Quotulatiousness

November 28, 2024

How is Argentina doing after a year under Javier Milei?

Filed under: Americas, Bureaucracy, Economics, Government, Liberty — Tags: , , , , — Nicholas @ 04:00

I don’t normally follow South American news all that closely, as despite being in the same hemisphere, little that happens there has much importance to us here in Canada or the United States. The election of Argentinian President Javier Milei, however, has made Argentina a much more interesting place to watch as Milei valiantly attempts to turn the economy around from its near-century-long decline. Here, Dan Mitchell provides his assessment of Milei’s efforts so far:

… let’s focus today on Milei’s goal of maximizing economic liberty.

The bad news is that if he wants Argentina to become the new Hong Kong, Milei has a long journey. According to Economic Freedom of the World, Argentina ranked a lowly #159 out of 165 nations in 2022.

As you can see from the EFW rankings, Milei’s country gets especially bad scores for Sound Money, Trade and Regulation (dead last for Sound Money and in the bottom-10 percent of the world for the other two categories!).

The good news is that you don’t have to be libertarian Nirvana (or even Liberland) to make a big jump in the rankings.

You don’t even need to be Hong Kong (which used to be very good with scores above 9 but has now declined to 8.58 thanks to Beijing’s intervention).

Heck, almost every country in the western world has experienced a significant decline in economic liberty this century.

Milei actually could put Argentina in first place today merely by achieving the same level of economic liberty (8.67) that the United States had in 2004.

For what it’s worth, I think it would take several years of good reforms to climb that high.

That being said, dramatic improvements are nonetheless possible in a very short period. Here’s my back-of-the-envelope estimate of where Argentina could be by the end of next year.

October 2, 2024

Duelling reports on how Javier Milei’s Argentinian “shock therapy” is working

Filed under: Americas, Bureaucracy, Economics, Government, Media, Politics — Tags: , , , , , , , — Nicholas @ 03:00

At Astral Codex Ten, Scott Alexander tries to find something approaching the truth between the pantingly enthusiastic libertarian reports and the angrily negative progressive reports:

How is Javier Milei, the new-ish libertarian president of Argentina doing?

According to right-wing sources, he’s doing amazing, inflation is vanquished, and Argentina is on the road to First World status.

According to left-wing sources, he’s devastating the country, inflation has ballooned, and Argentina is mired in unprecedented dire poverty.

I was confused enough to investigate further. Going through various topics in more depth:

1: Government Surplus

When Milei was elected, Argentina went from constant deficits to almost unprecedented government surplus, and has continued to run a surplus for the past six months.

This wasn’t fancy macroeconomic magic. Milei just cut government spending:

This source says he cut the size of government by about 30% overall. Unsurprisingly, this eliminated the Argentine deficit.

[…]

6: Overall

When Javier Milei took office, he promised to do shock therapy that would short-term plunge Argentina into a recession, but long-term end its economic woes.

He has fulfilled his campaign promise to plunge Argentina into a recession. Whether this will long-term end its economic woes remains to be seen.

I think he gets credit for some purely political victories (completing the budget cuts he said he would complete), for decreasing inflation, and for improving the housing market. But in the end, history will judge him for whether his shock therapy eventually bears fruit. I don’t think that judgment can be made yet, and I don’t see many economists eager to go out on a limb and say that there are strong signs that his particular brand of shock therapy will definitely work/fail.

There are disappointingly few Milei prediction markets, probably because it’s hard to operationalize “he makes the economy good”. This multi-pronged mega-market has few traders, and weakly predicts a mix of good and bad things, maybe leaning a little good. But here is a more specific one:

… which compared to Argentina’s historical GDP growth rate seems — no, sorry, Argentina’s historical GDP growth rate is too weird to draw any conclusions.

And maybe the most important test:

August 9, 2024

Rare signs of growth in the Argentine economy

Filed under: Americas, Economics, Government — Tags: , , , — Nicholas @ 05:00

It looks as if Argentina is managing a trick that Justin Trudeau can’t manage — growing the national economy while keeping inflation down:

Javier Milei, 8 October 2022.
Photo attributed to Vox España via Wikimedia Commons.

During his first year as president, Javier Milei has been waging a bitter but largely successful campaign against inflation.

Now, Argentines received more welcome news: their economy is growing again.

“Economic activity rose 1.3 percent from April, above the 0.1 percent median estimate from analysts in a Bloomberg survey and the first month of growth since Milei’s term began in December,” Bloomberg reported on July 18. “From a year ago, the proxy for gross domestic product grew 2.3 percent.”

The positive economic report, based on data from the Argentine government, is a surprise to many.

The 2.3 percent year-over-year increase defied expectations of a decline of similar magnitude, Bloomberg reported. As Semafor notes, the Argentine economy was projected to have the least economic growth of any country in the world in 2024, according to the International Monetary Fund.

A “Wrecking Ball”?

Argentine economists I spoke to said that the numbers are encouraging, but the country’s economy is far from being out of the woods.

As most people know, Milei inherited an economic mess decades in the making. When the self-described anarcho-capitalist assumed office in December, Argentina was suffering from the third highest inflation rate in the world — 211 percent year over year. The poverty rate was north of 40 percent, and Argentina’s economy was declining.

