For today's article, I have the good fortune of being an economist with family in Argentina. I have to say I disagree with several key points (as well as, ultimately, the takeaway for electoral strategy).
One thing you have to remember with developing countries like Argentina is that while the "macroeconomic management" does matter for growth to a certain extent, these countries' growth problems are mostly *microeconomic* and *political* in nature. The economy sputters because markets basically don't work at all, and the central bank/fiscal policy are way too captive to political considerations to keep *trend inflation* low.
Argentina is no exception. Over the past 20 years, a system had developed where there basically wasn't a single market-determined price in the entire economy. Successive Peronist governments (with a brief Macri interlude) had delivered a dizzying array of market controls, regulations, and subsidies, each meant to patch over an issue created by a previous government intervention. On the political side, one major reason the peg failed is that politicians, faced with incentives to over-spend before elections, never actually managed to get spending down to a sustainable level. Inappropriate "Neo-Keynesian management" is not the main reason why Argentina has failed to grow.
Milei's radicalism really can't be reduced to the dollarization proposal. The chainsaw/"Afuera!" represent a commitment to deal with the microeconomic problems. Indeed, Milei's government (advised by Sturzenegger) has already gone a long way in liberalizing Argentina's markets, with reforms to housing, labor markets, and trade policy. This more libertarian perspective is precisely what he was selling, and he was promising to do it in a much more extreme way than Bullrich. This was certainly not some sort of "centrist" approach to policy -- although economists see the merits of these reforms, many were worried about insufficient planning for the adjustment period.
Finally, we need to ask ourselves: if moderation is the key to winning elections... why didn't Bullrich win? I think you can't really escape the conclusion that Milei was just leagues ahead in terms of selling his agenda. Moreover, people were reasonably worried that Bullrich would talk a big game about "reasonable" reforms, which would then lead to something like the mild, temporary relief of the Macri administration rather than a true path forward. In a place like Argentina, sometimes you can't afford to be as risk-averse as a conventional candidate. Sometimes you just need to take a calculated risk and roll the dice!
It's funny, "rolling the dice" was exactly how an Argentinean economist who I met on a plane ride last year described it to me. She lived in the Netherlands and really wasn't a fan of Milei, but said that she could understand the rationale behind voting for him. The left clearly failed, the centre-right appeared weak - so voting for Milei and hoping for the best seemed like a sensible option to many people. Kinda like disillusioned Trump voters in the US, except that Argentina was actually doing bad.
Disillusioned American voters were sold a bill of goods - that the economy was actually bad - and voted to “fix” it with deportations and tariffs. Why those fix anything, I don’t know.
They weren't upset with immigration in general but in perceptions as reported by Fox and probably the MSM: Namely, some crimes committed by undocumented immigrants and the asylum issue at the border.
Now they can see what Miller & Trump's solution is, they don't like it.
The Democrats moderation here is campaigning on a platform of deporting undocumented criminals _and_ getting asylum at the border under control no matter what the groups say. (And the more the groups complain the better as far as perceptions go.)
2. They don't like Trump's current solution (even though when they voted for him public opinion was in favor of deportations).
I submit that the public wasn't just upset because of Fox news. Illegal immigration and the abuses of the asylum system really were big problems. Biden really did make it worse.
The public being upset now isn't a surprise. The public doesn't like illegal immigration. They public also doesn't like video of crying families being torn apart by ICE.
As usual the public wants things that are at least partially in conflict with each other. Just like they want low taxes and lots of entitlements.
Also rainbows and unicorns for everyone (at someone else's expense)
You're generalizing “people don't like undocumented immigrants or immigration” when what they really don't like is criminal immigrants. It's not that they want contradictory things or things that conflict. All the polling before the election did distinguish this.
In general I think Matt should take his own belief that people want someone who plays the President on TV more seriously. A campaign is an effort to shape how a politician's character ('character' as in 'TV character', not as in 'personal virtue') is situated within the narrative (and again, narrative here as in 'the story of a season of TV', not in some bespoke academic sense). In the Argentinian narrative there was a lot of fatigue with leftists and failed efforts to not be a socialist wacko, and Milei did everything he could to position himself as the guy who really hates leftists and would rather die than be a socialist wacko. I think ascribing more significance to it than that on the part of the voters drastically overrates their intelligence and familiarity with anything of substance. And to be clear this is not an insult directed at the Argentinian people, this is true of essentially all democracies in an era where people no longer take voting cues from local elites who might actually understand issues.
I do second your overall remarks from a global developing markets perspective as the my experience in FDI (not hot money) investment in developing markets is most frequently it is the micro-economic Rent Extractions as Regulation that is the huge problem. I was just myself commenting in Noah Opinion on the Tunisian case where they have a system from the dictatorship that's basically a Liscence Raj - hard to move a pinky finger in business economically without some permit, liscence - all dressed up in social language but really becomes levers for rent extraction - bribes, facilitations, partnerships as well as exclusion of competition with Regime related oligopolies - whether private or state owned in end it becomes almost theoretical difference.
I mentioned I think in Noah comment in Developing Markets I have almost libertarian views given so much of the regulation is façade dressed up in nice lefty language for social responsability etc to protect established interests (state, non-state... same-same) as well as direclty and indirectly extract rents.
What exactly are your disagreeing with? Yglesias clearly talks about the reforms Milei has undertaken:
"Combine this with scrapping rent control to bring more apartments onto the legal market, and deregulating prices in everything from airlines to maritime transport, and you’re left with a much more normal economy."
My short answer to what I'm disagreeing with is "almost everything"!
1. One of the article's premises is that Argentina's problem is bad "Neo-Keynesian management." It's not the first time that Argentina has been through a boom, and the last time was under Peronists. The optimal "Neo-Keynesian management" would be to alternate between Peronist and conservative, IMF-approved governments. Right now, the economy is running "too hot," so we need some austerity.
This is just a misdiagnosis of the problem. Argentina's problems are structural: persistent deficits (even under Menem!) and horrible microeconomic policies. The Keynesian theory would say that to get inflation under control, we need austerity, which will generate a *decline* in growth. This isn't what happened: structural reforms are *boosting* growth while inflation declines.
2. The article basically asserts that but for the dollarization plan, Milei is a conventional technocrat economically, following the moderate approach to governance that Matt usually endorses.
This doesn't seem to me like the right way of viewing things. Many conventional economists (myself included) thought Argentina needed these reforms in the long run but were quite worried about the short-run pain of ripping off all the band-aids at once.
Milei's radicalism lay in being far more aggressively libertarian than your typical economist, who's much more of an incrementalist conservative. (As Dave Coffin put it, Milei is doing Hayek or Friedman, not Keynes!) In hindsight, it looks like the more aggressive path was the correct one.
3. On the electoral front, I really don't think everyone was falling in love with Milei solely because of the dollarization plan. Contra Matt, basically everyone knew this wouldn't happen: I had plenty of conversations with relatives who could barely tell you how the stock market worked who, by election time, could tell you "we're never doing dollarization because we don't have the reserves." (Also, why would dollarization have been popular, in Matt's view? Isn't the moderate issue position typically the one that wins the most votes?)
4. Plenty of other details of the narrative are wrong... e.g., by August 2023, people were certainly thinking that there was a very good chance Milei would win. The unofficial "blue" dollar exchange rate had plummeted. I think Matt was a little out of his depth on this one.
This doesn't read like a list of high-level disagreements on substance as much as a list of changes in emphasis and hair-splitting.
MY thinks the dollarization plan was REALLY bad, and it was certainly what folks fixated on pre-election outside of the country. Perhaps people on the ground were more focused on the minutia, but dollarization is what 'broke through'. It would've been a disaster, and Milei just didn't do it. This underlines the broader point about "capturing the vibe" with weird rhetoric vs. actually doing dumb things (like replacing all of the grocery stories with ones run by the city).
Also, your effort to distinguish between Keynes and Hayek/Friedman resonates with me and possibly this crowd, but MY is talking with folks who view all of this as "Neoliberalism". Yes, deregulation is good! Markets are good! To the mood of the discourse, you're splitting hairs.
Anyhow, I appreciate you providing a more nuanced view with additional expertise. But I think your points would be more usefully framed as additional color or mild quibbles.
>The article basically asserts that but for the dollarization plan, Milei is a conventional technocrat economically, following the moderate approach to governance that Matt usually endorses.<
It seems to me austerity and market liberalization are pretty conventional. I mean, neoliberalism is practically the very definition of "conventional" in the modern era. But sure, Joseph Stiglitz and Thomas Piketty likely don't approve of the *pace* of the reforms. There's no doubt many people in that country have undergone tremendous suffering.
>One of the article's premises is that Argentina's problem is bad "Neo-Keynesian management<
I interpret the article as saying that Argentina's economic problems of late have been excessive dirigisme and ruinous borrowing, (aka Peronism). Is that now called "Neo-Keynesian" economics? Is Trump a Neo-Keynesian?
>On the electoral front, I really don't think everyone was falling in love with Milei solely because of the dollarization plan.<
I don't see where the article claims Milei won over the electorate "solely" because of dollarization. Yglesias claims that Milei campaigned as a "populist" (true enough). Part of that populist campaign was a call for dollarization. He also engaged in quite a bit of Trump-style cultural right-wingery.
I felt that Matt's key points were (1) Melei's policies are good in that they are roughly in line with conventional economic thinking, and only radical in that they were very different from the bad policies that previously caused hyperinflation. (2) the dollarization proposal was dumb but popular; good thing he didn't follow through. (3) stylistically populist rhetoric/narrative made him popular with voters, who aren't economists and can't tell if his ideas are actually any good.
I see you saying that Matt overblew the importance of dollarization (to voters) and that, actually, conventional economists were worried about the speed/drasticness of Melei's changes (moreso than the actual policies he put in place). These are certainly disagreements, but I feel like your stance isn't that different from Matt's on the whole. Perhaps if I were familiar with terms like "Neo-Keynesian" I would appreciate the disagreement more, but I am not.
" if moderation is the key to winning elections... why didn't Bullrich win?"
I think you can be less moderate if your direction is the way people want to go. That is, everyone wanted to go in at least the direction of Bullrich, so overshooting got attention and was acceptable.
But plausibly:
1) Make sure you're actually just overshooting, not going the wrong direction
2) This works better if you're not the incumbent. Once you're the incumbent and thermostatic backlash is starting to kick in - moderation is now in the correct direction (going with the thermostatic tide)
It seems to me that technocratic circles and academic circles generally massively underestimate the real impact of Good Sales Skills (aka Comm Skills aka Campaigning Skills) - and a big sales pitch in a dynamic way is something for example Trump is really good at (he's a natural genuis there able to overcome his series of objective failures).
