- Introduction
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- On October 23rd of this year, President Cristina
Fernandez won re-election receiving 54% of the vote, 37 percentage points
higher than her nearest opponent. The President's coalition also swept
the Congressional, Senatorial, Gubernatorial elections as well as 135 of
the 136 municipal councils of Greater Buenos Aires. In sharp contrast
President Obama, according to recent polls is trailing leading Republican
Presidential candidates and is likely to lose control of both houses of
Congress in the upcoming 2012 election. What accounts for the monumental
difference in voter preferences of incumbent presidents? A comparative
historical discussion of socio-economic and foreign policies as well as
responses to profound economic crises is at the center of any explanation
of the divergent results.
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- Methodology
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- In comparing the performance of Fernandez
and Obama it is necessary to locate them in an historical context. More
specifically, both presidents and their immediate predecessors, George
Bush in the US and Nestor Kirchner (deceased husband of Fernandez) in Argentina
confronted major economic and social crises. What is telling, however,
are the diametrically opposing responses to the crises and the divergent
results. On the one hand sustained growth with equity in Argentina and
deepening crises and failed policies in the US.
- Historical Context: Argentina: Depression, Revolt and
Recovery
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- Between 1998 2002, Argentina experienced
the worse socio-economic crises in its history. The economy nose-dived
from recession to full scale depression, culminating in double digit negative
growth in 2001 2002. Unemployment reached over 25% and in many working
class neighborhoods, over 50%. Tens of thousands of impoverished middle
class professional lined up to receive bread and soup only blocks away
from the Presidential palace. Hundreds of thousands of unemployed workers,
'piqueteros' (picketers), blocked major highways and some raided trains
shipping cattle and grain overseas. Banks closed depriving millions of
depositors of their savings. Millions of middle class protestors organized
radical neighborhood councils and linked up with unemployed assemblies.
The country was heavily indebted, the people deeply impoverished.
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- The popular mood was moving toward a revolutionary
uprising. Incumbent President Fernando De la Rua was overthrown (2001)
scores of protestors were killed and wounded, as a popular rebellion threatened
to seize the Presidential palace. By the end of 2002, hundreds of bankrupt
factories were 'occupied', taken over and run by workers. Argentina defaulted
on its external debt. In early 2003, Nestor Kirchner was elected President,
in the midst of this systemic crisis and proceeded to reject efforts to
enforce debt payment or repress the popular movements. Instead he inaugurated
a series of emergency public works programs. He authorized payments to
unemployed workers (150 pesos per month) to meet the basic needs of nearly
half the labor force.
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- The most popular slogan, of the multitudinous
movements occupying the financial districts, factories, public buildings
and the streets was "Que se vayan todos" ("All politicians
get out'). The entire political class, parties and leaders, Congress and
presidents were rejected outright. But while the movements were vast,
militant and united in what they rejected, they had no coherent program
for taking state power, nor national political leadership to lead them.
After two years of turmoil, the populace turned to the ballot box and
elected Kirchner with a mandate to produce or perish. Kirchner heard the
message, at least the part which demanded growth with equity.
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- Context: The US under Bush-Obama
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- The last years of the Bush administration
and the Obama presidency presided over the worse socio-economic crises
since the Great Depression of the 1930's. Unemployment and underemployment
rose to almost a third of the labor force by 2009. Millions of homes were
foreclosed. Bankruptcies multiplied and banks were on the verge of collapse.
Negative growth rates and a sharp decline in income, increased poverty
and multiplied the number of food stamp recipients. Unlike Argentina,
discontented citizens took to the ballot box. Attracted by the demagogic
"change" rhetoric of Obama, they placed their hopes in the new
president. The Democrats won the Presidency and a majority in both houses
of Congress. The first priority of Obama and Congress was to pour trillions
of dollars in bailing out the banks, even as unemployment deepened and
the recession continued. Their second priority was to deepen and expand
overseas imperial wars.
