Paul Krugman in Partying Like It’s 1998 New York Times 08/11/2018 talks about the similarities he sees between Turkey's present situation and Asian crises of the 1990s, which he has studied closely. He sees an admittedly "tricky"
How it works: stop the explosion of the debt ratio with some combination of temporary capital controls, to place a curfew on panicked capital flight, and possibly the repudiation of some foreign-currency debt. Meanwhile, get things in place for a fiscally sustainable regime once the crisis is over. If all goes well, confidence will gradually return, and you’ll eventually be able to remove the capital controls.
Malaysia did this in 1998; South Korea, with U.S. aid, effectively did something like it at the same time, by pressuring banks into maintaining their short-term credit lines. A decade later, Iceland did very well with a combination of capital controls and debt repudiation (strictly speaking, refusing to take public responsibility for the debts run up by private bankers).
He also notes, "Argentina also did quite well with heterodox policies in 2002 and for a few years after, effectively repudiating 2/3 of its debt." Which is certainly right.
Then he adds this, "But the Kirchner regime didn’t know when to stop and turn orthodox again, setting the stage for the country’s return to crisis."
I'm surprised that Krugman would blame Cristina Fernández' government for the economic disaster the current President Mauricio Macri created with his straight-up IMF/Washington Consensus/neoliberal policy recipe.
The Argentine daily Página/12 picked a memorable image for a weekend story on the brewing financial crisis there that generated panicky reactions in the business press at the end of last week (Luis Bruschtein, La batalla mauricultural 05.05.2018):
A Forbes column by Kenneth Rapoza warns, "It is time to get out of Argentina and sali corriendo [get out quickly]." (It Might Be Time To Get Out Of Argentina 05/03/2018)
In another surprise move, the central bank on Friday raised the key interest rate by an additional 675 basis points to 40 percent - the highest among major economies -- as the Treasury Ministry committed to reducing spending on infrastructure, and to target the country’s primary fiscal deficit at 2.7 percent of GDP, down from 3.2 percent this year.
The peso rebounded following the announcement to close 5.5 percent higher at 21.8 per dollar. It posted its biggest one-day decline since December 2015 on Thursday even after two surprise rate hikes. The currency is still down 15 percent this year against the U.S. dollar and dropped more than 6 percent this week, the worst decline since June 2016.
Behind the peso weakness is growing concern that President Mauricio Macri is dragging his feet on taking the possibly painful steps needed to revamp the economy -- and that both inflation and government spending are spiraling dangerously high.
Argentine President Mauricio Macri took office in late 2015. He did all the things that the IMF and the Washington Consensus and conservative respectable economics said he should do: paid off the vulture fund profiteers, cutting public services, dropping capital controls, etc., etc. Now Forbes is warning investors that it might be time to pull the [bleep] out of Argentina.
But that's the nice thing about Very Serious Respectable Economics. When it reduces the living standards of millions and takes things to the (possible) brink of a financial crisis, it can't be the that the policies were wrong. No, it's the wisdom of The Market and the best of all possible worlds. In early 2016 when the economy was limping, Macri promised that things would get better in the second half (segundo semestre) of the year. It's now 2018, and the Secundo Semestre seems to be further away than ever.
And, as we see in Forbes and Businessweek pieces cited above, if there's a financial crisis, Very Serious Economics has the perfect solution: cut government expenditures more, slam real wages and salaries down further, sell off public properties, drop even more of any remaining limits on foreign speculative capital, yadda, yaddda. Because the real problem according to them is that hasn't been enough austerity and privatization and so on. El Secundo Semetre is bound to arrive someday!
Luis Bruschtein writes:
La ideología del sálvese quien pueda o del “no me importa mientras a mí no me toque” se filtró por la grieta moral que ha producido este gobierno de empresarios que han hecho negocios muy productivos para sus empresas con el Estado, mientras llevaron a la economía del país al borde del precipicio.
[The ideology of everyone for themselves or of "I don't care if it doesn't affect me" has been spread by the moral crevice generated by this government of impresarios who have done very productive business for their companies with the state, while they have brought the country's economy to the brink of the precipice.]
This is an interview in English with the Argentine political scientist Atilio Boron. Boron is a distinctly left analyst and activist, though he is very much sympathetic to left-center parties in Latin America when they are confronting conservative or rightwing parties. That's not self-evident in Argentine politics; the Socialist Party since the 1940s has generally supported the conservative Radical Civic Union over the left/center-left Peronist Justicialista Party. Argentina's President Macri Withdraws Neoliberal Reforms Due to Massive ResistanceThe Real News 02/04/2018:
Since taking office in December 2015, President Mauricio Macri has applied a standard IMF/Washington Consensus/neoliberal economic policy of reducing government and social services, cutting real wages and living standards for workers, tax reductions and deregulation for the wealthiest, privatization projects, a drastic boost of public debt, etc.
Eduardo Dvorkin (La agenda del 19Cash/Página 12 04.feb.2018) describes the result this way:
Desde el 2015 se ha escrito muchísimo para caracterizar y denunciar al gobierno de los CEOs: la desindustrialización, la desocupación, el crecimiento de la desigualdad en el reparto del ingreso, la exclusión, el ajuste en ciencia, la cancelación de los proyectos de desarrollo autónomo de tecnología.
[Since 2015, very much has been written to characterize and denounce the government of the CEOs: deindustrialization, unemployment, the growth of inequality in the distribution of income, exclusion, the cutbacks in science, concellation of the porjects for autonomoous development of technology.]
Axel Kiciloff, the left-Peronist former Argentine Economics Minister and current National Deputy, wrote on his Facebook page (@kicillofok) 02/01/2018 commenting on the following statement by Macri:
#Ahora |
Macri: "Después de más de 100 años hemos logrado que baje el gasto, que baje el déficit, que baje la inflación, que bajen los impuestos y que el país crezca dos años consecutivamente"https://t.co/HCqu9kzytrpic.twitter.com/fpxObPcCeT
My translation: "After more than 100 years, we have managed to lower spending, which reduced the deficit, which lowered inflation, that lowered taxes, and allowed the country to grow for two consecutive years."
En una sola frase Macri batió un nuevo récord olímpico de mentiras.
1. El déficit fiscal fue mayor en los dos años de Macri que en 2015.
2. La inflación de los dos años de Macri es la mayor de los últimos 15 años (IPC CABA).
3. Después de 2 años de gobierno, el PBI recién recupera valores de 2015. Y en su repaso Macri parece olvidar que entre 2004-2015 el crecimiento promedio anual del PBI fue de +3,7%
4. La industria todavía está 2,9% puntos por debajo de los niveles de 2015.
El gobierno de Macri tiene otros “récords” que omite: el endeudamiento más rápido de la historia (usd 80 mil millones en 2 años); el déficit comercial más alto de la historia; y medalla de bronce en bicicleta financiera (3º país en el mundo).
Macri viene de mentir en Davos y en Francia, pero en Argentina la realidad es que cae el salario, recortan jubilaciones y cae el empleo de calidad. #AumentaTodo y hay un sinfín de despidos.
Eso es #ElGranAjuste
[In one single phrase, Macri broke a new Olympic record of lies.
1. The fiscal deficit was larger in the two years of Macri than in 2015.
2. The inflation of the two years of Macri is the high of the last 15 years.
3. After two years of governing, the GDP recently recovered its value of 2015. And in his review, Macris seems to have forgotten that between 2004-2015, the annual average GDP growth was +3.7%.
4. Industry still is 2.9% below the levels of 2015.
Macri's government has other "records" that he omits: the most rapid increase in indebtedness in history ($80 billion in two years); the largest trade deficit in history; and a bronze medal in the financial bicycle (third-place country in the world).
