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Monthly Archives: April 2015

LIGHT AT THE END OF THE TUNNEL IN ARGENTINA (The Hill Online)

By Mark P. Jones /  April 22, 2015

Dec. 10 will mark the end of the 12-and-a-half-year-long Kirchner era in Argentina. The country’s next president will almost without question be more supportive of free enterprise and private investment, have a greater respect for the rule of law — both domestic and international — and pursue a more centrist and pragmatic foreign policy than President Cristina Fernández de Kirchner (who succeeded her husband, Néstor Kirchner, in 2007).

 

One of three men will succeed Fernández de Kirchner: city of Buenos Aires Mayor Mauricio Macri, National Deputy Sergio Massa or province of Buenos Aires Gov. Daniel Scioli. Scioli and Massa belong to Argentina’s large Peronist movement. Scioli is the standard-bearer of the movement’s pro-government wing led by the term-limited Fernández de Kirchner, while Massa is the informal leader of the opposition wing. Macri is the only viable non-Peronist candidate, and last month cemented an alliance with the Radical Civic Union (UCR), which for almost 70 years has represented the political counterweight to Peronism.

 

If elected, each of the three candidates would reduce the degree of unilateral and opaque government intervention of the Argentine economy, exhibit greater respect for the rule of law and improve Argentina’s frayed bilateral ties with a host of nations ranging from Spain and Germany in Europe to Brazil and the United States in the Americas. Thus, regardless of who wins, we can expect Argentina to move toward the more pragmatic and market-friendly social-democratic models of neighboring Brazil, Chile and Uruguay and away from the contrary model represented by present-day Argentina. That said, there are differences among the candidates in terms of the degree to which they would diverge from the current model of government.

 

Of the three, Scioli is the candidate of continuity, with Argentine policies expected to change the least from the current status quo under a Scioli presidency. Macri, in contrast, is the candidate of change, potentially representing the most dramatic break from the status quo (with a caveat discussed below).

 

On one hand, Massa is the Goldilocks candidate, promising a sharper shift toward the Brazil/Chile/Uruguay model than offered by Scioli, but not as great as that offered by Macri. On the other hand, Massa could arguably be the candidate capable of delivering the most robust reform.

 

If Macri is elected president, his electoral alliance would hold only about one-third of the seats (most belonging to the UCR) in both the Argentine Chamber and Senate and run no more than two-fifths of the country’s provinces. Argentina has no experience with successful coalition government, and it is possible that as president, Macri could find himself very constrained in terms of the actual implementation of his desired reforms. In contrast, if Massa is elected president, an overwhelming majority of Peronists would in all likelihood, in line with the movement’s strong vertical leadership tradition, fall in behind Massa as their new boss. As the undisputed head of a party with substantial congressional majorities and control of more than half of the provincial governorships, a President Massa would quite possibly be better positioned than a President Macri to effect the most transformative policy change, since while his proposals would on average be more modest in scope, their prospects for actual implementation would be higher.

 

The presidential election takes place on Oct. 25. It is expected today that no candidate will win enough votes to avoid a runoff on Nov. 22. Recent polls have Scioli (35 percent) narrowly ahead of Macri (30 percent), with Massa (25 percent) in third place, but well within striking distance.

 

As the bridge between continuity and change, Massa would be favored in a runoff against either Scioli or Macri, but to earn one of the two golden tickets to the dance on Nov. 22, he will need to vault ahead of at least one of his rivals between now and the end of October. With the election six months away, it is not possible to proffer a prediction of the outcome of a hypothetical Macri-Scioli faceoff. There are too many unknown factors, including future campaign dynamics, the state of the economy in November and post-first round actions by Fernández de Kirchner and Massa, which could potentially tilt the outcome in either candidate’s favor.

 

Jones is the James A. Baker III Institute for Public Policy’s fellow in Political Science and Argentina Program director, the Joseph D. Jamail chair in Latin American studies and the chair of the Department of Political Science at Rice University.

