Generation Z and Argentine Election

[Joglide]

Cristina's last term was plagued with:

- Negative GDP growth
- Double-digit inflation
- Large fiscal deficits
- Exchange controls
- An increase in poverty

Are these the makings of a solid economic plan that will free people from poverty?

"But things are worse under Macri."

Indeed they are — the numbers don't lie.

So, the solution is to bring back someone who was an absolute disaster?

Look. All of the above was even more true of when they took over with a massive default not of their making and the Ks were a remarkable unexpected success for 7-8 years. Now the thing is to compare that with Macri's first term of office when he inherited much less of the same kind of problems from the later and poor CK admin. So what is his record? Significantly worse.
So your case that CK was an 'absolute disaster' is not proven as a judgement on Kirchenerismo over the whole period and is not looking so bad (not because of stupidity or nostaligia as you claim) but because M has made those poor performance years look better thjan they were because his have been worse and look like getting worse.
Once again I am struggling to see the logic of your case: you seem to say M has been worse than even late CK so we assume he needs replacing? Agreed.
So what are the prospects? Well we have candidates from all parties and the one who gains traction is Fernd and he is assembling a team. He may or may not be a CK clone in office if he makes it. The point is that Macri has so disillusioned the electorate in record time that a CK candidate becomes viable.
We might wish for another person or another administration but this is realpolitik and the electorate decide. What else is there?
Then the elephant in the argument is that the IMF will massively constrain what anyone can do.
Beyond that we need to agree to dissagree as you suggest.

 

[notebook.fix]

Argentina esta infestada de zurdos. 70 years of economic destruction by the PeDonists can't be undone in one term.

 

[Bajo_cero2]

Argentina esta infestada de zurdos. 70 years of economic destruction by the PeDonists can't be undone in one term.

Well, the debate is this country has nothing to do with right or left.

 

[MatameBA]

Look. All of the above was even more true of when they took over with a massive default not of their making and the Ks were a remarkable unexpected success for 7-8 years. Now the thing is to compare that with Macri's first term of office when he inherited much less of the same kind of problems from the later and poor CK admin. So what is his record? Significantly worse.
So your case that CK was an 'absolute disaster' is not proven as a judgement on Kirchenerismo over the whole period and is not looking so bad (not because of stupidity or nostaligia as you claim) but because M has made those poor performance years look better thjan they were because his have been worse and look like getting worse.
Once again I am struggling to see the logic of your case: you seem to say M has been worse than even late CK so we assume he needs replacing? Agreed.
So what are the prospects? Well we have candidates from all parties and the one who gains traction is Fernd and he is assembling a team. He may or may not be a CK clone in office if he makes it. The point is that Macri has so disillusioned the electorate in record time that a CK candidate becomes viable.
We might wish for another person or another administration but this is realpolitik and the electorate decide. What else is there?
Then the elephant in the argument is that the IMF will massively constrain what anyone can do.
Beyond that we need to agree to dissagree as you suggest.

You're mistaken in your assumption that the 2001 crisis was a burden for the Ks.

It was a blessing.

The country hit rock-bottom. Things couldn't get much worse. What happens economically in this situation? As the saying goes, "there's nowhere to go but up."

Once dollars start getting injected into the economy again, this creates a shock of demand. The country practically pulls itself out of the crisis. It's called an economic rebound. The K period was a textbook example. Not to mention, they were also blessed with extremely good economic conditions (barring the 2008 economic crisis), and the price of soy DOUBLED in 2007. The famous "viento a favor."

But what happened after the economic rebound ended and the price of soy stabilized? Exactly what I posted earlier — deficit, inflation, and negative growth numbers because those policies are not sustainable in ordinary economic conditions.

The best thing that could happen for FF right now is a hard default under Macri's watch. Because, again, the same exact situation will play out. Alberto will come in, "save" the economy and look like a hero. That will guarantee him political power for the next decade, and this same situation will repeat itself as it has so many times in Argentina's history.

Oh, and to stay on topic:

It's not surprising that 18-year-olds vote for populism. After all, the human brain isn't fully developed until age 25.

 

[Joglide]

You're mistaken in your assumption that the 2001 crisis was a burden for the Ks.

It was a blessing.

The country hit rock-bottom. Things couldn't get much worse. What happens economically in this situation? As the saying goes, "there's nowhere to go but up."

Once dollars start getting injected into the economy again, this creates a shock of demand. The country practically pulls itself out of the crisis. It's called an economic rebound. The K period was a textbook example. Not to mention, they were also blessed with extremely good economic conditions (barring the 2008 economic crisis), and the price of soy DOUBLED in 2007. The famous "viento a favor."

But what happened after the economic rebound ended and the price of soy stabilized? Exactly what I posted earlier — deficit, inflation, and negative growth numbers because those policies are not sustainable in ordinary economic conditions.

