I spend entirely too much time on Facebook. That being said, I have noticed a lot of disturbing status updates recently dealing with the elections in the USA yesterday. Instead of complaining and adding my own “two cents” directly on Facebook, I decided to address some of my concerns here, where among other things I have more space. So without further ado, here are some of my thoughts:

I think that the problems confronting the United States require a collaborative effort to solve. Personally, I am sick and tired of labels (liberal, conservative, conservative compassion, liberal pity, neocons, neoliberalism, whatever…) and I am even more distressed by the ongoing partisan nature of politics and its associated public engagement in contemporary American life.

Any moron should see that it took a collaborative effort to get us into this mess. A rather small leap of logic should indicate that working together is the only way out of it. And mind you, I am not singling anyone out in particular or pointing any fingers. It is just that a lot of recent status updates are concerning me as they are demonstrative of just how pissed off and separated from one another that Americans have become. I would have hoped that by this point in our lives that we would have evolved beyond simple name calling, the use of inflammatory language designed merely to inflame others, and behaviors which serve only to create divisions amongst ourselves.

The answer to our societal ails be they moral, philosophic, cultural or economic do not lie in the promulgation of unnecessarily hateful language, vengeful statements and other negative rhetoric. Those actions only serve to divide us as a people and to perpetuate the mental masturbation created by regurgitating the problem. I would prefer we talk about solutions for the more we wallow around in the problem the greater it becomes….

Clearly our current economic crisis is the number one issue confronting our country with the lack of an adequate health care system running a close number two. People can whine all they want to about socialism and health care; however, that merely serves to muddy the water. The fundamental responsibility of any government is to provide for the safety, the welfare and the quality of life of its citizenry and there is nothing more vital to the quality of life of each and every American citizen than the ability to enjoy a high standard of economic prosperity coupled with good health.

Enjoying good health and an adequate income is fundamental people. Don't you get it?

And you know what, the United States government, although of the people and by the people, has failed in providing improvements in our quality of life standards for a very long time (certainly the expanse of our own lifetime).

To single out any particular political party is ill-informed to say the very least considering that these quality of life issues have existed our entire lifetime. Those of us in the “40-something” age group are the first generation that was unable to enjoy the same quality of life most of our parents had. Most of us have smaller incomes (at least decreased buying power with what we earn), we have less job security, our wives are unable to stay at home and raise our children as any quality of life requires 2 incomes now… the list goes on and on.

These quality of life issues saw their creation long before we were born, and throughout our lifetime they have been gradually eroding through the course of 4 Democratic administrations spanning 18 years so far (5 and part of an additional year if you were alive during the end of JFK’s life) and 4 Republican administrations spanning 28 years.

Indeed, using a quantitative analysis alone one could reasonably argue that since the Republicans have held power for nearly 61% of our lifetime more of the blame falls on them than the Democrats. (Of course such an analysis his horse-shit, but an interesting point to consider nevertheless.) And if you want to look at the flipside using a qualitative perspective, the two greatest periods of economic prosperity in our country’s history occurred during our own lifetime and were presided over by first Ronald Reagan and then Bill Clinton.

There is a wealth of empirical evidence demonstrating that our overall quality of life to include our economic prosperity, our level of accessibility to adequate healthcare and our job security (if you have one) have been eroding at a consistent pace throughout our lifetime with very few "timeouts". Additionally, there is an equal showing that this gradual decline has continued regardless of which party was in control along the way.

I have been observing this election closely, or more specifically its impact on us as a people who engage with one another either in person or online, and I find myself increasingly saddened by the never ending negative rhetoric on both sides. As children we are taught that “united we stand and divided we fall”. We are taught the “Golden Rule” - to treat others with the same compassion and understanding we hope to receive in our own lives. Yet, when it comes to politics both of those seeming “self-evident truths” fall by the wayside and to me that is the most distressing issue our country is facing in the long run. Times of economic prosperity come and go. Times of social unrest come and go. Times of military conflict come and go. But those qualities that make the human experience worthwhile are timeless: love, compassion, understanding, sympathy, empathy…..

