06 July 2008

More complicated than seven votes

Last Saturday evening the mobile tax exports bill was approved by the Chamber of Deputies. Now it will go to the Senate, and if approved there it will become law.

Each politician and political pundit in Argentina has a slightly different view of the legislative debate and its result. The Kirchnerists are publicly exhilarated, though of course we don't know what they actually believe. For the hardcore K-people, it was a show of power and a triumph of loyalty. For the less sophisticated (the usefully idiotic palaeo-leftists, the Peronist Youth, and all the scum between those extremes), it was victory against the "oligarchy". For more than a few legislators, however, it was simply well-deserved relief from the strain of being pulled in several different directions — by the de facto President Néstor Kirchner, by the farmers, by the governors of agricultural provinces, by the urban middle class threatening with more cacelorazos, by our vulture-like media.

For the ones who lost, it was either the first step towards the unification of the opposition or merely one battle in a war that won't end soon. And they got a precious victory of principles: Cristina Kirchner had to subject to the will of Congress.

Mathematically, the result was simple enough: 129 to 122. The Front for Victory had to call on all of its allies for help, and some of their own defected. If three of the Río Negro deputies hadn't been offered a tax exemption that benefits the apple and pear producers of their province, the difference would've been reduced to one vote. If a certain deputy hadn't chosen to abstain at the last moment, instead of voting for the first minority, it would've been a tie. A year ago, even six months ago, Kirchnerism could've passed any law; yesterday it could've lost by a few votes, if only certain deputies hadn't been bought beforehand. That didn't happen, so the Kirchnerists won.

Néstor Kirchner won — the deputies explicitly ratified the authority of the President to set and modify export tariffs. This is so unconstitutional even a ten-year-old could take this matter as far as the Supreme Court, as it will most surely happen, but Kirchner has never been bothered by the law. The rest of the bill was changed almost beyond recognition — first it establishes a new tax and then it returns the money to 85% of the taxed. But the core of the problem, the one thing that matters to Néstor Kirchner, and which we citizens should never stop protesting — the short line that says that the President is entitled to do as she pleases with tariffs, is still there. So Kirchner can count this as a victory.

However, in a sense, it may be said he lost, too, and he's taking her wife and her party down with himself. Cristina Kirchner's approval rate has plummeted, most people don't believe she exercises power in more than symbolic fashion, the party is divided even at its core, and its alliances are coming apart. Right after Felipe Solá announced his vote against the export taxes, fellow Peronist deputy Carlos Kunkel called him "you traitor son of a bitch" so that everybody could hear. Vice-president Julio Cobos was told to "shut up" by an anonymous phone caller, echoing a previous, slightly more polite suggestion by minister Alberto Fernández. Cobos, who will be presiding the Senate next week, calmly replied he won't resign ("How could I resign, when so many people voted for me?"). Many of Kirchner's former allies, who are aligned with Cobos, will vote no to the taxes.

It's been almost four months since this all began, and everything has turned to the worse — consumer spending is down, credit rates are up to ridiculous levels, capital flight has accelerated, the high dollar-peso rate that made industrial exports competitive has had to be decreased to avoid a run on the dollar, and estimates of GDP growth have been taken down a couple of notches already. The export taxes that should've brought billions into the government's coffers are nowhere to be found, since the farmers refuse to sell, and the government is paying tens of billions per year to subsidize utilities and public services, and somehow has to honour a few additional billions of debt payments. Kirchner hates the idea of "cooling the economy", so public spending continues to rise. How will this end? One ugly word — stagflation.

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