On Tuesday in Buenos Aires, only a few blocks from whereArgentinian President Eduardo Duhalde was negotiating with the International Monetary Fund (IMF), a group of residents were going through anegotiation of a different kind. They were trying to save their home.

In order to protect themselves from an eviction order, the residents of335 Ayacucho, including nineteen children, barricaded themselves inside andrefused to leave. On the concrete façade of the house, a hand printedsign said: “IMF Go To Hell.”

What does the IMF, in town to set conditions for releasing US$9-billion inpromised funds, have to do with the fate of the residents of 335Ayacucho?

Well, here in a country where half the population now livesbelow the poverty line, it’s hard to find a single sector of societywhose fate does not somehow hinge on the decisions made by theinternational lender.

For example, librarians, teachers and other public sector workers, whohave been getting paid in hastily printed provincial currencies (sort ofgovernment IOUs) won’t get paid at all if the provinces agree to stopprinting this money, as the IMF is demanding.

And if deeper cuts aremade to the public sector, as the lender is also insisting, unemployedworkers, between 20 and 30 per cent of the population, will have even lessprotection from the homelessness and hunger that has led tens ofthousands to storm supermarkets demanding food.

And if a solution isn’t found to the “medical state of emergency”declared this week, it will certainly affect an elderly woman I metrecently on the outskirts of Buenos Aires.

In a fit of shame anddesperation, she pulled up her blouse and showed a group of foreignersthe open wound and hanging tubes from a stomach operation herdoctor was not able to stitch up or dress due to lack of medicalsupplies.

Maybe it seems rude to talk about such matters in the context of theIMF’s visit. Economic analysis is supposed to be about the peg to thedollar, “peso-ification,” and the dangers of “stagflation” — notfamilies losing homes and gaping wounds.

Yet reading the reckless advicethat the international business community is hurling at the IMF andArgentina’s government, perhaps a little personalizing is in order.

For weeks, Argentina has been scolded like a small child that shouldn’tget desert until it finishes dinner. Despite a commitment to slash 60per cent from provincial deficits, Argentina apparently hasn’t doneenough to “deserve” a loan. “The news is all on the surface,” sniffs aneconomist from Credit Suisse First Boston.

President Duhalde warns thatArgentina’s desperate population cannot support deeper cuts – the National Postcalls this mere “procrastination.”

The consensus is the IMF should see Argentina’s crisis not as anobstacle but as an opportunity: the country is so desperate for cash,it will do whatever the IMF wants.

“During a crisis is when you need to act, it’s when Congress is mostreceptive,” explains Winston Fritsch, chair of Dresdner Bank AG’sBrazilian unit. The National Post editorial concurs: “The opportunitiesfor reform have never been better… the IMF must withhold any furtherbailouts until Argentina dramatically overhauls its public sector andlegal system and re-opens its economy.”

The most draconian suggestion comes from Rocardo Cabellero and RudigerDornbusch, a pair of Massachusetts Institute of Technology (MIT) economists writing in the Financial Times. “It’s time to get radical,” they say. Argentina “must temporarilysurrender its sovereignty on all financial issues … give up much of itsmonetary, fiscal, regulatory and asset management sovereignty for anextended period, say five years.” The country’s economy — its “spending, money printing and tax administration” — should becontrolled by “foreign agents” including “a board of experienced foreigncentral bankers. ”

In a nation still scarred by the “disappearance” of 30,000 people duringthe 1976-1983 military dictatorship, only a “foreign agent” would havethe nerve to say, as the MIT team does, that, “somebody has to run thecountry with a tight grip.” And that, with the Argentineans out of the way,the country could be saved by prying open markets, introducing deepspending cuts, and of course, a “massive privatization campaign.”

It’s obvious to anyone who has been paying attention to Argentina’ssocial upheavals that such an economic dictatorship could only beenforced through terrifying state repression and bloodshed.

But there’sanother hitch: Argentina has already done it all.

As the IMF’s model student throughout the nineties, it flung open itseconomy (that’s why it’s been so easy for capital to flee since thecrisis began). As far as Argentina’s supposedly wild public spendinggoes, a full third goes directly to servicing the external debt. Anotherthird goes to pension funds, which have already been privatized. Theremaining third is what we think of when we say “public spending” -health, education, social assistance.

Far from spiraling out of control,these expenditures have fallen far behind population growth, which iswhy shipments of donated food and medicine are arriving by boat fromSpain.

As for “massive privatization,” Argentina has dutifully sold off so manyof its services, from trains to phones, that the only examples offurther assets Mr. Cabellero and Mr. Dornbusch can think of privatizingare the country’s ports and customs offices.

No wonder economists and bankers are in such a rush to blame the victimsof this crisis, to claim that Argentineans overspent, were greedy,corrupt.

Of course it’s true that the political system here iscontaminated with cultures of both payola and impunity. But the samefinanciers that happily lined the pockets of politicians and armygenerals in exchange for local contracts are hardly the ones who shouldbe trusted to do Argentina’s house cleaning.

Argentina’s housewives have a better idea. Last week, on InternationalWomen’s Day, hundreds took to the streets with brooms in hand andannounced that they wouldn’t clean their homes until they had swept thecorruption out of congress. Their protest was one tiny wave in a massivetide of grassroots mobilization that has already brought down successivegovernments and now is threatening to do something far more radical:bring in real democracy.

Following the model started by the “Piqueteros” (Argentina’s militantunemployed), tens of thousands of residents are organizing themselvesinto neighborhood assemblies, networked at the city and national levels.In town squares, parks and on street corners, neighbors discuss ways ofmaking their democracies more accountable and filling in wheregovernment has failed.

They are talking about creating a “citizen’scongress” to demand transparency and accountability from politicians.They are discussing participatory budgets and shorter political terms,while organizing communal kitchens for the unemployed and planning filmfestivals in the streets.

The president, who wasn’t even elected, isscared enough of this growing political force that he has begun callingthe “asambleas” anti-democratic.

There is reason to pay attention.

The asambleas are also talking abouthow to kick-start local industries and re-nationalize assets. And theycould go even further.

Argentina, as the obedient pupil for decades,miserably failed by its IMF professors, shouldn’t be begging for loans;it should be demanding reparations.

The IMF had its chance to run Argentina. Now it’s the people’s turn.

Naomi Klein

Naomi Klein

Naomi Klein is the award-winning author of the international bestsellers, The Shock Doctrine: The Rise of Disaster Capitalism and No Logo: Taking Aim at the Brand Bullies. She writes a regular column...