Am I crazy, or does this read like a litany of ways in which residents are worse-off after Milei's victory, concluding with "it looks like they're on a strong path to recovery"?
You have to consider why Milei was elected in the first place - a dramatic break from typical Peronist politics with a historic 55% of the vote.
The picture in Argentina was not rosy before Milei took office, it was a country on the verge of hyperinflationary collapse, with a population declining through emigration, a largely informal economy in decline, and people struggling to keep up with dramatic inflation.
I don’t know of another case where hyperinflation was arrested without introducing a new currency. Milei has apparently done it by simply cutting spending, which naturally comes with some pain as the subsidies and government employment are curtailed, but a sound currency sets the stage for distributed investment, lending, entrepreneurship and growth.
More recent policy changes have focused on opening up the country to exports and imports, which will be key to bringing about prosperity through growth in industry, and bringing prices into line with international norms.
https://www.msn.com/en-us/politics/government/javier-milei-d...
I'm not rendering a verdict on Milei. I don't know enough about his status quo ante; my priors are that Argentina was an economic basket case before, so I'm not predisposed to defend his predecessors. I have longtime friends from Argentina that absolutely loathe Milei, but they don't read HN so I feel pretty safe being open here.
I'm just commenting on this specific article, in which the author repeatedly makes firsthand contact with the immediate outcomes of Milei's policies, finds them to be generally bad, and concludes that the experience is evidence that things are going well.
I feel like the overall trend in global elections of the last few years is to blame global problems on local politicians. It's correct that Argentina's fiscal situation has long been difficult. But if it improves, is that on Milei? Or is it just waiting out the worst of a bad economic boom-bust cycle? Rather like waiting for the weather to improve, then the politician says he brought the sunshine.
> But if it improves, is that on Milei? Or is it just waiting out the worst of a bad economic boom-bust cycle?
This might be a valid observation in most other countries, but Argentina has been a basket case for ages. It’s defaulted nine times in a little over 200 years, and two of those defaults were in 2014 and 2020. I think this is one of those cases where you might could attribute a dramatic one or two year turnaround to the person actually doing something new (spending less).
In the case of Argentina they literally are waiting for the weather to improve. Much of their economy is based on agricultural exports and crops have suffered from drought lately.
Inflation in Argentina is still not under control. If the current number continues, they will have 30%~ yearly inflation. Argentina already saw this number before numerous time, including under Macri government.
In Argentina, the informal (free market) peso to dollar rate is called the “blue dollar,” it rose from about 200 to 1200 pesos per dollar in the 2 years prior to Milei taking office and has held relatively steady since: https://bluedollar.net/informal-rate/
Yes, I'm aware of that. Doesn't change the fact that inflation is still high.
But the real issue is, the "oficial" dollar rate is controlled by Central Bank, and it won't be for long. When, as he promised, he let the peso float totally free, we'll really know even if the inflation can continue at 30% yearly.
Let alone, together with this, the growth of this year, that will likely pressure the inflation. They managed to reduce the inflation to 2.7% monthly, while the country was in a 3% GDP recession.
I’d love to hear what people are reading to actually understand this. At this point I will openly admit that I do not know if what’s happening in Argentina is good or even on purpose. I sense that everything I read is at best motivated reasoning and at worst propaganda, and I’m not skilled enough to determine what is correct and what is not.
> The structural changes are painful but necessary.
One thing that is amazing, is how quickly Milei was able to make these changes. I’m guessing Argentinian law allows the president a lot of power to make changes quickly. By comparison, efforts to make the government more efficient in America will probably fail because they will be bogged down in lawsuits and obstruction.
Surprisingly, no. Milei's party does not have majority in the Congress, he does not have much power, and the best example is his omnibus bill [1]. Initially Milei's party attempted to pass a massive 300-page reform, consisting primarily of deregulations and paving the road for a more free-market government model. The reform was debated for almost 6 months, and the accepted version was about a 3rd of the original one.
The president has power to make only small changes in Argentina, but the previous system was so flawled that any minor change resulted in noticeable changes to the general economy.
I was just reading about the Chinese economic reform[0], which started in 1978. That was basically the end of communism in China, and the start of market liberalization. The point here is that when economic policies are reformed, it obviously doesn't turn the country wealthy instantly, which is what some of Milei's critics tend to assume. Due to these reforms Chinese economy had an impressive growth rate of 9.5% from 1978 to 2013, but they didn't solve poverty instantly. China's poverty rate fell from 88 percent in 1981 to 0.7 percent in 2015 [1].
