MercoPress. South Atlantic News Agency
Argentina's economy: a battle over utility bills is president Macri’s first big crisis
The following article from The Economist points out that the Argentine Supreme Court in the next ten days has to decide on tariff rises for gas and electricity blocked by lower courts. And president Macri cannot afford to lose sine the price increases are a vital part of his plan to restore confidence in an economy undermined by years of reckless spending. Read full article
Comments
Disclaimer & comment rulesWhat have the courts got to do with running the government's fiscal policies?
Aug 15th, 2016 - 11:23 am - Link - Report abuse 0I suppose the lower courts were stuffed full of appointments made by TMBOA?
Argentina really are a dysfunctional country, aren't they. (It's not a question)
“....an economy undermined by years of reckless spending.”
Aug 15th, 2016 - 01:32 pm - Link - Report abuse 0Pretty well sums up the showcase of Kirchnerism.
@1
Aug 15th, 2016 - 02:12 pm - Link - Report abuse 0Beggars belief really. Do the Argentinians have any private companies or are they all managed by the supreme courts?
Whether it's money loaned to them, or the foreign-sourced agricultural materials that they need to survive, or the cheapest utilities in the region, we are constantly reminded that the argentos are habitually unwilling to pay for the goods and services that they receive.
Aug 15th, 2016 - 03:10 pm - Link - Report abuse 0As usually, the hard core of know-it-all MP commentators are left in the dust, unable to understand people's reality--in the same way the Macri administration has been erratically going from fiasco to fiasco in the matter of the utility bills horrendous, sudden increases.
Aug 15th, 2016 - 03:46 pm - Link - Report abuse 0”...the argentos are habitually unwilling to pay for the goods and services that they receive, pontifies Marti Llazo from his high seat.
He misses the point, as usual. The whole discussion is about what Argentines pay, of course.
And so we have golfcronie, ChrisR and Martillazo, hand in hand with Mauricio Macri, asking themselves what went wrong when the key is very simple.
If you are a politician you need to understand that you need to talk to the people and take into account their needs--not to cater to CEOs only.
I have no idea wy the non RG's who hate Argentina so much, they must get a woody living their live day in and day out pissing on Argentina. Nor do I get the old feeble pedophile, who turned on his own people torturing them even care, and is totally clueless except of the propaganda he chooses to believe.
Aug 15th, 2016 - 04:11 pm - Link - Report abuse 0Between the sides, it sides like a match made in heaven. Unfortunately Quique.....no kiddies here.
#6 Captain Poppy
Aug 15th, 2016 - 05:14 pm - Link - Report abuse 0Here again, a commentator that calls himself “Captain Poppy” resorts to innuendo to suggest inaccurate and unproven facts while safely hiding behind a nickname.
It's easy to understand the low level and the lack of arguments of such individuals when they need to use calumny in lieu of fact-based comment.
I will remind Cptn. Poppy that not only he is violating Mercopress' Comments Policy; he is also violating common decency rules that say you must be prepared to back up any accusations you make.
Pedophilia is a crime, Captain Poppy, and an odious crime at that. I post with my real name because I have nothing to fear--nothing to hide. Conversely, the only reason you dare to imply I indulge in such practices--which I totally and emphatically deny--is anonymously. Come out from hiding and back up your accusations--then, we can begin talking business.
@5 Reekie: “The whole discussion is about what Argentines pay, of course.”
Aug 15th, 2016 - 05:51 pm - Link - Report abuse 0Or in this case, what Argentines don't pay. And in this case, they don't pay but a tiny fraction of the cost of providing their utilities. And if the consumers don't pay, then.... who...... hey, wait a minute.....
#8 Marti Llazo
Aug 15th, 2016 - 06:36 pm - Link - Report abuse 0Wrong again.
If Argentines don't pay, then who, pray say, who is?
Not Marti, for sure.
Reality is, Argentines do pay.
They do it directly through what they pay in utilities bills--and they also pay, indirectly, through energy costs subsidies.
One is direct way of paying, the other is indirect. The direct way hits most people in the same fashion, the indirect way may be mitigated by a progressive tax regime.
Quique, poor poor quique. You should know well all about that crime. You seem to think this is a high school debating forum. IS this your life, your entertainment? You live to debate and make valid and logical arguments? Get a real life.
Aug 15th, 2016 - 08:35 pm - Link - Report abuse 0your latest posts at me sound sooooo.......familiar. I wonder why that would be......I believe we BOTH know that answer.
Meet me in Argentina and I will show you me name. Email me and I will gladly give you my name......Mr. Canada.
@7 Reekie
Aug 15th, 2016 - 08:53 pm - Link - Report abuse 0You are really quite thick. What is it that you cannot understand when you read that :-
“An earlier government had fixed the price of electricity and natural gas in 2002 to help the economy out of a slump; the Kirchners barely raised it. As a result, Argentines pay a fraction of what their neighbors do for energy.
But they have paid in other ways. Energy subsidies jumped from 1.5% of government spending in 2005 to 12.3% in 2014. Partly because of such largesse, the budget deficit was a worrying 5.4% of GDP last year. ”
Do the math. If the price of energy to the final consumer is lower than its cost, either the government needs to subsidize the utility companies or the consumer - which means taxpayer money is going towards paying the energy bill, OR, if the government needs to raise prices in order to withdraw the subsidies - which means the consumer will need to start paying the correct price; whichever, the origin of the money is the one and same - the consumers pocket ; but of course, it 'sounds' better to the ignorant masses if the government subsidizes energy, not only to allow the millions who lost their jobs due to the disastrous economic policies during the Kirchner reign, to keep on consuming, but to spread the 'sacrifice' amongst all, i.e., making those who pay their bills, also pay for the cost of the bums that don't. There's no getting away from it, either the correct price is charged, or the whole system folds. The K's had 12 years to fix this imbalance, but what did they do instead ? they resorted to populism and just pushed the solution of the problem into the future...But I suppose understanding that is above your brain-grade.
Reekie , here is the nature of “progressive” in Argentina:
Aug 15th, 2016 - 09:14 pm - Link - Report abuse 01. Peronist government offers a lollipop to the populacho in the form of essentially “free” utilities -- outrageously subsidised -- in an effort to gain political favour. Massive subsidies for not just the lower income strata -- which would be the progressive thing to do --- but for all residential consumers, including those who are fully capable of paying something closer to the actual cost of supplying utilities.
2. Peronist government subsidies don't allow the utilities to make enough money to invest in modernisation, so quality of service gradually decays and power outages become commonplace. Progressive Peronist government policies attempt to drive privately owned utilities out of business in order to create new government agencies and install Camporista lackeys. Foreign investors take note of government practice and stay away in droves. Argentines ask themselves, “why no foreign investment here?”
3. Peronist government subsidies providing cheap/free utilities encourage enormous waste of energy by consumers, tremendously increasing demand that is satisfied only through importing energy from other countries, and paying in dollars that have to be borrowed at high interest rates. No incentives to reduce consumption, as in the progressive and civilised nations. Peronist government prints more money, but can't print dollars.
4. Peronist government subsidies soon take up about 40 percent of public spending, preventing allocation of meaningful budgets for improvements in education, technology, health, dredging of channels where rusting icebreakers are not being repaired, and so on.
5. Government tries to set utilities rates to levels well below regional averages, and Argentine judicial system reacts by creating conditions to bankrupt the privately owned utilities companies. Foreign investors take note, and stay away in droves. Argies ask “why no foreign investment here?”
