Moratorium and sky-high inflation: Macri’s ‘laissez-faire kablooey’ in Argentine

Achille Lollo 08/10/2019
On August 23, just two months before the presidential elections, Argentine’s Minister of Finance Hernán Lacunza and President of the Argentine Central Bank Guido Sandleris informed the IMF and the creditor banks that President Macri was requesting a moratorium, suspending all payments set for the next six months.

Tradotto da John Catalinotto

Editato da Fausto Giudice

Then, on September 5, the political framework of [laissez-faire began to crumble when the Consumer Price Index (CPI) revealed that infation rose to 54.4 percent over the last 12 months!

As a result, the neoliberal kablooey of President Mauricio Macri, took place on September 25, when the INDEC (National Institute of Statistics and Censuses) declared that in the four years of neoliberal government − that is, from December 10, 2015 until September 15, 2019 –, inflation has always been out of control, adding in these four years a frightening increase, equal to 230%. That is to say, an annual average inflation of 37%!
This revelation has left most Argentineans astonished, as they have only now discovered that the “wonderful economic free-market program of the Macri government, praised by Trump and the cream of Wall Street,” has actually turned out to be “a trap,” i.e., a bankrupt program, which has increased, disproportionately, divestment, unemployment and above all, inflation. In fact, many aspects of the Argentine economic crisis have caused a rapid decline in the quality of life and, above all, have reduced the efficiency of public services, bringing Argentina back in time. For these reasons, the Macri government’s regressive social policies and its inability to correct the effects of the economic crisis has made the so-called “laissez-faire kablooey” increasingly evident. A situation that contrasts with that of the government of Cristina Fernandez Kirchner who, in 2015, according to INDEC and the World Bank, had recorded a very low unemployment rate (4.4%) and inflation around 20%.
It is clear that the declaration of a moratorium, the explosion of inflation and the very poor living conditions of the workers and most of the middle class should have put an end to Mauricio Macri’s dream of re-election. I used the conditional “should” because Argentina’s contradictory electoral history can have some bitter surprises − as happened in 2015, when Sergio Massa − an important ally of the Frente de Todos − left the coalition created by Cristina Fernandez Kirchner to compete as an independent. This decision resulted in Macri’s victory.
The second surprise may come from the definition of the behaviors of the main sectors of the totally de-politicized middle class, who are always ready to follow the buzzwords of the media. In particular, the numerous middle class of the capital, Buenos Aires, have always been willing to allow themselves to be manipulated by the Clarín group (newspapers, magazines, radio and TV-Canal Trece) and those of the two competing TVs, the Telefe of the multinational Viacom and the Time-Warner of the U.S.-based group Turner-HBO.
In fact, despite the dramatic economic and social situation, most of the media continue to justify Macri and his government’s actions and, following this logic, they propose to voters the contradictory concepts of neo-liberal economic policy and dependence on the United States. Unfortunately, in the first round of the presidential elections, a large part of the middle class listened to the “voice of the master” and voted for Mauricio Macri, who in this way obtained 32.5% of the votes.
This result reopens the discourse on the political complexity of Argentine society and the positions of the different sectors of the middle class. In fact, in the last four years, the clumsy economic and monetarist reform plans of Minister Hernán Lacunza have made the middle class suffer, but that class has remained clinging to the obtuse ideological position of historic anti-Peronism. That’s just because the Frente de Todos of Cristina Fernández Kirchner is tied closely to the workers and trade unions, representing a new Argentine centre-left, progressive and willing to dialogue with the left. These elements the media explore “ad hoc” to promote and feed a genuine “class hatred” of the poor, which in recent years has seen significant growth not only in Argentina, but also in Brazil and Venezuela.
The various reasons of the ‘kablooey’
Today, critics of the Macri government’s economic programme, linked neither to the Peronist opposition nor to the left, argue that the mistakes made by Macri and his government aren’t political errors, but, rather, technical errors of a financial nature, attributable to those ministers who were later replaced in 2018. This justification that has become central to the arguments of the columnists of Clarín, Canal Trece and Telefe, to whom the opposition responds by recalling that Macri had made the electorate dream by promising to lower inflation from 20% to 8% and even to eradicate poverty!