There's a saying in Argentina: “Nothing changes in years, but everything changes in a day” It’s still too early to make definitive statements about Milei’s government. However, for those unfamiliar with Argentina, it’s worth noting some key realities under this so-called "libertarian" administration: the USD/ARS exchange rate remains controlled, a nominee presented by Milei to the Supreme Court is widely regarded as a highly corrupt judge (in the Gotham City way), and similar contradictions abound [0].
Milei is undoubtedly a skilled influencer. On a more practical note, consider this: if your software company needed a few laptops or notebooks to operate, you were previously limited to importing them by courier with a cap of USD 1,000, which was only recently increased to USD 3,000 a few months ago. This is one Apple powerful notebook, including taxes.
When it comes to managing inflation, certain strategies or "tricks" are often employed: inducing a recession, withholding increases in retirement benefits, and encouraging carry-trade practices [1]. In this binary world it is important to highlight that the previous governments were terrible.
Yes, there are similarities among Latin American countries. However, beyond the shared saying, Argentina's trajectory has been notably different, especially when compared to Brazil [1]. It’s important to emphasize that Brazil has developed robust industries, while Argentina has not achieved that level.
Argentine industries have historically been prebendaries, relying heavily on state support, subsidies, and protectionist policies (e.g. corruption) rather than fostering competitiveness or innovation. This dependency created a system where industries benefited from privileges granted by the government, often at the expense of broader economic efficiency and sustainability.
It is true that Peronism is often associated with corruption, clientelism, and populism. However, I would argue that corruption transcends political ideologies and affects the entire political (and social) spectrum in Argentina. Using a satirical analogy, I’d describe Peronism as the "Tesla of corruption" innovative and deeply ingrained. What is particularly "interesting" about corruption in Argentina is its complexity: it’s not just about taking bribes but involves an extensive and deep-rooted system. Corruption often becomes intertwined with policies, blurring the lines between governance and malpractice.
For example, companies like Samsung and others assemble electronics in a free-trade zone in Argentina, yet the final product prices are often double the international market price. This illustrates how policies intended to boost local production can become vehicles for inefficiency and potential misuse.
While Peronism has historically been associated with the country's decline, I don't believe it fully explains complex and multifaceted causes of Argentina's struggles until the XXI century.
> I would argue that corruption transcends political ideologies
As someone whose parents left Latin America a long time ago, this is why I'm still deeply skeptical of whether Milei's future will be a rosy one. Ideologies (libertarianism, communism, ancaps, etc) always seemed flimsy so long as there are mechanisms available for widespread abuse.
Inflation is down and the economy is doing better, but what's the point when poverty rates just skyrocketed to over 50% of the population [1]? Will it "trickle down", like it never did anywhere?
Moreover, cutting public services as aggressively as Milei did is bound to hurt the economy in the long term, with less access to education, healthcare, worsening public transit... All things companies rely on the state to provide their employees.
If you need proof of the dangers of austerity, take a look at the UK. They reduced spending, but are they really better off?
Several sources report more recent data showing a drop to 37-39%.
The picture in Argentina was not rosy before Milei took office, it was a country on the verge of hyperinflationary collapse. Given that starting position, IMO it’s remarkable how quickly things have turned around.
My numbers are from December, did we really see a drop of 15% in a month? One of us has to be wrong, and I don't see many sources claiming your numbers, the X one you gave is clearly partisan, opening with "MILEI DELIVERS".
The poverty rate above 50% of the population is something that happens when a country goes over several corrupt governments that steal everything the people have and put it in the hands of a handful of people that are always prepared to flee.
All those people failing to notice Argentina was poor before Milei got the presidency either have no idea what they are talking about or are malicious.
Now, yes, about worsening public services; Milei did the basic thing so the country can actually do something, the real test for his government is how he fixes those problems. (From the shit he talks, I would be in he not fixing anything, but if he actually acted like he talks he wouldn't have got inflation under control and would probably be already out of the presidency by now.)
Which makes it the entire "yay libertarian" tone completely stupid.
It doesn't matter what the policy politics are. What's necessary is a non corrupt government.
The hyperinflation is invariably because of corruption, because when the corrupt steal everything and print money to keep the lights on temporarily.