Macri went to Davos and France to lie, but in Argentina the realities is the fall in salaries, reduction of pensions, and a fall in the quality of employment. #AumentaTodo {inflation on everything} and there are layoffs without end.
This is #ElGranAjuste {the big cutback}. ]
The bicicleta financiera ("financial bicycle") is a phrase often used in economics and politics in Argentina. It refers to financial profiteering in the carry trade, which is basically exploiting exchange rates to extract economic "rent". Bert Dohmen (Carry Trade: The Multi-Trillion Dollar Hidden MarketForbes 09/04/2014) defined the carry trade briefly this way, "What is the carry trade? It’s the borrowing of a currency in a low interest rate country, converting it to a currency in a higher interest rate country and investing it in the highest rated bonds of that country. The big trading outfits do this with leverage of 100 or 300 to one."
The Presidential administrations of Néstor Kirchner and Cristina Fernández had imposed capital controls - heresy to the neoliberal gospel - and carefully regulated the dollar reserves to support their policy of promoting domestic industrial development and as part of blocking "imported inflation." Macri reversed that policy. And the predictable consequences have followed.
With authoritarian-minded governments and movements in ascendancy in various places of various types, there's a lot of speculation about an wide-reaching authoritarian trend internationally: the US under Trump and his pliant Republican Party, Poland, Hungary, Turkey, Russia of course, Austria, Brazil, the Phillipines, Argentina to some extent. Most American would probably include Venezuela in that list, and that's partially accurate. But the reporting on Venezuela in the US is pretty pathetic. And with it, we can never forget, "Venezuela claims the world’s largest proven reserves of petroleum, an estimated 298 billion barrels of oil." (Michael Klare, The Desperate Plight of Petro-StatesTomDispatch 05/26/2016)
Such trends are hard to measure. Marc Plattner gives his version of such concerns in Liberal Democracy’s Fading AllureJournal of Democracy 28:4 (Oct 2017). That publication's website states, "The Journal of Democracy is part of the International Forum for Democratic Studies, housed within the National Endowment for Democracy." The NED is rightly suspected of an excessive enthusiasm for regime change in countries in which US neocons and "humanitarian hawks" disapprove of the government in power. I mention that not to suggest that their arguments be disregarded, but rather that they should be understood in the broad context of NED's outlook and practice.
Plattner is looking back at the triumphalist "end of history" narrative after the fall of the eastern European Communist governments after 1989 in what former German Foreign Minister Joschka Fischer once called revolutions by implosion.
Looking at the global situation today, a quarter-century later, we see a vastly different picture. Those same principles and practices, which by the 1990s seemed to have fully regained their former attraction and to have spread to a much wider range of countries than ever before, now seem again to be losing their luster. Today liberal democracy is clearly on the defensive. Authoritarian regimes of various stripes are showing a new boldness, and they appear to be growing stronger as the confidence and vigor of the democracies wane.
Plattner expresses particular concern about the rise of populism in Peru:
In April 2016 in Peru, voters handed a landslide congressional victory to Popular Force, the party of populist former dictator Alberto Fujimori, who is serving a 25-year prison term for severe human-rights violations committed during his presidency. The party’s 2016 presidential candidate, the former leader’s daughter Keiko Fujimori, won a very substantial plurality in the April first round—almost 40 percent, nearly twice the vote share of second-place finisher Pedro Pablo Kuczynski. Yet this still left her well shy of a majority, and she was forced to face Kuczynski in a June runoff. She lost to him by less than a single percentage point, but her party’s legislative majority means that her influence on Peru’s political direction is considerable.
While the Peruvian case is important, the election of the rightwing/oligarchic government of Mauricio Macri in Argentina (end of 2015) and the "soft coup" in Brazil (2016) are currently notably more significant in terms of their effects on democracy and the neoliberal policies that undermine it.
Neither Argentina nor Brazil has abolished elections or political parties. And the "soft coup" that put current President Michel Temer in power in Brazil was more authoritarian in nature than the straightforwardly democratic election that brought Macri to the Presidency in Argentina.
But Macri's government is a great example of predictably bad economic policies - although of the kind approved and insisted upon by the IMF and the "Washington Consensus" - and how they are easier to maintain in more authoritarian conditions than in democratic ones. Macris's government came after 12 1/2 years of kirchnerismo government, i.e., left social-democratic Peronism under the Presidencies of the late Néstor Kirchner and Cristina Fernández de Kirchner. Although Macri in his 2015 campaign made gestures toward Peronist perspectives and was supported by a Peronist faction (Peronism is a complex political phenomenon, to put it mildly), his economic policies have been the textbook neoliberal playbook of budget cuts, privatization, low taxes for the wealthy, and lower salaries and wages for the majority. The results, of course, have been high inflation and a slumping economy.
Kirchnerismo was notable in having broken with the Washington Consensus on free trade and debt by maintaining capital controls and refusing to pay vulture funds for debt that had to be defaulted on after the financial crisis of 2001. The goal was to develop the domestic economy and in particular to develop Argentine industry. Foreign debt has been a problem for Argentina as a block to national development and independence from foreign control since the "unitarian" government of Bernardino Rivadavia took a major loan from the British Baring Brothers bank in 1824. Developments in Argentina would later touch off what became known as the Baring Crisis of 1890-91, which "originated in Argentina but it was felt all over the world, first in London." (Gerardo della Paolera and Alan M. Taylor, Straining at the Anchor: The Argentine Currency Board and the Search for Macroeconomic Stability, 1880-1935 [2001])
The Elliott Management hedge fund of Paul Singer, an American vulture capitalist and one of the largest contributors to the Republican Party, bought up defaulted Argentine debt and sued in American courts, getting a bizarre and genuinely radical decision in their favor from Federal Judge Thomas Griesa in a ruling upheld by the Supreme Court. Once Macri was elected President, he quickly made a settlement that was extremely favorable for Singer's vulture funds, taking on new debt to pay it off. (The Vulture: How Billionaire Rubio Backer Paul Singer Made Billions off Argentina Debt CrisisDemocracy Now! 03/11/2016; Katia Porzecanski, Singer Makes 369% of Principal on Argentine Bonds in Debt OfferBloomberg Markets 03/01/2016)
Time magazine of 05/02-09/2016 included Macri in its list of 100 Most Influential People, with a two-paragraph tribute from Mauricio Macri:
Argentina is rich in natural resources and human capital, but its economic progress has been hobbled by the ineptitude and corruption of its political leaders. Over the past decade, the policies of Argentina's ruling duo, Nestor and Cristina Fernandez de Kirchner, led to rampant inflation, falling currency value and capital flight. The result was the 2015 election of the reformist Mauricio Macri.
Macri has removed Argentina's currency controls, allowing more freedom for trade. He has pledged to reintegrate Argentina into the global economy, seeking private investment from abroad. And he has taken action to end the 15-year default that has kept the country in economic exile since 2001. Macri still has important tasks ahead of him, including taming inflation. But if he lives up to his promise, Argentina may finally do the same. [my emphasis]
At that time, the Macri government was raising regulated prices on public utilities and the economy was slumping. Macri's supporters were telling everyone to be patient and wait for the segundo semestre (second half of the year). Argentina is in the first half of Macri's third year as President. But still waiting for the segundo semestre. This video from the beginning of his second half-year in office mocks, "The second half was born dead." Segundo semestre de Macri 07/01/2016:
There have been some disturbing signs of political repression.
