• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Free Trade Fact of the Day

    Protectionism is not just on the rise among liberals in the United States. Leftist governments throughout the world are seeking to quash free trade in favor of redistributionist schemes. In Argentina President Christina Kirchner’s new export taxes have sparked violence throughout the country and the Wall Street Journal’s Mary Anastasia O’Grady explains the stakes:

    But the greater motivation behind the export-tax increase is inflation. This government, it seems, will do just about anything to reduce inflation except the one thing that would solve the problem: Let the peso strengthen. It has imposed price controls on businesses; frozen, and then subsidized, energy prices; and prohibited the export of beef. Last year it fired the director of the government’s agency for inflation data because she refused to fudge the numbers. Even so, prices rose by an estimated 20% in 2007 and expectations for this year remain high. This would explain the new round of confiscatory export taxes. By discouraging farmers from sending food abroad, the government thinks it can increase food supplies inside the country and damp prices.

    While making farmers furious and reducing the incentive to produce, this does nothing to address the causes of the inflation, which are monetary expansion and the failure of the economy to attract investment and expand productive capacity. A strong peso and a commitment from the government to respect private property are what’s needed to confront rising prices.

    Instead, like loyal minions desperate to plug holes in a leaky dike, Mrs. Kirchner’s economics team is running around trying to compensate for the many Kirchner policy errors without freeing the economy. The inflation crisis is only the latest fiasco. Subsidies to offset the new export taxes cannot be far behind.

    But never mind. Kirchner power does not lie in a rational economic model. The first couple’s idea of running an economy is to tax, prohibit, regulate, subsidize and otherwise micromanage every aspect of Argentine life so that no decision can be made without checking first with them. They are, at bottom, unreconstructed authoritarians.

    Posted in International [slideshow_deploy]

    Comments are closed.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×