Page 13 - Forbes - Asia (June 2018)

FACT & COMMENT

“With all thy getting, get understanding”

CRY FOR ARGENTINA

THE IMF IS COMING

BY STEVE FORBES, EDITOR-IN-CHIEF

ARGENTINA IS IN economic trouble— government could purchase Argentina’s
again. But the country has an opportunity entire basic money supply.
to turn the economic world upside down. Critics scof that such a move won’t
Its conservative president, Mauricio work. Ater all, Argentina already spent
Macri, is seeking a deal with the IMF for a nearly $8 billion in exchange operations
$30 billion credit facility. Since his surprise without stopping the slide. But these
win in 2015, Macri has been lackadaisical skeptics are missing a rather blatant error
about tackling runaway spending, massive Argentina made: he central bank bought
borrowing and rampant cronyism. Now pesos, thereby reducing the supply, which
the peso is under assault, as the govern- was a good thing, but then it turned right
ment has been pressuring the central bank around and increased supply by buy-
to buy more bonds with money created ing bonds. hat’s the equivalent of using
out of thin air—a sureire way to stoke inlation. Argentina a bucket to scoop out water at one end of a pool and then
has wrecked its currency time and again and seems on its pouring it back in at the other end.
way to doing so once more, the peso having lost 20% of its Macri should send his central bankers a simple memo:
value this year. Cease such nonsense immediately, and reduce the monetary
Macri is holding the rotten hand dealt by his two cor- base until the peso/dollar rate goes from 25-1 to 15-1.
rupt, tyrannical predecessors, Cristina Kirchner and When the crisis passes, which it quickly would, he should
Néstor Kirchner. But Macri won’t ind salvation with the consider something truly radical: Make the dollar Argenti-
IMF. Argentines loathe that agency, because during its last na’s oicial currency. People would gladly turn in their pesos
round of austerity measures, which were imposed 18 years for dollars at a 15-1 rate. Given their country’s sorry history
ago, unemployment rose to 20%. of monetary mismanagement, Argentines know it’s only a
here’s a simple way for the beleaguered president to matter of time before the peso is vaporized again.
stop the currency rot immediately: Buy pesos in the ex- Ecuador, Panama and El Salvador already use the green-
change markets with the government’s foreign reserves— back. Even though Ecuador was recently ruled by an anti-
about $50 billion at last count—until the peso recovers American letist, he quickly gave up the notion of trying to
all the ground it has lost. In fact, with that war chest, the reintroduce a local currency—the people wouldn’t stand for it.

William Howard Taft

Jefrey Rosen (Times Books)

Talk about a lack of respect! he 27th U.S. to the presidency, being remarkably tone-deaf
president is remembered, if at all, as the portli- when it came to practicing politics. But this slim,
est occupant of the Oval Oice. Not helping his well-researched and well-written biography
physical image is a walrus mustache that screams substantially beefs up Tat’s reputation. Tat was a
“out-of-touch/outdated.” More substantively, Tat’s remarkable man who scored major achievements
one-term tenure was a severe letdown ater the hy- during his lifetime—even during his unhappy
perenergetic and innovative administration of his stint in the White House.
always exciting predecessor, heodore Roosevelt. Tat’s lifelong desire was to serve on, if not lead,
he dazzling achiever versus the do-little dullard! the Supreme Court. He clearly had the brains and the
here’s no question that Tat was ill-suited temperament to do so. (His ambitious wife wanted

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