FWIW, fyi. Michael Pugliese -----Original Message----- From: New Democrats Online <[EMAIL PROTECTED]> To: [EMAIL PROTECTED] <[EMAIL PROTECTED]> Date: Monday, August 27, 2001 11:07 AM Subject: NEW DEM DAILY: Help for Argentina: Right Decision; Valuable Lessons > >================================== >NEW DEMOCRATS ONLINE >-- NEW DEM DAILY -- >Pithy news and commentary from the DLC. >================================== >[ http://www.ndol.org ] > >27-AUG-2001 > >Help for Argentina: The Right Decision, and Some Valuable Lessons > >In announcing support for an $8-billion emergency IMF loan package >for Argentina, President Bush has made the right decision, though >only after an unsettling series of policy lurches and gaffes. > >Argentina's troubles have been building for some time. After three >years of recession, with high debt and eroding international >confidence, capital began fleeing from Argentina in the last month, >creating an imminent possibility of financial panic. Had the >Administration turned its back and let Argentina fend for itself, the >economic consequence would have been unpredictable and highly >dangerous for South America as a whole (as witnessed by the >appeals by South American leaders -- from Brazilian President >Cardoso to Chilean President Lagos -- for emergency support for >their neighbor). Over the longer term, the diplomatic consequences >would have been at least as dangerous. > >Argentina's size and diplomatic influence make it an essential >partner for the United States in the prospective Free Trade Area >of the Americas agreement, which, if successful, will rank with >the U.S. alliances with Western Europe and Japan as among >the world's fundamental guarantees of prosperity and security in >the new century. The Administration's support for financial >assistance at this moment of crisis, coupled with Argentina's >commitment to domestic reform, will certainly help keep the >goal of an FTAA alive. > >Argentina's financial near-death experience ought to provide some >lessons for critics of international financial institutions on both the >right and the left, and for the Bush Administration itself. > >On the right, "market fundamentalists" have long argued that >emergency assistance for crisis-stricken nations creates a "moral >hazard" by encouraging bad financial policies. In their view, letting >one or two countries suffer the full consequences of financial panic >will encourage good policy by providing an object lesson in the >wages of sin. > >That sounds convincing until a big, important country like Argentina >is on the ropes. The plain fact is that financial panics are >dangerous: they cause intense suffering in affected countries, >cross borders easily, and raise the danger of political upheaval. >This year's real-world encounters with financial crisis in Turkey and >Argentina seem to have forced the Administration to grasp these >facts, and we hope the lesson sticks. > >Meanwhile, on the left, even as the IMF prepared to deal with >Argentina, anti-globalization groups have been planning a large >demonstration intended to shut down the fall meetings in >Washington of the IMF and the World Bank. A look at the >demonstration's policy goals (try http://www.september30.org for >a starter) offers a varied selection of vitriol, platitude and complaint. >There are certainly valid criticisms to make of the IMF -- like any >other human institution, it is imperfect, has made its share of >mistakes, and can learn from them. But one will search the anti- >globalization movement's leaflets and websites in vain for any >actual ideas on how Argentina today, or another country tomorrow, >might prevent financial crisis, find $8 billion on a few weeks' notice >to stave off a market panic, or develop the long-term policies >necessary for prosperity and sustainable growth. > >Finally, one hopes the Bush Administration will take some time >to reflect on its own performance. > >During the Asian financial crisis of 1997-99, President Clinton's >international economic team -- Treasury Secretaries Rubin and >Summers, Commerce Secretary Daley, and U.S. Trade >Representatives Kantor and Barshefsky -- provided sound policy >guidance and calm assurance to markets. The Bush Administration, >by contrast, has offered unpredictable policy swings. It took office >espousing "market fundamentalism." In July, National Security >Advisor Condoleezza Rice announced that Argentina would be left >to stew in its own juices. Then the Administration pivoted towards >its final decision to support IMF relief for Argentina, though signals >remained mixed in part due to an increasingly familiar series of >inflammatory statements from Treasury Secretary Paul O'Neill. > >Compared to the pros on the field during the crises of the 1990s, >the Bush team is so far turning in a junior-varsity performance. >Let's hope the IMF decision shows they are getting their signals >straight -- and let's also hope the brawling critics on the left and >right sides of the grandstands take the game more seriously. > >Further Reading: > >"Summit of the Americas: Good Start, But What's Next?" >New Dem Daily, April 24, 2001: >http://www.ndol.org/ndol_ci.cfm?contentid=3287&kaid=131&subid=192 > >"The Free Trade Area of the Americas: Why the United States >Must Take the Lead," by Jenny Bates, >Blueprint Magazine, Volume 9, Winter 2001: >http://www.ndol.org/ndol_ci.cfm?kaid=108&subid=206&contentid=2974 > >"Stabilizing the Global Economy," >by Robert Hormats and Laura D'Andrea Tyson, >Blueprint Magazine, Volume 2, Winter 1998: >http://www.ndol.org/ndol_ci.cfm?contentid=1459&kaid=108&subid=206 > >---------------------------------------------------------------------- >SUBSCRIPTION INFORMATION: > >You are subscribed to ndol.org & ppionline.org >email newsletters as: >[EMAIL PROTECTED] > >To subscribe, unsubscribe, or change your >subscription preferences, go to: >http://www.ndol.org/cobrand/newsletter_subscribe.cfm > >The New Dem Daily is published every weekday >morning by the Democratic Leadership Council. >Complete archives are available on NDOL.org: >http://www.ndol.org/ndol_ka.cfm?kaid=131 >---------------------------------------------------------------------- >
