Stiglitz: "Argentina is one of the few successful countries in reducing inequality and poverty"

[forest444]

The 2001 Nobel Prize in Economics laureate, Joseph Stiglitz, said in an interview with Página/12 that Argentina "is one of the few successful countries in reducing inequality and poverty," adding that our country "has a lot to teach the rest of the world in terms of resolution of macroeconomic crisis and sovereign debt restructuring. "

The former chief economist of the World Bank and Columbia University professor said that "the current scheme to resolve the crisis in sovereign debt does not work and allows the emergence of vulture funds", which he defined as "the scum of the international financial markets". He also considered the nine principles adopted by the UN General Assembly and promoted by the national government as "an important step" in a "long process" to solve this problem.

"Austerity during a recession generates social catastrophes. Fiscal austerity in times of recession, when the private sector is also reducing spending, only exacerbates the contractionary scenario," said Stiglitz. "Argentina has much to teach the rest of the world in terms of resolution of macroeconomic crisis and sovereign debt restructuring. The way in which Argentina solved its crisis of 2001 and 2002 led to high growth rates until 2011. Argentina has been one of the few successful countries in reducing inequality and poverty after the crisis. "

Finally, Stiglitz said that "the consequences of market fundamentalism have been devastating, as it has created more unstable economies and more unequal societies." He also explained that the markets "do not operate in a vacuum," adding that in response to the 2008 crisis, the economic discussion should focus on "how to rewrite the rules in ways that promote more inclusive growth."

At: https://translate.google.com/translate?hl=en&sl=es&u=http://www.politicargentina.com/notas/201511/9866-stiglitz-la-argentina-es-uno-de-los-pocos-paises-exitosos-a-la-hora-de-reducir-la-desigualdad-y-la-pobreza.html&prev=search

The full interview: https://translate.google.com/translate?hl=en&sl=es&u=http://www.pagina12.com.ar/diario/economia/2-286619-2015-11-21.html&prev=search
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But the group of people who benefited the most - the middle class (http://www.buenosairesherald.com/article/194579/argentinas-middle-class-doubled-in-ten-years-us-report-shows) - are for the most part obsessed with "lazy indians on welfare" (sound familiar?).

[enid602]

1. Argentina

I love Argentina, and have been travelling there every year since 1992. I lived there for three years. Argentina is somewhat fortunate, in that has one third the area of the continental US, but only 39 million people. It has a LOT of resources, and provides much of the beef and crops destined for Europe. They have very few billionaires, and certainly the largest middle class in South America. Their economy does follow a socialist model, and certain things, like utilities and urban transportation, are subsidized to the point that they are almost free. University is free. Buenos Aires has free symphony concerts every Saturday at 6:00pm at the Law School of UBA. The city plants a lot of gardens, and they are at present turning many streets downtown into pedestrian only.

They also have no industry. Everyone works for the government. Unemployment and under employment are off the charts. They have the lowest long term GDP growth rate in the world, save for Haiti. Their inflation adjusted GDP just this year reached its 1974 high. No one has any money. Inflation this year will top 60%.

Buenos Aires has plenty of 'monobloques.' or high rise projects, but they are poorly maintained, with balconies falling off. Capos guard the entrances to these projects, and residents have to pay them to use the elevator. Despite these projects built to help the poor, the city has a lot of 'villas miserias,' or impromptu slums filled with homemade, precarious housing. 10% of the population is undocumented, and do not qualify for the many benefits afforded to citizens. Police cannot enter the villas, and they have no schools, hospitals or transportion. No real streets or fire protection. No addresses. No mail service.

Argentina is a quirky, wonderful place. But its success, such as it is, is largely due to its rich land and relatively small population. Not really a model for other countries.

[forest444]

2. I'm happy you enjoy Argentina, enid. I'm certain it's mutual.

But I think you misunderstand Professor Stiglitz's point: Argentina in itself isn't a "model" (it's still a developing country, after all); the way they handled their 2002 collapse, emerged from the 27-year funk left to them by right-wing policies, and did so while fending off sustained and well-funded financial sabotage from criminals like TARP baby Paul Singer and accomplices in the court$ and in Washington, really is a model.

One which, if we could let go of our pride just a little, we'd do well to apply against terrorists like Singer ourselves. http://www.thenation.com/article/mitt-romneys-bailout-bonanza/

As for Argentina, most of that second paragraph simply isn't true - not that I blame you, since they are oft-repeated talking points from Clarín and other right-wing periodicals (and are consequently held up as articles of faith by Buenos Aires right-wingers).

While it's true that since 1950 in Latin America only Cuba, Haiti, and Uruguay have on average grown more slowly (not just Haiti - and definitely not "the world&quot , most of that lag was created by the "lost generation" between 1975 and 2002 - when Macri's brand of IMF/neocon economics prevailed. Excluding this period, long-term average growth in Argentina in the last 100 years has been about 4%; including this period, 3% - only somewhat less than the 3.3% average in the U.S. over the last century.

Because GDP has doubled since 2002, the long-standing 1974 record you refer to (which was in per capita, not total, GDP) has been surpassed years ago (when Néstor Kirchner was still in office), and is now almost 50% higher per person. Unemployment was indeed "off the charts" at the end of the neoliberal era (24% in 2002, with as many underemployed) - but it's currently 5.9%, the lowest since 1987.

Real wages are up as well: over three-fourths higher, and that's per private inflation estimates - which are around 25%.

