Letters to the Editor

by the Readers

Argentine Decline

(Re: "Diablo Domingo," Mariano Sana and Gerardo Razumney, Slant, Dec. 12, 2002)

While I don't disagree that Domingo Cavallo is not the best candidate to speak about the Argentine economy, I do disagree with many of the assumptions made by Razumney and Sana; they simply try to force Cavallo into a Diablo in a country run by diablos.

First of all, Cavallo was only one of the principal figures "in shaping the economic policies that eventually brought about the meltdown of the Argentine economy." Moreover, it was not economic policy alone that caused the meltdown but economics infused with politics. While Cavallo was instrumental in establishing a currency peg with the dollar, the authors fail to mention an alternative for stemming the debilitating inflation Argentina had experienced. The Argentine government was obviously incapable of handling the affair, so he sought to make currency management independent. Unfortunately for him, he was only partially successful and the currency peg remained under the management of their inept central bank. The authors wrongfully crucify the strong dollar, which made for cheap imports -- a good thing, because a fall in prices means real wages are rising since wages are only what you can buy with them. But it did not ultimately kill domestic production. The major culprit was the International Monetary Fund (IMF).

To sum up the IMF, I will quote Ron Paul, a Texas congressman who understands more about economics than anyone on Bush's team: "Recently I introduced legislation to withdraw the United States from the Bretton Woods Agreement and thus end taxpayer support for the International Monetary Fund (IMF). Rooted in a discredited economic philosophy and a complete disregard for fundamental constitutional principles, the IMF forces American taxpayers to subsidize large, multinational corporations and underwrite economic destruction around the globe. " The IMF used money to bribe Argentine officials -- including Cavallo -- to follow their directives. The billions the IMF used to bribe Argentines were funneled through corrupt channels into aristocratic coffers and bureaucracies instead of into capital investments to make Argentine industry more productive, and therefore competitive, despite the strong currency. While it is true that President Menem controlled spending, the spending merely shifted to the provinces. This brings me to refute another of this duo's points. Corruption played an integral role in distorting the economy beyond redemption. Just because corruption is inevitable when a government handles large sums of money doesn't make it any less important.

The authors also oversimplify the economic decline itself. The trade imbalance had more to do with corruption, and therefore misguided capital, than it did with the currency. Currency is a scapegoat for the failure of political reform. While it is true multinationals bought Argentine assets on the cheap, their purchases were dependent on the further infusion of IMF monies. This is corporate welfare. This is also the reason why the U.S. government is so slow to stop funding hapless regimes.

Andre Bustamante
Philadelphia

Guiding Principal

(Re: "Someplace Special," David Warner, Slant, Dec. 19, 2002)

Thanks for the kind words. I particularly appreciate your recognizing and commenting on the good work of the Meade staff and our children. We have a great team here of which I am proud to be a member.

Frank Murphy
Principal, Meade Elementary School

Philadelphia