The biggest default in history

When things are going well, people vote for the status quo.

When they are not doing so well, they move farther out on the political spectrum. In France, a couple of years ago, both Mlenchon on the far left and Le Pen on the far right were considered "politically dead". Now, a few years of crisis have brought them both back to life.

From France 24: "Far-right National Front candidate Marine Le Pen obtained a surprising 18% of the vote in the first-round of France's presidential election Sunday night...

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""Tonight is historic," Le Pen gushed to her supporters gathered in the 15th district of Paris on Sunday. "We are the only opposition to the ultra-liberal, libertarian left-wing."

"A seasoned National Front loyalist, 42-year-old Jean-Christophe, explained his reasons for supporting the candidate. "I'm against legalising immigrants without papers, no exceptions... We're not able to welcome them properly, so we should offer them aid in their own countries," he said.

"Marine ran a campaign tightly focused on economic protectionism and an exit from the eurozone."

It was a backlash against austerity', says the Financial Times.

If you're in power, you tell people that the status quo is great and getting better. If you're out of power, you tell them that things are going to hell in a hand basket, unless they vote for a change.

In France, as in America, left and right have more in common than in dispute. Both want to use the power of the state the force of government to get what they want. Protect one industry. Punish another. Reward one group. Tax another.

But the most important thing they want is to get elected to get into the driver's seat and turn the wheel in the direction they want to go.

Generally, the lefties want more spending. The righties steer towards more austerity. The lefties go with Krugman and Keynes. The righties prefer Friedman (Milton) and Schauble.

Right now, the Germans have the money. They don't want to give it to free-spending Greeks and Spaniards. So, the 'olive countries' promise to straighten up and the fix is in. Trouble is, except for the elite bankers, bureaucrats and politicians, the fix isn't working for anybody. In Spain, the real unemployment rate is nearly 25% close to Great Depression levels. Of the country's ten biggest companies, eight are now priced below liquidation value.

It's "suicide by austerity," says Paul Krugman.

And while the elite want to stick with Europe and the euro, more and more voters seem to want to make a break. Colleague Justice Litle: "Europe's real problem is a long-brewing and dangerous one: political backlash in the streets. At some point, angry Spaniards, Frenchmen, Portuguese et al may join their compatriot Greeks, stand up to their cowed leaders, and collectively shout in unison: "To hell with your austerity"".

And guess what country the anti-austerity crowd looks to for an example?

Argentina!

Yes, the Argentines were stuck in a somewhat similar situation. Their economy was tied to the US dollar. They owed the rest of the world primarily large foreign banks a fortune. And the more they tried to keep up with their bills, the more the economy seemed to suffer.

That was at the end of the 1990s.

What did they do? They simply walked away from their solemn promises, reneged on their debt, and dumped the dollar.

It was the biggest default in history.

And oh yes, the Argentine government not only stiffed its foreign creditors, it stiffed millions of its own citizens too. It froze bank accounts and forcibly converted dollar deposits to peso deposits, giving savers a two thirds haircut.

Did it work? Depends on what you mean by work'. The government ripped off lenders and its own citizens. People lost their life savings. Businesses went broke. Unemployment hit new highs.

But it was fairly quick. The economy was able to get back on its feet after a few years. And the leaders of the Peronist party, still in control even after the debacle, were able to get back on the job of ruining it. They seemed to learn nothing from the experience, except that they are able to get away with practically anything. Peso inflation is running at about 25% per year. The Argentine government just expropriated the largest oil company in the nation. And most observers expect another crisis within 24 months.

Is that success? Depends on what you compare it to...

More of Elizabeth's memoirs from our stay in Argentina

On our last week, Bill and I took another long ride to visit Feliz and his wife Elina. Their son Omar, who is helping to make bricks at Pucarilla, had asked me, "And when are you going to visit my parents?" So we knew we had to make an effort to go.

We met Feliz and Elina the first time we came to Pucarilla, six years ago. Feliz is Jorge's uncle. He was bent over with osteoporosis, while Elina seemed ageless; tiny, graceful and spry, with long black braids and a small high-cheek-boned face. Feliz endeared himself to us immediately, pulling the new dueo (owner) to him in a welcoming embrace, and kissing the new patrona's cheek.

It was the first time we had an inkling of the role the owners are expected to play on a finca (estate), at least, in the remote mountains of Argentina. An owner is also a leader. He is expected to act in the interests of the people living on his land, even to protect them against the caprices of nature and the resistance of the outside world.

