Argentina: Confusing Tales

["Charles Brown" <CharlesB@xxxxxxxxxxxxxxxxxxxxx>]

Argentina: Confusing Tales

Counterpunch, January 7, 2002
>From Progressive Economists
By Lawrence McGuire

I've been trying for years to figure out the world economic system, but it
ain't easy. No matter how much I read I always seem to end up even more
confused than when I started.

For example, lately I've been trying to understand what is happening in
Argentina. I know there is a connection between the crowd surrounding the
finance minister's house banging pots (he resigned that night), and the
International Monetary Fund (IMF), and people raiding grocery stores
because they are hungry, and motorbike couriers being shot and killed by
soldiers in Plaza de Mayo, but I don't know how it all fits together. So
for help I turn to some progressive economists and political commentators.
They're professionals and should be able to explain it to me, right?

First I read Marc Cooper (contributing editor to The Nation and a columnist
for LA Weekly). In his recent column in the LA Times (12/30/01), Cooper
tells me that for the past decade Argentina has been a 'gold mine' for
international investors. Ok, I guess that means that big corporations and
rich individuals invested their money in Argentina and made golden profits.
That's clear.

But then Cooper says "That experience [the collapse of the Argentine
economy] should be enough to throw into question the free-market
globalization model....".

Swoosh! That one flies right by me and I'm confused.

If Argentina was a gold mine for international investors, why should the
'free market globalization model' be questioned? Who created and
implemented the 'free market globalization model'? It worked for the people
who devised it, didn't it? Isn't the IMF controlled by the US Government,
which is controlled mainly by rich individuals and big corporations? The
IMF employees managed the Argentine economy for the benefit of their bosses
in the U.S., and apparently did a damn good job. So why should the model be
questioned?

I wrinkle my forehead and gird my mental loins. 'Concentrate,' I say to
myself. 'Focus and you will understand.'

Cooper continues: "The United States and other economically powerful
nations, and the international financial organizations they finance, should
allow for alternative models of development."

Now I'm even more confused. Why should they allow alternative models if
they are making such huge profits with their current model?

Looking for clarity I turn to Mark Weisbrot, (co-director of the Center for
Economic and Policy Research) writing in the International Herald Tribune
(12/26/01), and The Nation (12/10/01).

Weisbrot says: "The IMF's role here was crucial. It arranged large loans,
including $40 billion a year ago, to support the peso. This was the IMF's
second fatal error."

'Ok,' I say to myself, 'Go slowly. Why was this an error? Where did the $40
billion go?'

I continue reading. Weisbrot says: "The sacrifice of Argentina's economy
for the sake of Washington's imperial interests and the interests of
'emerging market' bondholders fits a pattern at the IMF,...."

Zip zip zip! I've missed something again. First Weisbrot says the IMF made
an 'error', then he says that this 'error' was made for the sake of
'imperial interests'. So what is the error? Isn't it the precise job of the
IMF to implement 'Washington's imperial interests'? Again, who appoints
them and pays their salary? The $40 billion apparently went to pay foreign
bondholders, right? And the $40 billion came originally from US taxpayers,
right? (Isn't that where IMF money comes from?) So apparently, last year
the IMF transferred $40 billion from US taxpayers to private US investors,
via Argentina....it seems that IMF is doing exactly what they are paid to
do. Why does Weisbrot call this an error? Has he not read what he has just
written?

full: http://www.counterpunch.org/mcguireargentina.html