Corruption in Argentina

[Daddy Rulz]

OK. Argento, you try to sound smart insulting one time after the other the Argentine people like that, but the true is that I've never seen in my life so resentful and dumb a fellow as you.

No wonder you paid U$S 10.000 of a bribe no one, with a minimun of common sense, would have ever paid.

I honestly swear to God don't mean to offend, but this again is so typically Argentine. Not that the bribe in and of itself is wrong, but rather that you paid too big of a bribe. So appropriate for this thread.

In most developed countries, it's against the law not only to receive a bribe but to pay one as well. Not saying good, not saying bad. I will say though that I think it harms your country, 1 dollar or 10,000 dollars. The entire culture of corruption will forever limit Argentina in it's development.

Which is great for me because, like Dickhead, I don't want to bank or own a business there, just live and fuck lots of cute girls. I hope it never changes. Bring on the next crisis!

[Julio]

It just proves that Rock Harder's old boss was perhaps a triffle harsh in saying how stupid Argentinos are.

Argento

OK. Argento, you try to sound smart insulting one time after the other the Argentine people like that, but the true is that I've never seen in my life so resentful and dumb a fellow as you.

No wonder you paid U$S 10.000 of a bribe no one, with a minimun of common sense, would have ever paid.

[Andres]

You have a great misunderstanding about what is income, (profit) and what is cash-flow. Income, (profit) is what you have left after your costs.

Wrong. Income and profit are two different concepts.

At some stage, and with the decline in soy prices, after selling their products, all the income will be main-lined to the government.

Wrong. That would happen with a fixed, high tax rate, not with a sliding one. In fact, many members of FAA wonder what they had to gain with rejecting the proposal sent to the Congress, since now they are worse off with a fixed 35% tax rate.

Methinks this is the Peronist class-war; the workers against the landed gentry, represented in a different guise.

There is a class struggle, that's for sure. We already discussed it.

And incidently, the reality is that broad-acre crops are an industrial product.

Argento

Not in the way Rock tried to refer to since, with the exception of soy oil, they are not transformed or manufactured in Argentina, merely exported as crops.

Andres

[Andres]

Industry, was thought in terms of production. Maybe it is not the correct term, but the agriculture is a form of industry, Its production is industrialized, in its extension there are plants (factories) that make flour and oil from the seeds.

The big exporters are surely making a fortune. The primary fault of the tax, was that it was based on the revenue rather than the profit. That is why it was so unfair for small producers, apart from being so high.

The problem with using the term industry in this case is that, paradoxically, many farmers are leaving "production" of milk and meat to planting and exporting soy, because the latter is much more profitable and demands much less investment in terms of manpower. In fact one of the concerns of letting farmers getting away with a "low" sliding scale is that prices of basic foods such as milk and meat will rise given the surge in internal demand and stagnating productions levels.

Andres

[Argento]

This is just an example of how difficult is to tax middle and high class incomes. Unfortunately, when you deal with public policies, you have to take it into account.

I don't understand your mention of "industry" on your comment, unless that you consider crops as industrial goods.

Andres

You have a great misunderstanding about what is income, (profit) and what is cash-flow. Income, (profit) is what you have left after your costs. This is the only country in my experience that seeks to tax cash-flow, irrespective of profit. At some stage, and with the decline in soy prices, after selling their products, all the income will be main-lined to the government. If it is such a great idea, why not apply it to all businesses across the board? Confiscate 45% of all the cash-flow from all of the businesses. Boy, wouldn't there be some pot-banging then. Methinks this is the Peronist class-war; the workers against the landed gentry, represented in a different guise. And the nation generally as a whole, Andres being part of the group of exceptions, didn't buy it. It just proves that Rock Harder's old boss was perhaps a triffle harsh in saying how stupid Argentinos are. Enough rebelled against the Peronist camp so maybe there is some hope. But obviously not for you Andres. You still have your cock firmly in your paw, peddling such socialist crap. If socialism is the answer, give us a pointer in the direction of just one country where it has been as successful as the Western democracies? And incidently, the reality is that broad-acre crops are an industrial product.

Argento

[Mike Cockburn]

Industry, was thought in terms of production. Maybe it is not the correct term, but the agriculture is a form of industry, Its production is industrialized, in its extension there are plants (factories) that make flour and oil from the seeds.

