Thursday, May 10, 2012

The Secret of Their Success

The countries that are doing very well in Europe are the Scandinavian countries....they all have strong social protection and they are all growing. The argument that the response to the current crisis has to be a lessening of social protection is really an argument by the one percent to say: “We have to grab a bigger share of the pie.” – Joseph Stiglitz, Nobel Prize winner and former chief economist of the World Bank

Since Argentina defaulted on $95 billion of international debt nine years ago and blew off the International Monetary Fund, the economy has done remarkably well.--Mark Weisbrot--Co-founder, Center for Economic and Policy Research (CEPR)

    Lean in close to your computer because I have to whisper this: the most closely guarded secret of this global economic meltdown is that some countries are actually prospering even though they are not supposed to.        
    It’s a secret because they are countries that have given the middle finger salute to the banksters and bond traders by rejecting austerity, budget balancing and the like and concentrating instead on providing jobs and benefits for their people.
    The biggest secret of them all is Argentina. A decade ago, it welshed on its nearly $100 billion debt to the International Monetary Fund. The Argentine is a good-sized country (double the population of Greece and Portugal put together) with a developed economy. Do you recall the pandemonium  and panic when it defaulted?  Of course not. You probably didn’t even know that Argentina had gone belly up big-time. Who pays attention to such stuff besides Wall Streeters? 

    Previous to its remissness, Argentina had been an obedient servant of our empire and its bond mavens. The ‘pro western’ succession of governments down there not only took all of Washington’s best advice on running their economy, they even adopted the dollar as their currency.  The result was years of misfortune, misery and stagnation for the many and fat profits for the few. 
    The locals got sick of being poor and made a peaceful revolution (bet you didn’t hear about that either). They took to the streets and even occupied factories. They went through four presidents in quick succession before they found one who had some cojones. In the nine years since,  the bad eco indicators have gone down and the good ones have gone up. Poverty has been greatly reduced, which is more important to my mind than transferring the country's wealth to speculators in the name of solvency. The current president was just reelected with such a strong majority as to give pause to Obama’s coup-making gremlins.
     We are now being deluged with scare stories from Greece.  The dread is that Athens will make like Buenos Aires and walk away from its arrears. Oh my God, this may collapse the Euro and even harm us over here! Hell will be unleashed!
      Not so much. All that’s likely to happen is that outrageously rich people who trade sovereign bonds might drop a notch to indecently rich. Indeed, if they’ve shorted Greece, they’ll get even richer.
    The real fear of our economic betters is that ordinary people are waking up.  Not only Argentina, but Venezuela, Brazil, Bolivia, etc., not to mention the Scandinavian countries, are prospering by doing exactly the opposite of what conservatives preach and Washington practices.
    Our leaders try to make economics a hard study so as to discourage the hoi polloi from figuring out how the system screws them.  That works in prosperous times, but in hard times, that kick in your empty stomach gets painful enough for you to start asking where it came from.