By Alejandro A. Tagliavini *
Just as Chavez changed the name to the Bolivarian Republic of Venezuela, the Argentine government should change it to the Peronist Republic of Argentina, given that it is the “Peronism” the consolidated system.
Mauricio Macri comes to the presidency supported by the right, highlighting the neo-con, neoconservatives who call themselves “liberals” and foreign friends like Mario Vargas Llosa. And he always promoted measures in the style of Peronist populism, without hiding his “respect” for Juan Domingo Perón whom he honored when he was “mayor” of the City of Buenos Aires.
As a good politician, he has his messianic profile and claims to be leading “a historic change”. And, take steps to stay in power, at any cost. For example, he subsidizes the purchase of cars to reactivate the very low industrial production.
Subsidies that come from funds that the State withdraws coercively from the market – from people – by way of taxes, inflation and very high interest rates and that fall heavily on the poor since companies, for example, pay them by raising prices or by lowering wages. According to the Catholic University, 51.7% of children and adolescents are poor and 13% went hungry during 2018.
And now he chose Peronist Senator Miguel Angel Pichetto as his vice presidential candidate for the October presidential elections, so there is only the option to vote for this formula of Peronist bias or for the Peronist opposition since the other candidates do not have a chance. Argentina definitely Peronist. Macri, defined the senator as “a man of state, that over the years … I knew and respect for their commitment to the country and institutions.”
Sometime before, he said that the political elite should be renewed because those had governed – and failed – for 25 years. Ironically, he gave Pichetto as an example, president of the Peronist Senate bloc with all the governments including the Kirchners and “if they win – the Kirchnerists – he will return to the same position”. Well now he will occupy a superior because, surely Macri wins, and to his vice president corresponds the presidency of the Chamber of Senators.
The shares rose to 18% at the news, because Macri maintains a corporate “capitalism” that privileges the companies he wants, far from a market economy where people, customers, decide which companies they prefer.
The problem will come when it gets clear that the economy falls sharply given the increase in the weight of the inefficient State over the private productive sector. Unless Macri unravels the corporatism that always sustained and allows a market economy. With interest rates of around 70% there is no credit for production, the price of the dollar lowered (for now) artificially complicates the export and the heavy tax burden prevents any investment plan.
To top it off, Macri is a serial “indebted”. Governing Buenos Aires quadrupled the indebtedness and, since he assumed the presidency in 2015, Argentina was the largest global debt issuer that, between 2016 and 2018, went from 52.6% of the GDP to 86.2% and is on its way to exceed 110% by the end of 2019, doubling the debt.
In short, the good news is that this Peronism is more “aggiornado” than Perón himself and somewhat more moderate than the Kirchners. Thus, the Argentine fall will be smoother.
* Member of the Advisory Board of the Center on Global Prosperity, Oakland, California