Stat Heads: How The Progressive Left Adds Up The Numbers

Down in Argentina, President Cristina Kirchner is running for re-election. As is traditional when leftist politicians run for office, she is pulling out all the stops: passing around walking around money, cooking the books, and, of course, using the powers of the state and the media to intimidate anyone who gets in her way: 

As Cristina Kirchner heads for an expected landslide re-election in Sunday's presidential voting, few Argentines are resting more uneasily than 12 economic consultants who face sanctions from her government for contradicting its calculation of the inflation rate.

In a bitter showdown, the 12 consultants are fending off government investigations, accompanied in most cases with fines of 500,000 pesos ($119,000) under an obscure consumer-protection statute called the "commercial loyalty law." Three of the most outspoken consultants have been singled out for additional criminal charges under a financial-speculation law. Their offense, in the eyes of the government, is insisting in press interviews or in their own published reports that Argentina's real inflation rate is between two and three times the official government rate of 9.9% annually.

Needless to say, Argentina's inflation numbers are not credible at all. In fact, there is no agreed upon method for calculating the country's inflation rate because no one believes the Kirchner government:  

The government has announced plans to develop a nationwide inflation index, with some advisory input from the International Monetary Fund, which might eventually supplant the current index, which is compiled based on prices in the Buenos Aires area only. But the relationship between Argentina and the IMF has been stormy for years. Argentine officials were recently angered when an IMF official suggested that, in trying to assess inflation in Argentina, the fund relied partially on estimates of provincial governments and other outside sources—none of which necessarily match the federal government rate. For the IMF to focus such scrutiny on Argentine statistics at a time of grave crisis in Europe and other wealthy countries "seems to me very much like the captain of the Titanic checking to see how the violin plays in the orchestra," Economy Minister Amado Boudou told Argentine reporters.

To protect themselves from government reprisals, many of the consultants have started disseminating their inflation data via opposition members of Congress, who then release the average for what is dubbed the "Congressional Consumer Price Index." The congressional index was 1.89% for September, compared with 0.8% for the official index.

Even some parts of the federal government, as well as groups loyal to it, no longer rely on the official inflation index. Many courts now use private inflation estimates for cases such as worker compensation claims requiring judges to set an indemnization. And even unions that are allied to the government cite the inflation estimates of private consultants during salary negotiations.

The state begs to differ, of course, with its toadies/official economists saying the inflation rate produced by Congress is "unpresentable," whatever that means. This being Argentina, there is a precedent for this sort of thing. Back in President Nestor Kirchner's administration, they raised the manipulation of statistics, and the intimidation of the statisticians, to the level of art. It's no different now. The former First Lady just lacks the subtlety of her husband.


Kirchner, btw, is expected to coast to victory. Partly that's because the opposition is fractured (hear that third partiers?) but mostly it's because the electorate can't resist a glamorous leftist who can get away with all manner of lies and intimidation, so long as she has the media, the trade unions, and the urban poor behind her. There's probably a lesson - not to mention a warning - in that. 

The Wages of Redistribution: Peruvian Agricultural Bonds

The W$J has a sad story about the hapless holders of Peruvian Agricultural Bonds (subscription only). These were bonds given to Peruvian land holders back in the Sixties when the leftist military dictatorship of Juan Velasco went on an "agrarian reform" binge. Agrarian reform was the hot progressive thing back then (and most recently reared its head in Zimbabwe and Venezuela). The way it works is this: the government takes land from the rightful owner and turns it over to The People; or, for the sake of administrative convenience, the caudillo's buddies. To give everything the veneer of legal respectability, the Peruvian government would give the owners Peruvian Agricultural Bonds, which could be redeemed for cash over a period of years. Since then the currency has been replaced twice, and then inflated into oblivion by hyper-inflation. Plus, the current (leftist) Peruvian government has disavowed the bonds. Ah, equality!

About 40 years ago, a left-wing military junta kicked Luis Huguet Nicolini, then 36 years old, off his farm near Barranca on Peru's Pacific coast north of Lima.

His 165 hectares (408 acres) of sugar cane had 10 months to go before harvest, but the dictatorship run by Gen. Juan Velasco, which had started to expropriate and break up land holdings, didn't give Mr. Huguet a chance to stay.

Mr. Huguet and thousands of others were instead issued "Agriculture Reform Bonds," paper with 20-, 25- and 30-year maturities, denominated in the now-defunct currency, soles de oro.

As you might expect, there is a trade in Peruvian Agricultural Bonds centered on a Connecticut hedge fund, which will buy your bonds for pennies on the dollar in the hope of someday winning compensation from Peru. Good luck with that.

Dreams Never End

Fox News has begun broadcasting from an alternate reality where Hillary Clinton is president and is traveling the world calling for higher taxes on The Rich and using the government to establish "fairness." There really is no other explanation for this story: Clinton: Rich Not Paying Their Fair Share In Taxes

The rich are not being taxed enough and the economy is suffering for it, Secretary of State Hillary Clinton said Thursday.

