Argentina criminalizes economics

The Economist (subscription required) reports:

MOST Argentines reacted with a shrug when their government began doctoring its consumer-price index in 2007. Cooking the books cost holders of the country’s inflation-linked bonds at least $2.3 billion last year. But anyone else who needed to know the true inflation rate simply turned to a clutch of private economists who drew on their own price surveys, data from provincial governments and other official statistics. They reckon that inflation is now running at about 25%. That is far above the 10% reported by INDEC, the government statistics agency . . .

Guillermo Moreno, the thuggish commerce secretary, is moving to stamp out the unofficial, but widely trusted, price indices. To do so he has dusted off a decree, penalising misleading advertising, approved by a military dictatorship in 1983. In February he sent letters to 12 economists and consultants ordering them to reveal their methodology, on the grounds that erroneous figures could mislead consumers.

Some of Mr Moreno’s targets refused; the rest were analysed by INDEC, which predictably found their methods flawed. Seven of them were then ordered to pay the maximum fine of $123,000 (all have appealed).

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