24 July 2007

Be careful what you ask for

Some of the items that are not, repeat, not becoming more and more expensive every day.
(picture by johannrela)
Rounding up the economics news... Cristina K says she'll do the same as her husband, though undoubtedly she says it with many and much more sophisticated words... (That's more or less the official party line, if we're to trust those ads of the Rafael Bielsa campaign where the people didn't complain but only, happily, cried "More! More!".)

In the meantime, inflation in Kirchnerland was 0.7% in June. It was only 0.4% in No-Thinking-Men's-Land (Filmus dixit), double that in Santa Fe, and 6 times as much in Mendoza. I have to check the rest of the data, but I believe there's a definite correlation between the inflation rate of a given place and its distance to Economy Minister Miguel Peirano, quite possibly with fluctuations here and there due to the presence of Evil Neoliberals, unexpected polar airmasses, and political transvestites.

Now seriously, La Nación complains that the national government is trying to make things complicated for Macri. You know Buenos Aires has always lived off the national state. Telerman, since before his lame duck stage, and now Macri as well, have repeatedly demanded that the national state transfer the control of the part of the Federal Police that patrols Buenos Aires City to the City, something that was included in the conversion of Buenos Aires from a Federal District to an Autonomous City. Macri, in particular, wants the police to follow his orders, something quite understandable when you based your campaign on the issue of security (or rather, how to protect the middle and upper class from the lower class). The national government ignored the demand, until now. Now they want to talk about it, but it seems they only intend to give the police to Macri — not the money needed to pay for it. That's 900 million pesos, almost US$300 million, 10% of the city's budget. As Petinato would say, chan!

And that's not all. K's folks are also perfectly willing to let Macri control the subte (i.e. the underground, tube, métro), which is the preferred method of transportation for millions of porteños every day — safe, fast, environmentally clean, and extremely cheap. But don't hang on to that last adjective. The subte companies receive 250 million pesos a year in subsidies. National subsidies for a system supervised by the national government. Guess what will happen when the system is transferred to the city. Chan!

You're probably thinking I strayed off my usual territory, since this doesn't have anything to do with Rosario. Wrong! Do you know how much a passenger pays for a trip on the Buenos Aires subte? 70 cents! That's less than one-fourth the price of a cup of black coffee in any café in BA. Do you know how much a passenger pays for a (much slower, much dirtier, and usually shorter) trip on a bus in Rosario? 1.20 pesos. That's half the price of a cup of a coffee in most cafés here. And that's because the subsidies granted by the state to make gas oil cheaper for public transportation throughout the country, which were already very biased in favour of the capital and its metropolitan area, were decreased even more some months ago.

Now I don't have the tiniest bit of hope that the Kirchner administration will take funds from BA just to give them to us. But the funds should never have been granted to BA in the first place. The unsubsidized subte ticket will probably cost about AR$1.60, more than twice what it does now, but certainly not unpayable. I don't see the problem — that should be nice to Macri's associates and ideological supporters, who surely don't like such populist, leftist devices as subsidies, especially if they make it easier for the poor to move about cheaply in the city. And it should also be nice to the national government — with higher fees, the subte will be used less, thus saving energy (not that's there's in any way an energy crisis!) that the country needs to produce the value-added industrial goods that are fueling our economy, such as soybeans and sunflower seeds.

Alas, what Macri asked for, he will get. Is there not a lesson to learn from this?

PS: I've just added a link to an article in today's La Capital. The Santa Fe Province and the national Ombudsman offices are considering an accusation of discrimination against the national government due to the unequal distribution of the subsidies to public transport. The metropolitan area of Buenos Aires gets 86% of the country's total subsidies; Santa Fe gets 2.42%. Each bus that runs in BA gets between 9,000 and 12,000 pesos/month, while in Santa Fe they get about 3,000.


  1. Pablo –

    Has anybody figured out what correlated with the sixty-four thousand dollar question that was found in Felicia Miceli’s bathroom? (Toiletgate). It gives new meaning to the expression “flush with cash”. I know, I’m just tirando de tu cadena. ;-)

    One can only hope that the new Minister of the Economy shows a little more savvy about personal financial matters than the former president of the Banco de la Nación.

    In closing, you asked Is there not a lesson to learn from this? I think the answer is that if you don’t vote for the K’s suggested candidates, then you have to be prepared for some unpleasant consequences. Chan!

    And let me thank you and the millions of other interioristas for subsidizing life in El Capital (apologies to Karl Marx).


  2. I don't really know what to say about the Toiletgate. It's so ridiculously weird. I'm inclined to think it was all made up, but I can't forget Hanlon's razor.

    Check the post again; there's a PS.

  3. Pablo,

    Let´s suppose this goes through. Wont Macri be able to say that all of this was part of the fairy tale. Now that the State is no longer paying all those subsidies what exactly is the State going to be doing with those substantial savings? Could we expect to find more Kirchner politicians with bags of money in their lockers especially since there is going to be a continuity of policy from Mrs. K? Why does the state need to tax us so much now since they no longer have to pay for so many things? Just questions that popped into my mind right off the bat.


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