Tuesday, June 4, 2013

Lessons from Economic Crises in Argentina

[Interview with David Galland, whose internationalization story involved moving his life and his family from the US to Argentina.]

Nick: How can the actions of the Argentine government give us insight into what a desperate government is capable of and what might be in store for the United States?

David: The current Argentine government is dominated by true believers, young people who have that idealistic notion of equality for all, and who believe that government mandates can fix anything that ails.

They are hardcore socialists, leaning towards communism.

But, as is the case in the United States, they really don't know what they are doing and so pursue policies that are incredibly short-sighted.

They are uninformed as far as history and economics are concerned and blunder from one harebrained policy to another.

There is literally nothing that they will not try.

It is like a textbook case in government gone mad.

They have stolen the retirement accounts, devalued the currency, and put capital controls in place.

There are trade controls so that people can't import necessities into the country, but instead, have to manufacture them locally, with the government giving monopolies to their friends.

They have price controls, which force the local supermarkets to not raise their prices. This will ultimately lead to shortages. And there are already shortages of certain items.

They didn't like an opposition newspaper, so they nationalized the newsprint manufacturing industry.

In fact, just about every single thing that you could do to screw up a country, they have done.


There is a lesson to be learned from all of this, and I think it is a very important one.

When it comes right down to it, any government –not just the Argentine government, but the US government as well –will simply do whatever it thinks it needs to do to keep the status quo intact, with no moral or ethical considerations.

[Read more of this fascinating interview, including how good life in Argentina is for expats.]