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APRIL 21, 2015 4:33PM

PATRIOT Act Reauthorization Fight Begins This Week

By PATRICK G. EDDINGTON

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http://www.cato.org/blog/patriot-act-reauthorization-fight-begins-week?utm_source=Cato+Institute+Emails&utm_medium=email&utm_campaign=b8a4d3d497-Cato_at_Liberty_RSS&utm_term=0_395878584c-b8a4d3d497-141820070&mc_cid=b8a4d3d497&mc_eid=37a4448f40

 

If the House Judiciary Committee keeps to its current schedule, on Thursday it will meet to consider the third version of the USA Freedom Act in the last two years. I’ve seen a very recent draft of the bill, and from my perspective in its current form the bill effectively acts as if the Snowden revelations and several independent reviews of the PATRIOT Act Sec. 215 metadata program never happened.

The bill ignores the fact that both the Congressional Joint Inquiry into the 9/11 attacks and the 9/11 Commission itself found that the attacks happened because of information sharing and analytical failures, not because of intelligence collection shortfalls. The bill claims to end the controversial telephone metadata program, but a close reading of the bill reveals that it actually leaves key PATRIOT Act definitions of “person” or “U.S. Person” intact—and under 50 U.S.C. sec. 1801(m) of the PATRIOT Act, “person” is defined as “any individual, including any officer or employee of the Federal Government, or any group, entity, association, corporation, or foreign power.” It’s the “group, entity, association or corporation” language that leaves open the possibility of continued mass telephone metadata surveillance under the PATRIOT Act.

The bill also grants the government sweeping “emergency” collection authority not tied to an imminent threat of death or bodily harm, which has generally been the standard for such programs in the past. The bill allows the government to retain U.S. Person call detail records if the government alone determines such records are “foreign intelligence information”. The bill’s FISA court revisions include the creation ofamicus curiae (previously called “special advocates” in earlier version of the USA Freedom Act) that in theory would help the court work its way through particularly thorny cases potentially involving major interpretations of law. But there are two key caveats to this provision: the FISA court has sole discretion to appoint—or not appoint—theseamicus curiae and the government still retains the ability to invoke the “state secrets” privilege, which would render the presence of the amicus curiae moot.

What is missing from the bill is at least as significant as what it contains.

The bill does not address bulk collection under EO 12333 as reported by former State Department official John Napier Tye. Further, the bill fails to address bulk collection and retention of US Person records under Sec. 702 of the FISA Amendments Act.

The bill lacks mandatory US Person data destruction and audit compliance provisions for information previously collected on US Persons not currently the subject of a criminal investigation. It contains no protections for national security whistleblowers; has no bar on the government imposing “back doors” being  built into electronic devices, software or hardware; does not bar the USG from targeting U.S. Persons solely on the basis of their use of internet anonymizing technology such as Tor; and does not address the recently revealed DEA telephony metadata program.

Whether supporters of the far more sweeping Surveillance State Repeal Act will be able to get a hearing on that bill or have the chance to take provisions of the SSRA and offer them as amendments to the USA Freedom Act—either in committee or on the House floor—remains to be seen. One thing is certain: the fight over reforming our nation’s surveillance laws is about to get much more intense, and quickly.

Topics:

Foreign Policy and National SecurityLaw and Civil Liberties

 

Contra el Corrupto poder en todos los gobiernos, nos alertó El Profesor de Filosofia Moral Adam Smith.

APRIL 21, 2015 4:33PM   –   By PATRICK G. EDDINGTON

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http://www.cato.org/blog/patriot-act-reauthorization-fight-begins-week?utm_source=Cato+Institute+Emails&utm_medium=email&utm_campaign=b8a4d3d497-Cato_at_Liberty_RSS&utm_term=0_395878584c-b8a4d3d497-141820070&mc_cid=b8a4d3d497&mc_eid=37a4448f40

If the House Judiciary Committee keeps to its current schedule, on Thursday it will meet to consider the third version of the USA Freedom Act in the last two years. I’ve seen a very recent draft of the bill, and from my perspective in its current form the bill effectively acts as if the Snowden revelations and several independent reviews of the PATRIOT Act Sec. 215 metadata program never happened.