#11 Jack Bauer and #12 Marti
Aug 15th, 2016 - 10:41 pm - Link - Report abuse 0I see Marti's line of argument as the closest to the thought process that Macri and his team of CEOs have been using to deal with the Tarifazo affair.
“Peronist government offers a lollipop to the populacho,” notes our illustrated commentator at #12.
I submit this sort of thought is held by Macri and his lieutenants, which is at the root of their incapacity to understand citizens' opposition to the increases.
They just believe people have enjoyed an undeserved free ride for too long and therefore they should not whine if the government now takes it away.
Jack Bauer attempts to convince us of the righteouness of Macri's decisions, indignantly talking about “ignorant masses” and “bums” which I am sure must be the way Macri and his CEOs must be talking right now in private.
He is in line with Energy Minister José Aranguren, who justified the increases by saying: “I have an Excel spreadsheet where results need to fit.”
Some minister.
#10 Cptn Poppy
You accused me of pedophilia and are still trying to demean me? You should be ashamed of yourself. Have at least the decency of putting your real name under the garbage you spew, as I asked you before.
Mr. Massot
Aug 16th, 2016 - 12:02 am - Link - Report abuse 0The Argentines have been subsidised until it became impossible to sustain.
Mr. LLazo was fight on the money - sorry you don't like it.
Finally, Captain Poppy asked you to contact him to speak frankly with each other, including revealing his true name.
For some reason you did not acknowledge that.
Capt Poppy also invited you to meet in BA where again, he would reveal his true name, while demonstrating that he visits or lives there and is familiar with the issues the people deal with every day.
Again, you refused. In fact you did not even acknowledge him.
Are you afraid of a truth that might challenge your belief system?
Somebody lacks integrity - looks like it's you.
#14 Kanye
Aug 16th, 2016 - 01:17 am - Link - Report abuse 0Look, boy. You are free to side with whoever you want, including Marti Llazo and the nicknamed Cptn. Poppy. I seek association or contact with neither and I am under no obligation to follow anybody else's agenda. I seek no validation here. But I will post my opinion in this forum and will ask not to be insulted or calumnied--but insults and calumnies won't keep me from posting. That's all.
Mr. Massot,
Aug 16th, 2016 - 02:11 am - Link - Report abuse 0I notice that when you get frustrated and can't answer, you start to condescend to people by addressing them in the diminutive or in a patronizing manner.
You can criticise any one of us other posters on here, but it does not change the fact that your arguments are flawed.
We all know that Argentina is not going to recover to become a prosperous economy within 6-8 months, whether Macri actually said that or not.
You have admitted as much yourself, yet you choose to use this as 'proof' of his “failure”.
I question your integrity. If you were indeed being intellectually honest with yourself, you would not draw that conclusion.
On the other hand, knowing that as you do, the fact that you do so publicly is proof that you are a propagandist.
Knowingly repeating untrue or flawed logic for political purposes or gain is by definition, political propaganda.
Naturally, we all know hear that the K's, and you as an otherwise insignificant K pawn, must do your best to discredit Macri. For your purposes, the poor must be made to feel impatient that Macri has failed as quickly as possible, before his policies have a chance to work.
Evita K's policies were creating more poverty, not less.
They would have continued to do so.
Macri is giving them some hope and a chance of economic improvement, given the chance.
You, Mr. Massot, ideologue, don't want that to happen.
You are dishonest to yourself and them.
Careful Reeeeeeeeekie!
Aug 16th, 2016 - 02:12 am - Link - Report abuse 0Captain Chicken Hawk is trying to launch another one of his doomed to failure psuedo psy ops.
Ohhhhhhhh! Can you picture the drama as Pooopy exhausts his entire blue collar vocabulary in the first 30 seconds.
What then? Poof on poof catfight?
What are the chances on a live podcast?
@ 14 Kayne, I don't think it would be convenient for Mr Massot to meet anyone in Bs As or elsewhere in Argenzuela, since we understand that Mr Massot is serving his sentence as a guest of the Canadian government, having been unable to deal with the calumnies down here.
Aug 16th, 2016 - 02:13 am - Link - Report abuse 0#16 Kanye
Aug 16th, 2016 - 05:00 am - Link - Report abuse 0Well Kanye, I know a hard working person when I see one.
I have to acknowledge your persistence in attempting to demonstrate your points of view.
I do respect somebody else's opinions--and no doubt, you have formed a very definite idea of Mauricio Macri as president of Argentina.
You believe the man is trying hard to better the country's economy and that he needs some time to achieve his goals. I can see that.
I happen to have quite a different set of views on the president and his team of ministers.
I believe he reached the position he is in because he lied during the election campaign, promising one thing and doing another after being elected. He actually said it: that if he had told people his true platform, he would have been committed to a psychiatric hospital.
But let's not jump to conclusions. Things did not start today and are not going to end tomorrow. Every week Mercopress will bring new stories and opportunities for comment.
Perhaps future events will prove me wrong--who knows? May be capitals and undeclared Argentine funds in foreign accounts begin to flow in, the economy improves, imports don't break the back of the domestic sector, inflation subsides, jobs get created, wages go up and prices down, Cambiemos gets a majority in the 2017 legislative elections, and the party begins a glorious path to a triumph in the 2019 presidentials.
If that happens, I will the happiest person in the world to be proven wrong.
#17 chronic
Loved that one!
#18 Marti
You wish!
Mr Massot,
Aug 16th, 2016 - 05:49 am - Link - Report abuse 0“If that happens, I will the happiest person in the world to be proven wrong”
One hopes those are indeed your true sentiments.
That sounds reasonable, at any rate.
I find it ironic that the majority of Argentine inhabitants vote for an alternative to CFK and her policies and hope for a change for the better, only to have non-residents like Mr. Think and others, working to make it fail.
Hey Quique.......help me out here. Who would you use to ship a parcel to Buenos Aires?
Aug 16th, 2016 - 02:33 pm - Link - Report abuse 0As you seek not to meet people yet you think putting some random name to your screen name makes you more valid than a name like mine, Chronic, Kanye.......That's your idea of being real? Nothing is real on the internet......nothing. And, your opinion is like everyone's asshole, we all have them and some are ugly and some are good.....it all depends on the person. I still think you are naive about living in Argentina and that your best attribute is your age, as you are closer to death than life.
Anyway, ever ship to Argentina?
#21 Captain Poppy
Aug 16th, 2016 - 03:06 pm - Link - Report abuse 0Captain: I do not object to readers commenting here under nicknames--MP allows it and that is fine.
I will, however, object to you or anybody else using anonymity to throw baseless accusations.
You recently implied I would be guilty of pedophilia, and I challenged you to repeat such serious accusation under your real name.
You offered to meet in real life and I said I am not interested.
By all means, post your opinions here as much as you want.
But use your rights responsibly. Alleging that those you do not agree with are criminals is not a responsible use of this space.
Reeeeseeeeeeeeekie, poor Poooopy's ideas fail in text so he seeks an alternative form of expression.
Aug 16th, 2016 - 04:19 pm - Link - Report abuse 0What do you think that he wants to do to you in person that he can't do on line?
Reeeek, everyone on the right loathes you and your failed ideas.
Small consolation: Virtually all view ole Cap as a buffoon.
@ 23 chronic
Aug 16th, 2016 - 04:39 pm - Link - Report abuse 0“ Virtually all view ole Cap as a buffoon.”
I for one do not share that view.
