Cristina Fernández by a Landslide

23 October 2011

Sunday


With the greater part of the votes counted in Argentina, Cristina Fernández de Kirchner is headed for a landslide victory with 53-54 percent of the popular vote. The result isn’t a surprise. Many media outlets had predicted the win, and many also predicted the landslide result. The BBC noted, “If confirmed, the victory margin would be the biggest since Argentina returned to democracy in 1983.”

When compared with the situation in South America in the second half of the twentieth century, when the continent seemed to lurch from dictatorship to hyperinflation to violent Maoist insurgencies, the political stability of the present is remarkable. And this is not merely a matter of political stability, but an apparent close accord between the rulers and the ruled: Luiz Inácio Lula da Silva of Brazil and Michelle Bachelet of Chile left office peacefully with very high approval ratings, while much comment has been generated by members of the indigenous Andean community winning the presidencies of Bolivia and Peru.

It is instructive to compare this popularity of the leaders in South America with the growing unpopularity and discontent in the northern hemisphere. At the same time that Cristina Fernández is being reelected by the landslide in Argentina, the leaders of the US and western Europe and facing popular protests in the street — popular protests that in a very abstract way resemble those that brought down the Argentine military dictatorship. Argentina, too, has a long and difficult history punctuated by social protests, and it is often said that it was the protests of the parents (mostly the mothers) of the disappeared in Argentina that ultimately brought down the military dictatorship.

Cristina Fernández, and her late husband before her, pursued precisely the populist policies that are those that seemed to be called for by the present “occupy” protesters, and I would not be at all surprised to begin seeing politicians in the northern hemisphere start to take a page from the populist playbook of the Kirchners. If this is what the people want, this is eventually what the people will get.

Notwithstanding the fact that when little Uruguay is exporting more beef than enormous Argentina, with its long tradition of beef production, it is obvious that there are problems with the populist model, that populist policies are popular is something of a tautology. It has been the balancing act of the older industrialized nation-states to concede just as must populism as necessary to placate the electorate while pursuing pragmatic policies while in office that has given these political systems their stability. For both parties to this bargain — the voters and the elected officials — it has always been a compromise. If we compare this unhappy compromise to the happy coincidence of voters and elected officials in Argentina, it is hard to see how any political system can long avoid this alternative model of political stability.

Is the Argentine economy not only too big too fail, but also so large that it can sustain counter-productive policies for its largest industry? Certainly it can sustain counter-productive polices, but for how long? Ten years? Twenty years? Longer? I am sure that a Keynesian would argue, on the wisdom of the idea that in the long run we are all dead, that twenty years of growth purchased at the expense of longer term growth is an acceptable compromise. And in fact it may be.

The argument here is much like that between noise traders and value traders on the stock market. At the end of the day, the noise trader may make more money, so that if you judge success by the amount of money that one person can earn in a lifetime, then you might have to conclude that chasing rumors is more effective than determining the objective value of a financial instrument.

In any case, the people of Argentina seem happy with their choice, and that’s good. I’m eager to return to Argentina at some time, and it is always a rewarding experience to visit a country where the people are satisfied and believe that they are headed in the right direction. As for the shadow of inflation, there’s always the dollar, which is the informal and unofficial second currency throughout the western hemisphere. As long as big ticket items are priced in dollars, inflation can be an incremental problem addressed by compromise, conservation, and substitution.

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Grand Strategy Annex

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One Response to “Cristina Fernández by a Landslide”

  1. MisterEgo said

    Interesting, you don’t watch American outlets and don’t do a lot of other stuff as well… and you are right, Mercedes Marcó del Pont truly has a radiant smile…

    I know extremely few things about Argentina. May I ask what socialist policies exactly make the country a wreck? What would you cut, and what would you leave standing… i.e. what are the worst offenders when it comes to spending… I’m a noob at economics, i have my ideas (pensions) but I want to hear the true reasons…

    Thank you.

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