StephenKMackSD's Blog

Sub-headline: Finance minister cites inflation and Brazil crisis as biggest threats to economy

‘…the understated former JPMorgan currency strategist exudes a quiet confidence that a good start has been made in defusing the complicated economic inheritance of 12 years of populist rule.’

Can one doubt that Argentina is ’emerging from the nether world’ of 12 years of ‘populist rule’ as part of a recovery from a premature expression of The Rebellion Against The Elites that happened in 2001, that is just now taking root in Europe and the USA? It is a temptation, to view Argentina as the harbinger of the watershed of the economic collapse of 2008, its immediate successor Austerity and our present doldrums, as expressing telling similarities?  Although the myth of the Lazy Southern Tier as opposed the Virtuous Northern Tier entices many  Neo-Liberals. Mr. Prat-Gay’s credentials reek current bourgeois respectability of the seasoned technocrat, not to speak of Capitalist bureaucrat. In sum, Mr. Prat-Gay is a member of the Club as is court appointed mediator Daniel Pollack.

Mr. Prat-Gay then carefully spins the yarn of appeasing the hold-outs (Vulture Capitalist Paul Singer and friends, who found an amenable American Court and a New York court-appointed mediator Daniel Pollack.Read and marvel at Mr. Pollock’s  CV here:

http://www.mccarter.com/Daniel-A-Pollack/

To call Mr. Pollack a pillar of the American Establishment political and legal is not overstatement.

Mr. Pratt-Gay declares:

‘“Our financial programme is no longer wishful thinking but a clear possibility. Solving the holdouts problem will open the window to foreign money,” says Mr Prat-Gay, cautioning that a US appeals court still has to approve the lifting of injunctions that will enable Argentina to make the payment. By raising finance abroad, Argentina will be able to plug a bulging fiscal deficit without resorting to austerity or printing money. The latter tactic was used by the previous administration and led to an inflation rate that is running at more than 30 per cent. “It’s not over until it’s over. But it’s nearly over.”’

‘The window to foreign money’ is the key phrase here, as he is a former Investment House employee with friends in the right places to make that ‘foreign money’ come to the aid of ‘center right’, meaning a business friendly government:

‘“Slowly but surely we are emerging from the netherworld of foreign investment,” he says’

The rest of the interview, besides the control of inflation, an accurate measure of financial responsibility, is an elaborate sales pitch to the very influential readership of the Financial Times.

By raising finance abroad, Argentina will be able to plug a bulging fiscal deficit without resorting to austerity or printing money. The latter tactic was used by the previous administration and led to an inflation rate that is running at more than 30 per cent.

But compare the Prat-Gay anti-Austerity strategy to this excerpt from this editorial, ‘Austerity by stealth, CFK has veered toward orthodox economic policies’ of Sunday, March 30, 2014 in the Buenos Aries Herald. Which amounts to a scolding of CFK for lack of political consistency, or just her free spending ways. Which amounts to demonstrable populist economic irresponsibility.

CFK’s approach has been much the same as Alfonsín’s. She too is dead against belt-tightening, spending cuts and all the other unpleasant things governments the world over often feel obliged to do. Though of late her government has veered towards “orthodoxy” in the hope of getting some much-needed loans from abroad, she still refuses to admit that anything much has changed. Nasty words like “inflation” and “devaluation” are conspicuously absent from the official vocabulary; should a government spokesperson be foolish enough to use them, it is front-page news.

http://www.buenosairesherald.com/article/155790/austerity-by-stealth

Pratt-Gay asserts that:

‘…he is working on the causes of inflation rather than the symptoms. “We are taking tough decisions to make sure we are slaying the dragon, rather than putting it in a cage for a while.” ‘

Causes of inflation, symptoms, tough decisions, and the overblown:slaying the dragon and putting it in a cage are the code words for Austerity and its costs, the chatter of the unimaginative Neo-Liberals hardly varies. Prat-Gay could have couched his argument in the palatable  Keynesianism register: now that we have reached a more stable, less acute financial stress, is the time for an Austerity, that taxes all sectors of the civic body-this places my  conjecture in the realm of wishful thinking.

