Arturo Frondizi and the dilemma of Argentine governance, 1955-1974

Arturo Frondizi (1908-1995) was the civilian President of Argentina from 1958 to 1962. March 29 is the anniversary of Frondizi's overthrow by the military.

Cloumnist Mariano Caucino used the opportunity to praise Frondizi in El golpe contra Frondizi y una oportunidad perdida Infobae 29.03.2016. This is intriguing because he highlights the admiration that current President Mauricio Macri has expressed for Frondizi. Which makes me curious about the ways that Frondizi's image is being used in the present-day context. The politics of history is always intriguing.

Arthur Frondizi on the cover of Time (Mar. 30, 1962 edition)

Juan Perón's government was overthrown in 1955 by a military coup that billed itself as the "Revolución Libertadora." They established a military government that was briefly headed by General Eduardo Lonardi and then by General Pedro Eugenio Aramburu. (Aramburu was later kidnapped and assassinated by urban guerrillas from the pro-Peronist Montoneros group in 1971.)

In 1958, the military government transferred power to an elected civilian government headed by Frondizi. Frondizi was a member of the Unión Cívica Radical (UCR) and in 1946 was elected to Congress as a national deputy for the UCR, which despite its name had become the main political vehicle of the Argentine oligarchy which was intensely anti-Perón. Frondizi was the vice-presidential candidate in 1951 in which Ricardo Balbín was the unsuccessful presidential candidate. In the twists and turns that make politics and history so fascinating, both Frondizi and Balbín would make practical alliances with Juan Perón.

The UCR was very supportive of the 1955 coup. As were the Socialist Party and the Soviet-line Communist Party, which makes for a whole other story. In the excellent theatrical film Eva Perón (1996), Frondizi is shown taking part in the coup planning. That would be this one, BTW, whose screenplay was written by Argentine political theorist José Pablo Feinmann:

Felipe Pigna writes in his biographical article Arturo Frondizi El Historiador (n/d; accessed 03/30/2016):

Tras el bombardeo por la aviación naval de la Plaza de Mayo producido el 16 de junio de 1955, Frondizi fue detenido por la policía peronista por sospechárselo co-responsable de la conspiración. La quema de las iglesias provocada por grupos de peronistas la misma noche del 16, pareció ser el límite y la señal de largada del golpe cívico-militar en ciernes del que el radicalismo era una de las piezas clave. Frente al peligro, el gobierno peronista resolvió liberalizar el uso de los medios de comunicación que estaban monopólicamente bajo su control. En estas especiales circunstancias, Frondizi se dirigió por primera vez por radio al pueblo argentino el 27 de julio de 1955.

El 16 de septiembre de 1955 un golpe de estado, conocido como la Revolución Libertadora, derrocó a Perón, y el radicalismo, junto con otras fuerzas políticas como el socialismo democrático, se sumó al gobierno a través de una junta consultiva.

[After the bombardment of the Plaza de Mayo by naval planes which occurred the 16th of June, 1955, Frondizi was detained by the Peronist police under suspicion that he shared responsibility for the conspiracy. The burning of churches by groups of Peronists the same night of the 16th, it appeared to be the end and the signal for the start of the civil-military coup in the making of which radicalism [the UCR] was one of the key pieces. Facing the danger, the Peronist government resolved to liberalize the use of the communications media that had been under its [the government's] control. In these special circumstances, Frondizi spoke to the Argentine people for the first time by radio on the 27th of July of 1955.

On September 16, 1955, a coup d'état, known as the Revolución Libertadora, overthrew Perón. And radicalism [the UCR], together with other political forces like democratic socialism [the Socialist Party] joined the government via a consultative junta.]

The burning of churches was not some fit of secularism. Peronism had and has to this day a clear Catholic component. The current Pope was even affiliated with a Peronist group in the 1970s, albeit a rightwing one. (Peronism is complicated!)

