Dirty job, ready for Alberto Fernández – Economic Corner Policy

Argentina could not with its history. And he repeated it. The last attempt at real adjustment of a state and an economy that has accumulated distortions for decades has just collapsed. Mauricio Macri had two shots. He tried to do it with gradualism and failed. And, once the facts finished, he sought to cross the river with the help of the IMF and also failed.

As a result, a mid-term adjustment is likely to be interrupted. The result of the Paso was judged by the government and Alberto Fernández, empowered by the elections, did not even hide the objectives that he gave.

Already without power, because everyone believes that December 10, his term ends, Macri has not managed to maintain his program. And he had to give everything up. Over the past three weeks, its economic policy has resulted in a "detodounpoquismo" that contradicts all that has been done so far: devaluation resulting in a dollar much more expensive than the equilibrium exchange rate, exchange controls with finger-tags for different economic sectors by default, selective tariff, anticipating new subsidies and liquefaction of the current pesos which will result in higher inflation.

The usual suspects

All this will relax the future new president, who will now be able to open and close faucets to take Argentina anywhere, except at the end of readjustments that the country has been avoiding for decades. These readjustments were initiated by Macri and can be summarized in two main areas:

1- The fiscal adjustment of a national, provincial and municipal state and an excessive, inefficient and parasitic social security system.

2- And the reconversion of an economy full of sectors that have never had a future and exist only thanks to the subsidies of viable sectors, such as agribusiness, which will never be able to develop precisely because they hang this train necklace.

The job of throwing buckets of gasoline

With every gasp thrown by Fernandez, Macri had to react by doing the dirty work that Fernandez would not want to do if he became president, but he would be able to have fun like no other.

Fernandez said the dollar was undervalued and that there was a gross devaluation of 30%. The most backward groups of the Argentine Industrial Union celebrate. Fernández said that customs duties should be reduced in dollars and that a decree on the needs and urgency came to freeze the price of liquid fuels and gas. Fernandez explained that Argentina was de facto in default and it appeared that Lacunza had postponed the expiry date. Fernández spoke of capital flight and in less than a week, Argentina replaced a new variant of the same exchange control with which he had spent most of his life from 1930 to the present day, with a resounding success, as it is obvious.

If Fernandez is president, he will decide on the wages that will have been decimated by the new devaluation, but he will not be to blame. Low private wages help export dollars and save money by saving less. Of course, the salaries and pensions of the state, which are unpayable, will continue to be updated much faster than expected for private sector wages. Not to mention the black job. Like always. The state corporation is the most sacred and untouchable society in the country.

If Fernández is elected, he will reign over a partially rebuilt energy industry after Macri has paid the political cost of recognizing these prizes. Now Fernández will again be able to freeze rates for a while. The light is not going to be cut off. And you can even say without lying that it's a legacy left by Macri at the DNU last week.

If Fernández is president, he will be able to sit with the internal and external creditors, in dollars and pesos, under national or foreign laws: Macri will be responsible. The beneficiary will be it: the reduction of interest and capital payments will tie the rope to the neck of unproductive public spending and customers.

And if for a time there is a shortage of dollars (or if the state prefers to monopolize or distribute them by typing import permits, debts or dividends, as did Christianity), Fernández can keep the Macri minicepo or even make it worse. It will be Macri's fault forever.

A Duhalde for it to come

In the background, the panorama resembles the one that Eduardo Duhalde left in 2003 to Nestor Kirchner and his then Chief of Staff, Alberto Fernández. Almost twin surpluses, high doses of intervention in the economy, taxes on taxes reinforced by the tax on inflation, very low wages in dollars, a failure for which it is not possible. 39 was not necessary to pay interest and lights and burners still on because someone had invested previous years

The plan Fernández left practically by the mouth. We will have to see what he does with such an opportunity if he is president.