Gastón Chillier and Ernesto Semánmarch wrote about the concerns that were already emerging in Macri's "first half-year" in What Obama Should Know About Macri’s ArgentinaNew York Times 03/23/2016, including the already-iconic case of indigenous activist Milagro Sala. Obama left the general impression with US voters and a political press that's largely oblivious to Latin American affairs that he had a left-leaning policy on Latin America, largely because of his pragmatic abandonment of the long-standing, failed Cuba policy. But actually his Latin American policy was generally conservative, including welcoming the political-military coup in Honduras and the extra-constitutional soft coups in Paraguay and Brazil. Obama's relations with Cristina's government was distant. But he made a point of embracing Macri after his election:
Mr. Obama’s historic trip to Cuba has all the pageantry of a farewell to the Cold War in Latin America. His visit to Havana will serve as a symbolic climax in the normalization of American relations with Cuba’s Communist government. But his excursion to Argentina has a very different resonance.
Shortly before Mr. Obama’s arrival in Buenos Aires, his administration announced the declassification of United States government documents relating to Argentina’s 1976-83 military dictatorship. Yet the visit is not about the current state of human rights, but about free trade and hemispheric security.
An acknowledgment of the malign role the United States played in the early years of the dictatorship is welcome, if overdue. But to ignore the red flags on human rights raised by the recent actions of Argentina’s new ruling party is a worrying reminder of that legacy. For Mr. Macri, Mr. Obama’s visit is already an endorsement. [my emphasis]
There have been some questionable legal investigations of senior officials from the previous government, including Cristina herself. The details of such cases can be difficult to judge from outside. The allegations against Cristina herself always looked fairly thin to me.
But after the 2017 midterm elections which brought her back to Congress and gave her a stronger position as leader of the opposition, the questionable arrests escalated and included the previous Foreign Minister and former Vice President Amado Boudou. And a new legal charge against Cristina Fernández that didn't result in her arrest because of her new parliamentary immunity. But the charge related to a sensational suicide of a prosecutor named Alberto Nisman in early 2016, who had been working for years on the AMIA bombing case from 1994. I know enough about the details of that case to say with confidence that those charges are bogus. So those are not good signs.
There have also been some questionable acts of repression against some of the many demonstrations against Macri's policies. Those are also difficult to judge from afar. But it's a pattern that is certainly disturbing from the standpoint of democracy and human rights.
And the borrowing that has historically been such a burden and trap for Argentina is continuing. Axel Kiciloff, currently a Congressional deputy from Buenos Aires city, the last Minister of Economics under Cristina's government and still a close ally of hers, warns that Macri's government is taking on a "colossal" amount of debt that, in his formulation, is being used for speculative purposes and is of "little benefit for the national economy." Kiciloff also charges Macri with trying to evade constitutional procedures and attempting to govern by decree. ("El DNU es anticonstitucional"Página/12 14.01.2018)
Obama has been on a Latin American trip, stops including Brazil and Argentina. In both places, he was echoing his conservative policies during his administration. The emphasis was particularly clear in Argentina, where he dropped by for a highly visible golf game with Argentine President Mauricio Macri, a corrupt oligarch on the Trump model, whose conservative party is facing midterm Congressional elections in two weeks. Página/12 reports (Con el "amigo" Barack 07.10.20174)
En la jerga de los golfistas podría decirse que lo de Mauricio Macri fue un hoyo en uno. A dos semanas de las elecciones consiguió una foto en la Casa Rosada piensan utilizar para instalar la idea de su liderazgo internacional y se la sacó jugando el partido de golf que no pudo jugarle cuando el entonces presidente de Estados Unidos visitó el año pasado la Argentina. ...
A la foto de esta mañana le antecedieron los elogios de Obama le dedicó ayer a Macri. “Inició esfuerzos para reconectar al país con la comunidad mundial. Me impresiona mucho el trabajo que se ha hecho en la Argentina”, dijo el ex presidente de Estados Unidos en Córdoba, adonde fue a disertar a cambio de una suma cercana a los 450 mil dólares.
[In golf jargon, one could say that what Mauricio Macri had was a hole-in-one. Two weeks before the elections, he managed to get a photo in the Casa Rosada [Presidential building] thinking to use it to create the idea of international leadership, and he got to play the round of golf that he couldn't play when the then-President of the United States visited Argentina last year. ...
This afternoon's photo was proceeded by Obama's praises that he dedicated to Macri yesterday. "He initiated measures to reconnect the country with the international community. I'm very impressed at the work that he's done in Argentina" {my translation from the Spanish}, said the ex-President of the United States in Córdoba, where he went to deliver a speech for an amount around $450,000 dollars.]
En el último mes, Obama ha tenido conversaciones con el Banco Northern Trust, con el banco Cantor Fitzgerald y con el grupo de compra en la privatizacion de empresas, Carlyle Group. Su Fundacion está financiada especialmente por donaciones de Microsoft y del gigante del sector eléctrico, Exelon, ambas con contribuciones de más de un millón de dólares. Obama ya ha hecho reiteradas presentaciones en Wall Street, por las que cobra alrededor de 400 mil dólares por cada una.
En San Pablo [São Paulo, Brazil], Obama partipará del evento organizado en el periódico económico Valor, del grupo O Globo, patrocinado por el banco español Santander. Cínicamente dice que viene a “oír a los líderes jóvenes”. No va a encontrar a ningun líder joven ahí. Para ello, tendría que llegar sin el patrocinio de bancos y tendría que ir a la periferia de San Pablo y de Buenos Aires. Pero con los patrocinios de las empresas que financian su Fundación, viene más bien a buscar nuevas oportunidades de negocios para esas empresas, en especial en los procesos de privatización que los gobiernos de Macri y de Temer ponen en práctica.
En Argentina, Obama tendrá reuniones con empresarios y se anuncia un encuentro con Mauricio Macri. En Brasil, al parecer, no se atreverá a un encuentro con Temer, que tiene el 3 por ciento de apoyo entre los brasileños. Tiene programado un encuentro en Córdoba sobre “economía verde”, organizado por la Fundación Advanced Leadership, organización que tiene su sede en Washington, con el apoyo del BID, de la OEA, de la Fundacion Mediterránea y la Boston Seguros.
In the last month, Obama has had conversations with Northern Trust Bank, with the Cantor Fitzgerald bank, the group that buys into the privatization of business [i.e., merchant bank] Carlyle Group. His Foundation is financed especially by donations from Microsoft and the giant of the energy sector, Exelon, both with contributions of more than a million dollars. Obama has made repeated presentations on Wall Street, for which he earns about $400,000 for each one.
In San Pablo, Obama will participate in an event organized by the economic newspaper Valor of the O Globo group, sponsored by the Spanish bank Santander. He cynically says he's coming to "listen to young leaders." He won't encounter any young leader there. For that, he would have to come without the sponsorship of banks and would have to go to the peripheries of San Pablo and of Buenos Aires.
In Argentina, Obama will have meetings with businesspeople and has an announced meeting with [President] Mauricio Macri. In Brazil, it seems, he didn't dare meeting with [President] Temer, who has 3% support among Brazilians. He has schedule a meetings in Córdoba [Argentina] on the "green economy," organized by the Fundación Advanced Leadership, an organization who has its headquarter in Washington, with the support of the BID, of the OAS, of the Fundacion Mediterránea and of Boston Seguros.]
The Brazialian leg of Obama's trip, presented as being on behlf of the Obama Foundation, is reported in:
The Portuguese text of the San Pablo (São Paulo) is available at Leia a íntegra da palestra de Barack Obama no Fórum Cidadão GlobalValor 05.10.2017. Obama offered some platitudes about the Internet and globalization. And some pious and presumably sincere warnings against racism and xenophobia. He even made a passing reference to the concentration of wealth to the One Percent. And praise of free trade, of course.
The Obama Foundation is supposedly training young leaders for the future.
The New York Times reports (Shasta Darlington and Ernesto Lodoño, Obama, in Brazil, Offers Familiar Slogan to Corporate Audience 10/05/2017) that Obama told his audience, "My biggest regret is not being able to bridge the differences that were emerging in our politics as much as I wanted."
