Magazine article The American Prospect

Stop the Press: Why the Media Missed Latin America's Collapse. (Gazette)

Magazine article The American Prospect

Stop the Press: Why the Media Missed Latin America's Collapse. (Gazette)

Article excerpt

AS ARGENTINA SANK INTO its worst economic crisis ever, a January 9 Associated Press story blamed "the greed of international investors and bad timing by the International Monetary Fund and the U.S. Treasury." The New York Times was equally scathing: "The Argentine economic miracle of the 1990s was a mirage created by foreign creditors enamored of the country's monetary policy," a December 21 editorial pronounced. "This allowed Argentina to go on a $130-billion borrowing binge without addressing longstanding shortcomings.... Predictably, the time has now come when Argentina can no longer make its debt payments, and foreign investors have lost confidence in the country."

Too bad the U.S. press wasn't as critical 10 years ago, when then-President Carlos Menem initiated Argentina's free-market reforms amid great journalistic fanfare. Touting Argentina's economic "miracle" in 1991, The New York Times called Menem's program "the envy of other Latin governments" and proclaimed Argentina the "next emerging economy."

That dispatch was typical of the period. Echoing first the George H.W. Bush and then the Bill Clinton administration, the press hailed Argentina and other Latin-American governments for selling off state-run firms, reducing trade barriers, and offering incentives to foreign investors. A 1991 headline in The New York Times declared that a "New Discipline in Economics" was bringing change to the region. "The free market, open economies and deregulation are now part of the vocabulary of taxi drivers and laborers," read the report. Reaching the same conclusion, the Chicago Tribune cited as signs of progress the openings of KFC, Taco Bell, and Pizza Hut franchises in Chile and Venezuela.

The free-market policies implemented by Latin-American governments produced short-term economic growth and booming stock markets--the Buenos Aires exchange climbed by 400 percent in 1991 and became the darling of emerging markets--but did little to redistribute income or benefit the poor. Hence, free-market reforms were broadly unpopular. But this didn't seem to trouble American reporters. A 1992 Washington Post story congratulated Latin-American leaders for emphasizing "the need to become competitive internationally, even if this implies short-term pain for millions of people."

Among Latin America's "reform-minded leaders," according to a laudatory 1991 article in the Post, were Menem, Carlos Andres Perez in Venezuela, Carlos Salinas in Mexico, Fernando Collor de Mello in Brazil, and Alberto Fujimori in Peru. A decade later, one of these five crusading reformers has been impeached, three live abroad in disgrace, and the other, Menem, is widely reviled and suspected of plundering Argentina's state treasury. Had the U.S. press not cavalierly dismissed the "short-term pain of millions," maybe none of this would have come as such a big surprise.

Consider Venezuela. After Perez was elected in 1989, its economy was the first in Latin America to be deemed a miracle. The country's gross national product climbed sharply at the start of Perez's tenure, but simultaneous austerity policies caused the real value of salaries to fall by almost half. In 1989 the government decided to triple bus fares. Riots broke out, and the security forces summoned to quell them killed somewhere between 400 and several thousand people, mostly in the poor barrios. Perez's popularity plummeted. For some reason, this baffled The Miami Herald, which reported in 1992 that international economists were "puzzled by Venezuela's generalized malaise because this oil-rich country is the economic star of the Americas."

Implicated in a series of corruption scandals, Perez was forced to resign in 1993. He now resides in the Dominican Republic. Last December a Venezuelan judge announced that his court was considering bringing charges against the former president and that Perez would be placed under house arrest if he returns home. …

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