In around April of 2000, I was in an undergraduate seminar on political economy at University of Buenos Aires. The class was for study-abroad students, intended to help us get a grasp on the turmoil surrounding one of the world's most severe and desperate debt restructuring and austerity plans the world had ever seen. It was also one of the most boring classes I'd ever sat through, way over my half-interested, over-partied head, a lecture full of jargon and misunderstood controversies. The professor, a stoic and debonaire Argentine surveyed the sea of glazed eyeballs, closed his notebook, and said, "let's go for a walk."
Living in Buenos Aires, we had all walked by the lines of people in suits outside retail stores, clutching resumes with a look of resignation. We'd each individually found ourselves caught up in abstruse political conversations about our nation's role in South America's misfortunes. Even without much explanation, it was obvious that something was wrong with a place where a professional might earn $20 thousand a year, and expect to make ends meet in a city as expensive as New York. It was impossible to miss the anti-IMF, anti-American, pro-Vague-Collectiveness slogans and graffitti, the kids our age, educated like we were, who were screaming for something better than their lives were providing. We all knew something bad was going on around us. For my part, what it was, its causes and effects, were a mystery explainable only by anecdote, like a fearful primative explaining the pox on his village.
The Argentine professor led us to the nearest subway stop, down the stairs to the downtown side of the tracks. He told us to keep our eyes open and not to speak a word of English. A few stops later we arrived at the city center, a sprawling plaza surrounded by the nation's legislative and executive offices. Coming out of the station we could already hear the mob. Down side streets and alleys, on balconies, rooftops, atop light poles and parked cars were young people yelling, redfaced. Smoke billowed out from around puckered groups of men in the crowds. Signs called for revolution and the end of the "Washington Consensus" that was seen as the root of it all. Angry, suspicious looks flashed our direction. Glass shattered somewhere. We were in the middle of a national crisis that everybody blamed on us.
One guy on my program nodded his head and smiled. He was the son of a powerful investment banker, a Georgetown University athlete, all-star advanced-placement academic from Westchester County, New York, and all around nice guy with perfect white teeth. "These guys don't know what they're talking about," he said Spanish, which he always spoke even to English speakers, even when nobody was looking for a scapegoat, just to better immerse himself with the locals. "They just don't know how they got into this mess." I hated this guy, even if he was probably right.
I never did acquire a particularly deep understanding of what was going on in Argentina in 2000. I knew that everything was expensive, that people were unhappy, and that it didn't seem to be their fault. I knew that smart people who I didn't like much seemed to have all the answers I didn't want to hear. But I did gain an appreciation for what an economic crisis means to everyday people.
Economic crises, like any Greek tragedy, are not forces of nature that cannot be prevented or undersood. Such crises are the product of human decision-making; decisions that ingratiate the public to their leaders. Debt crises, like the one in Argentina, Greece, or here at home, are the fruit of politics without tradeoffs-- low taxes combined with endless warfare, generous pensions, or free education. Everybody wants service, nobody wants to pay for it, and the bill is unlikely to come due before any particular election cycle. The same politicians who kept taxes low and expanded their government's offerings will take cover under the spectre of the IMF, Germany, China, or anyone else who comes calling for their due.
We can argue about the role of the state, but America's debt crisis is not the result of government largesse. Like all debt crises, it's solveable. It's just that nobody likes the solutions. Either we pay our bills or we cut back. Either we raise the cash or we hold off on a spending spree. Like everywhere else, it's a political failure; a design flaw in a system that's engineered to give people what they want most of the time, it is a common side-effect of democracy.
Later that same week back in Argentina the president came on the TV during primetime to implore his countrymen to pay their income taxes. From where I sat, coming from a prosperous time in a disciplined land where the IRS was monolithic, this seemed utterly absurd. But Argentine revenue collection mechanisms were corrupt and ineffective. Only the tiny demographic sliver of suckers paid up voluntarily. Whether borrowed or raised, money that did get spent was often wasted, even as people demanded that the power stay on and the trains arrive. But there and then, as here today, the problems are political. Economic crisis is a symptom of political dysfunction and bad decisions, not some bogeyman or natural disaster. Mr. Georgetown was right, even if he was utterly lacking in empathy and oblivious to his educational advantages.
Don't believe the hype. Like everywhere else, we really can cut our way out of this. We really can tax our way out too. What we can't do is nothing. Either we grow up and pay the bills for the things we demand, or we default and let the bank decide. We've all been burned by this economic crisis. There is real blame to go around, and there are far more real victims. But we need to be better than our leaders. They have an election to win. We have a government to run.
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