Yes, but at what cost. The cost of living for food and general groceries has gone up to 700%. Some prices are even the same as those from Spain. However, the minimal wage there is of €1050 p/month, while our minimal wage is around U$S200.
When will prices drop, we don't know. However, there's little incentive to do so. Argentina does one thing right and that is exporting good quality food. If it doesn't get bought internally, it will get exported instead of lowering prices.
That contradicts frontally with this quote from the article:
> "Food and beverage prices... rose significantly below the average: 11% in February," said consulting firm C&T
Fixing hiperinflation is never easy. It's like going on a diet: it's hard to do, but nobody knows a better alternative. And politicians always have the easy binge at hand to solve any problem: printing money.
Being responsible is hard at all times, and the only visible reward you get is the statu quo. But by printing money you get an easy economic spike that will soar your popularity.
The problem the diet analogy is that people neither die nor sink into poverty after a few months of reduced caloric intake.
It's not just "unpleasant", long running companies die, people on the ends of the spectrum fall into starvation. You don't easily recover from that.
Suffocating the private sector is not a long term policy. It's shooting yourself in the foot.
As I said, that's to blame on the high inflation, not on trying to fix it.
Traditionally hyperinflations also cause poverty. Take for example Venezuela or Zimbabwe, two of the worse cases in the last couple of decades. It's not like they ride the hyperinflation with a happy smile and business thriving.
Argentina was drunk, and Milei decided to stop drinking. Hangover will have to come anyways, and everybody knows it. You cannot blame the headache on stopping drinking, and the solution is keep drinking for a while. That's not how hyperinflation works, we have had plenty of cases. It's exponentially worse.
The liberal politics is to have enough taxes to cover the expenses. If you have deficit, you either raise taxes or lower expenses (Milei option, it seems).
It doesn't boil down to "lower taxes whatever it takes" if you then have massive deficits. That's a wrong policy usually taken by Republicans in the US.
You must understand, any argument you make will be viewed through an emotional lens, Milei is very pro-Israel (strike #1), anti-big government (strike #2) and has been vilified in American media as “Trump For Argentina”(strike #3). All discussion here and really anywhere online will be viewed through orange tinted glasses, it doesn’t matter how many logical arguments you make, he’s evil bec they’ve been told he’s evil. There is nothing intelligent or rational you can say that overcomes that programming. It’s almost not worth engaging because you’ll go in circles and those who disagree with you won’t ever make any actual logical arguments, it will always be appeals to emotion.
I'm sure he'll be successful on lowering inflation for a while. I just think his way of stopping it is short-term and it won't be enough to pave the way for a prosperous Argentinean economy.
To me, the private sector, the health of long running companies (and of course human lives) is a more logical argument than any loose analogy about being drunk or going on a diet that depict nothing on the actual real-life impact of any economic policy.
I didn't even mention good or evil. I mentioned that messing with your domestic industry almost never fares well for your country.
And, about Trump. They both have in common that they have special persionalities and both spend a lot of time on Twitter. But that's it. Regarding economic policies, Trump is a proteccionist and Milei is an anarchocapitalist.
There's nothing magical behind "long running companies". I can name a few that are trash, and they only keep going because they have politicians in their pocket. If a company depends on the government creating hyperinflation or subsidizing it for its survival, that's not a good sign.
In other words, if you are too big to fail, you are too big to exist.
A sharp increase in the cost of living IS inflation, which is precisely what Milei is laser-focussed on ending. The economic shocks of the early 90s produced vibrant prosperous economies in countries that stayed the course, and much suffering in countries that reeled from the initial shock and failed to complete them.
Argentina’s economy is largely a mirage fuelled by cycles of borrowing, default, and inflation. It will come crashing down sooner or later. I’m rather sceptical that Milei will manage to end the cycle, but I’ve yet to understand what the suggested alternative to trying is.
