I'm sure this is going to be used by anarcho capitalist types and the media to say Milei's program of cutting public services is noble and great and here's the proof. I feel like I must be taking crazy pills though. If the Argentinian gov needs 40 billion from the US to continue functioning, how does that mean Milei's policies are working? It's like if I decide to use a car to drive 1000 miles, but I only buy enough gas for 500 miles, but a dude at the midpoint in my journey offers to lend me enough money for the next 500 miles of gas if I kick all Chinese people out of my car in return, and then I return and say see due to my amazing thought leadership my car has double the gas mileage now.
The argentine government is currently balancing meeting its current fiscal needs with avoiding the money printing scheme. That means it needs to attract buyers for its bonds instead of using the printing press. That means markets must be confident of Argentina's continued recovery, or investors wont be willing to pay sufficient prices for those bonds to sell. The reason Milei went to the US is because Argentine bond prices collapsed following a victory of the Peronist (that's the former ruling, socialist party) in Buenos Aires. With low bond prices, there was no way to continue that program, so Milei went to the US. On the other hand, this latest electoral victory has restored market confidence, and Argentine binds have strengthened.
These problems have much less to do with libertarianism per se than the practical problem of funding a massive welfare state without utilizing a destructive amount of money printing. Milei is walking a tightrope of unwinding this system slowly. The problem is endemic to having a massive welfare state than it is to libertarianism, and it is one reason why libertarians (also, bog standard neoliberals) are critical of having a massive government. When the government has an extremely large balance sheet, so large that its taxation and redistribution schemes are negative sum, it is only a matter of time before the whole thing comes crashing down. That's where the economy was headed before Milei. The collapse was avoided, albiet narrowly, but that doesn't mean everything is suddenly normal again. The road to recovery will be a long one.
To use your car analogy, the previous peronist parties set up a 1000 mile family trip, bought a quarter of the gas, and then when has started running out wrote a bunch of gas IOUs and pretended that the IOUs were a substitute for real gas. The responsibke adult comes in, and is desperately trying to find ways to trade IOUs or anything else that's available for some gas so that the family can survive and get home. That means that the family might even have to skip a meal or two, which is painful in the present. But it's all a sacrifice in service of ensuring the family's survival over actually starving in the desert when they realized IOUs don't power cars.
Technically Perón was more like a Fascist than a Socialist, modeling his dictatorship fairly closely on that of his friend Mussolini, but especially in later years Peronism adopted Socialist political positions to an even greater extent than the earlier Fascist parties had. Still, the right-wing death squads hunting down and killing Socialists in Perón's later years were Peronists. So were their victims, but Perón ultimately backed the former rather than the latter.
Kirchner-era Peronism, though just as thoroughly based on social-justice rhetoric as Perón ever was, never approached its level of state enterprises like the Justicialist car and IAPI; despite renationalization of Aerolíneas, YPF, and the pension system, there was no Kirchnerist equivalent of Airbus, Ariane, or Systembolaget. So recent Peronism is far less Socialist in practice even than current France and Sweden, much less Bolshevik Russia.
>I'm sure this is going to be used by anarcho capitalist types and the media to say Milei's program of cutting public services is noble and great and here's the proof. I feel like I must be taking crazy pills though. If the Argentinian gov needs 40 billion from the US to continue functioning, how does that mean Milei's policies are working?
Socialists have run argentina for many decades. It wasnt going well and they gave Milei a mandate to fix Argentina. If the people just voted in a landslide confirming their continued approval. Then we can conclude those who are best to judge, the people, think it's working.
> It's like if I decide to use a car to drive 1000 miles, but I only buy enough gas for 500 miles, but a dude at the midpoint in my journey offers to lend me enough money for the next 500 miles of gas if I kick all Chinese people out of my car in return, and then I return and say see due to my amazing thought leadership my car has double the gas mileage now.
In your scenario you assign no blame at all to the previous governments? You completely ignore and discount why the people decided to give him a mandate?
Perhaps Argentinian citizens take the long view and decided Milei's policies are the best route of 'the hole', or maybe they decided the US's offer of 40 billion dollars only if they elected Milei again is the more likely scenario.
Milei's seemed spectacularly unpopular only 3 weeks ago.
