My father gave my three children a jar of pennies, and they were thrilled. We’d just opened bank accounts for each of them, and the credit union gave them a bunch of paper rolls, each to hold 50 pennies. They set out to count and fill, and soon they had $3 in pennies each. We went to the credit union and made the deposit, and they’re now watching their savings grow with the interest.
Mind you, this all happened at a credit union in the U.S., my homeland where we were recently on holiday from where we now live in Argentina. You give a bunch of pennies to a U.S. bank like Bank of America or JP Morgan Chase and they’ll charge you a couple of bucks or more to accept them, hold them and then withdraw them. Many credit unions don’t have monthly fees or heinous charges. The costs are for your own mistakes like going overdrawn.
All of this also happened in a country where inflation is pretty tame at 2.2% annual.
In Argentina, inflation is 25% annual. That is unless you believe the president, Cristina Fernandez de Kirchner. She measures it at 10% and pulls out her claws if you question her, turning your query back on you so that she never really answers you but makes you want to cry.
A deft politician? Certainly.
A good stateswoman? Not at all.
She dismisses inflation as a beneficial consequence of a bubbly economy. That was true for 2003 to 2011, when growth surged and inflation was left largely unchecked. But the economy has since run out of fizz. This should bring down inflation on less demand, and hence price cuts to keep people shopping. But no, it continues to rise as the government signs off on large wage hikes, prints pesos, pushes up public service rates and taxes, and basically errs in its economic policies. Private economists warn of 30% inflation in 2013.
I’d like to shout out on the behalf of my family, for my three Argentine children. But that would only fall on deaf ears, which may be worse than inflation itself. Too many people just go along with inflation without much of a hoot, almost with the pride that, hey, it’s been worse before so just get on with it.
Of course, if you are a government minder or a tax official and you are reading this, I know what you’re thinking – we’d better silence this guy by deploying the trolls in the comments section to write disconcerting threats IN CAPITALS. Or unleash an ideological devotee to wax critically and eloquently about my equivocations so as to put me to shame and steer the masses to praise their economic plan, the famed model. So write down my address and tax number and come after me. That’s what you do. You don’t think, man, maybe our economic model and our ideological ways are erring and we ought to change things so that pennies matter and children can start counting jars of centavos and saving for the future.
It’s good to think about change.