The museum is a showplace for an unconvincing national alibi. Argentina is innocent and maligned, its tale not one of squandered wealth, but of victimhood, as it is repeatedly plundered by Anglo-Saxon (of course!) financiers, helped in later years by their stooges at the IMF. Under Juan Peron, however, things had been different. During the Peronato, the foreign debt was repaid. Indeed it was, but (as is not explained in the museum) that owed more to the capital surpluses built up during World War II than to Peronism’s autarkic economic model, which was in deep trouble by the time its creator was deposed in 1955. No matter, Peron’s curious mix of fascism, corporatism, and Evita has never quite lost its grip on a nation forever searching for a magical solution to its largely self-inflicted woes. And now, a decade of growth under a new generation of Peronists has convinced many Argentinians that the conjurer-caudillo was on to something.
It’s hard to blame them. Just ten years ago, the botched free-market experimentation of the 1990s had pushed Argentina into the abyss. It began well enough, but pegging the peso to the U.S. dollar (a key part of the process, and the wrong currency to choose) without sufficient structural reform left Argentina increasingly uncompetitive. Lower export prices and successive emerging-markets crises in the latter part of the decade made matters worse. The country’s budget swung wildly off-kilter. Spending was too high, tax revenues too low. Foreign lenders filled much of the gap. Today’s Greeks know how the story ends. They should also note this: Billions in additional borrowing and belated attempts at austerity were not enough to put things right. The economy plunged. Capital fled. In December 2001, the government introduced the corralito (later toughened into the corralon), a measure that (more or less) froze all bank accounts. Argentina went into default shortly thereafter.
This remains (fingers crossed) the largest sovereign-debt default ($95 billion) in history. The dollar peg was dropped a few weeks later; the peso crumpled. Dollar deposits in Argentine banks were swapped into hugely depreciated pesos, a precedent that ought to alarm savers in the eurozone’s PIIGS. If the drachma and its feeble kin are to return, there will be corralitos first. Depositors have been abandoning their banks in Greece, Ireland, and elsewhere. Who can blame them?