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November 21, 2017

Politics & the press

Thursday, April 13, 2017

It’s not the economy, stupid

Two granaderos guard at the doors of the presidential office
Two granaderos guard at the doors of the presidential office
Two granaderos guard at the doors of the presidential office
By Marcelo J. García
For The Herald
Macri shifts from the defensive to the offensive, but conflicts are easy to unleash and hard to untangle

It is by now a truism in US politics that the 2004 presidential election that gave George W. Bush a reelection vs. John Kerry was settled by what analysts called “moral values.” Exit polls indicated that a larger number of people had on that occasion decided their ballot with issues other than the economy on their minds.

The Casa Rosada might have checked that precedent as it prepares its electoral strategy for this year’s midterm vote. The government is resigned to the idea that there will be no good news in the economy soon enough to sway more voters its way.

So, it will instead try to find its electoral character in some other way, including a high-profile confrontation with the unions and an attempt to tame the seemingly untamable teachers’ union.

Unlike James Carville’s infamous campaign motto that “It’s the economy, stupid” in the early 1990s, for Macri this year it will not be the economy. President Macri has decided to unfurl a battle for values, possibly out of conviction but also out of pure electoral needs. In an interview with Bloomberg TV last week, the head of state said that his government had no “Plan B” for the economy and he was likely right about that. But he does have a Plan B to pursue political survival in the August/October midterm vote which many said would make or break his hopes to stay in office for eight rather than four years.

From now on, government staffers in charge of the economy will be less visible. The administration insists that the country’s engines are starting to run, but the data coming from the now trustworthy Indec statistics bureau delivers contradicting numbers that, in the best of cases, show the recovery is slower than expected and less certain than needed to change the public’s mood.

This might be good news for the government’s embattled multi-headed economic team, which already lost a Treasury Minister, Alfonso Prat Gay, and a Banco Nación head, Carlos Melconián. After almost a year and a half in office leading a “gradualist” effort to sort the economy out, the team has little to show. To many, gradualism was nothing but a euphemism for lack of direction.

Disappointment

The President is disappointed at the results of his economic programme, but can’t and won’t admit it. This week, the official statistics landed another blow to the administration’s main achievement so far: lowering inflation. The cost of living went up 2.4 percent in March, climbing to 6.3 percent in the third quarter, and forced the Central Bank to show “policy resolve” and raise interest rates one point and a half to 26.25 percent. Higher rates mean a dragging economy.

There is another interpretation of the government’s shift from the defensive to the offensive. For weeks prior to the April 1 pro-government demonstration, the government feared a political precipice. History burdens Macri: no non-Peronist leader has completed an elected term since Marcelo T. de Alvear in 1928. Government officials circulated the notion that there were groups associated with the former government of President Cristina Fernández de Kirchner trying to “destabilize” the Macri administration. The change in Macri’s political tone sought to reaffirm that the government would not let itself be intimidated.

The police’s clumsy eviction of a teachers’ union demonstration outside Congress on Sunday’s rainy evening was the most symbolic action. But it kick-backed, and fuelled a conflict that the government seemed on the verge of winning. Last Saturday, the daily Clarín trumpeted on its front-page banner headline that Buenos Aires province Governor María Eugenia Vidal had scored an “important political victory” following the teachers’ unions announcement that they would cease to strike in order to pave the way for fresh wage negotiations. The teachers in the province and nationally have been on the protest path for their salaries since the school year started in early March. They want a wage hike that beats inflation this year after having lost roughly 10 percentage points in purchasing-power last year.

The mainstream media has been largely instrumental to the government’s wish to demonise the teachers’ union leaders for the benefit of the electoral polarisation it is trying to build up ahead of the electoral season. The government is relying on opinion polls that show that most Argentines are fed up with street protests and even strikes, and is trying to feed a debate on values rather than reality. In La Plata, home to Vidal’s office, some officials are looking at another international precedent — Margaret Thatcher’s victory over striking coal miners that lasted for a year in the mid-1980s.

History is of course easier to read in books than to write day by day. There is a more recent and local chapter of big political confrontations — the Cristina Kirchner administration’s months-long bout against the farming sector in 2008. The Kirchners lost the fight in the short term (the congressional vote over export duties that year), won in the medium term (Cristina Kirchner’s re-election in 2011) and lost again in the longer haul (Macri’s win in 2015). Conflict is easy to unleash, but hard to untangle.

@mjotagarcia
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