Clarín - On the occasion of the annual meeting of the World Economic Forum (WEF), better known for the place where it is held (Davos), where political and business leaders from all over the world meet, and for the attention that this meeting generates in the media , the English organization OXFAM released a report entitled "The Virus of Inequality."

There he affirms that, due to the pandemic, inequality has increased notably in the world and is going to increase even more. To clarify these questions, he answers questions received on his blog and when asked: How can you be sure that Covid-19 will lead to a huge growth in inequality in the world ?; they respond: “The IMF, the World Bank, and the Organization for Cooperation and Development (OECD) have all raised their growing concern because we will see a peak of inequality in all the countries of the world due to COVID.

These fears were also collected in a global survey of 295 economists from 79 countries, contracted by OXFAM, where 87% of those who responded said they expected an ‘increase’ in income inequality in their country as a result of the pandemic ”.

As on other occasions, the report has a global impact on the media and contributes to a growing concern that this is a prior phenomenon that is now accelerating.

It is true that the income of many ultra-millionaires has increased because a good part of their wealth is in stocks whose price has been artificially inflated by the monetary issuance policies of the main central banks of the planet. This is correctly pointed out by OXFAM, although it focuses its criticism on the rich and capitalism and not on the politicians who manipulate currencies.

However, his statement regarding inequality and COVID is, at least, to state what he wants to show in advance, because the data does not validate his statements.

Angus Deaton is Emeritus Professor of Economics and International Affairs at Princeton, and was awarded the Nobel Prize in Economics in 2015 for "his analysis of consumption, poverty and well-being." He is an expert in statistics, precisely on issues related to poverty. He has not written now with the intention of refuting OXFAM, but that is what he does in two papers published these days.

The first one is titled “COVID-19 and Global Income Inequality” (NBER Working Paper 28392). This is what his summary says: “There is a widespread belief that the COViD-19 pandemic has increased global income inequality, reducing per capita income more in poor countries than in rich countries. This assumption is reasonable but it is false.

Rich countries have experienced more deaths per capita than poor countries; despite their better health systems, higher incomes, more capable governments, and better preparedness. The United States fared worse than some rich countries, but better than several others. The countries with the most deaths had the biggest drops in income.

Therefore, not only was there no trade-off between lives and income; fewer deaths meant more income. As a result, income fell the most in higher-income countries. Country by country, international income inequality has narrowed.

When countries are weighted by their population, international income inequality increased, not because the poor countries diverged from the rich ones, but because China - no longer a poor country - had fewer deaths and positive economic growth, away from the poor. Poor countries. That these discoveries are the result of the pandemic is confirmed by comparing the global inequality of the IMF forecasts in October 2019 and October 2020 ”.

The other paper “GDP, Well-being and Health: Ideas about the 2017 Round of the International Comparison Program”, (NBER Paper 28177), is co-authored with Paul Schreyer, an OECD economist, and the mentioned Program is also from that organization.

It is, at least, curious, that OXFAM says to base its conclusions on the IMF, the World Bank and the OECD. In this other paper, the authors review the progress of this program that seeks to develop a methodology to be able to compare GDP data from different countries.

There they state: “The IMF, in its report 4, October 2020, forecasts positive growth for China in 2020 of 1.9% compared to a fall of 4.3% for the United States and a fall of 9.8%. for the UK. The forecast for per capita income in Africa is a reduction of 2.6% compared to 5.8% for the ‘advanced’ countries, and 8.3% for the Euro area. These forecasts, if these numbers or similar ones are confirmed, will bring a sharp reduction in global inequality ”.

The well-known "fallacy of authority" holds that a statement is not necessarily correct because the person who makes it has authority on the matter. Not because Deaton has received the Nobel Prize for contributions on these topics, his claims will necessarily be correct, but at least they collapse the appeal to authority that OXFAM makes when referring to those same international organizations and a number of economists.

Assigning the blame for all the ills of the planet to capitalism and the rich and saying that everything goes from bad to worse catches on all those who look for a villain or a conspiracy behind everything that happens, but it is a very poor reflection of what is happening.

