Gross Abuse of Property Rights In Argentina
Well, maybe it's not a surprise given that it's Argentina but here is an example of total disregard for property rights:
Although the amount in question is small and likely to be ignored by most citizens and investors, the damage to property rights is large and long-lasting. Time to start crying for Argentina...
Argentine stocks plunged 13 percent Tuesday after the government announced plans to nationalize nearly $30 billion in private pension funds.
The government of President Cristina Fernandez said that it had to protect retirees as stocks and bonds fall amid the global financial crisis. But her political opponents called it a naked scramble for cash to prop up falling tax revenue.
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The nationalization would allow the government to pay off millions of dollars in debt and finance stalled infrastructure projects starved for credit, a former finance minister Miguel Kiguel told Buenos Aires-based television station TodoNoticias.
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Argentina’s private accounts were created in 1994 under President Carlos Menem, who embarked on a wave of privatization in Argentina during his 1989-1999 terms.
The pension funds are controlled by the BBVA Banco Frances, a unit of BBVA of Spain; HSBC Holdings; the insurance company MetLife Inc.; and ING Groep along with other local funds.
Argentines contribute $4.6 million to the funds every year. About one-fourth of Argentina’s 40 million citizens are affiliated with the private funds.
Although the amount in question is small and likely to be ignored by most citizens and investors, the damage to property rights is large and long-lasting. Time to start crying for Argentina...
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