From Joe Foudy, a nice piece about international trade in Argentina. Old news, but new to me. Here’s a taste:
In a desperate gambit to save local jobs and central bank reserves, the government has since 2010 implemented a series of economic regulations that seem to mix purposeful self-delusion—akin to closing the window shade and claiming it’s nighttime—with discredited economic theories last taken seriously during the era of black-and-white television.
[I]n March 2011, Argentina’s government decided that car importers would have to match their imports with exports of equal value. … After months of negotiations, … [t]he government agreed to let BMW [import cars to sell] as long as the company’s Argentine subsidiary exported an equivalent amount of upholstery leather, car parts, and … processed rice.
It reminds me of a story Richie Freedman once told me about senior managers. In his experience, few managers learn from their mistakes.* If something goes wrong, they assume the idea was right, they just weren’t aggressive enough in implementing it. In Argentina today, we have a perfect combination of bad ideas and aggressive execution.
*That’s what impressed him about Jobs, that he did learn.