Great piece of work here from the House GOP Con­fer­ence on the stalled eco­nomic recovery…now in its 5th year.

From Greg Mankiw…

Admit­tedly, it’s not a fair visual depic­tion of Key­ne­sian Eco­nom­ics, but there are days where it sure does apply.

Per­o­nist pol­i­tics were never my forte.  All I pretty much under­stood from the few polit­i­cal cul­ture classes I took at col­lege gave me the idea that they’re left-wing, they’re typ­i­cally pop­ulist, and they’re based on personality.

(No won­der so many Nazis found the place to be so wel­com­ing after World War II.)

Well, the lat­est “Evita” wannabe is Pres­i­dent Cristina Kirch­ner, and like Eva Peron her­self, took over after her husband’s death.  It’s not gone well.  She wants to re-fight the Falk­lands Wars with the United King­dom (May she’ll last 75 days before com­plete sur­ren­der?) and ram­pant, run­away infla­tion has crip­pled their econ­omy due to mas­sive gov­ern­ment spend­ing, pla­cat­ing to gov­ern­ment and trade unions, crony-capitalism, manip­u­la­tion by their cen­tral bank, and fal­si­fy­ing gov­ern­ment eco­nomic data.

Sound famil­iar to any­one who’s been liv­ing in the U.S. since 2008 or so?

Well now they’ve double-down on fight­ing the infla­tion by tak­ing a page from the Sovi­ets, and by Sovi­ets I mean, the Gray Davis play­book and doing an all-out price freeze on com­modi­ties.  The first thing to suf­fer through this new real­ity — gro­cery items.

(Wake me when the U.S. gets asked to help with the human­i­tar­ian aide because no one will be ship­ping gro­ceries to Argentina.)

Argentina announced a two-month price freeze on super­mar­ket prod­ucts Mon­day in an effort to stop spi­ral­ing inflation.

The price freeze applies to every prod­uct in all of the nation’s largest super­mar­kets — a group includ­ing Wal­mart, Car­refour, Coto, Jumbo, Disco and other large chains. The com­pa­nies’ trade group, rep­re­sent­ing 70 per­cent of the Argen­tine super­mar­ket sec­tor, reached the accord with Com­merce Sec­re­tary Guillermo Moreno, the government’s news agency Telam reported.

The com­merce min­istry wants con­sumers to keep receipts and com­plain to a hot­line about any price hikes they see before April 1.

Polls show Argen­tines worry most about infla­tion, which pri­vate econ­o­mists esti­mate could reach 30 per­cent this year. The gov­ern­ment says it’s try­ing to hold the next union wage hikes to 20 per­cent, a fig­ure that sug­gests how lit­tle any­one believes the offi­cial index that pegs annual infla­tion at just 10 percent.

Econ­o­mist Soledad Perez Duhalde of the abeceb.com con­sult­ing firm pre­dicted on Mon­day that the price freeze will have only a very short term effect, and noted that sim­i­lar moves in Argentina had failed to con­trol infla­tion. Con­sumers shouldn’t be sur­prised if the super­mar­kets are slow to restock their shelves and offer fewer prod­ucts for sale, she added.

A more effec­tive way to con­tain infla­tion would be to “reduce gov­ern­ment spend­ing, which is financ­ing an expan­sion of the money sup­ply, and to have a cred­i­ble price index.”

Unless the rules of polit­i­cal econ­omy and trade have changed, expect to see Argentina’s gro­cery shelves bare in the com­ing weeks — if not months — as com­pa­nies look at a mar­ket which will become more and more erratic, with their imports into Argentina ham­mered by high prices they can’t pass on to con­sumers.  Even­tu­ally, the ports in Buenos Aires may even close to all imports all together.

Oh, there will still be inter­nal, domes­tic pro­duc­ers inside the coun­try, but they won’t fair much bet­ter than those from over­seas. Hyper-inflation has a ten­dency to eat a coun­try whole from the inside; espe­cially when the gov­ern­ment stymies profit mar­gin for two months all in the name of “price controls.”

So please don’t cry for Argentina one bit.  They’re about to deserve what’s on its way.

Here’s hop­ing we learn from their mis­takes before they become ours.

Worst part for the White House?  This was sup­posed to hap­pen in the 1st Quar­ter accord­ing to their script.

Then they could have blamed it on the GOP House and the fis­cal cliff.  This way, it’s all on Obama.

The U.S. econ­omy unex­pect­edly con­tracted by 0.1 per­cent in the fourth quar­ter, the first set­back in eco­nomic growth since the mid­dle of 2009.

The down­turn will inevitably fac­tor into the ongo­ing bud­get war in Wash­ing­ton. Con­gress and the White House are wran­gling over what to do with a round of spend­ing cuts set to take place on March 1 — and a pos­si­ble gov­ern­ment shut­down in late March — that some econ­o­mists have warned could fur­ther slow eco­nomic growth.

Ana­lysts had expected GDP growth to be 1 per­cent to 1.2 per­cent, but the advance fourth quar­ter esti­mate from the Com­merce Department’s Bureau of Eco­nomic Analy­sis on Wednes­day painted a dif­fer­ent picture.

The down­turn, accord­ing to the BEA, reflected lower pri­vate inven­tory invest­ment, reduced gov­ern­ment spend­ing at both the fed­eral and the state and local lev­els, as well as decreased exports.

“Reduced gov­ern­ment spend­ing” is a bogus claim.  Fed­eral spend­ing was up $31 Bil­lion in Q4 2012 com­pared to Q4 2011.   Unless the C+I+G+(X-M) for­mula has changed since I last took a macro­eco­nom­ics course…

No, what hap­pened in Q4 will likely be explored in the com­ing days and weeks. The likely answer: In antic­i­pa­tion of higher taxes from either Oba­maCare, the tax deal or both, com­pa­nies and indi­vid­ual con­sumers just stopped spending.

Or have the sto­ries about a piss-poor Christ­mas shop­ping sea­son not come out yet?  Per­haps the fact that while Ama­zon had sales jump 22 per­cent, at the same time prof­its shrink­ing 45 per­cent is a por­tent of things to come?