Week 24 of the Quarantine
I’m not superstitious.
– The response of 59-year-old Argentine president, Juan Perón, when asked if his girlfriend was only 13 years old
SAN MARTIN, ARGENTINA – Is there really any difference between Republicans and Democrats?
As we reported yesterday, there is one thing the two parties agree on – more money-printing.
But they agree on more than that. Here’s The Washington Post:
Concerned that the U.S. is losing its edge in tech competition, some U.S. conservatives are embracing more government intervention in the economy
…when the Senate called a vote last month on legislation that would direct billions of federal dollars to semiconductor manufacturers, nearly every Republican supported it.
The measure, which has enough bipartisan support to be enacted this year, is the strongest sign yet that Republicans are shedding some of their laissez-faire orthodoxy to counter an unprecedented challenger to U.S. power – China.
We used to expect this kind of claptrap from the Democrats. Now, both parties think central planning – wherein government functionaries look at tomorrow and improve it before dawn – can make America a better place.
And here’s Republican Senator Marco Rubio:
“Ultimately, capitalism is the best economic model. It will always yield the most efficient outcome. But there are times where the most efficient outcome is not the best outcome for America.”
Such as when? When did government interference – using the taxpayers’ money to decide which businesses would get capital and which wouldn’t – ever improve the outcome?
Soviet Approach
And now, imagine that the slow-moving, politically correct, dull-witted Swamp Creatures make the decisions in the fastest-paced, most entrepreneurial sector left in America – technology.
They will back some companies… (and presumably get a warm reception at company headquarters when they leave federal employment)… and turn their backs on others.
How will they decide who gets the money? The way they always do – on the basis of which Congressional district they are in… which lobbyists are pushing for them… and how much money they gave to whose campaign.
And oh, yes… maybe it will be color-coordinated, too – a Green company… owned by Blacks… in a Blue state?
Yes, the same people who made such a success of Amtrak (losses for 49 years straight)… and the Post Office (losses for the last 13 years) are now going to help America’s tech sector.
Rubio calls it a “21st-century pro-American industrial policy.”
Good thinking, Marco. It was a lack of an industrial policy that made the U.S. great in the 20th century.
And it was extensive central planning that made the Soviet Union such a nightmare. But let’s try the Soviet approach. Sure… why not?
The Washington Post continues:
That kind of language [industrial policy] is more often associated with Democrats, who have long endorsed the government taking an active role in shaping the economy, from Franklin D. Roosevelt’s New Deal to Alexandria Ocasio-Cortez’s Green New Deal. Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio) are big proponents of the approach, and Democratic presidential candidate Joe Biden has peppered his platform with industrial-policy proposals to revive the economy, including spending an extra $400 billion of federal money on American-made goods.
Rubio, what’s wrong with you?
Mush-Brained Planning
We are exploring the “Argentine Paradox.” What went wrong with the Argentines? How come the sixth-richest country in the world got left behind… and is now in the 80th position?
Yesterday, we saw that Argentina went the way of all European countries (including former European colonies, such as the USA) – towards more government, more “socialism,” with more Rubio-style, mush-brained planning and meddling in the economy.
These things seem to be the natural consequence of a broader voting base and the rise of “Keynesism,” in which it is believed that governments can improve the way economies function by pulling levers and turning knobs.
These two things probably damaged all the economies of the “western” world, roughly in proportion to how they were applied.
The Soviet Union, for example, got a toxic dose. Their feds made almost all the economic decisions – price setting, job selection, capital investment… everything. Planning was so complete that it retarded living standards over the 70-year period from 1919 to 1989.
In America, the Roosevelt Administration quacks prescribed similar medicine – government intervention in the economy – but not in fatal dilution. It merely turned the 1930s depression into the Great Depression.
And when World War II was over, growth resumed in a still relatively-free economy, with declining government spending, lower deficits, a growing population, new technology, and gold-backed money.
Economic Wreck
Argentina took a different path – a “Third Way.”
Juan Perón had been sent to Italy to study mountain warfare (anticipating war with Chile). While there, he became an admirer of another form of socialism and a different inspirational leader – Benito Mussolini.