The best thing that could happen for FF right now is a hard default under Macri's watch. Because, again, the same exact situation will play out. Alberto will come in, "save" the economy and look like a hero. That will guarantee him political power for the next decade, and this same situation will repeat itself as it has so many times in Argentina's history.

Oh, and to stay on topic:

It's not surprising that 18-year-olds vote for populism. After all, the human brain isn't fully developed until age 25.

I made no assumption that the 2001 crisis was a burden for the Ks. It was an enormous burden for the whole of the country and millions suffered for it. Both poorer and middle class people.
The Ks managed the recovery well. There is broad agreement about that.
Everything else you say seems to boil down to 'when conservatives and capitalists make an absolute mess then populists gain more popularity and gain power''. No one could disagree.
The final insulting comment about younger voters is just the kind of ageist conservatism that ensure younger people will not listen to voices of experience who seem incapable of managing things for the common good. It should be noted that at different periods and places younger people vote in large numbers for neo-liberal conservative economic policies and against social welfare expenditure. In that instance I assume you think they are being prematurely mature.

 

[Bajo_cero2]

The 2001 crisis alike today’s was artificial. Then like today, the usd was cheap for too long but frozen 1:1 so, it was impossible to compete and export. Today even the usd skyrocket recently, it was too cheap for too long but the 3000% increased of the service bills, oil, etc. makes the economy not competitive. It is ridiculous that I pay the same in electricity than what I used to pay in NYC.
What FF has to fix is a) to tax again minery and soy because MM usd deficit is because he abolished those taxes that even the IMF was asking for; b) to reduce the cost of public services and c) to stop the capital flight.

 

[Bajo_cero2]

And I guess that 30% of the population that was poor under Cristina never felt this way or suffered? Wow! Macri invented poverty in Argentina. How quickly we forget about the poor under the K govts, but the Ks controlled for the most part the social organizations, so those organizations weren't going to hit the streets not the airwaves like they do now. What a short memory we have.

FYI poverty was 51.7% when NK get the Presidency And he achieved to reduce it until 26.9% while after the 2009 international crisis affected the local economy. CFK left the country with 30% of poverty.

¿Cómo evolucionó la pobreza con cada presidente? - Chequeado

Hoy el INDEC publicó que en la primera mitad de 2019 aumentó la pobreza y la indigencia: el 35,4% de las personas está por debajo de la línea de pobreza y el 7,7% por debajo de la línea de indigencia. Tras asumir, el presidente Mauricio Macri pidió ser “evaluado como presidente” por la evolución...

www.google.com.ar

With MM is obvious the poverty skyrocket.
Today 66% of argentines do not make enough money to pay the canasta basica:

Escalofriante crecimiento de la pobreza en la Argentina

Desde la llegada de Mauricio Macri al poder, dos habitantes por minuto pasan a ser pobres y cada 73 segundos uno cae en la indigencia. El incremento insoslayable del hambre en el territorio nacional.

www.motoreconomico.com.ar

 

[Api]

You're mistaken in your assumption that the 2001 crisis was a burden for the Ks.

It was a blessing.

The country hit rock-bottom. Things couldn't get much worse. What happens economically in this situation? As the saying goes, "there's nowhere to go but up."

Once dollars start getting injected into the economy again, this creates a shock of demand. The country practically pulls itself out of the crisis. It's called an economic rebound. The K period was a textbook example. Not to mention, they were also blessed with extremely good economic conditions (barring the 2008 economic crisis), and the price of soy DOUBLED in 2007. The famous "viento a favor."

But what happened after the economic rebound ended and the price of soy stabilized? Exactly what I posted earlier — deficit, inflation, and negative growth numbers because those policies are not sustainable in ordinary economic conditions.

The best thing that could happen for FF right now is a hard default under Macri's watch. Because, again, the same exact situation will play out. Alberto will come in, "save" the economy and look like a hero. That will guarantee him political power for the next decade, and this same situation will repeat itself as it has so many times in Argentina's history.

That's what many people fail to realize - it was a blessing. A devaluation helps bring the economy back into balance. No politician ever wants to do it under their watch because it's political suicide. It makes imports and travel prohibitively expensive for most and exports more competitive worldwide. The trade imbalance and central bank reserve problem will correct itself.

I don't think anyone would argue that Macri's "best economic team in the last 50 years" has been anything short of a disaster. Removed capital controls, continued printing money, borrowed, majority of the borrowed money fled out of the country and now back to the cepo. Geniuses.

What I can't quite understand, however, is how some argue that the Ks were successful at managing the economy. If you are Kirchnerista and just blindly swallow up any propaganda sent your way from the politicians themselves or their media network that is one thing, but to objectively study the data and come to the conclusion that they were a success? When CFK left there was 30%+ inflation, 30%+ poverty levels, budget + trade deficits and negative GDP growth.