Along with our jobs, our economic prosperity and our potential for continued good health are we to forfeit those qualities which bind us as humans as well? My hope is that we can get out collective heads out of our asses. My hope is that we can see the results of this election for what they really are: a cry for help coupled with a mandate for change. My hope is we can halt this petty "schoolyard bully" mentality that has prevailed for all too long. For I truly believe that united we just might stand a chance to create a brighter future for us all. However, I am convinced that divided we will sure fail and fall!

Peace... out. Read more!

Argentine Strikes Destroying Tourism?

Well it seems that a blend of the world's economic times, routine Kirchner government incompetence and public revolt are now destroying the stability of the tourism industry here.

Strikes in particular are expected to create many issues with tourists. On Thursday the U.S. Embassy in Buenos Aires advised tourists to take the massive demonstrations here into account when making travel plans.
As many of you know, yesterday the subway workers were on strike for higher wages. Gas station owners and over 100,000 bank employees are expected to go on strike next week. Taxi drivers have announced that they are going to strike on Christmas Eve and Christmas Day.

With the seizure of the nation's pension fund, inflation sitting just about at 30% and annual growth of only about 1.5% (as contrasted to the 8% the last several years) and an estimate by UBA economist Jarvier Kulesz that the economy will only grow by about 0.3% next year, I would imagine that this is merely the beginning.

Hang on, it should prove to be an interesting ride. In the mean time I hear the beaches in Uruguay are great this time of year, and guess what.... no Kirchners, no D'Elia and no strikes......... Read more!

Worldwide Cost of Living Survey 2008

Moscow is the world’s most expensive city for expatriates for the third consecutive year, according to the latest Cost of Living Survey from Mercer. Tokyo is in second position climbing two places since last year, whereas London drops one place to rank third. Oslo climbs six places to 4th place and is followed by Seoul in 5th. Asunción in Paraguay is the least expensive city in the ranking for the sixth year running. Dublin remains the world's 16th most expensive city and Europe's 8th most expensive.

Mercer’s survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees.

Buenos Aires ranked as the 138th cheapest city for expats in the world (with only 5 cities coming in as cheaper than here).

source
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Argentina's Uncertain Economic Future

El Presidenta is going to have several problems to deal with moving forwards. Obviously a lack on industrialization in this country is going to continue to plague the country but unfortunately the problems confronting Argentina are far more serious than that.

The government is spending up its foreign reserves at an alarming rate to keep the peso artificially low. They are having a bit of a reprieve currently since the dollar is weak, but they are still spending a fortune to keep it as high as it is here. Looking at this in the long term, internationally the dollar has depreciated by more than 40% since 2001. Here in Argentina an increase of 300% was realized.

La Nacion recently talked about the lack of investor confidence and the necessity to continue this pattern of purchasing dollars to devaluate the peso: "The loss of confidence has been enormous; the loss of banking deposits and the increased purchases of dollars shows the authorities’ limitations, and in any case the odds increase of Argentina selling reserves to make the dollar go down because they cannot do anything else”, according to another businessman.

Then you have to consider Argentina’s decision to limit its food commodity exports on items such as meat, wheat, corn and the like. The intended result was the containment of internal inflation, yet Argentina now has an inflationary problem far worse than they had two years ago. This situation in turn has been exacerbated by the fact that they no longer have the export revenues they once did due to this policy.

Investments have all but dried up in the country and recently it was given the investment grade of a country “not to be trusted”. According to La Nación: “The uncertainty with respect to the evolution of this situation in Argentine has affected businessmen at the highest levels. `Curiously, nobody in the highest levels of government seems to know what will happen in next the 12 hours', says an executive that used to have good rapport with the administration of the Kirchners”.

And to top all of that off, the country actively engages in publishing false statistics regarding the state of the economy and inflation in particular. This in turn has deteriorated investor confidence to the point that virtually no one wants to invest any money here.

So what does the government intend to do? The Economist noted that rather than moving to correct the problems, the Kirchners have simply “whitewashed the effects of inflation” by canceling the publication of official poverty statistics. The Economist’s Intelligence Unit has also observed that Cristina has continued her husband’s “commitment to a weak currency policy... and to heterodox measures such as price caps, cross-subsidies and export taxes”. On June 10th Argentina updated the method by which it determines its Consumer Price Index. According to this new system every time a product’s price rises too sharply, it will simply be removed from the index on the theory that consumers will switch to other goods after being deterred by the new cost.