Not failing to overturn Citizens United. Not being unable to stop small arms proliferation. Not screwing up the future prospects for nuclear arms control by invading Libya and turning it into a playground for Sunni jihadists. Not neglcting to build the party organization so that the Dems didn't have historic losses in November. He most regrets not having tried harder during his Presidency to make nice with Republicans. Wow!
Atilio Boron has a longish article on Argentine President Mauricio Macri's politics, which includes five points of comparison he makes between the government of Carlos Menem (1989-1999) and Macri's (2015-present) El macrismo y sus límitesPágina/12 26.08.2017
Carlos Menem
(1) Menem came to power as the head of the Peronist Partido Justicialista (PJ), an established party with a previous history of being a left party, and Menem came to power campaigning in that vein. His embrace of neoliberal/Washington Consensus economic policies took years to generate significant opposition within the Peronist movement, while the main opposition party, the Radical Civic Union (UCR), was fine with that approach.
Macri came to power with a motley political coalition called Cambiemos, which doesn't provide him anything like the solid, well-established institutional support that Menem had with the PJ.
Mauricio Macri
(2) The major media are far more concentrated than during Menem's Presidency, and are very partisan in favor of Macri and his government. Boron sees this as a major compensating factor for the weaknesses of his coalition's structure. But he also notes that this makes him vulnerable to possible turns in the media's approach in a way that Menem was not.
(3) Menem acted within the outlines of a neoliberal consensus that was not only dominant at the time in Latin America but was also more widely regarded as desirable. Boron mentions in particular Brazil, Chile, Mexico and Peru. While neoliberalism is still a dominant pardigm, Boron notes that "ese paradigma de política económica hoy ha caído en desgracia con el ascenso de Donald Trump a la Casa Blanca y el neoliberalismo que permea todo el 'equipo' de Macri da la sensación de ser anacrónico en más de un sentido" (this paradigm of political economy has fallen into disgrace today with the ascension of Donald Trump and the neoliberalism that permeates Macri's whole "team" gives the feeling of being anachronistic in more that one sense).
(4) The flip side of Macri's weakness on party organization compared to Menem is that didn't face anything like the popular resistance that Macri has since the beginning of his Presidency to his economic and political policies. Menem's neoliberalism, which eventually resulted in the crisis of 2001 after Menem had left office, also benefitted from the fact that he took office at a time of serious economic problems including an actual hyperinflation and major economic setbacks to small businesses and large portions of the population. So people were willing to cut him more slack for a longer time. While Macri took over at a time when the economy was stagnating in some ways and significant inflation (but not hyperinflation).
(5) Menem became President in 1989 in the period where the Communist government in eastern Europe and the Soviet Union were falling, which resulted in the much-discussed unipolar moment of US predominance in the world. This gave the US the clout to more effectively act as a political and economic protector of friendly Latin American governments. But as Boron observes:
Macri se enfrenta a un mundo mucho más complejo y amenazante que el de los noventas y en donde la redistribución del poder mundial y la emergencia de nuevos centros de poder (Rusia, China, India) y el debilitamiento de Europa hace que aún con el ferviente apoyo de Washington la viabilidad de sus políticas esté marcada por la incertidumbre.
[Macri encountered a world that is much more complex and threatening than that of the nineties and in which the distribution of global power and the emergence of new centers of power (Russia, China, India) and the debility of Europe makes the viability of his policies is marked by uncertainty despite the fervent support of Washington.]
Boron expresses considerable doubt that Macri will be able to define the Argentine right over a longer period because his economic policies as well as his broader ideological position are garbled. Boron also thinks that Macri is conveying a strong image of governing for the benefit of large corporations.
The Trump Wall seems to have already come to symbolize the internal anti-immigrant measures against Latinos in the US, Trumpist white nationalism/racism against Latinos, and the often obnoxious way the US behaves in Latin America generally.
It's not surprising that Latin American nations would look to make more common cause with each other with Trump as US President and taking such an openly hostile position towards Mexico, to the point of threatening to send in troops! Making common cause makes plain good "realist" sense.
What is surprising to me to see that Argentine President Mauricio Macri's government is taking a particularly visible role in this effort. Peña Nieto publicly thanked Macri for his country's "solidaridad frente a la nueva posición adoptada por el Gobierno de Estados Unidos" ("solidarity in facing the new position adopted by the government of the United States"). Macri's Foreign Minister Susana Malcorra said that Argentina was ready to make a statement of support a week earlier, but postponed it at Peña Nieto's request. (Malcorra: “Latinoamérica no es más dura con Trump porque México no lo pide, busca un acercamiento”El País 07.02.2017)
Argentina and Mexico were already making bilateral agreements last year, Macri's first full year in office. (Daniel Venegas, Peña Nieto firmará acuerdos de cooperación con ArgentinaMelenio 28.07.2016) In his public expression of gratitude to Macri this week, the Mexican President also stated that Mexico would be giving a higher priority to bilateral commercial agreements with Argentina.
But the context for such cooperation is rapidly shifting with the new administration in Washington. Despite the pragmatic adjustment of relations with Cuba under Obama, he and his Secretaries of State Clinton and Kerry adopted a basically conservative policy toward Latin America. And I mean conservative in the ideological sense, not in the sense of caution. At the end of his term, Latin American politics had shifted in a way that was amenable to that approach. The left-leaning governments of Argentina and Brazil had been displaced by conservative ones dedicated to neoliberal "Washington Consensus" and to close cooperation with the Obama and the once-presumed Hillary Clinton Administrations. In Argentina, the change took place by legitimate elections in 2015, in Brazil in 2016 by a "soft coup" that the Obama Administration clearly found to be not unwelcome.
With Mexico in the conservative hands of Peña Nieto's government, Washington had friendly conservative governments committed to neoliberal economic policies in the north in Mexico and Argentina and Brazil in the south, able to press for conservative regime change in Venezuela, neoliberal economics and the weakening of regional organizations like UNASUR that the Obama Administration saw as challenging US hegemony in Latina America.
Macri now is at least giving public signals that he wants to position Argentina with other countries in both Latin America and Europe that are alarmed by Trump's generally reckless and hostile approach to foreign policy. Macri plans to visit Spain later this month. said that Argentina was ready to make a statement of support a week earlier, but postponed it at Peña Nieto's request. Malcorro also commented, "Trump ha descolocado al mundo, no solo a la Argentina" ("Trump has disturbed the world, not just Argentina").
And Mexico now has new incentives to make regional alliances to provide diplomatic and business options to the changed situation with the United States. Peña Nieto also has the incentive that he's been an unpopular President, which is not unusual for governments following a dogmatic austerity program. "Donald Trump’s obsession with constructing a wall on the frontier with Mexico has achieved something inconceivable — the start of a campaign to unite the country which could favour President Enrique Peña Nieto," writes Cecilia González (The Mexican side of the wallBuenos Aires Herald 02/03/2017) She explains the Mexican President's problems this way:
The mirage constructed by Peña Nieto started to collapse as from September 26, 2014, when 43 students from the Escuela Normal Rural Isidro Burgos in Ayotzinapa went missing after a hail of gunfire in Iguala, Guerrero, one of the poorest and most violent states in the country. The fatigue with the long silenced violence, the profile of the missing (poor youths studying to be primary school teachers in impoverished areas) and the presence of journalists during the gunfight triggered massive protests in Mexico and other countries. The world learned of disappearances and murders in Mexico under a supposedly democratic government. Peña Nieto’s international image never recovered, above all because the government wanted to manipulate the evidence and close down the case, which was prevented by the families of the victims supported by human rights organisations.
