Argentina General Discussion: Shock Therapy

[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.

[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.

[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

[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.

[wnwnwn]

No you did all you did was go on one of your typical rants about how far right figures like the West which isn’t true heck Bolsonaro doesn’t even like the West he was just a Trump lover. I was talking in the context of far right figures around the globe that are actually taking over and Milei so far fp is the only one that stands out as different

You deflect from the point because you know you are wrong. Pick ANY leaderships from Cold War or Post Cold War and the Right will tend to side with the West much more, simply because the West historically supports the Right outside their borders much more as well. That is not an opinion, but a pure fact.

Bolsonaro being too incompetent or evil to maintain that because Western Liberals got Woke about Gays and the Environment and act like suddenly they aren’t supposed to represent whiteness (and seem to believe what they really represent is Liberal Democracy lol) does not change what is an internal local reality.

Like, Bolsonaro isn’t really THAT different from your average Latin American Right-wing leader regardless if they’re from cold war (ex: Pinochet) or post cold war (ex: Uribe)

Anyway, Milei’s flop inauguration only had 8 global leaders total going to celebrate it:

- Armenia
- Chile
- Ecuador
- Spain
- Hungary
- Paraguay
- Ukraine
- Uruguay

Basically, all the right-wing governments in South America (you can maybe include Boric in there lolz) + Spain for obvious cultural ties not related to ideology + Armenia whose interest is a mystery to me + Hungary and Ukraine for new geopolitical club ally, at least in how those two perceive Milei.

First time a Brazilian president doesn’t go to the Argentinian president inauguration in 40 years, since democracy returned to Argentina. Which is quite significant.

Bolsonaro was invited and went to the inauguration as Milei’s friend though.

Bukele is the most popular president in the region. His absense means a small failure.
Out of that, everything seemed allright. Fernandez seemed sympathetic to Milei.

[wnwnwn]

Looks like I named the thread well:

https://twitter.com/DanielDiMartino/status/1734755187661668593

Beyond the generic IMF type austerity, he is focusing on trade.

Also he realises that there will be a negative impact, so the child benefit and food aid expansion is surprisingly realistic from him.

Well, he talked about 'hunger' in his campaing, but a lot of his supporters did memes and videos agaisnt food stamp recievers. The plan itself isn't the worst for the context, but it doesn't appeal much to his base. That will have its effects.

In the other hand, would somebody want a 'Peru thread'?

[wnwnwn]

Hermanito solo te pregunté la hora. Anyway, my point was that people who have detailed knowledge of their ancestry are usually pretentious rich people and you are not exactly disproving my point

X2

Well, in LATAM if an american didn't get his point.

[wnwnwn]

Guys, if you want to talk sh**t about LaTaM issues, just troll one of my Peru threads.

Light skin mestizo peruvians who only know the andean towns where their grandparents lived don't care about where the white part of their DNA come from (they suppose Spain usually, but that's it).
Doing research on those issues is not common.

[wnwnwn]

On topic, there are demonstrations planned for December 20.
https://www.infobae.com/america/agencias/2023/12/16/argentina-vivira-el-20-de-diciembre-una-de-las-marchas-mas-importantes-contra-el-ajuste/

[wnwnwn]

On topic, it seems Milei would let employers pay using Bitcoin, in words of his Minister of Foreing Affairs:
https://twitter.com/DianaMondino/status/1737874320322424984?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet

Newspapers says that this open the posibility of payment in kind.

[wnwnwn]

A reason why shock therapy worked in Peru was because the country didn't have a 'culture of massive protests'. Peru also had the Shining Path problem during the forst years of Alberto Fujimori's goverment, which discouraged protests. Also, after the self coup agisnt the always unpopular Congress and Guzman's capture, Fujimori's popularity only increased. By 1993, a new constitution was approved.

Now, Argentina is a different situation. Remember the 2001 crisis? La Rua had to leave the pink house. Peronists are still allied with those groups that lead protests. Most people seem to just be alineated, but Argentina is the cacerolazo country for a reason. 2024 will be a hard year for Milei and his fellow citizens.

[wnwnwn]

Of course the usual suspects always so concerned with democracy in Latin America say that doing the exact same thing as Chávez (giving him presidential superpowers) is okay because he won't actually do the crazy stuff and he is not a lefty . Jeez, wonder where I have heard this before.

