Cross on Dollars
November 7, 2001
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The "Reckonings" columnist in today's New York Times blames Argentina's economic woes on a currency system that pegs the Argentine peso to the dollar. This monetary "rectitude," the columnist claims, "is responsible for Argentina's looming catastrophe."
In fact, it's a stretch to blame the dollar for Argentina's woes. After all, America's economy is also pegged to the dollar, and while our economy has been lagging recently, it has not been in as long or as severe a decline as Argentina's. And much of Latin America went through much tougher economic times than Argentina did a few years ago as a result of the crisis in the Mexican peso, which is not fixed to the dollar. Back then, Argentina fared pretty well in comparison to its neighbors.
The Reckonings columnist circles in on one possible source of the problem, then rejects it in a breathtaking sleight of hand. "You might think, given all the talk of debt default, that the problem was government profligacy," the columnist writes. "But Argentina's budget deficit has ranged between 1 and 3 percent of G.D.P., not bad for a depressed economy, and its government debt is only about half of G.D.P., better than many European countries. By the numbers, Argentina's fiscal picture looks better than America's did a decade ago."
These numbers miss the point. What's relevant is not only the size of the budget deficit but the size of the budget. If high taxes are being charged to cover a bloated public sector that is crowding out private enterprise, the effects on growth are likely to be negative even if there is little deficit and little government debt.
Moreover, there are political corruption problems in Argentina that probably have had a lot worse effects on the economy there than the ideas of the "right-wing think tanks" the columnist blames for the country's woes. If a visitor to Buenos Aires can't take a taxi for fear of being robbed by the taxi driver, and if the country's Jewish-owned banks are shut down amid accusations of anti-Semitism, and if the president of the country is secretly smuggling arms on the side, it seems a bit of a reach to blame the country's economic problems on the currency policies recommended by right-wing think tanks in Washington. A country could have the best monetary policy in the world, but if there's no rule of law, the growth won't be there.
Almost Exclusively: The lead editorial in today's New York Times reports, "Mr. Bloomberg invested what is believed to be over $50 million into a campaign in which voters came to know him almost exclusively through his carefully tailored TV ads." Maybe the Times editorialists should turn off their televisions and turn on their radios, or at least open their mailboxes. Or read their own newspaper. A front-page news article in today's New York Times reports, "In the final days of the campaign, Mr. Bloomberg, the founder of Bloomberg L.P., was ubiquitous: on television and radio, in mailboxes, on Web sites. Mr. Bloomberg even mailed videotapes, in which he appealed for votes, to households across New York."
Public Service: A front-page news analysis in today's New York Times refers to Michael Bloomberg as "a Republican candidate with no prior public service." This is an echo of an election day e-mail sent to some readers of the New York Times on the Web, which said, "As you know, Election Day is finally here. In New York City, a Mayoral race is drawing to a close. The two candidates are Mark Green, a long-time Democratic public official, and Michael Bloomberg, the founder of the media company of his name, who has never held public office and is running on the Republican ticket." An article elsewhere in today's New York Times reports that Mr. Bloomberg "donated tens of millions of dollars to the Johns Hopkins public health school" and that he served on the boards of Lincoln Center and the Metropolitan Museum of Art. It's funny how that doesn't qualify as "public service" by the Times's definition. What the paper seems to be trying to say is that Mr. Bloomberg never has been elected to a public office before, or that he never worked for the government before. "Public service," like "public interest," is one of those terms that is often in the eye of the beholder.
Temple Mount: A dispatch from Berlin in the international section of today's New York Times reports, "If no agreement can be reached on Jerusalem, the question will be deferred, but Palestinians would continue to control the holy site there known to Muslims as Haram al Sharif and to Jews as the Temple Mount."
"Continue to control"?
While in practice, at the discretion of Israel, Palestinian Arabs have some administrative control over the plaza atop the Temple Mount, it is a wildly inaccurate statement to say that the Temple Mount is now under Palestinian control. The Temple Mount is in Jerusalem, which is, by Israeli policy and American policy set forth in law, an undivided city and the capital of Israel. Israeli police control access to the site, and a retaining wall of the Mount is used as a site for Jewish prayer. Israel conquered the area from Jordan in the 1967 Six-Day War, and it has not ceded control. If the Palestinians "control" the Temple Mount, as the Times claims, how was Ariel Sharon able to walk around there on his famous inspection trip?
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