The "there is no industry" bit is another popular right-wing trope, since Argentina's agricultural landowner elite (and their hapless admirers in the middle class - whom the elite despise as social upstarts) vehemently resents the industrial sector, which they see as a rival, and in fact have counted on their favorite Economy Ministers (Martínez de Hoz and to a lesser extent Cavallo) to undermine it as much as possible.

Nevertheless, manufacturing in Argentina contributes twice as much to GDP as agriculture. The only real problem with it is that it also requires a steady trade deficit in parts and supplies (and some finished items); but then, that's true of most developed countries as well (especially the U.K. and the U.S.).

The same can be said for the "everyone works for the government." Of course, 17.6% is not "everyone" - and that includes teachers, professors, police, postal workers, public hospital doctors and nurses, and all manner of other essential public services the rich would rather not pay for in Argentina (sounds familiar, right?).

You may also be surprised to learn most slum dwellers have access to electricity, running water, and septic tanks - but of course they could have access to much more if people like Mayor Macri would actually spend the funds earmarked to them by the Federal Government (these are, unfortunately, local responsibilities in Argentina). They also have a fair amount of purchasing power; what they don't have is access to home loans - another legacy of the neoliberal era that Mrs. Kirchner has been remedying by reactivating the National Mortgage Bank.

That's their most pressing need: decent housing (since most can actually afford rent, but no one will rent to them). Think of it: 20-30 year mortgages at 10% (wages go up by 30% a year in Argentina), and it's not a charity; beneficiaries are homeowners paying off their mortgages (much like Thatcher did with Britain's dilapidated Council Houses). But what do right-wing, middle-class voters say: "she's giving away houses to lazy blacks, while I have to work for mine!"

[enid602]

5. random thoughts

There's no question that post Menem administrations did everything humanly possible to avoid placing the weight of the 'crisis' on the backs of the middle class and poor. He should be commended. But in the 14 years that have since passed, relatively little has been done to turn Argentina into a market economy. Every year the government sponsors the 'retenciones,' whereby legislators from the provinces come to the capital, to decide with the government how much of farm profits are needed this year to prop up the capital.

17.6% of the workers work for the Government. And how does that percentage vary when you go from the provinces to the capital? And what is the multiplier effect of Government jobs on services in the capital? How much of what is left represents the unemployed? Clearly, industry is not as important to jobs in BA as it is in Sao Paulo or Mexico City.

Clearly, Clarin is anti Kirchner. But you don't have to read about lack of infrastructure there. A quick trip to Zona Sur at high tide, and your senses know instinctively the lack of sewers.

Paul Singer is a scourge on humanity, but he is not the entire problem. The judge who is in his pocket is most assuredly corrupt. What does it say about the US Supreme and District Courts that this judge (who holds an ENTIRE nation hostage) is not censured and overturned? And finally, even our beloved Obama must take some blame, as GWB was able to get the same 'Buitre" to back off, saying that the Judicial System does not have the right to supersede the Executive in matters of international relations. Bush was trying to protect the conservative Peru regime that was, after all one of his allies.

To Obama's credit, however, one can say that he had a 'full dance card' at the time of the 'Buitre' scandal. Still, Cristina's blaming the US for everything that fails in Argentina is perhaps not the best way to garner our President's allegiance. You pick your allies.

[forest444]

6. Thank you for sharing, enid.

Argentina is indeed complicated. My guess is that it's about to get even more so, unfortunately.

I'm with you on all the insights you just posted. Let me point out though that, contrary to media tropes, Cristina Kirchner never "blamed the US for everything that fails in Argentina" - only, and quite rightly, for what's been widely described as a callous indifference to vulture funds and their efforts to sabotage Argentina's bond market.

The thousands of affected bondholders will tell you the same thing - especially seeing as the Treasury Department and the courts moved as quickly as they did to nip vulture fund hostage taking in the bud in other bond default cases such as Detroit's and Puerto Rico's (and, unlike those two jurisdictions, Argentina was actually paying their bondholders religiously until Greasa blocked them last year).

This is a Cayman Islands money laundry we're talking about, responsible for not only billions in U.S. tax evasion (among them, the Romneys) but the destruction of leading U.S. firms such as Delphi Automotive and Caesar's Entertainment as well. Thousands of good jobs that are never coming back, thanks to Singer.

In the case of the Argentine bonds, that all the vulture fraud has been allowed to go on is a real shame. Not only because good, legit bondholders have had their money unjustly (some say, illegally) impounded; but because it dishonors what really is a good relationship between the two countries.

Good enough, in fact, that Cristina Kirchner was willing to put Argentina in a tight spot if it meant helping the U.S. in something important: http://www.democraticunderground.com/110844098 . You won't find too many friends willing to do something like that.

[Judi Lynn]

3. There was a good reason Joseph Stiglitz received his Nobel Prize.

So good reading his comments posted above, from the translated article.

A lot of us are aware of some of the reasons Argentina fell into that hole long before Nestor Kirchner was elected, and how far he brought them out of extreme trouble.

What Joseph Stiglitz says about recession, austerity, etc. also should have been acknowledged here by our own government. They know the way but the politicians masters don't want anyone to succeed but themselves, so with the power to control the government puppets, they can keep entire populations in chaos (except for the oligarchs, naturally) until decent leaders get a chance to help.

Thanks for sharing his comments. It's good to see the truth being told, and that truth published.

[forest444]

4. And how much more could have been done if neocons weren't sabotaging Argentina's bond market!

Which, of course, is the real reason Singer the TARP baby laundryman does what he does. He's already collected hundreds of millions in CDS "default" insurance, so it's not really the money - it's the malice (or, rather, Washington's).

Thank you as always, Judi Lynn, for all your good will and insight. That's what this world really needs, I think.