Argentina General Discussion: Shock Therapy

[Aurelius2]

Figured I'd make a thread. Lots of news to be had in the coming weeks and months.

Milei has announced a plan to cut the cabinet by more than 50%, retaining only these 8 ministries:
Human capital
Infrastructure
Economy
Justice
Security
Defense
Foreign Relations
Interior

https://twitter.com/electo_mania/status/1726938247501156522

[Reactionary Libertarian]

What exactly are the powers of the presidency in Argentina? My understanding is that a lot of Latin American countries have more powerful presidencies that allow for law by decree and bypassing Congress to some extent. Because from a US perspective, a lot of what he’s proposing sounds impossible without a majority in Congress.

[Battista Minola 1616]

What is a Ministry of Human Capital?

[President Punxsutawney Phil]

What is a Ministry of Human Capital?

The firstborn child of Javier Gerardo Milei.

[Filuwaúrdjan]

[Torrain]

Who will be the first to attempt to bribe Milei's dog medium to bend his approach to their will?

Guess some taxpayers' cash will be spent on it somewhere.

[CumbrianLefty]

What exactly are the powers of the presidency in Argentina? My understanding is that a lot of Latin American countries have more powerful presidencies that allow for law by decree and bypassing Congress to some extent. Because from a US perspective, a lot of what he’s proposing sounds impossible without a majority in Congress.

Yes, the president in Argentina is very much the top dog. More so than in the US even.

[SInNYC]

What is a Ministry of Human Capital?

Ministry of everything Libertarians claim that government shouldn't be involved in. ie, everything that was not relevant to agricultural and/or feudal economies a few centuries back.

[Reactionary Libertarian]

What exactly are the powers of the presidency in Argentina? My understanding is that a lot of Latin American countries have more powerful presidencies that allow for law by decree and bypassing Congress to some extent. Because from a US perspective, a lot of what he’s proposing sounds impossible without a majority in Congress.

Yes, the president in Argentina is very much the top dog. More so than in the US even.

Right, but what does that mean? Can he eliminate agencies without Congressional approval? Can he do dollarization by decree? What are his actual powers?

[Battista Minola 1616]

What is a Ministry of Human Capital?

Ministry of everything Libertarians claim that government shouldn't be involved in. ie, everything that was not relevant to agricultural and/or feudal economies a few centuries back.

I am not sure if I am more or less confused now. I am pretty confident feudal economies typically lacked a minister of infrastructure, anyway.

[Lumine]

The President has more or less the same powers as the US President has, with a couple of noteworthy exceptions. One of them - like across all of Latin America - is the freedom to fire and hire ministers without congressional approval. He can also call the Congress into an urgent session to vote a specific proposal.

The key one is the ability to issue emergency decrees (DNU) with the signature of the Cabinet, which allow the President to dictate or modify laws - as long as they are not dealing with tributary, penal or electoral matters - almost at will. The catch is that they have to go to Congress within a month or so, and Congress can reject them if both chambers vote against. But in the meantime, the DNU has full validity.

In this case, Milei can - like many other Presidents have - issue a DNU to alter the law that sets up the ministries (it's not part of the Constitution). And if he can prevent either the Senate or the Chamber of Deputies (in this case, more likely the latter) from voting the DNU down, he gets away with the Cabinet reorganization.

Thus far, the Argentinian Congress has never voted down a DNU, allowing Presidents to get away with issuing dozens of them. However, no President has ever had so limited Congressional support.

[SInNYC]

What is a Ministry of Human Capital?

Ministry of everything Libertarians claim that government shouldn't be involved in. ie, everything that was not relevant to agricultural and/or feudal economies a few centuries back.

I am not sure if I am more or less confused now. I am pretty confident feudal economies typically lacked a minister of infrastructure, anyway.

Lords loved infrastructure (though I'm not aware of  a feudal "minister" of anything if youre getting technical), they just defined it a bit different than most of us would. You need castles, houses of worship (if they are subservient), moats and walls, safe paths from the farms to the vassals and lords, occasionally even drainage to get rid of icky things from moats (only if your subjects get too uppity about having to do it manually). What you dont need is any infrastructure involving anything allowing peasants to go beyond their parents' place in life.

There is a fine line between corporate welfare and infrastructure, and we will see how far from the line Milei's is able to go.  And I'm guessing the human capital department is mainly about privatizing education, health care, anything to do with the 'peasants'.

[Vosem]

Not to derail this thread with stuff from the American news media, but Sohrab Ahmari's article decrying Javier Milei is just one of the most delicious things I've ever read.

https://twitter.com/robbysoave/status/1727346303338705386

[Ⓐnarchy in the ☭☭☭P!]

Days after the election the newly elected governor of the Peronist stronghold of Tucumán announced major cuts:

https://twitter.com/TraductorTeAma/status/1727012428091654358

"We are betting on a State where we must eliminate all unnecessary expenses"

[wnwnwn]

What is a Ministry of Human Capital?

