The Full Argentina

A blog about business and economics.
May 2 2012 11:42 AM

The Full Argentina

My latest column makes the case that the situation in Spain is basically identitical to the case of the Argentine currency peg and they might do well to imitate the Argentine combination of default and devaluation. In the piece I try hard to be realistic about the price Argentina paid for this action. There's been a tendency to create an overpolarized debate about Argentina, where people either want to damn them to hell for defying Washington Consensus orthodoxy or wave the country as a complete and total refutation of neoliberalism. The truth is that Argentina has a lot of problems, and a dose of neoliberal orthodoxy would do them some good. But default and devaluation also did them a lot of good, and it's very difficult for me to see how they'd be in a better position if they'd had the straightjacket of a dollar peg on for the past decade.

Most of all, Argentina is a valuable reminder that you really don't need to solve all your country's problems in order to avoid being in a steep depression. We recently had a mini-debate here in D.C. about our local arbitrary rule that you can't operate a liquor store on Sunday. Meanwhile in Virginia you can't operate a bar that doesn't sell food and in Maryland you can't sell wine in a supermarket. These are all bad rules and it all goes to show that the world—Spain and Argentina very much included—is full of moderately misguided arbitrary rules. But the specific labor market outcomes are still very much influenced by macroeconomic stabilization policy. Argentina claimed monetary sovereignty and has used it to get full employment. America has monetary sovereignty and is using it to achieve a high unemployment equilibrium. Spain is hostage to Germany's monetary policy priorities and the result is a deep intractable depression.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



Talking White

Black people’s disdain for “proper English” and academic achievement is a myth.

Hong Kong’s Protesters Are Ridiculously Polite. That’s What Scares Beijing So Much.

The One Fact About Ebola That Should Calm You: It Spreads Slowly

Operation Backbone

How White Boy Rick, a legendary Detroit cocaine dealer, helped the FBI uncover brazen police corruption.

A Jaw-Dropping Political Ad Aimed at Young Women, Apparently

The XX Factor
Oct. 1 2014 4:05 PM Today in GOP Outreach to Women: You Broads Like Wedding Dresses, Right?

How Even an Old Hipster Can Age Gracefully

On their new albums, Leonard Cohen, Robert Plant, and Loudon Wainwright III show three ways.

How Tattoo Parlors Became the Barber Shops of Hipster Neighborhoods

This Gargantuan Wind Farm in Wyoming Would Be the Hoover Dam of the 21st Century

Oct. 1 2014 8:34 AM This Gargantuan Wind Farm in Wyoming Would Be the Hoover Dam of the 21st Century To undertake a massively ambitious energy project, you don’t need the government anymore.
  News & Politics
Oct. 1 2014 7:26 PM Talking White Black people’s disdain for “proper English” and academic achievement is a myth.
Oct. 2 2014 9:19 AM Alibaba’s Founder on Why His Company Is Killing It in China
Oct. 2 2014 9:36 AM Beware the Chasers: "Admirers" Who Harass Trans People
  Double X
The XX Factor
Oct. 1 2014 5:11 PM Celebrity Feminist Identification Has Reached Peak Meaninglessness
  Slate Plus
Behind the Scenes
Oct. 1 2014 3:24 PM Revelry (and Business) at Mohonk Photos and highlights from Slate’s annual retreat.
Oct. 2 2014 9:08 AM Demons Are Real A horror movie goes behind the scenes on an Intervention-like reality show.
Future Tense
Oct. 1 2014 6:59 PM EU’s Next Digital Commissioner Thinks Keeping Nude Celeb Photos in the Cloud Is “Stupid”
  Health & Science
Bad Astronomy
Oct. 2 2014 7:30 AM What Put the Man in the Moon in the Moon?
Sports Nut
Oct. 1 2014 5:19 PM Bunt-a-Palooza! How bad was the Kansas City Royals’ bunt-all-the-time strategy in the American League wild-card game?