With his country’s economy in a full tailspin from decades of Peronism, Milei proposed a series of economic reforms dubbed “shock therapy” that consisted primarily of three components: slashing government spending, cutting bureaucracy, and devaluing the peso.

Critics warned that these measures would be disastrous, and many took it for granted that the remedies would deepen Argentina’s recession.

The former head of the International Monetary Fund’s Western Hemisphere Department, Alejandro Werner, said Milei’s strategy could tame inflation, but at great cost.

“A deep recession will also take place,” Werner wrote, “as the fiscal consolidation kicks in and as the decline in household income depresses consumption and uncertainty weighs on investment.”

Felix Salmon, the chief financial correspondent at Axios, concurred, comparing Milei’s policies to “a wrecking ball”.

“Milei’s budget cuts will cause a plunge in household income, as well as a deep recession,” wrote Salmon.

Despite these warnings, Milei delivered his “shock therapy” plan in the first few months of his presidency. Tens of thousands of state workers were cut as were more than half of government ministries, including the Ministry of Culture, as well as the Ministries of Labor, Social Development, Health, and Education (which Milei dubbed “the Ministry of Indoctrination“). Numerous government subsidies were eliminated, and the value of the peso was cut in half.

Even before Milei’s policies were given a chance to succeed, many continued to attack them.

“Shock therapy is pushing more people into poverty,” journalist Lautaro Grinspan wrote in Foreign Policy in early March. “Food prices have risen by roughly 50 percent, according to official government data.”

Yet the official government data Grinspan cited was a report from December 2023, before Milei had even assumed the presidency.

Contrary to the dire predictions, the results of Milei’s policies have been better than even many of his supporters had dared hope.

During the first half of 2024, inflation cooled for five straight months in Argentina, the Associated Press reported in July. Though consumer prices were up 4.6 percent in June from the previous month, that’s down from a 25 percent month-over-month increase in December, when monthly inflation peaked in Argentina. Meanwhile, in February the government saw its first budget surplus in more than a decade. And just days ago, an economic report was published showing a massive decline in poverty in Argentina.

Many doubted that these successes were possible, and the conventional wisdom said that wringing inflation out of the economy and slashing government spending could only be achieved at great cost: a deepening recession.

July 19, 2024

Argentina’s decades-long struggle with inflation

Filed under: Americas, Economics, Politics — Tags: , , — Nicholas @ 04:00

At the Foundation for Economic Education, Marcos Falcone provides an update on President Javier Milei’s ongoing efforts to drag the Argentine economy back from hyperinflation:

As Javier Milei rose to power in December of last year, Argentina suffered from an annual inflation rate of over 211 percent, only behind Venezuela and Lebanon. Having risen consistently for over two decades, a combination of perpetually unbalanced budgets and investors’ distrust made money creation (and thus inflation) almost unavoidable.

In that context, Javier Milei’s first promise in his inaugural address was to avoid hyperinflation. In order to do that, his highest priority was to balance the budget so as to stop monetizing the deficit. And indeed, after just one month, the government announced in January that Argentina achieved its first financial surplus in 16 years. In successive months, the budget has been kept balanced.

Quick action seems to be causing quick effects. Indeed, inflation has plunged from 25 percent in December to an expected 4 percent in July. This is happening in a context of price readjustments, with prices like rent going down (after the government repealed rent control laws) and energy and transport prices going up (as the government is cutting subsidies). Even the IMF has admitted that inflation is falling faster than expected. In fact, inflation is coming down so fast that banks have started offering mortgages for the first time in seven years. This signals that the market expects inflation to stay down.

Milei told Argentines that the process of defeating inflation would hurt—and it has. The downside of the government’s economic plan is that the country has entered a recession which is likely to last until at least the end of the year. Amid some layoffs, the country’s industrial output is decreasing. The spending cuts that allowed the country to balance the budget have resulted in less income for provinces and specific groups like retirees.

July 4, 2024

Argentina’s inflation rate

Filed under: Americas, Economics — Tags: , , , , — Nicholas @ 03:00

As you may have noticed, my interest in Argentinian affairs increased a lot with the election of Javier Milei as President. His first six months in office, while turbulent, do seem to have the economic indicators moving in the right direction for ordinary Argentines:

Argentina’s inflation rate has recently dropped to its lowest point since January 2022, registering a monthly increase of 4.2 percent in May according to the National Institute of Statistics and Census (INDEC). Although annual inflation has slowed for the first time since mid-2023, it still stands at 276.4 percent, one of the highest rates globally.

When Javier Milei assumed the presidency in December 2023, monthly inflation had skyrocketed to an unprecedented 25.5 percent. Within five months, Milei’s administration managed to reduce this figure by more than 20 percentage points. Despite the persistently high annual inflation rate, the trend indicates potential stabilization of the Argentine economy.

Javier Milei’s reforms have been described as aggressive. In his inaugural speech, he emphasized the need to clean up the economy before implementing his promises to dollarize and close the central bank.