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- Obama increased the number of troops in Afghanistan
by 30,000; expanded the military budget to $750 billion dollars; launched
new military operations in Somalia, Yemen, Libya, Pakistan and elsewhere;
augmented military aid to Israeli colonial armed forces; signed military
pacts with Asian countries (India, Philippines, Australia) proximate to
China.
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- In sum Obama gave maximum priority to expanding
the militarized empire, depleting the public treasury of funds to finance
the recovery of the domestic economy and reducing unemployment.
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- In contrast, Kirchner/Fernandez curtailed
the power of the military, cut military spending and channeled state revenues
toward employment programs, productive investments and non-traditional
exports.
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- Under Obama the crises became an opportunity
to revive and consolidate the financial power of Wall Street. The White
House augmented the military budget to expand imperial wars by deepening
the budget deficit and then proposed to cut essential social programs to
'reduce the deficit'.
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- Argentina from Crises to Dynamic Growth
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- In Argentina the economic catastrophe and
popular uprising provided Kirchner with an opportunity to bring about a
basic shift from militarism and speculative pillage to social programs
and sustained economic growth.
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- The electoral victories of both Kirchner
and Fernandez reflect their success in creating a 'normal' capitalist welfare
state. After 30 years of US backed predator neo-liberal regimes, this
was a great positive change. Between 1966 and 2002, Argentina suffered
brutal military dictatorships culminating in the genocidal generals who
murdered 30,000 Argentines from 1976to 1982. From 1983to 1989 Argentina's
suffered under a neo-liberal regime (Raul Alfonsin) which failed to deal
with the dictatorial legacy and which presided over triple digit hyper-inflation.
From 1989 1999 under President Carlos Menem Argentina witnessed
the biggest sell-off of its most lucrative public firms, natural resources
(petrol included), banks, highways, zoo and public toilets to foreign investors
and kleptocratic cronies for bargain basement prices.
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- Last but not least, Fernando De la Rua (2000
2001), promised change and proceeded to deepen the recession that
led to the final catastrophic crash of December 2001 and the closing of
the banks, the bankruptcy of 10,000 firms and the collapse of the economy.
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- Against this background of total and unmitigated
failure and the human disaster of US IMF promoted "free-market"
policies, Kirchner/Fernandez defaulted on the external debt, re-nationalized
several privatized firms and the pension funds, intervened the banks and
doubled social spending, expanded public investment in production and increased
popular consumption, on the road to economic recovery. By the end of 2003
Argentina turned from negative to 8% growth.
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- Human Rights, Social Programs and Independent Foreign
Economic Policy
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- Argentina's economy has grown over 90% from
2003 2011, over three times that of the United States. Its recovery
has been accompanied by a tripling of social spending, especially on programs
reducing poverty. The percentage of poor Argentines has declined from
over 50% in 2001 to less than 15% in 2011. In contrast US poverty has
risen over the same decade from 12% to 17% and is on an upward trajectory
over the same period.
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- The US has become the country with the greatest
inequalities in the OECD with 1% controlling 40% of the country's wealth,
(up from 30% in less than a decade). In contrast, Argentina's inequalities
have shrunken by half. The US economy has failed to recover from the deep
recession of 2008-2009, during which it declined by over 8%. In contrast
Argentina declined less than 1% in 2009, and has been growing at a healthy
8% (2010-2011). Argentina has nationalized pension funds, doubled basic
pensions and introduced a universal child welfare program to counter malnutrition
and guarantee school attendance.
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- In contrast 20% of children in the US are
now suffering from poor diets, drop-out rates are increasing for adolescents
and malnutrition affects over 25% of minority children. With more social
cuts in health/education under way, social conditions can only worsen.
In Argentina the income of wage and salaried workers has increased over
50% over the decade in real terms, while in the US they have declined by
nearly 10%.
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- Argentina's dynamic growth of GNP has been
fueled by growing domestic consumption and dynamic export earnings. Argentina
has a consistent large trade surplus based on favorable market prices and
increased competitiveness. In contrast domestic consumption has stagnated
in the US, the trade deficit is close to $1.5 trillion dollars and revenues
are wasted on non-productive military expenditures of over $900 billion
a year.