The bill ignores the fact that both the Congressional Joint Inquiry into the 9/11 attacks and the 9/11 Commission itself found that the attacks happened because of information sharing and analytical failures, not because of intelligence collection shortfalls. The bill claims to end the controversial telephone metadata program, but a close reading of the bill reveals that it actually leaves key PATRIOT Act definitions of “person” or “U.S. Person” intact—and under 50 U.S.C. sec. 1801(m) of the PATRIOT Act, “person” is defined as “any individual, including any officer or employee of the Federal Government, or any group, entity, association, corporation, or foreign power.” It’s the “group, entity, association or corporation” language that leaves open the possibility of continued mass telephone metadata surveillance under the PATRIOT Act.

The bill also grants the government sweeping “emergency” collection authority not tied to an imminent threat of death or bodily harm, which has generally been the standard for such programs in the past. The bill allows the government to retain U.S. Person call detail records if the government alone determines such records are “foreign intelligence information”. The bill’s FISA court revisions include the creation ofamicus curiae (previously called “special advocates” in earlier version of the USA Freedom Act) that in theory would help the court work its way through particularly thorny cases potentially involving major interpretations of law. But there are two key caveats to this provision: the FISA court has sole discretion to appoint—or not appoint—theseamicus curiae and the government still retains the ability to invoke the “state secrets” privilege, which would render the presence of the amicus curiae moot.

What is missing from the bill is at least as significant as what it contains.

The bill does not address bulk collection under EO 12333 as reported by former State Department official John Napier Tye. Further, the bill fails to address bulk collection and retention of US Person records under Sec. 702 of the FISA Amendments Act.

The bill lacks mandatory US Person data destruction and audit compliance provisions for information previously collected on US Persons not currently the subject of a criminal investigation. It contains no protections for national security whistleblowers; has no bar on the government imposing “back doors” being  built into electronic devices, software or hardware; does not bar the USG from targeting U.S. Persons solely on the basis of their use of internet anonymizing technology such as Tor; and does not address the recently revealed DEA telephony metadata program.

Whether supporters of the far more sweeping Surveillance State Repeal Act will be able to get a hearing on that bill or have the chance to take provisions of the SSRA and offer them as amendments to the USA Freedom Act—either in committee or on the House floor—remains to be seen. One thing is certain: the fight over reforming our nation’s surveillance laws is about to get much more intense, and quickly.

Topics:

Foreign Policy and National SecurityLaw and Civil Liberties

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Look up this update too (February 18, 2016)

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Patrick G. Eddington discusses the ethics of what the FBI wants Apple to do on KTSE’s The Armstrong and Getty Show

February 18, 2016

WOULD BE NIGERIA FUTURE BETTER THAN ARGENTINA? 

Argentina was pushed to Anarchy by: (1)  an UNANIMOUS ruling of It’s own Supreme Court of Justice’s Judges; (2) by a soldier General (with gastric cancer); (3) by The United States of North America (USA); and (3) by the English United Kingdom; All this was done by the first 2 weeks of September, 1930.  –  Since then, Argentina’s Anarchy has been going from bad to worst; actually the struggle is between Anarchy/Tyranny trying to consolidate into an unconstitutional Tyranny,  or Jump Back to a Republican Democracy as ruled by It’s Constitution 1853.

_____________________

Cato at Liberty
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Nigerians Elect Former Dictator to Save Democracy

Posted on April 6, 2015Doug Bandow

Nigerians have elected a new president, the first time an opposition candidate defeated an incumbent since the restoration of democracy in 1999. Muhammad Buhari, a 72-year-old former dictator and perennial presidential candidate, will take over on May 29.