To achieve a zero deficit, Milei enacted a 35 percent reduction in public spending. He achieved this by closing half of the ministries and secretariats, suspending public works for a year, reducing subsidies for energy and transportation, canceling government advertising, and maintaining the 2023 budget for 2024 despite an inflation rate of 300 percent. Essentially, the government drastically cut its expenditures.

These measures, although unpopular, yielded results. Milei’s government not only avoided a deficit, but achieved a surplus, and most importantly, inflation began to decline.

Following the inflation story in Argentina recently brought to mind Henry Hazlitt’s famous 1978 article “Inflation in One Page“. As the title suggests, Hazlitt summarizes the causes and remedies of inflation in a brief and simple explanation. He argued that inflation is a consequence of government monetary policies, specifically excessive money printing due to unbalanced budgets caused by extravagant government spending.

June 8, 2024

El Loco, Argentina’s “skunk at the garden party”

Filed under: Americas, Bureaucracy, Economics, Government, Liberty — Tags: , , , , — Nicholas @ 04:00

In The Free Press, Bari Weiss talks to Argentinian President Javier Milei (through a translator) about his first six months in office:

At the start of the twentieth century, Argentina was one of the wealthiest countries in the world. The capital, Buenos Aires, was known as “the Paris of South America”.

A lot can happen in a hundred years.

Argentina today is in grave crisis. It has defaulted on its sovereign debt three times since 2001, and a few months ago, it faced an annualized inflation rate of over 200 percent — one of the highest in the world.

Why? What happened?

Argentina’s new president says it’s simple: socialism.

When Javier Milei took office in December 2023, he became the world’s first libertarian head of state. During his campaign, he made his views clear: “Let it all blow up, let the economy blow up, and take this entire garbage political caste down with it”. In case the chainsaw he wielded on the campaign trail left any question about his intentions, during his victory speech last year, he reiterated his vision: “Argentina’s situation is critical. The changes our country needs are drastic. There is no room for gradualism, no room for lukewarm measures.”

There is nothing gradual about what Milei is now doing.

He’s eliminating government ministries and services, cutting regulations, privatizing state-run companies, and purposely creating a recession to curb the out-of-control inflation.

This is why people voted for him: change. They saw someone who could shake things up in a way that could turn out to be lifesaving for the country — even if it meant short-term economic pain.

But will it work? Not all Argentines think so. And not everyone is willing or able to wait for things to improve. In April, with food prices rising and poverty up 10 percent, tens of thousands of Argentines took to the streets to protest Milei’s aggressive austerity measures.

Milei is a strange and idiosyncratic creature. There are the obvious things: He says he doesn’t comb his hair (and he doesn’t appear to). He has four cloned mastiffs that he refers to as his “four-legged children“, and which he’s named for his favorite free-market economists. He was raised Catholic, but studies the Torah. (He even quoted a Midrash during our conversation.) He used to play in a Rolling Stones cover band. And he has been known since grade school in the ’80s as El Loco, on account of his animated outbursts, which would later bring him stardom as a TV, radio, and social media celebrity.

But that’s all the superficial stuff. What really makes Milei unusual is that he is the ultimate skunk at the garden party. In a world of liberals and conservatives, he doesn’t represent either side. He is ultra-liberal on economics, but right-wing and populist on rhetoric. He is anti-abortion, but favors the legalization of prostitution. He wants to deregulate the gun market and legalize the organ trade.

He calls himself an anarcho-capitalist, which basically means he believes the state, as he told me, is “a violent organization that lives from a coercive source which is taxes”. Essentially, he’s a head of state who really doesn’t believe in states. Or at least, not theoretically.

In January, Milei showed up at Davos, the Alpine mountain resort that hosts the annual World Economic Forum. This is traditionally a place where people who all think the same way go to drink champagne and tell each other how smart they are. Milei arrived, flying commercial, and blew up that comfortable consensus: “Today, I’m here to tell you that the Western world is in danger. And it is in danger because those who are supposed to have defended the values of the West are co-opted by a vision of the world that inexorably leads to socialism and thereby to poverty.”

All of this is why I was eager to talk to Milei and put some of these questions to him: How long will it take for things to improve in Argentina? Why does he believe the Western world is in danger? What’s the difference between social justice and socialism? Can the free market really solve all of our civic problems? And how does he feel about being the skunk at the garden party? (Spoiler: He loves it.)

And despite having called journalists “extortionists”, “liars”, “imbeciles”, “freeloaders”, and “donkeys”, for some reason, he agreed to sit down with me.

June 5, 2024

“Stop viewing every inconvenience discovered in the economy as a market failure needing government intervention”

Filed under: Americas, Economics — Tags: , , , — Nicholas @ 03:00

Argentine President Javier Milei visited the Hoover Institution at Stanford and spoke about his approach to addressing Argentina’s many economic issues during his first six-months in office:

Milei recalled his years as an economist with HSBC Argentina and work advising a large pension fund. He explained how he had to remain adaptable to changing market conditions and new ideas and not make assumptions based on static economic models.

“Reality is complex, but when the model doesn’t match reality, you get rid of it,” he said. “You don’t get angry with reality.”

