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  1. The greedy, corrupt schemes by corrupt politicians and multinational corporations leading to the collapse of the Argentine economy and middle class in 2001 are eerily similar to the ones we are experiencing right now in our country. There are several excellent videos about this on the internet. We can learn from Argentina’s mistakes. Here are just a couple of the videos.

    Watch first: search for: Argentina’s Economic Collapse – part 1 of 12 on Google. It’s from Argentina, in Spanish with English subtitles and about an hour long. This covers events mainly up to about 2002.

    Watch second: Google: The Argentina Experiment – SUBS. It is about 1 ½ hours long and covers the events occurring after December 2001. Uploaded in April 2011, it is from Greece with English subtitles. It’s not hard to figure out why the Greeks are interested in what happened to Argentina.

    Brief summary of events leading to the crisis of 2001:

    • Argentina was the 8th richest country in the world and a net exporter of food
    • Large, but passive and apathetic middle class
    • Middle class marginalized the poor not understanding that they would soon become just as poor
    • Corrupt politicians paid huge sums by multinational banks and corporations to do their bidding
    • Corporate schemes of “socialize the losses and privatize the profits” (similar to our bailouts)
    • Argentina’s manufacturing and industrial base was abandoned and replaced with cheap imports
    • Argentina’s debt in 2001 was 65% of GDP (we are now at 102% of GDP)
    • In 2001, tipped off that bank closures are imminent, the elite and well-connected move 15 billion dollars to off shore accounts

    December 2001 and after:

    • In early December 2001, middle class suddenly awakens after banks close and government announces a scheme that means the people will lose 29% of their savings immediately (they ultimately wound up losing 75% of their savings). Upon reopening, for first 90 days people allowed to withdraw only $200 per week.
    • 35 people killed by police and private security during massive protests on December 20
    • Without access to money, people establish barter networks that begin to become a large part of the economy until they are suddenly shut down.
    • Within 2 months, inflation goes from around 5% to 50% per year
    • By October 2002, 28% of population is indigent and 58% is below the poverty line
    • Desperately hungry people routinely block highways, demanding food and jobs from the government
    • “official” unemployment reaches over 20% (true number much higher)
    • Desperate to earn money, workers break in and occupy long abandoned factories where they were laid off and begin to produce products and establish purchasing networks with each other
    • Crime skyrockets: nearly every Argentine has been mugged in the past 10 years, hungry people loot supermarkets

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