The UCR https://en.wikipedia.org/wiki/Radical_Civic_Union is nominally a member of the Socialist International, and many decades ago was roughly aligned with Socialism, but in recent decades their politics mostly favor big landowners and other big businesses. Instead of running their own presidential candidate in 02023, they backed the mano dura Patricia Bullrich, notable for being the only major candidate more right-wing than Milei; he made her his Minister of Security. They did hold the presidency for two years until the crisis in 02001, and previously with Alfonsín in the 80s. They've voted in favor of a lot of Milei's initiatives in Congress; https://en.wikipedia.org/wiki/Argentine_National_Congress lists them as "independent".
Libertarians and Conservatives can all wish for a smaller government and slash things apart in America - it's not going to change the fact that America is a corrupt socialist country which runs semis, bails out billionaires, subsidizes farmers, and uses taxpayer money to enrich business owners.
The only difference between American socialism and Argentinian socialism was that Argentinian socialism pretended to help the poor but America doesn't even pretend to help the poor.
Snap, Chip, ssi, ssdi, medicaid, medicare (since recipients don't pay their way), ACA subsidies, progressive income tax (half of us pay no federal tax at all), 1-12 schooling/daycare (often with free lunch, sometimes also free breakfast)
Big brothers/sisters, salvation army, habitat for humanity, red cross, food banks too numerous to list, Shriners hospitals
Oh, forgot about the billions Los Angeles has spent on homeless housing
A Socialist would argue the private money spent use to the private charities you just listed should have gone to the government through taxation originally, and that the government should provide services and a safety net for all instead.
> Snap, Chip, ssi, ssdi, medicaid, medicare (since recipients don't pay their way), ACA subsidies, progressive income tax (half of us pay no federal tax at all), 1-12 schooling/daycare (often with free lunch, sometimes also free breakfast)
Literally the things held hostage for politics right now? How can you claim America helps the poor when we are literally living a government shutdown where poor are held hostage?
> Big brothers/sisters, salvation army, habitat for humanity, red cross, food banks too numerous to list, Shriners hospitals
These are not government. This is about people helping people. Some American people are helpful to each other. But the societal unit of government isn't - aka - there are people who don't want to help others at all.
> America at least "pretends"
American people try really hard - especially in blue states. But American government system holds people hostage. The work requirements, the constant paperwork, the sudden ineligibility - this is all uniquely American - designed to not disburse the benefits that people may be entitled to. America has the pretence of programs but if they truly wanted to help the poor, they'd make the programs truly usable - not hostage to political processes and eligibility corner cases.
Every country is more than its government. The original assertion was that America doesn't pretend to care about the poor.
Apparently, the assertion should have been "America doesn't care about the poor as much as I feel they should and no evidence you bring contrariwise will change my mind".
It reminds me of the houses in the gated communities with "no borders" signs in the manicured lawns.
How do you define socialism? I don't believe that we the people or the state collectively own the means of production in any major industry. Private ownership by capitalists is still the dominant economic system in the US.
The US literally purchased shares of Intel - thus owning means of production.
The US also bails out a group of people all the time. The group is called the rich.
Furthermore, it subsidizes select groups like big ag.
Except these, the US is predominantly capitalistic but so was Argentina. Their populace was fed up with the pretense of helping the poor while bailing out oligarchs. America doesn't seem to pretend to help the poor. Poors are undesirables.
Owning part of one company in one sector is not socialism unless you think nearly every country in the world since the invention of the limited company is socialist?
“Bailing out the rich” isn’t socialist is it? What do you think “socialist” means?
I don’t think you understand why the word “socialist” scares so many people. It’s not a word you can just slap on anything to make it “bad”, many people are actually scared about the underlying ideas not the word.
Some Americans seem to just think socialism=bad “because the CIA and the NYT does propaganda”. You may think America is bad and I may agree with you, that doesn’t make it socialist.
In the GDR you couldn’t start a private enterprise without a license. Any enterprise doing anything.
In socialist Burma, there were no privately-owned factories _at all_.
In Czechoslovakia the constitution banned a private company from employing anyone other than the owner of the company.
In Soviet Russia you needed a permit to move city. If you were a farmer you were unlikely to get that permit. You work for the collective farm, the government set the price they would pay you for your produce, and you couldn’t move city to a new job.
I hope these examples show why “the us government is socialist partly because it owns shares in Intel and partly because it’s a lender-of-last-resort for rich people” sounds fatuous.