Milei argued that many twenty-first-century leaders see every failure of an economic model as proof of a market failure warranting government intervention.

He added that the state interventions are slowly strangling our ability to generate economic growth.

“Let us not allow the fatally conceited to destroy our lives with regulations.”

Throughout his speech of more than one hour, Milei brought up luminaries who’ve shaped his worldview, including Adam Smith, Friedrich von Hayek, Milton Friedman, Henry Hazlitt, and Murray N. Rothbard. He described how they influenced his view that everything should flow from the promotion of private enterprise and maximum possible growth, and that state intervention often only exacerbates the problem it was intended to solve.

Milei described himself as a libertarian and a minarchist who believes the role of the state is only to protect individuals and their property from aggression.

While talking about the challenges of governing and the Austrian school of economists who influenced his worldview, he suggested that it may have been his love of conflict that brought him away from work as an economist and television commentator and into the position he finds himself today.

“That’s probably why I got into politics. I love conflict.”

Milei said that his government is working to tame inflation and get public spending under control, and he applauded his economy minister, Luis Caputo, sitting in the audience.

“He’s in charge of the chainsaw operation,” Milei said, alluding to the chainsaw he brought with him to campaign rallies to symbolize his anti-spending agenda. “We are getting rid of a whole lot of things.”

“I am very happy when my economy minister gets applause. He’s making the greatest adjustment not only in the history of Argentina but in the whole history of humanity. We have already adjusted by 13 percent of GDP.”

He then turned to confront those he called “statists” and “regulators” who oppose his efforts in Argentina.

“They’re sitting in an office, and they create regulation just to justify their own existence,” he said. “This has a direct impact on innovation … They regulate just out of ignorance or just to justify the chair [they sit on], and they’re ruining our lives.”

He argued that most people in economics can’t even articulate where the state ends and the market begins.

“The market is ourselves,” he said. “When there’s talk of the market, we are the market.”

He described the market as a “social cooperation process” where “property rights are voluntarily exchanged”. He contrasted this with interaction with the state, where participants are compelled to act in a certain way.

“State intervention is always bad, because it’s based on coercion, on force, and nothing based on coercion can be good.”

May 12, 2024

Javier Milei and the “Malvinas” question

Filed under: Americas, Britain, History, Media, Politics — Tags: , , , , , — Nicholas @ 03:00

Colby Cosh on how Argentine President Javier Milei handled British press inquiries about the Malvinas Falkland Islands like a boss:

I’ve been relishing a classic feast of British press overreaction to a BBC interview with the colourful libertarian president of Argentina, Javier Milei. The Beeb’s Ione Wells visited Milei at the Casa Rosada last week in Buenos Aires for a chat, and nothing like this could possibly happen without some talk about those damned islands — the Falklands or las Malvinas, depending on which country you believe to be their rightful sovereign.

Argentine leaders have to be careful how they talk about the Falklands (and about their uninhabited dependencies elsewhere in the South Atlantic). For decades regimes of left and right in Argentina have opportunistically kept the disputed islands at the forefront of the public imagination, fostering a spirit of delayed revenge. Sometimes this leads to daft verbal outbursts about “colonialism”, alongside game-playing with supplies and access to the islands. The constitution of Argentina contains language asserting “legitimate and imprescriptible sovereignty” over the rocks.

So anything a current Argentine leader says about the Falklands is bound to be scrutinized closely at home and in the United Kingdom. Milei is naturally impulsive, and has the particular problem that he is a political admirer of the late Margaret Thatcher. Wells tried to provoke him by bringing up the 1982 sinking of the General Belgrano and the consequent deaths of 323 Argentine sailors, which is still a slightly controversial episode of the Falklands War among the most self-hating shades of U.K. political opinion.

Milei, who had arranged a little display of Thatcher memorabilia in the room where the interview was held, sliced right through Wells’s Gordian knot. “Criticizing someone because of their nationality or race is very intellectually precarious,” he told Wells. “I have heard lots of speeches by Margaret Thatcher. She was brilliant. So what’s the problem?”

Even if you venerate Thatcher, who ordered the sinking of the Belgrano in very cold blood, you can perceive that this is a non sequitur. Milei is under no obligation to like a fellow neoliberal who was a military enemy of his own country. But one does remember that British statesmen have often been willing to express admiration for Napoleon I, Washington, Rommel and other killers of large numbers of British soldiers.

March 3, 2024

Argentine Brass Maxim: A Machine Gun of the Steampunk Age

Filed under: Americas, Germany, History, Military, USA, Weapons — Tags: , , , , , , — Nicholas @ 02:00

Forgotten Weapons
Published Nov 29, 2023

The Maxim Gun was the first successful true machine gun, and it became extremely popular worldwide. Maxim sent his first two working models to Enfield for testing in 1887, and by 1889 he had what he termed the “World Standard” model. No two contracts were quite identical, as the gun was constantly being tweaked and improved, but the 200 guns sold to Argentina in 1895 (50), 1898 (130) and 1902 (20) are a great time capsule into the configuration of the early Maxim guns in military service.

