Argentina has a new Central Bank president, and by all accounts her appointment puts an end not only to autonomy, but to orthodox monetary policy in the management of the nation’s currency. Ámbito says Mercedes Marcó del Pont describes herself as a “militant developmentalist,” and Página/12 has a really well-done explanation of how her “developmentalism” will effect the way the Central Bank operates.
Basically, if you’re a traditional Central Bank president like Redrado was, you proceed under the assumption that creating more money will cause inflation to rise. Since this is considered to be a bad thing, you think long and hard before lowering interest rates to stimulate the economy in the short term, especially if your inflation rate is already estimated to be the third highest in the world.
Marcó del Pont, however, has in the past proposed running things under a Brazilian model that places the Central Bank in a National Monetary Council along with the Treasury and the Planning Ministry. Thus, any decisions about the currency are made according to how they will help the country “develop.”
I think it goes without saying that different people have different ideas of what “develop” should mean, and that a lot of those people would essentially use their definition as an excuse to lower interest rates and crank the money supply in a show of cheap populism. Not surprisingly, U.S. analysts are predicting doom:
“The new president is very closely aligned with the government and won’t have an independent voice,” (Goldman Sachs analyst Alberto) Ramos said in an interview last night. “The government wants to continue spending at elevated rates to have short-term growth and the central bank won’t raise interest rates, it won’t have its own voice.”
Marcó del Pont has said she does “not think (the Central Bank) can be independent of the nation’s economic policies,” which pretty much says it all.







The Nation has a long, wonky, wonderful article on Mexican maize cultivation, the effects of NAFTA, and the dangers of genetically-modified seeds. Author Peter Canby backs up his excellent writing with piles and piles of meticulous research. Not to be missed. [

Hitmen have assassinated the PRI candidate for governor of Tamaulipas State, Rodolfo Torre Cantú. Torre was gunned down along with six others at about 10:30 this morning on a highway on the way to a campaign event. Drug mafias are assumed to be responsible. [



CIA cover-up in Peru
A video has just been released that shows the Peruvian Air Force – with the help of the CIA – shooting down a small plane flown by a family of missionaries. They thought the plane was being flown by drug traffickers when the pilot didn’t respond to radioed warnings sent on the wrong frequency.
The video is from 2001 – that is to say, the CIA has been covering this up for nine years. Here’s the video, as broadcast by ABC:
The first thing I noticed in this video is the amazing linguistic incompetence of CIA officials who presumably hold people’s lives in their hands. Hard to call off the dogs when you think the word for “machine gun” is “ratatatatat.” (CIA history tends to indicate that incompetence is one of the agency’s defining characteristics.)
Second, the reason this story is being reported at all – even nine years later – is because the victims are Americans. Non-U.S. citizens certainly wouldn’t get the same consideration, and I wouldn’t be surprised to learn that the CIA continues to participate in extra-judicial killings in many parts of Latin America.