THE ECONOMIST, A FAR CRY FROM OBJECTIVE JOURNALISM

THE ECONOMIST, THE POODLE OF ANGLO SAXON FINANCIAL INSTITUTIONS AND  POLITICIANS?

The fact that The Economist lacks objectivity is a known fact, especially when it comes to reporting on issues concerning Argentina and Israel. The notorious “Argentine bashing”, The Economist seems to have set as its top priority, makes the situation even more precarious, considering that a British economic magazine has the guts to lash out at Argentine s economy, when Britain's economy is in shatters. 

AS IF BRITAIN HAS NEVER “COOKED” ITS ECONOMIC DATA

The Economist latest article on Argentina’s economy, as always paints a bleak future for the country and its “cooked books” regarding inflation figures. As if Britain has never “cooked” its economic data!!!! Granted, the topic regarding Argentine inflation data has legitimacy, what causes growing concern is how such “alleged” reputable British economy magazine lacks objectiveness, when “reporting” about Argentina. 

ARGENTINA DEFIES ORTHODOX ECONOMY AND ACHIEVING ECONOMIC GROWTH, SOMETHING BRITAIN IS APPARENTLY UNABLE TO...

This time The Economist lowered its ethic one level further, reaching that of a struggling second class boulevard magazine, seeking desperately to draw attention, thus using offensive caricature of the Argentine President on its online edition, which differs to the printed edition. It seems as if The Economist is used as the propaganda tool of certain entities in the UK who believe to benefit from such distortions in the long run, be it the current Malvinas – Falkland saber rattling which in reality is about natural resources, or the Anglo Saxon financial institution who are appalled by the fact that Argentina managed to achieve economic growth despite of being excluded from the International Financial markets and defying the doctrines of powerful International Financial Institutions such as the IMF etc.

BRITISH ARROGANCE 

The Economist's caricature of the South American leader portrayed as a WITCH is provocative, appalling and distorts the essence of a person. The fact that the magazine fails to portrait the South American leader as a person in itself is British arrogance at its best one would say. The caricature of the Argentine President is just another insult by British media since a couple of weeks ago a Falkland newspaper referred to the Argentine president as a BITCH. (see http://geopoliticsrst.blogspot.com/2012/02/british-multiple-offensive.html ) 

JUST TO RECALL:

Britain has the highest rate of unemployment in 17 years, affecting a 2.67 million people, and welfare being reduced to only those already in poverty; capitalism is at its most discriminatory, as the middle-classes are sectioned off with the rest of the population under the breadline. And though the working class may have changed in appearance, they still bear the sign of a disgruntled mob with the police being the government’s own army of soldiers.

The British economy is expected to grow at a rate of just 0.6% this year, instead of the predicted 1.6%.

UK'S NATIONAL DEPT REACHED ABOVE £1TRILLION FOR THE FIRST TIME

 
Figures released by the Office for National Statistics showed that debt has risen to £1,003.9bn, or 64.2% of GDP, up from £883bn a year ago.
The UK economy will come under increased focus end of January, when gross domestic product (GDP) figures are published for the fourth quarter of 2011 - revealing how close the country is to falling into recession. The UK will fall behind the US and Japan, which are expected to grow 1.8% and 1.7% apiece.

Given these facts The Economist should first clear its own backyard before pointing fingers at other countries.

The Economist article reads as follows:

Argentina’s inflation problem

The price of cooking the books

An extraordinarily elaborate deception may come back to haunt the government as the economy deteriorates

Feb 25th 2012 The Economist

HISTORY has left Argentines with more than their share of economic trauma. Having twice suffered destructive bouts of hyperinflation in the late 1980s, they are sensitive to rising prices. When they spot inflation their instinct is to dump the peso and buy dollars. But after the economy collapsed in 2001-02, horror at mass unemployment temporarily eclipsed the public’s fear of inflation. That has been the successful political calculation of the president, Cristina Fernández, and her late husband and predecessor, Néstor Kirchner. For years they stoked an overheating economy with expansionary policies. Faced with the resulting rise in inflation, their officials resorted to price controls—and to an extraordinarily elaborate deception to conceal the rise.


Since 2007, when Guillermo Moreno, the secretary of internal trade, was sent into the statistics institute, INDEC, to tell its staff that their figures had better not show inflation shooting up, prices and the official record have parted ways. Private-sector economists and statistical offices of provincial governments show inflation two to three times higher than INDEC’s number (which only covers greater Buenos Aires). Unions, including those from the public sector, use these independent estimates when negotiating pay rises. Surveys by Torcuato di Tella University show inflation expectations running at 25-30%.


PriceStats, a specialist provider of inflation rates which produces figures for 19 countries that are published by State Street, a financial services firm, puts the annual rate at 24.4% and cumulative inflation since the beginning of 2007 at 137%. INDEC says that the current rate is only 9.7%, and that prices have gone up a mere 44% over that period (see chart).
INDEC seems to arrive at its figures by a pick-and-mix process of tweaking, sophistry and sheer invention. Graciela Bevacqua, the professional statistician responsible for the consumer-price index (CPI) until Mr Moreno forced her out, says that he tried to get her to omit decimal points, not round them. That sounds minor—until you calculate that a 1% monthly inflation rate works out at an annual 12.7%, whereas 1.9% monthly compounds to 25.3%.


