The Electric Commentary

Saturday, March 11, 2006

Bad Policy In Action

Dan Drezner reports on one of the worst decisions that a government could possibly make. Here's an excerpt from an L.A. Times story:

Argentine President Nestor Kirchner has a plan to fight rising inflation and escalating food prices: Let them eat beef.

In an extraordinary decision, the government this week announced a six-month ban on most beef exports from the world's third-largest purveyor of the meat.

In Argentina, prime beef is a cultural icon, rivaling tango, soccer and the late Eva Peron. Argentines are voracious beefeaters, consuming 143 pounds per capita annually.

But consumers here have been grumbling about beef prices for months, and Kirchner — a left-leaning populist often at odds with big business — presented the ban as a way to protect his people from export-driven price hikes.

The government hopes that meat targeted for overseas sale will now stay at home. Increased supplies will reduce domestic prices, which skyrocketed 20% last year, surpassing the worrisome inflation rate of more than 12%.

"It doesn't interest us to export at the cost of hunger for the people," Kirchner declared.


Unbelievablele. The only question that remains is if this will lead directly to mass starvation, or if mass starvation will come only after the enormous economic hit.

2 Comments:

  • Crazy. You don't need to be an economist to see that. At least it is only a 6 month ban, which should hopefully limit the damage.

    By Blogger Scott H, at 5:34 PM  

  • This article is a good example of what I hate about the media's ridiculous emphasis on the idea of "balance." You have to wade through about 90 percent of the piece until you get to this:

    Many economists say Kirchner's anti-inflation strategy of price controls and tactics such as the beef-export ban will fail absent a revised monetary policy. But others argue that price mandates and Kirchner's efforts to bring down beef prices may provide a short-term solution.

    This is the heart of the story, and yet we never learn who the "many economists" are and who the "others" are, what their specific arguments entail, and which side's view is favored by the majority of experts.

    By Blogger MDS, at 4:38 PM  

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