The former first lady broached the subject during a national security discussion at the Brookings Institution. She lamented that the United States has lowered taxes on the wealthy and said nations around the world need to "increase their public revenue collections" to spur investment.

"The rich are not paying their fair share in any nation that is facing the kind of employment issues (the United States is), whether it's individual, corporate, whatever the taxation forms are," she said.

The last I checked, Clinton is Secretary of State. She is not Treasury Secretary, Fed Chairman, head of the OMB, or Christina Romer. What Clinton is is a leftist who can't stop broadcasting her resentments against private capital, even as she has grown wealthy herself. What's really eye-opening is Clinton's idea of a more enlightened society:

Clinton pointed to Brazil's high taxation as an example that other countries should strive toward.

"Brazil has the highest tax-to-GDP rate in the Western Hemisphere and guess what -- it's growing like crazy. And the rich are getting richer, but they're pulling people out of poverty," she said. "There is a certain formula there that used to work for us until we abandoned it, to our regret in my opinion."

Brazil?? Is that the same Brazil that is (1) deforesting the Amazonian rain forests (2) drilling for oil using deep water platforms and (3) turning crop land over to bio-fuels. In other words, all of the things that Clinton's fellow partisans would never allow in a million years. Brazil's also famous for a glittering wealth/teeming slum dichotomy that has launched a thousands PBS documentaries. Clinton says Brazil is "pulling people out of poverty." That may be, but the level of desperate poverty seen in Rio's slums hasn't been seen in the US in generations, if ever. Anyway, what does that have to do with taxes? Has Clinton considered whether Brazil might be better off with less tax? Probably not. While Republicans must endlessly refight the Sixties civil rights movement, liberals never have to answer for the dramatic results of the tax cutting movement of the Eighties. Instead, they can just keep repeating the same tired themes: "the better to redistribute you with, my pretty!"

It should be no surprise that someone like Hillary would look to South America for a example of good governance. There, the left-wing lawyer wife of the President can herself become president, where upon she can traipse glamorously on the world stage while seizing pension funds and private savings for the social good. Some have expressed regret that Obama became president, rather than the supposedly more pragmatic Clinton. I say we would have had a 100% chance of electing a leftist with passing complexion all the same.

Government Issue

Via zerohedge comes this update from Venezuela, where a decade's worth of socialism and "nationalization" has resulted in the inevitable: price controls, currency devaluation, and energy shortages in a OPEC state: Chavez Devalues Currency

President Hugo Chávez announced a sharp devaluation of Venezuela’s currency on Friday night, a move that reflects the financial stress faced by his government since the price ofoil, the country’s top export commodity, fell from its peak as a result of the global financial crisis.

The action, which Mr. Chávez had repeatedly ruled out in the past, came after Venezuela’s economy contracted by 2.9 percent in 2009. Hampered by disarray in the oil industry and nationalizations that have shattered business confidence, the economy is expected to remain sluggish this year even as other large Latin American economies show signs of vibrancy.

The new exchange rates are appropriately deranged:

The official value of the dollar, which has remained at 2.15 bolivars since March 2005, will now be fixed at 2.6 bolivars, a rate reserved for the import of essential goods such as food and medicine.

The “oil dollar”, pegged at 4.3 bolivars, is for non-essential goods, while a third floating rate – what has until now been known as the parallel rate and currently values the dollar at just over 6 bolivars – will be formalised and managed by central bank intervention.

As Tyler says, those are the "blueprints for full economic insanity." Venezuelans are already engaged in a frenzied run on every retail shop in the country in advance of the expected inflation. To add to the chaos, Chavez is also threatening anyone who raises prices - "speculators" - with immediate attention from the army:

Hugo Chávez, Venezuela’s president, on Sunday threatened to deploy troops and expropriate businesses that increase their prices following a steep devaluation of the currency on Friday.

“I want the national guard on the streets with the people to fight against speculation,” said Mr Chávez during his weekly television show, Alo Presidente.

“Go ahead and speculate if you want, but we will take your business away and give it to the workers, to the people,” he said, stating there was no reason for businesses to raise prices.

Venezuela is on the brink of something - chaos at the very least, not that you would know that from the American media. They only care about Chavez when he's insulting George Bush or giving them hope that this time the socialist experiment will work. Instead, it is going to pieces as anyone could have predicted when Chavez started seizing banks, oil companies, etc, rather than leave them to prosper/fail on their own.

What I'd like to know is this: where are all of those wealthy American leftists who gave Chavez their imprimatur? Is this the world that they wanted for The People whom they claim to be so concerned for? Ordinary Venezuelans are looking into the maw of hyperinflation, energy shortages, and the utter destruction of their savings. Is this the revolution that Bill Ayers, Oliver Stone, Danny Glover, et al. were cheering on? It must be, since they haven't uttered a word in protest.

Jet Set Junta

David Horowitz was right! There really is an Unholy Alliance between western leftists and Muslim radicals. Leftist superhero Hugo Chavez continues look to the Middle East to gather allies in his war against the Empire - that's us - while facing an oblivious giant to the north. Are Americans even aware that first the president of Iran and now the head of the Palestinian Authority have been wined and dined in Caracas? If we're lucky, we won't ever have to know: Hugo Chavez Aligns Himself With Palestinians

In a meeting with Palestinian Authority President Mahmoud Abbas on Friday night, Venezuelan President Hugo Chavez accused Israel of aiming to "exterminate" the Palestinians.

