Another crisis 1999-2002

nicoenarg

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Sometimes I feel like there's no point writing a whole detailed post here because people will generally ignore about 90% of what you write anyway.

Dublin2BuenosAires, please read the place where I said "Rule of Law" was important.

Plus, and this is since you brought Ireland up, adopting the Euro as a currency effectively means more regulation from the big three.

No, you're right, to isolate one root cause for ideological reasons is pretty simplistic. Maybe you should take your own advice.
 

nicoenarg

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Dublin2BuenosAires said:
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.

I contend that its the government regulations to the tune of forcing banks to give out loans to people who definitely could not pay them back.

It is the people who took those loans knowing they couldn't pay them back but wanted to have a house as big as the next guy.

Its the unethical practices from banks that gave out those loans, manipulating and lying not just to the people but to themselves in the hopes that they could take a profit.

Yeah i know, it isn't politically correct to blame the poor little person who just lost his home due to the crisis but the facts are that that poor little man is just as responsible for creating the crisis as is the bank and as is the government.

You call that neoliberalism? Because if you do, our discussion is a moot point since our definitions differ to begin with. And yes, I am simplifying the issue for the sake of this discussion. Neither you nor I are writing a research paper.
 

Dublin2BuenosAires

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nicoenarg said:
I contend that its the government regulations to the tune of forcing banks to give out loans to people who definitely could not pay them back.

It is the people who took those loans knowing they couldn't pay them back but wanted to have a house as big as the next guy.

Its the unethical practices from banks that gave out those loans, manipulating and lying not just to the people but to themselves in the hopes that they could take a profit.

Yeah i know, it isn't politically correct to blame the poor little person who just lost his home due to the crisis but the facts are that that poor little man is just as responsible for creating the crisis as is the bank and as is the government.

You call that neoliberalism? Because if you do, our discussion is a moot point since our definitions differ to begin with. And yes, I am simplifying the issue for the sake of this discussion. Neither you nor I are writing a research paper.

We're done here I think. Indeed neither of us are writing a research paper and to be frank I've no interest in a lengthy discussion other than making the point that neoliberalism isn't the 'best we can do' and that the root causes of the current crisis are multiple and complex. I'll leave it at that.

To take this further would require half a bottle of wine and decent glass of whiskey.
 

nicoenarg

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Dublin2BuenosAires said:
To take this further would require half a bottle of wine and decent glass of whiskey.

Whiskey:D! Wish I had it with me everytime I went to my Econ class. I went to LSE where all things private were evil and governments were the Messiahs who were to come to save everybody.
 

jimdepalermo

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Bajo_cero2 said:
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.

scotttswan said:
They appear more like strategic moves to try and fill in the holes of a sieve.
I have to agree with Scott on this one. None of this appears to be part of any plan or even of any consistent philosophy of government or economics. It certainly doesn't constitute a strategy. Instead, each move is a reaction to something, usually something that resulted from unplanned, though not unpredictable, consequences of a prior move. On each of Cristian's points -

  • Neoliberalism in Europe - see comments below.
    .
  • YPF - This government initially reacted to Repsol's lack of investment by trying to gain more influence over the company. So Nestor arranging a deal for his old friends the Eskanazis to buy 25% of the company, with the investment to be paid in future dividends that insured insufficient revenue retention to fund needed investments. It was a profitable move for the E's and presumably the K's, but a disaster for all other Argentines.
    .
    Luckily for the K's, the E's were no longer important friends when the problem reached critical proportions, so Argentina could conveniently re-nationalize the company without concern for former friends of the K's. NOT strategic planning and not good government.
    .
    Did anyone in government ever stop to consider the disincentives to investment in the price controls on gas that limit YPF's revenue to a third of the global price? It seems they just realized that when Repsol cancelled the long-term sweetheart contract to sell discounted liquid gas to Argentina. So now we pay 3 times more for imports, exacerbating the trade imbalance.
    .
    Gradually decreasing subsidies and lifting price controls when things were booming a few years ago might have lessened the impact and attracted the outside investment that Argentina so badly needs. As for Argentina funding all its own needs, note that the price tag to exploit just the Vaca Muerta field is around $25 billion dollars per year. There is no way Argentina can fund this from government coffers, even if it could find the technical expertise to attempt it independent of private companies.