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- While in Argentina the impulse for a policy
of default with growth came about because of a popular rebellion and mass
movements, in the US popular discontent was channeled toward the election
of a Wall Street financial con-man named Obama. He proceeded to pour resources
into rescuing the financial elite instead of letting them go bankrupt and
funding growth, competitiveness and social consumption.
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- The Argentine Alternative to Bailouts and Poverty
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- The Argentine experience goes counter to
all the precepts of the international financial agencies (the IMF, World
Bank), their political backers, and publicists in the financial press.
>From the first year (2003) of Argentina's recovery to the present,
the economic experts have "predicted" that its growth was "not
sustainable" it has continued robustly for over a decade. The
financial writers claimed the default would lead to Argentina being shut
out of financial markets and that its economy would collapse. Argentina
relied on self-financing based on export earnings and re-activation of
the domestic economy and confounded the prestigious economists.
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- As growth continued, the critics in the Financial
Times and the Wall Street Journal claimed it would end once "unused
capacity was exhausted". Instead growth earnings financed the expansion
of the domestic market and created new capacity for growth especially to
new markets in Asia and Brazil.
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- Even as late as October 25, 2011, Financial
Times columnists still prattle about "the coming crises" in the
manner of messianic fundamentalists who predict the pending apocalypse.
They harp on "high inflation", "unsustainable social programs",
"overvalued currency", and more predictions of "the end
of prosperity". All these dire warnings occur in the face of
continued growth of 8% in 2011 and the overwhelming electoral victory of
President Fernandez.. Anglo-American financial scribes should focus on
the demise of their free market regimes in Europe and North America instead
of denigrating an economic experience from which they might learn.
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- In refutation of the Wall Street critics,
Mark Weisbrot and his associates point out ("The Argentina Success
Story", Center for Economic Bad Policy Research, Oct. 2011) that Argentina's
growth was based on the expansion of domestic consumption, increased manufacturing
exports to regional trading partners as well as traditional agro-mineral
exports to Asia. In other words Argentina is not totally dependent on
primary exports; it has balanced trade and is not over dependent on commodity
prices. In regard to high inflation, Weisbrot points out that "inflation
may be high in Argentina but it is real growth and income distribution
that matter with regard to the well-being of the vast majority of population",
(page 14) (my emphasis).
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- The US under Bush-Obama has pursued a totally
perverse and divergent path to that of Kirchner-Fernandez. They have prioritized
military spending and expanded the security apparatus over the productive
economy. Obama and Congress have vastly increased the police state apparatus,
reinforced their political influence over regressive budgetary policies
while increasingly violating human and civil rights. In contrast Kirchner/Fernandez
have prosecuted dozens of human rights violators in the military and police
and weakened the military's political power.
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- In other words the Argentine Presidents have
weakened the militarist pressure bloc which demands greater arms and security
expenditures. They created a state more accommodative to their political
project of financing economic competitiveness, new markets and social programs.
Bush-Obama revived the parasitical financial sector further unbalancing
the economy. Kirchner/Fernandez ensured that the banking sector financed
the growth of the export sector, manufactures and domestic consumption.
Obama slashes social consumption to pay creditors. Kirchner-Fernandez
imposed a 75% "haircut" on bondholders in order to finance social
spending.
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- Kirchner-Fernandez have won three presidential
elections, each by a larger margin. Obama may be a one-term president,
even with the billion dollar campaign funding from Wall Street, the military
industrial complex and the pro-Israel power configuration.
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- The popular opposition to Obama, especially
the "Occupy Wall Street movement" has a long way to go to emulate
the success of the Argentine movements that rousted incumbent presidents,
blocked highways paralyzing production and circulation and imposed a social
agenda that prioritized production over finance, social consumption over
military expenditures. The "Occupy Wall Street Movement" has
taken a first step toward mobilizing millions of active participants necessary
to creating the social muscle that turned Argentina from a US style client
state into a dynamic independent welfare state.
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