The NYC guy doesn't give much lessons for Rest of Country on substance I would say (quite the contrary) but in campaigning and sales skills he certainly does. One doesn't have to be a young guy to do that (see Trump again) but it is something that some people have and others do not. The Democrats seem since Obama to fundamentally wish-away as well as focus on selling to the already-sold rather than selling to new customers.... (and it's heresy and treason to sell to the impure customer...).
A risk-taking moderate willing to Talk Big certainly can happen.
"if moderation is the key to winning elections... why didn't Bullrich win?" Because when economic conditions get quite dire people become interested in just voting for the party that isn't in power.
During the Great Depression we saw for example:
USA: Republicans replaced by the Democrats
UK: Labor coalition replaced by the Conservatives
Germany: Weimar Coalition replaced by the Nazis
You see this even on the province level in Canada where in Alberta a left wing agrarian was replaced by a conservative radio blowhard and religious fundamentalist while in neighboring Saskatchewan a new socialist party defeated the conservative politicians who had been in power. This isn't about ideology or campaign tactics, it's about people voting against the party in power when the bottom falls out of the economy.
The hard reality is Argentina has been an economic basket case for some time now so things get weird, but you shouldn't draw many lessons from that unless your country is also an economic basket case (which the US isn't).
(It's like all the takes claiming Mamdani winning shows socialism is the future of American politics when what you should really learn is that it's good to run against two massively unpopular opponents who barely bothered to campaign.)
Great comment but I'm wondering why you call Argentina a "developing country." In the early 20th century Argentina was one of the ten most wealthy countries in the world.
Yes it was. When I say "developing" I'm mainly talking about its GDP per capita. But the reason for slow growth over the past century is plausibly the degradation of important institutions by Peronism, military dictatorship, etc. In a way, Argentina un-developed during the 20th century.
I mean a reactionary, tight authoritarian link between church, industry, and state which results in state control of industry to favor a small cabal of traditional power elite (including the church).
Explicitly includes Falangists and others.
I don’t think east asia has that many explicit Franco and Mussolini fans, who harken for that kind of traditionalist authoritarian government.
I kind of see that differently. There are plenty of authoritarian governments in East Asia, and by Western standards many of the cultures are quite conservative and hold a lot of values we might consider very traditional, especially wrt nationalism.
It might not look superficially like Mussolini but governments in Vietnam, China, NK and Myanmar feel very fascist-like to me.
I think a key difference is a pretty significant number of South Americans would call themselves “fascists.” Like it’s not a totally toxic brand. I don’t think you’d see that in east Asia. Fascist isn’t authoritarian- I mean Vietnam and Cambodia are still technically communist, Singapore and Malaysia weren’t fascist at all but we’re arguably authoritarian, same with SK. But no one would call themselves a fascist like they might in Chile, Argentina, or Colombia
There has been a lot of talk about Pinochet being a model for authoritarian governments worldwide (to the point of even being an “ism”—apparently “Pinochetismo”…)
I think it may just be a bad equilibrium. When you have a very corrupt political system, it's hard to vote out the guys throwing goodies to your coalition, because then you just get corrupt guys who throw goodies to the other coalition. No one wants to take the risk of being the first non-corrupt guy.
Why did they develop a corrupt political system? For example, in the US the goal was always yeoman farmers. We didn’t grant vast tracts of land to a class of elites we gave the land free to anyone who wanted to farm it. In South America vast land grants were given to elites with the goal being the land worked by peasants.
from early 20th century on Argentina to my best understanding saw the instalation of a certain normalisation of Peronism in a broad sense that became very hard to walk back. I would suspect the military dictatorhships need to throw some bones to the population at large (my overall experience in developing markets is the military officer class may be anti-Left in cultural terms but typically deep down feel that Command & Control is the way to go so you end up often in military juntas have such no matter what the supposed ideological color of the military)
Well, keep in mind that Argentina also royally screwed itself. At the turn of the (previous) century: Argentina was about as rich as the United States. It's fallen well behind. That's largely due to poor macroeconomic management.
Worth mentioning that Milei's party, La Libertad Avanza, has been a minority party in the National Congress and has had to form a coalition with Republican Proposal, the party of noted neoliberal Mauricio Macri, and a handful of independent parties to pass legislation. Dollarization was simply never on the table without an outright LLA majority.
I'm genuinely baffled by the "Milei is a right wing populist/Trump-esque figure" thing that the media adopted. And then Matt's throwing out "Neo-Keynesian" and I'm maybe even more confused. The man is an Austrian economist. He's not doing Keynes. He's doing Hayek. He's the epitome of the mostly imaginary free market libertarians that the Tucker/Oren Cass/Steve Bannon right wing populists think are the anti-christ that have destroyed the country. He's actually done what Elon imagined DOGE would do because he's not an incompetent with a crippling ketamine addiction and Elon's half assed aspirations towards being Milei were enough to turn him into public enemy number one of the Batya Ungar Sargon's of the world. Milei is the polar opposite of a populist, but apparently his "South American Nick Gillespie" schtick is short circuiting people's brains or something.
The entire thing from the Trumpist smears to the "economists warn of disaster" letters seem like straight up anti-market propaganda from the industrial policy fetishists.
I think the thing Milei shares with Trump is being a TV star, having big hair and somewhat flamboyant style, though of course the (big) difference is that Melei was a political pundit who commented on serious issues while Trump was a reality show star pretending to be a businessman (which worked better on TV than in actual business, where he was a huge failure).
Well, Argentina probably had too many people employed by the government, and the US is capacity constrained by not having enough (even pre- DOGE, possibly going back to Obama).
Sure, I'm not actually suggesting you could or would do what Milei has done with the chainsaw in the same way in the US, simply that Milei is a serious person about it in a way DOGE was not.
I'm convinced that the entire point of the terrorization is Mitt Romney's famous "self-deportation." Even Stephen Miller knows the federal government doesn't have the ability to deport tens of millions of people in a few years, so if the government is cruel enough to a smaller number of illegal immigrants, the rest will be frightened and leave on their own.
I think it's giving too much credit to make Miller seem like he's doing this kind of 3d chess. He surely knows the theory, and he'll take it, but he doesn't actually care if the end game is self deportation or concentration camps. He's going to go as far and as hard as he can get away with. Nor does he actually care about anyone's actual immigration status, he's equally as happy to deport citizens he doesn't like. Even if every undocumented immigrant in the country was gone he'd keep right on disappearing people.
It’s not even that, it’s deterrence. Would you pay a coyote thousands of dollars to come here right now, given what we’re seeing on television? The 2020 primary signaled that if Democrats won, the doors would be open. Trump is sending the opposite signal and it looks like it’s working. Fewer people are bothering to come.
I think this is a little off base. Crossings had already plummeted in 2024. They went down because policies were put in place to make them go down, not because of the vibes passing around the Darien Gap.
I guess because it points things out that people on multiple sides of the issue don't want to accept, nobody ever puts forth the probably-correct theory that crossings were high in 2021-2022 because Biden wanted them to be, because it was good economic policy.
That's not a policy without downsides, especially political downsides, but it's a more sensible and explicable policy than "oops," or "we had to do it because leftists told us to."
The ability to add millions and millions of extremely low-paid, hardworking people who put preposterously low demand on services is what made the US recover from the pandemic and inflation so much faster than the rest of the world. But this doesn't get discussed, because it's not the rubric on which we discuss immigration, which everyone usually wants to discuss in terms of crime or social justice. And because nobody in Democratic politics wants to make a pro-immigration argument right now, not even a "non-woke," mercenary one.
Immigration was not even a campaign issue until inflation fell below 4% and "the economy" no longer looked like a sure path to victory. Fox News IMMEDIATELY pivoted to all immigration, all the time, it shot up to the top of the "BIGGEST ISSUES!" list in surveys, and the non-right wing press, being the gutless parrots they are, accepted that this had happened totally organically and represented actual voter passion, and dutifully reported on how "angry" voters were about immigration until Trump won.
That sounds sensible and would be plausible if Stephen Miller agreed with you. All evidence is that he's ramping up an institution that will forcibly remove vast numbers of these people, not just be cruel to a small number pour encourager les autres.
I’m curious if other countries that are less of a basket case have done a chiller version of what Milei is doing-Chile and Peru? Chile seems pretty well run, but I have a ton of grad school friends from there and they’re a bit biased.
Yeah, the Trump association is just vibes, but those are mostly vibes that Milei created. This is what Matt was referring to when he wrote that you have to sell the sizzle. Milei is courting all that, and successfully. He's a surprising combination of a capable politician and capable leader in office, so far. I hope he breaks the pattern Matt discussed of initial success followed by reversals.
>I'm genuinely baffled by the "Milei is a right wing populist/Trump-esque figure" thing that the media adopted<
IIRC Melei was rather effusive in his praise of Donald Trump. And he was also rather Trumpy in his frequent denunciations of "Communists" and "Leftists." This probably has something to do with the media coverage.
Really? It seems to me fervant and frequent denuncations of the left (socialists, communists, Antifa, radicals, etc) is part of the standard tool kit of right wing populism.
"Trump is putting less demand-side stimulus into the economy than his 2024 competitor would have done with a trifecta because he leads the conservative party" seems like an underrated take here too.
Being a populist has absolutely nothing at all to do with policy. At least not on the right. It is about being a vehicle to express the hatred, anger and frustration of the voters. You can attach any policy program to it you want so long as that policy program has the vibes of expressing hatred, anger, and frustration.
Populism is fundamentally about zero sum conflict where you take, materially or socially, from some minority subset of the population and give it to the some majority tribal coalition. Deregulation/freer markets/individual rights are inherently anti-populist policies.
Populism is fundamentally about *vocalizing* about zero sum conflict and *saying* you will take, materially or socially, from some minority and give it to some majority. It’s not as essential what you actually *do* as long as you keep the vibes.
This is a very weird definition of populism and far too materialist for me to take seriously tbh. Many of the canonical examples of populism do include this element, but they mostly include it because the *affect* of populism (anti-elite, pro-masses) is well-aligned with this political strategy.
Also, I don't think even under your own definition it necessarily follows that deregulation is inherently anti-populist. If there is some group of people who are protected by current regulations, and you are making the case that they have unfairly accrued resources at the expense of everyone else and are taking that away, why is that not 'taking from a minority subset' and 'giving it to the majority'? It seems to me your argument presupposes that a deregulated market is the state of nature and returning to it can never be mobilized as part of an affect of revenge or inter-group conflict, but I don't think either of those premises is well-founded.
I think you're misunderstanding what's meant by "Neo-Keynesian" here. What Matt means by "Neo-Keynesian" is that governments should pursue expansionary fiscal and monetary policy when the economy is in recession, and contractionary policy during inflation, which is what Milei is doing. That plus a bunch of deregulatory policy which is orthogonal to the Keynes question.
It Matt had said that Milei's "Afuera" approach to slashing the government was not inconsistent with Keynesian economic prescriptions given the conditions, that would be more obviously correct than the implication that Milei had gotten into office and simply dropped his program in favor of some bog standard IMF playbook.
