Austerity by stealth
For the Herald
CFK has veered toward orthodox economic policies
Argentine populists have always made out that their country is the innocent victim of wicked foreigners, mostly Britons and North Americans, who have grown accustomed to appropriating large chunks of its wealth. After the imperialists have paid off their local collaborators, there is not much left, so much of the population has to scrape a living as best it can. For the politicians themselves, encouraging collective self-pity by blaming everything that goes wrong on the rest of the world may seem smart because it allows them to take advantage of their own shortcomings, but it also makes it all but impossible for them to manage the economy in a sensible fashion. According to their more fanciful ideologues, even trying to do so would be tantamount to letting oneself be mentally colonized by alien invaders.
Populists have been going on like this for so long that many really do believe that Argentina’s dismal economic performance over the years is due to psychological restrictions imposed by a sinister cabal whose HQ used to be in London but is currently in New York. That is why, once in government, they tell us that, unlike their craven predecessors, they will take no notice of warnings coming from imperialist fronts such as the International Monetary Fund about the dangers lying in wait for politicians who think their country is far richer than it actually is.
Free-spending populists always find it impossibly hard to deal with the crises they invariably manage to bring about. Being against austerity on principle, they are reluctant to cut back on spending even though circumstances leave them with no other choice. Before reaching power, they proved, to their own satisfaction at least, that widespread poverty is the inevitable result of the “orthodox” economic policies favoured by imperialists and their hirelings, so it was up to them to put matters right by giving people the money they deserve. One result of this approach is the amazingly complicated system of subsidies funded by the taxpayer Cristina and Axel are desperately trying to unravel.
Soon after he was sworn in back in 1983, president Raúl Alfonsín said that because the military junta had bequeathed him an appalling economic mess, what with the country virtually bankrupt and inflation running amok, he felt obliged to compensate people for the sacrifices they had made by ordering fat wage increases. We all know how that turned out.
CFK’s approach has been much the same as Alfonsín’s. She too is dead against belt-tightening, spending cuts and all the other unpleasant things governments the world over often feel obliged to do. Though of late her government has veered towards “orthodoxy” in the hope of getting some much-needed loans from abroad, she still refuses to admit that anything much has changed. Nasty words like “inflation” and “devaluation” are conspicuously absent from the official vocabulary; should a government spokesperson be foolish enough to use them, it is front-page news.
In most European countries, vote-chasing politicians now take a grim pleasure in assuring people that they are tough characters who, if elected, would be more than willing to slash spending to the bone, make vicious cuts, and do whatever else it may take to reduce the fiscal deficit. Apparently, in their part of the world such macho talk goes down very well. Losers may squeal or stage big public protests and progressive commentators shed tears over the unfairness of it all, but sadism wins elections.
In happy-go-lucky Argentina, however, even politicians who are suspected of neoliberal tendencies fear that, were they to say what in their view ought to be done to prevent the economy from being devastated by yet another hyperinflationary tornado, they would have to choose another profession. They have not forgotten that, when president Fernando de la Rúa’s economy minister Ricardo López Murphy proposed some relatively mild spending cuts, his fellow Radicals accused him of “genocide” before forcing him to step down.
Not that long after López Murphy departed, the dreaded markets came to the conclusion that belt-tightening was in order and took charge, impoverishing most Argentines. While they were at it, most politicians stayed out of sight. Is history about to repeat itself? As on many occasions in the past, the choice before the country is fairly simple: either the politicians do whatever it takes to restore economic sanity or, should they refuse because they think it would cost them too many votes, the markets will do it for them in their own brutal fashion.
CFK appears to understand this, but she is so devoted to her populist narrative, according to which no decent government would ever dream of doing anything that adversely affects people who are already hard up, that she is unable to come clean and say what she is up to. Though nobody is fooled by her efforts to pretend that nothing untoward is happening, she evidently feels it is her duty to push through a surreptitious austerity programme.
That would not be the case if, like some leftwing governments in the old days, she could call on her compatriots to sacrifice their own personal material wellbeing to the common good because building socialism, or whatever it is that she has in mind, requires a herculean effort. But, unfortunately for her, she has yet to find a way of fitting that kind of rhetoric into her beloved populist narrative in which millions of people she and her late husband liberated from the chains of neoliberal thought can at long last go on an endless shopping spree, so she will continue to try and hide behind a dense cloud of euphemisms.