The Argentine Maxims had gorgeous brass jackets, along with ball grips, triggers, feed blocks, and fusee spring covers. The have the early 1889 pattern lock, complete with a walnut roller to assist belt feeding into the action. These guns were in Argentine military service until 1929 (which included a retrofit at DWM in 1909 to use the new Spitzer 7.65mm Mauser cartridge). They then passed into police use until 1956, and 91 were sold to Sam Cummings of InterArms in 1960. Of those, 8 were exported out of the US, 28 went to government agencies and museums, and the remaining 55 were sold onto the US collector market. They are the single largest group of early Maxims in the country today, and make fantastic collectors’ pieces.
(more…)

February 27, 2024

Javier Milei gets ghosted by US media after posting rare budget surplus in Argentina

Filed under: Americas, Economics, Government, Media — Tags: , , , , , — Nicholas @ 03:00

Jon Miltimore on Argentine President Javier Milei’s good economic news that the legacy US media are resolutely ignoring:

Argentine President Javier Milei speaking at the World Economic Forum gabfest in Davos, Switzerland, January 2024.
Photo by Flickr – World Economic Forum | CC BY-NC-SA 2.0

Argentines witnessed something amazing last week: the government’s first budget surplus in nearly a dozen years.

The Economy Ministry announced the figures Friday, and the government was $589 million in the black.

Argentina’s surplus comes on the heels of ambitious cuts in federal spending pushed by newly-elected President Javier Milei that included slashing bureaucracy, eliminating government publicity campaigns, reducing transportation subsidies, pausing all monetary transfers to local governments, and devaluing the peso.

Milei’s policies, which he has himself described as a kind of “shock therapy,” come as Argentina faces a historic economic crisis fueled by decades of government spending, money printing, and Peronism (a blend of national socialism and fascism).

These policies have pushed the inflation rate in Argentina, once one of the most prosperous countries in Latin America, above 200 percent. Today nearly 58 percent of the Argentine population lives in poverty, according to a recent study.

And Milei rightfully blames Argentina’s backward economic policies for its plight — policies that, he points out, are spreading across the world.

“The main leaders of the Western world have abandoned the model of freedom for different versions of what we call collectivism,” Milei said in a recent speech in Davos. “We’re here to tell you that collectivist experiments are never the solution to the problems that afflict the citizens of the world — rather they are the root cause.”

The revelation that Argentina has done something the US government hasn’t done in more than two decades — run a budget surplus — seems like a newsworthy event.

Yet to my surprise, I couldn’t find a word about it in major US media — not in the New York Times, the Associated Press, the Washington Post, or Reuters. (The New York Sun seems to be the only exception.)

I had to find the story in Australian media! (To be fair, the Agence France Presse also reported the story.)

One could argue that these outlets just aren’t very interested in Argentina’s politics and economics, but that’s not exactly true.

The Associated Press has covered Argentinian politics and Milei extensively, including a recent piece that reported how the new president’s policies were inducing “anxiety and resignation” in the populace. The same goes for Reuters and the other newspapers.

A cynic might suspect these media outlets simply don’t wish to report good news out of Argentina, now that Milei is president.

January 26, 2024

Javier Milei to the parasites in Davos – You are the problem

Filed under: Americas, Economics, Media, Politics — Tags: , , , , , , — Nicholas @ 03:00

Jon Miltimore on Argentine President Javier Milei’s visit to the World Economic Forum in Davos earlier this month:

Argentine President Javier Milei speaking at the World Economic Forum gabfest in Davos, Switzerland, January 2024.
Photo by Flickr – World Economic Forum | CC BY-NC-SA 2.0

Javier Milei went to Davos to attend the 54th annual World Economic Forum (WEF) meeting last week.

Attendees of the meetings — often derided as global elites who bask in their pomp, privilege, and luxury as they try to address global problems with collectivist solutions — received a jarring message from Argentina’s newly-elected president: you are the problem.

“Today I’m here to tell you that the Western world is in danger,” Milei said in his prepared remarks. “And it is in danger because those who are supposed to have to defend the values of the West are co-opted by a vision of the world that inexorably leads to socialism, and thereby to poverty.”

[…]

This is just a sprinkling of the topics discussed in Davos, of course, but you’ll notice a common current that runs throughout them: the solution to virtually every problem requires more government and “collective action”, and less freedom.

This is precisely the kind of thinking Milei, a self-described libertarian, took aim at in his speech, which was a clarion call for leaders to reject collectivist thinking and embrace individual freedom.

“The main leaders of the Western world have abandoned the model of freedom for different versions of what we call collectivism,” Milei told the audience. “We’re here to tell you that collectivist experiments are never the solution to the problems that afflict the citizens of the world; rather they are the root cause.”

As Milei pointed out, few can better attest to the failures of collectivism than Argentines. The country surged to prosperity in the latter half of the nineteenth century, only to experience a massive drop in prosperity due to its embrace of Peronism, a blend of fascism and socialism named after the left-leaning revolutionary Juan Domingo Perón (1895–1974) who dominated Argentine politics for decades following his initial ascent to power in 1946.

