One of the first lessons from a wrecked economy with a 99% inflation rate is that…it’s not so bad. People still eat…smile…wear fashionable clothes…enjoy music and read books.
Yes, of course, government policies are idiotic. Corruption is widespread. And everyone, trundling along on the road to ruin, gets poorer. But they don’t necessarily have a bad time.
Red hot pesos
There are cars and trucks on the road here, belching smoke, mufflers and bumpers falling off, that would never be permitted in a healthy economy. People live in ‘favelas’ — slums, where the houses are improvised, temporary, and unfinished. There are trash pickers, cartoneros, who survive by reselling cardboard and eating the food that has been thrown away. And many things are remarkably cheap.
It is this last feature that helps to make life agreeable. Nice apartments rent for only a half to a third as much as in the US. A cook or housekeeper, full time, costs only US$100 a month. A trip across Buenos Aires costs about 1,000 pesos — or US$2.50. And fuel, too, is only a fraction of the price in the US or Europe. A gallon of gas is about US$1.50.
Last night, we went out to dinner in our old neighbourhood, Palermo Soho. We hadn’t seen it in a couple years. But things change fast in Buenos Aires. The streets were full of people — people going to bars and restaurants…shoppers or just people out for a walk.
‘You have to understand’, says a friend. ‘People want to spend their money. Nobody saves it.’
We barely recognised the old neighbourhood. The shops had changed, with new bars, restaurants, shoe stores, and fashion shops on every street corner. It was bigger, with more people…and more things to do…than we recalled:
Source: Joel Bowman
Biting the hand that feeds
It also seemed more woke…more ‘leftist’…and more activist. Socialism has become a fashion statement. One restaurant had a neon sign, for example, that proclaimed that ‘Capitalism is a failure’. Pictures of Che Guevara were almost everywhere.
We walked down the cobblestoned streets to the corner of Gurruchaga and Cabrera. There, we found our favourite restaurant, the Lo de Jesus. But that too had changed. It used to be a small, corner eatery, with local customers and a simple Argentine menu. But now it has spread out into the street, serving hundreds of meals — to tourists. It has become one of the city’s popular go-to restaurants. A large group of Americans sat at the table behind us. All in the 20s or 30s, most were rather nerdy looking; we guessed that they worked for Google or Facebook.
A street musician came by. A short man, dressed in black, with a white fedora, he pulled out his guitar. We feared the worst — that he would be screeching out popular tunes as we tried to talk. But we were happily surprised. He was a concert-level guitarist playing our favourite tango music — Por una Cabeza, El Dia Que Me Quieras…and a marvellous tune by Piazzolla, which requires a remarkable level of skill to perform.
Other diners recognised his talent too. When he was finished, he was showered with 1,000-peso bills.
Disappointed by the changes in the restaurant, we were nevertheless impressed by the food — it was almost as good as ever. We ordered an elaborate selection of starters — dried ham, blood sausage, salads. These were followed by steaks, with vegetables…and two bottles of Piattelli wine (there were five of us).
We should tell you something about Piattelli. It’s a winery in the Calchaqui Valley that is owned by a family from Montana. They invested a fortune creating one of the best ‘bodegas’ (wineries) in the valley. The restaurant was superb when we went there a couple of years ago. The wine is excellent too.
The meal concluded; the cheque arrived. Oh no…it was for 100,000 pesos. Our first reaction was shock. We are still adapting to the monetary system. Then, we did the maths. Dividing by the black-market rate, the whole thing came to about US$53 per person. In a non-tourist restaurant, the same meal might be half as much.
The other half
But numbers never tell the whole story. They leave out the most important parts. There’s the price of food, but there’s also the taste of it. Who puts a price on a kiss? Who calculates the value of a kind word? Who charges for the sunrise?
There are averages, but nobody lives the average life. People live in their own particular world, with a quality all its own. And the quality of a place, too, is often missed by the numbers.
Stalin noted that ‘one death is a tragedy; a thousand deaths is a statistic’. And that is the problem with Stalin’s world. It was a world of tragedies — millions of them. The misery was recorded in memories and memoirs, but not in the statistics.
That’s what makes fraudsters out of world improvers, activists, and central planners everywhere. They have numbers. They have statistics. But they don’t know what they’re talking about.
Here, as long-term sufferers know, we don’t trust numbers — at least not those used to justify public policies. That’s why we rarely provide a forecast, estimate, or calculation without a qualifier: ‘about’ or ‘around’. Because the numbers seldom tell the truth. And the more precise the number, the bigger the lie behind it. Unpack the maths — even our own — and you find assumptions, adjustments, and enough statistical wiggle for an earthworm farm.
We don’t trust any number or any fact — even those we make up ourselves.
So, tune in tomorrow. We’ll look at the biggest scam in statistics — GDP — and the latest fraudulent numbers from the Congressional Budget Office.
For The Daily Reckoning Australia