I agree that people are suffering in Argentina right now, and the blame for that largely rests on the shoulders of those responsible for decades of economic mismanagement. The only question is whether they will still be suffering in five / ten years or not. Argentina could be the Poland of 2035 - or it could be the Venezuela.
> A sharp increase in the cost of living IS inflation, which is precisely what Milei is laser-focussed on ending.
Yeah. We're just used to the usual "local" inflation caused by the constant devaluation of the peso, where workers have to constantly fight to even maintain their purchasing power. Of course, they end up lagging slowly more and more.
But, if you measured the cost of living in US dollars up until December 2023, it was roughly the same.
This time, following the disregulation we had a sharp spike in the price of groceries, in dollars. It's a rise too steep for workers to even try to compensate in their salaries.
Worse than that, even if company owners wanted to compensate it (a starving population is not an effective work force), they just can't. People brought their spending to a bare minimum to even stay alive, so most businesses don't even have enough income to raise wages.
Some people think we're heading to a depression like the US had in 1930
> Argentina’s economy is largely a mirage fuelled by cycles of borrowing, default, and inflation. It will come crashing down sooner or later. I’m rather sceptical that Milei will manage to end the cycle, but I’ve yet to understand what the suggested alternative to trying is.
I agree. However, he's trying to stop the cycle by stopping the total cash flow. The risk is collapsing the entire country in the process.
> I agree that people are suffering in Argentina right now, and the blame for that largely rests on the shoulders of those responsible for decades of economic mismanagement. The only question is whether they will still be suffering in five / ten years or not. Argentina could be the Poland of 2035 - or it could be the Venezuela.
Some economist predict that in the next few months poverty will reach 70%. Unless they are totally wrong, even 50% doesn't leave you more than a few months of economic shock.
Where did you get the 700% from? A 700% is x8. I bought most of the food using credit card, and the total of the month is increasing, but not x8, not even by x2.
I thought of this quote from the PBS documentary Commanding Heights
LESZEK BALCEROWICZ, Finance Minister, Poland, 1989-1991: Just after breakthrough, there is a short period, a period of extraordinary politics. By definition, people are ready to accept more radical solutions because they are pretty euphoric of freshly regained freedom. One could use it only in one way, by moving forward very, very quickly.
JOSEPH STANISLAW: Poland decided to do what Bolivia did, to introduce shock therapy, cut back on government expenditure and try and introduce a market system and see if it could work.
NARRATOR: Prices almost doubled, and shortages didn't end. All Balcerowicz could do was chew his nails and wait for the law of supply and demand to kick in. But then, after a few days, farmers began to bring their produce to market.
LESZEK BALCEROWICZ: I was going for a walk, and we were looking at the prices in the shops, the prices of eggs.
NARRATOR: His aides told him to concentrate on the price of eggs. If eggs appeared, if eggs got cheaper, the market would be working. Eggs did appear. And then the price of eggs began to fall.
LESZEK BALCEROWICZ: And I remember that very important day when the prices of eggs are falling. This was one of the signals that the program, the stabilization program, is working.
Very interesting. I doubt you'd need to convince many Poles today that a market economy - with its shortcomings and all - is better than a centralized one.
Balcerowicz is hated by many Poles. The cost of his reforms was pushed onto the poorest citizens. Because of the mess created by him in the early years of transformation, some people are still convinced that communism was better. Real change came later, when proper regulations were introduced, and his successors cleaned his mess.
It wasn’t the cost of his reforms, it was the cost of 40 years of communism. The only way out of the frying pan is through the fire, sadly. Blame the people who put Poland into the frying pan, not the people who led it out.
It's a nice story. I even wish it applied to all contexts.
In the real world, we have to ponder monopolies, the export market, other, non-free, big economic bullies, trying to destroy competition through subsidized goods, etc.
When will prices drop, we don't know. However, there's little incentive to do so. Argentina does one thing right and that is exporting good quality food. If it doesn't get bought internally, it will get exported instead of lowering prices.