While many of Milei’s predecessors, such as the jet-setting Cristina Fernández de Kirchner, a self-described Peronist and progressive, were delivering international speeches in Copenhagen about tackling climate change through “a new multilateralism”, Argentines watched their country slowly collapse into poverty.

By embracing protectionist trade policies and rampant government spending, Peronists set Argentina’s economy on fire. By 2023, 40 percent of the population was in poverty and inflation had reached more than 140 percent due to massive money printing. Because of the constantly eroding value of pesos, Argentine merchants are compelled to update prices on chalkboards throughout the day.

The human disaster in Argentina was not caused by climate change or AI or “misinformation”.

It was caused by Argentine politicians and bureaucrats abandoning free-market capitalism, an economic system that brought about unprecedented human prosperity across the globe, and a stark contrast to its various collectivist counterparts — fascism, Peronism, communism, anti-capitalism, etc.

This is why Mr. Milei called capitalism the only “morally desirable” economic system, and the only one that can alleviate global poverty.

January 15, 2024

The radical anti-state agenda of Argentina’s Javier Milei

Filed under: Americas, Economics, Liberty, Media, Politics — Tags: , , , — Nicholas @ 04:00

Jon Miltimore compares the Venezuelan experience after electing Hugo Chavez in 2007 to Argentina’s radically opposed choice to elect Javier Milei as President late in 2023:

Javier Milei, 8 October 2022.
Photo attributed to Vox España via Wikimedia Commons.

In November, the country elected libertarian Javier Milei as its new president. And whereas Hugo Chavez said, “All that was privatized, let it be nationalized”, Milei is essentially saying the opposite: All that was nationalized, let it be privatized.

Milei started by cutting in half the number of federal ministries in Argentina, reducing them from 18 to nine. This was followed by a massive currency devaluation.

Milei did not stop there. In a recent televised announcement, he said he would “repeal rules that impede the privatization of state companies”.

Those words were backed up by a 300-measure order designed to deregulate internet services, eliminate various government price controls, repeal laws that discourage foreign capital investment, abolish the Economy Ministry’s price observatory, and “prepare all state-owned companies to be privatized”.

Milei capped it off on Wednesday with a 351-page omnibus bill that takes aim at Argentina’s regulatory state and would grant Milei emergency powers “until December 31, 2025”.

Giving any president emergency powers is no small thing, even during a genuine crisis. Though Milei’s bill is designed to curb state power, not to expand it — a notable contrast to the typical crisis response paradigm — history and recent events in El Salvador show how emergency powers can be abused and used to violate human rights and liberty.

Whether Milei can get his full agenda through is unclear, but there’s reason for optimism.

His stunning election is itself evidence that Argentines are hungry for change. He’s already shown an impressive pragmatism to wed to his undeniable political flair, surrounding himself with a slew of talented policy experts. This includes Federico Sturzenegger, a former chief economist of Argentina’s central bank who two decades ago managed to turn around the failing Bank of the City of Buenos Aires. Sturzenegger’s reforms were so effective they became a Harvard case study.

Success is by no means certain, of course.

Recovering from decades of Peronism — a blend of socialism, nationalism, and fascism, which dominated Argentina’s political system for years — will not happen overnight. And Argentina’s political class has spent the last few years making a bad situation worse.

Still, the great economist Adam Smith once observed that the key to economic prosperity is surprisingly simple.

“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice,” the Wealth of Nations author said.

Milei knows this. He has not just read Smith (in addition to Austrian school economists such as Friedrich Hayek and Ludwig von Mises). In a 2017 profile, he dubbed himself “Adam Smith’s heir.”

A heavy dose of Adam Smith is precisely what Argentina needs, and Milei has correctly diagnosed the affliction of Argentina’s once-prosperous economy.

“The state doesn’t create wealth; it only destroys it,” Milei said in a widely viewed 2023 interview.

December 3, 2023

“I find myself despising the elites I joined in ways that shock me. I have come to despise the woke left, their indifference to crime, their reveling in reverse-racism, their deep hatred of Western civilization”

Filed under: Britain, Europe, Media, Politics, USA — Tags: , , , , , , , , , — Nicholas @ 05:00

I’ve been reading Andrew Sullivan’s Substack since he started and it’s always been a pretty clear indicator that as soon as the name Trump is mentioned, the rest of the piece can be ignored because he’s been saying the same things for literally years now. This week’s article is a significant break with that tradition. It’s not that he suddenly likes Trump but that he seems to have gained more understanding about why other people support him:

As old-time Dishheads may recall, I was one of a handful of pundits who thought in early 2016 that Trump not only could, but probably would, win the election. I could feel his appeal in my lizard brain, and had long studied the fragility of liberal democracy in my frontal cortex. But the moment I knew his presidency was almost certain was when the Brexit result was announced in June, when everyone still assumed Hillary was a shoo-in. Something was stirring. And that’s why, after my annual trip back to Britain last week, I’m feeling the nausea again.

[…]

Add to that anger a lockdown far more intense than in the US and a period of crippling inflation, and you have a recipe that will likely lead to a Labour landslide next year. And in so many countries right now, for a variety of reasons, you see the same “blow it all up” mentality, turfing out incumbents mercilessly, often in favor of performative populists of various hues and flavors.