What does "right wing populist on immigration" even mean in the Argentine context? A quick google implies it's almost trivially easy to immigrate to Argentina vs somewhere like the US.
It could simply mean making it less trivially easy to immigrate to Argentina, right?
But it could also mean many other things, such as making it harder for immigrants to access benefits, defunding naturalization programs or otherwise making naturalization harder, making deportations easier, etc..
Could be? The "populist" valence of immigration policy might be entirely different in Argentina. I've got no idea. Maybe it's all about rich foreigners sheltering their assets down there or something. Could be very different from the the populist labor dynamics of the US context.
I would imagine that Argentina has a problem with Venezuelan and Haitian immigrants, like most other countries in the western hemisphere. Those are the people you build immigration restrictions against, not wealthy Americans.
Yeah, I think people are kind of forgetting that Argentinians are, broadly speaking, white as hell, and also have a wider degree of genetic diversity within Europe beyond "Spanish" allowing them to identify with the pan-European conception of "whiteness" in roughly the same way you see in North America.
I'm not trying to call out any particular weakness of Argentinean character when I say that their views on immigration might mirror those of other white-identifying populations, and that even in the absence of actual high levels of migration you might be able to scare a certain kind of voter with the specter of the "wrong kind" of immigrant.
I'm kind of pulling an amateur-Matt here and extrapolating from a base of knowledge but being left to fill in a lot of gaps. I would love to hear from anyone with more familiarity with race dynamics in Argentina (or the rest of South America, where many countries have more directly European lineage than Americans tend to think).
((Fun example of Americans not knowing about South American demographics: Bush allegedly asking the President of Brazil, the last country in the West to outlaw slavery, a country that is 10% black, and whose most famous citizen was Pele, if "they have blacks too."))
My experience with Argentinians is that they always start a conversation by telling you which European country their parents (grandparents, great-grandparents) immigrated from. It's certainly incorrect to view Latinos or South Americans as a monolith.
He's issued an executive order (Decree 366/2025) which increased the barriers for immigrants to naturalize. His spokesperson at the time said it was, "time to honor our history and make Argentina great again," intentionally drawing parallels to Donald Trump
If I'm understanding correctly it seems like the focus of this is primarily cutting the eligibility of part time residents for public spending which is kind of a triangulation more than a hostility to permanent immigration, but it definitely can be read in a few ways and I'm not really clearly what the valence of it is locally.
I’m guessing it means he loathes indigenous people, and Argentina is kind of unique in South America in that they really believe the place was empty before Europeans got there.
I agree. My experience with South America broadly speaking is that they mostly deny that there was much ethnic cleansing going on but have more of a politically active, usually leftist indigenous population who… disagree. Not so much Argentina? Seems like they mostly succeeded on the ethnic cleansing front but I haven’t read up on the history of it to know if there’s systemic denial like there is in other countries.
I’m guessing the anti immigrant push is not so much against Spanish and Italian people moving to Argentina as it is people who look a little brown coming in from Peru.
The temperate zones where Eurasian staple crops grow well are places where European colonists nearly completely displaced indigenous populations around the world. The tropical zones where American and African crops did better, and the polar zones and deserts, where hunting and gathering still does better, kept more of their indigenous populations. Argentina and Chile, like the United States, southern Canada, coastal Australia, and most of South Africa, are mostly in the temperate non-desert zones.
I think you're right about the ease of immigrating to Argentina. A client of mine (woman from Central Asia) was planning to ger citizenship after only a very brief spell living there.
But perhaps Milei was railing against this system...
Because populism is a style rather than a governing agenda, it is reasonably accurate to describe Milei as both a populist *and* a policy libertarian in relation to the Peronist statism that could be called the establishment in Argentinian politics.
I think it's a bit of an easy criticism to say "Milei just did what mainstream economists and the IMF have been saying Argentina should do since forever". Yes, that's true, but we've known what this is for a long time, and no one was able to deliver a surplus until him.
What foreigners need to understand is that the Argentine political center is relatively far to the left. That means that even when a neoliberal like Macri took over in 2015, he still had to negotiate laws in a coalition with allies that don't agree that cutting costs has more benefits than it provides, with a general public and unions that are used to taking to the streets and staging huge protests, etc all making it very difficult to do the austerity everyone agrees is needed.
Even today, when Milei has tamed inflation, has brought down poverty, stabilized the currency, etc as a direct result of having a surplus the Senate just passed a set of entitlement bills that would cost 2.6% of GDP and send us back to a deficit. The political class (including the conservative party) are still happy to spend their way to impoverishment.
So the merit in Milei is that he was able to use his media savviness to convince a significant portion of the electorate that surpluses are good, that he had enough zeal to push through with deep cuts in record time (Macri took 4 years to deliver a deficit of 0.6%, Milei gave us a surplus in 4 months), some of them very unpopular, and that he was not afraid of popular protests and dismantled the system of paid protesters.
The policy mix itself was known for a while but he's the only one willing and able to execute it. it's hard to think of anyone else in the political system that would have tried. (Sidenote: Massa might have claimed to want austerity as a candidate, but he was the minister of Economy that spent his way to 220% inflation...)
This is making me sound like a Milei super fan and I'm anything but, I would've voted for Bullrich if I still lived there as I'm not a fan of his populist streak and following. But give credit where credit is due.
I'm married to an Argentine. Just wanted to emphasize your point that Americans have no sense of how expansive the welfare state is in Argentina. Over half of adults in Argentina are "employed" by the government, which is obviously not sustainable when a significant portion of those employees don't actually work. 100% annual inflation is also not something we can conceive of.
Absolutely. People don't really understand just how over regulated, profligate, overprotected, and overtaxed the Argentine economy is. We are so far to the left that any market reforms would yield good results.
And Milei is doing a lot of good things in these areas. He has a minister of Deregulation who has been painstakingly analyzing laws and regulations that make us inefficient and fixing them, he has a surplus, he has proposed law to get rid of ~190 taxes that bring in less than 10% of the state revenue, and he's pushing to access more markets (although being in a trade union with Lula's Brazil is making this challenging). His economic policies are genuinely libertarian, but it will take us over a decade of Milei-like governments to get somewhere sane given our starting point.
That said, it's not true that half the people work for the government, it's "just" 37% of employees. Although some provinces do reach 70% public jobs as a share of all employees.
Matt spent a lot of time on the Ezra Klein pod talking about how Trump had backed himself into a corner with all his wacky tax cut promises, and absent a miracle from DOGE didn't have a mandate to raise taxes/cut spending enough to run a surplus.
Meanwhile Milei is able to enact strict austerity measures without any backlash, even though the measures he's enacting don't include the central policy he ran on.
I think there's an alternate version of this column titled "What Trump can learn from Milei about policy in an inflationary environment", where Milei's ability to back off from dollarization and remain popular due to good overall economic management is contrasted with Trump's inability to drop expensive promises, even when they box in other parts of his agenda.
In today's abundant media realm, "say a bunch of wild shit that gets you elected" is something that we just may have to deal with more. It's annoying and nerve wracking, because one then has to see whether the wild shit will actually get implemented. Zohran Mamdani is poised to be the latest data point in this series. While there were four other options better than him in the primary, among the four options he's in now, at least he doesn't yet have a track record of actually doing bad shit, so I understand taking a chance on the devil one doesn't know for sure is a devil. I'm not familiar at all with Argentine politics, but I could understand a similar dynamic there.
It's a damn shame we just can't have clear cut discussions of proposed policy changes in electoral politics. But what we Slow Borers find excitement in, most people just find boring, and they want zazz. https://www.youtube.com/watch?v=80YTU1J6cmg
I agree with this, but I'm also struck by the fact that so many politicians who overperform are also not Mamdani levels charismatic. Susan Collins, Kristin McDonald Rivet, Adam Gray, etc. Like these are people who do not make waves on social media ever.
It's kind of like health advice. We give a lot of one-size-fits-all directives that do not consider that, given genetic and environmental variation, what is good for one person might be useless or even bad for another. Whether you want a showman or a manager or an ombudsman depends on the electorate, the position, and the timing. There's no easy answer.
Most politicians are not charismatic (like most people). Ergo, most successful politicians win despite not being charismatic. It would be interesting to find out if a stolid, long-term officeholder like Collins would defeat the charismatic equivalent of a Mamdani in Maine. (Though that may tell us more about Maine than any other place.)
There was this segment in the Ezra Klein and Chris Hayes podcast on Mamdani that was sort of buried in there that I thought was fascinating.
It basically bore down to its better to get attention even if you get strong negatives sometimes than to focus on keeping your negative news cycles down at the cost of keeping your attention low.
It reminded me of a bit of business advice from Ben Thompson that lean into your strengths makes more sense today than shoring up weaknesses for internet and media companies. It’s a switch that hasn’t really sank through broadly.
"One thing I’ve learned about the press is that they’re always hungry for a good story, and the more sensational the better. It’s in the nature of the job, and I understand that. The point is that if you are a little different, or a little outrageous, or if you do things that are bold or controversial, the press is going to write about you…
The funny thing is that even a critical story, which may be hurtful personally, can be very valuable to your business. [When I announced my plans to build Television City to the press], not all of them liked the idea of the world’s tallest building. But the point is that we got a lot of attention, and that alone creates value."
This is not new. Roosevelt’s 1932 campaign platform attacked Hoover for deficit spending and promised to balance the budget. He talked up tariff reciprocity, monetary orthodoxy, and states’ rights. Nothing about Social Security, bank insurance, or a permanent welfare state. The actual New Deal was miles away from the campaign vibes.
It’s weirdly consistent: the more structural the problems, the more candidates win by channeling mood rather than describing concrete solutions. It’s also why you get things like Zohran Mamdani running on “affordability” while floating policies that would make supply worse. The danger isn’t just bad implementation — it’s that rhetoric becomes the only currency.
You’re right that most voters want zazz. But we do ourselves a disservice if we act like this is new. Lincoln was elected on a platform of stopping slavery from expanding, not abolishing it. In politics, clarity often loses to vibes — and governing sometimes requires betraying the vibes to do anything at all.
It’s worse than that, because many of Mamdani’s dumbest policy proposals are popular.
Back when Dems won low-info voters, it was right-coded to point out that most voters were dumber than dirt (or “rationally ignorant”, to be more polite), whereas lefties thought increasing democratic participation would lead to better outcomes. Accordingly, right-wingers threw out tons of culture war chum, whereas lefty bloggers wanted politics to be about policy.
Now that low-info voters are on the right, I think it’s time to admit that voters are dumber than dirt and that running on policy is a bad idea, because the policies voters like are bad. Dems have to win elections using non-policy populism or popularism, and then try to govern as well as possible (because despite their dumb policy preferences, voters still judge incumbents mostly on results, not how they got there.)
