For some years now, I’d say since the first Bush president, it has occurred to me that the USA was inexorably sliding towards a position once enjoyed by Argentina. In the early 20th century, Argentina was one of the world’s richest countries, prompting the phrase “to be rich like an Argentine.” Argentina was a top immigration destination for Italians in the 20th century because of the economic opportunity it offered. Of course, not EVERYONE was rich. The society was stratified into rich and poor, with little in-between.
As the lower economic groups and the middle class felt increasingly pinched by the fallout of bad industrialization and landowning policies, they came under the sway of populist politics and its false promises. During the decades of the Peronist populist era, Argentina was bled dry so that by the 1960s the whole world would “tsk tsk” over the country’s fall. Essentially, the government spent money it did not have to buy, to put it baldly, votes, until it had no more to spend.
This situation set the stage for the gross distraction in the form of the anti-Communist hysteria of the 1970s which saw up to 20,000 men, women and children either disappeared, or victims of torture and murder (I say children for this reason: I sat next to an Argentine women on a plane some time ago, who told me she’d moved to the U.S. after her brother almost died. Eventually the whole story came out. He’d been a boy scout leader, who due to illness had not been able to accompany the troop to a field trip, during which the entire group was ambushed and massacred by goons. It turned out that the other troop leader had been suspected by the military to be running a communist cell with the scouts. After learning this appalling rationale for their wholesale slaughter, the woman and her family left the country. Plus, there were babies born in torture chambers and secretly given up for adoption.)
During this infamous period, Argentina was also suckered into borrowing billions from global banks. Ok, they didn’t HAVE to borrow it. But petrodollars were flooding into the banks, and they had to put them somewhere, and they offered the bankrupt Argentine government what appeared to be a way out of the hole. Public banks had reached the limit of what they could lend. So private banks GLADLY stepped into the breach. When the loans came due, Argentina could not pay and the “debt crisis” vicious cycle began.
During these decades of crisis, who was the most revered figure? Eva Peron, possibly the single biggest source of all their problems. And who was left unaffected? The descendants of those landowners and industrialists who made sure the structural changes required to reform Argentina never happened.
Now, in some ways, this is what we have going on here where not only are the poor bankrupt, but so is the government and many in the middle class. Private banks have laid out loans to people who cannot repay them (OK, they didn’t HAVE to borrow) and will now lose their homes. Savings are below zero and spending is out of line with earnings.
We are distracted by sodden celebrities, meaningless flag waving and immigrant scapegoating, while we face an economic abyss. Ronald Reagan’ funeral was a celebration of forgetfulness over the man who started it all. Structurally, it is hard to imagine economic reform that isn’t killed by the agro, pharma and military industrial complexes and the spawn of Wall Street.