Latin America

Argentina Embraces Unpleasant Old Ideas for Controlling the Oil Industry


Cristina Fernandez de Kirchner and Hugo Chavez

Argentina, where President Cristina Fernández de Kirchner pals around with the likes of Hugo Chavez and wows progressive fans, has discovered an old truth: There's no reason for government officials to take on the scary responsibilities of running actual businesses when they can boss around private companies and let the cowed "owners" take the fall for any resulting failures. That sort of separation of actual control and nominal ownership has been an understandable favorite of political leaders for along time. And the Argentine government has embraced it in spades.

NASDAQ summarizes the situation very pithily:

The Argentina oil industry has been more or less reduced to a utility under a presidential decree announced last Friday. But the new rules don't provide the kind of monopoly risk profile usually associated with lower margins.

Under the decree announced by President Cristina Fernández de Kirchner, the government will establish a commission to review the annual investment plans of all companies operating in the Argentina oil sector. The commission will reject any proposals it believes are inconsistent with national goals. Companies must submit their annual plans by September 30.

It's good to be boss without taking any of the risks, isn't it? The Financial Times adds:

For many investors, that won't be the worst of it. The commission will oversee companies' investment plans, sanction them if they fall short and, in the most  controversial aspect of the decree, periodically publish "reference prices for the sale of hydrocarbons and fuels, which will allow [oil companies] to cover the production costs attributable to the activity as well as obtain a reasonable profit margin."

So, to summarize: You can still "own" an oil company and take all of the risks associated with that status, but how you manage the company and price your products are controlled by the Argentine state. You might say, "It places some importance on the fact that private property is not nationalized, but the control through regulation is just as real." Oh, wait … That's an excerpt from a definition for corporatism.

Yes, everything old really is new again, including the corporatist economic theories of fascism.


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  1. Jesus, has Hugo officially decided that he gets ALL the food for Venezuela to himself or what?

    Dude is fat, is what I’m saying.

    1. His boobs are so big, even Ahmajenidad can’t resist.

      1. He looks like a Latin Fat Bastard.

        1. Hate to correct you here, John. But to me he looks like a Fat Latin Bastard. (:

          1. No. I mean Latin Fat Bastard as opposed to Scottish Fat Bastard.

            1. Oh, yes, that fat bastard.

              1. “He’s a disgruntled Venezulan General known for his unusal eating habits…he weighs a metric ton..his name is Fat Latin Bastard.”

                1. Get in my belly pronto!

      2. Man, I had no idea he got all porked up. Normally when one has the medical issues he supposedly had one will lose a bunch of weight, but apparently he has a different kind of ailment.

        The one that says you should go ahead and get another dessert. Or three.

    2. I guess he’s decided to spend the last months of his life eating everything in sight.

    3. Probably on massive steroids.

      1. It’s all those Cuban empanadas stuffed with the flesh of young dissidents. So fattening.

      2. Yeah, I thought the same. Looks like steroid bloat. Or steroid bloat + massive gluttony.

        1. It is just his body taking on the physical form of his soul.

  2. Since they didn’t build it, the government can take it. Of course if your success is the result of collective effort, so is your failure. Interesting revision of the “You didn’t build that speech”.

    If you have failed, somebody along the line ruined it for you. There was a lousy teacher somewhere in your life. Somebody helped to create this unfair American system that caused you to fail. Somebody benefited from your demise. If you’re a loser, it’s not your fault. Somebody else made that happen. The Titanic didn’t sink on its own. Corporations and insurance companies made a lot of money off of it, so they must be complicit. The point is, when we fail, we fail not only because of our individual shortcomings, but also because others have teamed up behind your backs. Vote for me ? I’ll punish the guilty and give you what’s rightfully yours.…..unishment/

    1. I think that might be the best response yet to “you didn’t build that”.

    2. It’s like Obama said in today’s A.M. Links, “That $800 balance on your EBT card? You didn’t build that. Someone else made that happen.

  3. It can’t be fascism if no one calls it that.

    1. You know who else…oh, wait, he did… nevermind!

  4. “‘It places some importance on the fact that private property is not nationalized, but the control through regulation is just as real.’ Oh, wait … That’s an excerpt from a definition for corporatism.”

    Hmm… kinda sounds like ObamaCare doesn’t it?

    1. Yep. Corporatism is back baby!

  5. Isn’t that disgusting fat commie pig dead yet? I was really hopeful there for a while that we would never have to see his fat pig face again. Maybe it would be almost as good if he loses the election. That would be a nice consolation prize.

    1. With whom would you rather dine, Hugo Chavez or Dunphy?

    2. Looks like Hyperion wants to be in Maria Pila’s next YouTube video.

  6. I’ve got a friend in Argentina who has been raging about this. Argentina is quickly turning into a shit hole again. Rampant inflation and the resumption of nationalizing the industries.