Captain Poppy does sometimes get his grammar a little different to what you expect the preceding text to come out with but he is not alone with that and why that should be cause for derision is beyond me.
It must be so good to be perfect, you are not a SP of gordo1 / 01 by chance?
Quique we both know why you are in Canada, so save the bullshit for the other posters. You've lived in the comforts and freedoms of North America long enough to know I can say most all of what I want to say about you and there is not the thing that you can do to stop that.
Aug 16th, 2016 - 04:56 pm - Link - Report abuse 0I will never respect your opinions, but I respect your right to have them and say all the ridiculous things that you want to say about Argentina, with not even knowing what it is like there anymore, other than what you can read about.
And if you don;t like my writing, take a year in Trout Run and chill out about it, otherwise, I say, eat shit and bark at the moon because I can care even less about your menial opinions as well. Because at the end of the day....this, MP, is all you have. That's all I have to say to you.
#23 chronic
Aug 16th, 2016 - 05:01 pm - Link - Report abuse 0“...everyone on the right loathes you and your 'failed' ideas.”
No surprise there, chronic. In fact, I would be having serious doubts if someone “in the right” showed appreciation for my postings.
I think Macri made a mistake here. Yes, he should increase fuel prices to market values in order to provide some sustainability but he should have reduced the shock to the system by a series of smaller increases rather than the big step change.
Aug 16th, 2016 - 05:38 pm - Link - Report abuse 024. lol. No one's sock puppet. How about you?
Aug 16th, 2016 - 05:41 pm - Link - Report abuse 0Capt Poppy,
Aug 16th, 2016 - 06:28 pm - Link - Report abuse 0Mr. Massot does not know what he is talking about. He just repeats the K propaganda.
I would hope that he is sincere about wanting a better lot for the Argentine people, regardless of the sitting government party.
Alas, his defence of the false Evita, CFK, is inexplicable as Argentina was on a steep downward spiral, a pariah state headed for complete economic collapse.
The poor were duped. Some were more duped than others.
On another note,
I was recommended to use DHL as a cheaper and more reliable courier than FedEx or Purolator, shipping to Mexico and S. America.
It has worked fairly well.
I can't find anyone shipping there at a reasonable price, what I am accustom to paying. Even Amazon will not touch Argentina. less then twenty I paid to have a lens shipped from Germany......a similar package to Argentina is hundreds, if shipper will take it....they will not insure it.
Aug 17th, 2016 - 12:58 pm - Link - Report abuse 0Well, the Noquis are ENTITLED to make a living.
Aug 17th, 2016 - 02:02 pm - Link - Report abuse 0@ 28 chronic
Aug 17th, 2016 - 05:22 pm - Link - Report abuse 0According to a certain 'female' on here McGregor is my SP because he 'stood up' to her, or vice-versa, and then there was another tag she was convinced was me.
But what can you expect?
I can confirm that the only socks I have have got my feet in them. :o)
In relation to the article above: Energy minister Juan Jose Aranguren proves to be a better gymnast than those performing in Rio when defending exponential increases in gas, electricity and water bills in Argentina.
Aug 17th, 2016 - 05:42 pm - Link - Report abuse 0For eight hours, the minister appeared before Congress energy commissions Aug. 16 but surprisingly would not answer key questions such as the wellhead price that energy companies pay.
He could not justify the cost components (such as exploration) to the companies supporting the difference between 1.9 US dollar cost per million BTU as declared by YPF in the New York Stock Exchange and the 5.5-US dollar cost declared as a justification for the increases.
In summary, Aranguren spoke at lenght but beyond talking about the “heavy inheritance” could not provide support justifying how his ministry endorsed tariffs increases of up to 1,600 per cent. He could not show a government's plan for energy going forward either.
Argentina currently purchases gas from Chile at a price 132 per cent higher than gas purchased to Bolivia. One of two Chile's gas selling companies is supplied by British Gas, owned by Shell.
Aranguren denied any incompatibility between his current energy minister position, current ownership of Shell shares, and his previous Shell CEO position.
The next chapter of this saga dragging since April is a ruling of the Supreme Court expected Thursday that the government hopes would quash a number of lower court rulings suspending the increases. In preparation for that, General Prosecutor Alejandra Gils Carbo has already submitted a non-binding report advising that public hearings must be held prior to the increases.
“.....exponential increases in gas, electricity and water bills in Argentina.”
Aug 17th, 2016 - 07:04 pm - Link - Report abuse 0Someone must learn the meaning of “exponential.”
Also must learn that nearly 40 percent of the national budget is spent on energy subsidies.
And that even after the proposed subsidy reductions, argentos still have the lowest utility rates in the region.
Tempest in a teapot.
But anything that peronismo can do to prevent fiscal responsibility, balanced budgets, energy conservation, conditions to invite foreign investment, etc., by the new government, will certainly be done.
@13 Reekie
Aug 17th, 2016 - 07:56 pm - Link - Report abuse 0“Jack Bauer attempts to convince us of the righteouness of Macri's decisions, indignantly talking about “ignorant masses” and “bums” which I am sure must be the way Macri and his CEOs must be talking right now in private.”
You obviously have little economic acumen....it has nothing to do with 'righteousness', he is applying very basic economic principles...something usually ignored by populist governments.... Perhaps if I put it in a different context , you can understand : try opening a small commercial business and then sell your stock at prices lower than cost....I suppose even you can guess the result. Or am I wrong ?
And unfortunately, can't think of any other way to describe the idiots who are unable to see the consequences of (the K's) populist measures, other than 'ignorant masses', and people who don't pay their way in society, as 'bums'.
Which leads me to conclude that you most likely fit into the category of 'bums'.
The rest of the story:
Aug 18th, 2016 - 02:40 am - Link - Report abuse 0News article in English:
Aranguren defended his administration’s actions by saying that, even with the increases, Argentines would still pay way less for their utilities than neighboring countries: “In regards to electricity, Argentines pay US $11 per kilowatt per month, while [neighboring countries] pay an average of US $46. When it comes to gas bills, we pay about 18 percent of what Uruguayans, Chileans and Brazilians pay,” the minister finished.
http://www.bubblear.com/energy-minister-aranguren-justifies-utility-bill-increases-before-committee/
But here is the kicker:
“Should the increases be annulled, the Macri administration will need around AR $80 billion to face this new expense. ”
-- This is exactly what the peronists are counting on, as a means to demonstrate the failure of the Macri government, but as a way of further depleting the national treasury, increasing inflation and foreign debt, degrading the Argentine currency, ensuring that foreign investment stays far away, and ultimately bringing on the next default crisis even sooner. It's the perfect storm. And quintessentially Argentine.
Ironically, it is exactly why the K Peronists failed, and voted in MCri to take a new and different course.
Aug 18th, 2016 - 05:24 am - Link - Report abuse 0Mr. Massot sees this too, but he still wants to follow those Socialist methods of Evita K.
Quite obviously, he cares nothing for the lot of the Argentine people.
Ideology before people.
#35 Jack Bauer #36 Marti Llazo #37 Kanye
Aug 18th, 2016 - 06:19 am - Link - Report abuse 0Most opponents to Macri's Tarifazo agree that some increases to utility bills is necessary.
After allowing for the increases in April, the energy minister appeared before Congress to attempt an explanation...mid August and only after nearly 50 judges across the country ruled that the increases were excessive, confiscatory, and lacked public consultation.
In any country where the government respects the citizens, the first step would have been...guess what...Public Consultation! You don't drop increases of up to 1,500 per cent without at least trying to explain it.