Look at the Netherlands: a progressive country that just saw Geert Wilders’ hard-right anti-immigration party go from 10 percent in 2021 to 23.5 percent of the vote, and become by far the biggest party in the Dutch House of Representatives, with center-right parties open to joining them. Or Argentina, where a weirdly coiffed, former rock-singer, Javier Milei — who had a near mental breakdown in a televised interview during the campaign, complaining about voices that weren’t there — wiped out the Peronist establishment in a landslide.

Orbán’s decisive re-election, Meloni’s electoral victory in Italy, and Sweden’s lurch to the right all suggest a sudden widening of the Overton window in much of Europe. In Germany, the AfD, the far-right movement, is now polling at 21 percent of the electorate, compared with 15 percent for Chancellor Scholz’s Social Democrats and 9 percent for the Greens. None of it is particularly coherent. Milei is Steve Forbes in a very bad toupee — about as far away from Boris’ Red Toryism or entitlement-friendly Trumpism as you can get. The only truly consistent thing is the ridiculous hair, and contempt for elites.

And the fear of the crazy right has gone. Milei and Wilders instantly moderated on some of their most outlandish positions, as soon as power was within reach. No, Milei won’t dollarize the Argentine economy, it turns out; and no, Wilders won’t ban mosques, as he tries to build a coalition government. Meloni has talked up immigration control, but in power, she hasn’t done much about it, and her support for Ukraine and the EU has been a big surprise. Poland’s hard-right party showed it could not stay in power forever this year, and in Spain, Vox lost ground. But in all this, a taboo has been broken — the same kind of taboo that the election of Donald Trump represented. The small-c conservatism of the Western electorate has expired.

That’s why I find the re-election of Joe Biden so hard to imagine. Biden is the incumbent of all incumbents. He became a senator in 1973! He has been vice president for eight years and president for four. He’s extremely old for the job he is doing, and everyone knows it. He has presided over inflation higher than at any time since the 1970s, and a huge new wave of legal and illegal immigration. We may now have a higher percentage of the population that is foreign-born than in the entire history of this country of immigration. Americans’ support for a border wall is the highest it’s been since 2016.

And Gallup’s latest polling on how the public feels about crime should terrify the Democrats. Coming back to DC this week after seven months away, I’m struck by how stark the decline has become. It says something when a city is experiencing a massive wave of carjackings, bars the cops from pursuing them, and just hands out free AirTags so you can track your stolen car yourself.

And the key, lame argument from Biden will be that Trump is too big a risk to take. He’s right. Broadly speaking, I agree with Bob Kagan on the crazed ambitions of this tyrant wannabe. But how has that argument worked out so far? Impeachments and indictments seem to have strengthened, not weakened him. And what we’re seeing all over the world is that voters are rushing toward the risky candidates, not away from them.

And Trump has already been in office for four years, and … democracy didn’t end, did it? Or at least, that’s what his supporters will say. They’ll remember the pre-Covid years as the good old days (and economically they wouldn’t be wrong), and also vent anger at an elite that seems to care more about pronouns and “equity” than protecting the border or controlling crime — the core functions of government. I’d be worried if Biden were ahead of Trump by five points in the battleground states. But he’s actually behind.

And though I will never vote for Trump, in my lizard brain, I kind of get the appeal. Inflation and mass immigration, alongside a bewildering and compulsory cultural revolution, are the kind of uncontrollable things that make people vent, especially if the president seems oblivious to these concerns — as Biden does. When Elon Musk f-bombed on Andrew Ross Sorkin and the advertisers who are boycotting X this week, the rational part of me shook my head. He’s bonkers and may see his company collapse from his whims and rages.

But at some deeper level, I also wanted to yell “Fuck yeah!” I find myself despising the elites I joined in ways that shock me. I have come to despise the woke left, their indifference to crime, their reveling in reverse-racism, their deep hatred of Western civilization. I hate how they’ve taken so much of the progress we made on gay integration and thrown it all away in transqueer solipsism. I loathe their piety and certainty and smugness. I found their instant condemnation of Israel, even as October 7 was taking place, shocking.

November 30, 2023

The challenge facing Javier Milei

Filed under: Americas, Bureaucracy, Economics, Government, Liberty, Media, Politics — Tags: , , , , — Nicholas @ 03:00

Craig Pirrong outlines just how much work Argentinian President-Elect Javier Milei will have to accomplish to begin to bring Argentina’s government in line with his electoral mandate:

When I wrote Milei is not a leftist, let’s say that rather understates the matter. Milei loathes leftists and leftism, and repeatedly refers to them on television and in public appearances in scatalogical terms, calling them “leftards”. He despises collectivism, and asserts bluntly that leftists are out to destroy you. His mission is to destroy them first.

As someone so vehemently hostile to the left and well outside conventional political categories, Milei’s victory has triggered a mass moral panic, especially in the media. The New York Times coverage was (unintentionally) hilarious: “Some voters were turned off by his past outbursts and extreme comments over years of work as a television pundit and personality.” Well, obviously a lot more weren’t, but I guess one has to take solace where one can, eh, NYT?

