Stop the Press:

As Argentina sank into its worst economic crisis ever, a January 9, Associated Press story blamed "the greed of international investors and bad timing by the International Monetary Fund and the U.S. Treasury." The New York Times was equally scathing: "The Argentine economic miracle of the 1990s was a mirage created by foreign creditors enamored of the country's monetary policy," a December 21 editorial pronounced. "This allowed Argentina to go on a $130-billion borrowing binge without addressing longstanding shortcomings. . . . Predictably, the time has now come when Argentina can no longer make its debt payments, and foreign investors have lost confidence in the country."

Too bad the U.S. press wasn't as critical 10 years ago, when then-President Carlos Menem initiated Argentina's free-market reforms amid great journalistic fanfare. Touting Argentina's economic "miracle" in 1991, The New York Times called Menem's program "the envy of other Latin governments" and proclaimed Argentina the "next emerging economy."

That dispatch was typical of the period. Echoing first the George H.W. Bush and then the Bill Clinton administration, the press hailed Argentina and other Latin-American governments for selling off state-run firms, reducing trade barriers, and offering incentives to foreign investors. A 1991 headline in the New York Times declared that a "New Discipline in Economics" was bringing change to the region. "The free market, open economies and deregulation are now part of the vocabulary of taxi drivers and laborers," read the report. Reaching the same conclusion, the Chicago Tribune cited as signs of progress the openings of KFC, Taco Bell, and Pizza Hut franchises in Chile and Venezuela.

The free-market policies implemented by Latin-American governments produced short-term economic growth and booming stock markets -- the Buenos Aires exchange climbed by 400 percent in 1991 and became the darling of emerging markets -- but did little to redistribute income or benefit the poor. Hence, free-market reforms were broadly unpopular. But this didn't seem to trouble American reporters. A 1992 Washington Post story congratulated Latin-American leaders for emphasizing "the need to become competitive internationally, even if this implies short-term pain for millions of people."

Among Latin America's "reform-minded leaders," according to a laudatory 1991 article in the Post, were Menem, Carlos Andres Perez in Venezuela, Carlos Salinas in Mexico, Fernando Collor de Mello in Brazil, and Alberto Fujimori in Peru. A decade later, one of these five crusading reformers has been impeached, three live abroad in disgrace, and the other, Menem, is widely reviled and suspected of plundering Argentina's state treasury. Had the U.S. press not cavalierly dismissed the "short-term pain of millions," maybe none of this would have come as such a big surprise.

Consider Venezuela. After Perez was elected in 1989, its economy was the first in Latin America to be deemed a miracle. The country's gross national product climbed sharply at the start of Perez's tenure, but simultaneous austerity policies caused the real value of salaries to fall by almost half. In 1989 the government decided to triple bus fares. Riots broke out, and the security forces summoned to quell them killed somewhere between 400 and several thousand people, mostly in the poor barrios. Perez's popularity plummeted. For some reason, this baffled The Miami Herald, which reported in 1992 that international economists were "puzzled by Venezuela's generalized malaise because this oil-rich country is the economic star of the Americas."

Implicated in a series of corruption scandals, Perez was forced to resign in 1993. He now resides in the Dominican Republic. Last December a Venezuelan judge announced that his court was considering bringing charges against the former president and that Perez would be placed under house arrest if he returns home.

Even as Venezuela's economy and Perez were heading down the drain, the press anointed Mexico's Salinas the new miracle man of Latin America. A 1992 Reuters story reported that thanks to Salinas's policies, Mexico was "almost universally viewed as a model for economic recovery in the developing world." But as in Venezuela, Mexico's rapid growth in GNP was accompanied by an estimated 40 percent drop in real salaries, even as the number of Mexican billionaires jumped from two to 24. Corruption marred Mexico's privatization program, which the U.S. media routinely hailed as a centerpiece of market reforms. No matter: When the U.S. Congress approved the North American Free Trade Agreement (NAFTA) in 1993, Salinas's stature as Latin America's savior was sealed. Just before his term ended the following year, the Chicago Tribune ran a story in which Terry McCoy, who was then the director of the Center for Latin American Studies at the University of Florida, saluted him as "Mexico's most dynamic and most revolutionary president" in half a century. "He's going to be a force in the world and in Mexico after he leaves office," McCoy predicted.

