Time to batten down the hatches

Over 70 years ago, Argentine voters chose a path that led the country deeper and deeper into a swamp from which it is now struggling to emerge. After many unhappy decades, in which hopes were repeatedly dashed, about half of the population has tentatively come to the conclusion that it would be foolish to continue chasing the populist will-o’-thewisp because populism – which may be taken to mean giving people whatever they say they want without worrying about the medium-term or long-term consequences of decisions that usually involve spending far more money than is available – is always bound to fail. Though economic hard times have persuaded some that life was far better when Cristina Fernández de Kirchner was running the show, Mauricio Macri, who very much wants to consign the old order to the dustbin of history, still seems to have the upper hand. Given the circumstances, this is quite remarkable.

Ever since the mid-1940s, when a military regime gave birth to Peronism, Argentina has been regarded as populism’s natural habitat, one of the few places on earth in which a movement of this kind could thrive, handily winning most elections, despite having impoverished much of the population, beginning with the men and women who despite everything still find it irresistibly attractive.

Until the currency markets started acting up in April, it appeared that at long last Argentina was turning her back on the old populist religion that had made her what she is today. What is more, she was doing so just when countries that were once thought to be immune to populism’s slatternly charms began embracing it, as did millions in the United States where, to the dismay of progressives everywhere, Donald Trump managed to shoulder aside Hillary Clinton and stride into the White House by exploiting the widespread dislike of an increasing arrogant coastal elite. According to admirers of the European Union, much the same happened in the United Kingdom with Brexit, as well as in Italy.

Despite all that has gone wrong in recent months, Macri’s government thinks it now has the economy under control. If the pollsters are right, many Argentines agree. Belt-tightening may be unpleasant for most of the population, but by giving the impression that the men and women responsible for handling it are determined to get things right this time – even if their meanminded penny-pinching does cost them some much-needed votes – it can win them the respect, no matter how grudging, of those who fear weakness more than anything else. This no doubt it why, to the surprise of the many who take it for granted that “it’s the economy, stupid,” Macri’s popularity index has risen sharply in the last few weeks. When times are tough, people need to feel that someone up there really is in charge.

Unfortunately not just for the government but also for a great many others, Macri’s macho approach to the country’s dire financial situation, which comes after years of ‘gradualist’ dillydallying that left things much as they had been when he took over in December, 2015, has not had the same effect on the markets. Though the dollar – by which is meant the peso – seems to have been brought under control, Argentina’s country risk index continues to scale new heights.

This cannot be due to nothing more than the fear that within a year Cristina and her oddball cronies could be back in the Pink House and doing their best to emulate their much admired Venezuelan friend Nicolás Maduro, a man who has contrived to ruin a country sitting on what specialists say are the world’s richest oil reserves. What spooks the financiers sitting in New York and London is the near certainty that the entire world is about to enter a stormy period, with interest rates rocketing skywards, in which Argentina, burdened as she is by big debts and what is worse, a wretched track record, will find it desperately hard to stay afloat.

There are plenty of reasons to think something very unpleasant could be about to happen. In Washington, the Fe,d and in Brussels, the European Central Bank, feel the time has come to put an end to what is euphemistically called quantitative easing and have thereby set off a panicky “flight to quality”; China is slowing down and growing at a pace, sixand-a-half percent a year, that most other countries would envy but which, by her recent standards, is assumed to be dangerously lethargic; Brexit could see the UK crashing out of the European Union without any prior agreement on trade relations, which is why the Army will be put on alert without anyone really knowing what the soldiers will be expected to do.

Politics isn’t helping. In much of the Western world, the revolt against the metropolitan elites, whose representatives are accustomed to calling the shots and are prone to despise those who do not share their points of view, is getting fiercer by the day. Varieties of populism, which defenders of the old order try to discredit by saying that what is going on reminds them of the time when Adolf Hitler began making a name for himself, are on the rise almost everywhere.

The example given by France’s ‘yellow jackets’ who, after staging a number of riots, forced President Emmanuel Macron to beat a hasty retreat, has encouraged the like-minded in neighbouring countries to take to the streets. If the Eurozone economy performs as badly in the coming months as pessimistic forecasters say is more than likely, movements derided as populist or extreme right-wing will win plenty of seats in the European Parliament.

As could have been predicted, an ill-timed attempt by the United Nations to make immigration from the underdeveloped countries into richer ones, with generous social benefits a basic human right, has made an already bad situation worse by alarming the many Europeans who would much rather see Muslims seek refuge in countries already dominated by their fellow believers. After expressing its willingness to sign the “global compact on migration,” which the UN insists is “non-binding” yet has already been rejected by the United States, Australia, Israel and many central and eastern European countries, the Belgian government lost the support of a key ally and felt obliged to resign. Other European governments, among them those of Germany and Sweden, could suffer a similar fate.