Blog Archives

And the Money Kept Rolling In (and Out) Wall Street, the IMF, and the Bankrupting of Argentina-Paul Blustein

MKRIOn Tuesday, June 27, 2017,  Argentine President Mauricio Macri of Argentina and Michelle Bachelet of Chile met in Santiago, Chile to discuss a trade agreement between the two South American nations.  A trade agreement would be a boost to the economies of both nations and help the Argentine economy recover from years of devaluation of the peso and loans on which the country was forced to default.  In three weeks I will revisit the Argentine Republic, landing in Buenos Aires, appropriately called the “Paris of South America”.   As of today, the exchange rate between the United States Dollar and Argentine Peso is  $1=16.4ARS. The peso continues to struggle to regain its value as the Macri administration continues its mission to reform the economy.  Incredibly, between the late 1800s and 1930, Argentina was one of the richest nations on earth and boasted a high rate of exports.  Changing world markets and political instability plunged the nation in dark times as the grip of Juan Perón (1895-1974) tightened over Argentina giving birth to the Peronist party.  Even today, his influence and that of the late Evan Peron (1919-1952) continue to be felt in Argentine society.

Students of Argentine history will often ask the question, why did Argentina end up in a financial collapse in 2001?  Paul Blustein (1951- ) tackles this questions and provides answers to help us understand how and why it happened.  Blustein is former writer for the Washington Post and has written about economics for more than 35 years. It was during a post in Buenos Aires that he began the project that became this phenomenal book that tells the story of what proved to be the inevitable.   As part of his research, he interviewed dozens of individuals who were direct participants in the events in the book and others knowledgeable about what really happened.  And what he explains in the book is eye-opening and prophetic not just for Argentina but for every country across the globe that has to confront a rising deficit and possible financial collapse.

On April 1, 1991, Economy Minister Domingo Cavallo (1946- ) adopted the convertibility system which fixed the exchange rate at $1=1ARS.  The new policy initially proved to be a blessing for the Argentine economy, allowing citizens to improve their quality of life, invest, improve savings and travel abroad.  But behind the scenes the government was struggling to reign in spending and raise enough taxes to maintain the newly placed system which required banks to keep an equal amount of U.S. Dollars to Argentine Pesos. A pesos crisis in Mexico and changing world markets, set the ball in motion for what was to come in the next decade. As Argentina grappled with a looming financial disaster,  the International Monetary Fund (IMF) became a prime player in the effort to save its economy.  The Fund, created in 1944 in New Hampshire, engaged in protracted negotiations with Argentina to save the Republic even in the face of financial mismanagement and a severe inability to stimulate economic growth.  The two would eventually reach an agreement that showed signs of being the saving grace needed to save the nation.   Despite IMF intervention, a second agreement would be reached before the long feared collapsed occurred dropping the value of the peso completely.  In fact, things got so bad that President Fernando De La Rúa (1937- ) escaped by helicopter after resigning along with Cavallo, who had previously instituted a zero deficit policy and enacted the corralito, the infamous rule that capped the amount of money citizens could withdraw from their bank accounts sending the public into a rage.

With the whole world watching, Argentina sank deeper into financial distress but in recent years has enjoyed a streak of years of political stability. Its economy still has a long way to go to reach pre-2000 levels and time will tell if the Macri administration can fully rebuild the country’s bank accounts while avoiding another financial catastrophe. For those in control, the lessons of the past will need to be remembered moving forward. What I did like deeply about this book is that not only does Blustein tell us the story but he helps us understand how the IMF works and the value of currency.  And no matter where you live, your country has the potential to suffer the same fate as the Argentines if adequate controls are not placed on spending and taxation. For those seeking to understand the crisis that crippled Argentina, this is a good place to start. I highly recommend supplementing Blustein’s compendium with Luis Alberto Romero’s A History of Argentina in the Twentieth Century. Both books will give the reader tremendous insight of a country that has to be seen in person to be appreciated.

