I remember it so distinctly. Mum allowed me to stay up to watch it even though it was a school night and it meant going to bed after midnight.
The reception was appalling on our tiny “PYE” television in the corner of the kitchen. But Scotland were playing Holland in the 1978 World Cup and as Dad’s parents were Scottish, this link was enough to give me legitimate bragging rights in national school. But everyone loved Scotland back then; we adopted them. They had Dalgleish, Jordan, Hartford, Gemmill, Souness, Buchan, and Robertson. They were quick and skilful and, of course, we watched them every week playing for Liverpool, Man U, Leeds and Notts Forest.
The game, played in the freezing cold of the Argentinean winter, was extraordinary with Scotland winning 3-2 but still failing to qualify, and then Holland’s contentious loss to Argentina in the final. What amazed me in 1978 wasn’t so much the brilliant game and Archie Gemmill’s outstanding goal, but the wonderfully alien atmosphere as reams and reams of paper were thrown from the stands to greet the players.
Last night, I found myself in the same stadium in Mendoza. It is still called Las Malvinas Stadium. I went to see the local team Godoy Cruz play Gimnasia of Buenos Aires in the Argentinean first division. A win meant the home side would still be in the running for the title. The atmosphere was electric. The fans didn’t stop singing once, flares lit up the sky, huge samba drums boomed throughout the game, flags were waved and the noise was deafening. The game ended 2-2, but still the fans sang.
On the way home, we chatted about the economic situation in Argentina. The local people — many with Irish roots — felt very sympathetic to our plight. The news from Ireland, Greece and Portugal is constantly in the papers here. As many thousands of Argentineans are still Italian citizens and can vote in Italian elections, political events in the periphery of Europe are watched very closely.
Because of everything Argentina has been through economically, they have an acute sense of what it means to be faced with huge debts, a future of deflation, a government that favours foreign banks over local citizens. Argentineans know the only way out of the crisis is some dramatic action.
Argentina has experienced 10 straight years of solid economic growth since it defaulted and abandoned its currency link with the US dollar. Every person I met said that this was the right thing to do. But interestingly they admit that they did not support the default and devaluation policy before it happened. Like many tens of thousands of Irish people, they could see that they couldn’t pay all the debts and that they couldn’t be competitive with a currency that pegs one to one with the dollar, but they were afraid to act. They were scared of the unknown. The entire establishment told them that if Argentina defaulted the country would never grow again.
In the event, Argentina defaulted and 70pc of their debts were wiped out. The currency fell dramatically. My friends, all of whom are local small business people in Mendoza, said the first two months were traumatic as no one knew what to do. But then the economy started to recover. Having had three years of recession from 1998 to 2002, the default happened in December 2002. By April, the economy started to grow and it has not stopped since.
Looking back, they all agreed, although they never wanted it to happen, that the default and the devaluation was the best thing for Argentina. The economy grew again and the people responded with a burst of entrepreneurial activity. They went back to basics. Exports took off and from having a perennial trade deficit, importing all sorts of finery with other people’s money, Argentina began running a trade surplus. Agriculture and wine became competitive again and all the people I spoke to also said that there was a profound sense of national sovereignty when you stood up to foreign loan sharks which, in Argentina’s case, was the IMF.
Argentina is clearly supportive of the dramatic course of action its government took in 2002, even though no one wanted to do it because everyone was scared of the future.
However, at a personal level, what about the millions of Argentineans who had dollar mortgages? Initially everyone with a mortgage panicked as the currency fell. They saw their mortgage repayments still in dollars but their pay in the new devalued peso. But then the government just cancelled all dollar mortgages and turned them into peso mortgages. So who paid? The foreign banks . The foreign banks who had made a fortune in Argentina lending in the boom, (sound familiar?) lost out.
And as for the local banks, didn’t they get hammered? Well, yes they did, said all my friends (and one is a banker) — “but they deserved it”. The government just issued them with government bonds, IOUs to replace their dollars and they began lending pesos again. The football fans last night over a few beers said that it was all surprisingly straightforward, even though they worried that the world would end.
In classic fans’ talk they compared economic problems to the problems of a team. If the team is losing and you know where the problem is either you fix it, change tactics and players or you continue to lose. Simple.
