Wednesday, June 12, 2024

OPINION AND ANALYSIS | 29-10-2022 06:00

Getting ready for hard times

The long-predicted but frequently postponed crack-up seems to have arrived.

When Mauricio Macri moved into the Pink House almost seven years ago, he thought it would be best for him to pretend that, despite appearances and some truly horrible statistics, the country’s economy was really quite healthy and that, under his sensible management, it would soon be growing again at an increasingly rapid rate. The idea was that both local and foreign investors would feel encouraged by his optimistic assessment of the task awaiting him. It was only later that he realised he should have painted a far gloomier picture in order to prepare the population for the tough times that lay ahead and, while about it, made the most of an inevitably brief honeymoon by taking the stern measures he must have known would be called for.

Would that have improved matters? Probably not; Macri’s government lacked the political clout it would have needed to get people to support the kind of structural reforms he and many others wanted to see carried out. Before they could embark on the kind of programme they had in mind, the country would have had to suffer a far worse economic crisis than the one which was bequeathed to him by the departing president Cristina Fernández de Kirchner and her most influential advisor, Axel Kiciloff. Well aware that it would not be in her interest to see whoever succeeded her as president make a success of his job, on leaving office Cristina handed him the economic time-bomb the pair had assembled.

Well, the long-predicted but frequently postponed crack-up seems to have arrived. Of course, the appalling state of the country’s economy is not entirely due to the Kirchnerite government’s incompetence – the Covid pandemic followed by a worldwide inflationary surge and the sharp rise in energy prices caused by Vladimir Putin’s invasion of Ukraine certainly did not help – but the current consensus is that, by insisting on printing huge amounts of money and doling it out to their political clientele, Alberto Fernández and Cristina made things far worse. 

As a result, a far more market-friendly approach than theirs to Argentina’s many problems has swung into fashion. The “libertarian” Javier Milei and, less spectacularly, the like-minded José Luis Espert, are making inroads into the support enjoyed not just by the opposition alliance “Together for Change” but also, in the huge Buenos Aires Province slum belt, by the Kirchnerite wing of the Peronist movement which depends on the votes of the country’s poorest and least-educated inhabitants. 

Alarmed by what is happening, Peronists of all stripes are retreating to the fiefs they have long dominated where they think they will be able to ride out the onrushing storm which, some fear, could have catastrophic electoral consequences for many of them unless they distance themselves from the increasingly chaotic national government. Opposition leaders may be less alarmed than such Peronists, but they too are nervously watching the opinion polls. Macri, who no doubt would dearly like to return to the Presidency but is aware that he has plenty of ambitious rivals who want to see him in the role of a benign elder statesman who lets someone else do the hard work of running the country, is edging closer to Milei, as is another “hawk,” Patricia Bullrich. For them, it is not merely a question of political posturing but rather of deciding just how much economic liberalism the country would need for it to get back on its feet. They assume that the worse things get, the more it will have to swallow.

Have they been beguiled by an ideology which makes many difficult problems look wonderfully simple, or is it that what really irks them is the way large numbers of people, especially politicians and their hangers-on, have contrived to live off the public sector without giving anything of value in return? This presumably matters more to them than any philosophical question. Even Milei, who is fond of alluding learnedly to the ideas put forward by economists of the Austrian School, owes his popularity not to his familiarity with their works but to his contemptuous treatment of what he, taking his cue from Spanish leftists, calls the “political caste.”

As far as Milei is concerned, caste members are noxious parasites who feed off the rest of the population. This may be a bit unfair because there are surely many politicians who dedicate themselves full-time to the common good and public employees who do more than enough to earn their keep, but it is undeniable that there are also plenty of time-servers and organisations, such as La Cámpora, which operate like mutual-aid associations and specialise in finding cushy jobs for their members in exchange for some political activism. Needless to say, much the same happens in the best-run countries, though not to the same degree as here, where far too many mediocrities get involved in politics only because they think, quite realistically, that it will guarantee them a decent income. 

All these people are dead against serious change because they know full well that, were it not for the constantly expanding public sector, they would be left to fend for themselves in an unforgiving world. Macri said as much a few days ago when he predicted that the next government, which like most people he thinks will be formed by members of the coalition he still aspires to lead, would have to do battle with die-hard supporters of the current order who would be willing to go to almost any lengths to cling to the “privileges” they have amassed over the years. For such individuals, something far more important than ideological differences – liberalism versus Peronism, capitalism versus socialism, stuff like that – is at stake. If, as could well happen, the established order does comes crashing down after being hit by an economic thunderbolt, many who have managed to live off it will fall into the swelling ranks of the newly impoverished, a fate they will surely deserve but which they will not blame on their own collective behaviour but on the wickedness of whoever is obliged to clear up the mess they will have left behind.

James Neilson

James Neilson

Former editor of the Buenos Aires Herald (1979-1986).


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