If anything, Argentina is known for being a economic rollercoaster fueled by populist after populist government. It never works out and the current situation seems like more of the same.
As the saying goes, there are 4 types of economies. Developed, developing, Japan (stagnation for decades with no negative ramification as normally would be expected) and Argentina (basket case).
And by all the heavens, could people please resist the urge to try and judge economic performance after a candidate has been in office for 1 quarter. Good economic management takes requires a decade or so before the fruits ripen. And mad scheme can work for 12 months and goose the figures if people care to.
https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_...
Also calling the politics just a series of populists does not accurately represent the economic agendas which have been exactly the same thing (basically left leaning populism via a heavy administrative state) repeated ad nauseam with the exact same outcome.
The whole reason Milei won was because the competition was from the same parties as always, proposing the same solutions as always, and he was the only one demanding something change, so people saw it as and opportunity and looked past the more radical stuff he was saying.
I don't understand this paragraph. It's not a series of populists, because it's been the same populist agendas? Is there some typo?
When every gov before him did the exact same pattern of going repeatedly goes into huge debt and uses gov social/economics projects to fix things, then the variations in their populists messaging is not really relevant.
Milei cut back government spending by 30% from the first month on (that's a 15% gdp of spending cuts in a month), and achieved fiscal surplus/superavit on that month. Contrary to the (very wrong) keynsian economics, deficit spending doesn't promote economic growth and Milei's measures and results demonstrate that actually having a smaller government with surplus promotes economic growth.
I didn't understand what you mean by "superavit"
Then I realised you are using the Spanish word superávit instead of its English equivalent "surplus"
Also, just say surplus.
So, sorry for destroying your Keynesian beliefs.
To the rest of us layman not familiar with your language, they just entered into a recession earlier this year[1]. And on behalf of us laymen, we'd love to know more about the etymology and context of your use of "more than a decade". To the rest of us, that normally means 10s of years, not mere months.
[1] https://www.reuters.com/world/americas/argentina-jobless-rat...
(Now we had like 10 definitions of the dollar/pesos ratio. The official one is 950AR$/US$ but it's almost imposible to buy at that price. To buy dollars, the prices are around 1300AR$/US$ or 1500AR$/US$ depending on the day of the week.)
[1] https://www.indec.gob.ar/uploads/informesdeprensa/pib_06_242... [2] https://i.imgur.com/f0pIiFE.png
[1] Comparison of the official inflation rate and the unofficial one published by the oposition in the congress: https://economictrends.com.ar/2015/01/16/economia-en-1-grafi...
[2] Anyway, I remember 2015 was a good year, we had a huge soy harvest and the international price was very high.
This month uptick YoY appears to be driven by their agricultural sector which last year had suffered due to a severe drought.
The IMF just revised their GDP projections down from -2.8% to -3.5% for this year.
Seems a wee bit premature to start gloating.
Keynes just suggested, that there may be better options to end a recession than to fight a war.
Argentina, like most South American countries, has too much red tape, too much bureaucracy, too much corruption, too many people with entitlement. I don't think Keynes has much to do with it. And please spare me the ideas of god' ol Ludwig who has not worked one day of his life in private entrerprises.
https://business.inquirer.net/464261/imf-downgrades-argentin...
people spending is low because people are afraid to spend and\or just do not have money to do anything, most people are barely affording food right now.. also unemployment is increasing..
https://www.reuters.com/markets/emerging/argentine-inflation...
Dolar blue exchange rates are sky rocketing and is more then 4x higher then before Milei..
https://bluedollar.net/informal-rate/
Poverty is also sky rocketing and already affect more then half of the country population.
https://apnews.com/article/argentina-poverty-levels-uca-stud...
https://foreignpolicy.com/2024/03/05/argentina-milei-economy...
He made a surplus in the first month because he basically withheld all the money he could and some the he couldn't, to the point that Chubut governor, that is also right wing himself, was threatening to withhold all the oil produced there. Milei lost the battle in courts..
https://buenosairesherald.com/politics/the-rosca/chubut-will...