  • Soy prices - Cristina claiming credit for the soy bonanza is like the rooster taking credit for the sunrise. We are all fortunate that the international price rose and stayed high, but Argentine policy had nothing to do with raising the price of soy.
    .
    However, Argentine policies re: soy exports have contributed to increasing prices of meat and other edibles. When export controls and tariffs were re-jiggered to protect basic food supplies after the peso was allowed to float, meat prices were protected (to feed to populace) but soy prices were not (since soy has little local use). So predictably, to maximize profits, everyone on the campo planted soy in fields where cattle once grazed, and now we're facing a shortage of meat.
    .
    I actually supported the government move to increase export tariffs on soy in 2009, which might have reigned in inflation over food prices, although possibly worsening the balance of payments. At that time there was no short-term concern for the trade balance, so the government took the "strategic" move to increase its tax revenues from farmers even at the cost of possibly reducing exports. That one time, this government lost, and the result has contributed significantly to inflation. (Please remember too that Cristina's stated objective in increasing the export tariff was to generate revenue that would improve the lot of the poor....)
    .
  • Dollar corralito - Now three years after the campo fiasco we're suffering high inflation driven largely by food prices, PLUS a trade imbalance. So the government denies the inflation by compromising the official agency responsible for monitoring it and tries to control the imbalance administratively? These fail to demonstrate long-range planning, sound policy, or even common sense. But given their prior failures at planning, policy, and sensibility, what other choices do they have?
Bajo_cero2 said:
Mention me a free market country with full employment.
Show me the full employment in Argentina! This is another fiction of Moreno's INDEC. I know Argentines without work for months and many who are underemployed. One company I know recently posted 2 positions that don't even pay all that well, and they received almost 1000 applications, up from 700 the last time they posted a few years ago. Why the big increase in applicants? "There aren't many jobs available these days," said one employee there.

This is NOT a country at full employment, and anyone who can see knows that to be the case. The fact that Cristina regularly claims full employment makes it no more true than the official reports of 9% annual inflation.

Bajo_cero2 said:
Argentina has no credit. So argentina has to pay cash. . . . That s a simple rule in administration, you have to spend less than what you get.
Actually, Argentina's credit returned after the default, and the country's risk premium even declined to the average of other Mercosur states' until INDEC began publishing rubbish numbers that spooked the credit markets. So the risk premium tripled in a matter of weeks. This is not a sign of sound governance or strategic planning. You might even call it lying. And shooting yourself in the foot.

Bajo_cero2 said:
A fact, after 20 years of neo liberal politics europe is in a huge crisis.
Europe is in a huge crisis because they introduced a common currency without the governmental underpinnings to make it work. Nice experiment gone wrong, as predicted at the time by many economists. This has nothing to do with neo-liberalism or any other political-economic school of thought.

The European experience is irrelevant to anything currently happening in the Argentine economy or politics, although it's not dissimilar from the problems of 1999-2002, when Argentina was borrowing in a currency it didn't control and couldn't devalue. (Dollars for Argentina, Euros for Greece and Spain.)

Bajo_cero2 said:
So, argentina can spend only what argentina exports. Isn t it real austerity?????
Real austerity was what Argentina experienced when it let the peso float to market rates. Despite the hardships - which were basically history by the time I moved here, so I have no personal experience - it was a very successful move, and the economy rebounded quickly. The same strategy might even work again here!

With the rebound, there was tremendous opportunity to invest in infrastructure - to improve the roads, update the trains, modernize the hospitals, at least paint the schools. Public transportation, for example, was once a marvel of Argentina and could be again with some strategic investment. Until that happens, we'll see more private vehicles jamming the streets, polluting the air, and worsening the trade imbalance by consuming imported fuel.

From the beginning this government's only "strategy" seems to have been to placate the lower classes with bread and circuses - social programs and "X for all," whether X be football, car racing, or LCDs - in order to maintain their political support. To their credit, they have succeeded somewhat in reducing poverty and improving income distribution, at least in the short run. But these moves have overheated the economy and created demand that exceeds the national capacity to produce, thus causing dangerous inflation. Inflation can and has led to crises in Argentina's past.

