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Beast of the Month - February 2002
Domingo Cavallo, Disgraced Argentinean Financial Czar
"I yam an anti-Christ..."
John Lydon (aka Johnny Rotten) of The Sex Pistols, "Anarchy in the UK"
Say what you will about the scandalous bankruptcy and swindle scheme known as Enrongate, but at least it merely involves one korporation (albeit the one-time seventh largest in the US.) Imagine the damage of the bankruptcy of an entire nation, one of the largest in the world.
Fortunately, you don't have to imagine it: it's happening right now in Argentina.
The bankruptcy of Argentina culminates an over 3 1/2 year recession which has mired the South American nation. On December 20, 2001, President Fernando de la Rua fled the country via helicopter while the people he officially represented faced brutal riot squads trying to quell a legitimate rebellion. (At least 25 were dead, a thousand injured and 1,500 arrested in the clashes.) Head of the supposedly liberal wing of Argentinean politics (of the amusingly ironic named Radical Party), the technocratic de la Rua continued to let Argentineans eat cake while the economy collapsed, and the end results are pretty clear: mass unemployment (officially at 18.5 percent, although underemployment is alleged to be at 2/3 of the workforce), poverty (15 million of a 36 million population base) and homelessness.
The fate of de la Rua may be better than his predecessor, Carlos Menem. The Peronist Menem, unlike de la Rua, was a charming huckster, who could get away with policies that swindled the lower and middle classes while in office. Now, he is under indictment for the massive corruption that happened under his reign.
It would be easy to lay the blame of what has happened on either de la Rua or Menem, or both. Easy, and not entirely undeserving, but it still wouldn't produce the entire picture of what happened. To get a better view, it would be best to understand they are both merely puppets of Domingo Cavallo, the real economic mastermind of Argentina's collapse and The Konformist Beast of the Month.
Cavallo, a Harvard graduate, has a long history of economic decision power in the land of the gaucho: previously, he had been a central banker under the military dictatorship of the late 70's and early 80's. In 1991 under Menem, he became Foreign Minister and then Economic Minister. It was Cavallo who instituted the neo-liberal policies that plunged Argentina into its current crisis. Ironically enough, he was picked in March 2001 by de la Rua to solve the problem he had created. Needless to say, he failed miserably.
What exactly were the policies that Cavallo instituted? He pegged the Argentinean peso to the dollar, in order to battle hyperinflation - a successful act that had a nasty side effect of plunging the nation's economy. Even worse, he backed the "privatization" schemes so popular by the neo-liberal crowd, policies which steal national resources from the public and give them to mega-corporations. (These are the same policies that led to mass revolt in Bolivia in early 2000, not to mention the California energy swindle by Enron and the BushMob last year.)
Perhaps this is the key to understanding Cavallo: the policies he instituted were not some bizarre aberration, but conventional thinking of the World Bank-IMF set.
Little surprise there: as Nick Mamatas succinctly notes on the Disinformation website: "Not one country has successfully developed thanks to the World Bank's system, and those few Third World countries that have become industrial or trade powers (South Korea, Taiwan, the OPEC states) have done so by doing the exact opposite of what the World Bank prescribes." Zero for fifty-plus years isn't an accident; it is a pattern of a very successful and destructive design.
A design which apparently the entire corrupt establishment of Argentina has bought: it is pretty telling that Cavallo could serve a military dictatorship, a right-wing Peronist outfit and a supposed liberal de la Rua administration without batting an eye - or changing any basic policies.
How will this all end for Argentina? Probably not good. The most telling fact: the first appointed replacement for de la Rua was a Peronist named Adolfo Rodriguez-Saa. Whatever his many faults (and, as a politician, he had many), Rodriguez-Saa was a rarity, a national populist with genuine love for his country and people. Unfortunately for Adolfo, he chose to make policy without properly consulting the US, the IMF or the Argentinean political establishment. He lasted barely a week, as supposed mass protests forced him to resign. His replacement, Eduardo Duhalde, has proposed confiscatory policies of austerity against the middle and working class more popular with the neo-liberal crowd. Somehow, we at The Konformist suspect that Argentineans haven't seen the worst of their crying yet over this mess.
In any case, we salute Domingo Cavallo as Beast of the Month. Congratulations, and keep up the great work, Dom!!!
A16: The World Bank V the World
Let Them Sip Champagne: The Battle of Bolivia
Post Office Box 24825
Los Angeles, California 90024-0825
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