However, showing a keen knowledge of the realities of life inside a currency union as they had been for 10 years with the US, the local fans here told me that you can’t do any of this without your own currency. Unless you can print money, backed by local government debt to reflate an economy suffering deflation and inject liquidity into an economy which has none, you are screwed. So they agreed that Ireland, Greece and Portugal have a choice: What are you going to do?
Argentineans have a much better understanding of economics and financial dilemmas than most citizens. The fans last night concluded that either we go for a massive default, together with the Greeks, Portuguese and others and stay in the euro or we leave the euro and default less spectacularly. They suggested that the price we should try to extract for staying in the euro would be a more significant default, because they understand the point is to improve your balance sheet so that you can start again. There is no point “half defaulting”, they laughed; “it’s like being half pregnant”, quipped one fan.
As we left the Malvinas Stadium, I wasn’t sure about taking advice from Argentinean football fans but the knowledge of our plight, the empathy and the sharpness of their analysis, was more impressive than much I have heard from so-called “experts” in Ireland. These people have lived through economic chaos which they never believed could happen to them and we are living through economic chaos which we never believed could happen to us.
That’s why it’s interesting to listen to them.
After all, the stuff you learn from experience can never be taught.
adamabyss
There is always life after major events, people lived on after two World Wars, Berliners were out the day after Hitler committed suicide clearing the streets, gathering blocks to rebuild their shattered apartments. They now have the leading economy in Europe, one of the strongest in the world, and why, because they don’t screw their own people and they actually produce stuff the world wants. What did the boom produce in Ireland, people with notions who are now either cracking up, appearing before the courts or trying to weasle more money out of the taxpaying citizen. The point surely though… Read more »
Is this what we have become a country like Argentina ? David wants a quick and easy solution to our debt earlier he had put forward the idea that the ECB could print money ….QE, now he goes for default. We wont be allowed to default because the ECB and the Germans not to mention Fine Gael are dead against it. We were once proud now we are reduced to handouts and the charity of EU/ECB/IMF. The question is are we mice or men? We can get out of this by : Austerity => balanced budget => stop borrowing =>… Read more »
Default is not a problem, the problem is when the elite use their theiving banks & traitor governments to use the default as a cover for a whole array of rape, pillage & plunder attacks on the workers & ordinary people.
In context.
It is one of the best docus I saw in Argentina’s story.
http://www.youtube.com/watch?v=rH6_i8zuffs
The IFSC was a grandstand project introduced by CJH, and through it, we got large investment and significant employment because of the corporation tax rate. Default is absolutely inevitable given the debts at present. If this Government thinks for a second, that cutting the wages of the lowest paid on a Sunday by roughly EUR 3 per hour will have any impact on relieving the unemployment of 400,000 people, then we’re simply grasping at straws. We need another grandstand employment project, but the problem is that there’s no room to manouvere, and without that space, we’re fucked to be frank… Read more »
Older people in Argentina will also know what it is like to live under a military dictatorship where people vanish into the night – re Naoni Klein’s book The Shock Doctrine. They have seen a lot in their time and we could learn a lot from them. The divide and conquer brigade are in full swing. Look at the number of Irish who prefer to have a swipe at the unemployed and blame them for the state of play. Is is a coincidence that in the same week that frontline made an issue regarding foreign aid we have another Irish… Read more »
subscribe.
Great article, I’d love to visit Argentina sometime:) Let’s leave the euro, our banks were messily pumped up by the ECB, let them take share in the negative consequences and share the burn. Government policy built on financial paper GDP NAMA ghost estates even with a strong agri sector is not working and won’t work. We’ll default anyway. The sooner we do so, the better for us. If the government do not do so, the quicker they disappear and this country’s sovereignty along with it. But the high priests of the banks and the ECB have feathered their nests before… Read more »
Yes there will be life after default. Brendan Behan once talked about the people who had lace curtains hanging inside the windows for all to see, but had no food on the table. They were better than the rest of us. For there to be life after the default, that sort of stupidity will have to end, and a new practicality and acceptance for the need to be ordinary and humble will have to reach into the common psyche. The media at the behest of our advertising sponsors will do everything to ensure that such humble tendencies never can currency.… Read more »
I’m also convinced that we have to leave the Euro now after the debate I’ve observed (mostly on here) over the last two years. I was against it at the start but having lived outside the EU for the previous 15 years, I didn’t really know what I was agreeing to. Now I do. We need to go it alone for a while and look after our own skins first. Everyone else is.
“But interestingly they admit that they did not support the default and devaluation policy before it happened.”