Just because Macri's numbers are worse, doesn't make that good. If Alberto takes over and 3 years later inflation is at 90% and poverty at 70% are we going to argue that Macri was a good economic manager? No. Nor should any rational person argue that CFK was a particularly competent because Macri's #s are worse.

The current economic environment we are in right now is not similar to what the Ks had during the majority of their term, save the last few years. They benefited from a devalued currency and a period of incredibly strong commodity prices. Argentina lives or dies on commodity prices with this economic model of taxing raw material exports and cap controls. Why was the economy roaring in 2007 and dead in 2014? For the same reason Venezuela's and Brasil's economy was robust and now in the dumps. High commodity prices. When dollars are rolling in you can distribute the cash, put some in your pocket and everyone will be happy. When the dollars dry up, you are left with high inflation, poverty, deficits, low growth and corruption investigations.

If anyone believes that just taxing exports and tightening capital controls is going to get Argentina out of this mess they are deluding themselves. A major devaluation, default and some underlying structural changes like tax reform is the only way out. Add in that the global economy is bound to crash as well, suppressing commodity prices - and you're looking at a particularly difficult situation for whoever is in power for the next few years.

 

[Joglide]

Api and I agree on many issues but of course competitive devaluations can lead to disaster also as countries decide to raise tariff barriers to protect their own industries against dumping which is what happened in the 1930s and the beginni ng of Argentine's economic nightmare. We also need to remember that severe devaluation comes at a heavy cost to the domestic population unless wages and incomes keep pace (and if they do then hyper inflation beckons). So it is not just politically risky in terms of electorate but economically and socially risky, as the rise of fascist regimes in crisis ridden Europe and latin America suggest. In terms of the K I think my view is clear: we can distinguish between early successes and late failures. No more than that. Macri has virtually no early successes to boast of. I am much miore pessimistic than you it seems that fiscal measures can lead to any longer term solution. Another default maiy or may not work but it will cause turbulence. More importantly, unless the new government of whatever persuasion can involve unions, employers and financiers in a New Deal, involving effective taxation to deal with the dreadful and almost unique Argentine problem of persistent and rising wealth and income inequalities, then there seems little prospect of real change. Productivity deals need to be tied to wage rises and to tax incentives for the poorer and middle classes. Its time that Argentina stopped being a treasure hunt for conquistadores who bitterly resist sharing any of their wealth.

 

[Bajo_cero2]

That's what many people fail to realize - it was a blessing. A devaluation helps bring the economy back into balance. No politician ever wants to do it under their watch because it's political suicide. It makes imports and travel prohibitively expensive for most and exports more competitive worldwide. The trade imbalance and central bank reserve problem will correct itself.

I don't think anyone would argue that Macri's "best economic team in the last 50 years" has been anything short of a disaster. Removed capital controls, continued printing money, borrowed, majority of the borrowed money fled out of the country and now back to the cepo. Geniuses.

What I can't quite understand, however, is how some argue that the Ks were successful at managing the economy. If you are Kirchnerista and just blindly swallow up any propaganda sent your way from the politicians themselves or their media network that is one thing, but to objectively study the data and come to the conclusion that they were a success? When CFK left there was 30%+ inflation, 30%+ poverty levels, budget + trade deficits and negative GDP growth.

Just because Macri's numbers are worse, doesn't make that good. If Alberto takes over and 3 years later inflation is at 90% and poverty at 70% are we going to argue that Macri was a good economic manager? No. Nor should any rational person argue that CFK was a particularly competent because Macri's #s are worse.

The current economic environment we are in right now is not similar to what the Ks had during the majority of their term, save the last few years. They benefited from a devalued currency and a period of incredibly strong commodity prices. Argentina lives or dies on commodity prices with this economic model of taxing raw material exports and cap controls. Why was the economy roaring in 2007 and dead in 2014? For the same reason Venezuela's and Brasil's economy was robust and now in the dumps. High commodity prices. When dollars are rolling in you can distribute the cash, put some in your pocket and everyone will be happy. When the dollars dry up, you are left with high inflation, poverty, deficits, low growth and corruption investigations.

If anyone believes that just taxing exports and tightening capital controls is going to get Argentina out of this mess they are deluding themselves. A major devaluation, default and some underlying structural changes like tax reform is the only way out. Add in that the global economy is bound to crash as well, suppressing commodity prices - and you're looking at a particularly difficult situation for whoever is in power for the next few years.

Well, simple.
The 30% inflation was how CFK financed the State without the IMF: success because she developed a strong internal market.
The 30% poverty was a success because it was 51% when they started: success.
Taxing exports is the only way you get usd without a loan, even the IMF asked for it.
The second is to stop the capital flight. Simple. We export for about 60 billion usd.

The problem now is that MM allows to cash the exports outside the country. The only thing he forgot to do is to change the name from Republic to colony.