Wednesday, May 18, 2022

OPINION AND ANALYSIS | 25-01-2020 11:01

A little less conversation, a little more action please

The connective strings of the Albertista narrative up until now have relied on two major concepts: blame Macri and the neoliberal gorrillas, and “Peronist optimism.”

Alberto Fernández and his advisors on matters of political strategy have made one thing absolutely clear: everything regarding the government and the economy is at its weakest and most fragile state in recent memory, and all of that is exclusively Mauricio Macri’s fault. Much ink has been dedicated to analysing how Macri’s main advisors, Ecuadorean political strategist Jaime Durán Barba and former Cabinet chief Marcos Peña, abused the use of modern marketing techniques, ultimately leaving their president “disconnected from reality.” Alberto’s main narrative arguments haven’t been exposed to the audience just yet, but the combination of “blaming the inheritance” and what we could call “Peronist optimism” — with ministers left and right repeating that wages will outpace inflation this year — reveal an initial pragmatism that seems to be working, if early opinion polls are to be believed.

“Performative utterances” refer to speech acts that not only describe reality but actually modify it.

There are moments when a politician’s words are rendered utterly useless — just look at Chilean President Sebastián Piñera since his country’s political upheaval, or the final years of Macri himself. When a leader’s political capital is strong, words can have stronger effects than even concrete actions. In the early days of Macri’s Presidency, a major percentage of the population looked forward to the next few years with hope, building positive expectations for the future. The Cambiemos leader and his team decided to blame Cristina Fernández de Kirchner and 12 years of Peronist government for the country’s ills, but he also sought to construct a narrative of optimism, many times based on vague and superficial concepts that have more in common with Christian pastors than heads of state.

According to the followers of our vice-president, Mrs. Fernández de Kirchner, Macri and his administration had a systematic plan to favour particular financial interests of a certain sector of society to the detriment of the “popular” classes, while accepting the instructions of Washington and Wall Street by borrowing hundreds of billions of dollar-denominated debt. This is what they understand to be neoliberalism.

To a certain extent they were right; Macri believed that for Argentina’s productive sector to lead the country out of stagnation, it should reap profits, thus shifting the cost burden from producers to consumers. Clearly, the last four years of Cristina’s mandate were marked by an intensification of capital controls (the cepo) and stagflation, as her administration failed to understand the changing winds and continued to prioritise consumption once the global commodities super-cycle was already over. When Macri took over, he talked the talk, but ultimately he continued to increase the fiscal deficit to finance growing government expenditures and threw money (in the form of sovereign debt) at the underlying problem of uncompetitiveness.

The message stuck. He won the 2017 midterms as the economy spurred into action and re-election was the only obvious scenario. Then he ran out of dollars and the global economy had a fit, and today Macri is considered utterly incompetent by a major portion of society, many of whom seemed to follow him blindly until the first major devaluation of 2018.

The connective strings of the Albertista narrative up until now have relied on two major concepts: blame Macri and the neoliberal gorillas, and “Peronist optimism.” Since he took office, Alberto and his ministers, along with Cabinet Chief Santiago Cafiero, have made it crystal-clear that what’s to come will be tough on everyone. We are over-indebted and almost out of foreign currency reserves, inflation is elevated and economic output is falling off a cliff. And all of this because of the previous administration. The four years that preceded it have nothing to do with anything, they seem to want us to believe.

Yet, the population shouldn’t worry, because this is a Peronist government which is for the working people. So, no matter what, wages will outstrip inflation. Never mind the austerity measures implemented in the “Social Solidarity Law,” including freezing pensions for retirees and tax hikes. Don’t worry about what measures will incentivise production and create jobs, we will figure those out after the debt renegotiation with the International Monetary Fund and private creditors. Donald Trump has our back, as does IMF chief Kristalina Georgieva. Overacting its intensity, the Fernández administration has had a frenzy of activity this summer, showing the population that they will stabilise the sinking ship.

The message, as did Macri’s initial narrative, is working. Alberto’s approval ratings have risen dramatically according to initial polls, and expectations for inflation and economic output have improved. It’s the closest thing to a “honeymoon” President Fernández can hope for, given the current state of things. And pinning the blame on Macri, as well as airing dirty laundry left behind by the previous administration — the AySA-Boca Juniors scandal, Vicentín-Banco Nación, US$10,000 in envelopes and more to come — helps in a social and political context where Macri’s political capital has been greatly consumed. Nobody loves you when you’re down and out, the song says.

It is difficult to envision a positive scenario for Argentine companies and the general economy this year. The private sector is broke and locked out of credit, which has all but dried up. The Central Bank has embarked upon a policy of monetary expansion and falling rates, which threatens to generate pent-up inflation, which could be unleashed the day after Alberto’s 180-day Social Solidarity pact expires. Buenos Aires Province Governor Axel Kicillof is already playing chicken with private creditors, with the spectre of a provincial debt default looming on the horizon (probably the worst precedent for what promises to be a tough negotiation between Economy Minister Martín Guzmán and Argentina’s creditors).

The tension between reflection and action has been a consistent part of Western thought for centuries. Philosophers and intellectuals were always despised by soldiers and men of action. We now understand that words can be as useful as swords, particularly in a world dominated by information spread across the Internet and piped into everyone’s side-pocket through smartphones. For now, it is working for Fernández. But at some point, the situation will require “a little less conversation, a little more action please,” as Elvis once sang.

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Agustino Fontevecchia

Agustino Fontevecchia


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