MercoPress. South Atlantic News Agency

“Getting rid of credit rating agencies is imperative”, says top Argentine official

Boudou: “they are a source and transmission of problems”

Argentine Economy Minister and Vice-President-elect Amado Boudou charged against credit-rating agencies and accused them of being “a source and transmission of problems,” warning that “as long as they exist, resources will continue to flow from those who have less to those who have more.”

While speaking at a seminar about the current global crisis sponsored by the World Bank and the Economy Ministry, Boudou stated that “previous to the 90s, credit-rating agencies didn’t have the kind of relevance they have today and the financial system still worked they way it should”.

“Some say the economy can be detached from the social sciences, but this is wrong,” he said, adding that “behind the economic philosophy, there’s always the political philosophy, especially when it comes to the decision-making process and that is decisive when it comes to results.”

Boudou assured that “as long as credit-rating agencies exist, resources will continue to flow from those who have less to those who have more. And this diminishes the possibility to create jobs and strengthening the domestic market.”

“When a small percentage of the population holds a large percentage of the country’s wealth, this affects their possibility to generate their own domestic markets and create aggregate demand,” he explained.

Before 2003 in Argentina the supremacy of markets was above government decisions and this unfortunately has become an economic philosophy allegedly undisputable, and “the results we experienced them in Argentina and now in Europe”.

However since 2003 making the State prevails is “one of the key reasons why Argentina overcame the crisis in eight years while Europe still can’t find a way out of it,” Boudou said, adding that “isolating economic science from politics only leads to bad results”.

He concluded by considering that “it’s clear that the markets work deficiently, but it’s a pattern that proves that the more deregulation there was, the more deficient they were”.

“Getting rid of the credit-rating agencies is imperative” underlined the Argentine Vice-president elect.

In spite of his elegant words towards sate intervention in the economy, Boudou who graduated in Economics at the National University of Mar del Plata was an active militant of the UCeD centre-right party who was a close of President Carlos Menem in the nineties..

Likewise, the minister was awarded a masters degree in Economics by the private institution Argentine Macroeconomic Studies Centre (CEMA), which is well-known in Argentina for its support of neo-liberal and free market policies, and its close links to the ‘infamous’ Chicago School of Economics.