Nigeria enjoys the continent’s largest GDP but trails several African nations in per capita GDP. Although possessing extensive energy resources, the nation suffers from regular power outages.

Nigerians are entrepreneurial but nearly a quarter of them are unemployed. An intrusive, exploitative state blocks economic development and steals wealth. According to the latestEconomic Freedom of the World Nigeria has one of the world’s least open economies, coming in at 125 of the 152 countries rated. This discourages foreign investment in what should be the continent’s best market.

Corruption raises the cost of business and rewards economic manipulation. Last year an expatriate worker told me:  “Nigeria is not a country. It is an opportunity.”

Nigerian politics is anything but clean. Jonathan’s People’s Democratic Party ruled for 16 years, using patronage and other tools of incumbency to maintain power.

Nigeria better protects political rights and civil liberties than many African states. However, the State Department pointed to a number of human rights challenges, including “vigilante killings; prolonged pretrial detention; denial of fair public trail; executive influence on the judiciary; infringements on citizens’ privacy rights; restrictions on the freedoms of speech, press, assembly, religion, and movement.”

Insecurity is pervasive. When I visited last year my group sported a well-armed escort. The oil-rich Niger Delta is especially dangerous; executives admit to paying bribes to discourage attacks.

Worse, sectarianism divides the nation. At times violence flares.

In recent years the murderous Boko Haram extended its reach across Nigeria. The group received a blaze of publicity last year after kidnapping hundreds of school girls. Boko Haram has killed more than 20,000 Nigerians and displaced 1.5 million people in Nigeria and neighboring countries.

The Nigerian military is underfunded and ill-trained, distrusted by civilian politicians. Worse, government abuses generate support for Boko Haram.

Understandably, Nigerians desperately wanted change. But in what direction?

As dictator, Buhari lasted only 20 months before being unseated by another general. TheEconomist observed: “He detained thousands of opponents, silenced the press, banned political meetings and had people executed for crimes that were not capital offenses when they were committed.”

Buhari says he now recognizes democracy to be the better option. He has a reputation for probity and being a Muslim may better position him to combat Boko Haram.

However, energizing the economy may prove more difficult. Candidate Buhari promised much. While there are some free market advocates in Buhari’s coalition, more around him are not and he is thought to be an “unreconstructed statist,” according to the Financial Times. This is a prescription for economic failure.

His previous record is cause for pessimism. Noted the Economist: “He expelled 700,000 immigrants under the illusion that this would create jobs for Nigerians. His economic policies, which included the fixing of prices and bans on ‘unnecessary’ imports, were both crass and ineffective.” Nigeria cannot afford a repeat performance.

Still, in at least one important respect the election was good news. Despite some technical problems, the election went surprisingly well. Jenai Cox of Freedom House called the vote “one of the smoothest and least violent in Nigeria’s history.”

Equally important was President Jonathan’s unconditional acceptance of the results. He declared:  “I promised the country free and fair elections. I have kept my word.” And he did.

As I point out in Forbes online, “Nigeria’s success suggests that the country has developed a lusher civil society and stronger commitment to the rule of law than often thought. Moreover, this experience offers hope for other African nations struggling with democracy.”

Nigeria is a tragedy. Not so much because of the bad events which have occurred, which are many, but for its many lost opportunities and great unused potential. The future of Nigeria now rests in Muhammad Buhari’s hands.

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El Estado Vaticano

Alberto Benegas Lynch (h)

Presidente del Consejo Académico, Libertad y Progreso

 

Adelanto que esta no es una nota que puedan absorber fanáticos (en realidad, ninguna de las que escribo): es para mentes abiertas que puedan analizar hechos demostrables con prudencia y en profundidad mirando distintos ángulos y capaces de sostener un debate con argumentos.