Milei’s agenda is indeed a radical one, especially for a statist basket case like Argentina. To combat the country’s massive (140 per cent annualised) inflation, Milei says he will dollarise the economy and eliminate (“burn down”) the central bank. He also wants to reduce radically the role of the state in Argentina’s economy. He says he wants to “chainsaw” the government – and emphasises the point by campaigning with an actual chainsaw.

His election on this programme sparked a rally in Argentine financial markets, with government debt rising modestly and stock prices rallying smartly.

Will Milei be able to deliver? Some early commentary has doubted his ability to govern based on the fact that his party’s representation in the legislature is well below a majority. That may be an issue, but not the major obstacle to Milei’s ability to transform Argentina into what it was at the dawn of the 21st century: an advanced, rapidly growing economy and a relatively free society.

The real obstacle is one that is faced by anti-statists everywhere – the bureaucracy. (I do not say “civil service” because that phrase is at best aspirational and more realistically a patent falsehood. Akin to the Holy Roman Empire that was neither holy nor Roman, the “civil service” is neither civil nor a service.)

Argentina’s bloated state is its own clientele with its own interests, mainly self-preservation and an expansion of its powers. Moreover, it has created a whole host of patronage clients in business and labour. Milei’s agenda is anathema to this nexus of public and private interests. They will make war to the knife to subvert it.

Even a president with an electoral mandate faces formidable obstacles to implementing his agenda. The most important obstacle is what economists call an “agency problem”. The bureaucrats are agents of the chief executive, but it can be nigh unto impossible to get these agents to implement the executive’s directives if they don’t want to. Their incentives are not aligned with the executive, and are often antithetical. As a result, they resist and often act at cross purposes with the executive.

The modern chief executive’s power to force his bureaucratic agents to toe the line is severely circumscribed. At best, the executive can make appointments at the upper levels of the bureaucracy (such as the heads of ministries or departments), but the career bureaucrats who can make or break the executive’s policy are beyond his reach, and not subject to any punishment if they subvert the executive’s agenda.

November 26, 2023

It’s apparently political earthquake season

Filed under: Americas, Europe, Government, Liberty — Tags: , , , , , , , , , — Nicholas @ 05:00

Elizabeth Nickson wonders if you can feel the Earth shaking in your area:

Did you hear the roar on the streets when Milei won Argentina? It built and built, and then everyone was out on the streets shouting, from windows, inside shops, houses. It is the future, all over the world. The Netherlands on Friday. Same same. Universal rejoicing.

Absurdistan does a solid line in doom, but our firmly held first principle is that every single one of us should be two or three times as rich, with massively increased scope and ability to do the things we want to do. Defeating the criminal cartel that runs Big Pharma, Big Ag, Big Government, Big Tech and Big Charity will light up the galaxy if not the universe. And … this. Especially this:

Unlike almost everyone in the media, Absurdistan knows regulation is the principal reason we are hornswoggled serfs. Even Trump’s team was surprised at the economic boom that came from his mild de-regulation; they thought tax relief was the key. It was important, none of us should be paying more than 25% in taxes, if that, but the regulation! You have no earthly idea how fiendish it has become until you start a business or require permission to create anything in the material world. Few journalists ever do that, the most they do is join a bank in “communications”, design an app or website, do PR, or “consult”. They are virtually, to a man or woman, children in the real world. So no one reports on the most brutal crippler of every man, woman and child on earth. Equally, virtually no writer I read has any grasp on the ingenuity, the creativity, the strength of the ordinary man. They all seem to think we need guidance from them, which is laughable. They have screwed up everything so utterly, we teeter daily on the edge of fiscal catastrophe.

Bloomberg reports on Milei victory

When Vivek Ramaswamy proposed instantly firing 50% of federal bureaucrats on Day One, I stood on my office chair and cheered.

When Javier Milei tore strips of paper representing government ministries off the whiteboard, I had to go out and run around the house a few times.

Africa is not limited by anything but confiscatory corrupt government, as asserted by Magatte Wade in her new book. Wade should be running things in Africa, which is polluted by commies, plutocrats, crooked multinationals, ravening bureaucrats, corrupt politicians and the brutalist green movement. The Chinese would stun the world if they could get rid of the vicious predatory communist regime that enslaves every man, woman and child. And not in the sense that they are “taking over”.

The mop-up will take decades. But unpicking the bad regs and shooing the bad legislators off to permanent exile, prosecuting the army of government thieves, and creating a multi-polar world, will be more absorbing than our endless self-cherishing, self-indulgence. Have we not all shopped enough? We have powerful enemies, but they are fully aware of how destructive they have been, their guilt written on their exhausted pouchy faces.

Trump is a symptom, not a cause

People fighting the Borg wish for leaders but this is not a movement that requires leadership by anyone but each and every one of us. Trump is a symptom, not a cause. This is multi-headed, like Medusa, representing tens, hundreds of millions of individuals saying NO. Real politicians like Mike Johnson, Geert Wilders, Pierre Poilievre, Javier Milei, and Danielle Smith are listening to us and stepping up.

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