The Argentine decline is a consequence of the regulations that govern the activities. Distortions aggravated with current protocols. The income of each person is severely disconnected from the attention of the needs of others, through voluntary exchanges.
More specifically: the income does not remunerate the production that meets the needs of the people. Many charge well above what they produce. The trade-off is that crowds are paid well below what they produce. Injustice, waste aggravated by government regulations in the pandemic / quarantine.
In this particular context, GDP measurements become uncertain. Employees, state officials and public entities are paid the same as before the pandemic, even if they do not perform their jobs. The same teachers, Justice and agents of Congress. Meanwhile, companies of all kinds are required to continue paying salaries, taxes, even if they work little or nothing and make it difficult for them to negotiate with their employees and clients. Companies of all kinds are required to continue paying salaries, taxes, even if they work little or nothing and make it difficult for them to negotiate with their employees and customers
Meanwhile, the GDP is still estimated as if the State continued with its normal occupations. Regarding private activities, production is usually differentiated from payments to productive factors. For the former, they estimate GDP at “market prices”; for the latter, GDP “at factor cost”. But there is no doubt that, in the face of a State that continues to demand its impositions and pay its agents, as before the quarantine, even though they work less and serve the population worse – failing to fulfill their functions and frustrating satisfactions – displeasure increased considerably.
The gap between payments to productive “factors” and productions that satisfy the needs of their clients is covered by governments imposing taxes and obtaining credits. In Argentina and lagging countries, they add regulatory distortions that grant real private fiefdoms, in addition to financing accepted along with monetary issuance.As a result of the quarantine and distrust of the environment, monetary issuance by the Central Bank increased sharply, more than price levels (Reuters) As a result of the quarantine and distrust of the environment, the monetary issue by the Central Bank increased sharply, more than price levels (Reuters)
As a result of the quarantine and the distrust of the environment, the monetary issue increased sharply, more than the price levels. A risk that transfers unforeseen costs into the future. In effect, these costs will materialize with the ravages of higher inflation, a possible contraction of income and future devaluation of the peso.
An explosive reaction is building
Economic agents keep a part of the issue without spending, thus reserving purchasing power going forward. Until they need it, when their expenses exceed income, diminished by uncertainty and inflation. Like an avalanche, higher prices and declines in real income will drive such reserves. In that process, inflation would accelerate like fires in dry fields as the winds pick up.
Rulers, politicians, and others seem to have lost the purpose of societies. They do not understand that, after the thousands of years since human appearance, different societies are gaining complexity and satisfaction as they incorporate individual freedoms.
They confirm the different achievements of the countries. The least developed are the most burdened with conflictive, rigid, authoritarian structures. Therefore, the advancement of nations consists in removing, overcoming, artificial impediments. Possibility offered by republican democracies.
We humans believe ourselves to be more intelligent than we would be isolated, fending for ourselves, without the interested assistance of others, that is, through transactions, voluntary exchanges of rights. Perhaps that is the recent message of Pope Francis: the achievements of each one are not the exclusive consequence of the merit of each individual. My books show that personal income corresponds to the quality of their associations. The most advanced societies are the ones that most fully manage to satisfy the particular needs of the different individuals that comprise them.
The most advanced societies are those that more fully manage to satisfy the particular needs of the different individuals that comprise it. Giving themselves freedoms, allowing relationships and institutions to emerge that better shape different individual desires.
It is extremely relevant to recognize that individual interests, views, are very different. The ideal way to integrate them is to value such differences, agreeing on fair, necessary and sufficient rules, the same for all people throughout time. Such was the simultaneous impulse of the French Revolution and the Constitution of the United States, abolishing lordships, submissions. The basis of joint progress is the freedom to negotiate rights, property.
In stark contrast, authoritarian societies aspire to sweep away, ignore, individual differences, privileging those of the powerful, supporters and party ideologues. Decreeing rules that concession income, properties, to their favored to the detriment of opponents and the whole. The return to the feudal regime, hunting grounds dressed as progressives, which drowns, inexorably impoverishes Argentina and countries that suffer from it. There is no way out If the legal system prevents recognizing personal needs, with rules that discriminate, are unfair, unequal, income and assets are depreciated (Franco Fafasuli) If the law prevents recognizing personal needs, with rules that discriminate, are unfair, unequal, income and assets are depreciated (Franco Fafasuli)
The confinement of the least free countries, overwhelmed with restrictions, is inescapable. By not recognizing the wishes and particular needs of all individuals, authoritarian countries impose frustrations, conflicts, and impoverish. Income measures individual satisfactions. If the ordinance prevents recognizing personal needs, with rules that discriminate, are unfair, unequal, income and assets are depreciated. A situation that worsens even more, when the protocols are variable, transitory, provisional. Discriminations disorient individual plans. They hinder, they impoverish.
This is the case of teacher unions preventing education, against protocols agreed by school administrations, with teachers, parents, students. Is it typical of a republic that officials are unaware of agreements between interested parties?
Another example: the national State pays dollars at $ 50 to some, $ 80 to others; and charges from $80 to over $130, depending on the face or discriminating criteria. Where was the country of Freedom, Equality? Officials, leaders, arrogate skills, knowledge, upset by their achievements for the whole.