Multifaceted shock changes like this smell of just another corruption shift. Deregulation is best accomplished by gradual reductions so all economic players have time to adapt. A shock shift probably means some insider is poised to cash in.
True libertarianism is insanity. Prohibition on murder and violence is a regulation. Use of currency is a regulation. The most libertarian unregulated market is illegal drugs, where mass murder and violence is used for business purposes.
"No true libertarian". Milei self-describes as an "anarcho-captitalist", and cosplays as "captain ancap", a hero of his creation. This is as close to libertarianism as we'll ever get. Libertarianism is an insane ideology for insane people, it thankfully can't be applied in reality.
When you note the increase in a statistic like poverty, you are implicitly taking into account the status of the country under its previous governance. That's how statistics work.
It was already baked into the cake because the previous administration spent something like 13% of GDP in its last year in order to win the election that they went on to lose. 13% of GDP's worth of malinvestment will increase poverty in due time, and that time was Milei's first year in government. In 2001 the Peronists left the next non-Peronist government a ticking time bomb, the next government (De La Rúa's)completely fumbled and had to end early, returning power to the Peronists. In 2023-2024 the Peronist plan was to repeat that experience. Unlike De La Rúa though, Milei seems to know what he's doing and so has been able to head off the putsch. It would be hard to push Milei out of power when his popularity right now is higher than his election winning percentage.
Also do keep in mind that in 2012 the Peronist government "intervened" the government's statistics department, and since then government stats were somewhere between unreliable and total fiction. Presumably that has changed now. Thus the poverty level before the election could have been understated, just as the inflation numbers then were.
Since the end of 2015 with Macri and then with A. Fernandez the statistic department is normalized and the numbers were quite good. (It's too optimistic to claim 100% accurate, but I don't remember mayor problems since 2015.)
Inflation is down and the economy is doing better, but what's the point when poverty rates just skyrocketed to over 50% of the population [1]? Will it "trickle down", like it never did anywhere?
This seems not true. The poor in countries with high gdp per capita are much better off than in countries with low gdp per capita. They are also better off than the poor were in prior times when those countries had lower gdp per capita. So some kind of trickling down must have happened.
It might be more convenient for your sense of moral indignation if it were otherwise but facts are facts.
This is some kind of mental gymnastics right there, I showed you poverty is rising and we're supposed to take it as meaning the people are richer for it?
Show me a single example of a country drastically slashing public spending and its citizens living better afterwards.
I don't know if they have inflation under control if, like TFA says, the locals tell him they drive to Chile to buy tires for less than half the price.
It was at 40% when he started. A 10% increase is not good, but with the high inflation and other economical problems it was not clear that doing nothing would keep the poverty at 40%.
The most recent reports say that it's now at 37%, it's probably correct, but take all reports with a grain of salt.
It's silly to claim that austerity is dangerous. Dangerous compared to what? Argentina had reached the logical end state of socialism and literally run out of other people's money to spend. There was no more room to raise taxes or borrow so austerity was the only remaining choice.
Poverty statistics are meaningless. The numbers under previous administrations were heavily manipulated and don't provide a solid basis for comparison.
All of the improvements are being hand-waved away by those desperate to see Milei fail, because success would jeopardize their worldview. It's not to see it's smooth sailing, but I'm optimistic based varied sources.
That’s oversimplifying a complex issue, some of his policies will work and some will fail, and that fact says nothing about underlying ideologies that drive his behavior.
Ok. What was bad with Peron himself? and what was the alternative there? Then, Are you saying that the various military dictatorships, Alfonsin, Menem, De la Rua and Macri were Peronist? What is your evaluation of their economic results?
Argentina was one of the wealthiest countries in the world with a massive amount of fertile land and natural resources yet somehow is now poorer than Chile and Uruguay.
People have a hard time understanding the nuances and the context. Because he is somewhat crazy, he is able to do things a normal politician wouldn't do. Clearly, eliminating corruption and waste is a good thing. He was also able to end the endless street protests. He was also the only option that was expected to make radical changes. On the other hand, the guy is pretty crazy, lacks empathy, is authoritarian, hates dissent, lies a lot, and so on. He is in love with Israel and Trump in an emotional way. Everything he doesn't like is extreme left, etc. My hope is that a new force will emerge that can continue fighting corruption, establish rule of law, create a vibrant market economy in a democratic way. It will be a long journey.
