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Argentina’s economic fiesta is over [a self-inflicted crisis Obama also favors]
Miami Herald ^ | June 17, 2012 | Andres Oppenheimer

Posted on 06/17/2012 3:51:19 AM PDT by Cincinatus' Wife

[SNIP of current situation].................. Judging from dozens of interviews here last week, there is only one reason for Argentina’s current decline — and it’s the usual one. It’s politics, of course.

Fernández de Kirchner’s populist government has given away massive subsidies in its quest to win elections, much like Hugo Chávez in Venezuela. While ever-growing subsidies work while commodity exports keep rising, they can leave a country bankrupt once world commodity prices stop growing.

While neighboring Chile under both center-left and center-right governments has saved in good years to maintain its social programs during bad years, Argentina has done exactly the opposite. It has squandered what economists say was its biggest economic bonanza in nearly a century in giving government jobs to loyalists, cash subsidies to millions of people — many of whom now find it more convenient to live from government handouts than to find a job — and transportation and energy subsidies.

Thanks to government subsidies, public transportation in Buenos Aires may be among the cheapest in the world: a bus ride costs the equivalent of U.S. 22 cents, and a train ride U.S. 26 cents.

Roberto Lavagna — the former economy minister under Nestor Kirchner who is credited with resurrecting Argentina’s economy after the country’s 2001 default on its foreign debts — estimates that government subsidies for transportation and energy soared from U.S. $1.2 billion at the end of 2005 to U.S. $19 billion last year.

While commonsense would suggest that Fernández de Kirchner would start reducing public spending in light of the economic slowdown, she seems to be doubling her bets. Last week, she announced a giant plan to give out 400,000 low-interest mortgages and build 400,000 homes over the next four years.

Where will the money come from? It will be borrowed from the state’s Social Security System. The government says the plan will create 100,000 jobs in construction work, and help reactivate the economy. Skeptics say the money will disappear in the hands of corrupt officials, like so many times before, and future retirees will not see a penny of their pensions.

“They have a very short-term, strictly political vision of the economy,” Lavagna said. “That’s very unlikely to change.”

What’s most worrisome is that a large number or Argentines, while increasingly skeptical about Fernández de Kirchner’s narrative about the alleged new economic model, are not necessarily opposed to a growing state role in the economy, Lavagna said.

“There is a growing statist trend, which is very accepted by society,” Lavagna said. “The latest polls show that Argentines support statist policies by a margin of two to one.”

My opinion: All indications are that Fernández de Kirchner will blame the outside world — the media, Greece or Washington — for the downturn caused by her own irresponsible economic fiesta. She will print increasingly more money to buy votes to win the October, 2013 legislative elections, if they are not held earlier, and will pray for a new spike of world commodity prices — which very few are predicting — to rescue the country’s balance sheet.

In the process, she will have squandered Argentina’s best opportunity in a century to use its commodity bonanza for improving education standards, attracting investments to create new industries, and lifting millions of people from poverty for good.

I hope I’m wrong about this, and that during the 3.5 years remaining in her term, Fernández de Kirchner she will take a more long-term, less ideological, view of what’s best for her country. But I didn’t hear anything during my stay here to convince me that she will do anything to save Argentina from its self-inflicted crisis.

TOPICS: Business/Economy; Foreign Affairs; Government; Politics/Elections
KEYWORDS: economics; economy; socialism
Sound familiar?
1 posted on 06/17/2012 3:51:26 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife

Kirchner will need a rallying point and distraction to counter the damage she is doing. Falkland Islands?

2 posted on 06/17/2012 4:53:16 AM PDT by trubolotta
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To: trubolotta

Yes. Dictators and wannabe dictators need voters distracted from reality — away from whose causing their misery.

3 posted on 06/17/2012 4:57:29 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife

“.................. Judging from dozens of interviews here last week, there is only one reason for Argentina’s current decline — and it’s the usual one. It’s politics, of course.”

It’s the SOCIALISM, stupid.

“Above all, if you wish to be strong, begin by rooting out every particle of socialism that may have crept into your legislation. This will be no light task.” - Bastiat 1801-1850

Here is just SOME of the damage THEY have done...


DEPOPULATE socialists from the body politic.

DEFUND their collectives, foreign and domestic.

The New Party Socialist deceiver occupying the oval office is the obvious one.

There are many more self-avowed,71

Their hallmarks are deception, intimidation, plunder and death. They have a record of destruction and death. Witness history. Witness current events.

C’mon November.

live - free - republic

4 posted on 06/17/2012 5:25:34 AM PDT by PGalt
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To: trubolotta

She’s been milking that cow so hard already that the udders are squirting blood (hopefully, that metaphor won’t become more apt in the not too distant future)...

5 posted on 06/17/2012 5:33:13 AM PDT by sinsofsolarempirefan
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To: Cincinatus' Wife

(from) “The Law” - Frederic Bastiat 1801-1850

Property and Plunder

Man can live and satisfy his wants only by ceaseless labor; by the ceaseless application of his faculties to natural resources. This process is the origin of property.

But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.

Now since man is naturally inclined to avoid pain — and since labor is pain in itself — it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it.

When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor.

It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. All the measures of the law should protect property and punish plunder.

But, generally, the law is made by one man or one class of men. And since law cannot operate without the sanction and support of a dominating force, this force must be entrusted to those who make the laws.

This fact, combined with the fatal tendency that exists in the heart of man to satisfy his wants with the least possible effort, explains the almost universal perversion of the law. Thus it is easy to understand how law, instead of checking injustice, becomes the invincible weapon of injustice. It is easy to understand why the law is used by the legislator to destroy in varying degrees among the rest of the people, their personal independence by slavery, their liberty by oppression, and their property by plunder. This is done for the benefit of the person who makes the law, and in proportion to the power that he holds.

6 posted on 06/17/2012 5:33:48 AM PDT by PGalt
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To: PGalt

And why the Ten Commandments and Judeo-Christian teachings must be undermined and eliminated by “social-justice” teachers and power hungry plunders.

7 posted on 06/17/2012 6:54:21 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife

Argentina - Peronism is still very popular.

People still remember Evita and Fernandez de Kirchner is as close to Evita as Argentines want.

What’s not to love? Just don’t cry for Argentina when it goes broke again.

8 posted on 06/17/2012 6:56:14 AM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: goldstategop

And the U.S. has Obamaism.

9 posted on 06/17/2012 7:13:16 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife

Now I know why Barney Frank is leaving congress.....he’s moving to Argentina to be a consultant.

10 posted on 06/17/2012 7:14:44 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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