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Under Argentina’s New President, Fuel Is Up 60%, and Diaper Prices Have Doubled (www.nytimes.com)

submitted 1 year ago by zephyreks@lemmy.ml to c/worldnews@lemmy.ml

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[-] merc@sh.itjust.works 5 points 1 year ago

I guess the right wing theory is that the president makes Argentina a great place to do business, business people rush in, and wealth trickles down.

But, that "trickle down" idea doesn't ever seem to have actually worked anywhere. Maybe the best Argentina can hope for is that at one point when the economy is booming, the working people suddenly form or join unions and the companies decide it's too risky / expensive to leave, so they negotiate with those unions.

OTOH, these days it's so easy to move corporations around to wherever the laws are the most corporation-friendly. So, even if somehow the new president does make corporations want to do more business in Argentina, it's hard to see how the people of Argentina will really benefit.

[-] ExLisper@linux.community 1 points 1 year ago

I would agree if Argentina wasn't so fucked right now. The goal is not to make Argentina great but to get out of crisis. I think what can happen is that all this drastic cuts and price hikes will lower inflation and stabilize the economy. With inflation under control and normal interest rates people will be able to start saving money again, take out mortgages and import goods. This could improve their situation if public services survive but my guess is they will end up fully owned by foreign capital at the end.

[-] merc@sh.itjust.works 1 points 1 year ago

I think what can happen is that all this drastic cuts and price hikes will lower inflation and stabilize the economy

It might, or it might not. The thing with inflation is that it's based on people's expectations as much as anything else. People have to believe that inflation will go away before it goes away.

The new president has one thing going for him, which is that he's not a continuation of the previous administration. That means there's a chance that people will believe that he's actually making serious reforms. If they'd stuck with a prime minister who was the finance minister when the inflation was going nuts, I don't think anybody would have believed that things were going to improve, which meant they wouldn't improve.