Argentina’s Milei marks one year in office. Here's how his shock measures are reshaping the economy | The Associated Press
Argentina’s Milei marks one year in office. Here's how his shock measures are reshaping the economy | The Associated Press
BUENOS AIRES, Argentina (AP) — When libertarian President Javier Milei assumed office one year ago, Argentine supermarkets were marking price increases on
All the Argentinians living in poverty since Milei took power, must be excited about inflation dropping these couple percentages.
They already were living in poverty
This guy is very much the opposite of my general politics.... But I think he has had the right idea with the economics here. Better to hurt now and be better later than hurt a little for ever (and not really grow... And risk the government defaulting again)
However... I don't trust him to actually make everyone better off once the economy is recovering. Expect income disparity to continue growing.
It's sad to see people fall for this obvious scam. He's using vague, unsubstantiated promises to legitimize a massive robbery of the working class. Poverty and unemployment are rapidly growing while the rich get richer. There's no economic justification for this, it's just grift.
But it’s who’s hurting. When the solution involves making the poor suffer more for the better of the economy…you think that’s the right solution?
I’m not going to pretend to know much about the Argentinian economy. But using the basic tenets of my moral worldview, I have to say I disagree. But hen again, I am incredibly uninformed about the history of politics in Argentina. And I will say, what I learned from my Argentinian friends while living in South America, I would have to assume the problem is similar to other countries in South America (and in NYC)—it’s not the structure, but the string of corrupt assholes who take advantage of the position when they get in power. That story is not unique to anywhere in the world. Power corrupts people. So I’m going to, again, share my kind a uninformed opinion and say I would assume corruption has been the problem, not that the poor people weren’t getting screwed hard enough.
My (very rough and possibly incorrect) understanding was that there was a lot of government subsidies of things and lots of government jobs that somewhat existed just to employ people.
This resulted in huge government expenditure as rich/middle class people took advantage. (I heard something about heated swimming pools as electricity was so subsidized. Not checked that though) This meant that the government was always teetering on bankruptcy (again) and the economy never really grew.
My understanding was basically that the country was pretending to be much richer than it was. This is more about resetting to what it can actually afford - hopefully setting itself up for future growth.
If the government went bust, most of this would have happened to an extent anyway. I'm not sure what other options there where, I think the other option at the election was to spend their way out, but they had no money and that would have pushed inflation even further.
Tldr:
On taking power, Milei implemented a series of austerity measures, including slashing energy and transportation subsidies, laying off tens of thousands of government workers, freezing public infrastructure projects and imposing wage and pension freezes below inflation.
It has been brutal. Unemployment has climbed, economic activity has declined and poverty has surged.
But now signs have emerged that Argentina’s bizarre and long mismanaged economy is starting to look a little more normal.
Inflation, Argentina’s perpetual scourge and Milei’s top priority upon coming to office, slowed from a monthly rate of 25.5% in December 2023 to just 2.7% in October
A stronger peso is also boosting confidence. The black market dollar price has dropped since July, narrowing its gap with the official rate of 980. Chileans, once accustomed to bargain-hunting in Argentina, are now surprised to see the traffic reversed.
That his approval ratings have held up at some 50% is also a sign of how desperately Argentines wanted change after years of crisis. “Strangely enough, there comes a time in all societies, when the cost of a fiscal adjustment becomes less than the cost of continuing with inflation,” said Sebastián Mazzuca, an Argentine political scientist at Johns Hopkins University. “It’s like a fire. There are badly injured people, but the fire was put out, wasn’t it?”
tl;dr: the poorest will pay the price yet again.
Very much so:
The poverty figure for the first six months of this year was 52.9%, up from 41.7% in the second half of 2023, said the country's Indec statistics agency.
Since taking office in December, Milei has slashed subsidies for transport, fuel and energy and sacked thousands of civil servants, as he seeks to bring down inflation and reduce government expenditure.
https://www.bbc.com/news/articles/ceqn751x19no
But hey, he's curbed inflation! Libertarianism FTW, am I right?