But the Catholic hierarchy in Argentina has also had a deeply reactionary side. And reactionary Church officials also supported the coup. As the newspaper La Prensa reported at the time on the bombardment of the Plaza (Perón y el bombardeo del 16 de junio de 1955 El Historiador, quoting La Prensa 17.06.1955):

Era la primera capital de Sudamérica en ser bombardeada por sus propias fuerzas armadas. Los aviones atacantes, punta de lanza de un alzamiento en varios puntos del país, llevaban en sus colas una “V” y una cruz que señalaban “Cristo Vence”.

[It was the first capital of South America to be bombarded by its own armed forces. The attacking planes, the tip of the spear of a rebellion in various places in the country, bore on the tails a "V" and cross which was marked "Cristo Vence."]

Cristo Vence, "Christ victorious, was the slogan of the reactionary Catholics. Horacio Verbitsky's four-volume history of the Argentine Catholic Church is titled Cristo vence.

The Time magazine cover from the time of Frondizi's own overthrow as President shows Juan Perón looming in the background. It's an appropriate image for the dilemma of governance in Argentina from 1955 to 1974. Peronism was the most popular political movement in Argentina. But Peronism was banned from formally participating in elections or even operating and organizing openly. The Revolución Libertadora even tried to suppress the tango and the milongas, the popular dance clubs that were central to the tango scence, because the oligarchy associated tango with (in their eyes) dangerous low-class Peronist populism.

But the Peronist movement remained active. And Perón backed Frondizi in the 1958 election, in an agreement negotiated by his close collaborator Rogelio Frigerio, which included a development program amenable to the Peronists. His willingness to cooperate with Perón led to a split in the UCR, with Frondizi's faction becoming the Unión Cívica Radical Intransigente (UCRI). The other faction, the UCR del Pueblo (UCRP), was led by Ricardo Balbín.

Frondizi's Minister of Finance from 1958-1960 was Aldo Ferrer, one of Argentina's most distinguished economists who passed away earlier this month.. (The department was actually called the Ministry of "Economía y Hacienda" [Economy and Budget]). Javier Lewkowicz wrote in an obituary article on him (Faro para la heterodoxia económica Página/12 09.03.2016):

Ayer falleció el economista Aldo Ferrer. Vivió 88 años durante los cuales ocupó diversos cargos en la función pública, escribió libros célebres de la economía argentina, contribuyó a crear la escuela de pensamiento económico latinoamericana del estructuralismo, formó discípulos y se brindó a compañeros y amigos a quienes transmitió hasta sus últimos días su pasión y compromiso de lucha por una Argentina soberana. La comunidad política y académica manifestó su pesar por la enorme pérdida para el pensamiento nacional.

[The economist Aldo Ferrer died yesterday. He lived 88 years during which he occupied various posts in public service, wrote celebrated books about the Argentine economy, contributed to creating the Latin American school of economic thought of structuralism, won disciples and made himself available to comrades and friends to whom he transmitted his passion until his last days and commitment to fight for a sovereign Argentina. The political and academic community expressed its pain for the enormous loss for the national thought.]

Frondizi initially promoted a developmental policy to promote Argentine national energy and guard Argentine national sovereignty. In a 1954 book, Petróleo y Política, he had criticized the behavior of the extractive industries and advocated putting the control of Argentina's oil and gas resources under the control of the state-owned YPF company (Yacimientos Petrolíferos Fiscales).

But Frondizi was only able to pursue his preferred developmental policy for a year or so. Under increasing pressure from the oligarcy, the military and the Church hierarchy, he defaulted to the kind of policies generally acceptable to the IMF and the United States. In a program identified with with economist Álvaro Alsogaray, who, in Felipe Pigna's words "con su famosa frase 'hay que pasar el invierno' orientó la política económica a promover las exportaciones, limitar el proceso de industrialización y liberalizar las restricciones impuestas a las importaciones disminuyendo considerablemente la capacidad expansiva de la industria nacional" ("with his famous phrase, 'you have to get through the winter" oriented economic policy to promote exports, limit the process of industrialization and liberalize the tariff restrictions on imports, considerable diminishing the capacity of national industry to expand").

If Mauricio Macri identifies with Frondizi's presidential policies, it's surely this version rather than the initial national-development orientation of Frondizi's government.