One problem is that many of the government’s reforms, such as the devaluation and hikes in utility prices, have a strong impact on inflation. But Mr Prat-Gay argues that the effect will be temporary. “We are very confident that once the one-off shifts in prices are out of the system, inflation will fall quite significantly, hopefully early in the second half of the year,” he says.

More coded language: One problem:  government reforms, devaluation and hikes in utility prices, have a strong impact on inflation. This is Austerity, despite the claim that the  effects will be temporary. Strong Medicine is needed to wean the Argentine Economy from the Free Spending, indeed mendacious policies of CFK?

Mr. Pratt-Gay is optimistic with a 69% approval rating as of March 5th with this assurance: Second, we’ve made some fiscal decisions to ensure the poor and most exposed to one-off increases are spared the cost,” said Mr Prat-Gay. The best laid plans. There’s a good reason why there has been no social unrest. In politics it is wise to rely on the changeability of the public mood. But then Mr. Pratt-Gay acts, in this interview, as a salesman for the newly ‘reformed’ Argentina, as a country that will pay its debts. 

The government needs improvements in the economy to materialise before the reigning calm begins to unravel. For now, support for Mr Macri’s reforms remain high, with his approval ratings in March rising 5 points to 69 per cent, according to Poliarquia, a local pollster.

“There’s a good reason why there has been no social unrest. First, we are not doing anything that we didn’t promise in the campaign. Second, we’ve made some fiscal decisions to ensure the poor and most exposed to one-off increases are spared the cost,” said Mr Prat-Gay. “People have voted for a change and they understand that change won’t happen in a week or a month or a quarter. There is patience.”

http://www.ft.com/intl/cms/s/0/882e7e1e-f7aa-11e5-9afe-dd2472ea263d.html#axzz45FnwAqyo

Here is an answer to Mr. Prat-Gay’s transparent salesmanship, in the Financial Times, by Mario Blejer:

Headline:Argentina’s deal with the holdouts is a mixed blessing

Sub-headline:The outcome for the people is positive but it has some alarming implications, writes Mario Blejer

Make no mistake Mr. Blejer, deputy chairman of Banco Hipotecario, is a Neo-Liberal conformist but he offers insights absent from Mr. Prat-Gay’s sales pitch:

Recalcitrant creditors bought Argentine paper at rock-bottom prices and their strategy was vindicated. They profited and the creditors who settled promptly did not. This is not fair and is also inefficient. Standard bankruptcy procedures treat creditors equitably, minimising economic damage by resolving things fast. In this case, inequality among creditors caused maximum economic harm. It underlines the need for a sovereign debt restructuring mechanism.

Yet, for all this, the readmission of Argentina to the international financial market must be counted as an important success. The new reformist government of Mauricio Macri deserves credit for its focus and effective negotiating tactics.

Some credit in this saga is also due, however, to Cristina Fernández, the former president. She argued vigorously for the creation of a formal mechanism governing the restructuring of sovereign debt. Recognising this could lead to a happier and more lasting outcome.

http://www.ft.com/intl/cms/s/0/db6779d6-f729-11e5-96db-fc683b5e52db.html#axzz45MlBtNYV

The new reformist government of Mauricio Macri deserves credit for its focus and effective negotiating tactics. Mr. Singer and his allies brought suit in an American Court, the reach of the American Empire and its political/economic actors is not ever in dispute , American Vulture Capitalists/Corporatists are adroit and always win.

Political Reporter

‘For a prime minister without strong, united opposition within or outside his party, David Cameron has had a rough few weeks.’

Careful, this sentence is rhetorically framed in Tory Triumphalism. The opposition is weak, even Mr. Corbyn’s fellow Labour Party members are tepid or worse.How many political stumbles, miscalculation or even mendacity, witting or unwitting, can the Eternal Tories make?  After this description of these blunders:

‘First there was the resignation of his welfare secretary in protest (he claimed) at cuts to disability benefits. Then came Tata’s announcement that it wanted to sell its British steel operations, throwing the future of the vast works at Port Talbot into doubt. Then, most threateningly of all, the Panama Papers revelations left the prime minister with questions to answer about Blairmore, his late father’s offshore trust which is incorporated in the central American republic and based in the Bahamas.’

