Has Max thrown down the gauntlet?

[Alby]

So, nobody knows how to translate "mora" in this context?

arrears

 

[talbur]

Sooner or later someone will need to make hard decisions, or at least be in office once the sh!t hits the fan from not making those decisions. If it’s in the IMF repayment agreement or not, hard cuts are coming and someone, somewhere is going to hurt. There is no magic bullet or money tree to fix Argentina’s addiction to over spending and underproducing without seriously changing at least one of those problems. Career politicians who really don’t stand for much beyond being “popular” enough to protect their own business interested or public paycheck (or have ambitious family dynasties to carry on) know this.

As K politics always needs an “enemy” to blame to cover their own shortcomings, it wouldn’t surprise me if they are now distancing themselves or setting themselves up to loose in 2023 so “cuando el Pueblo siempre vuelve” in elections following when hopefully the “dirty work” has been done, they can have an “Ah, pero [insert name here]” together with an “Ah, pero Alberto wasn’t really a Peronist” answer for everything. They also know the “Ah, pero Macri” excuse has passed its use by date.

I don't know if they will ever make the hard decisions. Argentina has been on a glide path lower for like a 100 years.

Personally, I blame the phenomenon of 'national brands' for the gradually increasing poverty.

 

[Redpossum]

I don't know if they will ever make the hard decisions. Argentina has been on a glide path lower for like a 100 years.

Personally, I blame the phenomenon of 'national brands' for the gradually increasing poverty.

Hmm, I'd like to hear more about this. Can you explain what you mean by national brands, and give us an example, please?

 

[Redpossum]

arrears

Hmm, arrears, yes, that makes perfect sense, thank you. And it is definitely distinct from default.

So, if we go back to my original post, what Moreau said was -
"Here there was no discussion of whether: 'default yes or default no'. In the first place, because with the Fund there is no default, there are arrears, which is something else"

 

[talbur]

National brands?

Ok. This is a bit of a ramble, my apologies in advance..

So, one day 'my friend' went into the local farmacia and asked for 'lubricante sensual'. Expecting KY to be brought to the counter. He was given the choice of KY or this other product which the clerk said (with much cheerfulness) was the national brand. 'My friend' was encouraged to buy the national brand.

When the occasion arose to use 'said product'...my friend and his girlfriend reported the the quality was not just sub par...but down right awful.

See, there seems to be a patriotic incentive for customers to use -and for sales clerks to sell- the national brand products. Not because they are high value products that are good for the customer, but simply due to the fact that they are made in Argentina. "Buy local", of course is not limited to Argentina, but in my experience it is more intensively put into practice at the national level here than in many other countries. You will find that many goods made in Argentina - whether they be clothes or refrigerators or toilet seats... are of poor quality.

Now, am I suggesting that Argentines are just bad at making stuff? NO. Absolutely not. What I am saying is that there is value in specialization...and that the Argentine manufacturing sector doesn't specialize. -They literally have been given the government mandate to make as many different products as possible in order to substitute for the items that are imported from overseas. Thus reducing the amount of hard currency sent overseas for imported products.

Argentine governments have engaged in this economic strategy referred to in the literature as "import substitution" for the past 70-100 years or so.

The thinking of this strategy is as follows...."we can send our hard currency overseas for the products we want, or we can save our hard currency by encouraging our manufacturing companies to make the same products here". The result is that Argentina doesn't specialize in any specific manufactured products...but instead they make almost all products (that are technologically feasible) for sale in the local economy.

An alternative economic strategy used widely by Asian countries is: "let's specialize in the making a product and make it really good and really cheap, so that the whole world will want to buy it. Governments in Asian countries will even subsidize the development of such products so that they can grow to dominate the global market for that product.

These countries go on offense and sell high quality/low cost goods around the world and earn hard currency. Argentine 'national brand' products typically are not sold abroad due to the fact that the cost/quality factors don't make the products competitive in a global marketplace.