Absent any strategy to increase production capacity during these last 9 years, whether through public or private investment, Argentina now suffers shortfalls in supply that can be met only with imports. Strangling the flow of imports boosts prices for those available, only worsening inflation. The lack of many goods in the market and shortages of basic products like gasoline frustrate the populace, which can also lead to crisis.

Having done virtually nothing of any strategic value in their 9 years with almost unlimited, dictatorial powers, the K's have been reduced to lying - making claims about prices, employment, and the fiscal imbalance that are obviously false to anyone with moderate intelligence. Meanwhile, they cover up corruption at even the highest levels of the government, including the office of Vice President, further degrading their credibility. A crisis of confidence can easily morph into a political/economic crisis.

Now that confidence is suffering, we have a new knee-jerk reaction in play - appealing to nationalism. Whether regarding the Malvinas, the nationalization of YPF, or the trade missions to Angola and much-vaunted "sales" of harvesters that are not even manufactured here, we are seeing a flag-waving circus intended to distract from the problems at hand. It is yet another stop-gap measure to forestall public unrest.

So there are a number of factors that individually or in combination, could lead to a crisis in the coming months.

I have not lived in Argentina long enough to say whether this government is worse than prior governments or even potential future governments. Or for that matter, worse than the governments of the US, the UK, or Germany, each of which has its own critical failures. I can only say that this government is certainly not the government that Argentina deserves.

It may well take another crisis to change this leadership, in which case we can only hope for a government with greater competence and honesty.
 

El chabon

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Full employment, when there are 35 to 40% people working in negro, please tell them they have a good job :)

There is also massive underemployment, if you would count with real jobs you could maybe give 40% a real job, the rest would either be working in negro, be out of a job or in a shit job.

I am pretty sure about 80% of the real jobs are also state linked
 

jazrgz

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Bajo_cero2 said:
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

jajajaaj a federal judge investigating something here ! yeps, it all relies on our outstanding totally independent and efficiant judicial system !! :S They bring hordes of ppl from bordering countries and handle them DNI´s to go vote for her. That´s how a huge amount of zombies (yeps, here in argentina, they love kretina so much that even dead ppl bothers to get up out of their tombs, grab their DNIs and then vote) and sci-fi clones (yeps, ppl also somehow clone themselves, in many cases even more than once and they all vote for KK) got to vote for K last elections
Bajo_Cero...really, you´re either getting paid for spreading this absolute non-sense or you are just living in your own nube de pedos !! sorry, it is a bit insulting, and i apologize for that, but saying that there is full employment and that we are doing great here is at least an insult to the millions (about 25% of the population) of our countrymen that are poor or indigent ! im sure you are enyoying the visitudes of this great regime..but pls take into consideration all those millions being used and treated like garbish by this regime..all those "emplyed" pps that can barely have a meal a day and dont even have drinking water and sewers or aducation......
-Juan
 

Bajo_cero2

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jazrgz said:
jajajaaj a federal judge investigating something here ! yeps, it all relies on our outstanding totally independent and efficiant judicial system !! :S

Ignorance is a bliss...perhaps I know some about that because I am an attorney specialized precisely about that.

jazrgz said:
They bring hordes of ppl from bordering countries and handle them DNI´s to go vote for her. That´s how a huge amount of zombies (yeps, here in argentina, they love kretina so much that even dead ppl bothers to get up out of their tombs, grab their DNIs and then vote) and sci-fi clones (yeps, ppl also somehow clone themselves, in many cases even more than once and they all vote for KK) got to vote for K last elections

Immigrants comes by their self and it is legal.

And they cannot vote...I would like to introduce you with a new experience: read a simple high school book about civic education. Because you are local, and you finished highschool, didn´t you? Then you should know that immigrants cannot vote for President.

Regards
 

El chabon

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Nope, they need to live 2 years in Argentina legally, then they can vote

That is offcourse if they are not given there residence papers by the corrupt system before by helpers dressed as lawyers
 
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