Quotulatiousness

August 9, 2024

Rare signs of growth in the Argentine economy

Filed under: Americas, Economics, Government — Tags: , , , — Nicholas @ 05:00

It looks as if Argentina is managing a trick that Justin Trudeau can’t manage — growing the national economy while keeping inflation down:

Javier Milei, 8 October 2022.
Photo attributed to Vox España via Wikimedia Commons.

During his first year as president, Javier Milei has been waging a bitter but largely successful campaign against inflation.

Now, Argentines received more welcome news: their economy is growing again.

“Economic activity rose 1.3 percent from April, above the 0.1 percent median estimate from analysts in a Bloomberg survey and the first month of growth since Milei’s term began in December,” Bloomberg reported on July 18. “From a year ago, the proxy for gross domestic product grew 2.3 percent.”

The positive economic report, based on data from the Argentine government, is a surprise to many.

The 2.3 percent year-over-year increase defied expectations of a decline of similar magnitude, Bloomberg reported. As Semafor notes, the Argentine economy was projected to have the least economic growth of any country in the world in 2024, according to the International Monetary Fund.

A “Wrecking Ball”?

Argentine economists I spoke to said that the numbers are encouraging, but the country’s economy is far from being out of the woods.

As most people know, Milei inherited an economic mess decades in the making. When the self-described anarcho-capitalist assumed office in December, Argentina was suffering from the third highest inflation rate in the world — 211 percent year over year. The poverty rate was north of 40 percent, and Argentina’s economy was declining.

With his country’s economy in a full tailspin from decades of Peronism, Milei proposed a series of economic reforms dubbed “shock therapy” that consisted primarily of three components: slashing government spending, cutting bureaucracy, and devaluing the peso.

Critics warned that these measures would be disastrous, and many took it for granted that the remedies would deepen Argentina’s recession.

The former head of the International Monetary Fund’s Western Hemisphere Department, Alejandro Werner, said Milei’s strategy could tame inflation, but at great cost.

“A deep recession will also take place,” Werner wrote, “as the fiscal consolidation kicks in and as the decline in household income depresses consumption and uncertainty weighs on investment.”

Felix Salmon, the chief financial correspondent at Axios, concurred, comparing Milei’s policies to “a wrecking ball”.

“Milei’s budget cuts will cause a plunge in household income, as well as a deep recession,” wrote Salmon.

Despite these warnings, Milei delivered his “shock therapy” plan in the first few months of his presidency. Tens of thousands of state workers were cut as were more than half of government ministries, including the Ministry of Culture, as well as the Ministries of Labor, Social Development, Health, and Education (which Milei dubbed “the Ministry of Indoctrination“). Numerous government subsidies were eliminated, and the value of the peso was cut in half.

Even before Milei’s policies were given a chance to succeed, many continued to attack them.

“Shock therapy is pushing more people into poverty,” journalist Lautaro Grinspan wrote in Foreign Policy in early March. “Food prices have risen by roughly 50 percent, according to official government data.”

Yet the official government data Grinspan cited was a report from December 2023, before Milei had even assumed the presidency.

Contrary to the dire predictions, the results of Milei’s policies have been better than even many of his supporters had dared hope.

During the first half of 2024, inflation cooled for five straight months in Argentina, the Associated Press reported in July. Though consumer prices were up 4.6 percent in June from the previous month, that’s down from a 25 percent month-over-month increase in December, when monthly inflation peaked in Argentina. Meanwhile, in February the government saw its first budget surplus in more than a decade. And just days ago, an economic report was published showing a massive decline in poverty in Argentina.

Many doubted that these successes were possible, and the conventional wisdom said that wringing inflation out of the economy and slashing government spending could only be achieved at great cost: a deepening recession.

Domicidal maniacs in charge

Filed under: Britain, Cancon, Europe, Media, Politics, USA — Tags: , , , , , , , , — Nicholas @ 04:00

Lorenzo Warby provides an oh-so-useful word to accurately capture what the diversity-at-all-costs elites running most western countries these days are actually up to:

Domicide is the destruction of home. It comes in the “hard” version — the physical destruction of houses and infrastructure.

Domicide also comes in a “soft” version — flooding localities with new people, separating people from, and otherwise degrading, their heritage. When folk say Britain is becoming “unrecognisable”, it is the domicidal effect of mass migration they are referring to.

The UK is suffering from a domicidal elite, one that uses mass migration to break up working-class communities; asymmetric multiculturalism to elevate incoming cultures over those of native English (the Celtic fringe get minority brownie points); favours non-“white” faces in advertising; asymmetric race-swapping in entertainment against the native English; denigration of British history as racist, white supremacist, imperialist, colonialist, etc.

Much of this is insulting virtue-signalling allied to, or presenting, cartoonish (simplified) and caricature (distorted) history. It all undermines social cohesion. But it is the use of migration policy as a systematic weapon against the resident working class which does the most damage. Though two-tier policing — obviously treating Muslims in particular with a deference not shown to the natives, especially when it comes to policing speech — is also highly corrosive of social cohesion.

Many working-class communities in Britain were already fairly dysfunctional — though the British state is not innocent in those dysfunctions1 — and sections of the British working class are very far from admirable. None of this justifies the use of mass migration to make things worse for such folk, however much it may help to explain the moralised class contempt that underlies so much of modern progressivism and modern managerialism.

To improve such things, to “level up”, requires a strong sense of how to create and maintain social order. Modern progressivism is strongly antipathetic to such understanding. To “level up” also requires a strong sense of custodianship, which managerialism typically lacks: particularly progressivist managerialism.