In Argentina, even allies of the government are criticizing the lack of consultation.
It's only the above MP commentators who form a cheerleader chorus blaming the victim and encouraging Macri to use scorched land tactics to impose his “just” increases on the population no matter what.
Very democratic.
The CFK government subsidies for natural gas right now result in a condition where consumers pay on average just a bit over 10 percent of the production and supply cost. Public monies are diverted from other uses so that consumers can over-consume at nearly no direct cost in the form of energy billing. Much of the debt inherited by the present government involves payment of these energy subsidies.
Aug 18th, 2016 - 02:34 pm - Link - Report abuse 0However, contrary to reekie's assertions, those who understand economics in Argentina, including even a handful of peronista governors, do understand the need for correcting the mess that CFK made in this over-subsidised utilities silliness. 15 of the 23 provincial governors reflected a rare moment of common economic sense in supporting the Macri government subsidy reductions:
“Entre peronistas, radicales y macristas, 15 gobernadores respaldaron la suba de tarifas de Mauricio Macri”
http://www.lanacion.com.ar/1929237-entre-peronistas-radicales-y-macristas-15-gobernadores-respaldaron-la-suba-de-tarifas-de-mauricio-macri
The inability of Argentina to effectively manage such relatively simple matters is of course very much a part of the reason that most potential new foreign investment in Argentina is going to stay away. And why most of us get a good laugh and a well-deserved face-palm out of the continuing sophomoric idiocy that characterises the incompetent management, ludicrous policies, and self-destructive tendencies of this country.
#39 Marti Llazo
Aug 18th, 2016 - 04:40 pm - Link - Report abuse 0Marti Llazo gifts us with another short-sighted, simplistic and prejudiced comment that puts all Argentines in a same bag, which of course would irk the citizens of any country in the world.
However, Marti concedes at #39 that ”15 of the 23 provincial governors (peronists, radicals and macrists) reflected a rare moment of common economic sense in supporting the Macri government subsidy reductions.” Marti appears to just wake up to the fact that a significant amount of support from the legislative opposition that has so far allowed Macri to pass most if not all his proposed legislation projects. The support of governors heavily depending on federal transfers is not overly surprising.
With such level of support shows, however, is Macri administration's ample room to maneuver in implementing measures that are socially and economically sensitive.
We will see whether Macri does that after today's expected Supreme Court ruling on the famous Tarifazo, which has come to monopolize the political agenda since April.
A country with some of the largest hydrocarbon reserves, importing its energy, and completely unable to so much as figure out the quotidian fundamentals of how to set reasonable rates for providing utilities services to its consumers. And one wonders why no reasonable person has any confidence in this country.
Aug 18th, 2016 - 06:25 pm - Link - Report abuse 0So reekie, tell us, is it true that 20 percent of the people in Bs As province have no access to potable water, as a result of there being no funds available after the enormous expenditures for excessive gas and electricity subsidies? Or is it because CFK spent the money on Futbol Para Todos instead of providing potable water ?
Reeeeeeeeeeeekie, my view is this:
Aug 18th, 2016 - 06:29 pm - Link - Report abuse 0If rg can bootstrap its self back into the second world - so be it.
Reeeeeeeeeeeeeekie, your view of rg would have the individual rgs on their knees beholden to the rg government for their daily bread such as it is.
The sad thing is of course that there are 15M Peronistas who agree with Riki.
Aug 18th, 2016 - 06:41 pm - Link - Report abuse 0As long as they remain a cohesive band of troublemakers the entire country is doomed.
Now THAT I do think is worth fighting against by the other 20M or so (allowing for children), but it seems not to be the case at present.
Just what does it take to make this happen, 20M backbones?
@38 Reekie
Aug 18th, 2016 - 10:00 pm - Link - Report abuse 0“In any country where the government respects the citizens, the first step would have been...guess what...Public Consultation! ”
You gotta be dreaming.....'public consultation', over energy tariffs ???
If that silly idea were put into practise - yes, silly, because what does the average Argy on the street understand about the costs of producing energy ? - the overwhelming result of such a 'consultation' would be....guess what ? ... “free energy ! ”.
Reekie, you definitely need to smarten up...
But moving on, why haven't you replied to the question of who got Argentina into its current mess ? The K's or Macri ?......and try to be honest for once...
Latest in English.
Aug 18th, 2016 - 10:11 pm - Link - Report abuse 0Clearly there is no hope for a country so incompetent.
Oh, and they got into this mess in part because the previous government failed to hold public hearings on the subject, but the present government is expected to hold public hearings ?
http://www.wsj.com/articles/argentinas-supreme-court-annuls-residential-gas-price-increases-1471534265
Macri was elected to enact new policies to improve the economy.
Aug 18th, 2016 - 10:56 pm - Link - Report abuse 0There has to be a cohesive strategy, and consistency, and resolve to see it through.
The naive and stupid Mr. Massot suddenly believes that every policy must be subject to public referendum, right Enrique?
Macri's mandate for his reform package was already approved in the last vote - the 2015 election that tossed out the thriving Socialist, Evita K.
Kayne, it is not merely the Massot that believes in this public referenda business, the Argies have built it into their constitution. But it is a reflection on the inability of the country to run itself.
Aug 19th, 2016 - 01:56 am - Link - Report abuse 0The Argentine Supreme Court has inflicted the heaviest yet political defeat to president Macri, by giving him a crash course on Democracy 101.
Aug 19th, 2016 - 06:11 am - Link - Report abuse 0After ignoring calls from street demonstrations, lower court rulings, advise from allies and even from some within his own team, Macri insisted in keeping increases in utility bills for gas and electricity ranging from 400 to 1,500 per cent and now finds himself at square one in a battle he started waging in April.
Macri's advise to the population had been to just pile up clothes when at home to save energy; and energy minister Juan Jose Aranguren said the he had determined the increases by fitting numbers in an Excel spreadsheet.
However, Aranguren declined to provide information on numbers such as the wellhead price by million BTU energy that companies pay when appearing before Congress commissions two days ago.
So naive Mr. Massot suddenly finds himself in good company--that of the four members of Argentine's highest court, who unanimously voted to tell Macri that even after being voted president he cannot do as he wish.
Good things happen sometimes.
Naive Mr. Massot,
Aug 19th, 2016 - 02:08 pm - Link - Report abuse 0“Democracy 101”
Do you really believe that's how successful democracies operate?
Is Canada a democracy?
Do you see that happening there?
I think I reluctantly have to agree with Mr. Llazo. If that is how the Argentine Constitution is written (amended by whom?) and that is how their government is structured, it will be a tough job for Macri to turn things around, let alone create a vibrant economy in 8 months.
That's the legacy of the K's populism for you.
E. Massot,
“increases in utility bills for gas and electricity ranging from 400 to 1,500 per cent”
Some creative obfuscation on your part, Mr. Massot.
Utility rates were going up from nearly free, to the lowest in SA. That was to try to cover the cost of production. Quite reasonable.
Now it will be paid for out of the tax revenues of those who actually work, or own a business AND pay taxes.
Let's be clear, it's a good ploy to play to the people while hobbling economic recovery.
And the naive Massot, cheering from the sidelines like Evita K, is happy to see another deliberate roadblock to prevent improvement for the economy and the people of Argentina.
Ideology before people, right Mr Massot?
Reekie reveals that his principal interest is in damaging the prospects of the current government in attempting to introduce the concepts of sanity, fiscal responsibility, and energy conservation to Argentina. Concepts, I might add, that are wholly unknown here.