A big problem is context collapse, because politicians used to be able to promise whatever dumb shit they had to in public while reassuring knowledgeable stakeholders of their true intentions. Now the activists are congressional staffers and the senators are on twitter.
No, because "high-info" doesn't mean "has better policy preferences." Unfortunately, getting policy correct is often counterintuitive and demands deep expertise. "High-info" just means "pays more attention to politics," which is why you need to avoid getting into specifics if that's your constituency; those people might remember and expect you to implement the dumb things you promised them!
I think the original mistake was that Democrats felt superior to Republicans because the latter constantly hid their unpopular tax policies behind a cloud of vibes. So the Dems started believing that their route to success was the opposite, i.e. mobilizing turnout by touting popular policies. But elections really are more about vibes. Even debates that seem to be about policy are actually about which groups' status should be raised or lowered. Bernie's appeal wasn't about his democratic socialist policy ideas; his emotional valence was just attractive to low-information voters.
Dems need to start signaling that they care more about citizens than immigrants, more about the law-abiding than criminals, more about normies than the marginalized. They need to avoid talking about policies that are unpopular (for obvious reasons), policies that are bad (because they might be held to them), and for god's sake stop talking about policies that are both (e.g. decriminalizing illegal immigration, federally-funded gender-affirming care for detainees, and other toxic nothingburgers). They can keep signaling the middle class over the wealthy, if they manage to privately assuage high-leverage donors and avoid strongly anti-capitalist vibes. They can keep touting popular, good policies.
Note that this suggests nothing about how Dems should govern, which is what policy discussions are about. Policy is incredibly important. YIMBYism and abundance have to win. But in my opinion it's time to stop fooling ourselves that this is what politics is about, or that discussing it is how we win elections.
"at least he doesn't yet have a track record of actually doing bad shit"
A fundamental problem with today's politics and their all-encompassing polarization is that everything a politician does is "bad shit" to, at an ABSOLUTE MINIMUM, 45% of the population, so what this means in practice is that nobody with experience (i.e. who knows what the fuck they are doing) is electorally viable.
Two notes: 1. Menem ran a notoriously corrupt government. Corruption is a big problem! 2. Fostering hatred (especially as to identity groups) and acting utterly arbitrarily with extreme cruelty are not mere “aesthetics.”
Not when 60% of your country's children are born in poverty, as they were in 2023. When you're a poor country the economics are by far the most important thing.
I agree that economics are by far the most important thing; I moved from the EU to the US* and was shocked to see the difference. An example that was posted recently here at SlowBoring:
Being able to afford AC to decrease your risk of dying from heat is REALLY REALLY important. Many Americans just don't understand how lucky they are and take too many things for granted...
* I saw that you wrote elsewhere that you are from Argentina, and I can't imagine the shock, if your move was to the US.
There was an opinion piece in the NYT yesterday: "Europe's Leaders Are Doing Something Disastrous" that led with "It's heat wave season in Europe From late June to early this month, temperatures across the continent soared past 100 degrees Fahrenheit... By initial estimates, the 10-day heat wave left some 2,300 dead ... This was a time to recognize the need for more resolute action"
I was waiting for the obvious answer on what that resolute action would be, subsidizing air conditioner purchases and make power more affordable to run them, but nope - their resolute action was that the EU needed to take more aggressive action on climate change. China's still polluting 5x per citizen than the EU, only one of those solutions will save lives next heat wave!
You're preaching to the choir, friend. I'm now thousands of kilometers away from my family and childhood friends because my people have been voting for a bunch of idiotic policies for decades. I generally avoid the NYT (due to their coverage of the economic crisis back in the day), but I'll read this article. (Link for whomever is interested: https://www.nytimes.com/2025/07/14/opinion/europe-heat-wave-climate.html)
edit: LOLOLOLOLOL. I understood from your comment that the NYT article agreed with the need for AC, but instead I see that it agrees with current European climate policies and opposes reforming them. Just amazing stuff.
No, they aren’t. There were plenty of Nazis who had a very highly developed sense of aesthetics, who loved Beethoven and Mozart and were educated and cultured, * and* who committed hideous atrocities. I’m guessing the equivalent would have been true in WWII-era Japan.
In reading some of these “left-wing economists” I was struck by a pathological obsession with inequality. Argentina has about the same population as South Korea but South Korea has almost 2x the per capita income. For Argentina to become as rich as SK it needs a lot of billionaire entrepreneurs making their fortunes.
I’d really like to ask them by what mechanism is Argentina going to move back into the first world if not by entrepreneurs getting fantastically rich?
Very few left-wingers think this. Read what Milanovic has to say about Chinese economic reforms. Most left-wing economists are concerned about global inequality and it reduces global inequality for poor nations to become rich. It would be an idiotic position held by almost no one to say that a poor country should stay poor because of equality.
At least in terms of Argentina that doesn’t seem to be the case at all. They would much rather have $25,000 per capital distributed equitably than $50,000 distributed less equitably even if everyone was better off.
Is Branko Milanovic not someone who stands alone (heh) as a leftist thinker? He strikes me as taking a very different view on things than basically any other leftist I come across.
It’s almost a tautology that a left wing economist is going to have an idiosyncratic model of the world.
I mean, this is true for almost any heterodox economist. If they’re principled, that means the model is falsifiable. Often they’re just cranks trying to dress up vibes with obscurantism whose model can’t be falsified.
There are countries that have been held back by forced equality like Mao-era China but Argentina isn’t one of them. And most left-wing economists including the ones named in this article were significantly supportive of Chinese economic reforms because they reduced global inequality.
Argentina is also actually home to the most successful Latin American company with billionaire founders (MercadoLibre). That by itself doesn’t create widespread prosperity.
>For Argentina to become as rich as SK it needs a lot of billionaire entrepreneurs making their fortunes<
Is this really true?
I'm personally a fan of at non d-bag billionaires, and I think the left in the US (and in many other countries) is foolish to be so hostile to highly successful business people. But I wonder if sharply raising a country's rate of growth actually requires the proliferation of plutocrats. It's an interesting question.
I think the argument for billionaires as such is that you shouldn’t try to legislate them out of existence. Like if they happen they should happen by accident that’s ok, and you should try to make sure that this generation’s billionaires aren’t 1:1 predicted by last generation’s billionaires, but playing whack a mole closing the mechanisms by which people become billionaires hurts normal entrepreneurs much more than it helps poor people.
’m far from egalitarian, but billionaires are distasteful. Sinking hundreds of thousands of hours of skilled labor into a mega yacht or a private jet is a very wasteful way of organizing incentives. But I’d really like to ask the inequality-obsessed left: by what mechanism is Argentina going to move back into the first world, if not through people getting seriously rich by building businesses?
Most industrialists in Victorian Britain didn’t become grotesquely rich. They got solidly wealthy and reinvested. That was enough. Poland today has converged a long way toward Western Europe—not because it minted a thousand billionaires, but because it built a functioning capitalist economy full of competent mid-tier capitalists.
Argentina needs something similar: not robber barons, but builders. And that means tolerating inequality for a while—not celebrating it, but accepting it as part of the price of real development.
Why is it better to be Poland “ full of competent mid-tier capitalists” than to be the US, full of billionaires, but with the average person having a dramatically higher standard of living?
If we are talking growth, we are comparing first derivatives, and Poland has a much better first derivative than the U.S.. Poland’s real GDP per capita grew about 6.8× from 1993 to 2023. That’s nearly triple the growth of the best 30-year period in U.S. history (1940–1970, ~2.5×). And Poland did it without minting a billionaire class — just with stable institutions, EU integration, and a thick layer of competent business owners. That's what real convergence looks like.
Because having more billionaires doesn’t guarantee the average person a dramatically higher standard of living. China had a large deliberate reduction in the number of billionaires over the last few years but this hasn’t prevented it from still significantly increasing living standards for the average person or producing extremely successful companies like BYD that must be kept out of the US by enormous tariffs. Elon Musk is much richer than the founder of BYD but the founder of BYD created more economic value. And most American billionaires aren’t even like Elon Musk who at least founded something but just have inherited money they keep in real estate and wealth funds where they ride the market.
Econ 101 says that the best market for society is perfect competition, where profits (counting opportunity costs) go to zero. The US has deviated very far from that and there is plenty of room for consumers and workers to be able to capture more economic value without weakening incentives for innovation.
Tesla is still worth 8x the market cap of BYD, so it’s created quite a lot more billionaires while the US lags in electric car adoption and it also loses global market share to BYD. Americans having to pay higher prices to pad Tesla’s tariff-protected profit margins to mint more billionaires does not contribute to average Americans’ prosperity.
Ford made slightly less than half as many electric vehicles as Tesla did in in 2024 but its stock trades for roughly 1/30th of Tesla's. I think it's clear that whatever's driving Tesla's valuation is not directly tied to its ability to manufacture electric vehicles alone.
“ Americans having to pay higher prices to pad Tesla’s tariff-protected profit margins to mint more billionaires does not contribute to average Americans’ prosperity.”
Tesla is hardly the one being protected by the tarrifs.
“Econ 101 says that the best market for society is perfect competition, where profits (counting opportunity costs) go to zero. The US has deviated very far from that and there is plenty of room for consumers and workers to be able to capture more economic value without weakening incentives for innovation”
You don’t think profits going to zero weakens incentives?
The only thing that really matters here is air conditioning, and seems like that’s a fixable problem without having to mint a rapacious class of billionaires
By accumulating all the money. Billionaires do useful things, but only to the extent that they build things and create jobs for others. It’s rapacious when you allow billionaire fortunes to be accumulated, redistribution has to be forced (it’ll all trickle up back to the top anyway if they’re providing useful goods and services)
Japan, as an example, does a ton of redistribution and they have a weak economy to show for it. Now it’s certainly debatable how much is due to their “redistribution” of their billionaires (not to mention their executive compensation is laughably low by US standards) but it’s certainly possible.
If in 50 years the median household income is an inflation adjusted $250k and the UBI is $100k, does it matter if there are 1500 trillionaires?
Did industrialists in Victorian Britain want to become grotesquely rich? Or did they want to make enough money so they could enter the House of Lords, be awarded the Order of the Garter, take over some impressive albeit decaying estate from a poor aristocrat, and devote their time to fox hunting?
In other words, perhaps they were just as ambitious as the obscenely wealthy oligarchs in the US but just had different aspirations.
You can, just in the UK. When the liberal rhetoric was at its peak in Seattle demonizing Bezos, I kept saying “no, we should obviously tax his wealth, but we should honor him in exchange. Make him the Duke of Amazon and offer him a permanent seat in the state legislature in exchange. Cultivate a sense of noblesse oblige in our modern nobility”
This is far more efficient than building mega yachts. Even Bleinheim Palace is probably cheaper to build than a mega yacht, and it was a ducal estate conferred to the most decorated English general of the 18th century.
