In a nation that still measures democracy in decades, the period between Easter and May Day evokes memories of food riots and coup attempts triggered by runaway inflation. But when Argentina chose Nestor and Cristina Kirchner to play Juan and Evita in the nation's never ending political drama, the land of the tango finally revealed its love affair with the yankee dollar.
It's election season in Argentina, and in spite of strikes slowing the oil industry and 100,000 Peronist workers marching down Avenida 9 de Julio to protest low wages, consumer spending is healthy enough for Goldman-Sachs to predict that annual growth this year will be higher than the 6 percent central bank estimate. Official inflation ran at 9.7 percent in March but many private sector analysts argue that the government is grossly understating that figure to assuage the international financial community over a peso that is being weakened by inflation.
Fears of recurring inflation remain so deeply embedded in the national psyche that Argentines line up daily at local cambista shops to change pesos to dollars. The agro-export business that helps drive the economy is done in dollars. And billions in flight capital that leave Argentina find happy homes in Manhattan banks.
In 2009 nearly $40 billion vanished from the Argentine economy, more than twice the amount of the 2008 goods and services trade that moved between the US and Argentina.
Argentina started dancing for dollars big time four decades ago when Juan Peron and his new wife, Isabel (an ex-night club dancer), returned from exile in fascist Spain. Their coterie included Jose Lopez Rega, known as El Brujo (the warlock). Linked in to the Propaganda Due loggia, El Brujo sought solace in the stars instead of the stats; his policies as Peron's top adviser launched an era of astronomical inflation, the Dirty War, and helped trigger the first Latin debt crisis. With the Peronist government able to freeze savings and other assets by decree, anyone who could afford to buy a few dollars and stash them under the mattress did so. They still do.
As sometimes happens during election season, flight capital returned home to support Nestor's victorious 2002 bid. The power couple from Patagonia then put a new spin on Peronist politics. They engaged young upscale voters who see the world beyond the entitlements provided to dedicated followers of justicialismo (the official name of Peron's party, an Argentine-Spanish acronym for social justice). The old Peronist concept of the mobilized community morphed into a more inclusive movement and the nation marched forward under the banner of Kirchnerismo.
But in Argentina, like Brazil, the collectivisms of the right and the left have been slowed by the strong headwinds of globalism. Instead of a dirty war, Argentina is fighting a war against food price inflation, a war on drugs and syndicalists, and free market technocrats are battling over the spoils as big government sells assets into a dollarized economy.
Cristina fell back on the old school Peronist tactic of dipping into central bank resources to drive the economy, creating new inflation and more flight to the dollar. Agribusiness and local oligarchy recoiled and after a contentious debate, Argentina's political class came down on the side of globalism and Kirchnerismo lost its luster. Nestor, president Cristina´s closet adviser passed away last year.
If inflation-fighting wasn't enough, Cristina-bashing by the nation's largest daily, Clarin, reopened old dirty war wounds linked to kidnappings of members of the Graiver family to pressure them to sell off the nation's newsprint industry. Clarin coverage also discussed the disappearance of prominent Peronist party fundraiser, Dudy Graiver. Dudy had served as an adviser to the junta government of general Alejandro Lanusse, and financed publications edited by Jacobo Timerman. However, some charge that Dudy was playing a double game, moving money for left wing Peronists while being helpful to those on the Peronist right. He became a powerful international banker active in global flight capital operations and had a close relationship with New York attorney Theodore Kheel, and white shoe law firm Rogers&Wells. The politically influential Graiver family continues to issue conflicting statements on these events.
Business publications, including the Economist charged that Argentina is understating inflation and poverty rates. Le Monde Diplomatique questioned the sustainability of syndicalist politics. Neoconservative public diplomacy assets continue to associate Cristina with Washington's favorite rogue nations, Venezuela, Syria and Iran.
But the same globalist media who bully Argentina watched from the sidelines as bankers and business leaders ignored the warning signs that led to the current crisis.
Advised by a solid team, including foreign minister Hector Timerman, a dedicated Peronist and former ambassador to Washington with close ties to the New York financial community,and Amado Boudou, the economy minister who wraps his Chicago school economics in an Argentine empanada, Cristina has moved her image to the political center to attract dollar investors. New evidence of Cristina's globalist tilt came on the heels of Friday's big populist rally along the Avenida 9 de Julio. Cristina named the scion of one of Argentina's most influential and internationally connected companies to head YPF, the powerful state oil company.
Now, as candidates jockey for position in October's presidential elections, her main competition seems to be Ricardo Alfonsin of the opposing Radical Civic Union (UCR). Ricardo is the son of former president Raul Alfonsin who led the nation's transition from dictatorship to democracy, only to be forced out of office early by bloody food riots, some of which were orchestrated by Peronist labor thugs. Polls by influential Buenos Aires daily Pagina 12 continue to indicate that, for now, Cristina remains the odds on favorite to win reelection.