FacebookTwitterGoogle+RedditEmail

Confusing Tales from Argentina

by Lawrence McGuire

I’ve been trying for years to figure out the world economic system, but it ain’t easy. No matter how much I read I always seem to end up even more confused than when I started.

For example, lately I’ve been trying to understand what is happening in Argentina. I know there is a connection between the crowd surrounding the finance minister’s house banging pots (he resigned that night), and the International Monetary Fund (IMF), and people raiding grocery stores because they are hungry, and motorbike couriers being shot and killed by soldiers in Plaza de Mayo, but I don’t know how it all fits together. So for help I turn to some progressive economists and political commentators. They’re professionals and should be able to explain it to me, right?

First I read Marc Cooper (contributing editor to The Nation and a columnist for LA Weekly). In his recent column in the LA Times (12/30/01), Cooper tells me that for the past decade Argentina has been a ‘gold mine’ for international investors. Ok, I guess that means that big corporations and rich individuals invested their money in Argentina and made golden profits. That’s clear.

But then Cooper says “That experience [the collapse of the Argentine economy] should be enough to throw into question the free-market globalization model….”.

Swoosh! That one flies right by me and I’m confused.

If Argentina was a gold mine for international investors, why should the ‘free market globalization model’ be questioned? Who created and implemented the ‘free market globalization model’? It worked for the people who devised it, didn’t it? Isn’t the IMF controlled by the US Government, which is controlled mainly by rich individuals and big corporations? The IMF employees managed the Argentine economy for the benefit of their bosses in the U.S., and apparently did a damn good job. So why should the model be questioned?

I wrinkle my forehead and gird my mental loins. ‘Concentrate,’ I say to myself. ‘Focus and you will understand.’

Cooper continues: “The United States and other economically powerful nations, and the international financial organizations they finance, should allow for alternative models of development.”

Now I’m even more confused. Why should they allow alternative models if they are making such huge profits with their current model?

Looking for clarity I turn to Mark Weisbrot, (co-director of the Center for Economic and Policy Research) writing in the International Herald Tribune (12/26/01), and The Nation (12/10/01).

Weisbrot says: “The IMF’s role here was crucial. It arranged large loans, including $40 billion a year ago, to support the peso. This was the IMF’s second fatal error.”

‘Ok,’ I say to myself, ‘Go slowly. Why was this an error? Where did the $40 billion go?’

I continue reading. Weisbrot says: “The sacrifice of Argentina’s economy for the sake of Washington’s imperial interests and the interests of ’emerging market’ bondholders fits a pattern at the IMF,….”

Zip zip zip! I’ve missed something again. First Weisbrot says the IMF made an ‘error’, then he says that this ‘error’ was made for the sake of ‘imperial interests’. So what is the error? Isn’t it the precise job of the IMF to implement ‘Washington’s imperial interests’? Again, who appoints them and pays their salary? The $40 billion apparently went to pay foreign bondholders, right? And the $40 billion came originally from US taxpayers, right? (Isn’t that where IMF money comes from?) So apparently, last year the IMF transferred $40 billion from US taxpayers to private US investors, via Argentina….it seems that IMF is doing exactly what they are paid to do. Why does Weisbrot call this an error? Has he not read what he has just written?

Maybe not because next he says: “Why does the IMF seem incapable of learning from repeated failures?” Forty billion dollars transferred in one year from the taxpayers to the private pockets of the folks who control the IMF is a failure. Hmm, what more could they possibly have to learn in order to succeed?

After recounting to us the similar things the IMF did to Russia, and Asia, Weisbrot calls what the IMF did in Argentina a ‘…failed economic experiment…’.

Zing! I’m confused again. How can it be an ‘experiment’ if they did the same thing in Russia and Asia? If an institution does the same thing over and over again, with similar results, I would call it a well-crafted policy that must work for the people implementing that policy, otherwise why would they continue doing it? What is experimental about it?

Longing for the light, I turn to the New York Times (01/02/02) and Paul Krugman, known as a fierce critic of the IMF.

Krugman (also writing about Argentina) says that in the 90’s, in response to IMF demands, “Tariffs were slashed, state enterprises were privatized, multinational corporations were welcomed, and the peso was pegged to the dollar. Wall Street cheered, and money poured in.”

‘OK,’ I tell myself, ‘Remember Econ. 101. If money poured in we can assume that it also poured out in the form of corporate profits, otherwise why would Wall Street cheer? Does Wall Street cheer for anything else?’.

But then Krugman, like the other guys, confuses me. He says: “The catastrophic failure of those policies is first and foremost a disaster for Argentines, but it is also a disaster for U.S. foreign policy.”