Threatening letters sent by the government to independent economists also shed light on INDEC’s methods. One was told that since the cost of domestic service was “a wage, not a price”, he should not have included it in his CPI calculations. “They have put a lot of effort and lawyers into such arguments,” he says.


Ana María Edwin, INDEC’s current boss, is unrepentant. In Ms Bevacqua’s day, INDEC artificially boosted the inflation rate, perhaps to benefit holders of inflation-linked bonds, she claims. She hints at underhand, possibly criminal, dealings between former INDEC staff, independent Argentine economists and international financiers. The evidence? That agreements between Mr Moreno and retailers to cap prices of basic products were not reflected in INDEC’s calculations before 2007. That suggests INDEC is now using some government-mandated prices rather than those that consumers actually pay.


When a product’s price spikes, INDEC takes it out of the CPI basket. “Poor people don’t just keep buying things if their price goes up a lot,” Ms Edwin explains. “They think: I will leave those tomatoes for the rich.” A proper CPI calculation does indeed involve rules for dealing with changes in buying patterns. But the potential for abuse is clear.


Some Argentine government bodies seem well aware of the true inflation rate. Foreign investors report presentations by the Central Bank mentioning a real (ie, inflation-adjusted) exchange rate that implies annual inflation of around 20%. Economists who have picked through the somewhat suspect figures for economic growth say they can discern a similar rate in the “deflator” used to correct some prices. Perhaps most intriguingly, INDEC’s and PriceStats’ inflation rates accelerate and decelerate in tandem.


The government has gone to extraordinary lengths, involving fines and threats of prosecution, to try to stop independent economists from publishing accurate inflation numbers. The American Statistical Association has protested at the political persecution faced by its Argentine colleagues, and is urging the United Nations to act, on the ground that the harassment is a violation of the right to freedom of expression.
At the government’s request, last year the IMF sent experts to help it plan a new national CPI. Ms Edwin says that the new index will not be ready until early 2014.
The longer this deception goes on, the trickier it is for the government to end. Faced with deteriorating fiscal accounts, Ms Fernández has begun to trim subsidies amounting to 5% of GDP. Their removal will push prices up further—as would a weakening of the peso. So Mr Moreno’s latest wheeze involves responding to a vanishing current-account surplus with strict import controls, which will undermine growth. Argentina has created a statistical labyrinth that might have been dreamed up by Jorge Luis Borges, the country’s greatest writer. This story is unlikely to have a happy ending.


CORRECTION: This article originally described State Street as an "investment bank". A "financial services firm" is a more accurate description of what it does. 

General Reader Comments:

When I read this kind of articles I find myself impressed. Can The Economist swear to me that it was written by an “Argy” in a top floor of a building in Puerto Madero? If so, I still think that the INDEK  affair is a bad thing, but I doubt about the objectiveness of the writer.

The Economist is a business magazine of prestige. Remember the fifth of November when Lehman Brothers broke and the worst economic crises destroy thousands of lives of "little" people (not the bank executives, of course). Well, The Economist keep the AAA rating for Lehman Brothers to the end helping the oblivion to come. Who is the liar? Argentina is not perfect but when her crisis explode (if explode), the harm will be negligible in comparison with the crises of LB.

The Economist observation is simple ridiculous compared to the inflation the us citizens are suffering since the 4 years of Obama's cooking. The Atlantic of March 2012 page 68 clearly states the Obama's cooking has bankrupted the US economy and no solution is presented by The Economist. The Economist sees Obama liking the Chinese’s bottoms every day for more loans but fails to present a solution to the US inflation. The Economist favors Obama’s cooking recipe for disaster which is the continued liking of the Chinese’s bottoms.

The Argentina economy is not as bad as the USA. Argentina economy never will reach the deficit of 15 trillion debts as the USA. On July 31, 2011 President Obama desperate demanded another 3 trillion dollars borrowed from foreign countries as the Department of Treasury did not have sufficient funds to pay the foreign debt placing the USA in a critical situation that can happen again this year. On July 31, 2011 President Obama desperation forced him to announce publicly that senior citizens on social security might not receive their checks on August 3, 2011. That is corruption. The social security funds are for the retirees not to pay the foreign debt. As you can see the economists have failed to identify what caused the USA economy to reach such deficit. Presently, the USA economy is in the same situation than July 31, 2011. No improvement has been made to relieve the 24 millions unemployed, the 44 million citizens on food stamps, the housing market, the high price of gasoline, the healthcare insurance that only a few can afford to pay. The USA economy doesn’t present a good future for me. I am planning to move to Argentina because I know I can buy fish and any other food I like to eat, have economical transportation and economical health services.