Argentina Charging Economists
Private economics consulting firms figure the rate of price inflation in Argentina is running more than double the official 9.7% and are publishing their data, making President Cristina Kirchner’s administration upset. The Wall Street Journal‘s Taos Turner explains,
The government is charging MyS Consultores with “publishing false information about inflation data” to benefit themselves and their clients. The criminal complaint alleges that MyS’s data also lead to speculative behavior in Argentina’s bond market.
The government says inflation is no problemo, and anyone that says otherwise must be an enemy of the state. Nine economics firms have been fined half a million pesos apiece for reporting the truth.
“They fine us for saying how much prices have risen,” Mr. Ferreres, director of his eponymous firm, tells the WSJ. “They could seek criminal charges against all of us. We don’t know how far they’re willing to go.”
Government officials in Argentina say they hope the fines will stop economists from “deceiving” the public into making poor financial decisions by publishing inflation estimates that substantially differ from the government’s consumer price index.
Of course legal scholars say these charges are unconstitutional and have no legal basis. However, Turner writes,
the fines had the desired effect of silencing some economists and leading others to refrain from talking openly to the media. Citing government pressure, consulting firm Economia y Regiones said in March it would stop making public its inflation estimates.
Never mind that former employees of Indec, which produces the official inflation numbers, and some Economy Ministry officials, admit Indec’s numbers are manipulated. Also, government officials routinely rubber stamp collective-bargaining agreements that include 20-30 percent annual wage increases.
Surely, economists are safe here in the good old U.S. of A, where the Bureau of Labor Statistics just reported that annual price inflation was running at 3.6% in May, at the same time Shadowstats.com‘s John Williams estimates that consumer prices are really rising at an 11.2% clip?
Nothing to worry about. After all, America is just a republic, not a banana republic. Right?