I'm hardly an expert but a couple minutes of Googling took me to the interesting case of George Carr Glyn, 1st Baron Wolverton, the banker behind the explosion of the railway network in the middle of the 19th century.
Not be be pedantic, but his father was a baronet and Lord Mayor of London and he was a banker, not an industrialist. Banking was more genteel than industry.
People like Joseph Chamberlain who made (or in his case inherited and expended) fortunes in industry typically entered the commons.
Definitely to be pedantic, he was the chairman or director of several railways. And to really be pedantic, a baron is not a baronet and is allowed to sit in the House of Lords.
He didn't rise from humble roots though, to be sure.
> by what mechanism is Argentina going to move back into the first world
(Knowing nothing about Argentina other than their famous football players..)
In the general case, the literature shows a causality from good institutions (rule of law, property rights, skilled workforce, incentives to invest and innovate, generally "inclusive" institutions the way Acemoglu & Robinson define them) to general prosperity and high net worth individuals. There is some causality in the reverse direction, if the billionaires are the product of inclusive rather than extractive institutions, and that creates a virtuous cycle.
To understand why Trumpists love Millei and why the left hates him, I think you also need to consider his non-economic policies. He’s extremely antiestablishment. He’s anti-abortion. He’s against mandatory vaccines. He’s anti union. He’s anti transgender rights. He has intentionally aligned himself with Trump and Bolsonaro.
One criticism leveled at Mamdani is that he’s very naive. Which is also what you see in the price controls on veterinarians post. I think we’re all aware that we can’t generally walk in and ask for a 50% raise. If you’re selling a house or a car or your old Pelaton you can’t just “raise prices” it will sell for what the market will bear. But for people like Mamdani and the poster they are just fundamentally ignorant of basic aspects of how the world works.
I was aware of the surge of private equity buying up vet practices, and clicked through to the tweet about price controls on veterinarians, and didn't see any calls for price controls.
I clicked through to the paper and it's about trying to stop PE from buying up all the vet shops in town to get monopoly power.
The price controls on veterinarians post didn't show naivete; it showed how simple ideology can be used to explain everything not so nice that happens to you. Veterinary prices are going through the roof because private equity is rushing in to buy up practices blah blah blah. One doesn't need evidence to make the claim because one is already convinced that is the way the world works (see: PE buying up all the homes, thus the high cost of housing).
In any case, I don't get it. It's not like the Hunt brothers trying to corner the silver market. Is a single PE firm going to create a monopoly of vet clinics in the country? If they buy up part of the market and increase costs and reduce quality of service, won't that turn out to be a lousy deal for them, as customers vamoose?
I like Warren, but I’d have to see the facts on the ground. I mean people are pretty sticky when it comes to vet care, and will be when ownership changes, especially if done quietly. I can see private equity middlemen driving up the costs at a given vet, I don’t see what they add to the transaction (like health insurance companies). But if a young vet starting out needs to come up with start up funds to lease a building, medical equipment, etc, they can either do it with loans or an equity stake. I think traditionally it’s been done with loans. Equity is ok too.
It’s theoretically possible that private equity buyouts are causing prices to be raised or staff to be cut. I know the big corporate multispecialty vet here is a lot more expensive than the lady that works out of a converted old house that we use, but they can do a lot more complex stuff.
The reflexive reaction “if private equity firms are doing a thing, a decent person should oppose it” seems to be a reasonable one, borne out by plenty of historical examples of vulture capitalism. But the facts of each case matter.
Trumpism is postmaterial nihilism. Republicans don’t care about competent governance or improving material conditions. They want to feel validated and to punish their cultural enemies. The leader is never wrong and there are traitors everywhere who need to be punished. It is so joyless. It is so stupid.
They’re enjoying the last few moments of people trying to do trade deals with the United States - at least until everyone else decides to just form a free trade bloc with each other.
Britain is going in the same direction in the 21st century as Argentina went in the 20th. Increased taxes are being levied on taxpayers to fund pensions and disability payments to an increasing number of non-workers, without a plan or end in sight. A recent attempt to cut some of these benefits by the current government failed, and now taxes are just going to have to go up again. No other party has a plan to change anything either. The country is cooked, and not just because nobody can afford to run AC with electricity prices as they are.
"Labour MPs have failed to come together and recognise the insanity of a system that has led to the free and tax exempt car scheme Motability (through which enhanced [disability benefit] recipients can choose brand new cars for free, or massively discounted models of swankier cars including BMWs, Mercedes and Audis) taking up almost one in five new car sales in the UK."
The Motability scheme was originally designed for people with serious physical disabilities that meant they needed a modified vehicle to get around. Now, you can get it for mental conditions as well, for some reason.
"In 2024, there were 361,437 PIP claimants with mixed anxiety and depression listed as their main disabling condition. This makes it the most common condition to get an award of PIP for out of over 500 conditions listed by the DWP.
So, if you have mixed anxiety and depression and it affects your daily living activities, such as cooking, washing, dressing or mixing with other people or your ability to get around, you should definitely consider making a claim."
Basically, if you don't have any physical issues you need to meet the criteria: Cannot follow the route of a familiar journey without another person, an assistance dog or an orientation aid.
It's not clear to me that someone with depression and anxiety alone could meet this criteria. Either the eligibility checks are poorly designed, or there's more to these people's mental conditions.
I have no clue if mental conditions alone are sufficient to qualify, but the fact that 20% of new cars in a medium-sized country are being purchased through a government welfare program seems problematic by itself!
It does, though I think this is in part just a consequence of the wider issue of sclerotic economic growth in the UK. A bit of stimulus is low on the list of issues over here - unfortunately!
What’s wrong with the government buying us cars? Why should we have to do it? I want socialized car insurance too. Dumb that you have to fake a disability, though.
Maybe the US gov should buy everyone a new car every 10 years or so, cash for clunkers style. It’d certainly be the best way to do it once we do have fully self-driving cars, because the benefits are only realized if every car on the road is self-driving, as then they can communicate with each other to reduce congestion.
According to the page, 29% meet the criteria of 'Enhanced Mobility' and further down the page it states 'The enhanced rate of the mobility component also gives access to the Motability scheme.'
I contend that the eligibility checks are poorly designed.
Clarkson’s Farm on Amazon really goes into the stasis pathology of the UK. The public has a just deranged level of opposition to any development, economic or otherwise.
>The public has a just deranged level of opposition to any development, economic or otherwise.<
There's been a lot of tut-tutting of Keir Starmer's lack of boldness. Or really, lack of any noteworthy accomplishments at all. But what you mention is the answer: making it easier to build shit is something that's opposed by very large numbers of British voters, many of whem voted Labour in the last election. So (I'm guessing) the current government simply doesn't have the votes in Parliament to get a bold program of reform enacted to enable the UK to build like it used to.
Voters are also very upset about economic stagnation and a falling standard of living - someone with some political talent needs to convince the public that oppositijs to building things is causes the stagnation and falling standards of living.
The time to do that was right after the election. OR, maybe he didn't need to convince the electorate—he just needed to exert mastery over his own parliamentary party ("bitter medicine is sometimes necessary to cure the patient").
But he has (had) five years to do whatever he wants with no constitutional restrictions other than Charles III deciding he wants to end up like Charles I. Five years is enough time for smart but initially unpopular policies to pay off and convince voters through their results (look at the ACA, or at NYC’s congestion pricing).
To defend Britain somewhat, Clarkson lives in the single most NIMBY village in the entire country, not everywhere is quite as bad as depicted in the show (particularly some northern cities are pro-development)
I learned what the pension triple lock is recently, and it is absolutely insane. I didn't know a pension system could be run worse than the State of Illinois' but some how the UK does it.
Yes, in the last two weeks I've learned about the pension triple lock and the Motability program and I'm left jawdropped by the existence of those things, but also baffled as to how I've never heard of either of them before in various libertarian publications. Like, searches for "Motability" and "triple lock" both return no hits in Reason Magazine.
Argentina’s stagnant trajectory in the 20th century was fundamentally because it had a natural resource commodity-based economy and those resources fell in price. The countries that need to watch out for an Argentina-style future are the Middle East oil states. Britain has economic troubles but it’s still fundamentally a human capital-based economy so Argentina isn’t the right historical example to learn lessons from.
No the stagnation was because a huge amount of over regulation, rent seeking and corruption that prevented economic growth combined with over taxation and government spending.
My probably least-contrarian opinion (here) is that the US should roll out some kind of super-streamlined uncapped quantity visa that allows native-born UK citizens ages 18-65 to live, work, and study in the US. The UK seems to waste so much human capital and the British are among the least likely immigrants to cause backlash: they're mostly monoglot anglophones, familiar with US culture, white, and not religious.
The counterargument to that is that it's already fairly easy for someone with that profile from UK or Europe to migrate to the US. They won't be subject to the kind of scrutiny that non-Europeans face during visa issual or multi-year waits to get a green card through employment. The reason they don't is that most Brits don't want the grind of US corporate lifestyle.
It's very easy for the British to visit the US, but living/working here seems pretty onerous.
There's a soft cap of 65,000 H1-B visas per year, something like 35,000 O visas are granted per year, and about 140,000 E visas are available per year. Something like 15,000 total EB1+EB1+EB3 visas are granted per year. The British aren't eligible for diversity visas. Many of these also require existing employment or an offer of employment from a US business. Moving between jobs or between a job and education can risk visa status.
Perhaps I'm wrong and there would be very few takers for a visa like what I propose. But I think it's worth trying.
You're right about H-1B visas but they're not hitting the per country caps for the EB visas, which takes less than 2 years for them, which reduces the risk. Green cards are for future employment, so technically, they can wait for an employer to sponsor the visa while waiting in UK if they miss out on the H-1B lottery. In contrast, the current backlog is 12+ years for India and 5 years for China. It's a lot easier for the Brits to travel to the US for job interviews. No, there isn't a huge pent up demand for Brits to move to the US permanently. I'm pretty sure of it.
One of the upsides of leading a political movement where your base's loyalty to you is highly personalized rather than being a normal political coalition of interests is that it gives you more freedom to ignore prior promises and implement correct policies without losing much support. Of course, just because you can implement correct policies doesn't mean you will. Trump routinely breaks promises without losing base support, but most of the time those policies are still bad, and sometimes even worse than the policies he previously promised.
We'll see what Mamdani does. Progressives and leftists are generally ill-equipped to pull a Milei because inclusion and participation and not "throwing the little guy under the bus" are (mostly to their credit) intrinsic to their political philosophy. But there are always exceptions.
My prediction: in a month, no one will care about this anymore, as MAGA closes ranks against the Hated Others, and Trump provides any number of new shiny objects for them to obsess about.
Sincere question, not trolling: Suppose the Epstein files reveal that Trump is guilty as hell, that he enjoyed sex with underage girls on Epstein's Pleasure Island or whatever.
How many of his supporters would care?
