October 24, 2014
Holed up in the Pink House
For the Herald
Presidential palace a sanctuary from troubles
Cristina’s “project” or “model” or whatever she calls it is a Ponzi scheme. It only works as long as more money comes in than goes out. As Bernie Madoff, who is currently doing time in a federal prison in North Carolina where he is due to stay until November 14, 2139, could have told her, when investors realize they have been taken for a ride, everything falls apart.
Cristina must feel much as did Bernie when the tide finally turned against him. Few days go by without an additional quota of bad news: higher inflation, lower Central Bank reserves, blackouts, devaluations, more poverty and labour union bosses doing a Haka as they prepare for their autumn offensive. There will be plenty more in the days to come. And Cristina? To the bewilderment of her admirers, the habitually garrulous president has remained silent for weeks. Perhaps she is waiting until she finds something encouraging to say.
Argentina’s rigid presidential system only makes matters worse. The Constitution decrees that Cristina remain in office until December 10, 2015, or, if that proves impossible, her place should be filled first of all by the vice-president, Amado Boudou, or, the next in line, Beatriz Rojkés, who is the wife of Tucumán’s governor, neither of whom is widely regarded as being up to the job.
This arrangement may suit Cristina, but it only makes things harder for those who think that almost two more years of rule by a part-time president would be disastrous for a country that risks ending up like Bernie’s financial empire. If for health reasons Cristina is unable to govern properly, she should call it a day, as would others in a similar position, but she cannot do so not just because the available alternatives strike her as unpalatable but also because, were power to slip from her hands, she could soon find herself facing charges of appropriating huge amounts of public money.
Perhaps it is natural that politicians who have been brought up to believe Argentina is a “rich” country are prone to overspend, even though by now experience should have taught them it would be better for them, and for their compatriots, if they adopted a more Scrooge-like approach. Almost all the many economic crises that have put an end to periods when it looked as though prosperity was within reach have been due to a widespread unwillingness to respect certain limits, but few have dared flout basic mathematical principles as brazenly as have Cristina and her friends.
As a result, halfway though the lady’s second term in office, the Kirchnerites have no money left in the kitty. So far, their desperate efforts to find enough to keep the show on the road have failed as miserably as did Bernie’s. Their latest wheeze was to tax property-owners according the market value of their land, flats and houses, but that was abandoned when Economy Minister Axel Kicillof, quite rightly, told his fellow Cabinet members that such a move would in all likelihood set off a generalized rebellion. It was also realized that the formal value of Cristina’s collection of real estate holdings would increase ten or twenty times, a change that by itself would be more than enough to fill the streets with angry mobs demanding her immediate departure.
Before becoming president, Cristina brushed off criticism of her cutthroat business methods (she and late her husband acquired their enviable fortune by twisting the arms of people unable to keep up with their mortgage payments under the military dictatorship), by saying that to make a career in politics she needed a great deal of money. That was certainly true in her particular case.
The well-oiled machine Mr and Mrs Kirchner put together worked wonderfully well by extracting money from the rest of the country and sharing some of the proceeds among those individuals who promised to support them, whether politicians, businessmen, “artists,” journalists or the owners of football clubs. They also used the loot to buy votes subsidizing electricity, gas, petrol and public transport prices in politically sensitive urban areas.
So, what will the Kirchnerites do now they too are as broke as any opposition provincial governor? In other parts of the world, even Greece and Italy, politicians can get away with telling people to tighten their belts, put their noses to the grindstone, and slog it out for several years until, finally, the world rewards them for their virtuous efforts. Though Cristina is more than willing to blame other people for the country’s many woes, she says she is against austerity for noble ideological and humanitarian reasons. On one occasion, she averred that should circumstances oblige the government to cut spending, she would not hesitate to call it quits. But that was then, before corruption became a major issue.
No doubt Cristina would much prefer to return permanently to El Calafate or, perhaps, remove herself and her family to some suitably revolutionary Caribbean resort, but with a pack of vengeful lawyers at her heels, that would be risky. With her past catching up with her, she must feel safer in the Pink House, where she will stay for as long as she can even if the country, bereft of a competent government, continues to be battered by the economic storms that she contrived to conjure up when she still thought that somehow or other her populist economic “model” could be made to work.