Argentina: warning for Spain

What a blow the Government of Alberto and Cristina Fernandez by Kirchner in Argentina. Kirchnerism has suffered an electoral catastrophe (also in the ruling province of Buenos Aires, a historical bastion of Peronism) after the first simultaneous and mandatory open elections (PASO) have been held.

In this stage prior to the legislative elections of November (an advance of the final elections) the opposition gathered in Together for Change, the coalition of Mauricio Macri, has won a resounding victory.

Alberto Fernández has accepted the defeat and affirmed that “we have not done something well so that people do not accompany us”.

Two events happen. First, that in Argentina things have been doing very poorly for a long time as a result of following bad ideas. And second, what Alberto calls “something.”

Not all countries have a happy story (Spain begins to be alert because it can also happen here). Argentina was a developed country that was on its way to becoming a major world economic power between 1853 and the early 20th century until it became a populist, poor and underdeveloped country with military regimes that have wreaked havoc.

Where did we fail?

We believed ourselves to be a fairy tale, as is the case with anyone who falls stunned and in love with populism, whether of the left or the right. And the main character of this story, and trigger of the plot, is Juan Domingo Peron, a colonel who actively participated in the 1943 military coup.

Perón openly admired Benito Mussolini and he worked at the head of the Ministry of Labor and Social Security in Argentina to implement many aspects of Italian fascism, such as corporatism, autarky and the cult of the messianic leader. Perón also won the support of the most important union in the country, the Railway Union, which proclaimed him “the first Argentine worker.”

Perón was no longer simply an army officer. He had become the messianic leader of Argentina. During his tenure, he spent gold and foreign exchange reserves, redistributed income, resorted to nationalizations, and built a corporatist society with a clear fascist influence. In addition, it expropriated the income of the agro-export sector to finance the massive expansion of public spending, which in a few years it went from 25 to 42% of GDP.

In Argentina today, more than 20 million people receive some type of transfer from the State, either in the form of public employment, retirements, subsidies or allowances. Of almost 45 million inhabitants, only seven million work in the private sector. Seven million who must support the 20 who live from the State. Herein lies the great problem of the Elephantian State: in its unsustainability and its immorality.

Argentina does not advance because it punishes success and celebrates privileges.

But let’s first understand this collectivist immorality reflected in what Alberto Fernández cynically calls “something.”

“Something” is, first, one of the toughest and most restrictive quarantines in the world. Meanwhile, in the middle of the first phase of that quarantine, the first lady celebrated her birthday with a celebration that, organized by any other Argentine, would have automatically taken her to jail.

Second, the case of the VIP vaccination in the Ministry of Health. Vaccination where they were vaccinated first and which led to the resignation of the Minister of Health Ginés González García.

Third, that when they told us “stay home”, they received a guaranteed salary at the end of the month (with our money). Meanwhile, 30,000 companies were merging and 70,000 were shutting down forever.

Fourth, that corruption, willful ineffectiveness and immorality It must be added that the economy has been in recession since 2018that Argentina ranks 126th in the World Bank’s Doing Business Index, that we have a public debt close to 90% of GDP, that we have one of the highest inflation rates in the world and that no one wants to invest in our territory.

But we still do not realize the problem that has locked us in this cycle of repeated crises.

Let us not forget that each increase in public spending is accompanied by an increase in the deficit. Then, from the printing of money by the Central Bank and, finally, from a currency crisis that hits the national economy.

As always, Argentina cannot solve the problem of the big government with more government. Fernández must cut public spending. The pandemic is no excuse for economic mismanagement. Not for the control of prices, the setting of wages, the creation of new obstacles and regulations, and, of course, the control of sectors such as energy, which they nationalize while saying that it is for “the good of all.”

This is how fairy tales are and this is the reality of Argentina, the kingdom of the reverse. A country that had everything, but also lost everything. Sometimes the warnings come this way. As i said Thomas Jefferson, “The price of freedom is its eternal vigilance.”

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