By the 1960 election, Perón was no longer backing Frondizi. And although Frondizi strove to maintain good relations with Washington, he was also reluctant initially to cut off relations with Castro's new regime in Cuba. When the always-US-dominated Organization of American States (OAS) met in Argentina in early 1961, Frondizi invited Ché Guevara to come to Argentina and confer with him soon afterwards. Even though he eventually gave in to US pressure to break relations with Cuba, his early support for Cuban sovereignty in the face of American pressure made the military even more suspicious of him. When Peronists did very well in elections in Buenos Aires province in early 1962 after Frondizi's government had loosened restrictions on their electoral participation, the military moved to oust Frondizi in March, no longer confident he would sufficiently protect the oligarchy and conform to military demands.

This was the continuing dilemma of the oligarchy and the military during this period until Perón's return to Argentina in 1974. They couldn't rule effectively without allowing the Peronists to fully participate in elections. And they were too afraid of Peronism to allow it.

In the New York Times' not-very-adequate obituary for Frondizi (Arturo Frondizi, Argentine Chief In Time of Austerity, Dies at 86 04/19/1995), Robert McG. Thomas, Jr.wrote:

Taking office at a time of economic distress, he again put pragmatism first, this time above his own political popularity, imposing a series of austerity measures to curb inflation and attract foreign investment, primarily to the country's ailing oil industry.

His measures, including a currency devaluation, would eventually be credited with laying the groundwork for an economic resurgence, but the immediate effect was to put a serious burden on the poor and middle classes.

The result was an almost constant series of strikes, demonstrations and clashes with the police, requiring the intervention of the military.

His undoing, however, was not his economic measures, but keeping a political promise to lift the ban on Peronist candidates and parties.

When the Peronists won a series of congressional elections in early 1962, the military, which had also become alarmed after learning that Dr. Frondizi had met secretly with Che Guevara, an emissary of the Cuban dictator, Fidel Castro, withdrew its support, forcing Dr. Frondizi's resignation that March.

Impoverishing large numbers of people, giving up your country's chances for sovereign economic development, reduction of the standard of living of "the poor and middle classes," aka, the large majority, for the Times in 1995, that was a sign of "put[ing] pragmatism first." Awesome.

US-Argentine agreements and Macri's economic policies

President Obama and Argentine President Mauricio Macri signed various agreements last week during Obama's visit to Argentina. Horacio Verbitsky reports (La transparencia del sigilo Página/12 27.03.2016) that the Fact Sheet at the White House website provides considerably more information about those agreements than Macri's government has provided its own citizens.

The Fact Sheet is in diplomatese, of course:

Since taking office in December, President Macri has quickly implemented economic reforms to begin addressing economic imbalances and deepen Argentina’s integration with the global economy. ... Reflecting significant private-sector interest in Argentina, U.S. companies announced multibillion dollar investments that will help build upon the more than $20 billion in annual United States-Argentina trade. In the coming months, six trade delegations will help U.S. and Argentine businesses identify further opportunities.

This is diplomatic blah-blah for policy changes that Macri quickly applied after taking office: drastic devaluation of the Argentina peso against the dollar, which drastically lowered general purchasing power and is still generating inflation in the 20-30% range; dropping export-import controls that were designed to promote development of key Argentine industrial sectors; ending capital controls (with minor exceptions) that open Argentina to having its dollar reserves drained and to being a target of the kind of financial speculation that precipitated the crisis of 2001; and, caving in to the demands of the US "vulture funds" to pay them an enormous premium on their investment in defaulted Argentine bonds; taking out new national debt to pay off the vulture funds.

Verbitsky refers to the article The Other Trip: Obama in Argentina Inter-American Dialogue 03/24/2016, which notes that Obama's trip to Argentina was "at least equally important for the future of US-Latin America relations, was President Obama’s trip to Argentina" as the trip to Cuba.

The unsigned IAD article explains the politics of Obama's policy highlighted on the trip to Argentina, which is to have the United States distinctly favor governments of the right against those of the democratic left:

Based on the current political trends in the hemisphere, and although no major bilateral initiatives are expected, Macri’s Argentina will likely become one of the closest partners of the US in the region.

