‘They Want South America Back the Way They Used to Have It’

Janine Jackson interviewed Mark Weisbrot about Argentina’s new government for the May 25, 2016, episode of CounterSpin. This is a lightly edited transcript.

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Janine Jackson: Washington Post editorialists, not known for hiding their feelings, heralded Argentina’s election of Mauricio Macri as “a chance to rejoin the Western world” and “a blow to Latin America’s already flagging socialist camp.”

“In a flash, Argentina has become pro-American,” CBS’s 60 Minutes told viewers, and Leslie Stahl shared that watching Macri and his wife play with their daughter, “you can’t help but think of the Kennedys and Camelot.” US corporate media seem to concur: Macri is a pragmatist, and though they aren’t certain he can lift Argentina from what CBS called “a morass of debt, inflation and international isolation,” it’s clear we’re meant to wish him well.

Here with a more sober rendering of things is Mark Weisbrot. He’s co-director of the Center for Economic and Policy Research and the president of Just Foreign Policy. He’s also author of Failed: What the Experts Got Wrong About the Global Economy. He joins us now by phone from Washington, DC. Welcome back to CounterSpin, Mark Weisbrot.

Mark Weisbrot: Thanks for inviting me.

JJ: 60 Minutes says that Obama’s visit to Argentina is a sign that the US has high hopes for Macri and his promise to, as they say, “turn his country around.” The Nestor and then Cristina Kirchner administrations were Peronists, they say, “whose populist economic policies, generous subsidies on things like electricity, high taxes on agricultural exports, burdensome regulations, a bloated bureaucracy and currency controls all in combination crippled the Argentine economy.” So we have this image of Macri, a former businessman who’s going to turn the country around and pull it in a better economic direction.

I wonder what should we know about Argentina’s economic history, that that image that we’re getting right now might not suggest?

MW: Well, first of all, for most of the time that the Kirchners were in power, the economy did very well. In fact, it was remarkably successful. They came in in the depression, or as the economy was actually beginning to recover, 2003, and over that time, the economy grew enormously, by about 60 percent. This is real GDP before the 2008 recession, financial crisis and world recession. And then it continued growing, and overall during their term of office, poverty and extreme poverty were reduced by more than 70 percent. And that’s using independent estimates of inflation, because there’s been a lot of controversy over the government’s estimates. So they did very, very well, and really raised people’s living standards.

New Argentine President Mauricio Macri

Now, the last few years the economy grew more slowly, and you had higher inflation and you had a black market develop, a black market for the dollar since 2011. So I think those are the things that allowed Macri to win, although he campaigned very much like he wasn’t who he is. He campaigned on a more liberal, social democratic platform, and then as soon as he got in there he immediately appointed his cabinet from JPMorgan Chase, from Shell, from other corporations. It’s really become a corporatocracy. And of course he cut the export taxes for the big export corporations, and he will, I think, try to redistribute income upward.

JJ: Well, one of the other early changes or developments that we saw was this tentative agreement with the “vulture funds.” And I wonder if you could explain in layman’s terms what happened there. Folks will remember Argentina’s default. What does this most recent agreement look like it could mean? And explain that vulture fund situation, if you would.

MW: Yes. Well, Argentina defaulted on its debt back in the end of 2002. And they reached a deal with—eventually, it was over 92 percent of their creditors. They took a big haircut on their debt, but the government was paying them. And then a couple years ago, a judge in New York, not a very competent judge either, Judge Griesa, ruled that they couldn’t pay the holders of their restructured debt unless they paid these vulture funds, that is, the people who bought the debt at a very low price after the default, and held it, and went and sued them for the full value of the debt. This was a very unusual and unprecedented decision.

And it was interesting, because even the IMF opposed it. And they were going to file a brief on behalf of Argentina, even though they didn’t like the government of Argentina at all, just because this decision was so destabilizing to the whole international financial system, to say that a country that basically is bankrupt and can’t pay its debt and reaches an agreement with their creditors, that this agreement can’t hold up. That would be terrible for the whole international financial system.

And then somebody in the US political system basically got the US Treasury Department to make the IMF reverse itself. So that showed that there was real opposition here from Congress and from others. And basically the judge succeeded in taking 92 percent of the creditors hostage to force Argentina to pay the vulture funds.

And so that’s what they just did, the new government did. Now, I can’t really fault them for making that deal. Because I think if the other side had been elected, the Peronists, they would have made that deal too. Because, basically, they were shut out of international financial markets. And that’s also part of what’s missing from this story that you summarized from the media. They don’t tell you that it wasn’t terrible economic mistakes by the government, primarily, that led them into some financial trouble over the last couple years. It was really just the international efforts, coming from the United States and the US judicial system especially, that forced Argentina to submit to this kind of blackmail.

JJ: In a story that was headlined “In Argentina, Obama Will Cheer on South America’s Shift Away From the Left,” the Washington Post talks about, again referring to the Kirchners, talks about leftist populists who “thrived on opposition to the United States.” CBS talks about the Kirchners allying themselves with official enemies, like Iran and Cuba and of course Venezuela, which the Washington Post editorial cites as “ground zero for the self-defeating autocratic populism that infected Latin America in the 2000s.”

I think corporate media really intend us to assume that pro-American means good, and not rhetorically but really, actually, that for a country to have a good relationship with the US, which means doing whatever the US says you should, that that actually is what’s best for a country or a region. And it really, entirely skews foreign policy coverage. It’s almost hard to make sense of things that talk so openly about “they’re pro-American, they’re anti-American.” I mean, what do you make of that? And is their wishful thinking coming true in Argentina? Is it really likely to skew the whole hemisphere in a different direction?

Mark Weisbrot: “They’ve been trying to get rid of all the left governments, really, for the whole 21st century.”

MW: Well, see, this I think is the most Orwellian and distorted part of the US coverage. Because they’re not saying—first of all, these governments were all extremely successful until quite recently, you know, in the last couple years, but they had a long run. The Workers Party in Brazil reduced poverty by 55 percent. You have Venezuela, Bolivia, Ecuador, Uruguay—they were all successful in this long period in the 2000s.

And, yeah, they were so-called anti-American; they weren’t against this country, but they were against US intervention, and that’s the part that they really leave out. I mean, even in Argentina, the US was blocking loans to Argentina in the Inter-American Development Bank, and trying to do it in the World Bank as well. And then as soon as the right-wing government came in, they changed their position and now are supporting that. And Obama’s trip there is to support this government.

So they’ve taken sides, they took sides against all the left governments, and they supported military coups in Venezuela, in Honduras, kind of a parliamentary coup in Paraguay. So they’ve been trying to get rid of all the left governments, really, for the whole 21st century, when they all came in, and they’re still trying to do that. And, yeah, they’re going to be on the offensive now, and the media is joining that offensive. Because they see weakness in Venezuela, since the parliamentary election last year. They see weakness in Brazil as the government is under siege. And they’re going to be supporting every effort to get rid of every left government, and now they finally have a right-wing government in Argentina. So they’re going for the whole thing; they want the whole South America back the way they used to have it.

JJ: We’ve been speaking with Mark Weisbrot, author most recently of Failed: What the Experts Got Wrong About the Global Economy. Find the Center for Economic and Policy Research on line at CEPR.net. Mark Weisbrot, thank you so much for joining us this week on CounterSpin.

MW: Thank you.