ISBN-10: 1586483811
ISBN-13: 978-1586483814

A History of Argentina in the Twentieth Century-Luis Alberto Romero

untitledOn April 6, 2017, The Global Confederation of Labor (CGT) conducted a one-day general strike in protest of the policies of the administration of President Mauricio Macri. (1959-) Inflation, high taxes, low wages and job cuts have constrained the people of Argentina into an economic vice grip as the president attempts to steer the country away from a looming economic crisis.  The strike is just one in many that have taken place during the last one hundred years in one of South America’s most popular countries. In July, 2017, I had the privilege to visit Buenos Aires, the city that has been called the Paris of South America.   In July of this year I will return to the nation that is home to world-famous steaks, milanesa, wine, asado and dozens of culinary delights that make the heart flutter and the mouth water.  I do not know what the political climate will be like when I visit but I can be sure that the people of Buenos Aires will show me the same hospitality that they did in the past and in the process help to create memories that will remain with me for the rest of my life.  My favorite Argentine presented this book to me as a gift, a gift that keeps on giving.  This book is a history of the Argentine Republic during the twentieth century. And what is contained in the pages of this book is essential in understanding modern-day Argentina.  James P. Brennan has translated the work of Luis Alberto Romero (1944-), who became a Professor of History at the University of Buenos Aires in 1967. The book is written as only a professor could but presents the reader with a wealth of critical knowledge that is invaluable.

The story begins towards the end of the 1800s as Argentina sees an influx of foreign immigrants, a trend that continued forming the blend of culture that became a signature to this day.  Politically, the nation is still in early stages at attempts to embrace democracy.  In 1916, the course of the nation changed forever with the election of Hipólito Yrigoyen (1852-1933), the “father of the poor” and co-founder of the Unión Cívica Radical.  He is seen as a reformist and one of the nation’s best leaders.  He was succeeded by Marcelo Torcuato de Alvear before being elected for a second time in 1928.  On September 6, 1930, he was deposed in a coup by the military, a trend that would continue for decades to come and cast a dark light on the future of Argentine politics.  Several military officials followed and assumed the office of the presidency. But in 1943, Argentina’s history was forever changed once again with the assumption of power by the late Juan Perón.   His reign over the nation, subsequent political activity up until the time of his death and the party that bears his name,  became permanently fixed in Argentine politics making it extremely hard for opponents of the party to exist as they attempt to transform society.

While the story of Argentina is complex and volatile as shown intricately in the book, there were other players involved in the development of the country.  The United States and Great Britain played critical roles in Argentine society in more ways than most Americans or Brits may be aware of.  Personally I learned a few things about my own government’s actions in Latin American and in particular Argentina that help explain how and why the nation still struggles with its economy.  When President Barack Obama visited Argentina in February, 2016, it was crucial step in repairing relations to two nations that were once more closely aligned.  Moving forward, it is hoped that both countries continue the effort and solidify a growing bond that will benefit both parties.  But in order to do so, it is necessary to revisit and reconcile the past not only with America but with England as well.  The conflict over the Malvinas Islands, instigated by then president Leopoldo Galtieri and the rise and fall of the export of beef, are dark moments in Argentina’s history that are examined in detail in the book.

The role of the military is not overlooked and throughout the book, its presence is continuously felt as one president after another is deposed and replaced by the next general in line.  And during the rule of Galtieri, the plague of the “disappeared” during the Dirty War that resulted in the deaths of thousands of Argentines with the final number possibly as high at thirty-thousand people.  The nefarious actions of the government would result in the formation of the Madres de Plaza de Mayo, the organization of Argentine mothers who demanded answers into the final destinations of their children and loved ones.  The group is supported by the Abuelas de Plaza de Mayo.  The true number may never be known but what is certain is that many lost their lives as the government enforced a crackdown on all forms of opposition.  Their efforts proved to be futile as opposition parties continued to flourish as legitimate threats to the crown of the highest office.   The elections of Carlos Menem and Fernando de la Rúa marked a stark change as neither candidate was a military official at the times of his election.   However, each left office in controversy with the latter being forced to leave quite unceremoniously.  He was succeeded by Adolfo Rodríguez Saá (1947-), Eduardo Duhalde (1941-), Néstor Kirchner (1950-2010) and Cristina Fernández de Kirchner (1953-) before Macri’s successful campaign as the candidate of the Republican Proposal (PRO) party.  Macri’s future is unknown at the moment but he finds himself in the position of former presidents who have struggled to maintain control of the country while attempting to balance the budget, promote economic growth and curtail the rising rate of inflation that has plagued Argentine society for several decades.

