Tag: Argentina

Categories
free trade & free markets too much government

Banning Consequences

When bad government policies create problems, government officials often pretend that the causes are unrelated to the effects. Instead they enact further bad policies. They may even seek to outlaw the effects, as if prohibiting puddles could stop the rain.

Suppose a government greatly expands the money supply, which leads to a general rise in prices obvious enough to cause people to complain about sticker shock. Governments may try to “solve” the problem with slogans and price controls.

In Argentina, which is lurching toward 30 percent inflation, they’re skipping the Whip Inflation Now buttons and going straight to the price controls. The government has temporarily frozen prices in the largest supermarkets. The two-month freeze is the result of an “agreement” between the trade group representing big stores and the Argentine government.

Now what happens?

Well, customers will race to the big stores, but small stores won’t lose business except in the short run. As the inflated demand outstrips a deflating stock of goods, the big stores and their suppliers won’t see much point in replacing goods that they can sell only unprofitably or at a loss. If they do replace the sold-off stock, they’ll likely do so with shoddier stuff in smaller packages.

Monetary inflation imposes hardship; price controls worsen the hardship. By the same logic, you help somebody whose leg you just broke by smashing his other leg too. You may think that this procedure would restore health, but actually—no.

This is Common Sense. I’m Paul Jacob.

Note on the illustration: The French assignat was an early instance of paper money inflation in Europe.

Categories
term limits

No a la Reelección

Her name is Cristina Fernández de Kirchner, and she’s Argentina’s president. She is apparently chafing under the country’s presidential term limits.

The last time I wrote about Mrs. Kirchner, five years ago, I had some advice: “Don’t cheer for Cristina, Argentina.” Thankfully, the Argentines aren’t cheering. In Beunos Aires, “Throngs of people banged pots and pans Thursday, as they protested government policies in Argentina,” relates a CNN report:

The massive march was the latest in a series of “cacerolazos,” protests named for the cooking pots participants hit to draw attention to problems they say are growing in the South American nation, including crime rates, inflation and political corruption.

Many demonstrators said a key issue drove them to the streets: the possibility that President Cristina Fernandez de Kirchner could push through changes to the country’s constitution and run for re-election.

Term limits. The people want them, and if the signs at the protest rallies are any indication, Argentines are against “Corrupcion,” oppose Kirchner’s “Reelección,” and are for “Libertad.”

And here in the putative Land of Liberty, a Miami, Florida, neighborhood known as Little Buenos Aires heard pots and pans clanging, too, as marchers expressed sympathy with friends and relatives in the Southern Hemisphere: “We are not afraid” and “We don’t want a communist Argentina.”

The full story of the protests, which have been going on since June, echo some of the issues and criticisms that were pushed for and charged against both Tea Party and Occupier protests in past years here in America. There’s talk of secret partisanship, even “astro-turf.”

But fear of dynastic rule isn’t confined to any party, or require any special organization.

For Argentines, I wish only the best: “Libertad.”

This is Common Sense. I’m Paul Jacob.

P.S. I will be in Buenos Aires later today — this evening, actually — and if I find anything to modify or amplify this story, you can be sure I’ll do so at thisiscommonsense.com.