Inflation

#21
I'm sorry, Bcero2, but I can't follow your argument. You identify the Macri admin lie about inflation as follows:
"Lie: they (presumably the Macri admin) asserted that the increase in the cost of electricity, fuel, transportation does not influence the inflation, but after 2 years they admit it does."
Can you cite a place where I can read the Macri admin assertion that an increase in etc etc does not influence inflation? I think that is a very odd statement, sort of like saying, making more money per hour and working the same amount of hours will not affect your total salary. Something doesn't add up so...if you can find a report where the govt made this assertion I promise to stop being so annoying to you. In any case, I trust you will agree that there is a difference between telling a lie and simply making a mistake about a future event.
 
#22
Simple. Wages cannot decrease by law, so, inflation is the loophole to by pass the labor law. If you read the news, the goal of this gobernment is to force low increases of the wages of about 10/15% while inflation is a lot higher. It is very simple.
I don't pretend to possess great insight into the fiscal dilemmas facing Arg so what is very simple to you is not very simple for me. Bear with me, please.

As an observer, I perceive something of a chicken / egg scenario. To control inflation one must limit both wages and prices, hopefully in tandem so that the cost of living is not dramatically increased and the populace is not further impoverished. If govt can lower inflation by limiting govt debt, then it would make sense to find ways to limit govt debt.That might include lowering interest on govt issued bonds etc and adopting policies to limit govt paid salaries and wage increases as well as private wage increases. For example, eliminating the subsidies paid to residents of the Recoleta for their utility service was a no brainer. Other subsidies need to be reevaluated. It might further help to adopt policies to stimulate exports in order to achieve a favorable trade balance.

Of course, these policies will be disruptive and cause tension, but as it is said, you can not make an omelet without breaking some eggs. The people need to comprehend that some belt tightening may be required. What I find curious is that so many people are so quick to condemn any effort to effect change. The "milanesas para todos" economic theory relied upon by the former administration led to significant poverty and inflation. I believe that the elimination of the black market for USD is a positive indication that the current administrations policies may bring about the necessary change.
 
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#23
I don't pretend to possess great insight into the fiscal dilemmas facing Arg so what is very simple to you is not very simple for me. Bear with me, please.

As an observer, I perceive something of a chicken / egg scenario. To control inflation one must limit both wages and prices, hopefully in tandem so that the cost of living is not dramatically increased and the populace is not further impoverished. If govt can lower inflation by limiting govt debt, then it would make sense to find ways to limit govt debt.That might include lowering interest on govt issued bonds etc and adopting policies to limit govt paid salaries and wage increases as well as private wage increases. eliminating the subsidies paid to residents of the Recoleta for their utility service was a no brainer. Other subsidies need to be reevaluated. It might further help to adopt policies to stimulate exports in order to achieve a favorable trade balance. Of course, these policies will be disruptive and cause tension, but as it is said, you can not make an omelet without breaking some eggs. The people need to comprehend that some belt tightening may be required.
What I find curious is that so many people are so quick to condemn any effort to effect change. The "milanesas para todos" economic theory relied upon by the former administration led to significant poverty and inflation. I believe that the elimination of the black market for USD is a positive indication that the current administrations policies may bring about the necessary change.
Well, with all my respect, you are naive.

The President asserted that his goal is to transform Argentina into India. It means he need the people to become poorer.

Inflation was the way the 1000 families that rule this country fight the common people who look for increase their salaries. While in other countries it happened through strikes, here proper wages were made by decree by Peron, the same than paid vacations, retirement, free universities, etc.

The right wing didn’t agree but since law Saenz Peña of universal vote was enacted, they never won an election again until Macri. So, they had no chances to influence the laws but they control the economy: the price of the usd blue and inflation. I give an example: how many factories that produce steel you think there are in Argentina? One, Techint. So, he decides on the price of a commodity that alters the prices of the whole markwt because steel is used for contruction. The same we can say about cement: Loma Negra. Paper for newspaper: the famous Papel Prensa, food Molinos Rio de la Plata (perhaps here I m outdated) and so on.

While in the former gobernment there was inflation (about %30), She put limits and the dolar blue and inflation was a political tool against her that she neutralized increasing the wages/social plans/ retirements over the inflation.

Now, instead, they rise the prices with no limit because they are in power while wages are freeze. The 25% of inflation they talk is a joke.

You talk about subsidies. He enacted subsidies to yachting clubds abd erased tax to minery and high end imported cars and cut taxes to farmers and owners of companies. The deficit he has is because he derogated tax to rich people only and this is why he is taking so much loans. The market is full of usd, so they can buy usd with no limit and cheap.

When the market crashes, something they are looking for, the usd they both cheap are going to sky rocket and wages are going to fall badly. It is a win loose situation where rich wins and middle class and poor only looses and common people pays for the debt they took for the usd they sent abroad (the income tax is used to pay the international loans and, ups, this is precisely what Macri historically doesn’t pay, evade using the off shore companies of the Panama Papers). A nice white collar fraud that already happened between 1976/1982.

And here you are naive, they want the middle class to dissapear. They want a cast society.

Inflation is going to go up because it makes them richer and richer.
 
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ben

Active Member
#24
I'm sorry, Bcero2, but I can't follow your argument. You identify the Macri admin lie about inflation as follows:
Can you cite a place where I can read the Macri admin assertion that an increase in etc etc does not influence inflation?
I definitely remember Kicilloff promising that raising the dolar oficial from 8 to 12 - or whatever insane amount it jumped in a day - would certainly have no impact on prices.
 
