Prat-Gay fired as Argentine Finance Minister after one year

[tenorly]

Source: Bloomberg News

Argentine Finance Minister Alfonso Prat-Gay was fired on Monday after just one year in the post as a long-heralded recovery in the economy fails to materialize.

The ministry he headed will now be split into two, with close Macri family associate Luis Caputo, who was finance secretary, heading the new Finance Ministry and Nicols Dujovne, a co-founder of President Mauricio Macri's right-wing think tank Pensar overseeing the Economy Ministry.

President Macri requested Prat-Gay's resignation following disagreements over economic policy, Cabinet Chief Marcos Pea said. The economy has sunk into recession this year, defying Macri's forecast that it would return to growth in the second half. The inflation rate has likewise defied Macri's projections of "20 to 25%," rising from 24% in November 2015 to 45% currently.

"Economic policies were very erratic, with bad results," said Eduardo Hecker, a former securities regulator who now heads consultancy DEL. By firing Prat-Gay, Macri has found the perfect scapegoat for this situation.

GDP fell 3.8% in the third quarter from a year earlier, the statistics agency reported, as rising prices eroded people's purchasing power; it had grown by 2.5% in 2015, the year before Macri took office.

Read more: https://www.bloomberg.com/news/articles/2016-12-26/prat-gay-resigns-as-argentine-finance-minister-after-one-year

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Another austerity pipe dream bites the dust. Under Macri, the real Economy Minister in Argentina has been the IMF - although between these news and Macri's announcement he will sign a center-left sponsored stimulus package passed overwhelmingly by Congress, that may in fact be changing.

[cstanleytech]

1. Well if the GOP has its way this is the future for the US as well because they

dont seem to realize that programs like SS pump billions of dollars into the economy and to cut them is to cut the throat of the economy as people without money will suddenly be people spending a hell of alot less which means alot of retailers will let alot of people go which means even fewer people with money to spend and so on and so on.

[tenorly]

2. Austerity for thee; but not for me.

A kind of neo-feudalism, you might say.

But we might be luckier than the Argentines. Trump might connect with his inner populist after all, and enact some good Keynesian stimulus (even if some of it is for our already bloated MIC).

I mean, if Macri - a doctrinaire neocon trickle-downer - is abandoning austerity after seeing the disastrous results, Trump is bound to have noticed. They do go way back after all.

[Judi Lynn]

3. Just saw the video you posted. That was creepy enough, wasn't it? An endorsement for Macri by Trump.

It's so sickening to see Trump's swaggering self-importance.

He wouldn't have to do that if he didn't know what a big nothing he is.

Would love to wish both Presidents the very worst possible luck, and the quickest possible departure!

By the way, I was grasping to remember a term after reading one of your posts on Argentina 2 days ago, and couldn't grasp it. It just showed up in your Bloomberg article: "Purchasing power." That's the element which has taken the nose dive after the Kirchners were replaced by this supporter of the Argentinian military dictatorship. Those fascists also didn't do the people a lot of good economically, in addition to terrorizing them to death through torture and murder.

[tenorly]

4. Ah, well. I guess it's the least Trump could do after screwing Macri Sr. out of Lincoln West in '84.

I'm glad you brought up purchasing power, and you're absolutely right: these conservative governments almost always work hand-in-glove with big business to erode it - especially now that they feel they no longer need the "real economy."

This was certainly true in the Videla dictatorship - and of course in the Bush regime here in the U.S., when the commodities bubble that began in 2003 led to a sharp jump in prices and lower real pay. Remember when Bush would claim there was "3%" inflation, almost no matter what?

Macri himself captured this kind of attitude in an interview back in 1999 (years before the political bug bit him): "Business needs lower costs; and salaries are just another cost."

[Judi Lynn]

5. He gave himself and corporate morality away with that one: "and salaries are just another cost."

"Another cost."

Only a man of Trump's caliber could be artless enough to say that. Accidently told the truth about where they stand vs. the working class.''

Someone would have to be so profoundly bent to think that way but they clearly do see the world as being theirs.

That one absolutely stuns.