Another crisis 1999-2002

[flyingkiwi]

Cristina is nothing if not practical. She is not going to allow a crisis on her watch. The fact that she is willing to go after private property, restrict the supply of dollars, etc, shows she is willing to do what it takes to avoid a crisis.

It complicates the life of all of us, but it is a short-term solution to the problem.

Hi there, I don't often way in on these but just wanted to add a few things.

These crisis happen not because a politicians force of willpower but because they have set up the conditions for them to happen. CFKs policies are to garner the most votes, not for the long term good of the economy. The collapse of the current house of cards is unavoidable. Everyday I look at the Buenos Aires Herald and wonder what new insane statement is going to come out of the President, economy minister, vice president, et al. There doesn't seem to be anyone in charge who knows the effect of what they're saying is going to have.

A point was made on this forum a while ago by someone who very wisely said that Argentina has been bombarded by decades of coups, crisis', state terrorism and economic instability and therefore the average Argentine has very little trust in the state and real long term growth and stability. From what I can see from the outside looking in everyone in power is looking for votes in the short term and has no skill or will for long term stability which will bring real economic growth and real wealth.

 

[El chabon]

You are misinformed.
These are the requirements for starting the case.
The Federal Judge investigates the person who applies regarding criminal and terrorist background. The investigation takes 7 months.
So, it is not so simple.
Regards

2 years and 7 months instead of 2 years, your right, that makes a really big difference.

 

[El chabon]

ElQueso

I'm saying that those who go through the process of citizenship are not the same ones you are saying are causing all the problems.

Nope, I didnt say that

While a large precentage of those who immigrate, integrate and become citizens might vote for Cristina in larger percentages, they are not the drug dealers, thieves and other undesirables that are causing the problem.

Again didn't say that

You can post how easy it is to get citizenship (I'm assuming that was what your previous post was about, though it has no title declaring it as such) but you miss the point that the idiots who cause social problems are those who do not vote and do not have a say in the direction of the country (however poor that decision might be), because they don't even bother to try to get citizenship, nor RESIDENCY even.

Even if they don't cause problems they eat up state revenue by social plans, free health care, education and other services.

And most villa's are also flocked, yes flocked by either foreigners or naturalized Argentines.

Cristina already has a high percentage of Argentine poor from which to draw her votes. If you were to tell me that those poor living in the villas (who I can almost guarantee you, if any of them have citizenship at all, it is an extremely low percentage) were voters and thus contributing to her base, I'd be right with you.

Are you really saying that Cristina's main fan base are not the poor and lower class. All I can say then is that there is a lot left for you te be learned.

But those who are causing the problems are not those who vote and have a stake in the country in that way.

Really.....

And btw - making guesses about how many voted for Cristina doesn't make a very good argument. You seem to be stuck in the same thought pattern that all who are becoming citizens are those drug dealers and thieves. I'd be willing to bet, from actual experience of seeing those who go through the process of legalization, if not citizenship, compared to those who sit on their asses, don't get legalized, and do the best they can to get away with doing nothing, that the latter percentage of citizenship is extremely low.

I know for a fact this is bullshit.

Although my family doesn't live int he villa, they know people who do and have visited there from time to time. I've gone as well. There are acquaintances from Paraguay who do come to live there, they are ignorant as hell, they pay extremely low prices for everything wthin the villa and work as absolutely little as possible.

So let them stay in Paraguay, problem solved. Argentina doesn't have to solve Paraguay's problems nor the other way around.

They will never become residents, nor citizens. They don't even think about it. They will never vote for Cristina.

Ever heard of the people that go into the villa's that help people with there residency papers? Somehow it happens just before the elections are and a little while later Alicia's group of thugs will come with fridges and TV's

On top of that, Cristina didn't make the immigration policies here. The problem with Argentina is not their immigration policy. In the six years I've lived here, I've watched theft and crime get worse, not because of immigration policies, but because of governmental policies that started before Cristina, who just made things worse. Again, plenty of Argentinos who make that vote, not drug dealers who are here irregularly.

Her husband legalized one million irregular residents, really have you been a sleep the time you have been here?

 

[jimdepalermo]

Bajo, there hasn't been a free market in the United States for about 80 years. Sadly many people seem unaware of that. A free market is when the government stays out of things and lets the market work. That used to be true in the US and that was when the U.S. prospered. The free market was not lost to the people all at once though. It was infringed on little by little by the governments and by corporations using their connections in government to keep out or drive out competition. A true free market brings properity. Usually the more government interference you have the poor and less efficient is the country and the people.

You're right, arlean, but the free market you describe ended when the great depression hit the US, then spread uncontrolled around the world, and set up the conditions for Nazism, Fascism, and World War II. In the US that "free market" was also characterized by "corporations using their connections in government to keep out or drive out competition," control banking, limit investment in education and infrastructure, and aggressively focus wealth among the top 0.01% of the population.