Aug 19th, 2016 - 02:20 pm - Link - Report abuse 0But other than economic failure can one expect from a country populated and run by Argentines?
“Do you really believe that's how successful democracies operate?”
Aug 19th, 2016 - 06:14 pm - Link - Report abuse 0By following their own laws as written in the constitution? Yes. Whether the rules are sensible or not, just ignoring them would not be democratic or ultimately good for the country.
“Oh, and they got into this mess in part because the previous government failed to hold public hearings on the subject, but the present government is expected to hold public hearings ? ”
Isn't the present government attempting to be *better* than the previous one? Following their own rules seems like a good way of starting. Not pissing off a large part of the public would also be helpful.
“You gotta be dreaming.....'public consultation', over energy tariffs ???
If that silly idea were put into practise - yes, silly, because what does the average Argy on the street understand about the costs of producing energy ? - the overwhelming result of such a 'consultation' would be....guess what ? ... “free energy ! ”.”
Maybe if it had actually been carried out, “the average Argy on the street” would understand a little more. Is it true that the government won't reveal the costs involved? If so it's hardly surprising the average person doesn't know what they are and doesn't understand the need for the increases.
In any case the end result is obvious. Doing the consultation would have delayed things, but left people happier. Doing it this way has caused the courts to block the increases, which has delayed them anyway, and also made Macri unpopular.
@51 “Is it true that the government won't reveal the costs involved?”
Aug 19th, 2016 - 07:19 pm - Link - Report abuse 0-- I think there is an article indicating that the government has shown and announced that the amount paid by consumers is about 10 percent of the production and delivery cost, or rather the amount of natural gas subsidies paid with diverted public funds is nearly 90 percent.
Since the previous government's setting of excessive subsidies appears to be in violation of a provision that is only now being enforced, the most reasonable (reasonable is not a value here and I recognise that) and appropriate measure would have been to nullify the improper prior rate subsidies.
Allowing the populacho here to set utility rates is patently absurd, since their understanding of arithmetic and economics is limited to the demand, “we want it all, we want if now, and we want it free.”
So the previous government buggered things up and the present government buggered things up trying to fix what was buggered up and the result is an economy in shambles and we have the most grotesque misuse and waste of energy imaginable.
Meanwhile, there is one area of widespread agreement: the court decision and the resulting jeopardy for utilities companies will prevent further investment in this sector, lead to increasingly long and frequent blackouts, and assure prospective foreign investors that their money is best taken somewhere other than Argentina.
@52
Aug 19th, 2016 - 09:08 pm - Link - Report abuse 0If removing the subsidy is supposed to increase investment and reduce blackouts, presumably some of those price increases are going to the utility Companies? Do we know how much?
Were the prices always set by the government? It not, I would have expected them to keep rising as long as the subsidies were in place.
And if the subsidies were against the law, why didn't Macri try to get the courts to anull them? They were quick enough to strike down the increases.
“Allowing the populacho here to set utility rates is patently absurd, since their understanding of arithmetic and economics is limited to the demand, “we want it all, we want if now, and we want it free.””
I'm sure they can understand they will be paying one way or the other; in their taxes if not in their bills. On the other hand, people need to be able to plan and stick to a budget as much as countries do, and improving energy efficiency can't be done overnight. I'm not surprised people are angry when the changes are so sudden and drastic, and why have the price increases in Autumn?
Mr. DT
Aug 19th, 2016 - 09:45 pm - Link - Report abuse 0“I'm sure they can understand they will be paying one way or the other; in their taxes if not in their bills. ”
You would think so, but it is an 'inconvenient truth'.
Even here, where we point it out to Mr.Massot, he will not acknowledge it, because it goes against his belief system that businesses should not turn a profit, even to reinvest in new infrastructure. Private ownership is seen as exploitive.
It suits the purpose of the K's to use the tone of righteous indignation, while ignoring true costs.
The people can very easily 'not see' a cost they are not paying for directly on their bill.
Additionally, for the poorest, who do not pay taxes, and those not so poor who avoid taxes, having the government pay out of money collected from taxpayers, is naturally preferable to them.
It amazes me that a part of the Party faithful like Mr Massot, and Argentines are working so hard to ensure there is no financial and economic recovery.
It's a lot like the Communists in Africa, China, and SE Asia, setting fire to schools and crops, bombing businesses, robbing banks, and terrorising the populace, to to destroy society and the family.
Replaced with the populist state.
Due to the acceleration of deficit spending in Argentina, its regularly scheduled default on external debt, previously planned for 4 to 6 years from now, may take place even sooner. Mr Reekie is counting on it.
Aug 19th, 2016 - 10:31 pm - Link - Report abuse 0Seeing the outrage and disarray of commentators such as Kanye and Marti Llazo you would think we are witnessing the advance of the red hordes and their imminent take over of the Casa Rosada.
Aug 20th, 2016 - 12:59 am - Link - Report abuse 0“It's a lot like the Communists...to destroy society and the family,” writes Kanye, unafraid of hyperbole, at #54.
At #51, Demon Tree asks some common-sense questions.
”Maybe if (public hearings) had actually been carried out, 'the average Argy on the street' would understand a little more,“ he noted.
Confirming that common sense is the least common of the senses, however, Marti shows absolute contempt for democratic openess and transparency. Can you imagine for a second this guy as a politician? He would put the very Donald Trump to shame!
”Allowing the populacho here to set utility rates is patently absurd, since their understanding of arithmetic and economics is limited to the demand, 'we want it all, we want if now, and we want it free,'” notes Marti. (Is this guy for real)?
The truth is, the Macri government displayed quite a similar arrogance to that shown by Marti and Kanye. By choosing to stubbornly refuse to hold public audiences and apply the energy bills increases to a population already suffering the impact of increased cost of living and fewer jobs, the government lost almost five months, and now has been sent back to square one.
And let's remember that we are talking here about a Supreme Court ruling, (which is democratic division of powers at work for those who don't know) and a far cry from the seditious take over by the “unwashed” as suggested by our valiant commentators.
Will be good to see the energy companies open their books at the public hearings.
Mr. Massot,
Aug 20th, 2016 - 02:02 am - Link - Report abuse 0I think I listed 5 or 6 negative tactics of the anarchist/terrorist/communists.
Funny that you only responded to one, and the best you could manage was accusing me of hyperbole.
“Outrage” of Kanye?
Nay, Mr. Trotsky.
Contempt, disbelief, incredulity, disdain, disappointment, despair, but no, not outrage.
It is the Argentines that should be outraged.
You, are their own worst enemy.
How is your comfortable life in Canada, hypocrite?
@56 Reekie: “ Will be good to see the energy companies open their books at the public hearings.”
Aug 20th, 2016 - 03:06 am - Link - Report abuse 0Reekie, if you knew anything at all about the Argentine regulatory process, you would know that the public hearings are not normally a place where “the books” of a utility are opened to the public - though such a wish certainly reflects your ideological orientation and its concomitant commitment to the destruction of private corporations. Note that these hearings take place after the regulatory agency has already examined the utility's requests and in most cases the decision has already been made. Ergo, under present Argentine law, the public has no significant role in these hearings other than to receive the decision of the agency, and to rather pointlessly object, since the objections have no binding impact on the agency's determinations. So we must ask ourselves: what is the real point of these hearings if public participation cannot in any obligatory manner influence the previously concluded decision? Since the hearings are merely informative, then reason suggests that the agencies' determinations could more efficiently and sensibly handled by being published in a public register.
