MercoPress. South Atlantic News Agency

W Street, Bush and CFK: “Jazz effect” or “Alfonsin syndrome”

In her first speech before the United Nations General Assembly, Argentine president Cristina Fernandez de Kirchner with unabashed satisfaction added the “jazz effect” to a list of similar financial episodes of recent history: “caipirinha” effect; “tequila” effect; “rice” effect.

Her obvious target: the current US markets triggered financial global crisis. She could have avoided adding insult to ignorance to the creators of Deep South rhythm. Mrs. Kirchner would have done better talking about politics, her alleged expertise, and recalling the "Alfonsin syndrome" if she wanted to establish parallelisms, since she should well know by now that successful finance and economics are based on sound, robust, transparent politics and intelligent policies. Raul Alfonsin will be remembered for the great merit of having steered Argentina from the vicious circle of authoritarian, cleptocratic military regimes followed by weak, austere and democratically anemic institutions governments which plagued Argentina for most of the last century. However the man who won the first free elections in 1983 following the military establishment's Falklands/Malvinas disastrous adventure, had to cut short his six year term overwhelmed by economic mismanagement, hyperinflation, negative international reserves, and obviously a non performing defaulted credibility in that particular field. In July 1989, six months before his term was up he handed the presidential sash and cane to his successor elected in May that year. In the United States, President George Bush has repeatedly tried to convince Congress and Main Street (exposed to the housing meltdown) that the excesses committed by Wall Street, under the auspices of his illuminated administration, need a big rescue package (700 billion US dollars check) because the US economy faces a big, major problem. With presidential and Congressional elections just five weeks away and all the House of Representatives seats on the line it is no surprise that the Democrats, House and Senate, plus "responsible" Republican senators can agree on basic points for the rescue plan, under certain conditions, but not the Lower House Republicans who would be voting for the beleaguered average US family to contribute ten thousand dollars to save "fat cats". President Bush's address to the nation on prime time, when for the first time he really outlined the magnitude of the mess the US economy is wrangled in, was unconvincing: he seemed uncertain of what he was talking about, he's face was sheepish and behind him a long "time" tunnel, probably to the unknown. Mr. Bush is not a lame duck, he's a dead duck. Confirmed when details of the derailed unity photo session at the White House on Thursday, with the country's Executive and Congressional leaders and hopeful presidential candidates turned the gathering into a shouting and recrimination exercise crowned by Treasury Secretary Paulson on "one knee", begging House leader Nancy Pelosi to help push through the bail-out package. Chairman of the Senate Banking, Housing, and Urban Affairs Committee, Chris Dodd summed up the situation: "we are not going to hand a 700 billion US dollars check to a 40 days Secretary of the Treasury and an unnamed successor for the next four years, whoever he might be". Nevertheless a bail-out package will come out based on the Democrat presidential candidate principles of fairness, and basic points, negotiable in language but not in essence: no excessive compensation or bonuses to Wall Street executives; if tax payers are going to advance the money and take the risks they will be rewarded; accountability and oversight and finally help for Main Street foreclosure problems. Certainly Mr. Bush will not make a dramatic speech to the nation, pack and leave before his term is up (January 20th.) as happened with Mr. Alfonsin. US institutions have behind them over two solid centuries of continuity and proven capacity to overcome political seisms, including the prolonged election process of 2000, (when Bush finally won) which was beautifully described in the Mexican press as "elecciones a la gringa" (gringo style elections). But President Bush will be limited to act as head of state and commander in chief, since the head of government politics now rests in Congress, in the hands of Democrats, a process which begun gradually in November 2006 nourished with Executive arrogance. Bush's place in history will now have to be disputed with ("Great Depression") Herbert Hoover (1928/32). Nevertheless going back to Mrs. Kirchner she could well have spared her remarks: she still has much talking to do with financial markets. Although she promised no sovereign defaulted hold out bonds negotiations were to take place, she has U turned and is ready to talk; she implicitly is admitting Argentina needs to return to money markets and must open her arms to foreign investment; she is paying dearly for President Hugo Chavez as lender of last resort; the president of the Inter-American Development Bank a significant source of financial support and infrastructure sourcing for Argentina, cancelled at last minute a long booked appointment at his Washington headquarters. The entire Argentine economic and financial spectrum doesn't take seriously her administration's statistics office "fantasy accounting" with alleged one digit inflation. Finally her political foundations with a comfortable majority in both Congressional houses has proved to founder (at least on taxing issues) and the hegemonic catch-all ruling Justicialista party is sufficiently alert and ready to realize that the Kirchners mystique has begun to erode and is nurturing several budding candidates. Besides one year from now President Cristina Fernandez de Kirchner will be facing mid term elections. Recent history tells us that Mr. Alfonsin and closer even Mr. Fernando de la Rua had to cut short following adverse results of mid term elections. And let's not talk of "unfounded trash orchestred" plots about corruption allegations, either in Argentina or Miami.