Even the weakest opposition need only hammer away at Cameron, to make some inroads. It is political folly to even entertain such a thought? Or can Bagehot entertain the Janan Ganesh notion of a permanently aggrieved political minority, as the cost of the British practice of Democracy, in the age of the Rebellion against the Elites. Ganesh made this argument last week here:

http://www.ft.com/intl/cms/s/0/bbe57aa6-f1dc-11e5-aff5-19b4e253664a.html#axzz44aT6zHMq

‘Rich democracies may have to live with a caucus of permanently aggrieved voters amounting to a quarter or a third of the whole.’

You sometimes have to wonder if Mr. Luce is paying attention! When he’s in his Declinist Funk even the fact that America, in the persons of Nuland and Pyatt, and organization like NATO and The Foundation for the Defense of Democracies, spent well over 5 billion dollars on the Coup in Ukraine, as of 2014, yet the situation continues to pay political dividends.  Their allies included Right Sector and Svoboda and dependable political hack ‘Yats’: recall Ms. Nuland’s notorious phone call? Perhaps that’s not quite good enough? even the continuing low level war in Ukraine won’t slake Mr. Luce’s appetite for Pax Americana, in a form that Bush II found necessary. And even Petro Poroshenko has been implicated in the Panama Papers burgeoning world wide scandal. Perhaps that reality will bring Mr. Luce out his funk?

Political Cynic

http://www.ft.com/intl/cms/s/0/507317a4-f74c-11e5-96db-fc683b5e52db.html#axzz44u1e0JoU

The invisible, indeed erased, central protagonist of Mr. Ganesh’s carefully massaged political history is Neo-Liberalism. It can’t be mentioned, its centrality in the Economic Catastrophe of 2008, is politically inconvenient to Mr. Ganesh’s polemic about the ‘mass rejection of elites’, a favorite trope at the Financial Times.

A selection of his -I won’t call them arguments –  polemical thrusts:

‘We are living through a mass rejection of elites. We know this because everybody says so. And magically, the reasons for popular rage always cohere with our own resentments.’

The utter collapse of the codified Neo-Liberal Dogmas remain strategically off stage. The appeal to the popular imagination, place that rejection in the realm of the madness of crowds. And resentment, rather than anger, over fraud and abuse of power, not to speak of outright theft, takes its central position.

‘If only governments had worked through each item of the personal manifesto that you — or I, or the next columnist along — have touted for years, this populist fever might not have America and much of Europe in its clammy grip.’

This is a personal struggle, it has no relation to the notions of law, justice or fair play: to the central concerns of the democratic state, but the subject to the moods, the animus of the rebels. Note ‘populist fever’ and ‘clammy grip’ equaling a disease state and the monstrous.

‘“Wonderful explanation machines” is the philosopher Nassim Nicholas Taleb’s synonym for human brains. We are “capable of making sense out of almost anything” and “generally incapable of accepting the idea of unpredictability”.

A handy philosophical commonplace that has found its way into this polemic, that does need some garnish, some ballast.

Continue reading →

‘This is a wonderful moment to be a conservative. For decades now the Republican Party has been groaning under the Reagan orthodoxy, which was right for the 1980s but has become increasingly obsolete. The Reagan worldview was based on the idea that a rising economic tide would lift all boats. But that’s clearly no longer true.’

All this optimism is kind of a bewildering stance in the face of the rise of Trump , the American Caudillo. Our very own Peron, the strong man who sets all our vexing problems right, by knocking heads together, those dissenters,well! Building a fence against Mexican rapists. Xenophobia, Islamaphobia, a Politics of  Fear,Suspicion, the threat of violence and its actuality . Mr. Brooks looks forward to the post-Trump era of Conservative politics, as full of an absent quality in the now: hope allied to decency?

