- - Sunday, August 18, 2019


Cry for Argentina. What else is there to do after a rout like this? “The main Argentine stock market plunged more than 30% on Monday, marking the second-biggest one day slump anywhere since 1950,” the financial network CNBC reported this week. “Meanwhile, the peso closed 15% weaker at 53.5 per U.S. dollar. The currency had been trading at 45.25 on Friday.”

In other words, Argentines found themselves significantly poorer last week than they did over the previous weekend. Granted, as a population that has gone through multiple economic shocks over the course of their country’s tumultuous history, Argentines are probably used to such depredations. Argentina, after all, was once one of the world’s wealthiest countries and now it’s barely an economic footnote. But nobody likes a currency or stock market crash of historical proportions — no matter how battle-scarred they already are.

What explains the massive sell-off? The return of Ms. “Don’t Cry For Me Argentina,” herself — or at least her successors in spirit. The Peronist opposition — ideological heirs to Juan and Eva Peron, the leftist firebrands who led the country to ruin in the 20th century — made a great showing in recent presidential primaries, far outperforming where they were in the polls beforehand. The results strongly suggest that that the country’s current president, the neoliberal economic reformer Mauricio Macri, will likely be going down to defeat in the general election in late October. Mr. Macri managed only 32 percent of the vote in the first round — 16 percentage points behind the Peronist candidate Alberto Fernandez. Mr. Fernandez’s running mate, meanwhile, is the Peronist former President Cristina Fernandez de Kirchner. (The two are not related.)

“We had a bad election,” conceded President Macri after the votes were tallied. He was understating the situation: Markets have left him and his economic reforms for dead.

Mauricio Macri has done a decent job as Argentina’s president, working through tough times since his election in 2015 and attempting to mop up the messes his predecessors left for him. When she was president, Cristina Fernandez de Kirchner had spent like a drunken sailor, and when Mr. Macri came into office, the larder was bare. President Macri implemented tough but necessary austerity measures to get the country’s finances in order. He was ultimately forced to take out a $57 billion bailout from the International Monetary Fund. Argentina, unfortunately, remains mired in recession.

The election results suggest that Argentines are sick of austerity, of recession, and of the fact that Mr. Macri has been unable to tame Argentina’s unsustainable inflation — for years among the world’s highest. (The fall in the peso will only make inflation worse in the meantime.) They are signaling an imminent return to Peronism, no matter how grim that past was, too.

It’s largely understood that the likely next president, Alberto Fernandez, despite leading the ticket, is actually a mere figurehead, and that vice presidential candidate Ms. Fernandez de Kirchner is really pulling the strings. That’s bad news for Argentina: Under her rule, not only will Argentina likely return its unsustainable, irresponsible, profligate ways, but Ms. Fernandez de Kirchner has also been mired, repeatedly, in corruption scandals throughout her time in office. There’s no reason to believe this pattern won’t repeat itself.

This will end in tears, Argentina.

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