How many more of his supporters would feel a slight sense of distaste but would assuage it immediately with "But the Woke Scumbag Immigrant-Coddling Anti-White America-Hating DemocRATS are so much worse"?
Am I being overly cynical or am I simply drawing the correct conclusion from ten f**king years of "surely THIS is too much, this will bring Trump down and make everyone abandon him/whoops, no, actually it didn't"?
Oh, they wouldn't care about *that* but they would be bitterly disappointed if the released files didn't show all the crimes that Hillary and Bill committed.
But they would just assume that the Biden crime family scrubbed the files and then move on to the next outrage.
In 2020, a letter signed by a small percentage of the US public health establishment endorsing protesting police as the only valid reason to violate lockdown orders convinced half the country that the entire field of public health is bogus. Maybe don't sign on to stupid letters.
To be fair, the vast majority of the people signing that letter were grad students and low level folks. Not all, but it still didn't represent a consensus or the leading lights of the US public health establishment.
One big takeaway I get from reading this piece and about the hyperinflation-exacerbated rent situation in Argentina is, if you have a well-run independent central bank, don’t mess with it.
What I find important and relevant is Milei's ability to enact extreme fiscal austerity and gain in popularity. I'm thinking of how something similar could translate to the US, maybe starting at the local level. As a Chicagoan, I'd fully support someone coming in and saying-- "the city and state aren't jobs programs. We're enacting huge spending cuts, re-writing pension rules, and focusing on attracting businesses. There will be pain involved, but it's necessary to right the course." Does it come down to having the political talent to sell this message?
I think it was probably only possible because things had gotten SO bad in Argentina.
Same applies to US entitlements and debt levels. We know there is a huge problem, we know it will probably end badly, but voters don't want change until the fiscal apocalypse hits.
The biggest difference between Chicago and Argentina is that at this point, there’s very little Brandon Johnson or any Chicago mayor could do to solve the problem. Chicago needs constitutional reforms to pensions that reduce liabilities and/or the city needs a bailout from the state or federal government to cover past underfunding.
I had a lovely trip to Argentina about two years ago. Part of Matt’s previous writing is to look at the actual impact of policies and who it benefits or harms; eg rent control is a handout to existing tenants, inclusive zoning is a tax on new construction.
Part of what made the trip so lovely was that a large number of Argentinian policies clearly favored me. My AirBnB was cheap because so many units were pulled off the market due to rent control. I feasted on fantastic Argentinian steak and wine for a fifth of the price it would have cost in the US, because of subsidies to ranchers and vineyards. I could walk into a Western Union with a fist full of dollars and walk out with twice as many pesos as I could have gotten at a currency exchange, because the country was so starved for foreign currency to subsidies imports. But of course there’s a cost on the other side of the ledger for all of these, and it was clearly being born by the Argentinian people through the scourge of inflation. More taxi drivers wanted to talk to me about the exchange rate, or inflation rate, or macroeconomic reforms than they did about the River Plate game I was going to, even in that football-mad country.
I understand why Matt would want to downplay the reforms in this column; “hacking the safety net and subsidies to the poor can unleash economic growth” does not follow the cozy paternalistic ideals usually shared here. But it is clearly working, and I wish Milei and the rest of Argentina continued success.
For today's article, I have the good fortune of being an economist with family in Argentina. I have to say I disagree with several key points (as well as, ultimately, the takeaway for electoral strategy).
One thing you have to remember with developing countries like Argentina is that while the "macroeconomic management" does matter for growth to a certain extent, these countries' growth problems are mostly *microeconomic* and *political* in nature. The economy sputters because markets basically don't work at all, and the central bank/fiscal policy are way too captive to political considerations to keep *trend inflation* low.
Argentina is no exception. Over the past 20 years, a system had developed where there basically wasn't a single market-determined price in the entire economy. Successive Peronist governments (with a brief Macri interlude) had delivered a dizzying array of market controls, regulations, and subsidies, each meant to patch over an issue created by a previous government intervention. On the political side, one major reason the peg failed is that politicians, faced with incentives to over-spend before elections, never actually managed to get spending down to a sustainable level. Inappropriate "Neo-Keynesian management" is not the main reason why Argentina has failed to grow.
Milei's radicalism really can't be reduced to the dollarization proposal. The chainsaw/"Afuera!" represent a commitment to deal with the microeconomic problems. Indeed, Milei's government (advised by Sturzenegger) has already gone a long way in liberalizing Argentina's markets, with reforms to housing, labor markets, and trade policy. This more libertarian perspective is precisely what he was selling, and he was promising to do it in a much more extreme way than Bullrich. This was certainly not some sort of "centrist" approach to policy -- although economists see the merits of these reforms, many were worried about insufficient planning for the adjustment period.
Finally, we need to ask ourselves: if moderation is the key to winning elections... why didn't Bullrich win? I think you can't really escape the conclusion that Milei was just leagues ahead in terms of selling his agenda. Moreover, people were reasonably worried that Bullrich would talk a big game about "reasonable" reforms, which would then lead to something like the mild, temporary relief of the Macri administration rather than a true path forward. In a place like Argentina, sometimes you can't afford to be as risk-averse as a conventional candidate. Sometimes you just need to take a calculated risk and roll the dice!
It's funny, "rolling the dice" was exactly how an Argentinean economist who I met on a plane ride last year described it to me. She lived in the Netherlands and really wasn't a fan of Milei, but said that she could understand the rationale behind voting for him. The left clearly failed, the centre-right appeared weak - so voting for Milei and hoping for the best seemed like a sensible option to many people. Kinda like disillusioned Trump voters in the US, except that Argentina was actually doing bad.
Disillusioned American voters were sold a bill of goods - that the economy was actually bad - and voted to “fix” it with deportations and tariffs. Why those fix anything, I don’t know.
Voters were genuinely upset about immigration. This really was Biden's fault.
They weren't upset with immigration in general but in perceptions as reported by Fox and probably the MSM: Namely, some crimes committed by undocumented immigrants and the asylum issue at the border.
Now they can see what Miller & Trump's solution is, they don't like it.
The Democrats moderation here is campaigning on a platform of deporting undocumented criminals _and_ getting asylum at the border under control no matter what the groups say. (And the more the groups complain the better as far as perceptions go.)
You made two different statements here.
1. Whether they really had a reason to be upset.
2. They don't like Trump's current solution (even though when they voted for him public opinion was in favor of deportations).
I submit that the public wasn't just upset because of Fox news. Illegal immigration and the abuses of the asylum system really were big problems. Biden really did make it worse.
The public being upset now isn't a surprise. The public doesn't like illegal immigration. They public also doesn't like video of crying families being torn apart by ICE.
As usual the public wants things that are at least partially in conflict with each other. Just like they want low taxes and lots of entitlements.
Also rainbows and unicorns for everyone (at someone else's expense)
You're generalizing “people don't like undocumented immigrants or immigration” when what they really don't like is criminal immigrants. It's not that they want contradictory things or things that conflict. All the polling before the election did distinguish this.
In general I think Matt should take his own belief that people want someone who plays the President on TV more seriously. A campaign is an effort to shape how a politician's character ('character' as in 'TV character', not as in 'personal virtue') is situated within the narrative (and again, narrative here as in 'the story of a season of TV', not in some bespoke academic sense). In the Argentinian narrative there was a lot of fatigue with leftists and failed efforts to not be a socialist wacko, and Milei did everything he could to position himself as the guy who really hates leftists and would rather die than be a socialist wacko. I think ascribing more significance to it than that on the part of the voters drastically overrates their intelligence and familiarity with anything of substance. And to be clear this is not an insult directed at the Argentinian people, this is true of essentially all democracies in an era where people no longer take voting cues from local elites who might actually understand issues.
I do second your overall remarks from a global developing markets perspective as the my experience in FDI (not hot money) investment in developing markets is most frequently it is the micro-economic Rent Extractions as Regulation that is the huge problem. I was just myself commenting in Noah Opinion on the Tunisian case where they have a system from the dictatorship that's basically a Liscence Raj - hard to move a pinky finger in business economically without some permit, liscence - all dressed up in social language but really becomes levers for rent extraction - bribes, facilitations, partnerships as well as exclusion of competition with Regime related oligopolies - whether private or state owned in end it becomes almost theoretical difference.
I mentioned I think in Noah comment in Developing Markets I have almost libertarian views given so much of the regulation is façade dressed up in nice lefty language for social responsability etc to protect established interests (state, non-state... same-same) as well as direclty and indirectly extract rents.
(Noah Opinion interesting recent touches: https://www.noahpinion.blog/p/developing-countries-a-follow-up)
What exactly are your disagreeing with? Yglesias clearly talks about the reforms Milei has undertaken:
"Combine this with scrapping rent control to bring more apartments onto the legal market, and deregulating prices in everything from airlines to maritime transport, and you’re left with a much more normal economy."
My short answer to what I'm disagreeing with is "almost everything"!
1. One of the article's premises is that Argentina's problem is bad "Neo-Keynesian management." It's not the first time that Argentina has been through a boom, and the last time was under Peronists. The optimal "Neo-Keynesian management" would be to alternate between Peronist and conservative, IMF-approved governments. Right now, the economy is running "too hot," so we need some austerity.
This is just a misdiagnosis of the problem. Argentina's problems are structural: persistent deficits (even under Menem!) and horrible microeconomic policies. The Keynesian theory would say that to get inflation under control, we need austerity, which will generate a *decline* in growth. This isn't what happened: structural reforms are *boosting* growth while inflation declines.
2. The article basically asserts that but for the dollarization plan, Milei is a conventional technocrat economically, following the moderate approach to governance that Matt usually endorses.
This doesn't seem to me like the right way of viewing things. Many conventional economists (myself included) thought Argentina needed these reforms in the long run but were quite worried about the short-run pain of ripping off all the band-aids at once.
Milei's radicalism lay in being far more aggressively libertarian than your typical economist, who's much more of an incrementalist conservative. (As Dave Coffin put it, Milei is doing Hayek or Friedman, not Keynes!) In hindsight, it looks like the more aggressive path was the correct one.
3. On the electoral front, I really don't think everyone was falling in love with Milei solely because of the dollarization plan. Contra Matt, basically everyone knew this wouldn't happen: I had plenty of conversations with relatives who could barely tell you how the stock market worked who, by election time, could tell you "we're never doing dollarization because we don't have the reserves." (Also, why would dollarization have been popular, in Matt's view? Isn't the moderate issue position typically the one that wins the most votes?)
4. Plenty of other details of the narrative are wrong... e.g., by August 2023, people were certainly thinking that there was a very good chance Milei would win. The unofficial "blue" dollar exchange rate had plummeted. I think Matt was a little out of his depth on this one.
This doesn't read like a list of high-level disagreements on substance as much as a list of changes in emphasis and hair-splitting.
