In a surprising turn of events, Argentina has elected the libertarian outsider Javier Milei as its new president. The hotly contested presidential run-off saw Milei defeating left-wing candidate Sergio Massa — a consequential shift in the country’s political landscape. Massa brusquely conceded on Sunday night, stating, “Milei is the president elected for the next four years.”
The victory of Milei, a self-proclaimed “anarcho-capitalist,” introduces an unconventional leader with what are considered to be radical economic views relative to Argentina’s neighbors. His campaign, characterized by anti-establishment rhetoric and metaphorical gestures such as wielding a chainsaw to show his fervor for cutting taxes, resonated with voters frustrated by Argentina’s economic decrepitude, including triple-digit inflation. One of Milei’s key proposals is the adoption of the U.S. dollar as Argentina’s national currency, an unprecedented move for a country of its size (Argentina is home to some 45.8 million people).
Massa — a lifelong politician and representative of Argentina’s left-wing political establishment — emphasized his government’s actions to address inflation during his tenure.
But Milei’s appeal, particularly among the younger generation, suggests a desire for change to break free from the cycle of economic crises.
Milei’s victory has produced excitement and concern alike. While some see him as the catalyst for much-needed economic reforms, others fear the potential austerity measures tied to his plans, such as shutting the central bank and slashing spending. Despite the uncertainty, Milei’s supporters view him as the only viable option to break the political status quo and address Argentina’s persistent and extreme economic challenges.
The election is not just a political shift but also a generational one, with Milei’s popularity among the youth reflecting a desire for a new direction. The effect of Milei’s win extends beyond Argentina’s borders, potentially influencing trade relationships, especially with his criticism of China and Brazil and his preference for stronger ties with the United States. As for the U.S., the hour is late, and we’ll take all the friends we can get, and Argentina is doubly welcome because the Millennium must be nigh if a libertarian won an election outside of New Hampshire.
The Argentina news I might add is a huge boost for the US dollar and trade with the United States given Milei's plan to dollarize Argentina.
Argentina would be the largest country to ever dollarize its economy.
— Daniel Di Martino 🇺🇸🇻🇪 (@DanielDiMartino) November 19, 2023
For more background, read John Fund’s latest reporting from Argentina on Saturday evening:
Buenos Aires — Argentina is a beautiful and charming country filled with people eager to show it off to visitors. But even they admit that, economically, they feel they are living in a Twilight Zone episode that never ends. A lot of them hope that Sunday’s election will usher in real change and put the nation “on the path to becoming a normal country,” in the words of the Acton Institute’s Alex Chafuen, an economist from Argentina.
The economy is likely to shrink 2.5 percent during 2023, while inflation is expected to hit 200 percent by the end of the year. More than 40 percent of the population is classified as living in poverty. Argentina has defaulted on its international sovereign debt three times in the past 20 years, and this week its unreliability prompted its neighbors Bolivia and Paraguay to stop shipments of bananas and pineapples. “Yes, we really have no bananas today,” Josh Mills, an American businessman in Argentina, quipped to me.
A hundred years ago, Argentina was one of the six wealthiest countries in the world. Now it ranks 66th, below Mexico and just above Russia. The slide began in 1946 when Juan Perón and his wife Evita took over the country. Joseph Humire of the Heritage Foundation recently summarized their reign:
In addition to giving sanctuary to Nazis, together the couple trashed the Argentine economy and eroded the country’s future by expanding the power of labor unions, creating lavish welfare programs, engaging in massive deficit spending, and introducing a form of “corporate socialism” that put Argentina on a path toward cronyism that continues today.
You can read the rest here.