Argentine "Ministry of Plenty" report

The problem with a planned economy is that you can't keep holding all the threads in your hand. Some you will forget, some will tangle, some will stretch and stretch and finally snap and lash against you.

As inflation started creeping into public opinion as a growing concern, the Argentine government started talks with a few economic agents (producers, distributors and sellers). The talks soon turned into "agreements", then negotiations under pressure, and finally de facto price controls. Even then, the loopholes were so many and so big that the price of most products continued rising.

The government restricted exports of beef and other sensitive products. Many cattle farmers, unsatisfied by their profits, turned their pasture land into soybean and corn crops. The slaughter and export fell. The government started monitoring the Liniers Cattle Market, which has long been the largest in Argentina. The livestock producers turned to private one-on-one transactions and to the black market, as the prices in Liniers were much lower.

The controls finally started leaking massively because of those little things that lie outside our abilities (and even President K's abilities). The price of corn rose internationally after Wargame Boy decided that the U.S. should move from dependency on foreign oil to dependency on foreign ethanol, which is produced (among other methods) by fermenting corn. Feedlot cattle in Argentina therefore became more expensive (the government is subsidizing feedlot corn). The weather in the north-center of Argentina turned rainy at the worst possible time, so the Paraná River started to rise, flooding a lot of low-lying islands in its delta, mostly in Entre Ríos, which were used as pasture for hundreds of thousands of cows; those cows are being moved at great cost to higher regions, and many are drowning or getting sick. Up goes the price again — no less than 10%, according to worried butcher shop owners, and this while the meat arrives with a noticeably lower quality.

At some point during the last year, also, the Argentine government concluded that, if you can't control the economy, you can invent it and get away with it. 2006 finished with an inflation rate suspiciously just beneath the highly symbolic mark of 10%. Fine enough. We went on vacation and everything was much more expensive than that, but hey, vacations are a luxury item, like a car. Surely beef, chicken, fruit and vegetables were more-or-less the same? Wrong. The result of meddling with the census bureau are evident. INDEC (I've already seen the spelling IndeK in the papers!) has hastily changed the methods used to calculate inflation, and nobody would be surprised to see similar changes for unemployment, GDP growth, and other figures. The scandal has given way to practical, typically Argentine skepticism — INDEC has become political and thus irrelevant. Nobody believes politicians will keep their promises; we know their job is trying to deceive us.

When the scandal first broke out, I guessed it was largely an invention of the media, because I thought things would be made clear soon; it was in the best interest of the citizenry and the government. I must correct myself now. Another high-ranking official of INDEC has just resigned, the third since December. IndeK is fast turning into a new Ministry of Plenty. Everybody, get a firm hold on your beef rations and pretend to be happy!