hard heads soft hearts

a scratch pad for half-formed thoughts by a liberal political junkie who's nobody special. ''Hard Heads, Soft Hearts'' is the title of a book by Princeton economist Alan Blinder, and tends to be a favorite motto of neoliberals, especially liberal economists.

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Friday, June 14, 2002

The case for devaluation seems so overwhelming to me,
it boggles my mind why the people who count are so
reluctant to do it. Maybe I feel this way because the
inflations of the seventies were before my time.

There are two big issues, it seems to me: whether or
not to devalue, and whether or not to default on the
debt. You've come down firmly on the side of
devaluation, what do you think of defaulting? Assuming
you support not defaulting, how would you prove that
the debt servicing would not be a crushing burden to
the Argentine economy, and in any case would be better
than defaulting?

Lastly, foreign aid. I'm in favor of it. I think the
standard conservative response will be 1) O'Neill's:
"I wan't some evidence it will work before we commit
money" 2) We could give away these drugs for free and
it still wouldn't do much good, because these
countries don't have the infrastructure to distribute
these drugs effectively. In fact, loose distribution
of these drugs may do more harm than good,by causing
the creation of new drug-resistant strains. I haven't
read the report, so I don't know whether they address
these arguments.