[HN Gopher] Notes on Argentina
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Notes on Argentina
Author : paulpauper
Score : 47 points
Date : 2025-01-26 16:58 UTC (6 hours ago)
(HTM) web link (jorgevelez.substack.com)
(TXT) w3m dump (jorgevelez.substack.com)
| blackeyeblitzar wrote:
| > 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.
| andsoitis wrote:
| > how quickly Milei was able to make these changes.
|
| Milei's speech at Davos 2025:
| https://www.weforum.org/stories/2025/01/davos-2025-special-a...
| g8oz wrote:
| Interesting speech. He certainly seems to worked up over
| various culture war topics.
| EA-3167 wrote:
| The same powers that allow Milei to make rapid changes are the
| ones that allowed decades of his predecessors to run the
| country into the ground.
| igsomething wrote:
| 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.
|
| [1]
| https://en.wikipedia.org/wiki/Law_of_Bases_and_Starting_Poin...
| darthrupert wrote:
| Amazing news. This is bound to cause painful cognitive dissonance
| on those who hate to see free market capitalism working.
| codechicago277 wrote:
| 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.
| slothtrop wrote:
| 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.
| wslh wrote:
| 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.
|
| [0] https://www.cato.org/blog/mileis-key-pending-task-ending-
| arg...
|
| [1] https://www.investopedia.com/terms/c/currencycarrytrade.asp
| augusto-moura wrote:
| Interesting that we have the same saying in Brazil. Latin
| America countries are very similar indeed
| wslh wrote:
| 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.
|
| [1] https://datacommons.org/tools/visualization#visType%3Dtim
| eli...
| Yoric wrote:
| To confirm my understanding: weren't protectionist policies
| (e.g. corruption + clientelism) pretty much enshrined
| pillars of Peronism?
| wslh wrote:
| 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.
| keb_ wrote:
| > 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.
| thrance wrote:
| 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?
|
| [1] https://www.bbc.com/news/articles/ceqn751x19no
| Empact wrote:
| 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.
|
| https://www.batimes.com.ar/news/argentina/expert-reports-say...
| https://x.com/marionawfal/status/1870100943418630363?s=46
| thrance wrote:
| 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".
| marcosdumay wrote:
| 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.)
| tptacek wrote:
| 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.
| cryptonector wrote:
| 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 Rua'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
| Rua 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.
| AtlasBarfed wrote:
| 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.
|
| Best of luck to Argentina.
| marcosdumay wrote:
| Notice that his government hasn't been libertarian.
| NooneAtAll3 wrote:
| and the poverty wasn't high
| thrance wrote:
| "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.
| hackeraccount wrote:
| do you want cheap prices and empty shelves or high prices and
| non-empty shelves?
| a2tech wrote:
| I think people want to buy food and not starve. So neither I
| guess?
| asveikau wrote:
| 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.
| bradleyjg wrote:
| _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.
| thrance wrote:
| 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.
| quijoteuniv wrote:
| I really really struggle to understand how anyone can have a
| rational justification of that guy.
| boxed wrote:
| It's all about what the alternative is. And the alternative is
| very bad.
|
| I'm not saying this is a good rationalization, but it is a
| fairly rational one, as those things go.
| quijoteuniv wrote:
| Tell me about the alternatives
| selectodude wrote:
| 75 years of Peronism?
| quijoteuniv wrote:
| 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?
| selectodude wrote:
| 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.
| rbanffy wrote:
| I would love to understand what effect the military
| dictatorships had in the economy.
| selectodude wrote:
| The junta started the downward slide. Peronism stepped on
| the country's neck once it was down. Argentina has never
| had good economic stewardship.
| pydry wrote:
| This is how Chavez and Maduro kept getting elected in
| Venezuela, but still, good luck explaining that to a Euro-
| Atlanticist...
| onislandtime wrote:
| 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.
| MadSudaca wrote:
| What do you know about the guy?
| tptacek wrote:
| 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"?
| slekker wrote:
| He did say it would get worse before it got better
| rbanffy wrote:
| "Some of you may die, but it's a sacrifice I am willing to
| make" - Lord Farquaad
| antics wrote:
| 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.
| Empact wrote:
| 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...
| asveikau wrote:
| 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.
| xienze wrote:
| > 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).
| asveikau wrote:
| When I look at Argentina I still see boom-bust cycles
| that subside.
|
| The most prominent crashes I can remember are in the late
| 90s/early 2000s and the current one.
| tptacek wrote:
| 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.
| tonyhart7 wrote:
| seems like someone dont take preliminary on economic class
| before
| SamPatt wrote:
| He said he spoke with about 100 local people, and that was
| their general consensus.
|
| They're more likely to understand how they're better off than a
| tourist, or someone reading what a tourist wrote.
| skybrian wrote:
| We're reading about their views secondhand - it's all what a
| tourist wrote.
| Geee wrote:
| 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].
|
| [0] https://en.wikipedia.org/wiki/Chinese_economic_reform
|
| [1] https://en.wikipedia.org/wiki/Poverty_in_China
| magicfractal wrote:
| Yeah, seems like everything is much worse off but somehow a
| higher dose of neoliberalism will definitely fix things, just
| give it more time
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