#25
I definitely remember Kicilloff promising that raising the dolar oficial from 8 to 12 - or whatever insane amount it jumped in a day - would certainly have no impact on prices.
I don't recall such a statement, but in any case, wasn't Kicillof CFK's wunderkind appointed Economy Minister around 11/2013?
 

ben

Active Member
#27
This was in January of 2014, when in the space of 2 days the dollar went from 6.85 to just under 8. (Good times.)
http://www.lavoz.com.ar/politica/pronostico-la-devaluacion-no-ira-precios-aseguro-kicillof

To be fair, his point was that 16% devaluation need not mean that the entire economy need rise by 16%.
That ignores how things work though. And he surely knew it.

Never say never, but I will be very surprised if Macri or any of his ministers can be quoted as saying something this stupid.
Considering the track record of the quoter, I'd like a link. Preferably an accurate one, which actually provides an accurate quote as opposed to circle the horses.

UPDATE: as he is wont to, the quoter just published a link to a publication which mocking an obscure BCRA officer for having said something like this, but does not, in fact, quote any minister of the current government as having ever said such a thing.

I am unfamiliar with the publication, and may be hasty in my conclusion that this is just another K rag, but I'd venture that you need but a cursory look to understand what they're about. That "Paradise Papers" is a trending topic may be some indication...

Bonus stupid points for quoting a professor at UCEMA, and University of Chicago alumnus, as a University of Chicago professor.
 
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#28
You have too much free time Ben, and I do not give a s...t about your high standards about quoting when you obviously do not understand what you read.

The quote you critized without understanding was about a paper that the vice President of the Central Banck made public where he “discovers” that if the usd/energy, etc increase, prices increase.

At the article I quote you have the link to the Director of the Central Bank asserting that the increase of the usd / energy, etc does not produce an increase of the prices at the official website of the Central Bank of Argentina
http://www.bcra.gov.ar/Noticias/El_uso_del_concepto_de_equilibrio_general.asp
 
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#29
Well, with all my respect, you are naive.

The President asserted that his goal is to transform Argentina into India. It means he need the people to become poorer.

Inflation was the way the 1000 families that rule this country fight the common people who look for increase their salaries. While in other countries it happened through strikes, here proper wages were made by decree by Peron, the same than paid vacations, retirement, free universities, etc.

The right wing didn’t agree but since law Saenz Peña of universal vote was enacted, they never won an election again until Macri. So, they had no chances to influence the laws but they control the economy: the price of the usd blue and inflation. I give an example: how many factories that produce steel you think there are in Argentina? One, Techint. So, he decides on the price of a commodity that alters the prices of the whole markwt because steel is used for contruction. The same we can say about cement: Loma Negra. Paper for newspaper: the famous Papel Prensa, food Molinos Rio de la Plata (perhaps here I m outdated) and so on.

While in the former gobernment there was inflation (about %30), She put limits and the dolar blue was a political tool against her. Now, instead, they rise the prices with no limit because they are in power. The 25% of inflation they talk is a joke.

You talk about subsidies. He erased tax to minery and cut taxes to farmers and owners of companies. The deficit he has is because he derogated tax to rich people only and this is why he is taking so much loans. The market is full of usd, so they can buy usd with no limit and cheap.

When the market crashes, something they are looking for, the usd they both cheap are going to sky rocket and wages are going to fall badly. It is a win loose situation where rich wins and middle class and poor only looses and common people pays for the debt they took for the usd they sent abroad (the income tax is used to pay the international loans and, ups, this is precisely what Macri historically doesn’t pay). A nice white collar fraud that aleeady happened between 1976/1982.

And here you are naive, they want the middle class to dissapear. They want a cast society.
I can not respond to each and every point in your argument. I'm all in favor of a just society - as you seem to be - with a fairer distribution of wealth. However, you come across as anti-Macri ideologue and some of what you wrote does shock and or confuse me. For example, did Macri really state he wants to turn Argentina into India intending to make Argentinians poorer! Wow! Send me a link. (I'm against him too if he said that he wants to make Argentinians poorer!)
Aren't the level of taxes determined by Congress? Does Macri or did Macri control the Congress to effect recent tax cuts on the wealthy?
What market are you referring to when you say "when the market crashes?" I didn't appreciate that market crashes -of any type- were good for the rich? I'm thinking 1929 when many wealthy people defenestrated.
Isn't much of the national debt due to the fiscal policies of the K clan? Arg did default on its international sovereign debt obligations before Macri took office, didn't it?
If there are now industrial monopolies i.e. a limited number of suppliers within an industrial sector (steel, paper, cement, food) can that be attributed to the current government? I don't follow your argument if you mean to attribute this situation to Macri rather than to an administration that was in power for over 12 years before him.
What I can say with a fair amount of certainty is that during the years of the K administration and especially the last 8 of CFK, there has been an increase in poverty especially outside of BA province. Inside the capitol, slums have flourished (if that term can be used to describe a growing problem).
 
#30
I'm sorry, Bcero2, but I can't follow your argument. You identify the Macri admin lie about inflation as follows:
"Lie: they (presumably the Macri admin) asserted that the increase in the cost of electricity, fuel, transportation does not influence the inflation, but after 2 years they admit it does."
Can you cite a place where I can read the Macri admin assertion that an increase in etc etc does not influence inflation? I think that is a very odd statement, sort of like saying, making more money per hour and working the same amount of hours will not affect your total salary. Something doesn't add up so...if you can find a report where the govt made this assertion I promise to stop being so annoying to you. In any case, I trust you will agree that there is a difference between telling a lie and simply making a mistake about a future event.
The assertion was very stupid of course.
I quoted the vice President of the Central Bank who “discovered” that if the energy increase the price, it is going to produce an increase of prices (believe or not, it is so obvious).

I also quoted the thief of Central Bank asserting the opposite.