Argentina Dollar Ban A Sign Of Failed Socialist Policies
http://news.investors.com/ibd-editorials/070912-617562-argentinian-dollar-ban-will-not-work-because-it-contradicts-markets.htm
Socialism: In the latest chapter of Argentina's war on economic reality, President Cristina Fernandez has banned the buying of dollars in a bid to halt capital flight. It's a market verdict on her policies, and it won't stop dollarization.
Putting dollar-sniffing dogs on outbound ferries from Buenos Aires to Uruguay apparently didn't halt Argentinians' desire to get their money out of the country. After losing a billion dollars a month to capital flight by small investors in 2011's fourth quarter, Argentina continues to lose about half that amount as citizens send assets out of the country.
And why shouldn't they? In the last three years, Argentina's government has seized private pensions to pay for pork barrel social programs, raising government spending to 38% of GDP.
It has been caught lying about its inflation statistics (officially around 30%), a sign it's now printing money. It has started paying down its foreign debt with its central bank reserves — some $4 billion out of its $46 billion kitty. It has also just told banks they'll have to lend $3 billion to politically favored businesses in an Obama-style effort to pick and choose winners and losers.
Once again, Argentina's damaging, once-a-decade cycle of devaluations and defaults is kicking in.
This matters because so much of what Argentina's leaders are doing is being justified with the sickly-sweet logic of the left. In reality, it's about force.
Fernandez declares that her anti-dollar "pesofication" is just an effort to "save jobs" — even as she blames the downturn in Europe for her own crisis.
In reality, she has stepped up government-spending, crushed the private sector through taxes, picked winners and losers, paid off favored union cronies, and is seeking to get access to global credit markets by paying off a series of government-issued dollar bonds called Bodens with other people's money.
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Mad Poet Strikes Again.
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