Stiglitz on Argentina: 'Neoliberal Experiment Has Failed'

[sandensea]

Only a few days after Argentina's Congress voted to extend the Food and Nutrition Emergency, Professor Joseph Stiglitz talked about the critical situation that the South American country faces as a consequence of a President Mauricio Macri's “failed economic formula” of neoliberalism for the nation.

“Macri bet wrong and now the country is paying a high price for the mistake,” the 2001 Nobel Prize winner told progressive Buenos Aires daily Página/12 when asked about the president's economic policies since taking office in late 2015.

“Argentina ... and the bankers are the ones to blame, including the International Monetary Fund (IMF). They made the mistake of supplying those funds.”

“I warned that he (Macri) was committing a great risk by reducing export withholdings. These profits brought about the rise in food prices and the impoverishment of lots of workers.”

Macri's export tax cuts, enacted by decree within days of taking office, cost public coffers around $4 billion annually, helping swell federal deficits from 3.8% of GDP in 2015 to 5.3% in 2017 and 2018.

They also helped drive inflation from 25% in 2015 to 55% this year; food inflation in particular has risen to 59%.

Macrisis

Argentina's GDP has fallen 6.9% since a carry-trade debt bubble known as the “financial bicycle” collapsed in April 2018. The loss of 262,000 registered jobs has pushed unemployment to 10.6% in the second quarter, its highest in 13 years.

The crisis forced Macri to turn to the IMF for a record, $57 billion bailout last year. Former IMF Director Christine Lagarde, who approved the bailout, asserted on Friday that “had we done nothing, I think (the crisis) would have been a lot worse.”

Critics, however, note that most of the $45 billion lent so far by the IMF has left the country by way of capital flight.

Opposition candidate Alberto Fernández, who leads in most polls by 20% or more, pointed out that total capital flight since Macri took office - an estimated $107 billion - equals the net increase in the public foreign debt.

Macri defaulted on around $32 billion in short-term debt on August 28, including peso-denominated debts - the first Argentine default on public debts denominated in its own currency.

At: https://www.telesurenglish.net/news/stiglitz-about-argentina-neoliberal-experiment-has-failed-spectacularly-20190921-0013.html

Professor Joseph Stiglitz with former President Cristina Fernández de Kirchner in 2012.

Stiglitz who praised Kirchner's “resolution of macroeconomic crisis and sovereign debt restructuring,” as well as “reducing inequality and poverty,” has been critical of Macri's “failed bet” on corporate tax cuts, financial deregulation, and foreign debt since succeeding Kirchner in 2015.

Amid the deepest crisis in two decades, Macri's re-election bid is behind by 20% or more in most polls.

[Judi Lynn]

1. So glad to hear from Joseph Stiglitz, a person of real value.

You've been reading this presidency exactly correctly from the very first, in every aspect. You had Macri's number, sandensea, every time.

Loved seeing Stiglitz' comments on Kirchner's leadership.

It's to the country's advantage someone like Alberto Fernández, who has a very close understanding of how things work when they are done right, may be the one to put things back together, if the election doesn't get hijacked, which is always possible when deeply
destructive people are involved.

Wow, it just dawned on me that the election is in October. Good grief! It's almost here, although it seemed so far away earlier in the year when Macri was conducting his war on the great majority with such a vengeance.

Very interesting hearing Christine Lagarde as she claimed had she not "helped" extend the IMF mercies to the people of Argentina things would have been far worse.

Hearing from Stiglitz in this article was a tremendous moment. Thank you.

[sandensea]

2. Thank you, Judi. You, too, saw it all very clearly from the start.

Which is all the more commendable, given that you have no Argentine relatives.

I must say, this wasn't too difficult to predict for someone whose family - like so many others - lost so much during the last dictatorship.

Macri and his gang, after all, the very same sort of people - ideologically and by way of pedigree.

These are not "pro-business" people by any stretch - except, of course, when it comes to their own.

Au contraire, they very much believe that "there are too many businesses in Argentina" are that being an employer should be limited to those with "the right last names" - or those few 'commoners' who, like the Macris, have their blessing.

They despise the poor, yes. But they resent labor unions ("We'll put those dirty slobs in their place!" ), the middle class ("Who do they think they are!" ) - and especially success stories ("Did you hear about that dirty Italian/Jew/Arab? He opened a grimy little factory a few years back, and next thing you know, he's rich!" ). That's just a small sampling!

And they especially resent politicians who aren't their lackeys; they literally want blood (as Cristina Kirchner can attest).

They'd like an Argentina more like the one that existed before democracy (pre-1916) - which of course in today's world would mean condemning the country to backward poverty.

So in some ways, they're not unlike the elite in here in the U.S. and many other countries: it's not enough to be better off than anyone else; they want it all, or almost.

But Argentina's elite is one of the worst in that they also want a return to the 19th century - something no Brazilian, Chilean, Colombian, or Mexican bigwig would want for their country. Certainly no American billionaire would want that (well...).

[Judi Lynn]

3. To a complete outsider, it never would have occurred that there would be an element in Argentina

to see Christina Kirchner as anyone other than a very accomplished person. I was shocked learning there was anyone actually looking down on her!

So typical of the ruling classes everywhere, they invade, terrorize, and break the remaining native citizens, then pretend ever after that the land under their feet has always been theirs, and everyone else there is unwanted.

It's such a deep sickness, and almost impossible to correct, unfortunately. People don't really ever want to acknowledge their stolen power over other humans.

It's odd to discover, after Néstor Kirchner's death, that while he was living, I was unaware that those people looked down upon his wife. What an obnoxious, offensive shame. I really hope through and through he never unconsciously shared any of their super-white attitudes.

[sandensea]

4. Sure. A woman, the daughter of a bus driver - and too "mixed" to be president. That just won't do!

But worst of all, she wouldn't do their bidding - or at least, not without asking questions.

I gotta tell you though, things have gotten so bad even many in the elite want a round of progressive reforms now.

"We put Macri in power because we didn't want another 'Venezuela'," some will tell you (which is what happens to people when they watch too much cable news down there).

"And that little bastard ended up getting us as close to it as we've ever been!!"