The phrase was uttered by a US president sixty years ago but has some current reminiscence after the statement this week by Luis Caputo, Argentine Economy Minister, who attacked private (prepaid) pharmaceutical companies for increasing their tariffs accuse their members: “They are declaring war on the middle class,” he tweeted after increases of more than 100% recorded since December. “We in the government will do everything in our power to defend the middle class.”
Now the National Commission for the Defense of Competition (CNDC) is trying to verify whether there was a concerted maneuver between healthcare companies.
John Fitzgerald Kennedy was that American leader who uttered the phrase against the businessmen of his country. In April 1962, after several months of negotiations, his government had reached an agreement remuneration agreement with the main unions and managers of steel companies, as a measure aimed at containing the inflation throughout the economy.
Kennedy’s attack on businessmen was leaked to the press. The following days, then, he had to go out to qualify his words. But privately he kept saying the same thing, according to historian Arthur Schlesinger, special advisor to the Democratic president’s government, who wrote in a diary memoir about his time in the White House that won the National Book Award. . Kennedy, the son of a businessman, did not want to defeat his country’s businessmen by threatening to lower the price of their products, Schlesinger said, but rather wanted to demonstrate that he was a businessman: his father had been a business man. understood the market.
In the postwar United States there was a Price Administration Office, which released a list of maximum prices and goods that were prohibited from being produced for unrestricted commercial purposes. Although under Kennedy that position no longer existed because inflation had subsided and because economists believed that the best method of keeping prices at bay was through monetary policy, making the most of the use of mathematical and modeling tools, the government continued to work on agreements with the most sensitive economic sectors to set specific prices depending on the circumstances.
“An increase in workers’ salaries above the inflation rate, especially in the steel and oil sectors, the cost of other products would increase, which in turn should be passed on to consumers. Kennedy’s plan to control steelworkers’ wages was modest and based on cooperation. His economic team hoped that this would give him leeway to implement a more aggressive fiscal policy without worrying about the possibility of overdoing it and raising inflation,” says author Zachary D. Carter in a book on JMKeynes and where he recounts how the ideas of the English economist influenced the governments of the United States.
Agreement, truce, gentlemen’s agreement. They are all euphemisms that politicians around the world, not just in Argentina, have at some point used – and will continue to do so – whenever inflation puts a strain on their efforts. From Kennedy in the postwar era to Milei in the 21st century, who attempted to establish a May and June cap on wage increases demanded by the Teamsters union and its general secretary, Hugo Moyano, or to impose fines on medical companies. for the recent increases.
But in politics betrayals are the order of the day and even more so when there is money involved in the negotiations.
“A few days after Kennedy closed the deal,” Carter continues, “the president of U.S. Steel [N.E.: una empresa de producción siderúrgica con plantas industriales en EE.UU. y Europa], Roger Blough, casually informed Kennedy that he would still raise prices by six dollars a ton. Having used Washington to lower the high wage demands of his employees, Blough intended to allow his shareholders to enjoy the benefits of the price increases.
As well as the fate of Keynesianism Perhaps Democrats had come to depend on Kennedy’s relationship with that country’s business magnates the Austro-Argentine destiny become addicted to the success of Milei’s relationship with Elon Musk but also a price-wage agreement with businessmen Argentinians to reach and support single-digit inflation in the next months.
Source: Clarin