A few weeks later, Mexico's economy collapsed, leading to a $48-billion international financial-rescue package -- the largest in history. Salinas left the country in humiliation; he now lives quietly in exile in Ireland. Raul Salinas, his brother and political collaborator, is jailed in Mexico on murder and corruption charges.

In Brazil a similar sequence played out not once but twice. Brazil's first free-market miracle came in 1990, the year Collor was elected. By 1991 the country had plunged into recession and hyperinflation. Collor was subsequently impeached when it was revealed that his campaign treasurer extorted millions of dollars from businessmen who later received government contracts. Some of the money was used to provide Collor's wife with a $20,000 monthly shopping allowance and to adorn the family mansion not only with a swimming pool but with a man-made lake stocked with carp imported from Japan. Miracle number two took place under the current president, Fernando Henrique Cardoso. It came to an official end in 1998, when the International Monetary Fund had to assemble a $42-billion bailout to keep the country from defaulting on its foreign debt.

When Fujimori's Peru hit the skids in the late 1990s, poor economic judgment was the lesser of the exposed failings of the press in this country. So enamored had U.S. reporters been of Fujimori and his free-market reforms that they often downplayed the repressive nature of his rule. Perhaps the most embarrassing tribute to him came in 1994, when syndicated columnist Georgie Anne Geyer declared: "Authoritarian democracy works for Peru." She called Fujimori a "political force of nature [who] has been loosed upon the world" and said that he was "being emulated elsewhere for his successful mix of authoritarian democracy, and modern management and technology." That was two years after Fujimori had suspended Peru's congress and its supreme court, using sham trials to convict thousands of people for allegedly collaborating with guerrilla groups. After the Peruvian economy went bust, Fujimori and his intelligence chief, Vladimir Montesinos, were implicated in numerous scandals. They both fled the country. Montesinos was subsequently arrested in Venezuela and returned home. Fujimori is on the lam in Japan.

Of all the Latin-American miracle men, none was lavished with more praise than Menem. The Bloomberg news service ran a typical dispatch in 1993, reporting that foreign investors "can't say enough about Argentina these days, calling it the latest free-market miracle of Latin America." At the time, a huge jump in unemployment, along with signs of gross corruption in Menem's privatization program, prompted widespread protests and rioting. In one northern Argentine province, thousands of state employees burned and looted the homes of government officials, the legislative building, and the courthouse. Meanwhile, Menem's decision to slash retirement benefits prompted more than 50 pensioners to commit suicide.

Menem's policies set the stage for Argentina's current economic recession, which has lasted four years, beggared the country's middle class, and led to the near collapse of the banking system. In late December, interim leader Adolfo Rodríguez Saá decided to name former Menem cronies to his administration. Argentines took to the streets, forcing Saá to resign after only a week in office. An elderly demonstrator told The Washington Post: "I didn't like it when he [Saá] called all the mafiosos and thieves from the previous government."

It didn't require an economics degree to see that increasing foreign debt, trade deficits, and poverty would ultimately unravel the Latin-American revival. What accounts for the press's infinite gullibility over the past decade? To begin with, most foreign reporters in Latin America spend far more time talking to local elites than they do canvassing ordinary people, let alone the poor. The early stories touting the Latin renaissance were all checkered with quotes from foreign executives and local businessmen, who were the prime beneficiaries of the free-market reforms. The New York Times closed its 1991 "New Discipline" article with a quote from Eduardo Stern, the vice president of a brand-new Chilean ski resort. "I dreamed of this project from my youth," Stern told the Times. "This . . . is proof that this country has changed."

The rapture of Latin America's elites neatly reflected the Washington line on the region's reforms. Throughout the 1990s, the Bush and Clinton administrations relentlessly promoted the idea that Latin America was becoming a free-market paradise. NAFTA would eventually lead to a hemisphere-wide free-trade area. Soon the entire region, from Canada to Argentina, would belong to the first world. Latin America's embrace of the free-market marked a "magic moment" that could lead to a "new era," declared President Clinton at the 1994 Summit of the Americas in Miami. A glowing Associated Press story about the gathering reported that it "featured soaring rhetoric and mind-numbing numbers, with delegates talking almost casually about the multitrillion-dollar market they envision."

Here's a mind-numbing number that puts the region's supposed boom in perspective: According to World Bank figures, between 1986 and last year, Latin-American poverty jumped almost 40 percent.

The U.S. press was too busy reporting on a "miracle" to notice.