Bruce, At 17:54 25/06/02 -0500, you wrote: >Keith, > >You have out-done yourself! Argentina did exactly what the IMF told >them to do: privatize, cut back public services and increase trade. >That's why they went belly up! > >Bruce Leier
I don't know why I am supposed to be in favour of the IMF or to endorse their remedies. The IMF was instituted as a back-up to those countries which got into difficulty when trading according to the fixed (that is, artificial) exchange rates of Bretton Woods. Since fixed rates vapourised in the 70s, the IMF has no constitutional basis and has been acting ultra vires ever since. The fact that I am generally in favour of minimising public spending and maximising free trade doesn't give me or anybody else the ability to give sensible advice to a country, such as Argentina, which has been unfortunate enough to have had corrupt governments for over a century. Nobody can help Argentina except itself. It has more than a few able economists who could draw up a sensible strategy if they were asked to by its politicians or electorate. Until then, why should any government or bank pour yet more money (partly your money, too, if coming from the IMF) down a black hole -- as they have been doing ever since Argentina's first big international loan (and consequent first default) in the 1850s? Keith Hudson > >> -----Original Message----- >> From: [EMAIL PROTECTED] [mailto:owner- >> [EMAIL PROTECTED]] On Behalf Of Keith Hudson >> Sent: Monday, June 24, 2002 2:06 AM >> To: [EMAIL PROTECTED] >> Subject: Cry for Argentina >> >> Terribly sad report on BBC Radio 4 this morning. Argentina, which was >the >> fourth most prosperous country in the world and the bread basket of >Europe >> only a century ago, is now sinking to levels associated with the most >> impoverished countries in the world, such as Bangladesh and Nepal. >Millions >> of people are now surviving only by begging, making compost or by >sorting >> and re-selling household rubbish thrown out by the minority of those >who >> still have jobs. >> >> What happened in the course of the last century is that Argentina's >> dictators learned how to make themselves popular in difficult times by >> giving out large welfare benefits to the public instead of allowing >their >> economy to operate in the normal way. In order to do this, the >politicians >> had to borrow repeatedly from banks and other governments -- though >> reneging on the loans when due. The result today is that no government >will >> lend Argentina's politicians any more money (that is, via the IMF -- >which >> doesn't have money of its own) unless there's evidence that they will >> follow normal economic rules, among which would be a sincere intention >to >> repay. >> >> Some nine or ten months ago, we had a poignant message on FW from >Carmen, a >> young Argentinian economist who was desperate to know what she and her >> young colleagues could do. My advice at the time was that she would >have no >> chance of influencing events because an inappropriate welfare culture >was >> still too deeply embedded in the older generation and that this would >> firstly have to die out over the next twenty or thirty years before >common >> sense could prevail. I suggested that she would be well advised to >> emigrate. We haven't heard from her since then and I hope she's all >right. >> >> Keith Hudson ---------------------------------------------------------------------------- ------------ Keith Hudson, General Editor, Handlo Music, http://www.handlo.com 6 Upper Camden Place, Bath BA1 5HX, England Tel: +44 1225 312622; Fax: +44 1225 447727; mailto:[EMAIL PROTECTED] ________________________________________________________________________
