Argentina's Kirchner Targets the Press
As the state-run economy hits the skids, the government responds with a crackdown on the free press.
By MARY ANASTASIA O'GRADY
One way a president can boost poll numbers in a bad economy is to wrest control of the central bank and start printing lots of pesos. There's nothing like cheap financing to restore the market's enthusiasm for buying all sorts of stuff—from stocks to houses—already on sale at fire sale prices.
The great reflation will make people feel rich again. A weak currency will also be a short-term boon to exporters, whose profits can then be taxed at ever higher rates. Complainers can be denounced for their greed.
Of course this perpetual motion machine will eventually conk out and when it does, a government that expects to survive will find it necessary to silence its critics. Just ask Argentines, who are living all of this in real time.
After more than five years of heavy state intervention in the economy, Argentina is again sliding into recession. Double-digit inflation is spiraling north and the government is running out of money. In response, President Cristina Kirchner is cracking down on the free press. Argentines are wondering if their democracy will survive.
The story of how Argentina got here is important to recall. The economy was flat on its back after the 2001-2002 collapse of "convertibility," the monetary arrangement that pegged the peso to the dollar. A demoralized nation was looking for a savior.
It thought it found one in Néstor Kirchner. He became president in 2003 and set about to restore the state-run economic model of Juan Peron; the market, he maintained, had failed. Mr. Kirchner took control of the central bank. He demonized the private-sector and investors. Using price controls, subsidies and regulation he made himself a Robin Hood to the masses. The legislature granted him extraordinary powers.
The economy bounced back as one would expect after a harsh contraction, and in 2007 his wife was elected president with 45% of the vote.
Now the illusionists are losing their touch. Not only is the economy going sour, but according to polls, the nation is growing intolerant of what many consider to be the first couple's abuse of power.
Four examples serve to make the point: First, when Mrs. Kirchner attacked the farm sector last year because it resisted her plan to impose high export taxes on its harvests, the nation rallied to the defense of the farmers, much to her surprise. Second, her decision to confiscate privately held pension accounts was loudly denounced as a violation of the rule of law. Third, there is a widespread belief that her government is using the state intelligence service to collect information against the president's "enemies." Fourth, an overwhelming majority of Argentines resent the privileges and jet-set lifestyle of the first family while national living standards plummet.
This popular dissatisfaction showed up at the polls in the June midterm elections, when Mrs. Kirchner's wing of the Peronist party lost badly. Even Mr. Kirchner did not manage to prevail in his bid for a house seat representing the province of Buenos Aires, which should have been a stronghold for the first couple.
Mrs. Kirchner and her husband have decided that they lost because of bad press coverage. They are especially upset with the Clarin media company, which though once a supporter, is now an outspoken critic. In public comments Mr. Kirchner often implies that the government is analyzing the company to see if it might not need to be downsized. In September, tax authorities launched a raid on the Buenos Aires offices of its daily newspaper. Tax authorities later issued an apology for the raid, but the paper maintains that it was an act of intimidation.
Yet the problem of bad press for the Kirchners is much bigger than Clarin. As the antimarket economic model hits the skids, the nation is turning against its architects and a free press will not remain silent. This is why the president forced a media law through the legislature two weeks ago, creating a new "audio-visual" regulatory board controlled by the executive.
The law also grants the executive control over all licensing of the radio spectrum and reserves at least two-thirds of it for state-owned and nongovernmental broadcasters approved by the executive. There is concern that Mrs. Kirchner is now preparing to take over the most important domestic supplier of newsprint and to begin using import licensing to control access to foreign supplies.
Hugo Chávez has become a dictator in Venezuela under the guise of democracy, and he has similarly shut down the free press. Argentines are worried.
Last week in the Argentine daily La Nación, philosopher and writer Santiago Kovadloff summed up opposition sentiment about the government's use of "the law" to consolidate power: "The law has become a beloved tool of corruption," Mr. Kovadloff wrote. "The executive has put it at its service. It manipulates it with skill." And where does that leave society? "Insecurity is no longer a threat. We are in the jungle."
Write to O'Grady@wsj.com
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