Can Argentina Survive the Kirchner Curse?

Economist

The sudden death of former Argentinian president and key power-broker Nestor Kirchner has triggered a surge in stocks and bonds trading within the Latin American nation. Kirchner is considered largely responsible for the anti-business policies of Argentina which helped depress the business climate there in recent years. But is it realistic to assume that Kirchner's death will change anything?

Argentine bonds posted big gains and stocks hit a new record high Thursday as markets anticipated a more business-friendly environment following the death of former president Nestor Kirchner.

While presidents from across the region and supporters filed past Kirchner's coffin to pay their last respects, Argentina's Merval Index of leading shares topped a new record, rising 1.17% to 2954.86 points.

The gains were led by power and gas providers amid speculation that the government of President Cristina Fernandez, Kirchner's wife, may consider easing rate controls following his death...

...Kirchner, who was president from May 2003 to December 2007, died of a heart attack at the age of 60 in his home province of Santa Cruz early Wednesday. His wife succeeded him in the presidency. However, Kirchner was thought to play an active role in crafting economic policies in his wife's government that were characterized by heavy state intervention in the economy and hostility toward the private sector.

Many political analysts had expected Kirchner to run in the October 2011 presidential election as a way for the husband-and-wife team to alternate in power and avoid constitutional restrictions on term limits.

Besides stocks, investors also snapped up Argentina's sovereign debt amid the positive sentiment. _WSJ

Leftist leaders such as Obama and Raul Castro have expressed their deepest condolences at the death of Kirchner, while businessmen and economic traders of Argentina secretly celebrate and not so secretly begin buying assets and making hopeful plans for the future.

The future of Argentina depends upon whether Kirchner's widow, President Cristina Fernandez, is able to change course from the suicidal anti-economic policies influenced by her husband. Cristina's plan to steal private pensions for use by the federal government is typical of the stupidity of the Kirchner - Fernandez coalition -- but even if Cristina cannot learn, perhaps the people of Argentina can outgrow their Cinderella fixations.

The video below suggests that the inconsistencies of the Argentinian populists may come back to bite them. (via Cato, in Spanish)...

in a 1973 speech, none other than Juan Perón emphatically condemns the nationalization of private pensions, calling it “theft” and referring to public pension systems as generally “inefficient” and “unsafe.” He describes a previous episode in Argentina when a government in need of money nationalized private pensions and depleted workers’ retirement funds, using them for other purposes. It was an “assault.” _Cato

If the uber-populist Peron condemned the federal theft of private pensions, Cristina (without Kirchner's backing) may find it difficult to push through such oppressive, fascist, anti-private sector policies. But her inner core -- such as it is -- is not likely to improve or grow wiser.