Economy Minister Luis ‘Toto’ Caputo has given ample proof in recent days of his predilection for parallel reality.
In a kind of homage to that 1988 film and cartoon classic Las puertitas del Sr. López, with a gray cartoon protagonist who escaped his routine life by opening doors granting him access to a fictitious world, Caputo has recommended not buying clothes in Argentina while keeping inflation measurements clear of updating.
With the approval of President Javier Milei, the real decision-maker of government economic policy, the minister hardly seems to care that these decisions have led to the exit of the head of INDEC national statistics bureau and the return of suspicions that the figures are possibly being manipulated.
Nor have the reactions from the country’s textiles manufacturers condemning him left their mark. Cabinet Chief Manuel Adorni, another spinner of fantasy, has made a huge contribution to that by denying that buying jeans abroad causes unemployment.
The textile sector alone has lost almost 20,000 direct jobs during the La Libertad Avanza administration.
The disassociation from reality has its impact on the markets and on politics. A fall in the shares of Argentine companies was accompanied by the loss of confidence on the part of provincial governors who have been promised compensation for the income tax cuts accompanying Milei’s planned labour reform.
“So it’s Caputo who is to honour that pledge?” the provincial governors on whom the government depends for approval of its key bill ask themselves incredulously.
There are other recent examples of Caputo’s unreality. He needed a press article to bounce his transport secretary, who had been denounced internally some time ago for granting irregular subsidies.
He also witnessed the walkout of the head of the Unidad de Información Financiera (UIF) money-laundering watchdog over the minister’s refusal to regulate the Law of Fiscal Innocence, exposing the country to the risk of being globally blacklisted for a lack of transparency in laundering assets.
With the most control of which economic buttons to push in memory since Domingo Cavallo in the 1990s, Caputo has drawn paroxysms of praise from Milei, despite his previous failure under Mauricio Macri.
Considered by some sectors of the markets to be a “financial wizard,” it would help if the economic czar avoided abusing his magic tricks.
Argentina is expensive and hardly anybody is asking for dollars any more. Until the door shuts and reality returns.
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