NotiAr - The generosity of a group of important friends (diplomats, historians, economists, journalists, political scientists, the military, experts in agribusiness, etc.) allowed me to join, from the beginning of the “cuareterna”, to a daily reflection meeting on the Argentine and international reality and, above all, the probability of changing the collision course that we have chosen for decades. In that forum, the defects that we find in the main opposition bloc, Together for Change, were raised, especially due to the lack of a general proposal that can offer citizens an optimistic horizon to get out of the deep crisis in which we find ourselves. Until now, this conglomerate of political forces –PRO, Radicalism and Civic Coalition- is limiting its actions to denouncing the attacks of the Front for All against the Republic and its institutions, staying in the strict conjuncture and obtaining no fruit whatsoever due to the fierce resistance of your adversaries.

The Instituto Patria, that hotbed of populist and old-fashioned economists in La Cámpora led by Cristina Fernández and who increasingly occupies more and more key positions in the state estates and in the most desirable boxes, works all day, and every day, to become a nation ravaged by misery, ignorance and massive corruption, in which we are all dependent on a corrupt state at every moment more emaciated and ineffective, faithfully following the model that the tyrannical Cuban and Venezuelan regimes imposed on their peoples and Nicaraguan.

In our view, there is only one work team, which includes the best teams from Recrear and Uni2, which has developed a government and public policy plan capable of restoring hope in the possibility of a future other than the one we currently see. it offers us the disastrous past, product of the repetition of mistakes and bad intentions, the same ones that our daily life exhibits today. I'm talking about Freedom and Progress, and the plan can be read at https://tinyurl.com/yyaaekzr. In it you will find concrete proposals on topics such as: State reform, taxes and federal co-participation, labor regime, foreign trade, citizen security, defense, Justice, education, financial system and energy policy; that is, all the key issues to take a real step forward, truly different from those we have taken so far.

In August, if Máximo Kirchner wants, we will have STEP. And they should serve so that all of us who consider ourselves opponents of this tragic ruling party compete in them within the same structure, so that ordinary citizens are the ones who choose the candidates that we take to the October legislatures. Obviously, this unification needs the generous acceptance of Juntos por el Cambio to compete with other candidates, non-K Peronists, conservatives, liberals and from other minority parties that, dispersed, can complicate the essential result we need: preventing the Front from stopping. All obtain the number of additional deputies that allows them to access their own quorum, that is, the final subjugation of the Republic.

I do not deny that the road will be arduous, because so many uninterrupted years of populism have made the mentality of the majority of society today infected with that rare disease that consists of thinking that all goods and services are human rights, that the State It must provide us with them at no cost (what a fallacy, since we always pay for it with crazy taxes!) and that work, effort and merit cannot and should not be required of us to improve our condition.

But part, at least, of that path is being followed by the Government, easing our task. By repeating the harmful policies of prices and tariffs, of intervention in the economy and energy, of ignorance of contracts, of comings and goings in rules and regulations, of growing corruption and capitalism of friends, of war against the countryside and the free press, of attack on Justice, of repudiation of modernity and of the investment that they practiced during the first twelve and a half years in which Cristina Fernández and her husband exercised power, will soon run into the hard wall of the total lack of resources to finance their nonsense. If you wait for China or Russia (Hugo Chávez is no longer here) to come to your aid, the onerous sovereignty compensation that these countries, whose terrible violations of human rights do not seem to bother you, will be asking for a lethal match for a local situation of by itself already explosive.

In that scenario I also include a situation to which we are not paying due attention. I am referring to the conflict with the pseudo-Mapuches, who are replicating in southern Argentina and Chile the adventure that the ERP carried out in Tucumán in 1975, where it intended to build a separate territory from the Argentine State and achieve international recognition as a belligerent party. Then and now, the presence of the legal forces was violently resisted by the insurgents, with the open collaboration of government officials, until the Peronist government ordered the repression with Operation Independence; But, unlike at that time, today the terrorists are associated with the great drug trafficking cartels, the Colombian FARC and the Peruvian Shining Path.

There is still an opportunity for optimism. Let's not waste it!

The Executive has held discussions in its crisis committee with a clear involvement of the Head of the Department of Labor, Minister Claudio Moroni, about double severance pay under Executive Order No. 34/2019 (December 2019) and the ban on work suspension for economic reasons or due to force majeure and employment termination for economic reasons, due to force majeure or without cause.

