Why Argentina is an Economic Basket Case, Reason #2,562,976

I'm taking a break from taking a break posting to put up this article from the Wall Street Journal

Some countries just cannot resist loading all the chambers and putting a gun to its head just to see what happens.  One of those countries is Argentina, a country that has done just about everything wrong economically over the past, oh, century or so. 

Argentina has an inflation problem.  But the government doesn't want people to know that there is an inflation problem.  Never mind that people see an inflation problem when they go to the stores, these giants of economic competence think that as long as economists aren't talking about inflation, no one will notice.

Argentina's government has filed criminal charges against the managers of an economic consulting firm, escalating its persecution of independent economists.

A federal court official said Friday that a judge is evaluating the charges but has yet to decide if it is appropriate to begin investigating them.

The government is charging MyS Consultores with "publishing false information about inflation data" to benefit themselves and their clients. The criminal complaint alleges that MyS's data also lead to speculative behavior in Argentina's bond market.

MyS Managing Partner Rodolfo Santangelo described the charges as "ridiculous" and said the firm's inflation data do not affect financial markets.

Consumer prices rose 9.7% in May from a year ago, according to the national statistics agency, Indec. But virtually all economists say annual inflation surpasses 20%—one of the world's highest rates—angering government officials who dismiss inflation as a problem.

The criminal complaint, initiated by the Commerce Secretariat, is the harshest in a series of legal measures against economists. The credibility of Indec's data has been questioned ever since former President Nestor Kirchner replaced longtime civil servants with political appointees in early 2007.

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. ...

Mr. Ferreres said the legal actions are part of a strategy to prevent independent economists from publishing potentially negative information during an election year.


Average rating
(7 votes)