Federal Capital (Paco Urondo Agency, published by BAE Journal, 23/12/2010)
Some analysts said years ago that Argentina had an economic policy, an economic project, which was going the other way around the world contrary to the successful models developed by countries called "serious" as the author title of this note, an Argentina that was "a wrong way."
As stated these neoliberal economists, Argentina was on a "discretionary increase and inefficient public spending which was contrary to the fiscal discipline necessary for a model to be sustainable over time." However, this so-called discretionary spending increase was no more (no more) that increasing public investment, but at the same time taking care of the much talked about fiscal discipline supported by those who during their governments could never achieve it.
That is, a high and increasing public investment to monitor the fiscal surplus, which in turn is supported in part by the revenues from "hold." The fiscal surplus is also accompanied by the trade surplus has been recorded since the beginning of the Kirchner Model, twin surpluses are an exceptional situation unprecedented. This policy implemented in Argentina 2003, leads not only improve the quality of life through social investment in generation and infrastructure but is itself primary and secondary source of jobs providing more strength to the domestic market.
Moreover, the false predictions about the policies pursued first by Néstor Kirchner and now Cristina Fernandez would lead to a new 2001 showed the folly with which economic analysis can be carried out so far from reality as close to the interests of concentrated groups of the economy. Examples of these chronic
false predictions can be great to shoot the bull exchange value of the dollar lack of resources to tackle the public debt maturities, the fall in domestic consumption by decline in real wages, unemployment and a drop in the level of activity.
Another case of deliberate and malicious these prophecies came last summer when he decided to apply reserves to fund debt relief. Given this political decision not to pay the debt service with more debt but instead do their own resources, the opposition and the financial establishment, using screen media monopolies, predicted the collapse of stocks, inflation, emission Undue loss of support of the monetary base and bank runs. Given these ruthlessly
was not disputed that the reality better, after having complied with the maturity of debt, reserves not only not decreased but increased reaching the historical record of 52 billion dollars. Similarly, slowed capital flight, inflation remained subdued, the exchange rate remains competitive and remains controlled by the Central Bank, unemployment continues to decline and the economy grows at a rate of 9 percent annually. Finally, domestic consumption (one of the pillars of the model) is in constant growth coming this month to record values.
While the crisis in many countries buried international financial banking and finance, banks in Argentina reached record profits and the system achieved unprecedented results thanks to active politics in the Plaza Central Bank exchange rate, which in turn allowed to accumulate sufficient reserves to support the second onslaught of the international crisis with no impact on the country's finances.
This is going in the opposite, trade surplus, budget surplus, debt reduction, increased wages and employment growth as opposed to fiscal and trade deficits, the debt, the growing unemployment and cuts in wages and live in countries admired as examples by economists establishment, such as European countries.
The impact of financial crisis and bailout plans millionaires did not leave any country safe, after Greece, Ireland became the second country to resort to rescue conditioned by the European Union and the IMF. However, these countries are not the only ones that contractionary fiscal policies, also Portugal, Italy and Spain, countries that are not peripherals such as France and the UK.
Before the crisis, the "successful" European countries chose to implement measures to safeguard the financial system regardless of what happens in the real economy and finance public, ensuring compliance with debt maturities in the short term. These solutions involve deflationary applied a reduction of public investment in social matters, a sharp drop in private investment, thereby exacerbating the problem of demand and increased social conflict deepens the recession.
precisely, so it was that when the world was in crisis the strength of the Argentine model, that I was going in the opposite of the world, allowed endure being affected slightly its economic indicators, which rapidly returned to values \u200b\u200bbefore the financial meltdown. This might be through strengthening policies internal market and reserve accumulation that enabled Argentina not to rely on international financial markets and carry out countercyclical policies to counter the effects of the crisis.
For its part, inflation was questioned so relativized by Nobel laureate economist Paul Krugman who said that inflation will moderate to live "is clearly better than the situation of depression and deflation that is plaguing many countries due to the crisis."
On this subject, Argentina should be aware that it is essential to ensure the sustainability of the growth with social inclusion, taking care not to fall into the trap that orthodox proposed economists, who lined after inflation intend "to cool the economy through an increase in unemployment and wage freezes.
In this sense, is false the premise that wage increases cause inflation, as the incidence of labor is decreasing in the formation of business costs. That is why we should not look for the causes of inflation on wage hikes but in the degree of concentration of the economy in a few companies that are in strong price maker.
The antithesis of this situation occurs in the countries called "serious and reliable", such as some members of the EU, whom they see as prices collapse due to a shrinking consumption due at the same time it comes to the rescue of the banking system, apply the adjustment plans recommended by the IMF through a sharp increase in unemployment and measures reducing wages and pensions.
Today Europe is in crisis and will continue to apply the typical neoliberal public expenditure cuts that plunge the country further, and lead inevitably to a deeper crisis in the not too distant future in exchange for saving in the short term to large groups concentrated in the economy and financial markets to the detriment of society as a whole.
believe that the solution to a crisis can plans to be in adjustment and greater indebtedness is an illusion, because it causes a reduction in output, investment and consumption, which implies the future inability to repay the debt without choice but to set a new plan thus generating a vicious cycle that inevitably finalize a much more intense crisis.
So now, after enduring years of criticism and false prophecies, which is more than clear who was in the opposite, who was on the right path and who is not, and how important it was to forge our own development model and go on a address other than the supposedly successful countries that today show the terrible results of their policy economic.