The big exporters are surely makeing a fortune. The primary fault of the tax, was that it was based on the revenue rather than the profit. That is why it was so unfair for small producers, apart from being so high.

I agree, but then you say:

I don't know where you get the 80% taxation. I guess that you take it from the sliding scale taxes when the international soy price rises over acertain value (in fact, tax is 95% if it gets over USD 600/ Ton)

In fact, what they did is increase it over 6% provided that the price remained at the November 2007 values. Only those values exceeding it would be taxed higher (hence the sliding tax idea) However, the media was pretty effective in convincing people that farmers are almost bankrupt.

This is just an example of how difficult is to tax middle and high class incomes. Unfortunately, when you deal with public policies, you have to take it into account.

I don't understand your mention of "industry" on your comment, unless that you consider crops as industrial goods.

Andres

[Andres]

I think they should apply taxes on more sectors and on individuals.

The tax for the rich and middle class is very low. It is a small tax haven.

I agree, but then you say:

I was against resolution 125. The tax was as high as 80%. That is too much! Some farmers were loosing money. They could have just increased it 10% and gotten away with it.

Overtaxation leads to poor productivity. If the industry were allowed to increase their production. The tax income would increase.

I don't know where you get the 80% taxation. I guess that you take it from the sliding scale taxes when the international soy price rises over acertain value (in fact, tax is 95% if it gets over USD 600/ Ton)

In fact, what they did is increase it over 6% provided that the price remained at the November 2007 values. Only those values exceeding it would be taxed higher (hence the sliding tax idea) However, the media was pretty effective in convincing people that farmers are almost bankrupt.

This is just an example of how difficult is to tax middle and high class incomes. Unfortunately, when you deal with public policies, you have to take it into account.

I don't understand your mention of "industry" on your comment, unless that you consider crops as industrial goods.

Andres

[Daddy Rulz]

And Daddy, didn't you get a trucho 50 at some coffee shop and threaten to sleep on the counter until they made good on it?

I forgot all about that, yes I did. It was at the cafe on Corrientes and Maipu or Esmeralda. They didn't want to exchange the bill and it got pretty heated. They assumed that because I looked and sounded like a tourist I would just hang my head and leave. Wups, I did indeed tell that pelotudo I would sleep on the counter until I got my change.

Doesn't top my buddies story of the real estate agent that switched out 600 bucks on his deposit though. He had to give a 1500 dollar deposit, along with two months rent for a total of 4500 dollars. Before he came to BsAs he had gone to the Bank of America in Seattle and got 45 100 dollar bills, it was still in the bank envelope when he gave it to the agent. While he inspected the apartment he had his Argentinian wife who was 8.9 months pregnant counting money with the agent. During the counting she had to take a pee. When he got back with the agent, the agent had separated 6 bills saying they were trucho. Upon inspection they were, so one of two things happened. Either he got 6 100 dollar bills from the B of A printed on copy paper with the same serial number or the agent came to the meeting prepared to rob him if the opportunity presented itself. You can decide for your self which is more likely.

More telling about this transaction and how ingrained corruption is in the psyche of S America (not just Argentina but it is high art there) was Sofi's reaction to this story. She said "why didn't he compare them to the list?" I said "what list?" She answered the paper he had written all of the serial numbers on, or the paper he photocopied the bills on." When I told her he hadn't done that she asked "then how did he expect to get the same bills back from his deposit?" When people buy houses there do they sit in a little room in a bank and count and verify the money? I'm serious about this question. Bad you have bought a shitload of apartments, how do the mechanics of that transaction work?

She was not surprised, shocked, amazed or anything by the actions of the agent. Rather the converse, she was amazed that a man as intelligent as my friend would be so dumb to expose himself to being robbed like that. I tried explaining how long the agent would spend in jail in the EEUU for doing that but I could see that she just couldn't grasp the idea. She couldn't imagine local police coming in, then calling the Secret Service and FBI to report the debased currency, and somebody for damn sure investigating not only who tried to screw who but also the source of where the money had come from. It was just completely outside of her experience to have an expectation of justice in a crime like this. She didn't really even think of it as crime, just a smart Portenyo taking down an unwary Yanqui, she didn't like it because he is my best friend, but had it been a stranger I doubt if she would have even given it a shoulder shrug.