Does Argentina sell products abroad? Of course - wine, beef, and other agricultural products are considered desirable and are sold around the world.

The point is... Argentine government policy has been to encourage Argentine companies to play defense and make goods for the home market. The government simultaneously encourages citizens to buy Argentine products over international products- as a patriotic duty. The result of this is that the Argentine economy doesn't really specialize in manufacturing any high quality products that can compete in the global marketplace. Mostly Argentine manufacturers make a broad range of low quality stuff for Argentines to buy out of patriotic duty.

Over time, trade balances lean against Argentina as Argentines still want to buy those high tech foreign products that cannot made locally and are also willing to spend huge sums of money for rare foreign brand items that are prized for their high quality. The net result is that negative trade flows drain hard currency reserves out of the Argentine economy weakening the peso and the real wages of the Argentine people over time. This causes a slow, almost imperceptible decline in the Argentine economy that has had a huge impact on living standards when you look at the trend over the course of decades.

This government driven economic strategy has, perhaps, been as damaging as anything else Argentine governments have done in the past 100 years. And when you combine the deleterious economic effects of this policy with a strong expectations on the part of the general public for strong government and a first world social welfare system-which are expensive....you get an unsustainable economic reality.

and worst of all... Argentines get stuck using low quality lube...

 

[Alby]

National brands?

Ok. This is a bit of a ramble, my apologies in advance..

So, one day 'my friend' went into the local farmacia and asked for 'lubricante sensual'. Expecting KY to be brought to the counter. He was given the choice of KY or this other product which the clerk said (with much cheerfulness) was the national brand. 'My friend' was encouraged to buy the national brand.

When the occasion arose to use 'said product'...my friend and his girlfriend reported the the quality was not just sub par...but down right awful.

See, there seems to be a patriotic incentive for customers to use -and for sales clerks to sell- the national brand products. Not because they are high value products that are good for the customer, but simply due to the fact that they are made in Argentina. "Buy local", of course is not limited to Argentina, but in my experience it is more intensively put into practice at the national level here than in many other countries. You will find that many goods made in Argentina - whether they be clothes or refrigerators or toilet seats... are of poor quality.

Now, am I suggesting that Argentines are just bad at making stuff? NO. Absolutely not. What I am saying is that there is value in specialization...and that the Argentine manufacturing sector doesn't specialize. -They literally have been given the government mandate to make as many different products as possible in order to substitute for the items that are imported from overseas. Thus reducing the amount of hard currency sent overseas for imported products.

Argentine governments have engaged in this economic strategy referred to in the literature as "import substitution" for the past 70-100 years or so.

The thinking of this strategy is as follows...."we can send our hard currency overseas for the products we want, or we can save our hard currency by encouraging our manufacturing companies to make the same products here". The result is that Argentina doesn't specialize in any specific manufactured products...but instead they make almost all products (that are technologically feasible) for sale in the local economy.

An alternative economic strategy used widely by Asian countries is: "let's specialize in the making a product and make it really good and really cheap, so that the whole world will want to buy it. Governments in Asian countries will even subsidize the development of such products so that they can grow to dominate the global market for that product.

These countries go on offense and sell high quality/low cost goods around the world and earn hard currency. Argentine 'national brand' products typically are not sold abroad due to the fact that the cost/quality factors don't make the products competitive in a global marketplace.

Does Argentina sell products abroad? Of course - wine, beef, and other agricultural products are considered desirable and are sold around the world.

The point is... Argentine government policy has been to encourage Argentine companies to play defense and make goods for the home market. The government simultaneously encourages citizens to buy Argentine products over international products- as a patriotic duty. The result of this is that the Argentine economy doesn't really specialize in manufacturing any high quality products that can compete in the global marketplace. Mostly Argentine manufacturers make a broad range of low quality stuff for Argentines to buy out of patriotic duty.