In late 2014, when the government was still facing the impact of the disappearance of the 43 Ayotzinapa students, a team of investigative journalists headed by Carmen Aristegui revealed that first lady Angélica Rivera had purchased a US$ 7 million mansion from Grupo Higa, a company which Peña Nieto had favoured with multi-million public works contracts when he was governor of the state of México. In mid-2015, his friend Virgilio Andrade, the official heading the civil service, concluded (to nobody’s surprise) that there was no conflict of interest but the stain of corruption left by the “white house” proved indelible for the government.
As if Peña Nieto was short of problems, on July 12, 2015, Joaquín “El Chapo” Guzmán, the leader of the Sinaloa Cartel, fled from a maximum-security prison via a tunnel a kilometre and a half long which his accomplices had patiently built in more than a year. The Mexican government became a laughing-stock and never recovered, not even when the drug czar was recaptured six months later.
And then there is the issue of the structural poverty which Mexico suffers and which no government has reduced, for which all ex-presidents are responsible and which is the main cause of Mexican emigration to the US. According to the Economic Commission for Latin America and the Caribbean (ECLAC), during the first two years of Peña Nieto’s government poverty in Mexico rose from 51.6 to 53.2 percent. Over 60 million Mexicans are poor and do not expect to improve their lives in their own country. How are they not going to try their luck on “the other side”? [my emphasis]
After the election of Peña Nieto in 2012, the international press explicitly hailed him as the man who would be able to stop the advance of South American “populism” and bring back the “Washington Consensus” as the dominant ideology in Latin America. Indeed, Peña Nieto’s central, though unstated, objective since taking power on December 1, 2012, has been to dismantle the progressive legacy of the Mexican Revolution of 1910. He has drastically rolled back protections for labor, imposed neoliberal education reforms, and moved to hand over the enormous oil and gas industry to transnational petroleum companies. He has also turned Mexico into a servile client of U.S. foreign policy and its northern neighbor’s “national security” concerns.
Macri's solidarity with Mexico against Trump doesn't mean that the previous goals of the Mexico-Brazil-Argentina conservatism has completely changed. But the foreign policy context has shifted dramatically.
Macrismo is, of course, generated protest and resistance, not least because of the grim results of over a year of neoliberal, Herbert Hoover/Angela Merkel austerity economics, El pueblo argentino marcha contra políticas del gobierno macristateleSUR 02/05/2017:
Catherine Thompson gives some additional background on the Trump family's dealings with the Agrentine President Mauricio Macri and his family in Trump Drives The Crazy As Far Away As ArgentinaTPM 08/11/2016:
In August 1991, Mauricio Macri, the current president of Argentina, was thrown into a coffin and hauled off to a hideout by unknown assailants. For at least some of Macri's 12 days in captivity, his father suspected that Donald Trump was behind the disappearance.
... Now, to be clear, there's no evidence whatsoever that Trump directed or was involved in Mauricio Macri's kidnapping. And apparently Macri's father, Franco, only briefly entertained this "Trump theory." But clearly, the elder Macri's dealings with Trump in the arena of New York real estate left him with the impression that Trump could be treacherous enough to have ordered his son's kidnapping years after their business relationship ended.
She also writes, "It's true that Trump essentially ran Franco Macri, himself a construction and auto manufacturing tycoon, out of Manhattan in the early '80s."
Jorge Lanata, an Argentine journalist, said on his show Sunday that Trump had advocated during the phone call for approval of the construction of a Trump-branded property in Buenos Aires. But Lanata prefaced his statement by saying, “mitad en joda, mitad en serio,” which roughly translates to “half joking, half serious.”
That preface was dropped from a story about the report in Talking Points Memo, which quoted an account from La Nacion, an Argentine newspaper. The TPM story promptly attracted controversy on social media and was followed by a formal denial from Macri’s office.
So if they're reporting this, it gives it kind of an evidence-against-interest credibility.
Macri is really kind of a Mitt Romney type, although Mitt's father made his money is a legitimate business. Macri's father made a large amount of his selling government supplies to the military dictatorship in 1976-83, a business that was said to be notoriously corrupt.
The Macris also invested at one point in a Trump project in New York.
Macri took office last December and is some like a 60% disapproval now, mainly thanks to the economic slump he brought on with his IMF-orthodox Herbert Hoover policies. After 2003-2015 under a Peronist government which was the longest period of growth and prosperity in Argentine history. Needless to say, they didn't follow IMF-onomics.
Luis Bruschtein Mauricio TrumpPágina/12 12.11.2016 looks at the similarities between incoming US President Donald Trump and Argentine President Mauricio Macri, who took office last December. The article is accompanied by this illustration:
I've described Macri as a kind of Argentine Mitt Romney, i.e., a plutocratic foof. Except Macri looks more like Dracula.
Bruschtein's commentary highlights for American readers how complex the use of "right" and "left" are in Argentine politics. The previous two Presidents, Néstor Kirchner (2003-2007) and Cristina Fernández de Kirchner (2007-2015), were Peronists from the Partido Justicialista (PJ) who practiced populist politics. Their governing policies were Keynesian stimulative economics, rejection of the neoliberal Washington Consensus, promoting workers' rights and women's rights and prosecuting human rights criminals from the dictatorship of 1976-83. They expanded government services and pursued an independent foreign policy focusing on Latin American unity, and successfully resisted pressure from international capital to go back to the neoliberal policies whose plain and disastrous failure culminated in the financial crisis of 2001. Their governments were considered part of the "Pink Tide" of left-leaning Latin American governments, a tide which is now triumphantly proclaimed by the corporate press and the US foreign policy establishment as being in retreat. Their politics became known as kircherismo. Néstor and Cristina were left social-democrats, in other words, and understood themselves in left-populist terms.
The main opposition party to Peronism since the national election of 1946 has been the Unión Cívica Radical (UCR). Macri was elected with that party's backing and is the current leader of the "radicals," as they are commonly called. Although his party is a separate group now called Cambiemos, essentially created by him originally as a personal vehicle he used to get elected governor of the Autonomous City of Buenos Aires. His Cambiemos party has gone through several names in its various iterations since 2003. The UCR, and the small Socialist Party which generally acts in concert with it, are committed to hardcore neoliberalism and aligns with other Latin American conservative parties. They are supported by the Argentina oligarchy, whose interests they are generally proud to serve. The oligarchy has found little to complain about in Macri's policies since last December.
But the UCR identifies itself as a left party. In fact, both the UCR and the Socialist Party are official affiliates of the Socialist International, the association of social-democratic parties, including the German SPD and the ruling Socialist Party in France. The UCR backed the coup of 1955 that ousted Juan Perón during his second term as elected President and outlawed the Peronist Party, which had gained 62% of the vote in the 1951 elections. And it generally shares perspectives with other conservative parties in Latin America, including fealty to IMF dictates and deference to the United States. But it maintains the rhetoric of being the "left" party against the Peronist "right."
It's worth noting that in European politics it is common, though by no means universal, to refer to populism as though it is by definition rightwing. It's also the case right now that the center-left social-democratic parties are generally facing a political crisis because their core neoliberal economic and social policies have become hard to distinguish from those of conservatives. And by "neoliberal," I'm talking Herbert Hoover/Heinrich Brüning/austerity dogma.
Bruschtein writes in the first paragraph:
“Todos tenemos un amigo que votó a Macri y ahora se lamenta porque ganó Trump” dice una frase que circula por las redes. Ironías aparte, tiene algo de razón, Macri es más parecido a Trump aunque quisiera parecerse a Hillary. Los dos son de derecha, pero Hillary es más presentable. Para los macristas, el triunfo de Trump en Estados Unidos fue como si los hubiera sorprendido un espejo caminando por Florida y los enfrentara a la imagen del empresario rústico, ignorante y oportunista para los negocios, que se desayunó al sistema político y alcanzó la presidencia. Trump y Macri fueron socios en un emprendimiento inmobiliario en Manhattan. Forman parte del mismo universo cultural. El aparato mediático del macrismo, Canal 13, TN, Lanata y demás, se apresuraron a disimular esas semejanzas, lo hicieron como si les dieran vergüenza. “Trump es de derecha, como el kirchnerismo pero sin doble discurso”, dijeron.