David, people fear what they don’t understand. Unfortunately, most people don’t understand the problem or how to fix it. We have to wait for the titanic to really sink to push it into their consciousness. Then, (after much pain probably) we will do what we should have done years ago. Keep writing sense.
Yes, “you can’t do anything without your own currency,” as one of the Argentines says. To surrender your currency is to surrender your sovereignty, But you can get your sovereignty back again, and you know how. Default on the bank debts.
But it’s time for a group of economists and independent politicians to devise a default plan, ready for use.
This default plan, with expected outcomes, initially troubling, not so long after positive, should be promoted as the basis for discussion throughout the towns of Ireland. Start there, in the Irish heart, not in the cities.
Last week a British MEP stated that Ireland “was playing one for the team, concerning the entire bailout debacle and particularly the private bank debt. Our (useless) MEPs should have been embarrassed that an MEP for a constituency outside of Ireland was actually doing the job that they are elected to do. This is what happens when you send sly porcines like Prionsias de Rossa, Gay Mitchell, and Brian Crowley to the centre of power – they rush up to the trough to stick their snout into the swill. Thereafter all you see is wiggly tails shaking at the rest… Read more »
First 2 minutes we’ve experienced here, ‘no future here’:
http://www.youtube.com/watch?v=quY5d_XdoWU&feature=related
Argentinian economic history – varied to the point of bizarre as it is – bears no comparison with Ireland. Mercosur is not the EU. You are comparing beef with medical devices. They did not have a common currency with other states and pegging did not make the dollar a proxy. They did not have binding international agreements to which they must comply (Lisbon et al) or face the flight of key FDI assets and the loss of key tax agreements that are still hanging by a wee thread. They had their own currency. Several over the years. Argentina has been… Read more »
There should be no assumption that barter markets would be necessary. A bank default can be done without them. For instance, an alternative to barter markets would be scrip markets. The government issues scrips for purchasing necessities, with the promise to pay them off in a few years. You already have some towns issuing “local money” in the USA and it’s being used. You could even do it in the form of debit cards. The amount issued would depend on family size. The big point is: default is inevitable. Either the default gets prepared for, or it may be chaotic… Read more »
Note to Mr. Lenihan: You should be ashamed of yourself that you still collect payment every month in official function!
The Irish banking crisis is heading to be among the costliest in the world.
http://blogs.wsj.com/source/2011/06/01/more-radical-measures-needed-to-solve-irish-crisis/
I must be going senile. Last week someone posted a very interesting list of foreign deposits in Ireland over the past 10 years. If I remember right, it rose to about $520 billion during the boom and was about half that last year. Now I can’t locate the post. Please repost so we can consider it again. The point I intended to make was that if we followed David’s advice and devalued “our” punt nua or whatever, those remaining depositors would be very annoyed to lose (say) $100 billion of their hard-earned deposits. Those deposits presumably provide some sort of… Read more »
Argentina hits the front page of the Guardian.
Argentina accuses world’s largest grain traders of huge tax evasion
http://www.guardian.co.uk/business/2011/jun/01/argentina-accuses-grain-traders-tax-evasion
So, it’s to be “austerity” then, Paddy Jones? Good luck with that one. How everyone spending less for generations can improve the economy defeats me. You’re not a banker?
Leo Varadkar is having his wrist slapped because he made some statements that some people in authority viewed as “talking down the economy” and also “undermining the confidence of the markets”. I’m having a real problem with them there assumptions for the following reasons 1. The economy is almost at rock bottom, so nothing Leo the Lion has to say will make a blind bit of difference. 2. The markets have not got the slightest bit of confidence in any of the bullshit that has, is , will, or might exanimate from the DOF through their glove puppets at Leinster… Read more »
To the Labour partner in government:
END THE TALK AND DO SOMETHING CONCRETE FOR WORKING PEOPLE!!
Block the introduction of water charges and property tax. Ludicrous proposals in these hard times, up there with Richard Burton’s ‘review’ of overtime pay for the working poor.
David.
Like the simplicity of the article. It removes the mystery gets down to the mechanics in a case example.
Now if we did default, break with Euro, do the insiders who run this country get control over the punt printers and DO IT ALL OVER AGAIN and make a ponzi property scam?
David,
Hope you’re enjoying your stay there. It seems like a great country, any hope for Paddy picking up work there from 5th generation Argie-Paddy?
