Tax Rebellion in Argentina
Violence broke out in Buenos Aires last week when demonstrators protesting food shortages and inflation were set upon by stick-wielding supporters of President Cristina Kirchner. The attackers were led by a sworn enemy of the private sector who was once an official in former President Nestor Kirchner's government.
"The only thing that motivates me," Luis D'elía said, after his assault on a protestor was caught on camera and his actions were justified by Mrs. Kirchner's chief of cabinet, "is hatred against the whorish oligarchs." He then announced that he and his men would patrol the city streets to defend their view that the country's producers are immoral. National police, who answer to the president, did nothing to quell the violence.
(...) the Kirchners have won the support of that segment of the Argentine economy loyal to the principles of 20th-century fascist Juan Peron. These include labor militants, government bureaucrats, the Peronist political machine and the likes of Mr. D'elía, whose thugs act as Mrs. Kirchner's informal enforcers. But by generating inflation and provoking shortages Kirchneromics is also fueling widespread discontent.
The recent trouble began not in Buenos Aires but in the provinces, where agriculture is the main economic activity. Farmers rebelled earlier this month when the government announced an increase in export taxes on agricultural products. Claims that the government's new "retention" rates -aka export taxes- are close to an expropriation are not without merit.
(...) Mrs. Kirchner says the tax increase is a redistribution mechanism, suggesting that growers and ranchers have to be forced to share more of their good fortune with others. But the greater motivation behind the export-tax increase is inflation.
This government, it seems, will do just about anything to reduce inflation except the one thing that would solve the problem: Let the peso strengthen. It has imposed price controls on businesses; frozen, and then subsidized, energy prices; and prohibited the export of beef.
(...) But never mind. Kirchner power does not lie in a rational economic model. The first couple's idea of running an economy is to tax, prohibit, regulate, subsidize and otherwise micromanage every aspect of Argentine life so that no decision can be made without checking first with them. They are, at bottom, unreconstructed authoritarians.
If you doubt this, consider the fact that Mr. Kirchner spent the past five years dismantling institutional checks and balances so that when this moment came, all the power would be in the presidential palace. He and his wife now control the judiciary, the legislature, the central bank, the national police and discretionary spending in the provinces. The only avenue left open to express dissent is civil disobedience.
As we saw last week, that path may be closing down too since the Kirchners now have their own military on the streets of Buenos Aires, led by Mr. D'Elía. The anger and envy behind the rage of this mob is what kirchnerismo has sown since 2002. Those who dare to differ are likely to be met with more savagery.
[Mary Anastasia O'Grady, The Wall Street Journal]
"The only thing that motivates me," Luis D'elía said, after his assault on a protestor was caught on camera and his actions were justified by Mrs. Kirchner's chief of cabinet, "is hatred against the whorish oligarchs." He then announced that he and his men would patrol the city streets to defend their view that the country's producers are immoral. National police, who answer to the president, did nothing to quell the violence.
(...) the Kirchners have won the support of that segment of the Argentine economy loyal to the principles of 20th-century fascist Juan Peron. These include labor militants, government bureaucrats, the Peronist political machine and the likes of Mr. D'elía, whose thugs act as Mrs. Kirchner's informal enforcers. But by generating inflation and provoking shortages Kirchneromics is also fueling widespread discontent.
The recent trouble began not in Buenos Aires but in the provinces, where agriculture is the main economic activity. Farmers rebelled earlier this month when the government announced an increase in export taxes on agricultural products. Claims that the government's new "retention" rates -aka export taxes- are close to an expropriation are not without merit.
(...) Mrs. Kirchner says the tax increase is a redistribution mechanism, suggesting that growers and ranchers have to be forced to share more of their good fortune with others. But the greater motivation behind the export-tax increase is inflation.
This government, it seems, will do just about anything to reduce inflation except the one thing that would solve the problem: Let the peso strengthen. It has imposed price controls on businesses; frozen, and then subsidized, energy prices; and prohibited the export of beef.
(...) But never mind. Kirchner power does not lie in a rational economic model. The first couple's idea of running an economy is to tax, prohibit, regulate, subsidize and otherwise micromanage every aspect of Argentine life so that no decision can be made without checking first with them. They are, at bottom, unreconstructed authoritarians.
If you doubt this, consider the fact that Mr. Kirchner spent the past five years dismantling institutional checks and balances so that when this moment came, all the power would be in the presidential palace. He and his wife now control the judiciary, the legislature, the central bank, the national police and discretionary spending in the provinces. The only avenue left open to express dissent is civil disobedience.
As we saw last week, that path may be closing down too since the Kirchners now have their own military on the streets of Buenos Aires, led by Mr. D'Elía. The anger and envy behind the rage of this mob is what kirchnerismo has sown since 2002. Those who dare to differ are likely to be met with more savagery.
[Mary Anastasia O'Grady, The Wall Street Journal]