As noted earlier, the Macri government followed the Kirchner practice of electing to not hold the public hearings for rate changes. The courts also quashed some Kirchner-era changes to utilities tariffs as recently as 2014.
Macri cannot be allowed to restore the economy and reduce poverty.
Aug 20th, 2016 - 04:02 am - Link - Report abuse 0E. Massot, like the other indoctrinated pawns, inexplicably supports the welfare of the Party, over that of the people of Argentina.
Pathetic ruling from the supreme court. Everything has been affected by inflation during these 12 past years but the utility rates. Now the people don't want to face reality. I-R-R-A-T-I-O-N-A-L!!!
Aug 20th, 2016 - 12:15 pm - Link - Report abuse 0@48 Reekie
Aug 20th, 2016 - 07:53 pm - Link - Report abuse 0“So naive Mr. Massot suddenly finds himself in good company--that of the four members of Argentine's highest court,”
I may be mistaken, but who appointed these Judges ? CFK, or old Nestor “Bulgy-Eye” Kirchner ? If that is the case, is it any surprise that they would decide against Macri's attempts to get the economy back on track ? If he does manage to, despite the judges, he'll just show what the K's 12 years of incompetence and stealing did......and they can't allow that to happen, can they ??
But getting back to the economic aspect of this issue, it is clear that you still think that the Government should heavily subsidize the energy prices, despite the fact it means the cost is still being footed - only this way, indirectly - by the Argentine taxpayer......
@60
Aug 20th, 2016 - 08:53 pm - Link - Report abuse 0Marti Llazo has already posted that there is a law requiring public inquiries to be held and that the courts quashed some changes Kirchner tried to make in 2014. So it seems that actually they are simply following the laws as written.
@54
Evidently the people were able to see some kind of problem, since they voted out the K's.
@61 DT
Aug 20th, 2016 - 09:27 pm - Link - Report abuse 0If the judges “are simply following the Laws as written”, and have therefore ruled that Macri cannot increase the gas and electricity rates, what they have done is tantamount to speeding up the bankruptcy of the utility companies... Must say, a really smart solution, which totally ignores reality. But if they want to keep on kidding themselves...
@62
Aug 20th, 2016 - 09:36 pm - Link - Report abuse 0They haven't said Macri can't increase the rates. According to the other article they have just said the government must hold public consultations with 3 weeks notice before doing so. Which judging from the evidence is what Macri should have done in the first place, to avoid all this trouble.
In any case, it's the job of the judges to interpret and rule on the law, not to ignore it because their decision may have unfortunate side effects.
And even apart from that, the low prices are supposedly being funded with government subsidies, so it's actually more likely to speed up the bankruptcy of Argentina.
#63 Demon Tree
Aug 21st, 2016 - 04:37 am - Link - Report abuse 0You are talking too much common sense and asking the right questions, whereas commentators such as Jack Bauer, Kanye and Marti Llazo are refusing to see reality, ignoring common sense altogether and brandishing their own ideological prejudices.
They are blaming 1) The “populacho” in the first place. 2) Judges whom they suspect of being part of a far-reaching Kirchnerist confabulation.
Why, even after the Macri administration has accepted the Supreme Court ruling, they keep vociferating how wrong the ruling was....
#60 Jack Bauer: No Jack, the SC is NOT Kirchnerist and nobody who knows a bit about Argentina, not even Clarin, has suggested such nonsense.
“...the K's 12 years of incompetence and stealing...”
Come on Jack. Grow up and inform yourself a bit instead of repeating ridiculous nonsense spewed by others. Find some independent sources. You'll be surprised.
I left 4 comments on this site and next day all 4 are gone. Why?
Aug 21st, 2016 - 04:42 am - Link - Report abuse 0Wrong again, Reekie. Your fetid imagination has run away with you again. Marti has done none of the things you allege. Instead, he insists that neither the Macri nor the Kirchner governments enjoy the least bit of competence and should not be permitted to manage anything more complex than a neighbourhood cricket match.
Aug 21st, 2016 - 05:22 am - Link - Report abuse 0@67 Marti Llazo
Aug 21st, 2016 - 10:48 am - Link - Report abuse 0If you despise Argentina so much why do you live there?
@66 John F
They weren't showing yesterday and now they are; all the later comments have changed number too. Strange.
#68 Demon Tree
Aug 21st, 2016 - 02:20 pm - Link - Report abuse 0“Marti Llazo
”If you despise Argentina so much why do you live there?”
Good question. It has also been a mistery to me why Marti is so active arguing here (always supporting the same side of Argentine politics) while repeating at the same time his pet comment that Argentina will be in a mess as long as it's governed by Argentines.
I have repeatedly indicated that the observation of perfect insanity in the unwillingness of Argentina to concoct a sensible form of governance has and will continue to provide me with the most excellent form of entertainment, perhaps at times laced with a tiny degree of Schadenfreude. But in the end I am still able to make a tidy profit here, taking advantage of the high inflation rate and rapid appreciation of certain types of property. The original observation that “Argentina will continue to be a festering failure so long as it is run by Argentines” was actually provided to me many years ago by -- you guessed it ---- an Argentine friend and associate. It's also something of a paraphrase of one of the most commonly told jokes about Argentina.
Aug 21st, 2016 - 04:46 pm - Link - Report abuse 0It's always funny that Argentines and wannabe-argentines who don't dare or deign to live in Argentina feel that they have such exquisite knowledge of the country.
Marti lives in Argentina.......Bahahahahahaha. And I post from Mare Tranqillitatis.
Aug 21st, 2016 - 04:57 pm - Link - Report abuse 0A Latin name fools only a fool.
Voice: “A Latin name fools only a fool.”
Aug 21st, 2016 - 05:03 pm - Link - Report abuse 0Denuone Latine loquebar? Me ineptum. Interdum modo elabitur.
Schadenfreude is German.
@64 DT
Aug 21st, 2016 - 10:35 pm - Link - Report abuse 0“According to the other article they have just said the government must hold public consultations with 3 weeks notice before doing so.”
Ok, so let's say Macri just does what the judges want him to, which is to hold 'public consultations'......what do they expect the people to say ? that yes, they want the prices of utilities to be increased ?? Anyone with half a brain knows the answer.
@65 Reekie
“whereas commentators such as Jack Bauer, Kanye and Marti Llazo are refusing to see reality, ignoring common sense altogether and brandishing their own ideological prejudices.”
Reekie , why do YOU keep on ignoring common sense....first of all, this issue (in Argentina) is not ideological, it is economic....to increase or not the price of energy. Where does ideology come into the picture ?
Second, if the 'public consultations' are held - and which NOW, I too am in favour of - simply because I'd like to see the result....the great majority will say NO to any increases, and what does that spell for the utility companies ?Please tell us, since you seem to think you are an expert on the subject. And this time don't sidestep the issue, answer the question ! And before I forget, let me remind that it is not a 'personal' question....OK ??
Also, pls note my post is # 61, not 60. And in 61, I asked a question, nothing more. I did not make any broad statements, therefore if there is any nonsense floating around it's coming from you. Fact is, I do know quite a bit about Argentina...I too have family living there (cousins) I myself lived there for a while, been back more than 40 times, on business and on vacation, which does not imply I need to know the current composition of the Supreme Court....reason why I asked, numbnuts.
Mr. Massot,
Aug 22nd, 2016 - 01:02 am - Link - Report abuse 0Nothing ideological about my posts.
You simply contradict yourself and defy simple logic.