[Dickhead]

I like living here too. I have a degree in Latin American history and have studied the history of the country quite thoroughly. So all this crap about not understanding why things are the way they are here is a little tough to apply to me. I have been all over the former Spanish colonies and I do understand why things are the way they are. Furthermore, I knew about the racism and corruption (and inefficiency) before I moved down here. The racism doesn't affect me since I'm white, and the corruption is a minor nuisance since I don't do banking here, or own property.

Here's the kind of shit that drives me nuts.

Carrefour Story #1: Sign says, "15% off on X, Y, and Z if you use any debit card. " X happens to be "bebidas" so I buy a bunch of booze, go to the check out counter, hand over my VISA debit card, and get no discount. "Why? " I ask. "This is not a debit card. " "It says 'debit' right on it, right here (pointing). " "Well, our system says it's a credit card. " "How many legs does a dog have if you call the tail a leg? " "Five. " "No, four, because calling a tail a leg doesn't make it a leg. "

I am in the express line and people are getting impatient. I tell her to get the manager. Manager agrees it's a debit card, but it's a US debit card. I agree. "So that's why you don't get the discount. " "Here is the ad. It says any debit card. It doesn't say any Argentinean debit card. " "Well, I am not giving you the discount. " "OK, I want to talk to the store manager. And, if I don't get the discount, I'm not making the purchase. " With a heavy sigh, she manually overrides the system and gives me the discount. Later one guy who was in line congratulated me. The rest were pissed.

Carrefour Story #2: I have three quarts of Brahma in the cart so I take one out so she can run the bar code, and I tell her I have a total of three of these identical items. Before I leave the store, I check the receipt. It shows one quart of Brahma but 3 dozen eggs. I only bought one dozen eggs. Eggs are 6. 09 and Brahma is 2. 50 so I am out 7. 18. In order to rectify this, I had to:

1) Go back to the register where I had to take the beer out of my backpack so it could be rung up. Yes, folks, first make the gringo pay for the beer!
2) Go to customer service, explain what happened, and wait while they call the cashier to give her a lengthy interrogation;
3) Take the credit they gave me back through the line (that's the third time through the line if you are keeping score at home);
4) Hear the mandatory request to donate the 18 centavos to Unicef since they have no monedas; and
5) Wait several more minutes for some flunky to arrive with monedas.

Fortunately, after all was said and done I discovered I had screwed them out of two bottle deposits so I had an extra 2.48 as compensation for all this bullshit.

And Daddy, didn't you get a trucho 50 at some coffee shop and threaten to sleep on the counter until they made good on it?

[Mike Cockburn]

I see you are full of prejudices.

I am not from North America, not from Australia, nor the UK.

Ethics?

I know a lot of argentinians that bought cheap. The argentine economy would never have boosted without the devaluation. Is it ethical to be a farmer?

Nice boy.

Nice ethics.

So, you're waiting for everything to crash down so you can buy your chinese departments in Recoleta.

What I fail to understand is why, since airplanes exist, you have to be living here (bearing this torment) instead of waiting in a tropical beach our final collapse, then take a jet and materialize your incredible operation.

Since you're another exponent of the brilliant intelligence North America has sent us lately, I'm sure there must be a reason.

Please enlight me.

[Mike Cockburn]

I think they should apply taxes on more sectors and on individuals.

The tax for the rich and middle class is very low. It is a small tax haven.

I was against resolution 125. The tax was as high as 80%. That is too much! Some farmers were loosing money. They could have just increased it 10% and gotten away with it.

Overtaxation leads to poor productivity. If the industry were allowed to increase their production. The tax income would increase.

I agree on your approach of covering basic people needs, at least for not facing high crime rates in the future. But it is naive to think that the state has an endless supply of money.

Individuals and companies doesn't like to subsidize the poor and, with the state not owning those cash-cow companies, little can you have money to spend. Just recall the fiercity of the recent farm lockout, a sector who's currently enjoying an unprecedented bonanza.

Andres

[Daddy Rulz]

little can you have money to spend.

