WASHINGTON -- It is always politically incorrect to blame the victim. But Argentina is an exception. Argentines have no one to blame but themselves for their current economic mess. They have long lived beyond their means. And now the piper must be paid.
There is no disputing that Argentina is the victim of recent international economic conditions beyond its control: the Brazilian devaluation two years ago that cut Argentina's exports to its largest customer; falling global prices for grain and oil that further undercut Argentina's export earnings; the global economic downturn; and foreign investors' newfound skittishness about lending or investing money in emerging markets.
But the economic hole the Argentines now find themselves in is primarily a domestic one, and it is as deep as it is because of bad choices they have made for decades. Thus the challenge facing the Bush administration and the International Monetary Fund in responding to the Argentine crisis is far more difficult than simply deciding whether to lend Buenos Aires an additional $15 billion to recapitalize its banking system.