EL ESTADO VATICANO

EL ESTADO VATICANO

Lord Acton, el gran historiador y profesor decimonónico, el 5 de abril de 1887,  al responder una misiva del obispo inglés Mandell Creighton quien sostenía que a los Papas y reyes había que tratarlos con vara más indulgente que a los ciudadanos corrientes, Acton responde que “no puedo aceptar su criterio en cuanto a que debemos juzgar al Papa y al Rey de manera distinta al que aplicamos a otros hombres con una presunción favorable de que no hacen mal. Si existe alguna presunción debe ser en sentido contrario para los que ocupan posiciones de poder y más aun cuanto mayor sea el poder. La responsabilidad histórica debe estar a la altura de la responsabilidad legal. El poder tiende a corromper y el poder absoluto corrompe absolutamente.” Como es sabido, esta última oración encierra el dictum más difundido de Acton pero es de interés recordar el contexto en el que lo escribió al dirigirse a una autoridad eclesiástica.

La tesis del presente artículo periodístico consiste en proponer la terminación del Vaticano como Estado, es decir, como estructura política y mantenerlo como asiento de la cabeza de la Iglesia puesto que lo contrario resulta incompatible con aquello de “mi reino no es de este mundo”. Y no solo eso sino que sugiero la liquidación del Banco del Vaticano por las mismas razones, lo cual no es óbice para que se depositen fondos en cualquier banco de la plaza local o internacional, situación en la que no resultarían necesarios los esfuerzos tendientes a corregir las corrupciones mayúsculas en un banco que algunos hasta han calificado de modo insolente como “la banca de Dios”.

El Cardenal y teólogo suizo Hans Urs Von Balthasar, ha insistido en que el Vaticano se transforme en un museo lo cual no quita que el papado se mantenga en ese lugar físico o en otro, espacio que también podría operar con independencia bajo distintas figuras del derecho internacional sin necesidad de constituirse en un Estado. En cualquier caso, esta visión despolitizada del Vaticano liberaría a la Santa Sede de todas las actividades que se relacionan directamente y de modo ejecutivo con la política propia de los Estados y que envuelven a la Iglesia en faenas que son consubstanciales a aquellos ámbitos.

Como es de público conocimiento, la actual conformación política del Vaticano de cuarenta y cuatro hectáreas se estrenó con el Tratado de Letrán en 1929 firmado por Benito Mussolini con poderes dictatoriales en representación del Reino de Italia. Los límites al poder son condición necesaria para evitar extralimitaciones pero cuando el poder político no solo no es necesario sino, como queda dicho, incompatible con el mensaje evangélico, debe dejarse de lado y también las operaciones bancarias y conexas que así minimizan posibilidades de corrupción como es el caso con el Banco del Vaticano desde que fue creado en 1942 como Instituto para las Obras de Religión (IOR).

En la actualidad los múltiples hechos de corrupción salieron nuevamente a la luz en nuestra época debido a las cuantiosas filtraciones de informaciones conocidas como “VatiLeaks” que tanto angustiaron a Benedicto XVI y que lo llevaron a dejar el papado para convertirse en emérito. Las primeras filtraciones fueron realizadas por el mayordomo del Papa, Paolo Gabriele, y recibidas por el periodista Gianlugi Nuzzi pero finalmente los orígenes fueron de distinta procedencia de círculos vaticanos y se diseminaron por todo el mundo de las noticias.

Es sabido también que con anterioridad a 1929 y desde 1870 (luego de la expedición de Víctor Manuel) no había jurisdicción física para la cabeza de la Iglesia y antes, en 1848, se había abolido el poder temporal de los Papas luego de tanta acción bélica del papado en nombre de los denominados estados pontificios, especial aunque no exclusivamente por Julio II (conocido como “el Papa guerrero”) y los hijos del Papa Alejandro VI (muy activamente por Juan y, más aun, por César).