The finca regulates access to water, builds and maintains acequias (irrigation ditches) and represas (reservoirs), works with the government to provide a health clinic, a chapel and a school, housing for peones coming down from the remote arriendos on their way to the outside world, maintains trails and access roads (even outside its boundaries), drives gente (people) to the hospital or to the market to sell cheese, introduces new technologies, teaches new skills, offers employment, and enforces the delicate, unwritten rules that make a place like this possible.

Now that we have shown how one solar panel and a battery can pump water and provide light to a jobsite at Pucarilla, for instance, several of the gente have asked us to order similar systems that they can buy from us. We provide an interface with the outside world from a place where there is no telephone or internet service, transportation options are limited, and in a country with an unreliable retail banking system.

In a modest way, I also help to bear the owner's burden; I've been giving English lessons to a fourteen-year-old girl! What makes this more remarkable is that in the course of teaching her the rudiments of my own language, I realised I needed to teach her Spanish grammar.

Luckily, all those years as mre de famille in Paris have given me a thorough understanding of direct and indirect objects, adjectives, adverbs, prepositions and conjunctions, not to mention circumstantial clauses. And Maria lent me an excellent old-fashioned textbook from 1966 that takes no prisoners in the grammar wars (it also touches on everything from how a rocket works to how to make a skirt)

We went to visit Feliz and Elina on Thursday. This is the day I usually ride out to Pucarilla and have lunch with Bill and the boys at the jobsite. I always enjoy this change of pace. There's music from Pedro and Jos's band, which they play while lying flat so as to take a rest from masonry Pedro with his drum and Jos with his guitar in the shade of a tree.

The young Alejo, one of Marta's cousins, is learning the guitar and he joins in. And there is Sir Oscar Pussington, so named by Jules, who joins the family every day for lunch and is gradually putting a little weight on his bones. He belonged to Omar, who lived in one of the empty houses at Pucarilla last year.

And there is the progress at the casita to admire. I admit that I wondered at first how an amateur architect, with limited Spanish and limited experience, with no drawings except a sketch on a piece of scrap wood, could communicate with workmen who spend most of their time roping cows. But all seem to take great delight in figuring out how to build this most unusual structure.

Feliz and Elina live at Corralito, a high plateau overlooking the Compuel river about two hours on horseback from the small fertile valley where we were having lunch. Gustavo had come with me to show us the way, and we had brought two extra horses for Bill and Jules to ride. We rode up to Corralito last year, when the river bed was dry.

This time, we rode beside and through the river, which was fast-moving and sometimes surprisingly deep. We had heard that the visiting nurse (who sleeps in our house at the moment, as the clinic is the next project to build) had fallen in on his way to see the elderly couple, so we were wary.

My horse is young and restive, and occasionally thought it would be more fun to bound down the stony banks and across the water, but we managed to stay relatively dry. It was a stunningly scenic ride, a small-scale grand canyon. The rock cliffs rising on either side are striped in red, pink and white, in green or black, and cut into dramatic shapes by wind and water. We passed an abandoned settlement on one side, while on the other we could see the vestiges of ancient terraces for farming. This path also eventually leads to an Indian fort on the top of a mesa, where there are carvings cut into stones and a wreckage of pottery shards and stone tools.

We finally came to the trail leading up to the plateau where Feliz and Elina live. We wound up through algarroba trees until we came out on the flat pasture in front of their cluster of houses. We could look out across the ravine to the cliffs on the opposite side; to the other side of us were the mountain ranges separating Pucarilla from Compuel. The farmstead has been occupied for centuries, as we knew from the mortar stones, heavy granite boulders drilled with holes for grinding corn, under the trees near the house.

A band of horses whinnied and hobbled as quickly as they could to greet us. Their front legs were tied loosely together to keep them from running away. These are Omar's horses and a handsome herd a lustrous grey broodmare, and four negritos, a rich chocolate brown. There were also a herd of goats in a pen, and a few chickens scratching around the farmyard.

Feliz and Elina were pleased, though not expecting to see us Elina, laughing modestly, skipped into her room to change into a bright plaid skirt. They invited us to sit down at their outdoor table and brought out a bottle of Coca-Cola.

While we sat, the radio continued playing softly. It is the background noise of many arriendos and of our own kitchen in the sala. Radio Cachi broadcasts the news of the fincas and their gente, informing families as far away as the cities of Salta and Cordoba of births, deaths and impending visits.

It was especially important during Holy Week, when relatives coming home to the mountains alert their families of arrival times in Molinos and learn when they will be picked up and by whom.

Elina's daughter was scheduled to visit on Good Friday. How would she get here, we asked?

"Someone will drive her from Molinos... " seemed like vague planning. But the next day, a woman and three children came to the main house. Jules (our son) drove them over to Pucarilla... an hour and a half drive. That's what the dueo is supposed to do.

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