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Milei's policies are going to stall once poverty rises further. https://www.reuters.com/world/americas/argentinas-barrios-rising-poverty-stalks-mileis-austerit

Milei's policies are going to stall once poverty rises further. https://www.reuters.com/world/americas/argentinas-barrios-rising-poverty-stalks-mileis-austerity-drive-2024-03-05/ https://www.reuters.com/world/americas/argentinas-barrios-ri... To me this is an incredibly complicated economic problem.

sandspar 3y ago
I have the image of a severely malfunctioning engine, a group of people gathered around trying to fix it. Someone finally gets tired of the whole thing and begins beating at it with a hammer. The other guys shrug. Maybe that'll work.
- zeroCalories 3y ago
  The analogy is exactly the opposite. Argentina has been getting beat by idiotic populist policy forever. Milei is taking a hands-off approach, which will let the economic fiction disappear. Yes, that will send many people into poverty, but the reality is that Argentina is a poor country and cannot provide high standards if living for everyone.
  - leidenfrost 3y ago
    1) Many times qe had "liberal" governments trying to fix it: Alfonsin, De La Rua, Macri. Even the de facto dictatorship tried to open up the economy. All of them failed. 2) Argentina is not poor. It's a rich country and their agriculture industry is one of the best in the world. However, it's an industry with very little trickle down dynamics, compared to other fields like electronics or the service industry. You don't need that many educated people to export crude oil and unprocessed goods to the world. A "pure" agricultural Argentina would be very financially stable, at the cost of having horribly high levels of inequality, with a (from my POV) inhuman quality of life for the average person. And no country in the world would favor that.
    - zeroCalories 3y ago
      1) And they continually get undermined by populists, just as is happening here. 2) Argentina has the GDP of a third world country. It is poor. You don't need natural resources to be a wealthy country, you need efficient industry. You will never get that as long as Argentina continues its populist policies. I'm not even against government spending, but the spending needs to be done tactically, like east Asian countries, not for "muh workers".
  - leidenfrost 3y ago
    > Yes, that will send many people into poverty, but the reality is that Argentina is a poor country and cannot provide high standards if living for everyone. The point of any talk about economics is to create prosperous nations and long lasting well being for the people. Not to make a number look good on paper. If you think that most people should live terrible lives just to have low rates of inflation, you just failed economics.
    - zeroCalories 3y ago
      You will never get a prosperous nation for everyone if you have a wasteful crab bucket economy. Yes, some people will need to be cut off. Hopefully they will find a more productive way to live, or die.
- aerhardt 3y ago
  Milei has a singular focus on curbing hyperinflation, an objective no other politician in recent Argentine history has shown any interest in, and he's using a multi-pronged approach to do so. Some of his policies have been fairly sophisticated, like removing the insanely complex network of quasi-monetary instruments that gave the government multiple ways to print money (ex: LELIQS - my head still hurts trying to understand that tire fire system), others are by-the-book inflation-curbing methods, but all in all more sophisticated than just hitting things with a hammer. Probably curbing inflation won't be enough, and maybe he will fail in doing so, but I think it's wrong to suggest his government is merely trying to brute-force the solution.
  - sandspar 3y ago
    Thanks for informing me. His public persona is "hammer guy" but perhaps that's more for the cameras.
leidenfrost 3y ago
Argentina hss a harsh reality: if it opens up its market and gets dedicated to work on the most profitable industry, you're basically dooming more than half of its population to starvation and poverty. There's a lot of sunken cost, millions of dollars and years of long running companies from an industry founded thanks to proteccionist policies. Those companies don't generate whealth directly, but it does sustain domestic commerce, create jobs and give fluidity to the internal economy
aerhardt 3y ago
The article says that the main cause of poverty is the rising of prices, which is precisely Milei's obsession. There is no indication in the article as to how his policies are going to stall, or am I missing something? I'd agree nevertheless that if he fails to bring prices under control, his government is going to be considered an utter failure.
- dragonwriter 3y ago
  > The article says that the main cause of poverty is the rising of prices, which is precisely Milei’s obsession. No, the article says nothing of the kind. The only thing it says even roughly directly about poverty (though using slightly different words) is that the mechanism by which Milei’s policies are reining in prices is by causing poverty: “…as new libertarian President Javier Milei’s austerity drive squeezes shoppers, helping rein in grocery price rises.”