The visit comes only months after Macri succeeded Cristina Fernández de Kirchner, who maintained what Obama himself called an “anti-US” foreign policy throughout her term, usually siding with Venezuela on regional matters. Bilateral relations were strained by her government’s attempt to negotiate with Iran over the investigation of a 1994 terrorist attack in Buenos Aires, and when her foreign minister personally confiscated the cargo of a US military cargo plane. In 2005—during the last visit of a US president to Argentina—Fernández’s husband and predecessor, Néstor Kirchner, confronted George W. Bush and harshly rejected his proposed Free Trade Area of the Americas.

Obama was also expressing strong support for Macri's neoliberal/IMF/Washington Consensus economic policies and opposition to the successful Keynesian and development-oriented policies of his immediate predecessors:

Obama praised Macri for the decisive steps he has taken in only 100 days in office to resolve the numerous macroeconomic distortions he inherited. These measures include lifting currency controls, reducing import restrictions, and—most importantly—reaching an agreement with most of the holdouts (or vulture funds, as they are known in Argentina) to end Argentina’s longstanding default. The Argentine Chamber of Deputies already approved the agreement with a significant majority, and it will likely pass the Senate in late March. Obama compared Macri’s efforts to reenter the financial system with his own success in overcoming the “Great Recession,” and said that under Macri Argentina “is reassuming its traditional leadership role in the region and around the world.”

Comparing the state of Argentina's economy when Macri took office in December to that of the US at the end of Shrub Bush's Presidency is fairly ridiculous. Macri's claims about the economy having been in crisis are "shock doctrine" justifications on his hardline neoliberal approach, not a meaningful description of economic reality.

These were also notable parts of the US-Argentine agreements:

American businessmen promised to boost investment in Argentina in the next four years by several billion dollars. ...

Obama expressed the desire of the United States to work with Argentina to develop the country’s significant deposits of shale gas and oil, one of the largest in the world. Chevron is already operating in partnership with Argentina’s state-owned YPF.

Verbitsky adds important information about those investment pledges:

Estas promesas de inversiones por no más de 4.000 millones de dólares al año son una gota en el océano que no compensa ni en forma remota la merma de la inversión pública dispuesta por el gobierno y el nuevo endeudamiento que comenzará dentro de dos semanas, con un primer saque de 12.500 millones de dólares para pagarles a los fondos buitre. Esto permite avizorar que la recesión será más profunda y duradera de lo que se preveía, porque constituye el único instrumento para atenuar la inflación que sigue en aumento y ya ronda el 5 por ciento mensual. Además, parte del dinero que pueda ingresar no se destinará a inversión productiva sino a la adquisición de empresas preexistentes, a precios de liquidación por la desvalorización del peso y la caída de la actividad.

[These promises of investment of no more than $4 billion per year are a drop in the ocean that will not even remotely compensate for the reduction in public investment ordered by the government and the new indebtedness that will begin with two weeks, with a first tranche of $12.5 billion to pay the vulture funds. This will allow us to watch a recession be much deeper and longer than the one that came before, because they {public investments} constitute the only instrument to attenuate the inflation that that will follow the augmentation {of the debt} and it already rounds to 5% per month. In addition, part of the money that can come in {with the American investments} will not be directed to productive investment but rather to the acquisition of preexisting businesses at liquidation prices due to the devaluation of the peso and the fall in {economic} activity.]

He also reports, "Miguel Angel Broda agregó que el acuerdo con los buitres no sustituye el ajuste fiscal." ("Miguel Angel Broda calculates that the agreement with the vultures will not replace the fiscal cuts.") In other words, Macri is promising that bad times due to his initial measures will be followed by significant improvements starting by the second half of 2016. Macri had argued that the unpopular capitulation to the vulture funds was necessary because without it lots more cuts in government spending will be necessary. Broda is suggesting that the cuts will go on anyway.

