MANUEL SOLANET FOR INFOBAE: The start of the war against inflation announced by President Alberto Fernández was limited to enunciating (erroneous) principles and launching an emotional call for unity. “The problem belongs to everyone and it is solved by everyone”, he said, without forgetting to use inclusive language.
Specifically, he ratified the creation of a trust to subsidize wheat for milling and domestic consumption. He did not clarify where the funds would come from, although it is known that they will result from the increase in withholdings on soybean meal and oil. That detail was left for ministerial announcements. If this is really the case, the impact will be absorbed by the oil industry, which will lose the differential with respect to soybeans. This announcement will be a problem for Matías Kulfas, Minister of Productive Development, and not only for Julián Dominguez, Minister of Agriculture.
The rest of the President’s statements promise more of the same. Convene an agreement on prices and wages with businessmen, union leaders, consumer associations and merchants. He also spoke of implementing the a law ensuring supplies and launching a battle against speculators.
Specifically, it ratified the creation of a trust to subsidize wheat for milling and domestic consumption. It did not clarify where the funds would come from
In addition, he has already told us that there will be no structural reforms to facilitate fiscal balance, competitiveness, confidence and private investment. Therefore, the outlook is more than bleak. We will likely see the familiar scenario surrounding many failed plans once again. It brings to mind the persecution of the moneylenders in 1951, the Gelbard Plan in 1973 and many others.
Fernández also spoke of implementing the a law ensuring supplies and launching a battle against speculators.
Roman emperor Diocletian was the first ruler to declare a war against inflation when in the year 301 issued his Edict on Maximum Prices. Not only did it set prices for more than 1,300 products, it also set values for labor. It also established the death penalty for speculators, who were blamed for the increases.
We will have to wait for the details of the ministers to see if this war on inflation will be carried out with a bow and arrow like Fernández seems to imply in his speeches.
History records the failure of the attempt and the frustration of the Roman people who, o hand, boasted of the power of their armies armed with weapons as successful as the catapult and the bow and arrow. Military art and technology have evolved, but the attack on inflation outlined by Alberto Fernandez remains as it was in Diocletian’s time. We will have to wait for the details of the ministers to see if this war on inflation will be carried out with a bow and arrow as it seems from his speech. If so, our assumption that the king is naked would be confirmed.