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Learning From Argentina: How Not To Deepen The Global Crisis

October 30th, 2008 | 05:23 PM

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By Michael Casey

Argentines, who are visited by financial meltdown more or less every 10 years, have been joking lately about a new business opportunity: crisis survival classes for Americans.

Yet Argentina’s spiral into yet another home-grown crisis this week reminds us that the most important lesson it offers for confronting the bigger one in the rest of the world deals with how not to commit its errors. The prospects for a sustained U.S. and global recovery will be undermined if the socio-political malaise at the heart of this country’s repeated failures is allowed to take root.

Resource-blessed Argentina cannot blame misfortune for its slide from having ranked as the seventh-richest nation at the outset of the last century to 70th at the start of this one. Nor can it fault a particular policy bias – neither leftist nor conservative regimes have a monopoly on crises. Rather, Argentina’s curse stems from the lack of a basic covenant between its people and their government.

As a friend in Buenos Aires once explained, “We do not view the state in the way that Americans or Europeans do – as a moral representation of society – we see the state as a mafia from which we must protect ourselves.”

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Election Night Party In Palermo

October 29th, 2008 | 06:26 PM

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Looking for a place to watch and celebrate the most important U.S. election in modern history? Look no more. Click on the photo above for more details, maps, etc. Yanqui Mike has even promised, once again, to buy you a drink – at least “until he goes broke.”

Where: The Sacramento
When: November 4, 9pm
Who: Anyone interested in the election

Link: Election Night Party Details

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Johnny Grabbed The Skillet

October 29th, 2008 | 06:01 PM

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By Antonia Cossio

It’s 8pm and I can tell what time is it by the echoes of ringing pots and pans. This aluminum symphony goes in crescendo, from the kitchens in my neighborhood to the streets. It started off quietly, just one invisible protester, pan in hand, making some noise, wanting to be heard. Now, a few more have joined him, or her, but just a few.

All this thanks to a new decision by President Cristina Fernández that some of my neighbors don’t like. Lately, it seems like some people have a natural reaction to any speech that doesn’t meet their expectations. It goes like this:

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Argentina’s New Economic Reality

October 26th, 2008 | 08:19 PM

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On September 16th, in a speech at a high school in La Plata, Argentine President Cristina Fernández stood at the podium and indicated, in two long-winded but typical run-on sentences, that Argentina would stand athwart the global financial firestorm.

“I think we Argentines are in a moment of profound introspection, watching as that world, the developed world, which had been made out to be a kind of Mecca to which we should strive, is falling apart like a bubble. And here we are, modest and humble, as Argentines, with our national plans, trying to build things on our own, with the accumulation of our (Central Bank) reserves, with the construction of our industrial model, with the accumulation of jobs, of education, here we are, in the middle of the storm, standing firm, like this high school, rebuilt, and ready to continue facing, as always, the present and the future.”

Hidden not-so-subtly in that statement is a tacit jab at the U.S. and the global financial crisis that is unraveling before our eyes. As is often the case with Fernández, her jabs are implicit. But sometimes she is more blunt, as was the case in another speech given nine days later at the Council of the Americas in New York. There, Fernández was asked if her government had a “Plan B”, or a backup strategy, to lead Argentina’s economy forward if the crisis started affecting Argentina. Her response:

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Online Survey: Would You Recommend Argentina?

October 24th, 2008 | 08:09 PM

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BA Province Bans Smoking

October 23rd, 2008 | 09:41 PM

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The Buenos Aires Province Legislature on Thursday passed a bill that bans smoking in many closed-door public places. It was not immediately clear when the ban will take effect. The ban makes an exception for casinos and bingo facilities, and lets restaurants and other spaces have a special area for smokers.

About half a dozen provinces have passed similar bans. The City of Buenos Aires banned smoking in October 2006 and, against all expectations, it has upheld the ban exceptionally well.

According to this article, around 30% of Argentines start smoking by the age of 11. That seems hard to believe, but a World Health Organization survey indicates that about 25% of Argentines aged 13-15 smoke. All told, some 35% of Argentine men and 25% of Argentine smoke.

The average pack of cigarettes in Argentina, according to the WHO, costs about $1.11. WHO research indicates that reducing cigarette usage is all about pricing:

“Raising taxes, and therefore prices, is the most effective way to reduce tobacco use, and especially to discourage young people from using tobacco. It also helps convince tobacco users to quit. A 70% increase in the price of tobacco could prevent up to a quarter of all tobacco-related deaths worldwide. A 10% price increase may cause a 4% drop in tobacco consumption in high-income countries and an 8% drop in low- and middle-income countries, with tobacco tax revenue increasing despite reduced consumption.”

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Tommy Lee Jones To Open Mar del Plata Film Fest

October 22nd, 2008 | 05:53 PM

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Actor Tommy Lee Jones will open the Mar del Plata Film Festival next month, the state news agency Telam reported Wednesday. Jones, who once shared a Harvard college dorm room with former U.S. Vice President Al Gore, will help the coastal city open the festival on November 6.  While there, he will show his 2005 flick “The Three Burials of Melquiades Estrada.”

Past celebrity guests at the festival, which runs through November 16, have included Tim Robbins, Susan Sarandon, Jeremy Irons, Gerard Depardieu, and a brilliant young friend of The Argentine Post who shall remain unnamed. (You know who you are, brother.)