Broda has been one of Macri's chief economic advisers. With a PhD in Economics from the University of Chicago, he is carrying on the legacy of an earlier group of "Chicago Boys," the neoliberal American economists who eagerly pimped Herbert Hoover economics to the Latin American military dictatorships of the 1970s. He was a critic of the kirchnerista economics that successfully got Argentina past the financial disaster of 2001, which was produced by the same kind of policies Macri is now implementing. (And Obama is celebrating.) Federico Bernal (Miguel Ángel Broda: un fundamentalista con Macri INFOnews 12.07.2015 |) calls Broda an "anarco-mercadismo" ("free-market anarchist). So Broda's prediction is also a recommendation of what he would prefer to see done. And what Macri's government is very likely to do.

The IAD article concludes with these observations:

It remains to be seen if Macri’s reforms will succeed in rekindling economic growth in Argentina. Inflation remains extremely high, labor unions are expressing their opposition to some of Macri’s measures, and the president does not hold a majority in Congress. For now, moderate sectors within Peronism—especially provincial governors—are collaborating with the president. That might change if the economy deteriorates further, and if Macri’s currently high poll numbers were to fall.

Nevertheless, Buenos Aires has become one of Washington’s closest allies in its desire to improve relations with Latin America and see a new generation of leaders in the region, and will likely remain so for the foreseeable future. To consolidate this trend, Washington will likely work to include Argentina in regional discussions and boost economic opportunities, including lifting restrictions for Argentine goods. The main political challenge for Macri will be to show that this does not mean the return to neoliberal policies and the “automatic alignment” with Washington the country pursued in the 1990s, and which most Argentines still associate with the economic collapse of 2001. [my emphasis]

Raúl Dellatorre reports that three of Macri's other favorite economic advisers are already looking for a scapegoat for the projected failures of their policies to achieve the promised growth and price stability in Argentina. (¿Quién será el que le rompa el globo a Alfonso? Página/12 27.03.2016) Central bank president Federico Sturzenegger, Minster of the Interior Rogelio Frigerio and Banco Nación president Carlos Melconian are pointing the finger at Finance Minister Alfonso Prat-Gay, already notorious for the surrender agreement with the vulture funds. That's right, Prat-Gay, yer taking the fall! At least that seems to be what that unholy trinity of neoliberal economic advisers are trying to set up.

Dellatorre writes that they are criticizing:

... el manejo de la política económica, a la que empiezan a responsabilizar del alejamiento o, al menos, falta de apoyo más firme de sectores que se consideraban aliados naturales, como la city financiera o el establishment empresario. Inversiones que no llegan, inflación que no cede, dudas sobre un horizonte de recuperación antes de fin de año, un déficit fiscal creciente y que abre cada vez más interrogantes sobre la forma de financiarlo, “corridas” cambiarias, son algunos de los ingredientes del escenario que no se esperaba tener a esta altura, y cuya existencia ya son varias las voces que se la atribuyen al arrogante jefe del Palacio de Hacienda.

[... the directing of economic policy, which they are starting to blame for the distancing, or at least the lack of more firm support, by sectors they consider natural allies, such as the financial "city" or the business Establishment. Investments that don't come, inflation that is not receding, doubts about the time horizon for the recuperation {of the economy} before the end of the year, a growing fiscal deficit and the question that is raise more and more about the way to finance it, exchange "orgasms," are some of the elements of the scene that were not expected at this point, and whose existence is attributed by various voice to the arrogant boss of the Finance Ministry.]

This reminds me of a comment by Peronist leader and political theorist John William Cooke in the 1960s, in response to similar free-market fundamentalist economic policies, that said something of the effect of, they promise cold winters that always come and glorious springs that never arrive.

The criticism that Dellatore describes involves insisting that further government cuts be made. This is the neoliberal faith of privatization of public services and minimizing any public functions that don't directly benefit the wealthy. And the monetarist voodoo that is typically part of such neoliberal experiments gets tossed in there, too. Of course. As well as our old friend the Confidence Fairy, who is apparently remaining in hiding until Macri's government slashes public expenditures some more. Pat-Gay is even promising GDP growth of 10-12% annually, presumably in those marvelous springtimes neoliberal prophets are so fond of predicting. Carlos Melconian is talking about needed "structural adjustments," one of Angela Merkel favorite phrases in grinding the economies of southern European countries into the dust in pursuit of her "ordoliberal" Herbert Hoover policies.