However, the main element of Macri’s “Political Kablooey” was the continuous price increases, in June and July, of all food products, especially the most popular ones, such as milk, vegetables, bread, etc.. Products that in August added up to 58.6%. As a result, on August 11, in the primaries of the presidential elections, the Peronist Alberto Fernández, candidate of the coalition Frente de Todos (Front with All) triumphed with 47.66% .
The victory of Alberto Fernández and the return of Cristina Fernández Kirchner to the Casa Rosada as vice president has infuriated the “master race” that, in this first round, has been beaten at the national level, affecting the election of various governors and many deputies. However, the victory of the Frente de Todos, was significant especially in the Autonomous District of the capital Buenos Aires that for years was governed by Macri, as it represented the winning formula of the neoliberal program.
It should be noted that President Macri’s political image and credibility deteriorated when he called for a moratorium announcing “non-payment” during the next six months. The moratorium that reminded Argentines, rich and poor, of the dramatic months of 2001, when the first signs of imminent default, namely bankruptcy, were clearly visible. A correlation of situations that in September caused the explosion of the parallel dollar exchange rate and logically its “export” to the off-shore banks of Uruguay and Paraguay.
The “left-wing misleaders” − that is, those who, according to the holy men of the Italian mass media, use the languages of 1968 − claim that most of the 57 billion dollars have been used to finance the interests and greed of the “master race,” just as it happened in the past during the dictatorial governments and then with the neoliberal ones. This thesis indirectly finds support in the words of the president of the Central Bank of Argentina, Guido Sandleris, who calls into question the “…lack of competence and therefore an imprudent use of international currency reserves …”. So, again in the words of 1968, it means that the Macri clan has appropriated a large part of the 57 billion dollars lent by the IMF as, in the past, did the various Menems, Galtieri, Viola, Videla, Ongania, Lanusse [Argentine presidents and dictators], not to mention El Brujo (The Sorcerer), that is, José López Rega, the faithful secretary of Peron and minister of Isabelita, who with the funds of the Argentine Treasury financed the Triple A [reactionary and paramilitary organizations], with which, in Argentina, began the drama of the “dirty war” and “the disappeared.”
Frente de Todos
Few remember, and the holy men of the “big press” avoid recalling what happened in 2015 in Argentina and Brazil, when the State Department and the CIA during the Democrat Barack Obama’s administration, obtained two important political victories, thanks to some legal machinations. In fact, in Brazil, the false impeachment developed to depose President Dilma Roussef, put an end to PT governments and take Lula to prison with an outrageous conviction for corruption.
Instead, in Argentina, the agents of the State Department and the CIA antennas “advised” federal judge Claudio Bonadio to conduct six trials against President Cristina Fernández Kirchner, just in the last six months of her term. In this way it was quite easy to destabilize the electoral campaign by attacking the political image of Cristina Fernández Kirchner, founder of the Frente de Todos, and then divide the electorate. The mass media orchestrated this manipulation of public opinion, underlining how the Clarín publishing group played a decisive role in Macri’s victory.
Today the Frente de Todos − after the media mishaps and also the mistakes made in the 2015 election campaign − presents itself as a much more open and pragmatic coalition, which brings together all the Peronist currents of the Justicialist Party, Sergio Massa’s Frente Renovador, the radical sectors that following Leopoldo Moreau formed the Movimiento Nacional Alfonsinista, and then the Partido de la Concertación of Gustavo Lopez, the Proyecto Sur of Pino Solanas, the Partido Socialista de Buenos Aires directed by Jorge Rivas, the Partido Solidario of Carlos Helles, the Nuevo Encuentro created by Martin Sabbatella and other minor groups linked to the popular movement.
The two large trade unions, the CGT (Confederación General del Trabajo − General Confederation of Labour) and the CTA (Central de Trabajadores de la Argentina − Argentine Workers’ Central Union), which represent 70% of the Argentine trade union movement, are the great allies of the Frente de Todos − which, in this way, presents itself to the voters in a unitary form as the new Argentine centre-left.
So if this centre-left coalition remains united and if it avoids the mistakes of 2015, the victory of Alberto Fernández and Cristina Kirchner will contribute, enormously, to loosen the geo-strategic noose that the United States, or rather U.S. imperialism, has managed to impose on the sovereignty of Argentina and many other Latin American countries.