    Statism FTW!

    1. And don’t forget war. They will soon be starting a war over the Faulkins to get the people’s minds off of their failures.

      1. I don’t think it will be a war-war. The Brits are in no shape to shoot back, and Obama has already essentially told the Argentines that the “Malvinas” are theirs for the taking.

        1. Appeasing a fascist dictatorship that is going broke and wants to hide that fact from their people. Yeah, that will end well.

        2. Obama has already essentially told the Argentines that the “Malvinas” are theirs for the taking

          Really? Not only is that a dumb position to take, I can’t see any reason at all for him to state a position on the Falklands either way.

          1. That’s the thing with Obama. He says unnecessarily stupid things.

            1. He loves the sound of his own voice and has never been around anyone with the stones to tell him how stupid he is.

              1. Reminds me of Algore

          2. HRH may opine on any and all subjects as he sees fit. Who are you to question the Divine Wisdom of the Sun King?

        3. The Brit military is bad off, but the Argentinians are way worse. They have yet to replace their losses from the first war.

          Since they have a track record of stiffing foreign lenders, nobody will sell them military hardware on credit.

          They don’t even have much of a fleet to sail out there to get sunk as a distraction.

        4. Obama has already essentially told the Argentines that the “Malvinas” are theirs for the taking

          When exactly was this?

          The anniversary of the Fauklands conflict was earlier this year, and the Argies were making a big ‘ol stink about it as usual, rabble-rousing and whatnot…. The Brits helped out by calmly reminding them that they’d gladly kick the Argies ass again if they really wanted to throw down… and the US – just like they did in the 80s – stated public neutrality, all while telling everyone behind closed doors that they’d still back the UK.

          The closest you could get to saying Obama has been different than any other president on this subject is pointing out that in 2010, The OAS General Assembly again recommended ‘negotiations’ between Britian and Argentina…and the US *didn’t* boycott the event or veto the ‘statement’.

          I’m no obama fan, but on this issue, the most he’s done is confuse the Malvinas with the Maldives.

        1. Christopher Faulkin A.

    2. Brazilians are very unhappy with the Argentinians as of late also. From what I hear, both US dollars and Brazilian Real are flying out of banks and investments in Argentina as Miss Presidente continues threatening to nationalize shit. These commies never learn, they just continue to think that if only they manage the socialism, that it will work this time.

      As far as Venezuela is concerned, I don’t think comrade Hugie is universally popular down there. My wife had a class last semester with 2 Venezuelans and both expressed some pretty instense hatred of dear leader.

      1. Joe from Lowell will tel you he is really popular and democratically elected. And you know one of these days he might lose an election if he doesn’t straighten up.

        1. Hahahaha, those were the days…

        2. Is this the same Joe who has been anonypussying here lately, or a different guy?

          1. Same Joe. He said things like the Dems were going to take control of the government and end the Iraq war and ACORN was out in America’s toughest neighborhoods doing “God’s work”. After about a month of the Obama administration when it became apparent that Obama was a complete fraud, he accused everyone of being racist and ran off. Now he has returned under a different handle in hopes of avoiding the rhetorical beatings he so richly deserves.

            1. I had forgotten the whole ‘Chavez was democratically elected so he’s immune from criticism’ bit. That was just surreal.

              1. You know who else was democratically elected, at first…?

            2. That means he could be any one of the progressobots coming over from Politico.

              Sometimes if I am drinking late at night, when they seem lurk the most, I will go on there just to get them into a foaming at the mouth blubbering rage. They are so stupid, it’s only fun once every other month or so for a couple of hours.

              1. I think some of them come from Balloon Juice, which seems to have an obsession with Reason.

                1. you know who else had an obsession with Reason?

  7. Don’t nationalize me, bro!

  8. Holy shit- talk about wasted potential. In the ’30s, Argentina was on the verge of being a First World economic powerhouse.

    1. They apparently want to become a big shithole between Brazil and Chili. Yes, what a shame. My wife was there last year, and I was looking forward to going myself. Apparently Buenos Aires is a beautiful city and great place to shop for values. With recent developments, my wife is not so keen on going back. I think we will go to Chili instead. Never underestimate the ability of commies to fuck shit up.

      1. Depends on where you go, but if you go to cities, Argentina is more scenic.

      2. When you go to Chili’s I definitely recommend the Chicken Crispers.

  9. Let’s see:

    – Lots of Germans who emigrated
    – Economic policy that very closely resembles Germany’s of the 1930’s

    I summon the Godwin

    1. In other words:

      You know who else presided over a large German population and wanted control over the means of production?

    2. I was having the same thoughts. They didn’t even try to hide their political proclivities.

      That’s not much of a disguise Herr Oberf?hrer.

  10. WHo gave her that pearl necklace?

    1. She’s really upset with me again,
      I didn’t give her what she likes.
      I don’t know what to tell her,
      Don’t know what to say.
      Everything got funky last night.