"All of us have a friend who voted for Macri and is now lamenting the fact that Trump won," goes a phrase that is circulated on the Internet. Ironies apart, there is something to it. Macri looks more like Trump even though he would prefer to look like Hillary. Both of them [Trump and Hillary] are on the right, but Hillary is more presentable. For the macristas, Trump's triumph in the United States was like walking down Florida [a famous shopping street in Buenos Aires] and being surprised by a mirror that presented them with the image of a businessman who was rude, ignorant and opportunistic in business, who had just eaten the political system for breakfast and achieved the Presidency. Trump and Macri were business associates in a real estate venture in Manhatten. They form part of the same cultural universe. The media apparatus of macrismo - Channel 13, TN, Lanata and the rest - are rushing to deny these similarities. They are doing it as though they are embarrassed. "Trump is on the right, like kirchnerismo but with a two-faced discourse," they say.
He goes on to observe, "Macri y Trump son parte de la propagación en todo el mundo de una hegemonía conservadora y regresiva" ("Macri and Trump are parts a part of the propagation around the world of a conservative and regressive hegemony"). Though he does caution against making easy generalizations about the diverse factors involved in the success of various rightwing movements.
Macri hasn't indulged in the sort of overt xenophobic and racist rhetoric on which Trump based so much of his campaign. He says that Trump's language is "ramplón y berreta," i.e., "course and trashy." Although I suppose "deplorable" would also be an appropriate translation. Bruschtein does quote a notorious statement by Macri that sound Trump-like, "All women like to be catcalled. Those that say it offends them, don't believe them. There couldn't be anything prettier than a catcall, even more if it's accompanied by a rude comment, like telling her what a pretty butt she has, that's just fine." (“A todas las mujeres les gusta que les digan un piropo, aquellas que se ofenden, no les creo. No puede haber nada más lindo que un piropo, por más que esté acompañado de una grosería, que te digan qué lindo culo tenés, está todo bien.”)
But Macri is also more straightforward than Trump about his neoliberal policies of deregulation and freedom for international capital movements that carry a high risk of Argentina becoming once again the target of financial speculation. Macri's law-and-order rhetoric would sound familiar to Trump supporters. If they spoke Spanish, that is, which most of them proudly do not. Macri is the heir to the Macri Group, a media empire built by his father. He was embarrassed by the exposure in the Panama Papers revelations of undeclared funds he had stashed abroad. And he sees the business ethics of the two as similar, describing Macri as having operated in a business environment "plagado de tramposos y coimeros" ("plagued by swindlers and bribe-takers").
Bruschtein argues that either Hillary or Trump represented bad news in foreign policy for Argentina. Although President Obama's policies on Iran and Syria have been dovish in many ways compared to that of his critics, his Latin American policy has generally been very conservative. His pragmatic adjustment of a Cuba policy that had been an obvious failure for decades was accompanied by increased hostility to the controversial elected government of Venezuela, even declaring Venezuela a threat to the national security of the United States. Hillary was Secretary of State during the coup in Honduras in 2011, which she and Obama welcomed in actual policy. She has the reputation of being more hawkish than Obama, and one of the foreign policy accomplishments she bragged about was the intervention in Libya with the generally disastrous consequences. Latin American publics are not especially inclined to look on US military interventions abroad as benign.
But he leaves it an open question whether Trump's actual policies would be better or worse than a now-hypothetical Hillary Clinton Administration's would have been. He notes that no one would be surprised to see a future photo of Macri, Trump and Italy's Silvio Berlusconi together.
Bruschtein also notes that the corporate press in Argentina favored Clinton in the American Presidential race. And, "En el sistema de medios norteamericano no existen medios importantes que expresen una mirada progresista y popular" ("In the [US-]American media system, no important media exist that express a progressive and popular view"). He's basically right on that.
The politicians Trump and Macri, he says:
... son una consecuencia del esquema de valores que puso en juego el neoliberalismo en su confrontación crispada con las experiencias democráticas y populares: la antipolítica, la exaltación de la riqueza como máxima virtud, la naturalización de la pobreza, la leyenda del empresario sin cultura ni escrúpulos que triunfó. Trump abona al mismo clima de época que Macri, que Uribe y el No a la paz en Colombia y que el Brexit en Gran Bretaña.
[... are a consequence of the value scheme that neoliberalism brought into play in its tense confrontation with democratic and popular experiences: the depoliticization {literally: the anti-political}, the exaltation of wealth as the highest virtue, the naturalizing of poverty, the legend of the entrepreneur without culture or scruples who triumphs. Trump nourishes the same climate as Macri, as {former Colombian President Álvaro} Uribe and No to peace in Colombia, and as Brexit in Great Britain.]
Mark Weisbrot summarizes the lazy conventional wisdom about the conservative trend in Latin American politics (Has the Left Run Its Course in Latin America?The Nation 05/10/2016):
There is a popular narrative here in Washington and media circles that Latin America’s left-populist turn has finally run its course. It goes something like this: A commodities boom, led by demand from China for Latin American raw materials exports, fueled regional economic growth in the 2000s. This happened to coincide with the election of left governments that were reelected after spending lavishly on handouts to the poor. They alienated foreign investors and their economic policies were unsustainable. Now Chinese growth has slowed, commodity prices have gone south, and with them the fortunes of Latin America’s nationalist, populist left. November’s election of right-wing challenger Mauricio Macri as president of Argentina, the Venezuelan opposition’s landslide congressional win in December, and economic and political crisis in Brazil — including the current effort to remove President Dilma Rousseff—herald the beginning of the end of an era. In this view, the region will continue to elect more right-wing—or, in business-press parlance, “moderate” (and pro-US)—governments that will return to some of the more sensible economic policies of their predecessors.
Horacio Verbitsky (El tercer semestrePágina/12 22.05.2016) writes about Federico Sturzenegger, the current head of the Banco Central de la República Argentina, appointed by current President Mauricio Macri, a devotee of neoliberal economic dogma. Sturzenegger is part of Macri's PRO party and was elected as a deputy (legislator) in the Autonomous City of Buenos Aires in 2013. Verbitsky describes the communication strategy on which Sturzenegger was coached along with other PRO candidates on how to defend their policies in public. As Verbitsky recounts it, this was part of the instructions:
No explicar nada. Si se explica qué es la inflación, habría que decir que la emisión monetaria genera inflación, que entonces debería reducirse la emisión, y que si se reduce la inflación habría que hacer un ajuste fiscal y que si se hace un ajuste fiscal la gente va a perder su trabajo. Eso es lo que no hay que decir. Desde el gobierno se puede hacer lo que se considera necesario, pero no hay que decirlo en medio de un debate. Mejor decir que están mintiendo con los números de la inflación o decir cualquier cosa; hablar de los hijos de uno. No importa.
[Don't explain anything. If you explain what inflation is, you will have to say that the issuance of money generates inflation, that therefore the money supply will have to be reduced, and that if inflation is reduced there would have to be fiscal austerity, and that if fiscal austerity is implemented people will lose their jobs. That's what you don't need to say. The government can do what it considers necessary, but doesn't have to say it in the middle of a debate. Better to say that they {Cristina Fernández' government} are lying with the inflation numbers or say whatever; talk about your kids. It doesn't matter.]