Mr. Brooks describes the American political present as a contest between the once ascendant Rising Tide America to the dismal present of  Coming Apart America. As usual  with the propaganda that Mr. Brooks produces, it is a convenient simplistic description, that erases from the picture, the inconvenient fact that the Republican/Conservative agenda has been one of nihilism, since the election of President Obama. And can we forget the era of The Contract With America authored/led by Gingrich? The Compassionate Conservatism of Bush II? The Willy Horton of the Lee Atwater/Bush I? We might become stymied in the act of remembrance of Nihilism’s Past.

All of this chatter framed,  tarted up,  by Kuhn’s Scientific Revolution:

‘ Trump is prompting what Thomas Kuhn, in his theory of scientific revolutions, called a model crisis.’

As usual with Mr. Brooks his apologetics for Republican Nihilism are subject to his notorious verbosity: the garnish of Kuhn’s theory of ‘model crisis’ is central to his pose as  optimist.Which becomes the soothing balm of ‘this to shall pass’ in his guise as  protestant scold.  In sum, Mr. Brooks’ Conservatism  is nihilistic at its core: a vision that is about sewing political discord, indeed chaos, as the means to power. Trump is the product of that Conservatism, and the self-destruction of the Republican Party.

Political Observer

Silver Fork Pundit and full time Dandy Mr. Ganesh proves beyond doubt that he to is one of the fellas! The playing fields of Britain are the proving grounds for the modern citizen, that these citizens are exclusively male is but an inconvenience to be overlooked.  He constructs a parable of the age of an utterly failed Neo-Liberalism as ‘an insecure world’ and how that world must be navigated, by the canny, not to speak of wise political/economic actor. Who lives now, and not like his father did, if he wishes to survive and prosper. The rise of the techniques of winning are part of the armamentarium of victory.

Mr. Ganesh is an idiosyncratic follower of Darwin as interpreted by Herbert Spencer: survival of the fittest is a motto that appeals to the cult of masculine power, that is the central animating ideology in the his world view. The rough and tumble of the playing field is the testing ground for one’s status as part of a coterie of the ‘fittest’. Aided by money saving  business decisions, finding talented players whose potential has not been fully realized, allied to the science of optimizing training as a means to boost performance on the field.

Given all of the above, how might we interpret Mr. Osborne’s latest political misstep, political miscalculation, or more candidly blunder? And what might this portend for Mr. Ganesh’s oft repeated belief in the politically eternal Tories?

Philosophical Apprentice

http://www.ft.com/intl/cms/s/2/0f843f1a-f1b7-11e5-aff5-19b4e253664a.html#axzz441INa3Vj

Patrick Buchanan offers some insights on the Rule-or-Ruin Republicans here:

http://www.theamericanconservative.com/buchanan/the-rule-or-ruin-republicans/

The Republicans are committing a protracted political suicide, and the nihilists, who purged the remaining Conservative rationalists from the Party, are stage managing this spectacle. The dithering of the now Closeted Randian Paul Ryan is indicative of this political melodrama.

After this ends, in the defeat of Trump by Clinton, (So goes the narrative constructed by respectable pundits.)  will the Eisenhower Republicans reassert control of the Party? Or will a Conservative Party be born out the defeat of the nihilists, who control the levers of power?  Then there is the burning question: can the political career of Paul Ryan be redeemed?

Political Reporter

http://www.ft.com/intl/cms/s/0/37a2377a-f11e-11e5-a609-e9f2438ee05b.html#axzz43pCrJDrK

‘None of the Leave campaigns come close. Instead, they cast slurs on the integrity of the economists who have little axe to grind; they pretend that a model result showing Brexit having economic costs is good for their argument because it also shows “the economy will continue to grow”; and they refuse to tell voters what they hope Brexit will look like, knowing this will be a turn-off to many. It is hard to imagine a more cynical approach to a referendum campaign. You do not need an economic model to tell you that.’