Indeed, modern feminist, progressivist, managerialism—in its lack of custodianship; lack of social solidarity;2 in its antipathy to taking the problems of social order seriously — is running the British state into the ground. The post-medieval British aristocratic and mercantile elite did a much better job of state management. But those elites had mechanisms — such as duelling, that forced men to defend their reputation at the risk of their life, and grand country houses, that turned into expensive investments in social isolation if you behaved badly — that selected for character.

Nowadays, the British elite only selects for capacity and even that is being degraded by DEI undermining the signals of competence. It turns out, over the longer term, character matters more than capacity. For capacity without character selects for manipulative, anti-social personalities that degrade institutions over time.

    1. For a particularly brutal depiction in fiction of the dysfunctional British welfare state — especially its school system — see Christopher Nuttall’s Mystic Albion series, especially the first book.

    2. Feminisation of institutions and discourse has tended to degrade social solidarity, see Benenson et al, 2009. The most conspicuous example of this in the UK is how uncouth it is in elite circles to mention the systematic rape and sexual exploitation of underage working class girls by overwhelmingly Muslim gangs.

A crisis of competence

Filed under: Business, Government, Military, Space, USA — Tags: , , , , , , — Nicholas @ 03:00

Glenn “Instapundit” Reynolds on one of the biggest yet least recognized issues of most modern nations — our overall declining institutional competence:

Almost everywhere you look, we are in a crisis of institutional competence.

The Secret Service, whose failures in securing Trump’s Butler, PA speech are legendary and frankly hard to believe at this point, is one example. (Nor is the Butler event the Secret Service’s first embarrassment.)

The Navy, whose ships keep colliding and catching fire.

Major software vendor Crowdstrike, whose botched update shut down major computer systems around the world.

The United States government, which built entire floating harbors to support the D-Day invasion in Europe, but couldn’t build a workable floating pier in Gaza.

Boeing's CST-100 Starliner crew ship approaches the International Space Station on the company's Orbital Flight Test-2 mission

And of course, Boeing, whose Starliner spacecraft is stuck, apparently indefinitely, at the International Space Station. (Its crew’s six-day mission, now extended perhaps into 2025, is giving off real Gilligan’s Island energy.) At present, Starliner is clogging up a necessary docking point at the ISS, and they can’t even send Starliner back to Earth on its own because it lacks the necessary software to operate unmanned – even though an earlier build of Starliner did just that.

Then there are all the problems with Boeing’s airliners, literally too numerous to list here.

Roads and bridges take forever to be built or repaired, new airports are nearly unknown, and the Covid response was extraordinary for its combination of arrogant self-assurance and evident ineptitude.

These are not the only examples, of course, and readers can no doubt provide more (feel free to do so in the comments) but the question is, Why? Why are our institutions suffering from such widespread incompetence? Americans used to be known for “know how,” for a “can-do spirit”, for “Yankee ingenuity” and the like. Now? Not so much.

Americans in the old days were hardly perfect, of course. Once the Transcontinental Railroad was finished and the golden spike driven in Promontory, Utah, large parts of it had to be reconstructed for poor grading, defective track, etc. Transport planes full of American paratroopers were shot down during the invasion of Sicily by American ships, whose gunners somehow confused them for German bombers. But those were failures along the way to big successes, which is not so much the case today.

But if our ancestors mostly did better, it’s probably because they operated closer to the bone. One characteristic of most of our recent failures is that nobody gets fired. (Secret Service Director Kim Cheatle did resign, eventually, but nobody fired her, and I think heads should have rolled on down the line).

Why Oil Paint Is So Expensive | So Expensive

Filed under: Economics, History, Media — Tags: , , , — Nicholas @ 02:00

Business Insider
Published Jul 13, 2019

Oil paint is simple. At its most basic, it’s just a mixture of oil and pigment. But depending on the color and quality, a liter of this paint could cost you $285 to $1,100.

While the rise of oil paint is associated with the Renaissance, paintings using poppy-seed oil have been dated as far back as seventh-century Afghanistan. So what is it that makes this paint so special? And why is it so expensive?
(more…)

QotD: Celebrity fund-raising for foreign aid

Filed under: Africa, Economics, Government, Media, Quotations, USA — Tags: , , , — Nicholas @ 01:00

Unlike private capital, foreign “aid” enters a country not because conditions there favor economic growth but because that country is poor — because that country lacks institutions and policies necessary for growth. And the more miserable its citizens’ lives, the more foreign “aid” its government receives.

Can you imagine a more perverse incentive? The poorer and more wretched are a nation’s people, the more likely celebrities such as Bono will convince Westerners and their governments to take pity on that country and to send large sums of money to its government. And because that country’s citizens are poor largely because their government is corrupt and tyrannical, the money paid in “aid” to that government will do nothing to help that country develop economically.

The cycle truly is vicious. Aid money naively paid by Westerners to alleviate Third-World poverty is stolen or misspent by the thugs who control the governments there. Nothing is done to foster the rule of law and private property rights that alone are the foundation for widespread prosperity. The people remain mired in ghastly poverty, their awful plight further attracting the attention and sympathy of Western celebrities, who use their star attraction and media savvy to shame politicians in the developed world into doling out yet more money to the thugs wielding power in the (pathetically misnamed) “developing world”.

If I could figure out a way to measure the long-term consequences of this new round of debt relief — a way that is so clear and objective that even the most biased party could not quibble with it — I would offer to bet a substantial sum of money that years from now this debt relief will be found to have done absolutely no good for the average citizens of the developing world.

It’s a bet I would surely — and sadly — win.

Don Boudreaux, “Faulty Band-Aid”, Pittsburgh Tribune-Review, 2005-06-18.

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