Yesterday it was announced that double severance pay will be effective until the end of the year, and the ban on suspensions and layoffs will be extended. Remember that double severance pay does not apply to employees registered with a new job as from the effective date of Emergency Executive Order No. 34/2019 until mid-December 2019, and the ban on suspension or layoff does not apply to employees registered with a new job as from April 1, 2020 onwards.

Keeping the ban on layoffs is a looming menace that endangers the recovery of confidence amid the uncertainty that discourages investment, and forces many industries to freeze businesses in hope of more encouraging signals.

That is the reason why just like the announcement on this new term extension, it would be imperative to open up a discussion on the gradual process to leave the ban on layoffs and double severance pay behind.

A transition and counterfactual reasonable plan would be to reduce double severance payment to a 75% or 50% surcharge, and these reductions may boost job creation. It is advisable to eliminate, at least, employers’ contributions while keeping subsidies for those employees who have lost their jobs. These two compatible benefits help encourage employment. Employees who get a new job know that they will keep their subsidy from ANSeS, and employers may subtract the net amount of the subsidy from the wages under collective bargaining agreement and pay the difference.

As to the ban on suspensions and layoffs, considering that the gradual process to go back to normal should include double severance pay, the option would be to have a system where in case of termination, employees are paid the amount under Emergency Executive Order No. 34/2019, i.e. double severance pay, and the reductions proposed in the previous paragraph. And in order to leave suspensions for economic reasons or due to force majeure behind, suspensions should be agreed in accordance with Section 223 bis (Employment Contract Act) with a subsidy and some rotating shift schedules if it is OK with the company and business activity.

If we manage to move out of the ban on layoffs and adopt a transition process, markets will be encouraged to rebuild trust. In line with forecasts, such as the one given by Orlando J. Ferreres, predicting a 6.5% annual growth (2021) and in order to recover jobs, the State aid programs should be kept, including the Emergency Aid Program for Employment and Production (ATP), soft loans or loans with no interest and forgiveness of social security contributions to SIPA [Argentine Integrated Pension System] to engage in a recovery process with sustainable expectations to recover trust as well.

In other words, even though the arguments put forward by the business sector are more than reasonable, demanding the end of the ban on layoffs and double severance pay, if we keep these measures in place, the recovery process will be jeopardized. If there is no gradual plan to go back to normal while keeping the Emergency Aid Program, jobs will be necessarily lost, and the hard effort made so far to protect employment could well be in vain.

As liberal organizations, we firmly believe that the institutions of liberty have helped lift billions of people out of poverty through the generation of wealth produced by work, innovation, and entrepreneurship. That is why we reject solutions to poverty based on state intervention and income redistribution, which only serve to stop the creation of wealth by impoverishing the entire population.

Rather, we propose policies that focus on the following principles, similar to those that have reduced extreme poverty from 26.8% of the world's population to 5.4% in just three decades.

1. RULE OF LAW: Respect the independence of political and legal institutions that guarantee equality before the law, protection of individual rights and respect for private property.
2. MARKET FREEDOM: Trust in the ability of people to save, undertake, contract, invest and decide for themselves what goods and services to consume within a framework of freedom and mutual respect.
3. FREE TRADE: Promoting the free and voluntary exchange of goods, services and ideas favors all parties involved, and in this exchange the whole society also benefits.

We renew our commitment to promote these principles in civil society to transform them into public policies that ensure a future of prosperity for Latin America and the world.

We adhere:

• Asociación Argentina de Contribuyentes.
• Asociación Civil Río Paraná.
• Asociación de Contribuyentes. (Perú)
• Ayn Rand Center Latinoamérica.
• Caminos de Libertad (México)
• CEDICE Libertad (Venezuela)
• Centro de Estudios Económicos Argentina XXI.
• Fundación Club de la Libertad.
• Fundación Eléutera (Honduras)
• Fundación Federalismo y Libertad.
• Fundación Internacional Bases.
• Fundación Libertad.
• Fundación Libertad y Progreso.
• Fundación Nueva Democracia (Bolivia)
• Fundación Progreso y Libertad.
• Fundación para la Responsabilidad Intelectual.
• Fundación Rioplatense de Estudios.
• Instituto Acton Argentina.
• Instituto Amagi.
• Instituto Desarrollo Ambiente y Libertad (Costa Rica)
• Instituto Fernando de la Mora (Paraguay)
• Instituto Libertad y Desarrollo (Chile)
• Red Liberal de América Latina.