But I had to point out you went a little Yoda on us here.

Nice boy.

Nice ethics.

So, you're waiting for everything to crash down so you can buy your chinese departments in Recoleta.

What I fail to understand is why, since airplanes exist, you have to be living here (bearing this torment) instead of waiting in a tropical beach our final collapse, then take a jet and materialize your incredible operation.

Since you're another exponent of the brilliant intelligence North America has sent us lately, I'm sure there must be a reason.

Please enlight me.

JAJAJA so typically Argentine, none of us are saying we don't like it there. It's a symptom of your mass delusion of grandeur that you can't accept that your system is fucked up. "You Yanqui pigs have nothing to teach us, if you don't like go back where you came from."

I learned a lot about enjoying life in the two years I lived in BsAs. How family is more important than money, how to be a better friend. In order to do that I had to first admit that what I thought I knew might be wrong, then I was ready to observe and learn. Too bad most Latins can't break through the Machista to do the same regarding building a country.

But if they did I wouldn't be able to fuck cute girls for 30 bucks so on balance, as the song says "don't go changing."

Andres nothing after the second quote was aimed at you.

[Andres]

2) According to the chinese. Chaos, means both Crise and Oportunity. After the crise comes the oportunity. Those that bought departments in 2001-2002, made a pretty good deal.

The problem with that reasoning is that it only works for people holding large amounts of cash and only for a while (if at all, since I doubt that Recoleta-apts owners would sell their apartments cheap if a crisis arrives) It's very far away from a sound economic policy aimed at creating jobs and wealth for the long term.

I think there will be a recession, crise is a too strong word, it won't be as bad as the last crise. Aren't there signs already? The government already has problems finding funding for its expenses and the inflation skyrockets. The productivity is on decline.

Soon or later a recession will arrive. After all, you cannot keep 6-7-8% growth rates forever.

However, sound economic policies go beyond growth and recession times. You cannot change a "social agreement" just because your fundamentals are weakening. In this case, you are not dealing with the stock market but with the economy at a whole.

Andres

[Andres]

I can't stand the argentinian strikes. They really hurt the companies and in the long term themselves. In other countries, the strikes are more civilized,

For example, the pilots denies to work extra hours, If that doesn't work they gradually make the measures harder.

Strikes work that way in Argentina because only by playing at the extremes do executives sit at the negotiating table. If you just wave signs and flags, they laugh at you.

For your proposal to work, the work-relations courts has to work promptly, something that doesn't happen.

The strikes (different unions taking shifts) probably wiped out the profits and created a deficit. In that position it is logically harder to accept higher wages and pay for the necessary repairs (they had 40 or so planes on the ground)

You need to study a little bit more the case of Aerolineas before building theories of profits and losses. After the privatization, the company ceased to be profitable and was passing from hands to hands (Iberia, American, LAN Chile) once the Spaniards sold the main assets (offices in NY, Paris, etc, and planes) Of course, between every move the state covered a part of the salaries and losses in order to keep a neuralgic company running.

I have a friend working in a travel agency. She stopped selling aerolineas long ago (over a year ago) in favor of other airlines. AA is just not trustworthy, planes are canceled without notice, the employees strike all the time. Don't think for a minute, that she is the only one that has stopped selling tickets from aerolineas.

This doesn't mean very much for the Aerolineas case. As Exon explains in his posting, Aerolineas is virtually monopolic for many routes, so if you don't buy Aerolineas tickets you have to take the bus.

Andres

[Andres]

There is always money.

Like when you say "I can't, I don't have time". Everybody has time! 24h per day. It is always a question of priorities.

Don't you always have money for food and clothes no matter how little money you've got.

Isn't it more important to provide food and education, rather than building a tren bala or other big projects. Having poor people is an indirect cost, it is not only a social debt, but it is a running cost, converted in higher crime rate and low productivity.

I agree on your approach of covering basic people needs, at least for not facing high crime rates in the future. But it is naive to think that the state has an endless supply of money.

Individuals and companies doesn't like to subsidize the poor and, with the state not owning those cash-cow companies, little can you have money to spend. Just recall the fiercity of the recent farm lockout, a sector who's currently enjoying an unprecedented bonanza.

Andres