When you have a standard economic prescription that will damage large numbers of ordinary people in order to enrich the wealthiest even more, you have to dress it up some other way. Or, as Sturzenegger's coach recommended, avoid talking about them as much as you can.
Cristina's last Finance Minister Axel Kiciloff in his book Diálogos sin corbata. Para pensar la economía, la política (y algunas cosas más) en el siglo XXI (2015) discusses the dominance of liberal/neoliberal (free market/Herbert Hoover/Angela Merkel) type economic policies, associated especially with the military dictatorship of 1976-83 and the government of right-Peronist President Carlos Menem (1989-99).
Durante el liberalismo esto resultó tarea sencilla porque traían de afuera el recetario económico. Más allá de que tuvieras o no ideas propias, te decían lo que, había que hacer en el Ministerio de Economía, y eran políticas que todos conocen: ajuste fiscal; ajuste financiero, que significa bajar la liquidez, bajar el credito, la politica monetaria contractiva; apertura de la economía, es decir, ningún tipo de resguardo o administración del comercio exterior, dejar que todo venga de afuera ...
[During liberalism, this {finding an economic theory} turned out to be easy work because they brought a recipe book from abroad. Aside from whether they had their own ideas or not, I'll explain what they had to do in the Ministry of Economics, and those were policies everybody knows: fiscal tightening; financial tightening, which meant reducing liquidity, reducing credit, the contractionary monetary policy; opening the economy, that is to say, no type of protection or administration of external commerce, let everything go abroad ...
That latter reference is to the Hail Grail of the corporate-deregulation "trade" treaties like TTIP and PPT, the unrestricted flow of capital, both into and out of a country. This makes a developing country not only vulnerable to financial speculation that can create a run on its currency and and cause a financial panic. It also means that the country's development can be dominated by external political and market forces. The governments of Néstor Kirchner and Cristina Fernández de Kirchner pursued a policy of capital controls that had as its goal promoting domestic industry for the balanced development of the Argentine economy and reduce its vulnerability to economic attacks from other countries.
Kiciloff also gives this brief summary of the standard neoliberal prescription, "Ese plan de cuatro puntos - ajuste fiscal, ajuste monetario, apertura de la economía y endeudamiento - es el plan permanente del liberalismo y de la ortodoxia." ("This four-point plan - fiscal contraction, monetary contraction, opening of the economy and indebtedness - is the permanent plan of liberalism and orthodoxy.")
That prescription is also known as the Washington Consensus because the United States has promoted it assiduously through the IMF and the World Bank and the corporate-deregulation "trade" treaties. That four-point plan is a good summary of what the Macri government has been implementing at a rapid pace since it took office this past December.
Verbitsky's article includes the following table projecting a probable scenario for the growth of public and private debt in Argentina:
The orange bar shows the projected public debt plus the private debt denominated in foreign currency as a percentage of GDP (PIB). The immediate concern about the growing debt is not the percentage of GDP as such. It's that most of the current new debt is going not to long-term investments in Argentina but to paying what is essentially ransom to vulture funds that bought up already-defaulted debt. And the private debt denominated in foreign currency becomes bigger as a percentage of GDP the lower the Argentine peso falls in relation to the foreign currency.
And this is part of the standard neoliberal recipe that Macri's government is applying to the Argentine economy. They justify it by claiming that the economy was previously in bad shape. Verbitsky writes, "Macrì no para de repetir que desde hace cinco años la economía no crece ni crea empleo privado, lo cual es lisa y llanamente falso." ("Macri never stops repeating that the economy hasn't grown for five years nor has employment increased, which is plainly and simply false.")
He cites El Revelador, which provides this table and the text explanation shown below:
Durante la campaña electoral de 2015, la oposición al gobierno de Cristina Fernández de Kirchner, repetía (y lo sigue haciendo) que hacía 4 años que la Argentina no crecía. Y lo decían en términos porcentuales del PBI. Cierto es que dejó de crecer al ritmo en el que lo hizo en los años previos. Pero contextualicemos observando lo que ocurrió en el mismo período sumado (2011-2014) en los siguientes países:
Mientras que en 2014 nos cansamos de escuchar que Argentina hacía 4 años que no crecía, en ese período, su PBI creció porcentualmente más que el de Alemania, España, Estados Unidos, Francia e Italia todos sumados.
[During the 2015 election campaign, the opposition to the government of Cristina Fernández de Kirchner repeated (and are still repeating) that since four years Argentina did not grow. And they say it in terms of percentage of GDP. Certainly it stopped growing at the rhythm that it did in the previous years. But let's put it in context of what happened in the same period in total (2011-2014) in the following countries:
While we kept hearing in 2014 that Argentina hadn't grown in four years, in this period it GDP grew percentage wise more than that of Germany, Spain, the United States, France and Italy all together.]
So when Mark Weisbrot talks about what US elites and mass media talk about "more sensible economic policies," it the neoliberal prescription that they are praising as "sensible."
Weisbrot's point is that economic policies that work well for the majority of people are a strong attraction. And it's left governments, the so-called "Pink Tide," that have been delivering that. As he writes of the Argentine case:
Changes in economic policy were also key to Argentina’s success after its default and devaluation at the end of 2001. The remarkable economic growth and poverty reduction that followed over the ensuing decade — real GDP increased by about 78 percent, and poverty was reduced by more than 70 percent (these numbers are based on independent estimates, as the government’s estimates of inflation are disputed; see http://sedlac.econo.unlp.edu.ar/eng/statistics.php)—had relatively little to do with commodities. It was not even export-led growth.
One necessary condition for Argentina’s robust recovery (real GDP grew by more than 60 percent from 2002 to 2008) was the government’s default on the foreign debt and its taking a hard line in the renegotiation. Right away, this achieved a sustainable debt burden—rather than getting Argentina stuck in a series of recurring crises due to too much debt, as with Greece, for example. And again in contrast to Greece, Argentina freed itself from the demands of its creditors for continuing austerity. The government was also able to tax exporters to capture the windfall from the devaluation, use the central bank to manage the exchange rate, implement a financial-transactions tax, and pursue other policies that enabled the country to emerge from depression. [my emphasis]
In fact, Weisbrot is downright optimistic about the prospects for the democratic left in Latin America:
The Latin American left has led the region’s “second independence” in the 21st century, altering hemispheric economic and political relations, and—even including the economic losses of the recent downturn—presiding over historic economic and social changes that benefited hundreds of millions, especially the poor. Despite the electoral setback in Argentina and the current threat to democracy in Brazil, they are likely to remain the dominant force in the region for a long time to come.
The former (and likely future) President of Argentina Cristina Fernández has been targeted by current conservative President Maricio Macri's party and government with cooked-up but nevertheless vague accusations of corruption. Cristina and her former Finance Minister Axel Kicillof gave statements to Federal Judge Claudio Bonadio last week over a policy her government had instituted called the "future dollar." It was a device by which investors could make a futures bet on whether the currency would go up or down. It was a policy device to stabilize the currency. (CFK faces Judge Bonadio, accuses gov't of 'making' a case against her to 'deprive' her of her 'liberty'Buenos Aires Herald 04/13/2016)
Bonadio was accused them of a crime just for setting up the policy. He didn't even claim that they had violated the law or given inside information to investors to let them cheat the system.
But, as Cristina herself explains at her website, there were people who may have made money on the "future dollar" system who may also have benefited from inside information (Future dollar and the “unscrupulous illegally enriched” 04/19/2016):
Some names of the “unscrupulous future dollars buyers” have been revealed. Do you think they are all K? Look, Caputo S.A. company bought in the Rosario term market 3.56 million dollars between October 8th and 27th, in 2015. Do you know who Caputo is? Nicky, for his friends. Close confidant of Macri, he was his wedding witness and usual attendant in the meetings of the Presidente with the cabinet.
