May 25, 2013
CFK takes on the wrong judge
When the US election campaign was approaching its end, psephologists started talking about the importance of the likeability factor; they attributed Romney’s apparent late surge to people assuming he was a less unpleasant character than they had been led to believe. In Argentina, personal feelings about Cristina have played an even bigger role. It was thanks in large measure to the widespread desire to be nice to her after her husband’s sudden demise that two years ago her image immediately recovered its lost lustre and went on to shine so brightly that last October she became by far the most powerful woman the country has ever known.
Unfortunately for everyone, herself included, Cristina let that remarkable triumph go to her head. Instead of making good use of the political capital she had been given, she frittered it away until there was little left. Within a year, her approval rating was back where it had been in mid-2008 when she was waging a bizarre rhetorical war against “coup-mongering”, “militaristic” and “selfish” farmers, many of whom barely managed to scrape together a humble living. Her conviction that in the last analysis the only thing that mattered was her personal ability to communicate with the people has hurt her greatly, as has her self-indulgent willingness to surround herself with an unimpressive assortment of family members, relatively youthful ideologues, servile cronies and notorious opportunists.
She has also discovered that what may play well in Argentina does not necessarily work abroad. Her “charisma” is not for export. When she tried, in her usual haughty manner, to treat the New York judge Thomas Griesa as though he were some malleable local magistrate who could easily be cowed into doing her bidding, she pushed the country toward yet another default.
Cristina has described herself as a “successful lawyer” (in Harvard, she said that was why she is a multi-millionairess) so she should have known that a defendant in an important case would be ill-advised to tell the world that he or she had no intention of obeying an unfavourable court order. Not surprisingly, Griesa, who up to them had given Argentina the benefit of every doubt, felt so exasperated by her behaviour that he decided to throw the book at her.
Just how all this will end is anybody’s guess. Although, as Cristina hoped, an appeals court ruled that Griesa had been a bit harsh, that did little to change the country’s reputation as a financial delinquent whose government cannot be trusted. Argentina may have grown accustomed to being cold-shouldered by big foreign investors and their local counterparts, but it is currently in desperate need of money and is in no shape to put up with the additional difficulties that are already being felt. Even before Griesa made it terribly clear that he was not going to let himself be bullied by Cristina and her friends, Argentina was slithering quickly towards yet another crack-up. Overnight, the risk of this happening grew significantly.
In an attempt to extract some political advantage from a nasty setback on the economic front, Cristina has taken to decrying “judicial colonialism”. Many opposition politicians agree that it is outrageous that foreigners should decide whether or not the country is giving creditors a fair deal and blame former governments for permitting it, but given the circumstances they had little choice; no overseas investor in his right mind would ever dream of letting some local judge say how much he should be allowed to retrieve unless interest rates were high enough to make his bet seem worthwhile. To complicate matters still further, many leftists think that, seeing that both the people who borrowed money and the creditors were in all probability corrupt, paying out is morally wrong. They may be right, but that is not how the world works.
When Argentina defaulted in late 2001, most people blamed the politicians. After going into hiding for a few months, they emerged and set about persuading their compatriots that it was not really their fault, that the disaster that had befallen the country was almost entirely due to the malignant stupidity of the IMF, the heartless greed of foreign capitalists and US imperialism, as well as a handful of Argentine miscreants who had been led astray by “neoliberal” siren songs or because they were treacherous by nature. That strategy had the desired result. Most Argentines seemed quite pleased to be told they were the hapless victims of a world allegedly determined to impoverish them.
The upshot was a government led first by Néstor Kirchner and then by his wife that took it for granted that Argentina would at long last prosper if it freed itself from the shackles of foreign thought, and foreign rules and regulations, and went its own way. For a while, that “unorthodox” formula appeared to work: China’s insatiable appetite for soybeans pumped billions of dollars into the economy, so it rapidly expanded. But with growth came what soon turned into one of the world’s highest inflation rates, nothing was done to make Argentine firms more competitive, a grotesquely inefficient public sector got fatter by the day, and then the easy money started to run out. Unless we are very lucky, within a few months Argentine will be in the middle of one of its periodic economic meltdowns. By driving Griesa up the wall, Cristina made the day of reckoning come much closer.