She's from Argentina, She knows whats up

[Lawrence of Arabia]

So we had an open forum in our last history class. this 1/2 argentine gilr said it was the world bank/ imf/ 1st world countries who created the latest crash in argentina. she couldnt explain how it happened, but was sure that it invovled the 1st world.

i said that it had nothing to do with imf/ world bank, and was the fault of the argentininan govt, and bad luck. it was the govts fault because:

1. the peso was pegged to the US dollar since 1991 to combat hyperinflation
2. they didnt unpeg it after they got out of hyperinflation

it was bad luck because

1. asian currency crisis/ brazilian currency crisis that wasnt their fault.


so who is right?

[Sava]

no banana option!

[Asher]

Both of you are idiots; it was another reason: Argentina doesn't exist.

[Fake Boris]

Stiglitz, former vice-president of the World Bank, says the IMF had a great part of the responsibility.

[Lawrence of Arabia]

(hint: the world bank and the imf hate each other cuz they are in competition, usually to see who can screw up the most countries through too rapid of liberalisation)

[Last Conformist]

You're both idiots, but you (sg) are probably right.

[Asmodean]

Okay...Argentina has had a rough time, but to blame it on the IMF/1st world.....not a chance.

They have basically been ****ing up their economy for the last 35 years, and the combined efforts of all the world's economists could not have saved them.

Anyway...that's my two cents.

Asmodean

[Fake Boris]

Originally posted by Lawrence of Arabia
(hint: the world bank and the imf hate each other cuz they are in competition, usually to see who can screw up the most countries through too rapid of liberalisation)

Yeah, but the thing is he's not in the World Bank anymore and has shot arrows at both.

[Lawrence of Arabia]

Yeah, but the thing is he's not in the World Bank anymore and has shot arrows at both.

if you are familiar with stiglitz, you know that he was a sort of a maverick who wanted to change the world bank from the inside. while he disliked the world bank, he totalled hated the imf. he even called them 'bloodsuckers'

[Lawrence of Arabia]

here is what stiglitz had to say about argentina

INTERVIEWER: [So in Bolivia], the overall results might not have been as good as people originally thought. Tell me what you saw.

JOSEPH STIGLITZ: I saw a country that was facing recession. I saw a country that was asking questions like, why is it that when the United States faces an economic downturn, everybody says you ought to have a stimulus? But in Latin America, when they have an economic downturn, they're told to tighten their belts, [to] go back to the kinds of policies that were used -- we call them Hooverite in the United States -- policies that were rejected by the new economics, Keynesian economics, several years ago. The policies that they were taught in their graduate schools and undergraduate standard textbooks, every textbook says that when you have a recession, you're supposed to have expansionary fiscal policy. [But] they're told no, that's not right; you have to cut back your expenditures. And when that happens, the economy goes down.

But more broadly, what we see in countries like Bolivia, they're asking: "Okay, now we felt the pain; we've felt the pain of contraction and austerity. When do we start getting the fruits?" And in retrospect they say: "Well, yes, we had a few years of growth, but those few years of growth exposed us to an enormous amount of volatility. And now we have four, five years of stagnation, recession, depression." And looking at the statistics, if we look at a longer span, our growth record now in this decade doesn't appear particularly impressive.

And, in fact, what growth we had could largely be interpreted as a catch-up from the lost decade of the '80s, a lost decade caused by mismanagement of the last economic crises by the IMF. And they look around, and they say, "Look at the star pupil -- Argentina." [In] '91, '92, '93, '94, everybody described it as the best performing economy. They followed the IMF prescriptions; they got rid of hyperinflation. They did succeed, but they didn't get the kind of sustained economic growth that is going to bring benefits to all the people. The result, since 1995: double-digit unemployment. An economic framework that originally worked to bring down inflation became a shackle that did not allow the economy to grow. The wonder in Argentina is not that there were eventual riots; the wonder is that it took so long for them to occur. At the time they occurred, unemployment was approaching 20 percent; open unemployment and disguised unemployment was another 10 or 15 percent. What kind of democracy can sustain that kind of failure of economic policy? And some people will say it's the problem of the Argentineans, [but] the IMF and the policies they imposed have a high degree of culpability. They exposed it to disturbances, interest rate rises around the world, that were not caused by its misperformance, but by a global failure, global problems. They couldn't adjust quickly enough to these, but I'm not sure any country could have, any democratic country could.

INTERVIEWER: But in the case of the Argentinean people, some people would argue they just didn't do enough. What would you say to people who say that?

JOSEPH STIGLITZ: Well, what I say is they went very far towards reform. Prices were not only flexible; they were falling. Wages were falling. People were seeing their incomes decline. Maybe, you know, critics say, "Well, they should have declined faster; they should have gone into poverty quicker." That was what the prescription was saying. But the fact is, you know, I don't want to say that they did everything right, because clearly there were mistakes made all around, but the economic straitjacket of being pegged to the dollar made their life impossible, particularly in an environment where the dollar was overvalued. Their neighbor Brazil devalued enormously; the euro was weak. They were in an impossible situation. And then, with the IMF giving them a good report card for so long, they borrowed too much from the international markets, which just kept pushing more money on them, [saying], "Fine, take it if you want it," until they all of a sudden change their minds, saying, "Oh, no, I'm sorry -- now you have to pay us high interest rates." The debt GDP ratio in Argentina was only around 45 percent. In Japan it's around 130 percent. So even in terms of their indebtedness, it was not outrageous. But they were put in this economic straitjacket which the markets rightly recognized would be very difficult for them to get out of.

[chequita guevara]

The problem with neo-liberalism is that it pulls the rug out from underneath undeveloped economies. Capital isn't reinvested in the local economy so no market is built. Instead, enough capital flows in in order to falicilate the looting of a country. It's no surprise that the only coutrnies in the 3rd world which have managed to develop have done so by following the exact opposite policies of neo-liberalism: Taiwan, South Korea, Malayasia, Singapore, etc.

[Lawrence of Arabia]

where is the loot? since everything bought by multinationals needs to be paid, either in credit, or cash, theres a transfer in both directions.

[Dis]

it seems everyone from other countries blame the U.S. for their own problems. This is nothing new.

[Last Conformist]

Blame Canada!

[Lawrence of Arabia]

it seems everyone from other countries blame the U.S. for their own problems. This is nothing new.

yeah, but they are right sometimes. some countries can complain at what imf and EBRD. other countries (or regions like middle east) can compain about what we do to them politically. but not argentina. in the 1930s, argentinas GDP per capita was equivalent to frances. whats happened since then is their own fault.