Argentines don’t want to hear bad news (does anyone?). Monti gave the Italians bad news, and he only got 9% of the vote. The bureaucracy is out of control in Argentina, and it just keeps growing and creating costs. There are too many subsidies to certain businesses. And, as a result of votes during the last crisis, power is now concentrated in the presidency and a few key positions. There are not the checks and balances we are used to between branches of government in the States. Both major parties voted to nationalize pensions. Government benefits and subsidies are given to a large number of people, who then vote for more government benefits.
“In Argentina, we have the ability to make the same mistake many times, and nothing happens to change things. Why? Because there is a pervasive belief that the state can provide all that people need: jobs, welfare, everything.” Perhaps, he mused quietly, that attitude is a heritage from colonial days, when the King of Spain controlled the country and power and privilege and benefits came from the King.
Aerolineas loses $2 million a day, but people believe it is better than a private company. The government is not seen as something owned by the people but as something that exists to solve problems and take care of the people. Both parties and a majority of voters seem to agree that government is better than the private sector. Some sectors have few controls, and others are tightly controlled.
“Even so,” I asked, “can’t those in control see that inflation is bad?” The problem, he explained, is that those who have the ear of the president see inflation as a way to growth and thus a good thing. Those in power deny there is inflation and think it is caused by “commercial” interests that selfishly raise prices. Kirchner and those around her actually believe that their current policies will work. Meanwhile, 42% of GDP is government expenditures.
Ha ha! Good thing we are nothing like Argentina! Those guys are screwed!
John Mauldin summarizes a conversation with Argentine Senator Juan Carlos Romero:
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You´re right about inflation.
But I think you are mixing things here. First of all, there is nothing better than have Health care, Education and other services FOR FREE. Yes, that´s because are provided by the STATE. Things have always worked fine in that way. I think you should investigate more before write such superficial article, with no argument or knowledge of Argentinian history, don´t you?
And the people does not expect government to provide all the needs. In fact, we pay taxes that are managed by gov, in order to have public services. Why? Because private sector usually does not respect our citizen rights.
The main problem, is that those who governs are involved in a high index of corruption.
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