Los escándalos son denunciados por muchos dignatarios de la Iglesia a raíz de lo cual se han barajado muy diversos estudios, por ejemplo, los realizados por Vicenzo Gioberti y Luigi Taparelli d´Azeglio y las historias sobre lo que venimos comentando han sido relatadas, entre muchos otros, por autores como Mark Donovan, David A. Yallop y Ryan Thorton en diversas revistas académicas y obras publicadas.

Entre otros artilugios, la estructura política del Vaticano se ha usado para cubrir con inmunidad diplomática delitos varios, por ejemplo, en los casos de los escándalos más sonados sobresalen los del Nuncio en la República Dominicana, Josef Wesolowk, el Arzobispo de Boston en Estados Unidos, Cardenal Bernard Law y el archiconocido ex administrador del Banco del Vaticano Paul Marcinkus. También, antes que eso, la referida politización da pie para interpretaciones en cuanto a haberle conferido legitimidad a las tendencias nazis alemanas con el Riechkonkordat de 1933, además de las constantes entrevistas y declaraciones con jefes de estado y políticos del más variado color y especie.

Ya Juan Pablo II pidió perdón por la Inquisición, las Cruzadas, las “guerras santas”, la judeofobia y otras barrabasadas como para seguir cargando con responsabilidades y funciones que abren las puertas a la corrupción y a los insondables vericuetos del poder político. La Iglesia ya debe lidiar con bastantes problemas como para involucrarse en los campos mencionados que exceden en mucho su misión específica. También Juan Pablo I intentó en sus treinta y tres días de papado ir al fondo de algunas de las corrupciones sin lograr su cometido, lo demás está por verse.

La mejor tradición señala los graves inconvenientes que invariablemente se suscitan cuando se vincula el poder político con la religión, por tanto no es del caso provocar ese vínculo y más bien seguir las enseñanzas de los Padres Fundadores en Estados Unidos que denominaron esta conveniente separación con la sugestiva etiqueta de “la doctrina de la muralla” espantados con las experiencias de las guerras y masacres religiosas en  Europa.

Personalmente he conversado sobre lo expuesto con dos sacerdotes y tres laicos entendidos en la materia y han coincidido en lo dicho. Aunque no me han pedido reserva, no me siento autorizado a revelar las fuentes puesto que hasta el momento -por razones diversas- mis contertulios no han hecho públicas sus opiniones sobre el tema señalado. Lo destaco al solo efecto de puntualizar que aquellas reflexiones sobre las antedichas propuestas me han resultado sumamente gratificantes. Mencioné lo del Cardenal von Balthasar porque hizo público su pensamiento respecto a lo comentado.

Hay otra faceta de la politización, ya no entendida como las obligaciones de la jefatura de Estado y sus entretelones, sino referidas a ciertas declaraciones sobre asuntos económico-jurídicos que no se condicen con valores y principios éticos de una sociedad libre, que aun realizadas con las mejores intenciones perjudican el bienestar de la gente, especialmente de los más necesitados. Me he ocupado en otras ocasiones de este aspecto crucial, de ningún modo circunscripto a “sacerdotes para el Tercer Mundo” y “teólogos de la liberación”. En esta nota me limito a considerar la faz más directa y crudamente política del Estado del Vaticano que someto a la consideración de mis lectores.

 

 

http://www.nytimes.com/2002/02/10/business/five-questions-for-steve-h-hanke-peso-peg-done-wisely-but-not-too-well.html

FIVE QUESTIONS for STEVE H. HANKE; Peso Peg: Done Wisely, but Not Too Well?

By ANTHONY DePALMA
Published: February 10, 2002
STEVE HANKE

STEVE HANKE

ARGENTINA was once the darling of investors, a large emerging market graced with stability and transparency. Now, it has defaulted on $132 billion in debt, its banking system is in turmoil, the value of its currency is uncertain, and middle-class Argentines have rioted through the elegant squares of Buenos Aires.

