Guess Who Has Joined the Javier Milei Fan Club

Janet Yellen met at Sao Paulo with Argentina’s economics minister and came away burbling about the ‘important steps’ President Milei is taking in respect of the economy.

AP/Jose Luis Magana, file
President Milei during the Conservative Political Action Conference, February 24, 2024. AP/Jose Luis Magana, file

We were delighted — and intrigued — to discover, on the Reuters news wire, the remarks of Secretary Yellen in respect of President Milei of Argentina. It seems that Mrs. Yellen met at Sao Paulo with her Argentine counterpart, Luis Caputo. Reuters reports that she welcomed what she called “important steps” by the Milei government to, as Reuters paraphrased it, “restore fiscal sustainability, adjust the exchange rate and fight inflation.”

“There is no doubt that this has been, and will continue to be, a difficult economic transition period for the Argentine people,” Mrs. Yellen was quoted by Reuters as saying in remarks that were prepared for her meeting with Señor Caputo. She couldn’t help but condescend that, as Reuters put it, “protecting the most vulnerable during the transition would be vitally important.” Then again, too, she’s a Democrat, with all that connotes.

All the more striking, though, is the way the encounter subtly marks the significance of what Mr. Milei is doing. He clearly grasps, hence his frenetic international travel, that his challenge is not going to be so much learning from foreign countries. A number of them — including our own — are a few paces away from the predicament in which the Peronists stranded Argentina. Mr. Milei is presenting a way for foreigners to learn from what he is doing.

That is, the professor of economics turned president, has become the teacher, and the world is rapt with attention. Feature, say, his remarks last week at the Conservative Political Action Conference, where he offered a warning against socialism that was all the more eloquent in light of Argentina’s harrowing economic history. It was, after all, a hybrid of nationalism and statism, Perónism, that drove Argentina, once one of the world’s richest nations, into penury.

Hence the urgency of Mr. Milei’s program to, as he puts it, “give Argentines more freedom and to eliminate corruption from politics.” Mr. Caputo told Mrs. Yellen that these reforms are “an inflection point” for Argentina. While Mr. Milei faces hurdles in Congress, he’s making progress on his war on inflation. The Financial Times says prices are due to rise 15 percent in February over the prior month, down from 25.5 percent in December.

“We have avoided hyperinflation,” Mr. Milei crows — an achievement when annual inflation has been running at upwards of 200 percent. His next steps are to “continue lowering inflation,” he tells the FT, and “finish cleaning up” Argentina’s central bank’s balance sheet, which was misused, in an echo of our own Fed, by his predecessors to help inflate the economy. Mr. Milei aims to fix the economy the hard way — not with monetary manipulations.

“Once the central bank is cleaned up, we are planning to lift exchange controls,” Mr. Milei avers. That will, among other things, help reopen Argentina to the global economy. In this regard, Mr. Milei tells the FT he is being guided by “free-market thinkers from the Austrian school of economics” and dismisses calls for more intervention by the state as “Keynesian rubbish.” Nice, again, to hear Mrs. Yellen kvelling about his program.

“The word which best represents this government is hope,” Mr. Milei says, as, the FT reports, polls show “a growing proportion of Argentines believe the economy will look better in six months.” What a contrast with how Mrs. Yellen and  President Biden are handling our own economy. Argentines see that “you don’t get out of poverty by magic,” Mr. Milei explains. “You get out of poverty with capitalism, savings, and hard work.”

The New York Sun

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