Tag: Javier Milei

Categories
international affairs political economy regulation

Rents After the Chainsaw

Javier Milei, Argentina, free markets, regulations, housing

Argentina’s Ministry of Deregulation — yes, it now has one — reports that by June 2024, little more than half a year after chainsaw-​wielding libertarian candidate Javier Milei won the presidential election, the housing market boomed … into a magnificent recovery.

Back in March, Reason magazine observed that listings on the Argentinian real-​estate platform Zonaprop had increased from 5,500 before Milei’s deregulation “to 15,300 today, a staggering 180 percent rise.”

Why the big jump?

Strict national rent controls had been imposed in 2020, by the previous administration. When Milei lifted them, replacing them “with nothing,” tenants and landlords could then make whatever arrangements they could agree upon.

One method of evading the punishing controls had been switching to an Airbnb model of renting, with contracts renewable every three months. Such expedients were almost mandatory … given Argentina’s galloping inflation. But they introduced their own kinds of uncertainty.

Owners also took units off the market.

Annual rentals plummeted under this anti-​market regime. In late 2023, Valentina Morales saw maybe “12 apartments advertised in the entire Palermo neighborhood,” a region with a population of almost 250,000.

Rents on the few apartments available with annual contracts skyrocketed. Tenancies were required by regulation to last for three years, with arbitrary and unrealistic caps on rent increases. And rent had to be paid only in pesos. But since inflation did not pause under the pre-​Milei regime, owners were forced to guess how high inflation would go over the three years … and they charged accordingly.

Now? All such nonsense is gone.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with Krea and Firefly

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
budgets & spending cuts international affairs political economy

Was Milei Bailed Out?

Javier Milei, Argentina, bailout, foreign policy

You saw it on the news, newscasters almost gloating: Argentina’s peso plunged — triggered by  low reserves and political defeats for President Javier Milei.

Then the U.S. Treasury under Secretary Scott Bessent finalized a $20 billion currency swap line with Argentina’s central bank. This was on top of direct U.S. purchases of pesos in the market and plans for another $20 billion from private sources. The deal was seen as a U.S. strategic play to counter instability in Latin America.

Some called it a bailout.

Were Milei’s radical reforms saved at the expense of the U.S. taxpayer?

Bessant was asked this, yesterday, directly on MSNBC, and had a response: “Do you know what a swap line is?”

I had to brush up on it. (I don’t engage in any cross-​currency swaps, understandably, not being a major corporation, a central bank, or a sovereign state.) A currency swap is a financial agreement between two parties to exchange principal amounts and interest payments in different currencies over a set period — a temporary loan in one currency backed by collateral in another, designed to provide liquidity, hedge exchange rate risks, or access cheaper funding without the full risks of outright borrowing.

“In most bailouts you don’t make money,” Bessent said. “The U.S. government made money.”

In an exchange, both parties gain. But in any exchange involving extended spans of time, there is risk, so any initial win for Treasury could be wasted by a failure of Milei’s course.

Unlike American politicians opposing inflation, Milei’s been quite honest with Argentinians: “To cure inflation, you have to go through a recession. There is no way around it.” So why Milei didn’t just peg the Argentine peso directly to the U.S.; why a “crawling peg” rather than strict? Milei has been clear: he lacked political clout.

Milei insists that his crawling peg reform isn’t gradualism (which he despises), and that the swap isn’t a bailout; Bessant agrees, saying the swap’s “a profitable move for America.”

This is Common Sense. I’m Paul Jacob.

Note: Milei’s party gained in the most recent election.

PDF for printing

Illustration created with Krea and Firefly

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
ideological culture international affairs

Age of Arms

Argentina, gun rights, Javier Milei, economic recovery

While it is entirely reasonable to treat children and adults differently, and for laws to reflect this basic division, questions of precisely when children should become adults have eluded rationality. 

In Argentina, where the legal age to vote is 16, young people may join the military at age 18, but had to wait till 21 to own a gun. 

Until Argentine president Javier Milei’s reduced the minimum age to purchase and carry a firearm to 18, a step towards greater consistency.

But that is not how the culturally dominant left-​wing media and intelligentsia see it. They paint dire dystopian visions of violence as a consequence of Milei’s libertarian pro-​carry, pro-​armament philosophy.

 A December article in The Epoch Times shows that this old, elitist attitude is falling to the wayside as “Residents of Argentina’s Crime-​Ridden Cities Welcome Milei’s Gun Reform.”

Key point? Dire dystopia is current reality.

Years of inflationism, government growth and regulation, as well as the seemingly endless political struggle between communists and Peronistas, has left a rising rate of homelessness and poverty.

And the homeless are getting grabby. 

In public. 

More daring and violent everywhere.

Against this, the pre-​Milei government’s soft-​on-​criminals approach left normal people feeling defenseless. So gun ownership has understandably increased. The Epoch Times quotes a Buenos Aires resident who “believes that the public’s attitude toward firearms ownership is shifting away from the notion of less guns equals less gun crime, an ideology that was promoted by the previous administration.”

