Argentina’s economic reform: a new model to stop crying

BUENOS AIRES — Argentina is an 11-hour flight and two time zones away from New York, so the news it has just elected a radical free-market economics professor named Javier Milei as its new president may not resonate with many Americans.

But Milei’s landslide win over an entrenched left-wing political machine Juan and Evita Peron founded in the 1940s (immortalized in the Andrew Lloyd Webber musical “Evita”) is significant on many levels.

  • Milei will replace an anti-American Peronist regime that was cozy with US adversaries.

China, Argentina’s second-biggest trading partner, has had growing influence over the country’s valuable shale and lithium reserves and operates a military-run space station there that Argentine officials have no access to. 

Milei has called China an “assassin” regime, and while still allowing trade with it, he will strictly limit official ties.

Argentina will also drop out of attempts by nations such as Russia and Brazil to create a new unit of account as an alternative to the US dollar.

Indeed, Milei wants to put a brake on Argentina’s 143% annual inflation rate by adopting the dollar as its de facto currency. 

The local peso has lost about 90% of its value against the dollar on the black market in the last four years.

Other US allies will benefit from Milei taking office. 

He recently waved an Israeli flag in solidarity with the Jewish state and has pledged to move the Argentine embassy to Jerusalem.

He also firmly supports Ukraine in its war with Russian President Vladimir Putin.

  • Milei has lessons for US leaders on how to attract aspirational young people and lower-income voters. 

Surveys show two-thirds of Milei supporters were under the age of 43.

Sunday’s election showed him winning big among the 40% of voters who work in the informal sector.

At the same time, he underperformed in wealthy Buenos Aires districts where many people have benefited from the crony capitalism the ruling Peronists have nurtured.

A former singer for a Rolling Stone tribute band, Milei brandished a chainsaw at his rallies to demonstrate how he would chop up “useless” government ministries.

He has clearly mastered both performance art and social media.

Nigel Farage, a populist hero of Brexit in Britain, and Donald Trump are admirers.

To critics who complain about his outlandish behavior, Milei’s incoming foreign minister, Diana Mondino, has a crisp answer: “If Javier combed his hair neatly, if Javier didn’t get angry, would people ever have invited him to speak?”

  • Though he was mostly known as a “shock jock” pundit before his election to Congress two years ago, Milei seems to have internalized the observation the late Gov. Mario Cuomo once made: “A leader campaigns in poetry and then governs in prose.”

During his Sunday victory speech, Milei was calm and even conciliatory to his opponents.

“From being one of the richest countries in the world, today we [are] 130th. Half of Argentines are poor, and another 10% are destitute,” he said. “Today we embrace the libertarian model so as to return to being a global power.”

Claiming his 11-point victory margin as a mandate, Milei has already smartly formed alliances with establishment conservative parties that may be able to help him pass his economic program through Congress.

If he succeeds, Milei could rehabilitate the battered reputation that America, free markets and free trade have in a region crucial to US interests.

After recent left-wing victories in Brazil and Colombia, Argentina now joins Chile, Paraguay, Ecuador and Uruguay in successfully countering the left-wing tide.

Of course, it would also improve the lot of the long-suffering people of Argentina and provide a new model for their future. 

“Imagine someone born 25 years ago in Argentina,” informal worker Franco Leonel told me in the capital. “For your entire life you have seen nothing but misery and little chance to get ahead unless you emigrate. We simply want to be a normal country again.”

There are a whole lot of people in the world who want the advantages of living “normally.” 

Professor Milei may have something to teach them as well.

John Fund is a columnist for National Review and a fellow at the Committee to Unleash Prosperity.

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