Mr. Giles is defensive for a reason, in his chatter of ‘economic modeling’ as predicative of the future! Where were these ‘models’ and ‘modeling’ when Neo-Liberalism and its reforms were offered as an economic panacea? That drove ‘Western Economies’ into penury. Recall Mrs. Thatcher’s penchant for passing out copies of ‘Road to Serfdom’, as a dire warning of not just the planned economy, but of the dangers, the predations of the British Welfare State against a natural Capitalist Virtue?

Mr. Giles and his economic allies are not trusted for valid and empirically verifiable reasons: we are the eighth year of an economic- how to characterize this state of  the lack of economic prosperity? And the continuing of Austerity demanded of those who can least afford cuts to benefits,the Takers, while providing tax breaks to top, the Makers? Long live Hayek and his vulgar stenographer Ayn Rand!

StephenKMackSD

http://www.ft.com/intl/cms/s/0/33e877be-ef63-11e5-aff5-19b4e253664a.html#axzz43pCrJDrK

My answer to @ManchesterJ

@ManchesterJ @StephenKMackSD

Is this the question you are referring to?

‘None of the Leave campaigns come close. Instead, they cast slurs on the integrity of the economists who have little axe to grind; they pretend that a model result showing Brexit having economic costs is good for their argument because it also shows “the economy will continue to grow”; and they refuse to tell voters what they hope Brexit will look like, knowing this will be a turn-off to many. It is hard to imagine a more cynical approach to a referendum campaign. You do not need an economic model to tell you that.’

Introduced by more of the same defensiveness: ‘they cast slurs on the integrity of the economists who have little axe to grind’. The beliefs of those economists have led to economic disaster and the political fallout of the Rebellion Against the Elites, the Party Line here at The Financial Times, in its many iterations and permutations.Those economists have reason to be defensive! How many mistakes will it take to learn a bitter lesson, that the technocrats are undependable, yet fixated on the myth of their invincibility.

StephenKMackSD

Mr Williamson has given voice to what Wm. F. Buckley actually thought, of all those who weren’t him! But  Mr Williamson sounds more like a latter day Nietzsche opining about the lower orders of humanity. National Review snobbery seems a natural inherited trait of the writers at that publication.

What is sobering is that people, now, remind me of the post WWII generation who came home from War, and wanted to bury the past: like Don Draper and his new fake identity masking his roots in rural, poor America. The as if being that the depression and the fact that everyone was just a bunch working stiffs, who came from nothing, and were starting over. They were the creatures of their own creation, except now, in the wake of the utter collapse of the codified Neo-Liberal Dogmas, men like Mr Williamson, no doubt well educated and with a contempt for all those who are not him, gives voice to what Mr. Luce characterizes as:

As an exercise in condescension, Mr Williamson’s words rival the most inbred hereditary peer.

In the Depression people took care of each other, that ethos is long dead in American life, economics and politics. The rise of the  Hayek/Mises/Friedman troika has utterly destroyed the once vibrant idea and practice of  altruism, as part of the disease process of the Welfare State.

Political Reporter

http://www.ft.com/intl/cms/s/0/63b061be-ecfc-11e5-bb79-2303682345c8.html#axzz43Y97wuqi

I read Douthat’s essay and was underwhelmed, his political focus is so utterly narrow, and he lacks curiosity, a trait  which might just be essential when you are a pundit, or at the least claim that status.
The whole of the Republican political trajectory since the Generation of Treason of post WWII, Welfare Queens driving Cadillacs of Reagan to Willy Horton and beyond has been the cultivation of political necromancy. Given that why is Trump a political surprise? Mr. Douthat should have been reading the ultra-respectable Financial Times, where Luce and Wolf and other hirelings, proclaimed the bad news of The Rebellion Against the Elites, in Europe and America. In sum, Mr. Douthat is an utterly parochial thinker and writer.

On the question of Paul Ryan, he is ruled by one imperative, an unslakable political ambition. He even publicly renounced his Randian Faith, in the face criticism of the Evangelicals: who rule the Republican Party with political ferocity, as to the primacy of an Old Testament God, interpreted by the inheritors of the mantle of Cotton Mather

Philosophical Apprentice

http://www.theamericanconservative.com/larison/ryan-and-the-anti-trump-republicans/