I'll tell you why you are wrong - you are wrong because you think that real socialism is only one that maps exactly to a prior example. You think it can't be real socialism if there is even one edge case that differs from a pre-existing example.
Your argument is a variant of the straw man fallacy. Look it up.
I think myself and the other poster are mainly taking issue in your use of a specific term "socialism." I think you could argue that if the US owned 51% stake in Intel, you could argue that would be socialism. I've heard the term "socialize" applied in similar conversations such as "privatize the profits, socialize the losses," which I believe is a more accurate rephrasing of your original point.
The had a currency swap. US earns interest from argentina by taking USD$20B worth of pesos. Argentina get USD$20B. By the end of the swap, Argentina "swap" the borrowed USD$20B with their pesos. Argentina has to pay interest (quick googling didn't reveal the exact terms). They both get their own currency in the end.
Did we bail them out before? From what I can tell, we opened up a currency swap using a Treasury fund (not funded by tax dollars) specifically devoted to currency stabilization.
A currency swap IS a bailout if the swap occurs at a price above what would otherwise be the market clearing price. "currency stabilization" is just a funny way to say "artificially propping up the peso"
> using a Treasury fund (not funded by tax dollars)
tell me, where do you think the Treasury gets its dollars...
> The fund began operations in April 1934, under director Archie Lochhead and financed by $2 billion of the $2.8 billion gold surplus the government had realized by devaluing the dollar.
> The ESF can convert SDRs into dollars on its account by issuing certificates against them and selling the certificates to the Federal Reserve,[6] and later repurchase them when it has surplus cash.
The ESF is self financing. And yeah, sure, it is artificially propping up the peso, the same way we propped up the Mexican peso, the Thai bhat, and others once upon a time.
If not us tax dollars, how are they funded? Are the backed with full faith of credit of the us government? It’s hard to search for answers on this one.
Actually, they were bailed out because the peso tanked after the peronist opposition won a political victory. The peso has strengthened because the libertarian party there won, so the stability of Argentina has increased. Peronism winning is directly correlated with argentine instability and bailouts
The overvalued peso makes Argentine products economically uncompetitive abroad—and, now that we are allowed to import things freely, domestically as well. Keeping the peso overvalued is not an especially libertarian position, but rather one on which Milei seems to harmonize with the Kirchners' historical policies, and especially Menem's disastrous 1:1 policies that brought Kirchner to power in the first place.
For Argentina to be stable, we would need a stable industrial base. That's very difficult to establish when the state is, in effect, taxing our exports and subsidizing our imports, even if it's less directly than during the Kirchner years.
If Argentine output declines and unemployment soars, it will be very hard for Milei or his successor to avoid defaulting on the bailout loans, unless an even larger bailout follows, as it often has.
The peso is valued higher. It does not follow that it is overvalued. Most currencies will strengthen if central banks stop inflating their currency, and that is a libertarian position.
The peso is actually valued lower this month than ever before in history, but we can see that it is still overvalued because our domestic production still isn't competitive with imports. Not even in areas like cars and clothing where we have have a well-developed industry, if one that is shitty in quality.
And this deplorable situation is not just a result of the central bank not printing money, which is indeed a perfectly libertarian position. Rather, it is a result of a massive outflow of foreign exchange reserves from the central bank in recent months, the explicit objective being to artificially raise the exchange value of the peso, worsening our uncompetitive situation.
*valued higher than the counterfactual where there was money printing.
A less competitive domestic industry does not imply an overvalued currency. It could mean that domestic industry is economically less productive compared to foreign industries. Since Argentine domestic industry has enjoyed vast protectionist barriers for a long time, there is good reason to think this is why they are uncompetitive. At any rate, inflating the peso to make industry nominally productive in terms of foreign exchange, as past administrations have done, would also not make domestic argentinian industries more productive; it would simply trade a boost to domestic industry with a drain on the argentine government, hiding the less productive nature of domestic industry until hyperinflation catches up.
Removing protectionist barriers is also quite libertarian, and not even uniquely libertarian - free trade is universally supported by well-trained economists. In Argentina's case, this means domestic industry has to catch up for all the lost productivity that trade barriers have caused over the years.
> valued higher than the counterfactual where there was money printing.
Oh, I certainly agree with that!
> Removing protectionist barriers is also quite libertarian, and not even uniquely libertarian
I agree with that too.