      She was really bombed,
      And I was really blown away,
      Until I asked her what she wanted,
      And this is what she had to say:
      A pearl necklace.
      She wanna pearl necklace.
      She wanna pearl necklace.

    2. She does look positively evil in that picture.

    3. Is evil sexy as good as crazy sexy?

      1. Depends on whether you want to die by professional hit squad or groinal blood loss.

      2. She can blitz my kreig anytime.

    4. WHo gave her that pearl necklace?

      Mea culpa!

    5. “You said you gave Mary Jane a pearl necklace, how much did that cost?”

      “Obviously you missed the point of that story, Brian.”

      1. “Ill pretend I’m Jamaican, man!”

  11. One of my neighbors is Argentine. It is really a great country. Can’t the communists stick to fucking up lousy countries?

    1. Seems like their current trend is to get into power in good countries, claim that the only reason the country was ever good is because it was already socialist, and that their election is a mandate to more FORWARD with more PROGRESS. Then after they steal all of the money and things start to go badly, they will say it’s because they didn’t do enough of what they were doing, and blame it all on evil capitalists.

      1. Seems like the Obama playbook.

    2. You could say that about CA. Why couldn’t they fuck up north dakota instead?

      1. This is so true. I lived in CA for 5 years, and it is so nice, sem os terremotos. I want them to get out of Maryland so bad, but I see no hope for that. I would move to North or South Carolina and hang out with the rednecks, if I could find a job there that paid well enough. North Korea would be a good place for the commies. Or Antarctica. Or maybe Pluto, that would be better.

        1. Maryland could be a nice place if not for the Commies. The bay is beautiful. The rest of the state is very easy on the eyes and it has a great climate with four pretty mild seasons. These people destroy everything they touch. They are like vampires.

          1. I know, it is something I lament about on a daily basis. They have ruined a lot of sections of Baltimore that have the potential to be such nice neighborhoods.

            1. I love Fells Point. Baltimore could be a great city again if Maryland were anything but a fucked up communist kelptocracy.

              It drives me nuts when progs sit around and congratulate themselves on what nice places the progs run. Those place were great before you got there and worse for you being there you worthless fucks.

              1. The nicest area is the Northwest, Cheswolde, Cross Country, and Mount Washington, IMHO. It’s like you are not even in Baltimore at all.

                1. I like Hampden also.

      2. I really hate them for what they have and are doing to CA. CA used to be a damn near libertarian state. And it is paradise on earth. Now it is Guatemala with a film and computer industry.

        1. I just hate them, period.

        2. I was in CA back in ’76. It really was paradise. What a fucking shame.

          Using your vampire analogy, I must remind everyone that for a vampire to get into your house, you must invite them in.

  12. My last company was an Argentinian conglomerate. I somehow suspect they’ll end up doing okay.

    1. The one guy from our Argentina branch I have seen seems to be smoking a lot lately. Can’t blame him – I guess it is stressful being in the commercial insurance and life insurance businesses and having a country ruin business and make its people poor.

      1. My former employer seems to do quite well. They had a little problem with Kirchner when Chavez nationalized their Venezualan operations, but overall, I think they’ll do okay no matter who’s in charge in Argentina. The phrase ‘too big to fail’ comes to mind. They are around 5% of Argentina’s GDP.

  13. Under the decree announced by President Cristina Fern?ndez de Kirchner, the government will establish a commission to review the annual investment plans of all companies operating in the Argentina oil sector. The commission will reject any proposals it believes are inconsistent with national goals. Companies must submit their annual plans by September 30.

    Il Duce would be so proud if he weren’t so dead.

    1. Other than germans, all of the argentinians are italian. Yes, he would be very proud.

  14. Heartwarming news from Chavezistan.…..wsrpc=401

  15. Nationalize, it’s the guarantee way of attracting foreign investment. Just ask comrade Hugo.

  16. Judging from Chavez’s atrophy and rapid baldness its nice to see cancer doing something useful for a change. Can’t wait for his weight-loss program to begin.

  17. “There’s no reason for government officials to take on the scary responsibilities of running actual businesses when they can boss around private companies and let the cowed ‘owners’ take the fall for any resulting failures.”

    Yes, this is indeed how my elders once explained “fascism” to me, back in the day. Carry on.

  18. I just went to Argentina a couple months ago on a trip sponsored by the business school at my university (USC). We visited over a dozen businesses on the trip, and the one commonality in all our visits was the fact that they all commented on the arbitrary and ridiculous economic policy of the government, and how that hampered their business. Some of the stuff (like this) is just plain idiotic. And it’s a tragedy. Argentina is a beautiful country, the people are nice, the women are beautiful, and there’s always stuff to do. It was a great place to visit, but I sure as hell wouldn’t invest money there.

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