The punditariat class of the LATAM press truly reunites some the most disgusting people of the planet

The most out of touch*
The right leaning opinion pages in peruvian social media are the most out of touch spam possible.
That pundit class even supported a stupid after Castillo imposed an state of emergency for a day after rumours of massive looting appeared in the day of planned protests. This may have sounded too authoritarian, but some looting did happen before in the prior hours.
I don't like Castillo, but the campaing of the pundit class agaisnt Castillo was horrible. It made Alwater look like a saint

Back to topic, I suppose Milei has put some very extreme measures in his omnibus law proposal to force reaching an agreement which would ended up meaning passing most of what he actually wanted.

[wnwnwn]

That's actually a rather sensible measure considering the state of Argentina's finances but the schadenfreude is delicious.

I could feel empathy towards that Venezuelan student coming drom the future, but maybe another student from Peru could have warned Argentinians about the dangers of voting for someone who will turn the country inside out in the authoritarian fashion of Fujimori. You can say whatever you want about Massa, but he's not like Maduro

Peruvians generally support the policies of our central bank, which current form started after reforms by Fujimori. Before that, we had Alan Garcia and hiperinflation and a situation similar to Fernandez's Argetina. I don't think most peruvians would persuade people to vote for Massa.
The issues most related to Fujimori was corruption, Grupo Colina (a paramilitary group), forced sterilizations and the impulse of 'chicha culture' and 'trash television' (Laura Bozzo became popular in the 90s). I don't think Milei has show sings to support a paramilitary group or forced sterilizations.

[wnwnwn]

Alberto Fujimori knew how to get people support him. He made the self coup only as he expected the people to support him after that (most peruvians did). That's not the case with Milei, who seems dissasociated from the average argentinian.
Also, Milei's oposition is way more organized that Fujimori's opposition was in the early 90s.
About human right violations, they were also done by 'democratic' peruvian presidents before Fujimori. During Belaunde's first term in the 60s, the goverment did a genocide on matze natives during the construcción of a highway. Also, Alan Garcia had his own paramilitary.
Milei has the luck that his opposition is easy to ridiculize. In the 1990 run-off campaing in Peru, the idea of massive layoffs of goverment workers had some racial connotacions. In campaing, Fujimori accused Vargas Llosa to support them indirectly as effect of MVLL's economic platform, remarking the supposed racial connotations of an ad he did on a monkey in an office (it was actually agaisnt APRA members that were high level goverment positions back then, not average peruvian clerks). The white passing (at least for peruvian standarts) Vargas Llosa, maybe occulting his feelings, didn't defend himself well. Small thigns like this helped japanese peruvian Fujimori to win. Both in 1990's Peru and 2023's Argentina, 'ghost jobs' in goverment offices were a fact. Fujimori did the massive layoffs, but he correlated them with APRA unqualifed members in ghost jobs (which were a good part of the people affected), so most peruvians accepted the measure. Milei is doing the same, in this case with the 'noquis' (peronists in 'ghost job' positions). As a good part of them are as white as Milei, it's hard to make racial connotations on the massive layoffs. Actually, it was one of the less controversials parts of his campaing.
Some say goverments newd bread and circus to survive. Mieli's policies try to make sure that most argentinians will have at least some bread during the probably difficult mext years, and the circus seem to be done with his 'anti-casta' measures agaisnt peronists. As peronists organizations get out of the welfare system, he may offer bread and circus at the same time. The argentinian cultural industries will suffer, but Milei needs the support of the masses to survive and he may get it if he plays his cards well.

[wnwnwn]

Poverty in Argentina hits 20-year high at 57.4%, study says

I read Milei gave only 30% raise on minimum wage when yearly Inflation is already above 250% now. I cannot grasp how people survive with this.

OTOH the government is making surpluses now. The bet people seem to be making is that short to medium term big sacrifices are necessary in order to stabilize the economy.

That means there will be goodwill towards Milei for at least the next two years, where most people will be willing to accept that kind of stuff, which includes the poverty rise. However, if the economic scenario ISN’T stabilized and reversed that will generate an even bigger resentment because people won’t accept living like that forever.

Milei is doing a 'shock', a massive reducción of subsidies to reduce fiscal spending and help inflation reduce i  the long term. This was expected.

The problem is that Milei supossedly increased welfare spending to avoid massive hunger, but this measures doesn't seem to translate to funding for 'comedores populares'(soup kitchens):

https://elpais.com/argentina/2024-02-25/milei-ahoga-a-los-comedores-populares-antes-era-dificil-ahora-es-peor.html

Where would be the money going?...

Maybe the goverment has created alternatives. Am I right or wrong?

[wnwnwn]

There’s a high chance that the election of Milei is a new epoch in global history and will lead to a rise of libertarian parties worldwide just as labor parties did. By all accounts Milei is shrewd and has a good chance to succeed.

Argentina has a very particular situation and Milei policies hasn't been that much different to what right wingers in other country would do in his case.