"If you issue money, it's to give to the people who need it most. Those people exist and live and they're going to be left without enough to eat if you don't keep giving them. These are facts of reality. The government issues pesos to be present as a state."
The phrase was said by the host Pamela David on the air of the América channel this week in a program when the specialized journalist Julián Yosovitch explained in front of him that the increases in inflation in recent years and the dollar had been the product of an "uncontrolled" issuance.
"I'll interrupt you there," David stopped him, saying that none of that "mattered" because "the people who need it most don't have enough to eat" and the broadcast would help them.
The intuitive and visceral reaction of the driver, as opposed to the reflection of the specialist, is reminiscent of the impetus with which politicians react when conducting economic policy. Something that happens in the world, but in Argentina perhaps more exaggerated.
The host of American Breakfast had a run-in with economist David Yosovich.
"Gentlemen, when you get up early in the morning and look in the mirror while shaving, I want you to think carefully about one thing. Ask yourself, "What am I doing today to increase the amount of money circulating in the economy?" Richard Nixon told his economic advisers.
What about inflation?
"We will control prices and wages."
Increasing the amount of money in the economy so that people have more money to spend in their pockets has been the subject of debate in more than one cabinet.
The implementation of the Austral Plan was taking place during the government of Raúl Alfonsín and indeed there were differences between the Minister of Economy, Juan Sourrouille, and the president of the Central Bank, Alfredo Concepción, on this issue: the issuance.
The first argued that monetary policy should be restrictive while stabilization was consolidated in all contracts. The second, on the other hand, was in favour of continuing to give rediscount operations to banks, i.e. loans. The Ministry of Economy and the IMF (at the time Argentina was under a program that the international organization had supported to curb inflation and pay the debt) were against the BCRA's vision. The bank's economy representative, Ernesto Feldman, told the board.
"Gentlemen, there is a limit to the demand for money. It's not infinite."
The year was 1986.
"What do you mean it's not infinite?" Concepcion interrupted. "I do see that people always want more money," he added.
Another episode about these differences between currency and income occurred in an exchange between Eduardo Duhalde and Jorge Remes Lenicov in the midst of the crisis of the summer of 2002.
The President was pressured by criticism of all kinds (corralito, increase in poverty, negotiation with the IMF and asymmetric pesification). In a conversation he had with his Minister of Economy, he cited a piece of advice given to him by a Peronist economist friend of his, a deputy of the Social Pole and who had advised Alan García, a Peruvian president in the 1980s and whose experience ended in hyperinflation: Daniel Carbonetto.
"Daniel tells me that we have to give a salary increase and issue," Duhalde told Remes. The Minister of Economy acted as if nothing had happened while leafing through some papers. "I replied that you had told me that it could not be broadcast," Duhalde continued, "but he assures me that you are lying to me. That you have banknotes in the Central Bank, that there is money used and kept.In addition, he called Pezoa (N.E.: Juan Carlos Pezoa, Undersecretary of Relations with the Provinces) and they told me that Iribarne (N.E.: Alberto Iribarne, head of the Mint) is issuing. I want that money."
Remes Lenicov stopped what he was doing. Duhalde had come up with an avalanche of names, versions, and inquiries.
"Look, Negro, it's not like that. First, Iribarne prints at the Mint to extract old silver and put in new ones. Second, the Central Bank is absurd because it is the banks' legal reserves."
"But whose are they?" asked Duhalde.
"They're from the banks. But we can't take them out because it's broadcast."
"But Iribarne is broadcasting," the President replied.
"Black, he prints, he doesn't emit. And you can't lower reserve requirements because otherwise it would be like issuing and generating inflation. And we didn't get out of that."
Mauricio Macri was another one more tempted by monetary expansion with the December 28, 2017.
Milton Friedman wrote in his book A Monetary History of America: 1867-1960 that "inflation is always and everywhere a monetary phenomenon only if the quantity of money increases faster than the output." This happened in Argentina in 2019-2023, the amount of silver went up more than production. And Pamela David's theory of the demand for money, of issuing even more, aims to counteract the effects of that inflation. It's impossible for politicians not to rattle around with it. With theory.