Misreading Milei: The American press can only see Argentina through a US lens
December 12th, 2023
It's been frustrating to see the US coverage of Milei, Argentina's new president. The American press seems to deeply misunderstand what's going on. It seems the US reporters can only understand Argentine politics through the lens of the US, when really it's just a totally different situation.
For one thing, the American press loves to call Milei a "populist", which couldn't be more incorrect. He ran against the populist left (the Peronists), and all the key policies he's proposing are a direct attack on what populists want!
In particular, whenever Peronists are in power, they print pesos at an increasing rate over time in order to have more money as spoils to distribute to their supporters. Although this causes inflation in the long-run, this patronage is popular because it creates new jobs (whether or not they're needed) and pays social welfare programs and subsidies. This is a huge part of how the Peronists get reelected.
Printing money also wipes away household debt, because inflation eats at the value of the principal. This is popular because in the short term, it's good for borrowers. It's bad for lenders, but there are far more borrowers than there are lenders. (However this is also bad for borrowers in the long term, because lenders stop lending as soon as they learn that they will lose all their money if they lend it out, so borrowers can no longer borrow! As just one example consequence, there is no mortgage industry in Argentina, so it's really hard to afford a house.)
Milei intends to shut down the money printing. He's also mentioned the possibility of dollarizing Argentina's economy, i.e. use the US Dollar as the official currency and get rid of the peso. Dollarization would tie Argentina's hands forever from a monetary perspective so that if Peronists win again, they wouldn't be able to start printing money like they always have in the past, because they'd no longer have control over the monetary policy. Long story short, it's anti-populist to halt the money printing gravy train, and it's silly that the American press keeps calling him a populist!
The American press also loves to call Milei the "Trump of Argentina", a comparison that simply doesn't map to what I've seen. I've watched many of Milei's speeches, and he's much more like Milton Friedman than Trump. The policies Milei says he'll push for are totally different, and he has a lot more philosophical consistency than Trump ever did. The only serious similarity I see to Trump is that they're both political outsiders who surprised everyone when they won the presidential election.
Frankly seeing the US coverage of Argentina's election makes me wonder how much the American press gets wrong when they write about other countries too… If they have no idea what they're talking about when they write about Argentina, how can I trust what they write for other countries?
P.S. When Milei won the election a few weeks ago, I wrote a brief post about the context of why Milei was elected: https://devonzuegel.com/a-libertarian-just-won-argentina-s-presidency-what-s-going-on
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