The highlight of Romero’s work is the attention paid to the economic policies that nearly crippled the economy and threatened to cause the country to self-destruct.  Seemingly, the ministers of finance were replaced as often as the deposed presidents.  Martinez de Hoz (1925-2013) and Domingo Cavallo (1946-) stand out in the book as pioneering reformists and also contributors to the woes of Argentines. They are two among dozens that have tried without long-lasting success to complete fix the nation’s problems.  Romero’s investigation into their policies and their effects serve as a lesson in economics that can be revisited in the future by other ministers of finance.

For those wishing to understand the political history of modern-day Argentina, this is the place to start.  So take a seat and follow Romero has he steps back in time revisiting the pivotal moments in the Republic’s history that has and continues to confound its citizens and those abroad.

Argentina is amazing” – Arjun Kapoor

ISBN-10: 0271021926
ISBN-13: 978-0271021928

Evita: The Real Life of Eva Peron- Nicholas Fraser and Marysa Navarro

wp-1455996519271.jpegOn July 26, 1952, Evita “Eva” Peron died at the age of 33 from the effects of uterine cancer, leaving behind a grieving husband and a country in mourning.  The former actress and radio personality had risen from the streets of Los Toldos to become the First Lady of Argentina and the creator of the Eva Peron Foundation.  The organization had served the poorest residents of the country giving financial support and developing areas in need of structural improvement.   Her policies and actions sometimes drew controversy and faced resistance from different sectors of society including the military, who tried more than once to stage a coup before Juan Peron finally fled into exile in 1955. Her life has been depicted in Broadway and in films but the true story is often subject to speculation, misinformation and mystery. This is the real story as told by Nicholas Fraser and Marysa Navarro of a young woman, born in adversarial circumstances but destined for a life of fame and purpose but destined to a tragic fate.  Carefully researching her early life, their account also serves as a historical record of the social climate of Argentina in the early 20th century.  Her spiritual and political evolution into a leader who at times garnered more attention than that of her husband, displays remarkable commitment, drive and patriotism.  But like all famous historical figures, controversy follows her throughout her life and her tragic decline is a reminder of our own mortality.  Her death and the actions surrounding the embalming and theft of her body are both shocking and disturbing.

Well over 50 years have passed since her death and even to this day there are many loyal Peronist and Peronistas that remain committed to an era that has long since passed.  Since the time when Eva was the name heard around the world, there have been many figures in Argentine politics that have come and gone.   The  recent administration of Cristina de Kirchner was plagued by accusations of corruption and even murder after the untimely death of Alberto Nissan who threatened to reveal what he believed to be the government’s complicity in a horrific crime that had been covered up and ignored by the government. In 2015, she was succeeded by Mauricio Macri and many hope that change is in the air.  And with the recent visit of President Barack Obama, the people of both Argentina and the United States have renewed optimism that the two nations can repair relations and continue to build a better relationship.   While Peron is no longer with us, she remains a mythical figure in the history of Argentina and for some she will always be the unrelenting crusader for equality. But for others, she will always represent the many things that were considered to be wrong with Argentine politics.  Nonetheless, her legacy continues and for an eternity, Eva will always be remembered.

ISBN-10: 0393315754
ISBN-13: 978-0393315752

 

Ed A. Murray

On reading. On writing. On life.

The City of Novels

Where the piles of books grow so high they become their own city

Book 'Em, Jan O

Ghosts, Tall Tales & Witty Haiku!

Midlife Midwife

Recovery, nursing, spirituality.....

How to blue

Un blog acerca mi vida personal sientete libre de juzgar.

adoptabookaus

Aussie reader and lover of words. LETS CHAT ABOUT ALL THE BOOKS

Web Development Ebooks

“Life is like riding a bicycle. To keep your balance, you must keep moving.” — Albert Einstein

Streed's Reads

Specializing in Books with Tie-ins to the Middle East, Russia and "The Stans" Countries, with an Occasional Out-of-Region or "Smut" Piece to Add Some Balance

Musings of a mad woman

Bipolar is my superpower