You know who is mentioned too? The Macri family, that via Socma-Chery firm, adquired 8 million dollars at future price, later multiplied –not as bread and fishes- because of the devaluation determined, among others, by Central Bank president, prosecuted Sturzenegger, who paid in spite of the cause presented by his political party.
There are other “unscrupulous”: senior presidential adviser and PRO national party trustee José María Torello, bought 800.000 dollars in future dollar contracts, on October 27th, charged in February. The secretary of Interministerial coordination, former CEO in Farmacity, Mario Quintana, one of the illustrious negotiators in the pay to vulture funds, bought almost 1.5 million dollars, last September, via his Pegasus fund.
But pay attention, there are more “unscrupulous”: media companies. The newspaper La Nación bought 4 millions dollars. Grupo Clarin’s television network, Cablevisión, got 11 million dollars multiplied by the devaluation. That’s right, Clarin is always involved in this kind of things. And not precisely for being the sweetest thing.
Who benefited from the devaluation? Obviously, those who decided to devaluate, that apparently are not only in the Central Bank. Who were perjudicated by the devaluation? As usual, the Argentinian people. Question: when did they buy those millions of dollars? Did they know that in case of winning the elections they would devaluate, as the candidate denied it on TV?
A federal prosecutor, Jorge Di Lello, is opening an investigation into Banadio and Macri's Central Bank president Federico Sturzenegger over their accusations against Cristina and Kicillof. (Dólar futuro: imputaron a Claudio BonadioEl Destape 20.04.2016)
The goal of the Brazilian opposition and oligarchy want to remove Rouseff's elected government and replace it with a rightist government committed to the kind of neoliberal economic policies and aggressive posture against the democratic left that the government of Mauricio Macri in neighboring Brazil is taking.
The latest moves in Brazil's political crisis have the country on edge as it faces not only a government meltdown but its worst recession in decades. The political chaos in the capital, Brasilia, is also playing out less than 100 days before the nation plays host to the first Olympic Games to be held in South America - an event that will cast the world's eyes on Brazil.
The battle over Rousseff's impeachment has polarized the nation of 200 million people and brought the government of Latin America's largest economy to a virtual standstill.
The proposed impeachment is also taking place as Brazil faces its largest corruption investigation, targeting a sprawling kickback scheme at state-run oil company Petrobras.
Prosecutors say billions in bribes were paid over several years and have implicated not only members of Rousseff's Workers' Party but members of the opposition leading the charge to impeach her.
Whatevber we eventually find out is happening behind the scenes, this "soft coup" approach against the democratic left is broadly favored by the conservative policy the Obama Administration takes in Latin America, the pragmatic easing of tensions with Cuba notwithstanding.
Mauricio Macri, President of Argentina and sometime director of a Panamanian company
Jennifer Adair sketches the record of the Macri Administration in Argentina that took power in December in Argentina Turns NorthNACLA 03/30/2016, giving this background:
Throughout the 1990s, Argentina was a shining example of the Washington Consensus and [Argentine mPresident Carlos] Menem its most enthusiastic booster. His government courted foreign investment and introduced austerity measures that led to a punishing rise in inequality and sovereign debt. And while selling public utilities and state enterprises to the highest bidder, Menem also pardoned previously convicted military officers, citing national reconciliation and the dawn of a new age of prosperity.
The era of illicit U.S.-Argentine relations took a nosedive at the start of this century. In 2005, George W. Bush arrived at the Summit of the Americas in the seaside town of Mar del Plata with plans to finalize the details of the FTAA. As was widely reported at the time, his presence sparked massive protests against the free-market recipes of the previous decade. The host of the summit, Néstor Kirchner, who assumed the Argentine presidency in the aftermath of the country’s 2001 economic crisis, delivered a succinct message: US-backed economic policies had produced nothing but “misery, poverty, and democratic instability.” Negotiations for the FTAA tanked, and Bush left Argentina in a fury. It was a stunning turn of events, and a defining moment in the broader regional move away from neoliberal experiments.
Last week, Obama came to inaugurate a new chapter in bilateral relations, bearing the same free-market recipes as his predecessors. The visit confirmed Argentina as a principal ally in the midst of the continental retreat of the “pink tide [i.e., governments of the democratic left];” it also underscored the Macri administration’s role in leading a rightward shift across South America. [my emphasis]
And those Menem-era neoliberal policies are exactly what Macri's government is bringing back:
In his first 100 days in office, Macri has quickly set out to undo the policies of the Kirchner years through the elimination of agricultural export taxes, the end of energy subsidies, massive layoffs in the public sector, and a devaluation of the currency. During their talks, Macri and Obama fortified commitments to increase commercial ties between the two nations. While the initial agreements remain shrouded in mystery, the meetings pointed to future deals in agribusiness, telecommunications, and energy. Further details will likely emerge over the coming weeks. But as an immediate outcome, the agreements move Argentina one step closer towards greater participation in the Trans-Pacific Partnership, while bolstering Macri’s related desire for closer economic ties with the European Union.
The final piece in realigning Argentina back toward world markets involves the issue of debt. In early March, the Macri government reached an agreement to pay the remaining “vulture fund” holdout creditors. Obama’s visit coincided with ongoing congressional debates surrounding the decision to settle the 15-year dispute, a legal battle that has played out dramatically in a New York federal court and which includes a silent-movie-worthy villain in the figure of Judge Thomas Griesa. Asked to make a statement on the ongoing case, Obama demurred: “I have to be careful not to comment because of the nature of our legal system. These are judges that I appoint.” He nonetheless offered a clear verdict on the implications of the impending settlement, which totals over $4.6 billion dollars in payments to U.S. creditors. “Today in a show of confidence in Argentina’s new direction, many U.S. businesses are announcing tens of millions of investments here in Argentina,” Obama stated. [my emphasis]
Ms Fujimori, the daughter of former President Alberto Fujimori, says tackling crime is her priority.
She is also supported by some Peruvians who credit her father with defeating the country's Maoist Shining Path rebel group.
However, other Peruvians have said they would never support anyone associated with her father, who is currently serving 25 years in prison for ordering death squads to massacre civilians during his attempts to end the insurgency.
Setting up an offshore company is not illegal. But if well-known public figures or powerful government officials for tax-evasion or other illegitimate purposes, that's obviously likely to turn into problems with them.
The information comes from an investigative report, The Panama Papers, an investigative report from the International Consortium of Investigative Journalists (ICIJ). This particular investigation has a small host of Reporting Partners. The three featured most prominently are the Süddeutsche Zeitung (Munich), The Guardian and BBC News.
The "Panama" comes from the location of the law firm Mossack Fonseca, which "administers offshore firms for a yearly fee. Other services include wealth management." (Luke Harding, The Panama Papers: what you need to knowThe Guardian 04/03/2016; Süddeutsche Zeitung 03.04.2016) There are even Nazi and CIA connections! You just know there are screenwriters already at work on TV and movie scripts based on this. The Nazi connection is that the father of the partner Jürgen Mossack was a member of the Waffen-SS and later worked with the CIA. (Martha Hamilton, Mossack Fonseca, un bufete globalUnivision 03.04.2016)
Iceland's Prime Minister Sigmundur Gunnlaugsson is already facing calls for his resignation over information about him revealed in the investigation. (Panama Papers: Iceland PM's investments questionedBBC News 04/03/2016; Frederik Obermaier und Bastian Obermayer, Im Schatten-KabinettSüddeutsche Zeitung 03.04.2016; English version: A storm is coming)
The already scandal-plagued international soccer governing body FIFA has had new questions raised by the document revelations. (Thomas Kistner et al, Doppeltes SpielSüddeutsche Zeitung 03.04.2016)