I can't believe even you would want to return there.

 

[nicoenarg]

well, with all my respect, people is immigrating into argentina, not emigrating for working.
Colombians right now, europeans soon.
There is no reason for a crisis like 2001 because:
a) there is not a neoliberal economy plan. They do have it in europe and you can se how does it works.
B) the nationalization of ypf
c) the high price of soy
d) the dolar corralito

those are strategic moves to avoid a crisis.
Regards

(Before I begin, I just want to say right out that I don't think neoliberalism is perfect or any other economic model for that matter, I just think its the better one out there right now.)

Europe has a "neo-liberal" economy? That's news to me. I understand that the term "neo-liberal economics" is thrown around kinda like "Keynsian economics" is thrown around by people without actually knowing what it means.

Don't get me wrong, the European Economic MODEL is supposed to be neoliberal and if they actually had implemented neoliberalism correctly, they probably wouldn't be dealing with these problems in the first place.

I know I sound like "oh Communism didn't work in the Soviet Union because they didn't implement it right" kind of person but let me just lay out what I mean by them not implementing neoliberalism right.

The biggest problem in Europe and something that is at the heart of these crisis is the fact that they have a very heavy welfare system. You can not have a welfare state and claim to be neoliberal at the same time.

Also, neoliberalism, as many understand it, isn't just privatization of nationalized companies. It is also deregulation. Europe and deregulation? Honestly?

Another aspect of neoliberalism, which is at the core of it, is "no coercion" or realistically, "reduced coercion". Take the example of Greece, it was "coercion" from Europe that actually made the situation worse, not neoliberalism. Same is true for Portugal, Spain, Italy, etc. When you have the ECB controlling all decisions in your country with the GOVERNMENTS of other countries, at times, calling the shots...that is not neoliberalism, that is government control and coercion gone really really bad. In fact, its the opposite of neoliberalism.

Along these lines is another principle that I would say is the most important one, and this might surprise those that think neoliberalism just means a bunch of businessmen and bankers running amok, and that principle is RULE OF LAW. The concept of neoliberalism is that people will "do the right thing", given a clear legal framework, with very little coercion needed (ideal would be no coercion needed but realistically, that isn't possible). The concept also applies to governments where governments will be as corruption free as possible and will follow a set of rules that are part of the legal code of the country (no wonder it never worked in Argentina ).

Finally, governments are not better equipped in any sense than people. That is part of neoliberalism too and its something I happen to agree with the most. People forget that government officials are people, just like them. They are not automatically inclined to do things better than those in the private sector. They are in fact more inclined toward corruption in societies where they have a lot of immunity. That is why neoliberalism demands that rule of law be applied across the board, to government and non government individuals alike.

Its this last that Argentines do not seem to understand. Generation after generation Argentines think, "oh this government will be better than the last. Kirchners are better than Menem" and what not. The fact of the matter is, your politicians just do not have anything to worry about. When you're in power, you blame the others, when things get screwed up, you escape in your helicopters. Not saying Argentina is the most corrupt place on earth and don't want to start a debate about "but compare this country and this politicians" because that'd be stupid. I am just talking about Argentina because I happen to be a resident here.

 

[nicoenarg]

well, with all my respect, people is immigrating into argentina, not emigrating for working.
Colombians right now, europeans soon.
There is no reason for a crisis like 2001 because:
a) there is not a neoliberal economy plan. They do have it in europe and you can se how does it works.
B) the nationalization of ypf
c) the high price of soy
d) the dolar corralito

those are strategic moves to avoid a crisis.
Regards

Please explain to me how nationalization of YPF is a good thing or forget good or bad. Tell me how that is going to help the economy. I would be really interested to know where all the investment is going to come from and where all the money for exploration is going to come from. Also, who is going to buy the shares of the Eskenazis? And where are they going to get billions in U$S Dollars to pay back Repsol (this is assuming they do the legal thing, which I am afraid they will not).

And finally, and most importantly, kindly explain to me where you and the rest of Argentina gets so much faith in your government that you think they're doing anything in your favor? If you think its for votes, well they can get votes by screwing up YPF and blaming Menem for it. Next time round, that gives them more power and reason to nationalize other companies because "hey, look, privatization screwed it over, we're going to fix it...in 30 years".

Just food for thought, Syrian government promised reforms in Syria 40 years ago, and they just started protesting against the government because they saw no reforms. It took a minority of the Syrian population 40 years to remember the government duped them because they had faith in their government, how long is it going to take Argentina to realize they let their governments screw them over repeatedly?

