The government's tilt toward its urban industrial constituents has also taken a toll on farm output. Argentina has a clear comparative advantage in agriculture: the country's vast fertile plains potentially make it an export powerhouse to rival the American Midwest. Yet early in Cristina Kirchner's rule, farmers went on strike to protest the government's efforts to skim the cream from the commodity boom by increasing taxes on exported wheat, soy, and meat.

Under Ms. Kirchner, the total tax on agricultural exports has risen to 75 percent, effectively curtailing new investment into the sector. Instead, investment is instead flowing into uncompetitive sectors favored by Perónist politicians and bureaucrats.

The most bizarre example is the government's import-substitution program in frigid Tierra del Fuego. In 2009, Ms. Kirchner sought to create jobs in this desolate region isolated from markets by distance and geography by encouraging production of consumer electronics -- that's right, TVs and smartphones. To this end, she doubled the value-added tax on imported electronics (which largely come from Asia), a move she later backed up with restrictive import-licensing requirements. She also lowered the already-minimal taxes paid by electronics companies (notably, Samsung) that assemble products in the region. The baksheesh, including exemptions from the income tax, value-added tax and taxes on imported parts, have cost the Argentine treasury about $1.3 billion -- more than $100,000 for each of the 10,000 jobs that have been created.

Argentina now faces the double whammy of a slowing global economy and productivity-sapping domestic economic distortions. The deteriorating balance of international payments is stimulating speculation about a new peso devaluation, while the country's increased levels of protectionism are generating threats of retaliation from its regional trade partners.

Less tangible, but more ominous, there has been a decline in the quality of governance across the decade. Argentina has seen a marked deterioration in the World Bank's measure of government effectiveness and the rule of law, even as the government's increased reach has produced a significant drop in most dimensions of economic freedom.

Argentina's post-crisis model is thus coming unraveled, and the economy appears on course for another reality check. As in past run-ups to disaster, Argentine wealth is fleeing the country despite the government's tightening of capital controls. A new financial crisis could be especially devastating because the country's differences with foreign debt holders (other than official lenders like the IMF) are still unresolved, effectively freezing it out of global capital markets.

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