As stated these neoliberal economists, Argentina was on a "discretionary increase and inefficient public spending which was contrary to the fiscal discipline necessary for a model to be sustainable over time." However, this so-called discretionary spending increase was no more (no more) that increasing public investment, but at the same time taking care of the much talked about fiscal discipline supported by those who during their governments could never achieve it.
That is, a high and increasing public investment to monitor the fiscal surplus, which in turn is supported in part by the revenues from "hold." The fiscal surplus is also accompanied by the trade surplus has been recorded since the beginning of the Kirchner Model, twin surpluses are an exceptional situation unprecedented. This policy implemented in Argentina 2003, leads not only improve the quality of life through social investment in generation and infrastructure but is itself primary and secondary source of jobs providing more strength to the domestic market.
Moreover, the false predictions about the policies pursued first by Néstor Kirchner and now Cristina Fernandez would lead to a new 2001 showed the folly with which economic analysis can be carried out so far from reality as close to the interests of concentrated groups of the economy. Examples of these chronic
false predictions can be great to shoot the bull exchange value of the dollar lack of resources to tackle the public debt maturities, the fall in domestic consumption by decline in real wages, unemployment and a drop in the level of activity.
Another case of deliberate and malicious these prophecies came last summer when he decided to apply reserves to fund debt relief. Given this political decision not to pay the debt service with more debt but instead do their own resources, the opposition and the financial establishment, using screen media monopolies, predicted the collapse of stocks, inflation, emission Undue loss of support of the monetary base and bank runs. Given these ruthlessly
was not disputed that the reality better, after having complied with the maturity of debt, reserves not only not decreased but increased reaching the historical record of 52 billion dollars. Similarly, slowed capital flight, inflation remained subdued, the exchange rate remains competitive and remains controlled by the Central Bank, unemployment continues to decline and the economy grows at a rate of 9 percent annually. Finally, domestic consumption (one of the pillars of the model) is in constant growth coming this month to record values.
While the crisis in many countries buried international financial banking and finance, banks in Argentina reached record profits and the system achieved unprecedented results thanks to active politics in the Plaza Central Bank exchange rate, which in turn allowed to accumulate sufficient reserves to support the second onslaught of the international crisis with no impact on the country's finances.
This is going in the opposite, trade surplus, budget surplus, debt reduction, increased wages and employment growth as opposed to fiscal and trade deficits, the debt, the growing unemployment and cuts in wages and live in countries admired as examples by economists establishment, such as European countries.
The impact of financial crisis and bailout plans millionaires did not leave any country safe, after Greece, Ireland became the second country to resort to rescue conditioned by the European Union and the IMF. However, these countries are not the only ones that contractionary fiscal policies, also Portugal, Italy and Spain, countries that are not peripherals such as France and the UK.
Before the crisis, the "successful" European countries chose to implement measures to safeguard the financial system regardless of what happens in the real economy and finance public, ensuring compliance with debt maturities in the short term. These solutions involve deflationary applied a reduction of public investment in social matters, a sharp drop in private investment, thereby exacerbating the problem of demand and increased social conflict deepens the recession.
precisely, so it was that when the world was in crisis the strength of the Argentine model, that I was going in the opposite of the world, allowed endure being affected slightly its economic indicators, which rapidly returned to values \u200b\u200bbefore the financial meltdown. This might be through strengthening policies internal market and reserve accumulation that enabled Argentina not to rely on international financial markets and carry out countercyclical policies to counter the effects of the crisis.
For its part, inflation was questioned so relativized by Nobel laureate economist Paul Krugman who said that inflation will moderate to live "is clearly better than the situation of depression and deflation that is plaguing many countries due to the crisis."
On this subject, Argentina should be aware that it is essential to ensure the sustainability of the growth with social inclusion, taking care not to fall into the trap that orthodox proposed economists, who lined after inflation intend "to cool the economy through an increase in unemployment and wage freezes.
In this sense, is false the premise that wage increases cause inflation, as the incidence of labor is decreasing in the formation of business costs. That is why we should not look for the causes of inflation on wage hikes but in the degree of concentration of the economy in a few companies that are in strong price maker.
The antithesis of this situation occurs in the countries called "serious and reliable", such as some members of the EU, whom they see as prices collapse due to a shrinking consumption due at the same time it comes to the rescue of the banking system, apply the adjustment plans recommended by the IMF through a sharp increase in unemployment and measures reducing wages and pensions.
Today Europe is in crisis and will continue to apply the typical neoliberal public expenditure cuts that plunge the country further, and lead inevitably to a deeper crisis in the not too distant future in exchange for saving in the short term to large groups concentrated in the economy and financial markets to the detriment of society as a whole.
believe that the solution to a crisis can plans to be in adjustment and greater indebtedness is an illusion, because it causes a reduction in output, investment and consumption, which implies the future inability to repay the debt without choice but to set a new plan thus generating a vicious cycle that inevitably finalize a much more intense crisis.
So now, after enduring years of criticism and false prophecies, which is more than clear who was in the opposite, who was on the right path and who is not, and how important it was to forge our own development model and go on a address other than the supposedly successful countries that today show the terrible results of their policy economic.
The author is a member of the Study Group of National Economy and Popular (GEENaP) www.geenap.com.ar (Paco Agency Urondo)
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