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**AUGUST 16, 2023**
On the Prospect website
* David Moore on the scandal of Democratic National Convention chair
Minyon Moore
<[link removed]>,
whose lobbying firm works on union avoidance
* David Dayen on how GOP intramural fights are blocking approval
<[link removed]>
of spending bills
* Ryan Cooper on Republican retaliatory strategy
<[link removed]>
to divert attention from Trump's indictments
Kuttner on TAP
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**** Argentina: Vultures Come Home to RoostÂ
How America's most predatory hedge funds deepened Argentina's
economic miseries and helped invite a far-right reaction
On Sunday, a neofascist candidate named Javier Milei, in the mold of
Donald Trump and Jair Bolsonaro, shocked the political establishment by
placing first in the preliminary round of Argentina's presidential
elections.
The reasons for popular frustration are not hard to discern.
Argentina's inflation rate has been running in excess of 113 percent.
The real, black-market rate of the peso against the dollar keeps
plummeting. After Sunday's surprise result, the central bank raised
the key interest rate from 97 to 118 percent.
This is in a country that was once among the world's wealthiest, and
now has a poverty rate of around 40 percent. The political center, not
surprisingly, has lost legitimacy.
The Peronists, once a left-populist outsider party, have been the
governing party for much of the recent past, and are now seen as
hopelessly part of the discredited establishment. In Sunday's
election, the Peronist candidate, Sergio Massa, placed third. The
center-right candidate, representing the mainstream opposition, came in
second.
It's not as if Milei has a realistically radical program to cure
Argentina's ills. Like other neofascists, he stands for a spasm of
nihilism. A onetime tantric sex coach, Milei would abolish Argentina's
public-health and education systems, shut down the central bank, and use
the U.S. dollar as national currency.
While Argentina has itself to blame for some of its woes, the
international financial system, including the IMF and U.S.-based hedge
funds, share the blame. Argentina has oscillated between running up
foreign debt, and then succumbing to IMF-enforced austerity programs to
pay off or write off debt. None of this has rescued its economy, but it
has enriched speculators.
Some U.S.-based hedge funds, notably Paul Singer's Elliott Investment
Management, bought distressed Argentine bonds at about one-sixth of
their face value over a 15-year period
<[link removed]>.
When creditors came together to negotiate a settlement at so many cents
on the dollar, Singer was the holdout. In 2001, after Argentina
defaulted on $131 billion of debt, 93 percent of the country's
creditors, in two restructurings, agreed to take 30 cents on the dollar
<[link removed]>.
But Elliott held out for a sweeter deal. In the final settlement in
2016, Elliott netted billions at Argentina's expense.
Before World War II, banks that invested in the debt of South American
countries, often at inflated interest rates and profits, knew that they
were taking a risk. When nations defaulted on the bonds, as they often
did, the creditors lost everything. But there was so much money to be
made that bankers soon were offering more loans.
The International Monetary Fund was created after World War II to help
debtor nations refinance debt and avoid crippling austerity. But by the
1970s, the IMF had mutated into the agent of creditors, with the help of
U.S. courts and U.S. bankruptcy law.
There is a horrific double standard in the use of bankruptcy. Large
corporations are able to use bankruptcy to shed their debts while the
same management that incurred massive losses is often able to keep
control. But households and student debtors who try to use the
bankruptcy process face total economic ruin. Countries are precluded
from using bankruptcy to shed debts altogether.
We need a massive reform of the one-sided bankruptcy laws, an end to the
favorable tax and regulatory treatment of hedge funds and private equity
firms
<[link removed]>,
and a restoration of the role of the IMF as it was created at Bretton
Woods in 1944. Argentina can take its share of blame, but the role of
predatory global finance makes its situation far worse.
~ ROBERT KUTTNER
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Don't Believe Republican Bluster About Trump's Indictment
<[link removed]>
It doesn't matter what happens in the courts-conservatives are
already committed to political show trials against their enemies. BY
RYAN COOPER
Congressional Spending Battle Is an Intra-Republican Affair
<[link removed]>
It's become a proxy for Republican battles about both national
security and Kevin McCarthy's job security. BY DAVID DAYEN
Democratic National Convention Chair's Firm Helps Companies Block
Labor Laws
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Dewey Square Group, where Minyon Moore leads State and Local Affairs,
was paid over $10 million last year by a Lyft-funded industry group
fighting state labor protections. BY DAVID MOORE
Â
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