Stories
Slash Boxes
Comments

SoylentNews is people

posted by janrinok on Monday October 28 2019, @01:46PM   Printer-friendly
from the pendulum-swings dept.

Arthur T Knackerbracket has found the following story:

Left-leaning Fernandez hails government of people, but central bank currency move shows no quick fix to economic woes.

Fernandez's win unleashed euphoria in parts of Buenos Aires, as supporters cruised the streets honking their car horns, and a wave of people surged towards the neighbourhood of Chacarita, where the official victory party was being held. 

Speaking to supporters at his party's headquarters, Fernandez thanked voters for showing a commitment to building a more equal Argentina. 

"We're going to be the Argentina that we deserve because it's not true that we're condemned to this Argentina," he said.


Original Submission

 
This discussion has been archived. No new comments can be posted.
Display Options Threshold/Breakthrough Mark All as Read Mark All as Unread
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
  • (Score: 1, Interesting) by Anonymous Coward on Monday October 28 2019, @02:13PM (5 children)

    by Anonymous Coward on Monday October 28 2019, @02:13PM (#912796)

    They borrow money in foreign currency. That's the most brain damaged thing you could ever do.

    Any country that sells debt in a currency that it has no political say in, that is a recipe for disaster. Like borrowing money in a currency you don't earn. What could possibly go wrong??

    Starting Score:    0  points
    Moderation   +1  
       Interesting=1, Total=1
    Extra 'Interesting' Modifier   0  

    Total Score:   1  
  • (Score: 5, Informative) by Thexalon on Monday October 28 2019, @04:20PM (2 children)

    by Thexalon (636) on Monday October 28 2019, @04:20PM (#912871)

    Poorer countries have 2 options when it comes to credit:
    1. Borrow money in foreign currency from nasty folks like the IMF, who can and will use those loans to dictate government policy to the detriment of democracy.
    2. Don't borrow money, because no major foreign investors will invest in an asset that's denominated in a currency that could go belly-up at any moment.

    And you might think "Well, OK, live within your means, and tax your citizens and your own economy to get money to do things". But if you can't borrow money, your only other viable method of growing your economy quickly is to open your country up to foreign corporations. Those foreign corporations don't want to be taxed, and don't want to pay much for wages, so they'll only join your economy if you promise that they won't have to pay taxes and won't have to pay your citizens more than a few nickels (in US currency) an hour. So who are you going to tax? So now these corporations are also dictating public policy to the detriment of democracy.

    The upshot of all this is that the government of many poor countries, even democratically elected governments, regularly find themselves oppressing their own citizens to satisfy the whims of US and European business interests.

    And if a head of state of one of these countries refuses to play ball with these lousy deals, those corporations will evaluate whether that country has anything worth grabbing, and if so will make some calls to their good friends in Langley, VA to see whether something can be done about that head of state. And that's a major reason why the US has backed overthrows of democratically elected governments all over the world, especially in Latin America and including Argentina, and why the new governments of those countries are typically made up of CIA assets.

    Approximately the only countries that have managed to escape the US/EU-controlled version of this trap to any significant degree are Cuba, Iran, North Korea, and Russia. And guess which countries the US foreign policy establishment considers mortal enemies? Other countries that have attempted to wriggle free in recent decades include Iraq, Libya, Venezuela, Bolivia, Brazil, and Zimbabwe, and you can see how well that worked out.

    --
    The only thing that stops a bad guy with a compiler is a good guy with a compiler.
    • (Score: 2, Insightful) by Anonymous Coward on Monday October 28 2019, @05:57PM (1 child)

      by Anonymous Coward on Monday October 28 2019, @05:57PM (#912903)

      It's a bit more involved than that.

      You do point out the differences between private and public capital sources, and that is correct, but governments have plenty more levers at their disposal than just the door handle.

      There are also other approaches that are quite feasible in the margins between the two, on the basis of trade even without capitalisations.

      However, even without typing a whole screed that nobody's likely to read about tax and trade structures, we can look at the history of some approaches that poke uncomfortable holes in some of your stereotyping. For example, post-WWII the UK was one hell of a lot more socialist than Denmark is today. They actively nationalised a number of industries. They brought trade unionists into policy and industrial management structures. They applied strict capital controls and massively expanded their welfare state. Yes, the UK did this. The heartland of the "anglosphere" and the home of the vaunted financial district of London. They applied taxes that went beyond being punitive, all the way through to confiscatory.

      The result? "Miserable Britain", the "Sick Man of Europe". Nationalised industries weren't national champions, but international laughing stocks. Anyone with capital found ways of doing anything, everything elsewhere because being there was very nearly pointless.

      Even rich, powerful, connected countries haven't done very well by this.

      And before people start wagging their fingers and talking about Scandinavia, bear in mind that Sweden and Denmark didn't subscribe to many of those approaches, and even to the extent that they did, they've been rolling them back over the last couple of decades to signal success. Norway's been able to put off some days of reckoning for a while on the strength of their north sea oil - but that's getting more expensive to extract and running low, so their pot of proverbial gold is not going to support them indefinitely. Their big idea was to keep some capital from that aside (smart and thrifty) and then invest it - but they have a problem that their high taxes and restrictive structures have made them a less attractive venue for entrepreneurialism. So now they're financiers looking for outside investment opportunities - and they're not about to pour that into an Argentina without some guarantees. Such as, denominating it in dollars.

      • (Score: 3, Informative) by Thexalon on Monday October 28 2019, @10:59PM

        by Thexalon (636) on Monday October 28 2019, @10:59PM (#913009)

        1. What exactly does the situation of the UK in 1950 have to do with the situation of Argentina and other poorer countries in 2019?
        2. Your claims about nationalized industries all being horrid doesn't make much sense in the light of Britain's NHS consistently providing better health care than the US's private health system.
        3. Regardless of any of that, one problem the UK has not had to face is political instability due to foreign powers attempting to impose their will on the country via covert actions and coups. Pretty much all countries in Latin America and Africa, and many in the Middle East, have.

        --
        The only thing that stops a bad guy with a compiler is a good guy with a compiler.
  • (Score: 2) by BK on Monday October 28 2019, @04:29PM (1 child)

    by BK (4868) on Monday October 28 2019, @04:29PM (#912875)

    This deserves more discussion.

    On one hand, borrowing in a currency you can't reasonably hope to repay is foolish. OTOH, undoubtedly the Argentinians undoubtedly want to participate in causing climate change... which in turn may require those currencies. Its hard to not be able to do what you want.

    --
    ...but you HAVE heard of me.
    • (Score: 2) by driverless on Tuesday October 29 2019, @04:17AM

      by driverless (4770) on Tuesday October 29 2019, @04:17AM (#913117)

      "We're going to be the Argentina that we deserve because it's not true that we're condemned to this Argentina,"

      Make Argentina Great Again! I know where you can get hats with that (MAGA) on it.