Mussolini combined socialism with nationalism – essentially, a program of giveaways, wrapped in the flag and delivered to the sound of trumpets.
Perón was elected president of Argentina in 1946. He set in motion the typical reforms – pensions, medical care, minimum wages, a “13th month” salary bonus, and so forth.
These were combined with Rubio-style industrial policies.
Argentina’s most important sector was agriculture; it was where the money was. So, the Perón team took control of exports, reducing farmers’ earnings and using the revenue to fund vote-buying social welfare schemes.
Later, banks and railways were nationalized. Five-year plans were announced. Trade barriers were set up. Price controls were put in place.
Thanks to its farm exports, Argentina had always run a trade surplus. But by the third year of Perón’s presidency – 1948 – the surplus had turned into a deficit. Inflation increased to 33% by 1949. Strikes became commonplace.
In a remarkably short time, the economy was a wreck.
This brought a wave of disgust and dissent, mostly from union leaders and intellectuals. Perón’s response was classic. He called them “traitors”… and had them arrested… and tortured.
Corruption
These things were not as shocking as you might think. Because there was another long-fermenting cause of Argentina’s demise – corruption and violence.
After the vote was given to all adult males – with the passing of the Sáenz Peña law in 1912 – the old, conservative elements were unhappy with the results. The people voted for the “wrong” candidates, they noticed.
That, of course, is a familiar complaint. The person who would make the best president is one who is thoughtful, slow to judge, curious, clever, humble, and able to look at a problem from many different directions. But this poor fellow never even makes it into the primaries.
Instead, the voters prefer the bigmouth with the easy answers… the enemies… the quick fixes and the promises.
In the event, the masses voted for populists and reformers who threatened the old order.
In reaction, the conservatives decided that electoral fraud was an acceptable tactic, at least until the voters became more sophisticated and more learned.
Domingo Martinez, chief of the Argentine Federal Police in 1943, said:
The great majority of elections since the law of Saenz Pena was put into effect…were fraudulent. No president after Yrigoyen [elected in 1916] was truly elected by the people.
In practice, the candidates were selected in the proverbial “smoke-filled rooms.” Deals were made… and the votes of “the people” were a foregone conclusion.
Coup
This corruption gradually soaked through the entire society – its businesses, its government, and its politics.
And today, from the largest corporation to the humblest taxi driver, nothing in Argentina is completely straight. Dishonesty, corruption, double-dealing… inflation, defaults – are all part of public life here.
Argentina has its color coordinates, too – “black” markets… “blue” (unofficial) exchange rates… and “white” (official… declared… transparent) money.
As Juan Perón imposed more and more controls and planning, the economy creaked and staggered. Inflation hit 50% in 1951. Between 1948 and 1952, there was zero growth.
Amid growing opposition – notably from the Catholic Church – Perón at first dug in his heels, exhorting his supporters to vandalize churches and burn down opposition centers.
But then, navy jets appeared over the capital and dropped bombs on his supporters in the center of Buenos Aires.
Days later, the coup was complete. Perón barely escaped with his life, aboard a gunboat sent to his aid by Paraguayan president Alfredo Stroessner.
Fascinating and Contradictory
Much more could be said about Perón and Peronism. The man was fascinating. For years, he kept his dead wife’s coffin in his living room. He had a liaison with a 13-year-old girl.
He provided refuge for prominent Nazis fleeing Germany after the war, including Klaus Barbie, Adolf Eichmann, and Josef Mengele.
But he also opened the doors to Jewish refugees. And Jews were among his closest advisors.
He could be a supporter of the labor unions one day… and their implacable enemy the next.
He enjoyed friendly relations with leftist revolutionaries, including Che Guevara, for example. But he was also friendly with right-wing dictators, such as Stroessner and Chile’s president, Augusto Pinochet.
Juan Perón died in 1974. But Peronism – “big man” politics, central planning, giveaways to the masses, deficit spending, and money printing – still rule Argentina.
“It is our most successful export,” says a local friend.
Regards,
 |
Bill
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