Naïvely, I skipped college Economics, imagining it didn't have anything to say to me. So I am playing catch up now on a very practical level (and getting great tutoring from by my daughter, a Phi Beta Kappa Economics grad and Senior Business analyst, and my husband, Argentine architect and small farmer as well).
Here are some of my lessons thus far, and the schooling continues:
· How to live with inflation
· Why one good chocolate bar costs more than an entire filet mignon
· Why Argentinians pay cash instead of credit cards and checks
· What "export quality" means
Living with Inflation. Actually I haven't figured out how to live with inflation in my five years here--I've never seen inflation like this (well over 10 percent a year, no matter what the feds say)! My grocery bill has more than doubled. Gas just went up too. The cost of a simple dinner for two with wine and dessert has jumped from around $US 10 to US$30, so we rarely go out. Even filet mignon has jumped from $1.50 to around $4 per pound (just a wee bit more than chicken). Other costs have risen similarly. We buy less meat and fowl, eat more rice, and have limited ourselves to wines under $5 a bottle for the most part.
"International Prices." Chocolate, coffee, cars…for the same quality, we spend more (in dollar equivalents) than US folks. Why? Because these are imported product and have an international price. Why would Toyota give us a break? On the other hand, some offer cheaper or stripped down models you won't find in the US, e.g., the VW Polo (a step below a Jetta), the Ford Ka (kinda like the Beetle), and Fiats that would fit in most California bathrooms with room to spare. Meanwhile, the same model computers, cameras, TVs, and other electronics cost more. Import taxes, you know!
"Export Quality." For those Northern Hemisphere residents who buy our counter-season citrus fruits (very juicy, yes?): for every perfect lemon or orange you put in your basket for a moderate price, I can buy a dozen of the “non-export quality” lemons and oranges here. . . the “Charlie Brown” fruits. I was amazed to watch the conveyer belt at La Campanita orchards…the deft hands that snatched the rejects so only the Grade AAA fruits would roll into the crates for chipping abroad.
Flowing Cash. This is a cash economy, by and large. I have never seen anyone use a check to buy anything at a stop. When we first got married, Roberto used cash to pay bills, making stops at all the offices (phone, utilities, insurance, cable TV, etc.). I tried switching us over to credit cards and paying by phone, but many firms still do not offer that option! Retail shops offer discounts for cash (because they pay a hefty fee for accepting credit cards). I meet working adults who have neither checking account nor credit card or debit card of any kind.
Encouraging people to run around with cash seems a good way to keep muggers and thieves happy, seems to me. (NOTE: I avoid doing it!) I was delighted that our insurance company just started accepting credit card payments as I worried about the young women who work alone in these offices! Plenty of offices and shops keep their doors locked during business hours—and let clients or customers in only after they ring a buzzer. (Even so, our accountant was robbed in his office, by the way.) The lack of faith in banks and the mistrust in strangers is, of course, well justified here, but boy, the ramifications are tremendous. Alas, the ATMs here are frequently out of service or just plain out of cash--and I can see why!
Dreams of Home Sweet Home? Without a hefty inheritance, buying a decent home now remain a dream for the younger generation. While a house might only cost three or four times one's salary, the buyer will need about 30% for a down payment and pay off the mortgage in four or five years!! I know my children in the US could not do that, and I sure hope more of the young adults here are going to figure something out.
Well, in the meanwhile, anyone for a premium chocolate bar?