Lord Acton’s dictum is no more evident in the Peronista-Paradise called Argentina.
Just as Peron had his Evita, former president (now deceased) Nestor Kirchner left his country a dubious legacy with his wife, Cristina, serving as President. As all Peronist leaders before, support from the “descamisados” (shirtless ones) depends upon a endless & increasing stream of largesse.
Disasters with high or hyper-inflation has until recently taken excessively-loose monetary policy off the table. Also, high reported rates of consumer price inflation requires, according to law, upward adjustments in welfare payments & increased salaries for public-sector workers.
Official data from the state-controlled Indec put the consumer price index, year-on-year, at 10% in September. But a survey based on private-sector economists released by opposition members of Congress put it at a 24.6% year-on-year rate & was up 1.82% on the month in October.
While the open dispute about the inaccuracy of statistics on rising consumer prices has Argentina is on the verge of being the 1st country to be censured by the IMF for not sharing accurate data about inflation and the economy. (“Not sharing” is apparently diplomatic speech being used by IMF officials that would not come out and accuse the regime of lying.)
Another indicator of the abject failure of the Argentine government is the fact that, outside of extreme authoritarian communist states, it is extremely rare for a modern economy to have a black-market exchange rate. Yet ever-tightening controls over foreign exchange & capital flows have inspired Argentinians to buy “blue dollars” that sell for at least a 30% premium over the official exchange rate.
The list of economic stupidity seems boundless.
Consider this quote from the central bank governor, Mercedes Marcó del Pont:
“It is totally false to say that printing more money generates inflation; price increases are generated by other phenomena like supply & external sector’s behavior.”
And then there are the requirements that importers must engage in an offsetting amount of exports. For example, the Porsche importer had to export olives & wine; while the Subaru dealer exported chicken feed & Hyundai dealer sold soy flour to Vietnam.
When last I was in Argentina, I drew the parallel with the monetary & fiscal behavior going on there now with what preceded the disastrous collapse of the Weimar Republic. Just when I thought that the economic policies coming out of Buenos Aires could not get worse, they do!!!