How did this happen? One of the main suspects is the Convertibility Law that Argentina adopted in 1991, a modified currency board system that pegged the peso to the dollar one to one. At first, it succeeded in taming Argentina’s runaway inflation, but many economists believe it eventually became a severe drain on the economy.

The currency board system, however, has supporters. One of the strongest is Prof. Steve H. Hanke of Johns Hopkins University. Professor Hanke agreed to answer questions about Argentina’s travails but insisted on responding by e-mail because of what he called the complexity of the issues.

ANTHONY DePALMA

  1. The currency board system was supposed to ensure economic stability. What went wrong?
  2. In our 1991 book, ”Banco Central O Caja de Conversión?,Kurt Schuler and I proposed an orthodox currency board for Argentina. Instead of the real thing, the Argentines opted for a convertibility system in April 1991. In October 1991, we warned that convertibility would evolve from a currency-board-like system into something closer to a central banking system. And that it did. Last year, for example, the ”pure” foreign reserves in the convertibility system fluctuated wildly from a high in February of 193 percent of its monetary liabilities to a low in December of 82 percent. If Argentina would have employed an orthodox currency board, those reserves would have always been 100 percent of the system’s monetary liabilities.

If that wasn’t bad enough, Domingo Cavallo meddled with convertibility shortly after he was reinstated as Argentina’s economic czar in March 2001. In April, he announced that the peso’s anchor would eventually change from the dollar to a basket of 50 percent dollars, 50 percent euros, and in June he announced a preferential exchange rate for exports. These changes moved convertibility further from currency board orthodoxy and caused interest rates to skyrocket. The lessons are clear: deviations from currency board orthodoxy cause problems — big problems. In Argentina, they resulted in a tightening of monetary conditions in the middle of a slump.

And to add insult to injury, the de la Rúa government increased tax rates on three occasions during the past two years. These rate hikes put Argentina’s tax rates well above comparable U.S. rates. Not surprisingly, the tax-increase packages caused the economy to slump further and tax revenues to collapse.

  1. So the currency board is not to blame? Only the way Argentina tinkered with it?
  2. There is nothing wrong with the currency board system concept. Indeed, the I.M.F. has concluded that the currency boards installed in the 1990’s, as well as Hong Kong’s, have strengthened fiscal discipline and the banking systems, have motivated reforms and have been the linchpins for growth. And until it began to meddle with convertibility, that was the case in Argentina. Indeed, Argentina’s real G.D.P. grew by more in the decade of convertibility than in any other decade in the 20th century.
  3. The currency board system seems to be unprepared to deal with external events that can cause unforeseen problems — for example, Brazil’s 1999 devaluation, which severely hurt Argentina’s exports to Brazil. Isn’t this a major flaw in the system?
  4. You are alluding to the allegation that by linking the peso to the strong dollar, the peso became overvalued and Argentina became uncompetitive. The claims about Argentina’s lack of competitiveness are nonsense. A classic sign of uncompetitiveness caused by an overvalued currency is declining exports. But Argentina’s exports increased every year in the past decade except 1999, when Brazil, its largest trading partner, suffered a currency crisis.

Exports during the first 11 months of 2001 were about 3.2 percent ahead of exports during the same period in 2000. Considering that the real growth in world trade was only 0.9 percent last year, Argentina’s export performance was relatively strong. Indeed, the export sector has been one of the few bright spots in the Argentine economy.

  1. What will happen next in Argentina?
  2. Since the central bank was established in 1935, until 1991, the peso depreciated against the dollar by a factor of three trillion. With central banking and a floating peso, I am afraid Argentina’s problems have just begun, again.

  3. Isn’t the currency board discredited even if it did not contribute to Argentina’s crisis?
  4. No. Argentina’s meltdown occurred after the convertibility system was officially abandoned on Jan. 6 and is still in progress. The only reason Argentina was able to hold its head above water before then was the convertibility system, with all its flaws.

Photo: Steve H. Hanke