The 12 years of socialist/populist economic and social policies have failed,
They wrote off 70% of outstanding debt, “Nationalised” industries, and still bankrupted the nation. Argentina fell into Default, the Federal Reserve was being steadily depleted, poverty steadily rose from as low as 20%, to 27% in 2014, and at least 28.4% by the time the K regime was voted out in 2015.
Macri has reformed taxation and tariffs, and done his best to create an environment for business investment and success.
He is attempting to re-invigorate the economy to lead to financial recovery and lower poverty.
Quite simply, you don't want that to happen.
Your tactics are to force him to abandon his path, which tells us that you see it is likely to be successful if allowed to proceed.
Shucks, it can't be any worse than under Evita K.
Why stop economic growth?
Your motives can only be ideological.
#74 Kanye
Aug 22nd, 2016 - 03:37 am - Link - Report abuse 0“Why stop economic growth?”
Come on Kanye. Who are you tring to fool?
Mauricio Macri is not attempting to make Argentina grow.
His main measures so far benefited the estancieros and the agro business--a narrow sector of the economy that does not create a large number of jobs.
After depriving the state of the income formerly provided by the export tariffs, he killed the tax on wealth, further reducing the state income.
He attempted to unreasonably increase the energy bills and he totally fumbled it, receiving a slap on the wrist from the Supreme Court.
He is opening imports (in a futile attempt to reduce inflation), which will stab domestic small and medium size enterprises.
He vetoed a law against layoffs, because his goal is to increase unemployment so that wages can go down.
“Your tactics are to force him to abandon his path...”
I wish I had that power. Unfortunately, all I can do is to follow this process from afar, with hopes that Argentine electors discover as soon as possible that they have been fooled by a witch apprentice--the yellow-balloon guy.
@75 Reekie: “....agro business--a narrow sector of the economy that does not create a large number of jobs...
Aug 22nd, 2016 - 04:41 am - Link - Report abuse 0Right now, the agro business pays the bills for Argentina. ”Industria Argentina“ has all the earmarks of a sheltered workshop and because of decades of Peronism, worsened by recent Kirchnerism, Argentine manufacturing has grown increasingly anachronistic and noncompetitive. A significant portion of the current recession here is due to failings in the manufacturing sector. Over the past year, the Argentine auto assembly business is off more than 20 percent (assembling Asian, European, and North American brands -- there is no ”Argentine” auto, the country having failed at that under Perón).
Meanwhile, agro business brings in dollars. Without agro dollars, the country plummets directly into default in record time. Somewhere between 8 and 10 percent of Argentine jobs depend on agro, though Kirchnerist policies resulted in reductions in agro output and reductions in the number of jobs created by agro, essentially strangling the goose that laid the golden eggs. As as result of the damage that CFK brought about in this sector, even little Paraguay now exports more beef than Argentina! And Argentina now has to import higher quality wheat since CFK policies resulted in such damage to those growers that they shifted from “quality in wheat” to just “quantities of lower quality wheat.” In some parts of Argentina, agro output was also constrained by CFK import restrictions, resulting in a lack of spare parts for agricultural equipment, pumps, and other machinery. It remains to be seen how quickly and to what degree the Argentine agro sector can recover and grow under the new government's economic policies and the comparatively flat market prices, as well as the stiffer competition from nations which, unlike Kirchnerist Argentina, promoted and supported their agricultural sector and provided for innovation and higher productivity.
@75 Reekie
Aug 22nd, 2016 - 06:32 pm - Link - Report abuse 0Why don't you man up and answer the questions in my # 73 ? :
1) “Where does ideology come into the picture ?”
2) “.....the great majority will say NO to any increases, and what does that spell for the utility companies ? ”
Either you don't know, which means you are just blowing a lot of hot air , OR you are incapable of replying honestly, because the truth shatters your populist ideology....which is it ?
Your statement “He vetoed a law against layoffs, because his goal is to increase unemployment so that wages can go down”, just shows how your wee brain is conditioned to not analyzing the economic rationale behind certain decisions, and your hurry (or your urge) to believe populist propaganda....
So I ask again, if you were a small business owner and sales had dropped steadily by 70%, would you keep all your staff on, regardless of your losses or would you downsize ?
Consider this a 3rd question. If it's too difficult to understand, just tell me.
The notion you entertain, that Macri wants layoffs for the simple purpose of allowing re-hiring at lower wages, is counterproductive to the objective of the Law, which is to create productivity, which results in hiring, an overall larger salary mass , which in the end means more sales.....it's known as a virtuous circle. And it needs to be allowed to complete the cycle.
Waiting for 3 the answers.
As you review the comments of economic analysts during the past 20 years, one common theme is recurrent: the lack of competitiveness in Argentine industry. Argentine industrial workers provide comparatively low productivity, yet receive exceptionally high compensation for their lack of output. Studies within Argentina that evaluated competitiveness modeled a sample manufacturing unit that costs US$0.41 to produce in the US, but costs US$1.87 in Argentina. So it's easy to see why investment avoids Argentine industry.
Aug 22nd, 2016 - 10:23 pm - Link - Report abuse 0The excessive compensation component of low productivity is only one of the several principal factors which discourage investment in Argentina, and particularly foreign investment. Other elements that reduce competitiveness in Argentine industry include excessive regulatory burdens, high tax rates, poor infrastructure, unpredictable and erratic statutory and judicial features, corruption, high theft rates, high interest rates, and extremely high inflation. While the present government has made some improvements that might in theory help attract investment, it has not yet provided significant relief from these many well-embedded negative aspects that diminish Argentina's potential for economic development.
It's pretty simple Mr. Massot
Aug 23rd, 2016 - 03:24 am - Link - Report abuse 0With a nonviable business,
You can lay off people and hire some back at lower pay,
Some jobs.
Or
Not hire anyone at any wage, because the company has been unable to support itself and gone bust.
No jobs.
EM
”He is opening imports (in a futile attempt to reduce inflation), which will stab domestic small and medium size enterprises“
If it fights Inflation, then your domestic goods must be woefully overpriced for the crap quality they are.
Keeping out imports by excessive taxes and tariffs is known as Protectionism.
The goal of allowing importers, is to lure manufacturing investment and jobs to Argentina. Perhaps having goods produced in Argentine factories exported to other markets in SA.
The foreign car manufacturing in Argentina was a big money maker - of course, under Evita K, they were closing up shop due to her anti-business policies.
Protectionism only means your domestic industries only remain competitive artificially.
There is no incentive to manage costs, improve efficiency, or develop product improvements. The industries stagnate, and will lose value as exports. As you pointed out - no price breaks for the domestic consumers either.
Argentines want Fords, Volkswagens, and Peugeots, not the Peron Motors Company's flashy ”Evita K” sports coupe.
Why?
Because there ain't any Argentine cars produced there anymore!
Thats basic Macro Economics, baby. Not ideology.
These are the Pri
I am moved by the Macro Economics 101 crash course I am offered by diligent Marti, Kanye, Jack et al.
Aug 23rd, 2016 - 06:44 pm - Link - Report abuse 0Problem is, my friends, the world does not go the way the magic of free offer and demand is taught at universities.
Let's take Jack's questions at #77:
1) “Where does ideology come into the picture ?”
A: You see ideology at work when “free-market” decisions are implemented by the Macri administration, quashed by the courts, and the government stubbornly keeps forging ahead. I admit conflict of interest and money may be part of ideology as well.