MY thinks the dollarization plan was REALLY bad, and it was certainly what folks fixated on pre-election outside of the country. Perhaps people on the ground were more focused on the minutia, but dollarization is what 'broke through'. It would've been a disaster, and Milei just didn't do it. This underlines the broader point about "capturing the vibe" with weird rhetoric vs. actually doing dumb things (like replacing all of the grocery stories with ones run by the city).
Also, your effort to distinguish between Keynes and Hayek/Friedman resonates with me and possibly this crowd, but MY is talking with folks who view all of this as "Neoliberalism". Yes, deregulation is good! Markets are good! To the mood of the discourse, you're splitting hairs.
Anyhow, I appreciate you providing a more nuanced view with additional expertise. But I think your points would be more usefully framed as additional color or mild quibbles.
>The article basically asserts that but for the dollarization plan, Milei is a conventional technocrat economically, following the moderate approach to governance that Matt usually endorses.<
It seems to me austerity and market liberalization are pretty conventional. I mean, neoliberalism is practically the very definition of "conventional" in the modern era. But sure, Joseph Stiglitz and Thomas Piketty likely don't approve of the *pace* of the reforms. There's no doubt many people in that country have undergone tremendous suffering.
>One of the article's premises is that Argentina's problem is bad "Neo-Keynesian management<
I interpret the article as saying that Argentina's economic problems of late have been excessive dirigisme and ruinous borrowing, (aka Peronism). Is that now called "Neo-Keynesian" economics? Is Trump a Neo-Keynesian?
>On the electoral front, I really don't think everyone was falling in love with Milei solely because of the dollarization plan.<
I don't see where the article claims Milei won over the electorate "solely" because of dollarization. Yglesias claims that Milei campaigned as a "populist" (true enough). Part of that populist campaign was a call for dollarization. He also engaged in quite a bit of Trump-style cultural right-wingery.
Thank you for the long and thoughtful reply.
Thank you for these details.
I felt that Matt's key points were (1) Melei's policies are good in that they are roughly in line with conventional economic thinking, and only radical in that they were very different from the bad policies that previously caused hyperinflation. (2) the dollarization proposal was dumb but popular; good thing he didn't follow through. (3) stylistically populist rhetoric/narrative made him popular with voters, who aren't economists and can't tell if his ideas are actually any good.
I see you saying that Matt overblew the importance of dollarization (to voters) and that, actually, conventional economists were worried about the speed/drasticness of Melei's changes (moreso than the actual policies he put in place). These are certainly disagreements, but I feel like your stance isn't that different from Matt's on the whole. Perhaps if I were familiar with terms like "Neo-Keynesian" I would appreciate the disagreement more, but I am not.
" if moderation is the key to winning elections... why didn't Bullrich win?"
I think you can be less moderate if your direction is the way people want to go. That is, everyone wanted to go in at least the direction of Bullrich, so overshooting got attention and was acceptable.
But plausibly:
1) Make sure you're actually just overshooting, not going the wrong direction
2) This works better if you're not the incumbent. Once you're the incumbent and thermostatic backlash is starting to kick in - moderation is now in the correct direction (going with the thermostatic tide)
Yeah, I mean I completely agree with this. I just think this differs from Matt's usual analysis.
As a 2nd reply on the last part in re Moderation
It seems to me that technocratic circles and academic circles generally massively underestimate the real impact of Good Sales Skills (aka Comm Skills aka Campaigning Skills) - and a big sales pitch in a dynamic way is something for example Trump is really good at (he's a natural genuis there able to overcome his series of objective failures).
The NYC guy doesn't give much lessons for Rest of Country on substance I would say (quite the contrary) but in campaigning and sales skills he certainly does. One doesn't have to be a young guy to do that (see Trump again) but it is something that some people have and others do not. The Democrats seem since Obama to fundamentally wish-away as well as focus on selling to the already-sold rather than selling to new customers.... (and it's heresy and treason to sell to the impure customer...).
A risk-taking moderate willing to Talk Big certainly can happen.
"if moderation is the key to winning elections... why didn't Bullrich win?" Because when economic conditions get quite dire people become interested in just voting for the party that isn't in power.
During the Great Depression we saw for example:
USA: Republicans replaced by the Democrats
UK: Labor coalition replaced by the Conservatives
Germany: Weimar Coalition replaced by the Nazis
You see this even on the province level in Canada where in Alberta a left wing agrarian was replaced by a conservative radio blowhard and religious fundamentalist while in neighboring Saskatchewan a new socialist party defeated the conservative politicians who had been in power. This isn't about ideology or campaign tactics, it's about people voting against the party in power when the bottom falls out of the economy.
The hard reality is Argentina has been an economic basket case for some time now so things get weird, but you shouldn't draw many lessons from that unless your country is also an economic basket case (which the US isn't).
(It's like all the takes claiming Mamdani winning shows socialism is the future of American politics when what you should really learn is that it's good to run against two massively unpopular opponents who barely bothered to campaign.)
alberta mentioned!!!
Great comment but I'm wondering why you call Argentina a "developing country." In the early 20th century Argentina was one of the ten most wealthy countries in the world.
Yes it was. When I say "developing" I'm mainly talking about its GDP per capita. But the reason for slow growth over the past century is plausibly the degradation of important institutions by Peronism, military dictatorship, etc. In a way, Argentina un-developed during the 20th century.
I can see that. Sort of like the way we'll be talking about Great Britain being a "developing nation" soon.
What is it about Argentina that makes voters susceptible to this in a way that South Korean or Dutch or Swiss voters aren’t?
Fascism has a real, powerful constituency. I mean this in the literal sense, not the hyperbolic “libertarians are fascist” nonsense.
Across South America, fascists are reasonably popular among the business class and their electoral politics reflect it.
I think they have more influence in Chile, though. This is colored by my grad school Chilean friends almost all being… pretty conservative
Is this actually different from voters in East Asia?
I'm always curious how people are defining fascists, so I'm interested in what definition you're using.
I mean a reactionary, tight authoritarian link between church, industry, and state which results in state control of industry to favor a small cabal of traditional power elite (including the church).
Explicitly includes Falangists and others.
I don’t think east asia has that many explicit Franco and Mussolini fans, who harken for that kind of traditionalist authoritarian government.
I kind of see that differently. There are plenty of authoritarian governments in East Asia, and by Western standards many of the cultures are quite conservative and hold a lot of values we might consider very traditional, especially wrt nationalism.
It might not look superficially like Mussolini but governments in Vietnam, China, NK and Myanmar feel very fascist-like to me.
I think a key difference is a pretty significant number of South Americans would call themselves “fascists.” Like it’s not a totally toxic brand. I don’t think you’d see that in east Asia. Fascist isn’t authoritarian- I mean Vietnam and Cambodia are still technically communist, Singapore and Malaysia weren’t fascist at all but we’re arguably authoritarian, same with SK. But no one would call themselves a fascist like they might in Chile, Argentina, or Colombia
There has been a lot of talk about Pinochet being a model for authoritarian governments worldwide (to the point of even being an “ism”—apparently “Pinochetismo”…)
Susceptible to the appeal of Peronism or the appeal of Milei?
Peronism mainly.
I think it may just be a bad equilibrium. When you have a very corrupt political system, it's hard to vote out the guys throwing goodies to your coalition, because then you just get corrupt guys who throw goodies to the other coalition. No one wants to take the risk of being the first non-corrupt guy.
Path Dependency. A real thing.
Why did they develop a corrupt political system? For example, in the US the goal was always yeoman farmers. We didn’t grant vast tracts of land to a class of elites we gave the land free to anyone who wanted to farm it. In South America vast land grants were given to elites with the goal being the land worked by peasants.
Resolving to corruption is far too simplistic.
from early 20th century on Argentina to my best understanding saw the instalation of a certain normalisation of Peronism in a broad sense that became very hard to walk back. I would suspect the military dictatorhships need to throw some bones to the population at large (my overall experience in developing markets is the military officer class may be anti-Left in cultural terms but typically deep down feel that Command & Control is the way to go so you end up often in military juntas have such no matter what the supposed ideological color of the military)
Desperate times, desperate measures. Argentina's economy was really, really bad.
100 years of Peronist oriented failure.
Look at South Korean, Netherlands and Switzerland.
Look at Argentina.
Look like same per capita income, same inflation rates (also take 20-30 year continuous view not merely right now)
Well, keep in mind that Argentina also royally screwed itself. At the turn of the (previous) century: Argentina was about as rich as the United States. It's fallen well behind. That's largely due to poor macroeconomic management.
I agree to an extent but not totally.
Worth mentioning that Milei's party, La Libertad Avanza, has been a minority party in the National Congress and has had to form a coalition with Republican Proposal, the party of noted neoliberal Mauricio Macri, and a handful of independent parties to pass legislation. Dollarization was simply never on the table without an outright LLA majority.
I'm genuinely baffled by the "Milei is a right wing populist/Trump-esque figure" thing that the media adopted. And then Matt's throwing out "Neo-Keynesian" and I'm maybe even more confused. The man is an Austrian economist. He's not doing Keynes. He's doing Hayek. He's the epitome of the mostly imaginary free market libertarians that the Tucker/Oren Cass/Steve Bannon right wing populists think are the anti-christ that have destroyed the country. He's actually done what Elon imagined DOGE would do because he's not an incompetent with a crippling ketamine addiction and Elon's half assed aspirations towards being Milei were enough to turn him into public enemy number one of the Batya Ungar Sargon's of the world. Milei is the polar opposite of a populist, but apparently his "South American Nick Gillespie" schtick is short circuiting people's brains or something.
The entire thing from the Trumpist smears to the "economists warn of disaster" letters seem like straight up anti-market propaganda from the industrial policy fetishists.
I think the thing Milei shares with Trump is being a TV star, having big hair and somewhat flamboyant style, though of course the (big) difference is that Melei was a political pundit who commented on serious issues while Trump was a reality show star pretending to be a businessman (which worked better on TV than in actual business, where he was a huge failure).
Well, Argentina probably had too many people employed by the government, and the US is capacity constrained by not having enough (even pre- DOGE, possibly going back to Obama).
Sure, I'm not actually suggesting you could or would do what Milei has done with the chainsaw in the same way in the US, simply that Milei is a serious person about it in a way DOGE was not.
The only thing this administration seems serious about is terrorizing random migrant workers and legal residents of the wrong ethnicity.
I'm convinced that the entire point of the terrorization is Mitt Romney's famous "self-deportation." Even Stephen Miller knows the federal government doesn't have the ability to deport tens of millions of people in a few years, so if the government is cruel enough to a smaller number of illegal immigrants, the rest will be frightened and leave on their own.
I think it's giving too much credit to make Miller seem like he's doing this kind of 3d chess. He surely knows the theory, and he'll take it, but he doesn't actually care if the end game is self deportation or concentration camps. He's going to go as far and as hard as he can get away with. Nor does he actually care about anyone's actual immigration status, he's equally as happy to deport citizens he doesn't like. Even if every undocumented immigrant in the country was gone he'd keep right on disappearing people.
