03/2016.
In the neoliberal dogma, it's always time for austerity. For the majority, of course, certainly not for the oligarchs. Just as it's always time for privatization, for deregulation, for lowering taxes on the wealthy, for lowering wages and busting unions. For defenders of the One Percent, the old standards are the only music worth playing.