Monday, April 16, 2012

More Negative Mood Anecdotes


Argentina continues to be my favorite touchstone for what is to come for most Western governments and societies. After their debt collapse and currency devaluation a decade ago, followed by the seizure of private retirement funds, I think they are blazing a trail we'll see trampled down by many governments between now and 2020.

Here is some saber-rattling about nationalization of a key energy company using the language of scarcity and depletion (note that Ms. Kirchner's government says YPF has not invested "enough" into the sector to keep supplies sufficient to meet public demand. We'll see how government control, if it comes to that, will help with that. Between depletion, high costs for advanced extraction techniques and a high dose of bureaucracy, one can imagine the outcome. Add in some threats to retake the Malvinas and we would have a full-blown negative mood marker in play here.

3 comments:

David said...

Reading Ferfal's blog "surviving Argentina" has been a good use of time (even though he has now moved to Ireland to get out of Dodge). There will likely be big divergences between what the basket-case Argentine government did (and does) and the USA's government does, but the general gist strikes me as a useful template.

The real concern is that the USA's denouement will occur with nowhere near the decades of experience Argentine citizens booked before their 2001 meltdown. They had most of the 20th century to get used to overt idiocy in politics, whereas US citizens' imaginary world of plenty (plenty of consumer goods, plenty of honesty, plenty of predictability) will likely give way to the rotting foundation in comparatively little time.

The political ramifications are dire, I think.

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