The United States of Argentina

From the American Conservative magazine comes this cautionary tale of woe:

Anyone not alarmed by the state of the U.S. economy is not paying attention. As our Dear Leader begins his term, the theory of very big government has the support of an alarmingly broad political consensus. Despite the obvious dangers—devastating inflation and the ruin of the dollar—the United States seems pledged to a debt-funded spending spree of gargantuan proportions.

In opposing this trend, critics face the problem that the perils to which they point sound very theoretical and abstract. Perhaps Zimbabwe prints its currency in multi-trillion units, but that’s a singularly backward African dictatorship: the situation has nothing to do with us. Yet an example closer to home might be more instructive. Unlike Zimbabwe, this story involves a flourishing Western country with a large middle class that nevertheless managed to spend its way into banana-republic status by means very similar to those now being proposed in Washington.

The country in question is Argentina, and even mentioning the name might initially make any comparison seem tenuous. The United States is a superpower with a huge economy. Argentina is a political and economic joke, a global weakling legendary for endemic economic crises. Between them and us, surely, a great gulf is fixed. Yet Argentina did not always have its present meager status, nor did its poverty result from some inherent Latin American affinity for crisis and corruption. A century ago, Argentina was one of the world’s emerging powers, seemingly destined to outpace all but the greatest imperial states. Today it is … Argentina. A national decline on that scale did not just happen: it was the result of decades of struggle and systematic endeavor, led by the nation’s elite. As the nation’s greatest writer, Jorge Luis Borges, once remarked, only generations of statesmanship could have prevented Argentina from becoming a world power.
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The country was killed by political decisions, and the primary culprit was Juan Perón. He dominated political life through the 1940s and ruled officially as president from 1946 to 1955, returning briefly in the 1970s. Although he did not begin the process, he completed the transformation of Argentine government so that the state became both an object of plunder and an instrument for plunder.

Perón came from a fascist and corporatist mindset, which became more aggressively populist under the influence of his second wife Eva. They aimed their rhetoric against the nation’s rich, a designation that was swiftly expanded to cover most of the propertied middle classes, who became an enemy to be defeated and humiliated. To equalize the supposed struggle between the rich and the dispossessed, the Peróns exalted the liberating role of the state. The bureaucracy swelled alarmingly as nationalization brought key sectors of the economy under official control. Government bought loyalty through a massive program of social spending while fostering the growth of labor unions, which became intimate allies of the governing party. Argentina came to be the most unionized nation in Latin America. Perón also ended any pretense of the independence of the judiciary, purging and intimidating judges about whom he had any doubts and replacing them with minions. [emphasis added]

The Peronist model—a New Deal on steroids—evolved into an effective clientelism, in which party overlords and labor bosses ruled through a mixture of corruption and violence. Clientelism, in effect, means the annexation of state resources for the benefit of political parties and private networks. Right now, both the word and the concept are not terribly familiar to Americans, but this is one Latin American export that they may soon need to get used to. ...

Article here. The road to socialism, like the road to hell, is paved with good intentions. Go read the whole thing.

Perspective: Argentina's economic collapse

Here are a couple of "food for thought" articles on dealing with major economic disruptions and their aftermath. The posts deal with life in Argentina, once the richest and most prosperous nation in South America, after that nation's 2001/2002 economic collapse.

From the Washington Post, August 2002: Despair in Once-Proud Argentina

The desolation of that day, neighbor vs. neighbor over hunks of meat, suggested how profoundly the collapse has altered Argentina. Traditionally proud, Argentines have begun to despair. Talk today is of vanished dignity, of a nation diminished in ways not previously imaginable.

Argentines have a legacy of chaos and division. In search of their "workers' paradise," Juan and Eva Peron declared war on the rich. During the "dirty war" of the 1970s, military rulers arrested tens of thousands of people, 15,000 of whom never resurfaced. And when then-President Carlos Menem touted New Capitalism in the 1990s, the rich got richer -- many illegally -- while the poor got poorer.

Yet some things here never really changed. Until last year, Argentines were part of the richest, best-educated and most cultured nation in Latin America. Luciano Pavarotti still performed at the Teatro Colon. Buenos Aires cafe society thrived, with intellectuals debating passages from Jorge Luis Borges over croissants and espresso. The poor here lived with more dignity than their equals anywhere else in the region. Argentina was, as the Argentines liked to say, very civilized.

Not anymore.

Argentines have watched, horrified, as the meltdown dissolved more than their pocketbooks. Even the rich have been affected in their own way. The tragedy has struck hardest, however, among the middle class, the urban poor and the dirt farmers. Their parts of this once-proud society appear to have collapsed -- a cave-in so complete as to leave Argentines inhabiting a barely recognizable landscape.

Worth a read, if only to see what economic collapse has wrought on what was once South America's wealthiest nation.

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Here are a couple of videos, parts 1 and 2 from a series of 12 on the 2001 Argentine economic collapse:





The rest of the series can be viewed on YouTube (search for "Argentina economic collapse") if you're interested.

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Another article, author unknown: What an Economic Collapse Looks Like: How to be a survivalist in an economic decline

Here's a blog, Surviving in Argentina, purportedly written by someone currently living there. The author's posts do have a ring of authenticity to them, so I am inclined to give his views weight as to the situation in Argentina. Read a couple of his posts (excuse the occasional incorrect grammar -- his English is far better than my Spanish, for sure!) here, here, and here.

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Back around 2003 or so I did some defensive firearms training, and one of the students was a fellow from Argentina, who painted a pretty bleak picture of the Argentinean economy and the adverse effects on the entire social structure, at all levels. He talked about the rising crime in his country, and the importance of having defensive tools and the skills to use them. You could tell he thought the stuff he was learning would have real-world application when he got back home to Argentina.

As we here in the US embark on an era of potentially multi-trillion (that's trillion with a "T") dollar deficits, with a total public debt already in the $10.6 trillion dollar range ($6.3 trillion in debt held by the public, and $4.3 trillion in intragovernmental holdings, as of Jan 15th, 2009), the possibility of once unthinkable economic collapse begins to seem less remote, and more than idle speculation to more and more Americans. And this in America, a nation whose poor are the envy of some nations' upper middle classes. The social dislocation of such a collapse, should it occur, would likely be great indeed, in part because so many Americans are woefully unprepared for even modest (by comparison) and localized events, such as floods, hurricanes, and the like.