Energy is going to be one of the largest issues plaguing Argentine stability. Nestor put a freeze on prices about six years ago in an attempt to level inflation in other areas he could not control. This prize freeze has had two long term effects:

• The industry has pretty much halted research & development and the expansion of facilities and services;
• Investment, particularly foreign, has dried up in that sector.

Next we have issues regarding the petroleum industry. The penguins have been actively controlling internal prices. Why? Again, they are trying to artificially manipulate inflation in the country by putting price caps on items they can control hoping that once the overall cost of living is averaged out inflation will remain at a manageable level. Of course this is not working out as well as hoped.

At the heart of this matter is the fact that the price for a barrel of oil is around U$S40 dollars internally while imported oil is going for nearly U$S 140. The only solution to this situation seems to be either raising the internal price of oil to match that of international rates or to raise taxes so that the government can subsidize the oil industry.

La Nación recently noted: “In Buenos Aires Province the situation has been repeated in several locations. In Bolívar, a town of 30,000 inhabitants 300 kilometers from Capital Federal, there are 12 service stations that have not sold any gasoline or diesel since last Sunday. In La Plata, as much as 90% of the service stations were out of fuel as of yesterday. Meanwhile, Mar del Plata is also experiencing fuel shortages. In San Juan the fuel shortage worsened with gas rising to about 30 pesos. Recently in San Salvador, a municipality of Jujuy, a state of emergency was declared regarding transportation services due to a lack of diesel. In Mendoza diesel is selling at the price of 30 to 50 pesos, and Tucuman is experiencing long lines in stations in the capital to purchase fuel, fuel that many stations no longer have. In many of the interior zones such as Santa Fe, Santiago del Estero and Chaco more than 50 percent of the stations are shut down”.

The interesting thing is that at a time of international food shortages and increasing prices, Argentina is potentially in the best economic situation it has found itself in for decades. Yet the political climate here is such that it is very probable that Argentina could find itself continuing its cycle of “boom or bust”.

I certainly hope not. Read more!

A "Country in Crisis" or a bunch of "Twits on the Loose"?

I think that the current farm crisis is a complex issue and one that has politics at its origins and not economics. So, I think to truly understand this conflict one has to look beyond the mere numbers.

However, if one does want to look at the numbers and the economics there are two clearly valid arguments. And I am not particularly taking a side in this matter either way. I see weaknesses not only regarding the positions of each side, but also in their methodology.

Going back a few years, Menem's government slashed farm taxes. In 2002 Nestor reinstated them starting them at 10%, and then quickly raised them to 24%, then 35% and now they sit at about 44%. So, certainly one can understand the frustration of the farmers.

The initial reason the government gave for the imposition of the new taxes was to avoid the "soyization" of the economy, meaning they were hoping that by increasing the level of taxes on soy, this would in turn compel farmers to turn to increased production of other commodities such as wheat, corn, dairy and meat. Now, the problem with this thinking has to do with timing. With Argentina as the number one supplier in the world of soy meal and soy oil, and number three in soybeans behind the United States and Brazil AND with international prices for soy on the rise, the question has to be asked: is this really the time to seek to limit soy production?

A couple of weeks ago, the government then changed its story and said the taxes were created to more fairly "redistribute the wealth" in the nation through Cristina's announcement a week ago last Monday of her "Plan for Social Redistribution". In an obvious ploy to manipulate public sentiment she announced the new taxes would be used to fund 30 new hospitals, erect public housing and make roadway improvements.

Now this raises several questions and Alfredo de Angeli, president of the Agrarian Federation in the Province of Entre Rios (and recent detainee) put it best when he raised the question: why was the government so determined to change things on March 11th through increasing the farm tax so dramatically if things were going as well as the government maintains. “Low unemployment, a multi-year cycle of economic growth, commercial and fiscal surpluses” seems to be the mantra of this administration.

The simple truth is that in this scenario, the only possible answer could be that this new "redistribution of the wealth" program is nothing more than an apparent need to have access to more funding to maintain political stability. The government itself has admitted that its claimed fears of "soyization" were not true. Will it step up and admit that this new "Plan for Social Redistribution" is a joke as well?

Okay, so let's take a look at the other side of the fence. And luckily this one is much easier to explain (or at least I am going to do so more briefly).