> Since Argentine domestic industry has enjoyed vast protectionist barriers for a long time, there is good reason to think this is why they are uncompetitive.
That is also true, but I don't think it's actually an alternative to having an overvalued currency as you've framed it; rather, when the currency is allowed to float freely (or, rather, sink freely), the market solves the problem. The weaker currency can buy less imports, making domestic industry more price-competitive, at least domestically. The export price domestic industry needs in order to pay its wages and locally sourced resources falls, so its products become cheaper in international markets, where their cheapness can enable them to compete with less shitty foreign alternatives, and manufacturing products for export becomes more profitable.
There may be very-low-value-added industries like the air-conditioner-assembly industry in Tierra del Fuego which never become profitable in this way, and will need to close, but I believe our automotive and textile supply chains are largely domestic on a value-added basis.
All of this is very different from the kind of hyperinflation that results from unconstrained money-printing. But hyperinflation is the Black Beast that seemed ready to sink Milei a month or two into his term, and certainly some form of hyperinflation could ensue if people lose their residual faith in the peso, perhaps faster than the lack of newly printed pesos could bring it to a halt.
The major risk of such free-market shocks is that a temporary economic setback could cause permanent damage or death to some people, for example through lack of access to health care or through famine.
I think Argentina is not really in danger of famine on a free-market basis, despite our rampant latifundismo. At worst, the situation could require a taxpayer-funded food-stamp program for some of the staples previously covered by Precios Cuidados, such as sunflower oil, polenta, enriched white flour, sugar, and yerba mate. Maybe we could add lentils, soybeans, and texturized vegetable protein. Today, though, we're far from famine—every neighborhood butcher I've visited in the conurbano discards their beef-fat cuttings, unable to sell them. When I volunteered for the Casa de Maria in Isla Maciel some years ago, the mostly obese villa residents to whom we distributed boxes of donated food largely resold it rather than eating it. I haven't been back there in years, but I imagine that to still be the case.
Health care access has been a major problem under Milei, but we do still have the public health-care system Perón established, so we are still not in the terrible situation of the US, where people with major chronic health problems only receive medical care when an ambulance brings them to the emergency room. Argentina's healthcare outcomes as measured by statistics such as infant mortality are comparable to the US, despite being a much poorer country.
I’d expect foreign investment to explode now that investors can feel more secure that the socialists won’t steal them. This landslide will bring some stability and buy-in and now is the time for them to as aggressively advance their objectives.
It is the same path as Britain under Thatcher. Decades of socialist ruin followed by a financial bailout and a libertarian taking over to fix things up. At first there is pain. Inflation goes up, unemployment skyrockets. The economy is bent out of shape by the socialists and as it slowly moves back to its natural state there's lots of disruption along the way. But then the recovery continues as the bad decision making under socialism gets steadily unwound.
If Milei's story arc is anything like Thatcher's it ends with him being stabbed in the back by center-left "wets", who become overly responsive to the most emotional voters. The country doesn't revert to Peronism but does enter another period of slow long term decline as the singular personality who pulled it back from the brink exits the stage. The natural Argentinian socialist worldview reasserts itself as the lessons are never learned. We will have to see if Milei is able to build up a protege and natural successor. Trump seems to be doing it successfully with JD Vance, but so far Milei seems to have nobody waiting in the wings - just like Thatcher.
The country got a lot richer after Thatcher. Some jobs went away permanently, because they were not trying to be globally competitive, but that wasn't Thatcher's fault. She just stopped them being fake jobs.
That skips over some bits with Thatcher. She started well taking on the unions but overdid raising interest rates, wrecking much British industry and went kind of nutty in the end trying to push through the poll tax which 90% of the population hated and led to her being kicked out.
I don't follow the details with Milei but I get the impression of something similar where he's starting well undoing dumb stuff but I'm not sure about trying to prop up the currency rather than just letting it float and having normal economics like most democratic counties.
I think a lot of good governance comes down to undo stupid stuff and try not to do new stupid stuff.
I am not convinced that Vance is Trump's "natural successor". First, I'm not sure we have really seen what Vance thinks (on any topic). He takes care to not openly contradict Trump's position, but here and there he hints that his own position may be different.
Second, Vance doesn't have anything like Trump's charisma. He's much more wooden. He would have to hold the Trump coalition together through policy alone, and I'm not sure that can be done. (All right, he can also use nostalgia. I'm not sure that will be enough.)
