Will Bush follow Bill to bailout city?
Posted: June 26, 2002
1:00 a.m. Eastern
© 2002 Creators Syndicate, Inc.
"When sorrows come, they come not single spies, But in
battalions," said Hamlet. If President Bush has time left over
from defusing a war between India and Pakistan, and preparing
a plan for Mideast peace, he best take a quick glance south.
From Tijuana to Tierra del Fuego, democratic capitalism is in
deepening peril.
Some 500 maquiladora plants in Mexico have moved to Asia,
taking 250,000 of Mexico's best jobs, in search of
25-cents-an-hour Chinese labor. The global race to the bottom is
on.
Mexico's stock market has lost one-seventh of its value in three
months, and the peso has lost 10 percent of its value against the
dollar. Finance Minister Francisco Gil Diaz compares Mexico to
Argentina. While it has been selling off national assets to cover
budget deficits, you can only sell the family silver once. "At some
point, we are not going to have anything more to sell," said Gil.
In Colombia, the war with the narco-guerrillas goes on and on,
as Venezuela seems headed for another coup. In Peru, President
Toledo's popularity has plummeted to below
Nixon-at-Watergate levels, two cabinet ministers resigned last
week, and riots erupted in Arequippa to protest plans to
privatize two electric generators.
Last Friday, Uruguay let its peso float and it lost almost 30
percent on local markets, as the IMF rushed in $1.5 billion.
Uruguay is in its fourth year of recession, with GDP down 17
percent ? a depression. But it is in South America's giants where
the crisis is deepest.
On Friday, Brazil's currency fell to a record low against the
dollar. Second only to Argentina, Brazil is the riskiest place on
earth to invest. The spread between Brazilian and U.S. bonds is
similar to that between Russian and U.S. bonds before Moscow's
default. Fears that Brazil may follow Argentina into default have
soared as the old radical Luis Ignacio Lula da Silva is running
2-to-1 ahead of the incumbent party's candidate for president in
the October election.
Argentina, once the most promising nation in Latin America, is
becoming a failed state. Last year, an Argentine peso was worth
a dollar. Today, it is closer to four to the dollar. By tens of
thousands, Argentine professionals are fleeing their country,
and First World companies are following ? Wendy's, Home
Depot and Sky TV are gone. Airlines have cut back on flights to
Europe and America. Foreign newspapers and magazines are
disappearing from newsstands.
On Friday, Argentina's central banker, Mario Blejer, resigned.
With spreading social unrest and a dead economy, Buenos Aires
may resort ? as Berlin did in 1923 ? to printing-press money. If
Argentina does not get another bailout from the IMF in June, it
may be forced to default on its old loans to the IMF. Then the rot
in the Global Economy will be visible to all.
Many factors make this crisis in Latin America more serious than
1998. Most Latin countries have already sold off their prized
national assets ? telephone and utility companies, banks, major
state enterprises. There is little left to be pawned at the Casbah
of Global Capitalism.
Some Latin nations are so mired in debt it is ridiculous to ship
them new IMF loans, so they can make payment on the old IMF
loans. And unlike 1998, the U.S. economy is not robust ? the U.S.
merchandise trade deficit is running at $480 billion a year. Our
manufacturing base has been gutted, and our current account
deficit is near 5 percent of GDP. Even the free-trade-uber-alles
boys are moving to protect America's farms and factories from
floods of cheap foreign imports.
Economic nationalism is on the way back.
Across Latin America, leftist politicians are demanding an end to
U.S.-style "neo-liberal" economics, and Latin peoples are
searching for someone to lynch for having robbed them. There
is little doubt at whom corrupt and incompetent Latin politicians
will point the finger: the Big Banks, the IMF, the transnational
companies that bought up their national assets for a song ? and
the Bush administration, for playing Dutch Uncle to their
desperately demanded new IMF loans.
Three things keep the great fraud of the Global Economy going.
Endless U.S. taxpayer bailouts of bankrupt regimes through the
IMF and World Bank, a $480 billion U.S. merchandise trade
deficit that sells off America's manufacturing base to pay for
consumer and capital goods not made in the U.S.A., and foreign
aid forever.
The day this triple-looting of America ends, the house of cards
comes down. Until then, a prediction: President Bush and
Treasury Secretary Paul O'Neill will emulate Bill Clinton and Bob
Rubin, and get into the bailout business ? big-time, as Dick
Cheney would say ? because no one wants to be the one left
standing there when the music stops.
Related offer:
Buchanan's latest book is here!
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Patrick J. Buchanan was twice a candidate for the Republican
presidential nomination and the Reform Party?s candidate in 2000.
Now a commentator and columnist, he served three presidents in the
White House, was a founding panelist of three national television
shows, and is the author of seven books.
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