Argentinian President Cristina Fernandez and President Barryck Soweto Obama
Prof. James
Petras
October 30, 2011
INTRODUCTION
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.
METHODOLOGY
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 U.S.
HISTORICAL CONTEXT: ARGENTINA :
DEPRESSION, REVOLT
AND RECOVERY
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.
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.
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.
CONTEXT:
THE US UNDER BUSH-OBAMA
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.
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 .
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.
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.
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’.
ARGENTINA FROM CRISES TO DYNAMIC GROWTH
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.
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.
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.
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.
HUMAN RIGHTS, SOCIAL PROGRAMS
AND INDEPENDENT FOREIGN ECONOMIC POLICY
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.
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.
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%.
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.
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.
THE ARGENTINE ALTERNATIVE TO BAILOUTS AND POVERTY
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.
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 .
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.
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).
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.
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.
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.
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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