2) “.....the great majority will say NO to any increases, and what does that spell for the utility companies ? ”
A: If the government is implementing measures resulting in a benefit for the population, it should be able to offer a justification for it.
If the benefit is likely to go to the energy companies including Shell of which energy minister Aranguren was CEO and remains shareholder, then the government will do what's doing.
3). ”...if you were a small business owner and sales had dropped steadily by 70%, would you keep all your staff on, regardless of your losses or would you downsize?
A: You would of course downsize or close down. The small size and medium size enterprises have alreay alerted about the government's decision to open imports, perhaps reducing one point of inflation percentages but ruining domestic production and increasing dollar purchases. Argentina's being there, done that before, my friend.
@80 Reekie
Aug 23rd, 2016 - 09:30 pm - Link - Report abuse 0It's a miracle, but thanks for answering the questions, even if partially biased by your ideology, instead of analyzing the issues under only economic principles.
1) Implementing 'free-market' practises can hardly be considered ideological.... unless of course you swing to the far left and implement extreme socialism, or communism, where State-owned organizations, taking care of all aspects of daily life, totally eliminate any hint of a free-market and/or the possibility of the average citizen to make his own decisions about how and what to consume.
2) “If the government is implementing measures resulting in a benefit for the population”...
Macri's decision to raise utility rates is the only way to keep the utility companies afloat in the long run, and yes, benefits the population because they will continue to have access to energy ; Which is better, to have NO energy because the companies go bust, or to have it and pay the necessary price (based on cost) ? Just a rhetorical question, no need to answer.
#3) Glad you see the light. As to imports, they are sometimes very effective in making local manufacturers, usually protected by Government, to pull their fingers out and become competitive. Otherwise, the consumer has no option but to buy the locally-produced crap, at any price that the manufacturer wishes to charge. The locals need to become productive (to benefit the consumer) , or they die (making room for someone more competent and competitive to take their place)....simple as that.
In the early 90's, Brazil opened up to imports in a pretty significant way . Despite still being considered 'protectionist', this made the big local manufacturers (national as well as multinational) invest and bring in the same technology available abroad. The positive results were felt very soon, as the average Brazilian consumer suddenly had access to many more options, at lower prices. Think about it.
So reekie is sooo very concerned about those government workers being dismissed.
Aug 24th, 2016 - 01:05 am - Link - Report abuse 0Let's take a look at a representative sample.
The Argentine national spy agency, AFI (Administración Federal de Investigaciones, in jibber jabber ) fired some 600 “workers.” Turned out that their qualifications, or rather lack of them, had nothing to do with the work done by the agency. But they were instead militant Kirchnerist organisation members, including Camporistas and members of the Evita Movement. They were inserted by the Kirchner government to swell the ranks of the AFI with people (you can't really call them workers) in the weeks before the presidential election.
In the civilised and serious nations, such dismissals of political activists would likely have been unannounced and each suspect would have been taken to the door by security and only allowed to remove provably personal items. But no, this is Argentina. The suspects showed that they were true Kirchnerists, and were clever enough to steal not just an enormous amount of material from the federal agency (including computers), but the inventories of those items, along with 30 years' worth of files and investigations conducted by the AFI.
Similar robberies of government materials and property have been reported and documented, involving the now-dismissed Kirchnerist personnel placed in other government agencies.
#81 Jack Bauer
Aug 24th, 2016 - 05:28 am - Link - Report abuse 01. “Implementing 'free-market' practises can hardly be considered ideological.... unless of course you swing to the far left and implement extreme socialism, or communism.”
Negative. Ideology exists on both sides. Check, for instance, Milton Friedman, one of the “Chicago Boys.” He is one of the harshest ideologues of monetarist and free-market theories.
2. “Macri's decision to raise utility rates is the only way to keep the utility companies afloat in the long run.”
Negative again. This is what Macri wanted people to believe. There are other options of course, but not in Macri's neo-liberal line of thought.
3. “...imports, they are sometimes very effective in making local manufacturers...become competitive. Otherwise, the consumer has no option but to buy the locally-produced crap.”
Imports should be carefully controlled. Lifting restrictions without criteria as the Macri government is doing do not make prices come down, but that myth has been brandished before.
You can now elaborate on the usefulness of importing tea from the U.K., chocolate from Swiss, cheese and jams from France, snacks and seasonings from the U.S. as well as olive oil and cold cuts from Italy--all products made in Argentina at excelent quality levels.
Little by little, imports of fish, chicken and even pork are increasing as well.
Washing machines, refrigerators and other appliances are being imported from Brazil and SE Asia.
Imported clothing is now taking the place of local products, imported from China, India y Vietnam.
Who is to bother hiring employees, equipment, space to manufacture something when you can import from a little office, using a computer and a secretary?
Argentines still remember the 1970s and the 1990s. Job losses, enterprises closing, dollar purchases increasing the foreign debt, are the real consequences of opening the gates.
@83 “Washing machines, refrigerators and other appliances are being imported from Brazil and SE Asia....Imported clothing is now taking the place of local products, imported from China, India y Vietnam. ”
Aug 24th, 2016 - 03:02 pm - Link - Report abuse 0-- This is not a matter of “now taking the place” but these imports have been the case here in Argentina for more than 20 years. It's very democratic, you see, to allow people to make choices in what they buy. And people here have been willing to pay the price for better quality and greater value.
Do you think that the Audi that former vice president Boudou illegally registered was made in Argentina? Or that Kirchner's presidential Audi A8L 4.2 FSi Quattro was made in Argentina? Do you think that CFK's Tango 1 was made in Argentina? To get modern, quality products you have to import them from outside of Argentina.
Industria Argentina has for too long been producing antiquated, overpriced, low-value chatarra. If it had been producing decent products, then we would not see the consumer preference for more-competitive imported products. Industria Argentina is going to pay the price for its Peronism, for its having remained backward, lacking in innovation, and pricing far out of line with any reasonable expectation of cost-benefit value. It's time to pay the piper.
@83 Reekie
Aug 24th, 2016 - 09:36 pm - Link - Report abuse 01) “Negative. Ideology exists on both sides. Check, for instance, Milton Friedman, one of the “Chicago Boys.” He is one of the harshest ideologues of monetarist and free-market theories.”
I am quite familiar with Milton Friedman's line of thought. He defends a capitalist economy in a free-market society ; Also, that economic freedom is essential for political freedom. It is easy to see that 'big' government gets in the way of economic activity, and usually ends up by curbing personal freedom. The key to a healthy economy, is small government, allowing the market forces to interact and to find their natural level ; Government should limit itself to acting in a supervisory capacity to avoid abuses. Running a healthy economy does not need to be tangled up in left or right-wing ideology.
Just look at the US economy during the Reagan years ...adopting a lot of Friedman's ideas, the US economy was doing just fine, very different to what is happening now. The slogan “there is no such thing as a free lunch”, has never been truer. But then, enter the populists , with their socalist ideas, and screw things up. Brazil, under the PT, is a classic example.
2) “Negative again. This is what Macri wanted people to believe. There are other options of course, but not in Macri's neo-liberal line of thought.
”There are other options of course”....which options ? subsidies ? they just kid the people into believing they are paying less, but they'll pay the price elsewhere.
3) “ Imports should be carefully controlled.”
Sure they should ; but they should also consider whether the consumer is getting the best bang for his buck. Luxury items should be allowed in, duly taxed, for those who can afford them. If Argentina produces goods with the same quality as the imports, great, but it should still be left up to the consumer to decide what he wants. And if local industry can't supply what they want, imports are the solution.
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