Over time, trade balances lean against Argentina as Argentines still want to buy those high tech foreign products that cannot made locally and are also willing to spend huge sums of money for rare foreign brand items that are prized for their high quality. The net result is that negative trade flows drain hard currency reserves out of the Argentine economy weakening the peso and the real wages of the Argentine people over time. This causes a slow, almost imperceptible decline in the Argentine economy that has had a huge impact on living standards when you look at the trend over the course of decades.

This government driven economic strategy has, perhaps, been as damaging as anything else Argentine governments have done in the past 100 years. And when you combine the deleterious economic effects of this policy with a strong expectations on the part of the general public for strong government and a first world social welfare system-which are expensive....you get an unsustainable economic reality.

and worst of all... Argentines get stuck using low quality lube...

 

[Redpossum]

I went to the local Farmacity, asked for Preparation H, and was told there is none here. They sold me a locally made product which honestly worked just as well or better.

As far as Argentina's balance of trade, the numbers are far from accurate. The big agro producers export far more than they report, the reasons for which really, really belong in their own thread; that's a complicated issue. But under reporting is in the tens of billions of USD.

 

[talbur]

I went to the local Farmacity, asked for Preparation H, and was told there is none here. They sold me a locally made product which honestly worked just as well or better.

As far as Argentina's balance of trade, the numbers are far from accurate. The big agro producers export far more than they report, the reasons for which really, really belong in their own thread; that's a complicated issue. But under reporting is in the tens of billions of USD.

I've never used Prep H or Argentine PrepH, but I trust your judgement and accept your point.

So, lets do a mental exercise:

Argentine people need and Argentine companies produce "bad lube" and "good PrepH"

Now lets make a very simple hypothetical example and say that Chilean people need both products as well and for the sake of simplicity... Chilean companies produce "good lube" and "bad PrepH"

If each country specialized in the product they were good at manufacturing, Argentina could make all the 'good Prep H' for both countries and Chile could produce all the 'good lube'. They could trade with each other and the people of both countries would benefit from high quality products. Furthermore, since Chile is now making twice the lube, their manufacturing process would benefit from the economies of scale phenomenon by which the average cost of a good produced tends go down in quantity - due to initial sunk costs for necessary for manufacturing. Same with the production of Prep H in Argentina. Lower production costs means lower product costs to consumers and/or higher profits for Argentine/Chilean companies.

The end result is people get better products at lower prices, employees/shareholders make more money. This is one of the main ways a society gets richer. Argentine policy for the past 100 years not only prevents this, but very clearly pushes economic activity away from efficiency and specialization.

While the rest of the world has grown richer due to specialization and trade of manufactured products over the past 100 years, Argentina has not benefitted from this phenomenon.

 

[Quilombo]

Argentina's economic problems are all interconnected and, at the end of the day, generally self imposed.
This isn't to say that vulture funds and the IMF don't prey on Argentina, but not anymore than other developing countries.
As hard as it may be for the Ks to believe, Argentina just isn't that special.

Since Yrigoyen things have gone to shit. Perón supported the coup that overthrew him, there was the Great Depression/Infamous Decade, then Perón and his palls in the GOU counter-couped the coupers and well, welcome to almost 80 years of something between lupus and lymphoma for the Argentine body politic.

As for Maximo's theatrics? He doesn't believe anything the Ks "stand for" (neither does his mother and aunt). He just wants to keep the Camporajugend happy as that's his base for a future run for president, and pretending to have a spine might be the trick. Two things you can bet on though are that the dollar will continue to rise, and no matter the final outcome for the IMF deal with Argentina the future will continue to be bleak for most Argentines.

 

[MilHojas]

Máximo Kirchner resigns lower house post over IMF deal

Leader of the ruling coalition’s bloc in the Chamber of Deputies steps down in protest over government's new deal with IMF. President admits in a TV interview that Cristina Fernández de Kirchner "has a different view" to him.

www.batimes.com.ar