But wait a minute, the major purpose of U.S foreign policy is to make Wall Street cheer, correct? Where is the failure? How can this be a major disaster for U.S. foreign policy?

I agree it is a major disaster for Argentina. But the ‘free market’ policies implemented in the past ten years will now allow U.S. investors to swoop into bankrupt Argentina and buy all the companies they want at rock bottom prices. And isn’t that something that will make Wall Street cheer again?

Cooper, Weisbrot, and Krugman have described exactly how a relatively small group of wealthy people used their available financial and political resources to enrich themselves at the expense of others. But despite the fact that the IMF system worked incredibly well for the people who designed and paid for it, these three writers conclude it was a ‘catastrophic failure’, an ‘experiment’, a ‘failure,’ an ‘error’ and a ‘failed model’. Why?

I’m still confused. Perhaps somebody else can answer that last question.

Lawrence McGuire is a novelist who lives in France. His latest most recent book is The Great American Wagon Road. He can be reached at: blmcguire@hotmail.com

More articles by:
Weekend Edition
June 24, 2016
Friday - Sunday
Pepe Escobar
Goodbye to All That: Why the UK Left the EU
Michael Hudson
Revolts of the Debtors: From Socrates to Ibn Khaldun
Andrew Levine
Summer Spectaculars: Prelude to a Tea Party?
Kshama Sawant
Beyond Bernie: Still Not With Her
Mike Whitney
¡Basta Ya, Brussels! British Voters Reject EU Corporate Slavestate
Tariq Ali
Panic in the House: Brexit as Revolt Against the Political Establishment
Paul Street
Miranda, Obama, and Hamilton: an Orwellian Ménage à Trois for the Neoliberal Age
Ellen Brown
The War on Weed is Winding Down, But Will Monsanto Emerge the Winner?
Gary Leupp
Why God Created the Two-Party System
Conn Hallinan
Brexit Vote: a Very British Affair (But Spain May Rock the Continent)
Ruth Fowler
England, My England
Norman Pollack
Fissures in World Capitalism: the British Vote
Paul Bentley
Mercenary Logic: 12 Dead in Kabul
Binoy Kampmark
Parting Is Such Sweet Joy: Brexit Prevails!
Elliot Sperber
Show Me Your Papers: Supreme Court Legalizes Arbitrary Searches
Jan Oberg
The Brexit Shock: Now It’s All Up in the Air
Nauman Sadiq
Brexit: a Victory for Britain’s Working Class
Brian Cloughley
Murder by Drone: Killing Taxi Drivers in the Name of Freedom
Ramzy Baroud
How Israel Uses Water as a Weapon of War
Brad Evans – Henry Giroux
The Violence of Forgetting
Ben Debney
Homophobia and the Conservative Victim Complex
Margaret Kimberley
The Orlando Massacre and US Foreign Policy
David Rosen
Americans Work Too Long for Too Little
Murray Dobbin
Do We Really Want a War With Russia?
Kathy Kelly
What’s at Stake
Louis Yako
I Have Nothing “Newsworthy” to Report this Week
Pete Dolack
Killing Ourselves With Technology
David Krieger
The 10 Worst Acts of the Nuclear Age
Lamont Lilly
Movement for Black Lives Yields New Targets of the State
Martha Rosenberg
A Hated Industry Fights Back
Robert Fantina
Hillary, Gloria and Jill: a Brief Look at Alternatives
Chris Doyle
No Fireworks: Bicentennial Summer and the Decline of American Ideals
Michael Doliner
Beyond Dangerous: the Politics of Climate
Colin Todhunter
Modi, Monsanto, Bayer and Cargill: Doing Business or Corporate Imperialism?
Steve Church
Brexit: a Rush for the Exits!
Matthew Koehler
Mega Corporation Gobbles Up Slightly Less-Mega Corporation; Chops Jobs to Increase Profits; Blames Enviros. Film at 11.
David Green
Rape Culture, The Hunting Ground, and Amy Goodman: a Critical Perspective
Ed Kemmick
Truckin’: Pro Driver Dispenses Wisdom, Rules of the Road
Alessandro Bianchi
“China Will React if Provoked Again: You Risk the War”: Interview with Andre Vltchek
Christy Rodgers
Biophilia as Extreme Sport
Missy Comley Beattie
At Liberty
Ron Jacobs
Is Everything Permitted?
Cesar Chelala
The Sad Truth About Messi
Charles R. Larson
A Review of Mary Roach’s “Grunt”
David Yearsley
Stuck in Houston on the Cusp of the Apocalypse
FacebookTwitterGoogle+RedditEmail