In Argentina, President Javier Milei has screwed the economy up so badly he needs a $20 billion bailout. That’s because his “free market” economics don’t actually work.
In Argentina, President Javier Milei has screwed the economy up so badly he needs a $20 billion bailout. That’s because his “free market” economics don’t actually work.
Or, Argentina simply has an enormous hole to dig itself out of from its previous mismanagement.
I’m not actually fond of most Libertarian policies myself, I lean socialist in general. But you can’t judge his performance purely on the basis of needing a lot of money, he wasn’t starting from a blank slate. From what I’ve read he’s actually managed to make good progress on a couple of deep economic problems Argentina had.
Except, if we were to read the article, things are materially worse than when he took office:
And Argentina’s hyperinflation is way down. Argentina had 112% inflation previously. Economies are complicated and you can have good things happening alongside bad things, for various reasons.
Inflation is arguably down mostly because of austerity measures which have not addressed any fundamental problems, only kicked them down the road.
As the article addresses, inflation is down because demand has cratered, as people are simply significantly poorer than they were before. Demand for food is down, as people don’t have the money for food anymore, so prices must come down. Instead, people have to stand in breadlines to be fed.
This isn’t a good thing. It’s the worst way of addressing inflation, as it leads to sharp increases in severe poverty without addressing any of the actual causes of inflation. The Argentinian economy is becoming less productive and the added imports means more money is flowing out of the country instead of towards it.
Before, inflation was making Argentinians poor. Now it’s Milei making them poor. In the end, poverty is just getting worse.
I get what you’re saying and agree with the basic premise, “economies are extremely complicated and it’s hard to ascribe x caused y, when so many other things can go sideways”. It drives me nuts when people think the US president controls oil prices, if they did it would just be perpetually free!
Where I wholeheartedly disagree with your message is because Milei promised quick and easy solutions to Argentina’s economy. He sold the story that 100 years of economic turmoil was due to corruption and gross incompetence. He promised he was not corrupt (which was a lie), and applying some basic economic principals would lead to a roaring economy (which never materialized and never will because economists already know the policies he’s proposing don’t work in the long run).
Yes his austerity measures led to inflation going down which his foreign apologists immediately point to, but the exchange rate skyrocketed offsetting any gains for a typical Argentine (most everything financial in Argentina is measured in USD, even ironically government fees).
If today you go ask typical Argentines “are you better off financially now than 3 years ago” the answer is going to usually be no.
I think it’s important, for at least Americans, to see that those policies don’t work. Yes it’s a valuable lesson at the expense of a ton of people, but hopefully people at least learn from others mistake. And yes I hear that narrator voice right behind me.
My point is that the simple fact that Argentina needed a bailout doesn’t mean that his policies “don’t work.” These things are more complicated than a simple red or black number in an annual balance sheet.
To be clear, I don’t like Milei. But Argentina was in a terrible state for a long time before he came to power, and whether I like a person or not doesn’t have much effect on whether his policies are effective.
And my point being is that, just because America is in tens of trillions in debt, and we’re on the verge of a massive market crash, doesn’t mean that electing an economic libertarian that plays with chainsaws, performs at rock concerts, and is a friend to powerful rich people, will get us out of this mess. Again I state, I hear that screaming narrator voice right behind me.