By Michael Soltys, Buenos Aires Herald Senior Editor

However much realism the government may be displaying in the early stages of dialogue with the opposition, the state takeover of the Mahle piston ring factory in Rosario from its retreating German owners is a clear statement in the opposite direction - not only is it an assertion of a pre-electoral economic philosophy of ubiquitous interventionism but also a reinforcement of that philosophy's most conspicuous tool and symbol, Domestic Trade Secretary Guillermo Moreno, whose power and scope only seems to grow despite the electoral debacle. Moreno, the new executive director of the nationalized firm who announced in person the plans for the car parts plant on Thursday (including the preservation of its 530 jobs), thus not only consolidates his permanence but can keep dreaming about an "Argentine motor," a car which is apparently envisaged as something of a cross between India's Tata Nano and East Germany's Trabant and thus cheap in every sense of the word - a dream which justifies Mahle being officially defined as a "strategic industry." In short, all as if last month's elections had never happened.

This operation will cost the state over six million dollars in the immediate term with the outlay of a few million more in coming months - not huge sums but it is the continuing and gratuitous accumulation of loss-makers by the public purse which remains disturbing. With go-vernment spending rising 250 percent faster than state revenues this year, the Cristina Fernández de Kirchner administration badly needs to retrench and cutting back on these costly business ventures (of which Aerolíneas Argentinas with its multi-million daily costs is the most prominent example) would seem to be the most obvious and painless way of doing so. The successive outbreak of dengue and influenza epidemics this year shows that there are plenty of areas where the state should be spending money within its core areas of health, education and welfare without ploughing millions into the invasion of the private sector.

The government can always point to cases such as General Motors to argue that it is not doing anything not being attempted elsewhere in the world and there can be no doubt that the rescue of their jobs by new owners with deep pockets is good news for the Mahle workers themselves. The worry is of this forming part of a pattern (including the Massuh paper mill, for example) which adds more holes to those deep but shrinking pockets.