"Argentine President Cristina Kirchner announced this week that her government intends to nationalize the country's private pension system. If Congress approves this property grab, $30 billion in individually held retirement accounts -- think 401(k)s -- managed by private pension funds will become government property.When the role of government is as the great predator prosperity flees to safer domains.
[ . . . ]
Mrs. Kirchner won't have trouble making the case for expropriation to Congress, which is controlled by her fellow Peronists. When the Argentine government ran out of money in 2001, it blamed the market and increased its own role in the economy. Since then it has imposed price controls, defaulted on its debt, seized dollar bank accounts, devalued the currency, nationalized businesses and tried to set confiscatory tax rates with the aim of making society more "fair." Mrs. Kirchner and her predecessor (and husband) Nestór Kirchner have also preserved the Peronist tradition of big spending.
All of this has been deemed acceptable because of the "crisis." But it has come at a cost: Among emerging market investors Argentina is now considered one of the worst places on the planet to put your money. . . . Argentina, if little else, serves as a cautionary tale on how to ruin an economy."
Thursday, October 23, 2008
Argentina's Property Grab
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