The American Interest
Analysis by Walter Russell Mead & Staff
Time to Arrest More Economists in Argentina

As we’ve been predicting here at Via Meadia, the gimmickery and fancy accounting in Argentina are ensuring yet another round of frustration and pain for one of the most underperforming countries in the world.

The bizarrely paranoid government persists in threatening anyone who publishes independent inflation estimates with criminal prosecution — a sure sign, of course, that the government is mismanaging the economy badly, knows it is mismanaging the economy badly, and thinks its only hope lies in deceit. But as time goes on, the fake government statistics are less and less convincing, and the populace senses that things have gone badly awry.

That is the stage Argentina has reached now: President Kirchner’s popularity keeps tumbling and is now down to 30 percent in a recent poll as more and more Argentines understand that their money is losing value even as their economy stalls.

She tried to puff up her popularity for a while by manufacturing a hubbub with Britain over the Falkland Islands — another infallible sign of an Argentine government that has lost its way. But even that no longer works; a worried and sullen public just keeps feeling gloomier as spring approaches in the Southern Hemisphere.

There are still some cards that failed Argentine leaders habitually play that President Kirchner can now employ. She can crack down on the press more, blame the United States more and do something provocative and eye catching about the Palestinians. She can try a bit more Brazil bashing, whip up some outrage over Argentina’s Antarctic claims, try seizing some bank deposits and she can embrace inflation rather than trying to cover it up: printing money and raising state salaries and benefits in the hope that the scam gives her a few more months.

Argentinians have been through this many times before; it has become a kind of standard leadership trajectory there, with the ruling Peronist Party particularly good at creating economic crisis by the use of quack economics. The country’s leadership is so bad that it can never do well for long, but its natural resource base is so deep that even the worst leaders can’t completely wreck its potential.

The question now isn’t whether President Kirchner’s policies will fail. Of course she will fail. They all do. The question is whether this latest apin around Hell’s merry go round will convince the Argentine public that a genuine new departure is needed.

It probably won’t, sad to say. The ghosts of Evita and Juan still haunt and curse Argentina. When a tired and shopworn old demagogue fails in Buenos Aires, it isn’t time to reject demagoguery and look for serious leadership. It’s time to look for a smiling new demagogue with shiny new promises and feel good slogans — and, of course, impassioned denunciations of Anglo-Saxon liberalism and its wicked ideas about free markets, honest government and the transparent rule of law. Why listen to that boring old liberal stuff when you can have an excitingly different, cleverly packaged quack cure?

We can hope that this time is different, and when the Kirchner scam goes down along with the various Menem, Alfonsin, and Peron scams of the past, Argentines will note the causal relationship between listening to demagogues and recurring economic crisis. But I wouldn’t put money on it; Argentina seems to like this kind of up and down, boom and bust pattern.

But for foreigners if not for Argentines, there is a silver lining. If the pattern holds, as the Kirchner plan continues to unravel, Argentina will soon be one of the cheapest destinations in the world for tourists.

Published on August 27, 2012 8:58 am
  • Corlyss

    “Time to Arrest More Economists”

    Boy! Now there’s a tantalizing idea . . .!

  • Trevor

    It seems amazing that Argentina can continually lapse into socialism when their next door neighbor in Chile thrives using property rights and limited government.

  • Polly

    Good to know that the United States isn’t the only country in the world whose citizens prefer hope and change to reality!!

  • Daniel

    I was born and raised in Argentina. That is the pattern they choose to follow for generations now. It’s a shame that Mr. Obama wants to do the same here, following the path of Castro, Chavez and Kirchner. (and Gov. Brown in California)