Is the Argentine Economy Going to Collapse?

[gouchobob]

The topic of the thread is the possibility of economic collapse in Argentina. Given the current government policies I would say major economic problems are a forgone conclusion. The only unknown's are the timing and how bad it is going to be. The government obviously thought things were going to get worse as the year progressed and had the elections moved to June from October. There are rumors floating around that after the elections there will be more radical moves by the government to stave-off disaster like a wave of additional nationalizations or perhaps becoming more authoritarian in a bid to hold on to power. Whether this will happen time will tell.

What impact will this have on most expats? Not much in my opinion unless you are working in the local economy, or decide you want to leave and have property there(it could be a very tough market to sell in).

Some people believe that another default won't be as bad as 2001. This may be true but it looks doubtful that the country will have the good luck to be bailed out by another commodity boom as occurred after 2001. My take is that if another crisis happens it will probably be different than 2001 and it could be worse. I don't have much confidence in the current government but don't believe that any replacement would necessarily be any better.

I thought the FT article was excellent. What I got from the article is that most of current problems in Argentina(last 50 years or so) are the result of incredibly bad governments making incredibly bad decisions. The really sad part of this is that the
Argentine people on the whole seem to accept all this and don't think it can be any better. Until there is big shift in the thinking of the average Argentine I think Argentina will remain a country with unrealized potential.

 

[bigbadwolf]

I don't quite get the relationship of this statement to anything we've discussed. I think it's way off base. The crux of our conversation was bias and reliability of a newspaper/magazine Not whether or not military might by and between two nations has any relevance.

The problem with the pro-business (or rather, pro-capital) journals and news sources is that they conveniently ignore certain embarrassing realities of the way the world really functions. So there is bias by way of deliberate omission right there. One of these embarrassing realities is military power, which incidentally accounts for much of the difference between the USA and Argentina. Thus, for example, now that the USA is in a crisis an order of magnitude higher than that of Argentina in 2001, no-one dares utter a squeak of how the same financial rules don't apply to the military hegemon, which is making up new rules for itself on the fly. In short, to understand the difference between the USA and Argentina, we have to look at an ensemble of differences in the evolution of military power and economic development. Periodicals like "The Economist" present a very lop-sided account of why backward countries like Argentina are backward and ignore the ugly realities of realpolitik. In my humble opinion.

This makes me want to ask ...what news outlets do you feel are so reliable and non bias to the point you would call it fair and balanced?

There is no "bias-free." That is like looking for the holy grail. Every description of what is going on comes embedded in some context, and is viewed through a conceptual prism of some sort. This applies with equal strength to the sources I use.

For starters, I like "New Left Review" and the US-based "Monthly Review" (which is always teetering on the edge of bankruptcy).

 

[harpo]

To some extent the differences between the US and Argentina match those between the north and south of Europe.
In the north, the harsher climate led to hard-working individualistic folk and a strong sense of public duty and probity - someone dipping into the village grain supply could put the whole community at risk during the winter.
In the south - put your feet up in the sun, it's fiesta again tomorrow!

 

[perry]

To some extent the differences between the US and Argentina match those between the north and south of Europe.
In the north, the harsher climate led to hard-working individualistic folk and a strong sense of public duty and probity - someone dipping into the village grain supply could put the whole community at risk during the winter.
In the south - put your feet up in the sun, it's fiesta again tomorrow!

Yeah and what do you say about the hard working Greek Italian and Portugese immigrants who have created very successful communities in most American and Canadian and Australian cities?

 

[fedecc]

To some extent the differences between the US and Argentina match those between the north and south of Europe.
In the north, the harsher climate led to hard-working individualistic folk and a strong sense of public duty and probity - someone dipping into the village grain supply could put the whole community at risk during the winter.
In the south - put your feet up in the sun, it's fiesta again tomorrow!

Climate and geography does indeed influence the behaviour of people, though is not the determinant factor.
Allready in 1845, Domingo Sarmiento (major character in argentine history and former president), wrote the "Facundo", a book in which he tried to explain argentine society. For him the way most people lived isolated in the desert, separeted miles between each other, made it very dificult to have a sense of community, and thus people live in a semi barbaric state, with only a few places of civilization (BA and other cities).
Also, they fertility of the land and the abundance of cattle and mild weather made survival very easy. Unlike europe people here did't have to work hard to survive, the nature just provided.

 

[Conorworld]

To some extent the differences between the US and Argentina match those between the north and south of Europe.
In the north, the harsher climate led to hard-working individualistic folk and a strong sense of public duty and probity - someone dipping into the village grain supply could put the whole community at risk during the winter.
In the south - put your feet up in the sun, it's fiesta again tomorrow!

An interesting idea. Maybe it works nowadays but 5-600 years ago it was the opposite. But I think it's more to do with culture and politics too. Australia is not a lazy nation even though it basks in the sun.

 

[harpo]

Yeah and what do you say about the hard working Greek Italian and Portugese immigrants who have created very successful communities in most American and Canadian and Australian cities?

They became honorary northerners...

Yes, I know the idea's a pretty massive generalisation, but perhaps there's a grain of truth in it. Sometimes I wonder how any work got done in tropical climates before air-con.

Interesting comment about it once being the other way round. Certainly European civilization has its roots in Egypt, Persia etc and then we had Greece and Rome; though I suppose Stonehenge took a bit of effort.

 

[Recoleta Carolina]

"The Economist" is not reliable. it is skewed and biased -- but just not as much as the "Wall Street Journal." On the other hand, the quarterly "Country Intelligence Reports" produced by the Economist Intelligence Unit are a different matter altogether.

I find The Economist nothing more than diluted "news" that I don´t take very seriously. It is amazing to me just how many people think that they get real "news" in this publication.

 

[bigbadwolf]

I find The Economist nothing more than diluted "news" that I don´t take very seriously. It is amazing to me just how many people think that they get real "news" in this publication.

I couldn't agree with you more. It's the kind of publication you glance at distractedly in an airport lounge while the rest of your attention is divided between the incessant blare of CNN and the Department of Homeland Security's solemn announcement that the threat level is now orange.

The Economist probably appeals to the 20-somethings and 30-something semi-educated barbarians with MBAs, clutching their blackberrys in one hand and a copy of the Economist in the other. It's not just the Economist, of course. It's the sheer torrent of low-quality junk printed material by way of newspapers and magazines.

I personally like the weekend edition of the Financial Times -- but that's for articles on things other than finance, economics and corporate balance sheets. And the London Review of Books.

But now I'm way off-topic and shall probably be chastised imminently.

 

[Conorworld]

I like the Economist!

It may not be as detailed as the Financial Times etc but it has great, simple analysis of topics. Its easy to read and simply designed. It does its job well. I do like its Charlemagne and Bagehot etc pieces.