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Argentina: Bloggers Discuss Inflation

High inflation is an old scourge of the Argentine economy. Since the economic crisis (1999-2002) and the peso's devaluation, inflation has been back on the scene in spite of President Cristina Fernández de Kirchner‘s program of social inclusion [es] launched after she succeeded her husband in 2007.

Inflation has long been a subject of controversy in Argentina. An important political issue, it is expected to be one of the main themes debated during the presidential race next October.

According to the national statistics agency Indec [es], inflation rose 10.9% in March 2011 from a year previous for consumer goods. Yet it is commonly said that the Indec is a part of the government's efforts to hide soaring inflation figures. Independent estimations, including one of the former Indec official Graciela Bevacqua [es], says annual inflation has reached between 25 and 35%.

An advertisement indicating that candies are submitted to the anti-inflation sugar prices agreement (see note at bottom of post for more on price controls). By Flickr user J. Villamota (CC BY 2.0)

An advertisement indicating that candies are submitted to the anti-inflation sugar prices agreement (see note at bottom of post for more on price controls). By Flickr user J. Villamota (CC BY 2.0)

In The Argentine Post, blogger and Wall Street Journal's contributor, Tao Turner, denounces with bitter irony the way the government refuses to handle the high inflation problem:

In just about any other country, an inflation rate of 10% would raise red flags and cause politicians to panic over ways to curb rising prices. Moreover, government officials in those countries would use the word “inflation” to describe what was happening to prices. But Argentina has never been “any other country” and its idiosyncrasies are sometimes so frequent that they cease to surprise.

In a similar fashion, the antigovernment blog BlogBis [es] came up with ten ironic recommendations for the government's web partisans in a post called ‘Manuel para el Twitero K’ (Textbook for the pro-Kichner twitter user):

Algunos conceptos que debe incluir en el tuit que lo convierten en irrefutable:
Si hablan de inflación o pobreza, recuérdele que todo era peor en el 2001.

Some concepts that you should include in a tweet so as to make it irrefutable:
If they talk about inflation or poverty, remind them it was way worse in 2001 [during the economic crisis].

Several blogs try to demonstrate that food and basic products prices have soared since Kirchner accessed to the presidency. Fernando Satillan from the blog 7:50 a Retiro [es] shows how the price of the Argentine specialty ‘milanesa‘ (breaded meat filet) sandwich has gone up in six months :

A un par de cuadras de la oficina de la Fundación, un buen señor vende sandwiches de milanesa a $10. Hace unos seis meses estaban a $7. A pesar del “milanga management” del gobierno, el sanguche de milanga se me dispersó 43% en 6 meses. Es la inflación, Amado.

A few blocks from the office of the Foundation, an old man sells sandwiches of milanesa at 10 pesos [2.45 US dollars]. Six months ago they were at 7 pesos [1.70 US dollars]. Despite the “milanesa management” of the government, the [price of a] milanesa sandwich has grown 43% in 6 months. That's inflation, Amado [Amado Boudou is the Argentine Minister of Economics and a fervent defender of the Indec method]

He also quotes a comment left under one of his posts suggesting the creation of a citizen website dedicated to inflation:

Mi amigo Steven hizo un excelente comentario al post “Dispersión” que publiqué esta mañana: “En la era del celular con cámara, ¿para cuando el sitio www.eslainflacionamado.com.ar con detalles como éste?”

Mi friend Steven wrote an excellent comment of the post “Dispersion” I had published this morning: “In the era of cellphones with video, what are we waiting for to create the website thisisinflationamado.com.ar [referencing the name of the Minister of Economics, Amado Boudou] with all the details like this one?’

The controversy over inflation data has been growing, especially since the government fined several independent economists –such as Estudio Bein & Asociados, Finsoport, MyS Consultores or GRA Consultoras– for challenging official inflation. The government used article 9 of a law [es] on deceptive commercial practices that forbids the “presentation, advertisement of propaganda that, through approximations of concealment, could mislead, deceive or confuse about … the price and conditions of commercialization of goods, properties or services” to silence the dissident economists.

A wad of hundred peso bills. The peso is the Argentine currency. By Flicker user Alex E. Proimos (CC BY 2.0)

A wad of hundred peso bills. The peso is the Argentine currency. By Flicker user Alex E. Proimos (CC BY 2.0)

Such an initiative triggered many indignant reactions from the Twitter and blogger community.

Miguel A. Kiguel (@kiguel) says the law is threatening freedom of speech:

Llegó la multa por decir en los medios q la infación es 25%. Chau libertad de expresión. Sólo se acepta la inflación trucha del INDEC.

The fine for saying in the media that inflation is 25% has arrived. Good bye freedom of speech. Only the false inflation from INDEC is allowed now.

Answering to a tweet posted by the official Twitter account of the Minister of Economics Armado Boudou, Taos Turner (@taos) writes:

Ministro, abogados dicen que las multas a economistas violan la constitucion. Que dice usted?

Minister, lawyers say that the fines to economists are contrary to the Constitution. What do you say?

The blog Perspectias Criticas [es] explains how the government slows down the inflation debate by accusing newspapers of spreading manipulated figures:

En los sectores K dicen que este es un tema de los medios de comunicación y que a la gente esto no le llega , pero la realidad es que el kilo de pan , por ejemplo, hace 2 años esta $ 5 y ahora está $10.

In the pro-government sectors they say [inflation] is a debate made up by the media and that it doesn't affect the people, but the truth is that a kilo of bread was 5 pesos [1.22 US dollars] two years ago and now it's 10 [2.45 US dollars] pesos

Yet the pro-Kirchner bloggers give a completely different point of view. For instance, the blog Que Venga el día [es] posts an article by Raul Dellatorre in Página12 [es] which explains the mechanism of prices formation to its readers. According to Dellatorre, criticisms about inflation figures obstructs the debate about economics:

Durante años, la oposición ha convertido a la inflación en una muletilla para atacar la política económica del Gobierno… La reacción opositora, lejos de recoger el guante y abrir la discusión, optó por la salida más simplista: insistir en que el Gobierno sigue “negando la inflación”.

For years, opposition has used inflation as an arm to attack the economic policy of the government… The opposition's reaction, far from accepting a respite and opening the discussion, chose the most simplistic way out: to insist in the idea that the government goes on “denying inflation”.

In their blog INDEC que trabaja [es], INDEC workers defend their methods of calculation, drawing on the International Monetary Fund's predictions for 2011:

La verdad … es que la inflación es un invento mediático que intentan constantemente trasladarlo a la vida real. ¿Se acuerdan del “tomate a $18″ o de “la papa más cara que en París” que titulaba TeleNoche? Bueno, la inflación de la economía está mucho más cerca de las estadísticas del INDEC (similares a las del FMI) que a las mentiras sin un mínimo de rigor científico que muestra Clarin.

The truth … is that inflation is an invention of the media that they try to apply to the real life. Remember the “18 pesos tomatoes” or the “potato more expensive than in Paris” that was quoted by TeleNoche? [an Argentine TV channel] Well, inflation is certainly closer to the INDEC statistics (the same as the IMF's) than to the lies without a minimum of scientific rigor that Clarin [newspaper] shows.
You can read more about price controls in the article ‘Cry for me Argentina [...]: The return of price controls’ by Daniel Gross in Slate.com

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