Before anyone starts comparing to the US’s DOGE, let it be said that the two countries have virtually nothing in common economically.
Argentina has a nearly century-long history of economic volatility alternated with stagnation, massive inflation crises, a spell of military dictatorship (after a flirtation with fascism)…
Wait a second…
(In all seriousness, Argentina is truly unique. As economists say, there are only four kinds of economies in the world: developed, developing, Japan, and Argentina.)
Prior to that they had an 'economic miracle' from WW2 till then which is probably more what people refer to. The lost decades are quite easy to understand with conventional economics - they had a property and stock bubble which got everyone left with huge debts when it collapsed.
You have a point, for sure; the _whole_ previous century (couple centuries, even) of Japan economical history is one-of-a-kind (as is Argentina’s).
However, wtr. “lost decades are quite easy to understand with conventional economics”: that’s more debatable. For example, stagflation is common(ly explained), but stag-deflation (as in Japan) is more unusual and has weirder effects. The US subprime crisis was also a real estate bubble (which, here also, rippled to the financial markets), but its burst had quite different fallouts.
Anyway, thanks for adding to the discussion, and disclaimer: IANAE (I Am Not An Economist — thanks God ^^)
Or to put it another way: extreme steps were probably required in Argentina to tackle a truly hidebound, rentier-dominated and corruption riddled government. Inflation expectations were strong and justified. Government deficits were out of control. And the population was truly ready to bear some pain for the sake of reform. (Source: My guide in Argentina this past November; Milei’s approval rating has stayed high despite economic contraction.)
Argentina is what Trump’s team imagines the US to be. They’re not the same.
>Inflation expectations were strong and justified. Government deficits were out of control. And the population was truly ready to bear some pain for the sake of reform
We went from 25% inlation where prices changed every single week to discussing whether the government will be able to lower inlation from a monthly 2% (still high, o course). The goal post was moved but I'm just glad not to have prices change every week, it was complete madness. And the 2% is the average, of course, you can find some prices the same as they were 2 months ago.
Unless you're not looking very hard I presume you're making a polemic point here. i.e. it's not a good faith response to the person you're replying to.
They are obviously saying "the differences are significant enough for these measures to be misplaced" and you probably mean something like "I think the differences in these areas are closer than you claim".
So - go ahead and make the argument you intended to make so we can engage with it.
I'm not sure why every conversation about politics on HN brings out everyone's inner asshole. I asked a simple question—how are they different? I'm not being polemic or "making a point". I asked a simple question because I am a simple man and do not understand what makes these situations so different.
On the surface, a popular president is voted into office on promises of "cutting government inefficiencies" and then proceeds to do just that. Not sure if that's "not looking very hard", but those look pretty similar to me.
I happen to hold my politics very loosely, and so (at the risk of being downvoted by angry HN commenters) I asked, "How are they different?"
Sorry I don't spend hours every day reading up on politics and comparing international presidential trends.
Very short answers are often intended as offhand snark. Combined that with the fact that it seemed to me (and I assume many others) that the large differences between the Argentinian situation and the US one was incredibly obvious - I was drawn to the conclusion that you were most likely being snarky.
I did however moderate my reply to be respectful and I attempted to draw out a more thoughtful response. The fact you categorise me as the asshole in this leaves me even more uncertain as to your sincerity.
Many of the things Argentina is doing are getting Argentina closer to what the US was. Labor unions have much less power in the US - and so the US was not seeing the problems of a too powerful labor union (or at least not near as many, depending on if you are pro or anti-union you will also argue if we are seeing problems with too weak a union)
In particular Argentina is moving to free trade, while Trump is moving away. Trump also isn't working within the law/constitution to make his cuts while it appears Argentina is.
There are a number of open court cases on if he can fire people like that. There are some injections in place already, and the supreme court is likely to get involved. It isn't clear if Musk's job is even legally something he can hire someone for. All of this will take years to work out in the courts and so there won't be repercussions for a while.
The above is really complex. I don't pretend to understand the laws.
> What is Trump doing that isn’t lawful or constitutional?
Quite a lot of things. Many of them that might be Constitutional for the government but are illegal and unconstitutional for Trump because they would require Congressional action to make or change law to be valid, and that hasn't happened. That applies to, for instance, most of the spending cuts that are not done through the budget process and the mass firings.