Link: Mardel Film Festival
Link: Mardel Film Festival (a second site, take your pick)

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Pension Fund Plan Underscores Radical Policy Shifts

October 21st, 2008 | 10:26 PM

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Argentine President Cristina Fernandez on Tuesday announced a radical reform of the country’s 14-year-old private sector pension system. Though I was at the press conference, I can’t link to the story I did here, but the Wall Street Journal’s Matt Moffett has a good overview here. The NY Times has another here, and Bloomberg another here

Matt’s first graph summarizes the situation:

“Hemmed in by the global financial and commodities bust, Argentina’s leftist government may have found a novel way to scrape up the money to stay afloat: cracking open the piggybank of the country’s private pension system.”

Regardless of one’s take on the wisdom of the government’s decision, it is a pristine example of how public policies in Argentina can change dramatically from one government to the next. Instead of successive governments building on and refining the policies of their predecessors (as is done in Brazil and Chile), Argentine governments typically reverse them entirely.

In recent decades this seems to have made Argentine public policy somewhat analogous to an old car that stops and starts in the middle of traffic. Just as it gets going, for good or bad, a different government comes along and stops the car, saying that the entire engine needs to be replaced.

This stop-and-go progression can be seen in the following graph, which comes from a presentation by former Argentine Central Bank President Mario Blejer.

Even though it’s five or six years old, the presentation, which is titled “Argentina: A Case of Extreme Volatility” and written in English, is worth checking out because it underscores the impact that extreme policy changes appear to have on the regularity of economic growth.

All economies experience natural cycles of growth and recession, but Argentina is unique. It tends to leap voraciously toward one extreme or the other, discarding subtle diversions from the median as if they were antithetical to human decency. The following graph, also from Blejer’s presentation, compares Argentina’s cycles with those of Australia, the UK and the U.S.

In the 32-year period between 1971 and 2002, Argentina’s gross domestic product fell in 15 of those years. In 10 of those recessions, GDP fell by more than 4% annually. And in 12 of the 17 growth years, GDP expanded by more than 5% annually.

Argentina appears to have taken literally the biblical admonition about being either hot or cold but never lukewarm.

“The average annual GDP growth rate for the period 1971-2002 was 1.3%, i.e., zero growth in per-capita terms,” Blejer says. After tanking about 11% in 2002, Argentina’s GDP has grown an average of 8.8% annually since then, making it one of the fastest-growing economies in the world. 

What will happen next year?

Link: Mario Blejer’s Presentation

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Argentina Through Nietzschean Eyes

October 21st, 2008 | 08:08 PM

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For many of us, the end of college is the end of continuous, daily intellectual stimulation. We graduate, join the workforce, grow accustomed to our jobs, get married, have kids, or not, and settle into a quotidian routine that no longer challenges us to think in ways that build new neural pathways. In some ways, our creative capacity, and the related ability to think critically, atrophy amid the lack of constant, vigorous stimulation.

Without fresh cerebral challenges that force us to question our assumptions, we settle into a groove that, while not inherently bad, is somewhat anemic. Too much of this leads to boredom, and there is even some research indicating that intellectual stagnation can lead to depression and reduced life expectancy.

All of which would seem entirely irrelevant to us here were it not for an interesting Argentine antidote to the problem: Alejandro Rozitchner. A friend of this blog, indeed in some ways its partial progenitor, Alejandro is a unique Argentine intellect. He is controversial, pugnacious, razor sharp, creative and funny. He is also a teacher, but not the kind you typically find in an academic environment.

One of his favorite subjects is the German philosopher Friedrich Nietzsche (1844–1900). Alejandro is offering a four-session class on Nietzsche beginning next week in Palermo. If the class is anything like one I took a while back, it will provide insight not only into Nietzsche and his thinking, but also into Argentina. As such, it should also be a perfect way to challenge your assumptions about the world in general and about Argentina in particular.

Prerequisite: Fluency in Spanish

Place: Teatrito del Bar El Taller, Plaza Serrano
Days: October 23th, 30th, November 6 & 13th
Time: de 8-9:45pm
Cost: 250 Pesos

Info: Ask for Shona at 4831-1588 or write to: cursos@bienvenidosami.com.ar

Link: Nietzsche Course

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Have Your Own Pizza Party, Argentine Style

October 18th, 2008 | 06:59 PM

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Pizza Catering

José Sarmiento Loading A Pizza

Have you ever wanted to host a party but didn’t want to cook and clean up afterwards? If so, now you’ve got the perfect solution: In-home pizza catering. 

For the second time since May, I have experienced the joy of having a party fully catered by a capable crew of thin-crust pizza chefs. On Saturday, my wife’s grandma turned 88, so we had a 75-person party to help her celebrate. We had it catered by La Marosca Catering. 

The company is run by Gastón Espinet and José Sarmiento, two youthful Argentines. They came with a crew of seven buddies, all English-speaking college students, who cooked up a dozen varieties of perfect pizzas, all delivered flawlessly to a hungry crowd.

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Video Intro To The Argentine Post

October 18th, 2008 | 04:31 PM

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Please enable Javascript and Flash to view this Blip.tv video.

This is a little three-minute video explaining some of The Argentine Post's new features. It has some gaffes and “Bushims” but it's still intelligible.

At any rate, I'll be adding new features soon, so let me know if there&

#039;s anything else you'd like to see here. If your Internet connection moves like a sloth, click pause and let the video load before watching it. For much better resolution, you can watch the video in full-screen mode by clicking the TV player icon inside the video player.

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Buenos Aires Jazz Festival Starts Today

October 15th, 2008 | 06:12 AM

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A week-long jazz festival starts today in Buenos Aires

. The festival includes all kinds of local and international artists as well as indoor and outdoor shows. For information about performers, show times, tickets, locations, etc., in English, click here.

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