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Miscellaneous See other Miscellaneous Articles Title: Argentina's control of national stats A recent article in The Wall Street Journal: “Argentina’s government has filed criminal charges against the managers of an economic consulting firm,” the paper reads, “escalating its persecution of independent economists.” Apparently a local firm, MyS Consultores, published an inflation figure that was not to the administration’s liking...which is to say, a figure probably much nearer to the truth than the “official” reading. The government’s own figure is 9.7%, even though you’d be hard pressed to find anybody who thinks it’s less than double that. Most economists reckon it’s north of 20%. Some say much higher, a notion the government seems to tacitly confirm every time it supports trade unions’ collective-bargaining agreements that include annual wage increases of between 20-30%. Curious, no? In any case, investors and economists alike have been increasingly skeptical of the government’s published stats since the former and late president, Nestor Kirchner, began replacing longtime civil servants with political appointees back in early 2007. The Commerce Secretariat – who still heads what Orwell might call the nation’s “Ministry of Information,” Indec – was a close political ally of Kirchner’s. Curiouser and curiouser, indeed... Continues the Journal: “So far this year, the Secretariat has fined at least nine economic research firms 500,000 pesos ($122,000) each. This week, the Secretariat also slapped a second fine on Orlando J Ferreres & Asociados.” “‘They fine us for saying how much prices have risen,’ Mr. Ferreres, director of his eponymous firm, said. ‘They could seek criminal charges against all of us. We don’t know how far they’re willing to go.’” It’s no secret that governments abhor competition. They are, by definition, coercive monopolies. Whether it’s debasing a mandatory currency, stealing from the people it affects to serve or fiddling with the “official” stats, governments seek the unfair advantage that only force can secure. Still, this is just the kind of caper you’d expect in a country like Argentina, itself no stranger to inflationary currency crises, as Eric pointed our earlier in the week. “In 1969,” observed Eric, “the Argentine government trimmed two zeros off the existing Peso Moneda Nacional to create the new Peso Ley. In 1985, the government slashed four zeros off the Peso Ley to create the Peso. Then in 1992, the government cut three zeros off the Peso to create the Austral, simultaneously linking it to the US dollar, one-for-one. Ten years later, this peg to the dollar ruptured and the Argentine currency swiftly lost 75% of its purchasing power...again.” Indeed, when it comes to squandering resources and enacting foolish economic policies, few countries can compete with Argentina’s prowess. From ousted presidents, military dictatorships, socialistas, Peronistas and now Kirchnisters, the poor people of this land have just about seen it all. It takes a lot to surprise an old Porteño. A friend here recently put the situation to us thus: “There are four types of countries in the world, Joel. You have the ‘first world’ countries and the ‘third world’ countries. Then you have Japan, a special case. Nobody can quite figure out how those people made so very much from so very little...and then you have Argentina, another special case, where exactly the opposite is true.” Alas, Argentina’s government is no lone thief in the night. Governments around the globe, in all “four” types of nations, are tipping the national accounting abacuses in their favor, duping voters and taxpayers all the while.
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