 

[nicoenarg]

Free market means that you move your factory to china. You sell all the state companies and then the state has no enough resourses and has to take debts. Then you have unemployment, the country get debt and you have a crisi like the eu or the us or the 2001 here.

Now in argentina there is not free market, you can import only if you export or if you produce goods here, that s why we have full employment.

Bajo_cero2, I respect your legal opinion and facts because I know that I am not a lawyer and so don't know the legal aspects as well as you would, mainly because you're a lawyer and you know your s**t.

However, I think you really have no idea what you're talking about in the above sentences. First off, you have about 6.7% unemployment (and these are numbers from the government, kinda like the 9% inflation numbers. Any sane person wouldn't believe that inflation is 9% yet I see tha same people touting 6.7% unemployment numbers as proof that Argentine government is "oh so awesome") so I think its a bold and factually incorrect statement when you claim you have no unemployment whatsoever.

Anyway, you said that when you sell state companies, you do not have enough resources, the government has to take on debt and there's unemployment. How did you come to that conclusion?

I don't know what you have in mind but the problems you describe eerily remind me of a welfare state going on to become the next failed communist state. Since you were comparing it to the world of free markets, I just would like to remind you that governments are not supposed to be job creators in the free markets, its the private sector.

Governments are also supposed to have balanced budgets (I recommend you read up on neoliberalism, you don't seem to have enough knowledge of it yet you seem inclined to go against it). It is integral. If a government feels like they have to run up debt to do something, well, don't do it. Its a very simple concept. Government revenue should come from taxes and taxes alone, not businesses. Government responsibilities should be minimal. Protection of its citizens is one of those very important responsibilities. Last time I checked, Argentina was not one of the safest places to be. And in my book, that says that the government has royally f**ked up.

At the end, I just wanted to point out that your, to use your word, "dogma" is that essentially the government is responsible for welfare of the people. According to my "dogma" the government should not be responsible for the welfare of the people but it should just be there to protect the established rights of the people. So the people can go about doing business without hindrance (whether that hindrance be from other individuals in the society, other businesses or foreign powers).

We all have our dogmas that we establish as facts in our minds and on those we build the rest of our ideas or theories or whatever. I can clearly see your dogma, and I am sure you can see mine. So let's get past the attitude where we tell people they can't say something just because to us it sounds like "dogma".

 

[nicoenarg]

Oh and before someone else jumps in with "do you remember the GREAT DEPRESSION!!!???" I want to remind people that I am not saying neoliberalism is the solution to all and there is no evil and all good in it. It has its shortcomings. It too is a broken system created in idealistic terms. I am just of the opinion that its the best thing we got right now.

We can of course always come up with better systems. Even neo-liberalism has evolved from classic liberalism.

 

[Dublin2BuenosAires]

Public sector spending is not the root cause of the crisis in Europe, there are a myriad of reasons which merged together to create a perfect storm in Europe, to isolate one root cause for idelogical reasons is foolishly simplistic. Take Ireland, one of the major contributors to the crisis here was neo liberal 'laissez faire' regulation (or in fact non-regulation) of the financial services industry which was fuelled by a tsunami of eurozone credit and buoyed by a seemingly never ending boom in house prices. Effective market regulation could and should have prevented both from funding an investment bubble. During this period of addiction to credit the Irish government decided on a public sector spending policy which effectively redistributed the economic crack (not craic!) amongst the populace, ever ignorant of the crash to come.

Greece lied their way into the eurozone courtesy of some 'creative' accounting provided by Goldman Sachs (the emperors of neo liberal economics) and then benefited from a similar credit boom which they used to paper over their own insanely weak tax take and lavish public sector spend. Apparently free credit was used to boost public sector spend to buy votes and to waste incredible amounts of money on military spend...military spend which French, German and British companies benefited handsomely.

In summary an unregulated credit tsunami artificially boosted public spending in Eurozone countries, the beneficiaries of which were global manufacturing and services companies. The credit was based on financial hoodoo concocted in NY and London on the basis that adverse risk and non repayment of loans could be re-packaged and sold as an investment.

Public sector spending did not create the crisis, however it contributed funded by foolish unregulated investment practices. You cannot look at either in isolation.

 

[Dublin2BuenosAires]

Oh and before someone else jumps in with "do you remember the GREAT DEPRESSION!!!???" I want to remind people that I am not saying neoliberalism is the solution to all and there is no evil and all good in it. It has its shortcomings. It too is a broken system created in idealistic terms. I am just of the opinion that its the best thing we got right now.

We can of course always come up with better systems. Even neo-liberalism has evolved from classic liberalism.

You are saying it is the best we've got right now? The best we can do in terms of a political system is one which has crippled the global economy.

It really isn't. Actually neo liberalism is a relic of the credit fuelled 2000's - i'm fairly certain we'll a more socially aware brand of capitalism replacing it across the next decades.