European Union 2013?…. Eurozone=Egozone If you call the EU foreign minister Catherine Ashton’s phone number to inquire on the EU position with regards to ___<- fill in any international subject of your interest, Libya, Palestine, Syria whatever you fancy, you end up on an answering machine: You are connected to the Office of the High Representative of the Union for Foreign Affairs and Security Policy Catherine Margaret Baroness Ashton of Upholland. If you would like to hear the German opinion please press 1. For the French opinion please press 2. For the British opinion please press delete! Of course, this… Read more »
Just for interest, and not directly related to this article or stream of comments, but I came across an interesting item yesterday while listening to one of Max Keiser’s reports. http://rt.com/programs/keiser-report/episode-148-financial-max/ It’s about 6mins in and it relates to a news story claiming that Zimbabwe are seriously considering moving to a gold-backed currency. They’ve gone through a period of hyperinflation and currency collapse and the head of their central bank is strongly urging this move. Apparently they have trillions in unmined gold reserves, along with considerable deposits of other minerals. Further pressure being heaped on the dollar of course. Naturally… Read more »
Here’s a thought, provoked by the wisdom of that renowned libertarian Benito Mussolini! Are we living in a fascist state???
“Fascism should rightly be called Corporatism, as it is the merger of corporate and government power.”
Well correct me if I’m naive on this one but I believe such a merger occurred in a tent in Galway some years back ;o)
COMMODITY SCAM UPDATE: !!!! THREAT LEVEL RED !!!!…. When Banks explode…. I am astonished that it did not happen yet, but one of these days a Bank will go up in smoke, and while I am against violence as a form of protest, and I would not sympathize with it, I could understand the reasons, very much so! x x x x Th well known players, Goldman Sachs, JPMorgan, Citigroup, Bank of America, Barclays and many more push capital like mad. As a result, revenues increased by 55% according to a WSJ report from today. Commodities were the fastest growing… Read more »
Met a guy from Argentina a few months ago fled from one default to another.
Here is an interesting take on how to survive in business post default. This is a topic I would advise people to study there will be a lot of angry headless chickens in this neck of the woods
.http://www.inc.com/magazine/201106/doing-business-in-argentina_Printer_Friendly.html
The Varadkar ‘bold boy’ comments rather than being examined like play dough have been treated like Fukushima fuel rod meldown that have breached the containment vessel. The exception in this case proves the rule that we are brain washed, media manipulated on a diet of economic bull figures and lies. For example, the creeping unemployment figures edging towards 15% are treated as radioactive particles we don’t want to hear much about. The figures disguise 30-60% unemployment in the young cohort >35yrs. Many of these are young graduates with high skills acquired through state investment in their college and early education.… Read more »
Has the time come to sack the bosses running the North Eastern Health Board ?
http://www.breakingnews.ie/ireland/driver-who-rushed-dying-man-to-hospital-calls-for-health-service-response-507446.html
We spend a fortune on the HSE. It gets Health levies, state subsidies, and extortionate amounts of money from the private health insurers. And this is what you get. Ordinary citizens trying to replace disorganized parts of the HSE.
This is not a funding crisis – the funding crisis has yet to happen – this is a management/organization crisis. This is what happens when you have a lemming freindly society – incompetence and dodgy thinking abounds.
Astonishing story brewing in Greece! The Prime Minister openly accused of treason in parliament because of a fraud he’s been implicated in relating to very dodgy trading in CDS on Greek Debt just before he came to power. Check it out on the latest Keiser Report from yesterday
http://rt.com/programs/keiser-report/episode-152-keiser-report/
I remember that WC, although I missed some of the later stage. By the time the Holland game came round Scotland were, as David says, already out. Can’t remember watching it. But I do remember the OTT send off for the Ally’s Army with cheering thousands lining the road to the airport. Expectations in Scotland were sky high, and as it turned out completely unrealistic. The BBC and ITV were rooting for them as always (and as always I suppose this generosity was not reciprocated). “Go Scotland!!” I saw the Peru game in the union bar and some of those… Read more »
If the money supply has not been contracted, where has it all gone? It would be interesting to see a visual representation of the “location” of all euro’s currently in existence. Maybe an aggregate report, globally, of all the accounts holding euro’s. I’m sure google could provide the technology.