He also immediately faced huge protests when he announced his plans in the first month.
https://www.bbc.com/news/world-latin-america-68085197
And protests against his policies have being a constant..
https://www.reuters.com/world/americas/argentinas-milei-face...
https://edition.cnn.com/2024/06/12/americas/protests-argenti...
People did not voted in Milei because they liked him or his ideias, they voted against the other candidate that was the minister of economy from the previous president, and that was clearly not making a good job.
Likely anyone running against him would have won, Milei was just luck to be the one.
And Milei is not even the first right wing president in recent times, they had Mauricio Macri that is from a center-right party, in the government from 2015 to 2019. Macri did as poor of a job dealing with the country economic problems as all the left wing governments previous and after.. Milei is managing to do even worst..
My guess is that as happened with Macri in 2019, Milei will is unlikely to be elected for a second term or to elect a right wing successor if he decide to not run again himself..
In fact, i doubt he would win again in a election held today..
That is just false. When Milei took over, the dollar blue was at 1188 pesos, and it's now at 1445 pesos. That's an increase of 21.6% after 7 months, not 300%/4x. By the way in the 7 months previous to Milei, the increase was 160%.
And about poverty, it was already at 50% when Milei took over. But obviously if you're left-leaning you might want to avoid mentioning it...
Protests? Yeah the same people who didn’t protest once in 4 years while the whole country was peaking in poverty? Very trustworthy group to use as a measuring factor of the country’s health. That’s just the unions and groups that were getting money under the table getting scared of having to actually work like everyone else.
I don’t know if you’re aware but the average worker did not join these protests like they did for example in the protests that happened during 2001.
Let’s not forget the country we had in 2023. Milei did not cause all these things. The country was already going HARD in this direction.
The reason people voted Milei is up to each person and what you said in your last paragraphs leaves so much untold that I don’t even know where to begin. Just because he’s not a “K/Peron” president doesn’t group him with Macri. Macri was very weak in all his policies and politics. If you have a very large vector going in one direction, it takes another large vector at a substantial angle to change it. Macri did neither.
I gotta say though, my shitty neighborhood was never better than during the macri times… wasn’t the left with their big present and spending state supposed to use all that money on the people? I rather have Milei not spend it and have surplus and not have to print money all the time than get devaluation and still not see any progress.
My guess is that your source of information speaks wonders of Lula and is very anti Milei, because all the things you quoted don’t imply what you think they imply. There are at least 70 years of baggage behind all that.
For example paying for unemployment benefits and end-of-life healthcare just gets consumed. Similarly increasing military spending and having people just live on bases likely has a very negative ROI (as it removes people from the labor market).
The argument is that the government is in a unique position to fund infrastructure projects and do long-term investment in underfunded sectors. (Very high expected ROI, because - by definition - these are areas where some money goes a long way, that's what underfunded means, right? But simply maintaining a very large welfare state while economic productivity is bad is ... you won't believe it, but it's bad and unsustainable.)
Tell me the incentives and I'll tell you the result.
private companies indeed go bankrupt all the time.
> Governments [don't care]
many governments care.
see the table on the second page https://www.oecd-ilibrary.org/cost-benefit-analysis-of-inves...
> Governments don't know what has positive ROI
and? no one knows with absolute certainty.
we should prefer market based solutions when they work, and we should work on making markets applicable to as many problems as possible, and we should definitely keep an eye on the usual regulatory capture problems (revolving door, incumbents lobbying to keep competition out, etc..)
markets work when the playing field is clear and equal. (for example global trade works if the seas are clear of pirates, and when there are mechanisms to keep rate of counterfeiting low enough to have trust between consumers and producers.)
https://marginalrevolution.com/marginalrevolution/2020/01/wh...
About levelling the playing field, the problem is regulation in general. Monopolies are only bad if they are supported by violence=governments (for example you could consider Google a monopoly but it's a market based one). You don't need a lot of competition, just remove all regulatory barriers to entry/exit (note: barriers to exit are also important).