sandspar 3y ago

I have the image of a severely malfunctioning engine, a group of people gathered around trying to fix it. Someone finally gets tired of the whole thing and begins beating at it with a hammer. The other guys shrug. Maybe that'll work.

zeroCalories 3y ago
The analogy is exactly the opposite. Argentina has been getting beat by idiotic populist policy forever. Milei is taking a hands-off approach, which will let the economic fiction disappear. Yes, that will send many people into poverty, but the reality is that Argentina is a poor country and cannot provide high standards if living for everyone.
- leidenfrost 3y ago
  1) Many times qe had "liberal" governments trying to fix it: Alfonsin, De La Rua, Macri. Even the de facto dictatorship tried to open up the economy. All of them failed. 2) Argentina is not poor. It's a rich country and their agriculture industry is one of the best in the world. However, it's an industry with very little trickle down dynamics, compared to other fields like electronics or the service industry. You don't need that many educated people to export crude oil and unprocessed goods to the world. A "pure" agricultural Argentina would be very financially stable, at the cost of having horribly high levels of inequality, with a (from my POV) inhuman quality of life for the average person. And no country in the world would favor that.
  - zeroCalories 3y ago
    1) And they continually get undermined by populists, just as is happening here. 2) Argentina has the GDP of a third world country. It is poor. You don't need natural resources to be a wealthy country, you need efficient industry. You will never get that as long as Argentina continues its populist policies. I'm not even against government spending, but the spending needs to be done tactically, like east Asian countries, not for "muh workers".
- leidenfrost 3y ago
  > Yes, that will send many people into poverty, but the reality is that Argentina is a poor country and cannot provide high standards if living for everyone. The point of any talk about economics is to create prosperous nations and long lasting well being for the people. Not to make a number look good on paper. If you think that most people should live terrible lives just to have low rates of inflation, you just failed economics.
  - zeroCalories 3y ago
    You will never get a prosperous nation for everyone if you have a wasteful crab bucket economy. Yes, some people will need to be cut off. Hopefully they will find a more productive way to live, or die.
aerhardt 3y ago
Milei has a singular focus on curbing hyperinflation, an objective no other politician in recent Argentine history has shown any interest in, and he's using a multi-pronged approach to do so. Some of his policies have been fairly sophisticated, like removing the insanely complex network of quasi-monetary instruments that gave the government multiple ways to print money (ex: LELIQS - my head still hurts trying to understand that tire fire system), others are by-the-book inflation-curbing methods, but all in all more sophisticated than just hitting things with a hammer. Probably curbing inflation won't be enough, and maybe he will fail in doing so, but I think it's wrong to suggest his government is merely trying to brute-force the solution.
- sandspar 3y ago
  Thanks for informing me. His public persona is "hammer guy" but perhaps that's more for the cameras.

leidenfrost 3y ago

Argentina hss a harsh reality: if it opens up its market and gets dedicated to work on the most profitable industry, you're basically dooming more than half of its population to starvation and poverty. There's a lot of sunken cost, millions of dollars and years of long running companies from an industry founded thanks to proteccionist policies. Those companies don't generate whealth directly, but it does sustain domestic commerce, create jobs and give fluidity to the internal economy

aerhardt 3y ago

The article says that the main cause of poverty is the rising of prices, which is precisely Milei's obsession. There is no indication in the article as to how his policies are going to stall, or am I missing something? I'd agree nevertheless that if he fails to bring prices under control, his government is going to be considered an utter failure.

dragonwriter 3y ago
> The article says that the main cause of poverty is the rising of prices, which is precisely Milei’s obsession. No, the article says nothing of the kind. The only thing it says even roughly directly about poverty (though using slightly different words) is that the mechanism by which Milei’s policies are reining in prices is by causing poverty: “…as new libertarian President Javier Milei’s austerity drive squeezes shoppers, helping rein in grocery price rises.”