La editorial del WSJ sobre Kirchner

Quite the Bell-Ringer
September 20, 2006

If the New York Stock Exchange has stood for any single thing across its illustrious history, it has been a commitment to free markets. The Exchange proudly claims an "unwavering commitment to investors and issuers." But the emerging world of globalized, electronic markets has given the NYSE an identity crisis of late, and none more so than this morning when the honored task of ringing the hallowed opening bell goes to, of all people, Argentine President Néstor Kirchner. Could it be some post-modern economist at the Exchange has redefined the meaning of free markets?

Last time we checked, it was a mortal sin at the NYSE to stiff a creditor. In late 2001 and in 2002 the Argentine government reneged on $82 billion in private-sector debt, confiscated dollar bank accounts, devalued the peso and tore up utilities contracts. Mr. Kirchner took office in 2003, and rather than reverse the trend, he continued the assault on the rule of law.

At first he refused to negotiate with creditors and later forced them to take 34 cents on the dollar. Argentine economic policy under Mr. Kirchner has consisted of bad-mouthing investors and profits, constructing new state enterprises and imposing price controls to damp inflation, now running in double digits. This week the Kirchner government began pressuring banks to make new home loans even as 170,000 Italians filed for arbitration in Washington against Argentine non-payment on its debt.

What's going on here? Well, Argentina's investment profile is lagging badly. According to Goldman Sachs Emerging Markets Research, in 2005 the country's ratio of investment to GDP was 19.8%; in the first half of 2006, it was 20.2%. But a country needs a 25% investment-to-GDP ratio to produce a long-term GDP growth rate of 5% annually. Naturally, the anti-market Mr. Kirchner needs more investors willing to take below-market returns on money they may never see again. Somehow he has ended up with the boys at the NYSE. Go figure. Obviously, Mr. Kirchner already has.