I would not want to have bought property down there recently.
Argentinians Cry Once Again
from Walter Russell Mead's Blog by Walter Russell Mead
Argentina’s President Kirchner has really done it this time: A massive blackout in the capital has prompted 300,000 protesters to take to the streets not only throughout Argentina but also outside Argentinean embassies around the world.
The demonstrations are the largest so far in the Kirchner era (including Nestor Kirchner’s term). The protesters are comparing the current political atmosphere to that of Cuba and Venezuela. The FT’s BeyondBrics blog reports:
The protests came as some unlucky people, including this correspondent, were still grappling with power cuts after a major blackout on Wednesday night brought Buenos Aires to a standstill. But Julio De Vido, planning minister, earlier in the day declined to accept that the government’s policy of keeping energy prices cheap and virtually frozen may have played a part in the electricity system collapse.
Instead, he lashed out at the economic management of the government of Raúl Alfonsín (1983 to 1989), who left office six months early in the thick of an hyperinflation and an energy crisis.
The government surely needs no reminding about the combustible mixture of economic problems and people on the streets, however: that blend chased Fernando De la Rúa from office in December 2001.
This is just another turn in the cycle of failure that Argentina watchers have seen again and again: Populist leaders proclaim an unrealistic economic plan (they’re usually members of the Peronist party, which continues to attract votes despite regularly bringing Argentineans into poverty and ruin). At first, these reforms go well, but then problems creep in: budget deficits, inflation, the flight of smart foreign and domestic capital. To stop the bleeding, leaders try ever cruder and crazier methods: confiscating assets, nationalizing companies, repudiating debts, implementing wage and price controls, and so forth. But the problems keep getting worse until, finally, a popular outcry brings a merciful end to the regime.
Unfortunately, savage depression usually sets in, as all the bad decisions taken by the departed rulers come to fruition and foreign and domestic investors shun a country that has made itself a pariah. Then new leaders step in to make promises based on yet another set of crackpot ideas, and the cycle repeats.
We hope things go differently this time, but we wouldn’t bet on it. The Kirchner cycle seems to now have passed into the early stages of mounting protests against crippling policies. Don’t cry for me, Argentina, the words Andrew Lloyd Weber put in the mouth of Eva Peron, don’t really apply this time around. The Argentines aren’t crying for President Kirchner; they are crying because of her — and it looks as if plenty more tears must fall until her era comes to an end. |
