Last week, the US Supreme Court made a decision that
could force Argentina to pay American billionaire hedge fund managers the full
value of its decade-old debts. Argentina’s dollar denominated/pegged debt is
one of many cruel legacies of the criminal Washington consensus government
under Carlos Menem. Menem was known for being buddy-buddy with Bill Clinton,
and excluded the same sort of chill machismo as Clinton, while turning his
country into an internationally financed Ponzi scheme. In the 90’s, he was
lauded as a hero of fiscal discipline and inflation control, but his real
achievement was severely eroding Argentina’s sovereignty and allowing it to
become a petri dish for reckless neoliberalism. As poorly managed as Argentina
had been before the neoliberal experiment, it should now be clear that
establishing a currency board and pegging the peso to the US dollar was a disastrous
“solution.”
The current Kirchner government is also deeply flawed, and I
have trouble finding anything positive to say about the leadership of my second
home country. This government has continually lied about inflation statistics
and violated freedom of the press. That being said, Argentina has been
struggling for years to build up its dollar reserves by exporting an enormous
amount of its agricultural production, at the cost of increased food prices for
the poor. Argentina has also seen millions of acres of its land transformed
into soybean farms, with all the environmental consequences from the herbicides
and fertilizers that go along with it. Meanwhile, the US refuses to allow
imports of Argentina’s higher valued agricultural goods, such as meat and
citrus, due to grossly outdated health and safety measures that masquerade as
protectionism for America’s welfare farmers. So on the one hand, US policy is
forcing Argentina to pay back debts in dollars, and on the other hand, US
policy is making it difficult for Argentina to actually acquire those dollars! Along
with the current disaster in Iraq, it’s hard to see how our current leadership
could do a better job of turning the entire world against the US.
This recent series of decisions from our neo-con court system may force
Argentina to pay back these illegitimate debts, which could drain billions of
its hard earned dollar reserves. This is crony capitalism of the worst kind;
sociopath-investors like Paul Singer are using America’s court system to force
the sovereign government of Argentina back into client-state status. The
already unstable Argentine peso,
which has caused some farmers to start reverting to commodity currency, could
fall even further as the result of this decision. In the purest sense, it’s
hard to see how human welfare, except for the top 0.001%, will improve as a
result of this decision.
What some are pointing out is that this decision is counterproductive for the US in the it sends a clear warning, after the financial crisis, to avoid US financial centers like New York. There is already a strong reaction away from US hegemony and the Ukraine crisis was a tipping point that pushed Russia out of the Western orbit and into closer relationship with China. Brazil has already been alienated over US espionage, spying on the president's email. Germany also. Then there was part of the Snowden affair where a foreign chief of state's plane was force to land for inspection.
ReplyDeleteBank on it that there is a rising global alliance to counter US hubris and that of its close allies, some whom are discovering that they are not close enough to be above US manipulation.
What this is signals is that US soft power is crumbling and the US grab for global hegemony is provoking the dialectical reaction that would be expected historically.
Even worse for the US elite, this is also going on within the US itself as the population finds itself increasingly commoditized and exploited for rents, with constitutional liberties not only revoked but criminalized.
Americans should be crying for the US.
In other words…"something's gotta give".
ReplyDeleteHopefully citizens (or their leaders) don't choose the degree of freedom known as poverty. I'm optimistic they won't.
"So on the one hand, US policy is forcing Argentina to pay back debts in dollars, and on the other hand, US policy is making it difficult for Argentina to actually acquire those dollars! "
ReplyDeleteThe solution is to assert sovereignty, redenominate this foreign debt forcible into Pesos and then start doing trade deals with the Chinese and Russians.
The state can bring about a decent country if it wants - implement a hut tax and then start hiring public sector workers to put public money into local communities.
Argentina is nearly there, but it just needs to stop kowtowing to the US hegemony.
Tom what you describe sounds like every other empire collapse, because stupid elites too obtuse to know what's going on in front of them while they fall into their own control paranoia (resulting in chaos instead).
ReplyDeletePeople in charge should know better by now, but they are irrational control freaks after all.