> And why aren’t there any repercussions (as far as I know) for that?
There have been legal reversals, but court processes are slow. There aren't other consequence, because most other consequences for malfeasance by the Chief Executive require active Congressional action, and while Congress has not actively done what is necessary to make actions legal, it also hasn't been interested in taking corrective action against Trump, largely because the majority tacitly supports the illegal actions (both in their substance and the decision to do them by unlawful means.)
The US economy pre Trump was one of the best performing in the developed world, the Argentinian one one of the worst. There's a saying - if it ain't broken don't fix it.
>That facilitated more disciplined monetary policy and the reduction of inflation from 25 percent per month when the president came to office to 2.2 percent in January 2025.
25% is ridiculously high even for a yearly inflation rate. But to have it monthly means the value of the currency halves every 3 months. I thought there must have been a typo somewhere, but sure enough, that is the correct value.
After some time, they actually issued the bills of the new fake money that magically got real (pun fully intended).
Here in Argentina we had almost simultaneity the "Convertibility Plan" https://en.wikipedia.org/wiki/Convertibility_plan <voice="Mingo"> One (AR)Peso equal to One (US)Dollar</voice>. It was successful to reduce the inflation but it was hard to drop the peg later and it caused a lot of problems.
The current government is "crawling peg", of 2% reduced recently to 1%, so people does not get attached to a magic number. (It may be brilliant or a disaster, we will know in 10 years.)
I lived in Brazil during hyperinflation, and the transition to the Real. During that time we would go buy groceries at the first moment after a paycheck, filling up carts to last as long as possible because prices would be changing not just every day but a few times a day, grocery stores would employ people whose only job was to remark prices on the shelves in the morning, afternoon, and evening.
At the time I don't think many people believed that yet another currency change (we had gone through the Cruzado, to Cruzado novo, to Cruzeiro, to Cruzeiro real in a span of 8 years) would solve it, I was too young to understand the plan and it just felt like another annoying swap of currency I needed to do.
The URV (real unity of value) was this abstract thing we could use as benchmark against the previous currency (Cruzeiro real) and the new one being introduced (Real, the one living to this day), the more sweeping changes were broad fiscal reforms, and removing the stupid indexation between prices and wages.
If this were stated for many countries it would be cause for concern, and it certainly draws parallels to the US - but Argentina's economy has been a disaster forever, and regularly suffers from huge hyperinflation and government defaults.
It seems much easier to justify the argument for radical government cuts and austerity in this environment.
Milei seems to be part of a regular pattern of swinging back and forth between economic extremes. The author of the video/channel is skeptical that this latest round will do much in the long term (previously things 'worked' in the short term before going off the rails).
(I don't have the knowledge/expertise to judge his analysis, but some of the history/context was interesting.)
Also from 2011 we have an official dollar exchange that is like 30% less than the black market one https://en.wikipedia.org/wiki/Argentine_currency_controls_(2... Note it was lifted in 2015 but it started again in 2019 (It's explained near the bottom, but I can't find a specific article.) This inflated the GDP. We ever cheated in the Big Mac index!
> POLITI: That's right. Under Milei, the poverty rate increased to more than 50%. An even more shocking statistic is that 6 in 10 children live in poverty.
From topic's article,
> and the poverty rate, after having initially risen, has fallen below the 40 percent range that the previous government left as part of its legacy.
Tax to GDP ratio in Argentina before Milei was below OECD average, presumably cut down further now, and the country will go into debt with the IMF anyway.
Aren't the Kochs big on fossil fuels? Surprising the article doesn't mention what Milei aims for in that area, or the Atlas Network connections they have to him.
Economic conditions in Argentina were exceptionally horrible before Milei, and now they are... ordinarily bad. It looks like progress!
Alas, I'm always a bit skeptical of any piece published by the Cato Institute, because it is not exactly an impartial source. The Cato Institute always advocates for lower taxes, less government, fewer business regulations, fewer consumer protections, and fewer restrictions on personal behavior. Always, regardless of the specifics.