Hindsight and Foresight Praxis I thought we had moved down the field and left behind the theory of default in touch and engaged with foresight the real experience to score .We seem to procrastinate and dither and uttering assurances and re assurances while standing in a flood with our wellies on .Is it not a foregone conclusion default has already arrived ?And that it just needs to be seen by those unbelievers ? Like any winning team its the forwards that make the team win so move back ditherer and run fast ahead foresight . If we as ‘thinkers’ on… Read more »
Morning from Argentina,
Regarding the article on INC magazine calling Argentina a basket case one of the main guys interviewed in that piece – Andy Fierer – is an old mate. In fact, I will be meeting him later here.
I am not saying that we should model ourselves on Argentina or anything close to that, but what I am saying is that life goes on after events run their course.
Best,
David
Chomsky on US foreign policy at the Syracuse Peace Council 05/2011
http://willyloman.wordpress.com/2011/05/14/noam-chomsky-at-the-syracuse-peace-council-may-11th-2011/
[…] (David McWilliams) — There is life after default, take a look at Argentina http://www.davidmcwilliams.ie/2011/06/01/there-is-life-after-default-take-a-look-at-argentina […]
Must read:
http://www.theburningplatform.com/?p=15909
Sound familiar? “A prominent Wall Street analyst predicted this week that not a single top executive at Goldman Sachs will face criminal prosecution for the company’s role in causing the financial meltdown of 2008. “I think that there is a genuine sense out there that there are two sets of rules, one for big and powerful institutions that are deemed to be too politically interconnected or powerful to fail, and the rest of us, Main Street,” says our guest Gretchen Morgenson, the Pulitzer Prize-winning business reporter who has written extensively on how the U.S. government has failed to prosecute any… Read more »
Habemus Papa….
http://www.spiegel.de/wirtschaft/soziales/bild-766308-221284.html
Ops, sorry I mixed it up, but the picture, this picture….
In this union of tomorrow, or of the day after tomorrow, would it be too bold, – No, too cold! in the economic field, with a single market, a single currency and a single central bank, to envisage a ministry of finance of the union?” he said.someone coughs
….Requires “a very important change of the treaty, and will have consequences in all the union’s responsibilities.
more coughing
…
Review of some successful market-based alternatives to current capitalism, socialism, communism. Could Ireland move in this direction?
http://www.alternet.org/story/151107/vision%3A_as_the_american_capitalist_economy_craters%2C_promising_alternatives_emerge?akid=7045.171424.5Bt_py&rd=1&t=2
Professor Noam Chomsky Receives the 2011 Sydney Peace Prize
http://www.sydneypeacefoundation.org.au/
Whether Peace Prizes make sense at all is a different question, but this one makes much more sense than the Nobel peace Price for Obama, does it not?
Parnell St, Garden of Remembrance, 12am
http://thechatteringmagpie14.blogspot.com/2011/05/run-to-dail.html
The Fat And The Furious
Joe Stiglitz’s article and conclusion in vanity fair
http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105
could be extended to….When will it come to Ireland?
So how did the great Modern, sophisticated, consumerist liberal-lending, ECB supported borrowing, pretenscious driven, pride fuelled, corruption filled, arrogance propelled, Bertie Boom in Ireland all end up ?
It ended up with articles titled “there is life after Default” pointing the way to the inevitable….
I haven’t really seen this question addressed, except obliquely and in passing, in all the commentary we are hearing. Is this a ‘don’t scare the children’ kind of thing or maybe I am just obtuse. We know what would happen to savings held in Ireland, be they in Irish or foreign banks, in the case of Euro exit – they are revalued (devalued) in the new currency. They are therefore badly hit or practically wiped out. What about a default, say an orderly one, where Ireland remains in the Euro. What happens to deposits then? Those in Irish state-guaranteed banks… Read more »
Hi all, I’ve been away for the past few days. Firstly may I say good luck and good on you to Doflynn! I’m sorry I could not join you, and even if I could, I’m lame with a ligament injury to my right foot at the moment. While I was away I heard one for the old rumour mill which really doesn’t surprise me, but if true is rather worrying! It came from a priest who had been conversing with what he described as a reputable FG insider. He said how this guy had described how the cracks are appearing… Read more »
@Paul
As the soil dries and contracts over the week end I am bringing a special hand mirror to nearby fields in ardagh over the sunny week end to direct at the top of ploughed fields in particular and if any chalice is popping up its head it will reflect back its presence .Metal detectors are a waste of time and expensive.I might find my weight in gold and maybe crafted gold at that.