Ministry of everything Libertarians claim that government shouldn't be involved in. ie, everything that was not relevant to agricultural and/or feudal economies a few centuries back.

I am not sure if I am more or less confused now. I am pretty confident feudal economies typically lacked a minister of infrastructure, anyway.

Lords loved infrastructure (though I'm not aware of  a feudal "minister" of anything if youre getting technical), they just defined it a bit different than most of us would. You need castles, houses of worship (if they are subservient), moats and walls, safe paths from the farms to the vassals and lords, occasionally even drainage to get rid of icky things from moats (only if your subjects get too uppity about having to do it manually). What you dont need is any infrastructure involving anything allowing peasants to go beyond their parents' place in life.

There is a fine line between corporate welfare and infrastructure, and we will see how far from the line Milei's is able to go.  And I'm guessing the human capital department is mainly about privatizing education, health care, anything to do with the 'peasants'.

A 21th Century  Locofoco?

Is a ministery/secretary that already exist. It will also cover some of the functions of the ministeries that Milei is closing.

[Aurelius2]

https://twitter.com/WatcherGuru/status/1728096533906665566

[mileslunn]

My guess is Argentina will see huge boost in GDP which is good thing, but basically all of it will flow to the very wealthy and average Argentinian will be worse off and that is not a good thing.  Societies with a few at top and weak middle class tend to have lots of social issues while countries with strong middle class tend to be most socially cohesive.  Off course it is important to have some rich people, you don't want to go on full communist like Cuba or Venezuela but Nordic Countries have plenty of very wealthy people while still have strong middle class.

Canada and US (Yes I am biased from there) is good example.  GDP per capita is much lower in Canada than US, but Canada on quality of life does much better as less crime, less poverty, less racism, longer life expectancy so many here just fine being poorer than US if wealth more equally distributed and we are still globally in top 20 richest countries per capita, just not top 10 or top 5 (if you exclude tax havens and microstates) like US is.

So my guess is Argentina's GDP per capita rises a lot, but average person is as bad or worse off while it is great for wealthy.  Sort of a repeat of Russia in 90s when oligarchs made it big but rest fell behind as things sold off piece meal.  Cuts and privatization made be needed but should be done methodolically for former while for latter have open competition on bids not given away to oligarchs which I fear if rushed rather than done slower will happen.

[lfromnj]

Lol this is funny. He wants to privatize the argentina air company  by making it a worker cooperative with no subsidies which the union opposes.

https://airlinegeeks.com/2023/11/21/money-losing-aerolineas-argentinas-could-soon-be-employee-owned/

[wnwnwn]

Lol this is funny. He wants to privatize the argentina air company  by making it a worker cooperative with no subsidies which the union opposes.

https://airlinegeeks.com/2023/11/21/money-losing-aerolineas-argentinas-could-soon-be-employee-owned/

The best option for them would be that the goverment keeps subsidizing the company. Also, the idea of 'selling the flag carrier' have an impact.

[oldtimer]

My guess is Argentina will see huge boost in GDP which is good thing, but basically all of it will flow to the very wealthy and average Argentinian will be worse off and that is not a good thing.  Societies with a few at top and weak middle class tend to have lots of social issues while countries with strong middle class tend to be most socially cohesive.  Off course it is important to have some rich people, you don't want to go on full communist like Cuba or Venezuela but Nordic Countries have plenty of very wealthy people while still have strong middle class.

Canada and US (Yes I am biased from there) is good example.  GDP per capita is much lower in Canada than US, but Canada on quality of life does much better as less crime, less poverty, less racism, longer life expectancy so many here just fine being poorer than US if wealth more equally distributed and we are still globally in top 20 richest countries per capita, just not top 10 or top 5 (if you exclude tax havens and microstates) like US is.

So my guess is Argentina's GDP per capita rises a lot, but average person is as bad or worse off while it is great for wealthy.  Sort of a repeat of Russia in 90s when oligarchs made it big but rest fell behind as things sold off piece meal.  Cuts and privatization made be needed but should be done methodolically for former while for latter have open competition on bids not given away to oligarchs which I fear if rushed rather than done slower will happen.

Russia's GDP didn't rise in the 1990's.

All countries that tried Shock Therapy had their economies hit very badly and some never really recovered.

Even Thatcher was forced to abandon Friedman when his ideas failed in practice.

[wnwnwn]

My guess is Argentina will see huge boost in GDP which is good thing, but basically all of it will flow to the very wealthy and average Argentinian will be worse off and that is not a good thing.  Societies with a few at top and weak middle class tend to have lots of social issues while countries with strong middle class tend to be most socially cohesive.  Off course it is important to have some rich people, you don't want to go on full communist like Cuba or Venezuela but Nordic Countries have plenty of very wealthy people while still have strong middle class.

Canada and US (Yes I am biased from there) is good example.  GDP per capita is much lower in Canada than US, but Canada on quality of life does much better as less crime, less poverty, less racism, longer life expectancy so many here just fine being poorer than US if wealth more equally distributed and we are still globally in top 20 richest countries per capita, just not top 10 or top 5 (if you exclude tax havens and microstates) like US is.