Standing beside Abbas at the presidential palace, Chavez saluted the Palestinians for what he called their "fight against the Yankee empire ... against the genocidal state of Israel, which attacks, which kills, which attempts to exterminate the Palestinian people."

Abbas thanked the Chavez government for its support and said: "We're all on the same path."

Chavez made similar remarks on Wednesday, denouncing Israel as "a murderous arm of the Yankee empire" during a visit by Iranian President Mahmoud Ahmadinejad

This is of a piece with Chavez's recent kind words for Carlos the Jackal, a man who was simultaneously a Venezueln, a Marxist, and a Middle Eastern terrorists. There are a lot of American progressives who have attached themselves to Chavez, including the president. These are also people who consider themselves sophisticated about the ways of the world. Yet, if you suggest that there is a confluence of interests between western leftists and the Jihad, they would look at you as if you were crazy. But, the fact is that the Left's shadow war against the West (or at least the free market, Anglo-American part of the West) is a coalition of odd alliances that we are only dimly aware of.

The Revolution Will Not Be Petitioned

Alex Tabarrock over at Marginal Revolution links to a study that tracks the effects of anti-Chavez political activity can have on one's employment (or lack thereof) in Venezuela: Chavez and the Power of the State

What the authors find is shocking, albeit not surprising. Before the recall election, petition signatories and non-signatories look alike. After the election, the employment and wages of signatories drop considerably, about a 10% drop in wages relative to non-signatories. Survey evidence conducted by the authors is consistent with retaliation by Chavez supporters especially in the form of job losses in the public sector. The authors estimate that the retaliation was so widespread, many workers were pushed into informal employment, that the Venezuelan economy was significantly damaged.

OK so it's just what you'd expect, but it's nice to see someone produce a contemporaneous economic study showing the practical effects of a thuggish left-wing government at work. For all their concern for the "People," a lot of progressive governance is dedicated towards this sort of institutionalized political revenge. When the state can give you everything, they can take it all away...

The "political activity" that led to all this misery was the simple act of signing a petition to force a referendum on Hugo's government. He won (obviously), but that clearly was not enought.

Paternity Wars: Attack of the Clones

We had previously discussed the successful paternity suit that a woman brought against the President of Paraguay, who fathered a child while serving as a Catholic bishop. Now, a third child has surfaced. Wait, where did the second come from? Woman: Paraguay's Lugo has Third Child

The latest woman to claim a child with Lugo is a 39-year-old divorcee with
two adult children who said she met Lugo three years ago, after he gave up his
church leadership position. And while the two other women are pursuing paternity
claims, she says has no plans to sue the president.

Unbelieveable. Lugo was a noisily Leftist "priest" throughout his career. I have to wonder about the sincerity of his religious faith, as his adherence to Catholic teaching was non-existent. Has anyone asked him if he even believes in God?

The third woman, for her part, seems to have loved him for his skills as a community organizer:

"I fell in love because as a man, he is phenomenal. He is charismatic. He was
my ideal of a man and social-political leader," Moran told Channel 4 television.
"I do not need money or his last name for the child, because I can support my
family. I am the owner of a child day care center and have plenty of work."

Blah Blah Blah. Lugo stands revealed as yet another Leftist, "marching through the institutions," weakening them from within while aggrandizing his own political power. In this case, he was willing to trade on the religious faiths, not just of his parishoners, but also of his lovers. No one seems concerned about how a such a fabulous "social political leader" could also father and abandon children like a petty feudal baron lording it over his serfs. Some would call that hypocracy, but he did it for The Cause, so everything's cool. While Progressives have forever proclaimed themselves to be the vanguard of the future, they never fail to reveal themselves to be the proponents of political and personal arrangements that are older than recorded history.

Holy Father

I used to think Paraguay's president, Fernando Lugo, was little more than a lefty disguised as a priest/president, but no more. Now, he has set a new standard for presidential sex scandals: President of Paraguay Had a Child as Bishop

In a stunning confession, the president ofParaguay, Fernando Lugo, a former Roman Catholic bishop, admitted to fathering a child while the Vatican still considered him to be ordained.

That's right, he fathered a child while serving as a bishop, and then lied about it while serving as president. The mother - 26 years old to the president's 57 - has sued for paternity. Macho men around the world are shaking their heads and muttering imprecations against the dangers of beautiful young women. The president is subdued and a bit rueful:

“It is true that there was a relationship with Viviana Carrillo,” Mr. Lugo said, referring to the child’s 26-year-old mother. “I assume all responsibilities that stem from that, and I recognize that I fathered the child.”

And the child is already taking advantage of the powers bestowed by his unusual parentage:

(A lawyer for the mother) confirmed that Guillermo once fell from the third floor of a building and survived without a scratch. “He is the son of a bishop, no doubt,” Mr. Acosta said. “It was a miracle.”