When it comes to economic policies, I prefer to see pragmatism over ideology. If something works, do it; if it stops working, stop doing it. In the words of Lee Kuan Yew, who led the transformation of Singapore from one of the poorest to one of the wealthiest societies on earth:
> My life is not guided by philosophy or theories. I get things done and leave others to extract the principles from my successful solutions. I do not work on a theory. Instead, I ask: what will make this work? If, after a series of solutions, I find that a certain approach worked, then I try to find out what was the principle behind the solution. So Plato, Aristotle, Socrates, I am not guided by them…I am interested in what works…Presented with the difficulty or major problem or an assortment of conflicting facts, I review what alternatives I have if my proposed solution does not work. I choose a solution which offers a higher probability of success, but if it fails, I have some other way. Never a dead end.
> We were not ideologues. We did not believe in theories as such. A theory is an attractive proposition intellectually. What we faced was a real problem of human beings looking for work, to be paid, to buy their food, their clothes, their homes, and to bring their children up…I had read the theories and maybe half believed in them.
> But we were sufficiently practical and pragmatic enough not to be cluttered up and inhibited by theories. If a thing works, let us work it, and that eventually evolved into the kind of economy that we have today. Our test was: does it work? Does it bring benefits to the people?…The prevailing theory then was that multinationals were exploiters of cheap labor and cheap raw materials and would suck a country dry…Nobody else wanted to exploit the labor. So why not, if they want to exploit our labor? They are welcome to it…. We were learning how to do a job from them, which we would never have learnt… We were part of the process that disproved the theory of the development economics school, that this was exploitation. We were in no position to be fussy about high-minded principles.
I find the Libertarian obsession with Argentina quite curious. There seems to be this view that Argentina is massively over-regulated with massive government and that if you strip that all away Argentina will be a power house of productivity and wealth. The problem I have with that is... that's not libertarianism. Thinking that Argentina should be regulated and taxed a bit more in line with a modern liberal European democracy is not a demonstration of the successes of Libertarians. I would think that the libertarian would be far better pointing at a low regulation, low tax economy and demonstrating how reduced regulations would help there. Maybe for example, take the US banking regulations and strip them away - if the libertarians are right, we'll see a boom lifting all boats. If they're wrong we'll see a string of notorious and massive scams ripping of the average American. Unfortunately that'll never happen so I guess we'll never know.
Charles Koch libertarian think tank believes Milei's libertarian views are correct.
There's not really much of substance to take from blatant biased opinion reviews of public policy, you will accept or reject it purely based on how your views already align.
Argentina's government has been a disaster for a century.
It's not at all surprising to me that reining in government spending in an economy that has had 4? Defaults over the past few decades will result in an improvement.
I'm very aware of it, growing up in Brazil an Argentinian crisis was on the news every couple of years. I'm not saying anything about the Argentinian government, I do feel something like Milei was bound to happen. I wished it never needed to be so drastic but that's just my humane side showing some bias, they needed a shock to get out of the eternal crisis.
What I'm criticising is using Cato Institute's mouthpieces as an analysis of it, as if it were a model to be followed, and using this rather peculiar societal issue as a pillar to the ideas the think tank tries to push all the time, it's just blatant libertarian propaganda.
As of right now, the comments on the Marginal Revolution blog are rather telling. Generally agreeing that the two situations are not remotely the same.
Cato ignores a lot of failures coming from austerity or deregulation initiatives, they are literally a paid mouthpiece for the world view Koch-adjacent folks have, they do not exist to provide comprehensive analysis of benefits and failures of deregulation. They solely exist to push the view regulation = bad, even to the point of a dualspeak-esque attempt to put freedom and regulation completely at odds.
I do not understand who can read Cato's opinion pieces and believe it might have something substantial to be said, if you subscribe to libertarianism there are much better intellectual works to provide you arguments.
Even if I don't subscribe to their views, Kevin Carson, and Gary Chartier have the non-right wing form of libertarianism put up for discussion, instead of this Ayn Rand/Milton Friedman corporatist view of libertarianism.
Argentina has a nearly century-long history of economic volatility alternated with stagnation, massive inflation crises, a spell of military dictatorship (after a flirtation with fascism)…
Wait a second…
(In all seriousness, Argentina is truly unique. As economists say, there are only four kinds of economies in the world: developed, developing, Japan, and Argentina.)