While Javier Milei’s program to reduce inflation appears to be on course, Argentina has been so dystopian for so long, most changes for the good will be incremental.

Like setting the age to carry firearms to equal the military service age.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with Flux and Firefly

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
general freedom international affairs

Denial Is a River in Argentina?

“In the history of the Earth, there is a cycle of temperatures,” said Javier Milei during a presidential debate in 2023. “We are not going to adhere to the 2030 Agenda [a United Nations list of dozens of goals for curtailing countries’ use of resources]. We do not adhere to cultural Marxism. We do not adhere to decadence.”

Now Argentina’s President Milei is acting to formally withdraw from accords requiring countries to become poorer in order to “save the planet,” etc.

Although Milei has axed many government departments, his government still has a chief environmental officer. This personage had been leading the Argentine delegation attending the COP29 climate summit in Azerbaijan, happening November 11 – 22, 2024. But Argentina had told the delegation not to participate.

Now Milei has pulled them from the summit. Why? That was not immediately announced. But “Milei has consistently denied the existence of a climate crisis,” moans the Buenos Aires Herald.

Denialist Milei doubtless recognizes hurricanes, tornadoes, and other incidents of drastic weather. He’d probably add, though, that planet earth has seen plenty of crisis-​level weather before carbon-​emitting industry arrived to take the blame.

Milei’s decision to exit COP29 came a day after his meeting with President-​elect Donald Trump, of like mind on environmental and other questions.

Trump is expected to re-​withdraw the U.S. from the 2015 Paris agreement, another anti-​industrial environmental accord. We don’t know yet whether Argentina will also withdraw. 

But if you’re betting Yes, I like your chances.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with Midjourney

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
inflation and inflationism international affairs too much government

Is Milei Making It?

After libertarian economist Javier Milei surprised the rest of the world by winning the presidency of Argentina in 2023, the question became whether — or how quickly — he could slash government programs, privatize nationalized firms, and set free a flatlining government-​controlled economy.

A president can do some things on his own. But Milei requires the cooperation of the legislature to institute many substantial reforms. And for months his legislative agenda has stalled.

Now some of it is being enacted. On June 28, the Chamber of Deputies passed a sweeping package of bills that Reuters dubbed Milei’s “first big legislative win” and Bloomberg’s Manuela Tobias characterized as “deregulat[ing] vast swaths of the economy and boost government revenues.…”

The enacted reforms include provisions to make it easier for employers to fire workers and to deregulate the oil and gas industry. Milei was able to privatize only a few of the dozens of state firms that he wanted the government to unload.

Tobias notes that the passage of Milei’s reform package, “albeit significantly watered down,” is impressive considering that members of Milei’s own party constitute less than 15 percent of the lower chamber.

Milei’s most obvious success has been fighting inflation, which according to Deutsche Welle is “down from around 25 percent per month last December to 4.2 percent this May.” This is a major achievement for a figure outside the mainstream of globalist standard opinion, who has called himself an “anarcho-​capitalist” (of all things) and was labeled by the German paper “right-​wing populist and economically liberal.”

Terms mean different things in different countries: it’s pretty obvious that Milei’s program has nothing to do with that of American “liberals” such as President Biden and his partisans.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with Midjourney and Firefly

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
Accountability deficits and debt international affairs

The Shock of Surplus

Rooting for Argentina and President Milei

The current president of Argentina is an avowed “anarcho-​capitalist.” He isn’t really — but close enough for government work.

It’s more accurate to say that Javier Milei is a capitalist and libertarian. He has taken on the job of extricating the Argentinian economy from the mire of socialism and corruption — unleashing outlawed market processes.

He seeks to do it not by pushing for micro-​changes around the edges of the margins of government spending and intrusions but by figuratively wielding the chainsaw that he literally wielded during his election campaign.

One sign of the success of his “shock therapy” cited by The New York Sun is the “first budget surplus in more than a decade.” A monthly surplus of almost $600 million is the first surplus since the summer of 2012.

But, the Sun quickly adds, Milei’s various radical proposals still face an uphill battle in the legislature. All those people who created the mire are still around.

There are hopeful signs. The lower chamber has already passed a preliminary or framework agreement to make various basic reforms. These include privatizing of currently state-​operated companies, deregulation, and revamping of criminal and environmental laws.

The lawmakers “chose to end the privileges of the caste and the corporate republic, in favor of the people,” Milei says.

Meanwhile, though, egged on by unions, thousands of Argentinians have taken to the streets in a general strike to protest the reforms. Milei can win, but it won’t be easy.

This is Common Sense. I’m Paul Jacob.

PREVIOUS COMMENTARIES ON JAVIER MILEI

Milei Defends Capitalism
January 24, 2024

Market Rents Work in Argentina
January 23, 2024

Milei’s Chainsaw
January 6, 2024

To End the Great Declension
December 13, 2023

The Outsider Who Won
November 20, 2023

The Ultimate Outsider
October 24, 2023

Two Libertarians, North and South
September 19, 2023

PDF for printing

Illustration created with Midjourney and Firefly

—

See all recent commentary
(simplified and organized)

See recent popular posts