The government has been artificially setting the rate of exchange of the peso low (deliberately devaluing it) to increase the desirability of purchasing Argentine commodities on the international market. I believe it was January of this year that the government purchased a billion US dollars to achieve that goal. I know last year they were purchasing dollars by the hundreds of millions to achieve this aim. Speaking metaphorically, dinner has been served and the bill has arrived. As the farmers have been eating at this table of plenty, the government (and with good cause) wants them to chip in on the tab. After all it is they, who have been benefiting the most from the demand for Argentine commodities stimulated by a deliberately weakened peso. Can they really cry foul in the face of high demand for their products, created by government spending to devalue the currency? If the farmers are not going to ante up, who then is expected to refill the coffers of Argentina’s foreign reserves?

Second point: Argentina is an agricultural based economy. There really isn't much other industry developed in the country at the present moment. Sure it seems unfair that historically the farmers have had to fund infrastructure. However, if they don't - who else is there that can pay that bill? There is a lack of any other viable sector in the economy that the government can turn to in regards to such costs. That is unless, GASP PANT PANT PANT, one wants to ask presidents and former presidents to open their foreign bank accounts. LOL

So is there a point to all of this? Probably not. LOL But if there is it is this: as with most arguments, debates, standoffs and crises there are at least two sides to consider. And more often than not, both merit serious consideration. That is why in the end "COMPROMISE" is the key to "saving the day". Hopefully “the forces that be” will come together and get something worked out... In the meantime I am grateful that they produce a lot of malbec wine here.
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Argentina's Farm Crisis: I say “Basta”, meaning “Enough”

Mahatma Gandhi once noted that “an eye for an eye makes the whole world blind”. In the United States we say “two wrongs do not make a right”. The grueling, 3-month-long fight between President Cristina Fernandez de Kirchner and Argentina’s powerful farmers is a prime example of what happens when these principles are ignored.

And the most interesting thing is that Argentina is undergoing its best economic situation in decades, yet because of this stalemate the mood in the streets is one of gloom and doom. "This is the most gratuitous crisis in Argentine history," political analyst Rosendo Fraga noted. "We've never seen a crisis during such favorable world conditions. ... What the president needs to do is resolve this dispute with the farmers today and immediately start rebuilding her support."

So what has the recent stalemate between the government and the farmers created so far?

Well there are over 200 routes cut off in the country, no commercialization of grain, food and fuel shortages, increasing inflation, a rise in interest rates, the Central Bank’s foreign reserves have depleted more than U$S 1.5 billion the last few weeks.

Consumer confidence has decreased by 24% over that of last year. Domestic consumption has lowered by 20%. Real wages are now stagnant at best, and poverty and income inequality are on the rise. A recent poll, take last month by the University of Belgrano found that 69 percent of people in the capital, Buenos Aires, thought another crash was "very probable". Public services costs are on the rise; the national debt is a larger percentage of the country’s GDP than that of 2001, the year of Argentina’s last sovereign default.

This situation has, in turn, led to financial, economic and political uncertainty.

So what does the government intend to do? The Economist noted that rather than moving to correct the problems, the Kirchners have simply “whitewashed the effects of inflation” by cancelling the publication of official poverty statistics. The Economist’s Intelligence Unit has also observed that Cristina has continued her husband’s “commitment to a weak currency policy... and to heterodox measures such as price caps, cross-subsidies and export taxes”. On June 10th Argentina updated the method by which it determines its Consumer Price Index. According to this new system every time a product’s price rises too sharply, it will simply be removed from the index on the theory that consumers will switch to other goods after being deterred by the new cost. Yesterday, after months of blocked highways and food shipments coupled with peaceful demonstrations the Kirchner government responded with police brutality and arrests.

So what is going to happen? Your guess is probably as good as my own. One thing remains certain in Argentina: anything is possible. I personally say: “basta”, meaning “enough”. Instead of continuing its policies of handing out wasteful welfare state handouts and redistributing the wealth, Argentina should look to a combination of real and meaningful economic reform, better monetary policy and limiting the role of government. Until that day, Argentina’s former days of glory will remain ever out of reach.

But that is just my opinion. What do you think?
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American Task Force for Argentina Video: The Impact of Argentine Debt

American Task Force for Argentina (ATFA) is an alliance of organizations united for a just and fair reconciliation of the Argentine government's sovereign debt default and restructuring.

for more information and videos click here Read more!