So my guess is Argentina's GDP per capita rises a lot, but average person is as bad or worse off while it is great for wealthy.  Sort of a repeat of Russia in 90s when oligarchs made it big but rest fell behind as things sold off piece meal.  Cuts and privatization made be needed but should be done methodolically for former while for latter have open competition on bids not given away to oligarchs which I fear if rushed rather than done slower will happen.

Russia's GDP didn't rise in the 1990's.

All countries that tried Shock Therapy had their economies hit very badly and some never really recovered.

Even Thatcher was forced to abandon Friedman when his ideas failed in practice.

It kind of worked in Peru

[MaxQue]

My guess is Argentina will see huge boost in GDP which is good thing, but basically all of it will flow to the very wealthy and average Argentinian will be worse off and that is not a good thing.  Societies with a few at top and weak middle class tend to have lots of social issues while countries with strong middle class tend to be most socially cohesive.  Off course it is important to have some rich people, you don't want to go on full communist like Cuba or Venezuela but Nordic Countries have plenty of very wealthy people while still have strong middle class.

Canada and US (Yes I am biased from there) is good example.  GDP per capita is much lower in Canada than US, but Canada on quality of life does much better as less crime, less poverty, less racism, longer life expectancy so many here just fine being poorer than US if wealth more equally distributed and we are still globally in top 20 richest countries per capita, just not top 10 or top 5 (if you exclude tax havens and microstates) like US is.

So my guess is Argentina's GDP per capita rises a lot, but average person is as bad or worse off while it is great for wealthy.  Sort of a repeat of Russia in 90s when oligarchs made it big but rest fell behind as things sold off piece meal.  Cuts and privatization made be needed but should be done methodolically for former while for latter have open competition on bids not given away to oligarchs which I fear if rushed rather than done slower will happen.

Russia's GDP didn't rise in the 1990's.

All countries that tried Shock Therapy had their economies hit very badly and some never really recovered.

Even Thatcher was forced to abandon Friedman when his ideas failed in practice.

It kind of worked in Peru

It worked in Lima, dooming the rest of the country.

[wnwnwn]

My guess is Argentina will see huge boost in GDP which is good thing, but basically all of it will flow to the very wealthy and average Argentinian will be worse off and that is not a good thing.  Societies with a few at top and weak middle class tend to have lots of social issues while countries with strong middle class tend to be most socially cohesive.  Off course it is important to have some rich people, you don't want to go on full communist like Cuba or Venezuela but Nordic Countries have plenty of very wealthy people while still have strong middle class.

Canada and US (Yes I am biased from there) is good example.  GDP per capita is much lower in Canada than US, but Canada on quality of life does much better as less crime, less poverty, less racism, longer life expectancy so many here just fine being poorer than US if wealth more equally distributed and we are still globally in top 20 richest countries per capita, just not top 10 or top 5 (if you exclude tax havens and microstates) like US is.

So my guess is Argentina's GDP per capita rises a lot, but average person is as bad or worse off while it is great for wealthy.  Sort of a repeat of Russia in 90s when oligarchs made it big but rest fell behind as things sold off piece meal.  Cuts and privatization made be needed but should be done methodolically for former while for latter have open competition on bids not given away to oligarchs which I fear if rushed rather than done slower will happen.

Russia's GDP didn't rise in the 1990's.

All countries that tried Shock Therapy had their economies hit very badly and some never really recovered.

Even Thatcher was forced to abandon Friedman when his ideas failed in practice.

It kind of worked in Peru

It worked in Lima, dooming the rest of the country.

The shock therapy didn't hurt particualary the rest of tthe country. The centralism problem peaked before that. Most workers hurt by the sale of public companies lived in Lima.
The problem of centralism in Peru is too complex to fully explain, but it's clearly a product of prior events. It probably peaked just before Agrarian Reform, which kind of dromedario in the short term the agrarian sector and increased migración to Lima, but started thebase of a new society.

The inequality between Lima and the rest of the country has actually reduced a bit, but it mostly beneficed the semi-westernised cities and some towns. Some areas near mines has been afected by polution and there is the case of La Rinconada. This balance up things, but its not like shock therapy destroyed the countryside. The worst things on peruvian history were done before the Agrarian Reform.
Those poor towns were poor or poorer prior the shock therapy.

[Okay, maybe Mike Johnson is a competent parliamentarian.]

Not to derail this thread with stuff from the American news media, but Sohrab Ahmari's article decrying Javier Milei is just one of the most delicious things I've ever read.

https://twitter.com/robbysoave/status/1727346303338705386

Reason isn't that extreme. Ahmari is missing an easy lay-up; he can't even characterize Milei as an extremist properly.

[Torrain]

The people behind Liz Truss (this guy runs the IEA, the think tank that basically wrote her disastrous budget, and is rumoured to be on her long-delayed resignation honour list) are *very* excited about Milei. If past is prologue - then good luck, you'll need it...