Argentina heads back to easy credit -- and black market

Hold onto your hats, folks, and fasten your seat belts. We're going back to the old Argentina where prices ''rise at the speed of sound'' and where you can make 100 percent on the stock market in a week.

Argentina's new leaders - installed last week - have dropped the previous government's free-market economic approach. They plan to drive the nation toward its traditional ''dirigista'' system, meaning a controlled economy.

In Argentine parlance, this means an economy with cheap credit on one level, the black market operating on another.

Argentine leaders hope that import restrictions, announced over the weekend by the new economy minister, Jose Maria Dagnino Pastore, will protect domestic industry, get plants working again, and put more people to work.

Immediately after being named economy minister, Mr. Dagnino Pastore devalued the Argentine peso by 25 percent, lowered interest rates, and imposed a strict limitation on imports. It is the sort of economic program that Argentines can understand.

The plan, some of which is still being outlined, harks back to the 1960s, when cheap credit and import limitations fueled a moderate economic growth despite whopping inflationary rates and a black market for everything from dollars to machinery.

It is a chaotic economic world. But Argentines who learned to live with it through the 1960s and '70s gradually adjusted to the chaos, compensated for it, and in a way found it a comfortable world.

A generation of Argentines was nurtured on the chaos. And when efforts were made in the late '70s to put some order into the system by going to a free-market approach, the economy actually went into a recessionary tailspin. The economy, already bad, only got worse.

Now that brief interlude at freeing the economy appears over.

Economy Minister Dagnino Pastore is a ''dirigista.'' A moderately conservative economist, he has been an economy minister before - in 1969 under a military government headed by Lt. Gen. Juan Carlos Ongania.

Although details of Mr. Dagnino Pastore's program have yet to be detailed, Argentina's businessmen are already breathing a sigh of relief. They agree with his statement that the economy, in the 1970s and early '80s, has deteriorated at a rate ''without precedent.''

The nation, he said, is in the midst of a recession that amounts to ''a veritable national emergency.''

Inflation is running at the rate of more than 200 percent per year; the rate for the month of June was 18 percent, higher than the yearly rate for many countries.

But inflation is not the key problem in Argentine thinking. Since Argentines have learned to live with soaring inflationary rates and compensate for them, they are more concerned with cheap credit. Lack of this credit led to the highest business bankruptcy rate in history and to lagging sales of consumer goods and manufactured export items.

Moreover, the free flow of imports from abroad, which was a hallmark of the liberal, free-market economic thinking of the late 1970s, led to declining productive capacity.

This, in turn, led to the highest unemployment totals in Argentine history. The free-import policies also helped fuel a foreign debt totaling more than $35 billion.

The new economic program is likely to fuel inflation, but as one businessman said: ''We're going back to the old-time Argentina we all understand. Inflation may rise at the speed of sound, but we can live with it. What matters is that we can begin to have money to spend.''

Argentina's economic traumas were heightened by the Falkland Islands war. The Argentine treasury admits that the 10-week struggle cost Argentina at least $3 billion.

The war also cost Argentina a government. Its new leadership, under Maj. Gen. Reynaldo Bignone, took office July 1, promising to restore civilian government by early 1984.