And abject nihilism and hollowness of the GOP gives him free room at act.
It’s not even that, it’s deterrence. Would you pay a coyote thousands of dollars to come here right now, given what we’re seeing on television? The 2020 primary signaled that if Democrats won, the doors would be open. Trump is sending the opposite signal and it looks like it’s working. Fewer people are bothering to come.
I think this is a little off base. Crossings had already plummeted in 2024. They went down because policies were put in place to make them go down, not because of the vibes passing around the Darien Gap.
I guess because it points things out that people on multiple sides of the issue don't want to accept, nobody ever puts forth the probably-correct theory that crossings were high in 2021-2022 because Biden wanted them to be, because it was good economic policy.
That's not a policy without downsides, especially political downsides, but it's a more sensible and explicable policy than "oops," or "we had to do it because leftists told us to."
The ability to add millions and millions of extremely low-paid, hardworking people who put preposterously low demand on services is what made the US recover from the pandemic and inflation so much faster than the rest of the world. But this doesn't get discussed, because it's not the rubric on which we discuss immigration, which everyone usually wants to discuss in terms of crime or social justice. And because nobody in Democratic politics wants to make a pro-immigration argument right now, not even a "non-woke," mercenary one.
Immigration was not even a campaign issue until inflation fell below 4% and "the economy" no longer looked like a sure path to victory. Fox News IMMEDIATELY pivoted to all immigration, all the time, it shot up to the top of the "BIGGEST ISSUES!" list in surveys, and the non-right wing press, being the gutless parrots they are, accepted that this had happened totally organically and represented actual voter passion, and dutifully reported on how "angry" voters were about immigration until Trump won.
That sounds sensible and would be plausible if Stephen Miller agreed with you. All evidence is that he's ramping up an institution that will forcibly remove vast numbers of these people, not just be cruel to a small number pour encourager les autres.
I’m curious if other countries that are less of a basket case have done a chiller version of what Milei is doing-Chile and Peru? Chile seems pretty well run, but I have a ton of grad school friends from there and they’re a bit biased.
Regulation wise though the US does need huge amounts of reform.
Too many veto points.
Too much government interference
Yeah, the Trump association is just vibes, but those are mostly vibes that Milei created. This is what Matt was referring to when he wrote that you have to sell the sizzle. Milei is courting all that, and successfully. He's a surprising combination of a capable politician and capable leader in office, so far. I hope he breaks the pattern Matt discussed of initial success followed by reversals.
Yea, I think it's the apparent complete lack of discernment beyond the aesthetics that creates the incoherence.
Yeah, the discourse is often stupid, in multiple ways and often intentionally.
>I'm genuinely baffled by the "Milei is a right wing populist/Trump-esque figure" thing that the media adopted<
IIRC Melei was rather effusive in his praise of Donald Trump. And he was also rather Trumpy in his frequent denunciations of "Communists" and "Leftists." This probably has something to do with the media coverage.
I feel like it takes an almost willful illiteracy of "right" politics to be unable to parse between "right populist" and "anti-communist".
Really? It seems to me fervant and frequent denuncations of the left (socialists, communists, Antifa, radicals, etc) is part of the standard tool kit of right wing populism.
Unfortunately, I think "willful illiteracy of 'right[-wing]' politics" describes many media political commentators these days....
"Trump is putting less demand-side stimulus into the economy than his 2024 competitor would have done with a trifecta because he leads the conservative party" seems like an underrated take here too.
Being a populist has absolutely nothing at all to do with policy. At least not on the right. It is about being a vehicle to express the hatred, anger and frustration of the voters. You can attach any policy program to it you want so long as that policy program has the vibes of expressing hatred, anger, and frustration.
Populism is fundamentally about zero sum conflict where you take, materially or socially, from some minority subset of the population and give it to the some majority tribal coalition. Deregulation/freer markets/individual rights are inherently anti-populist policies.
Populism is fundamentally about *vocalizing* about zero sum conflict and *saying* you will take, materially or socially, from some minority and give it to some majority. It’s not as essential what you actually *do* as long as you keep the vibes.
Fair.
This is a very weird definition of populism and far too materialist for me to take seriously tbh. Many of the canonical examples of populism do include this element, but they mostly include it because the *affect* of populism (anti-elite, pro-masses) is well-aligned with this political strategy.
Also, I don't think even under your own definition it necessarily follows that deregulation is inherently anti-populist. If there is some group of people who are protected by current regulations, and you are making the case that they have unfairly accrued resources at the expense of everyone else and are taking that away, why is that not 'taking from a minority subset' and 'giving it to the majority'? It seems to me your argument presupposes that a deregulated market is the state of nature and returning to it can never be mobilized as part of an affect of revenge or inter-group conflict, but I don't think either of those premises is well-founded.
It can definitely about status or power, rather than material. It's the zero sum conflict that matters.
I think you're misunderstanding what's meant by "Neo-Keynesian" here. What Matt means by "Neo-Keynesian" is that governments should pursue expansionary fiscal and monetary policy when the economy is in recession, and contractionary policy during inflation, which is what Milei is doing. That plus a bunch of deregulatory policy which is orthogonal to the Keynes question.
It Matt had said that Milei's "Afuera" approach to slashing the government was not inconsistent with Keynesian economic prescriptions given the conditions, that would be more obviously correct than the implication that Milei had gotten into office and simply dropped his program in favor of some bog standard IMF playbook.
I'm pretty sure in the extreme case of Argentina, "afuera" kind of is the IMF approach.
Milei is a right wing populist on social issues, particularly immigration, in spite of his libertarian position on economics
What does "right wing populist on immigration" even mean in the Argentine context? A quick google implies it's almost trivially easy to immigrate to Argentina vs somewhere like the US.
It could simply mean making it less trivially easy to immigrate to Argentina, right?
But it could also mean many other things, such as making it harder for immigrants to access benefits, defunding naturalization programs or otherwise making naturalization harder, making deportations easier, etc..
Could be? The "populist" valence of immigration policy might be entirely different in Argentina. I've got no idea. Maybe it's all about rich foreigners sheltering their assets down there or something. Could be very different from the the populist labor dynamics of the US context.
I would imagine that Argentina has a problem with Venezuelan and Haitian immigrants, like most other countries in the western hemisphere. Those are the people you build immigration restrictions against, not wealthy Americans.
Yeah, I think people are kind of forgetting that Argentinians are, broadly speaking, white as hell, and also have a wider degree of genetic diversity within Europe beyond "Spanish" allowing them to identify with the pan-European conception of "whiteness" in roughly the same way you see in North America.
I'm not trying to call out any particular weakness of Argentinean character when I say that their views on immigration might mirror those of other white-identifying populations, and that even in the absence of actual high levels of migration you might be able to scare a certain kind of voter with the specter of the "wrong kind" of immigrant.
I'm kind of pulling an amateur-Matt here and extrapolating from a base of knowledge but being left to fill in a lot of gaps. I would love to hear from anyone with more familiarity with race dynamics in Argentina (or the rest of South America, where many countries have more directly European lineage than Americans tend to think).
((Fun example of Americans not knowing about South American demographics: Bush allegedly asking the President of Brazil, the last country in the West to outlaw slavery, a country that is 10% black, and whose most famous citizen was Pele, if "they have blacks too."))
My experience with Argentinians is that they always start a conversation by telling you which European country their parents (grandparents, great-grandparents) immigrated from. It's certainly incorrect to view Latinos or South Americans as a monolith.
He's issued an executive order (Decree 366/2025) which increased the barriers for immigrants to naturalize. His spokesperson at the time said it was, "time to honor our history and make Argentina great again," intentionally drawing parallels to Donald Trump
If I'm understanding correctly it seems like the focus of this is primarily cutting the eligibility of part time residents for public spending which is kind of a triangulation more than a hostility to permanent immigration, but it definitely can be read in a few ways and I'm not really clearly what the valence of it is locally.
I’m guessing it means he loathes indigenous people, and Argentina is kind of unique in South America in that they really believe the place was empty before Europeans got there.
There aren't any indigneous people left to loathe though? For what it is worth, Buenos Aires is the whitest big city I've ever been to.
I agree. My experience with South America broadly speaking is that they mostly deny that there was much ethnic cleansing going on but have more of a politically active, usually leftist indigenous population who… disagree. Not so much Argentina? Seems like they mostly succeeded on the ethnic cleansing front but I haven’t read up on the history of it to know if there’s systemic denial like there is in other countries.
I’m guessing the anti immigrant push is not so much against Spanish and Italian people moving to Argentina as it is people who look a little brown coming in from Peru.
I could be wrong!
The temperate zones where Eurasian staple crops grow well are places where European colonists nearly completely displaced indigenous populations around the world. The tropical zones where American and African crops did better, and the polar zones and deserts, where hunting and gathering still does better, kept more of their indigenous populations. Argentina and Chile, like the United States, southern Canada, coastal Australia, and most of South Africa, are mostly in the temperate non-desert zones.
I think you're right about the ease of immigrating to Argentina. A client of mine (woman from Central Asia) was planning to ger citizenship after only a very brief spell living there.
But perhaps Milei was railing against this system...
Because populism is a style rather than a governing agenda, it is reasonably accurate to describe Milei as both a populist *and* a policy libertarian in relation to the Peronist statism that could be called the establishment in Argentinian politics.
Affect >>> ideology
Argentine here.
I think it's a bit of an easy criticism to say "Milei just did what mainstream economists and the IMF have been saying Argentina should do since forever". Yes, that's true, but we've known what this is for a long time, and no one was able to deliver a surplus until him.
What foreigners need to understand is that the Argentine political center is relatively far to the left. That means that even when a neoliberal like Macri took over in 2015, he still had to negotiate laws in a coalition with allies that don't agree that cutting costs has more benefits than it provides, with a general public and unions that are used to taking to the streets and staging huge protests, etc all making it very difficult to do the austerity everyone agrees is needed.
Even today, when Milei has tamed inflation, has brought down poverty, stabilized the currency, etc as a direct result of having a surplus the Senate just passed a set of entitlement bills that would cost 2.6% of GDP and send us back to a deficit. The political class (including the conservative party) are still happy to spend their way to impoverishment.
So the merit in Milei is that he was able to use his media savviness to convince a significant portion of the electorate that surpluses are good, that he had enough zeal to push through with deep cuts in record time (Macri took 4 years to deliver a deficit of 0.6%, Milei gave us a surplus in 4 months), some of them very unpopular, and that he was not afraid of popular protests and dismantled the system of paid protesters.
The policy mix itself was known for a while but he's the only one willing and able to execute it. it's hard to think of anyone else in the political system that would have tried. (Sidenote: Massa might have claimed to want austerity as a candidate, but he was the minister of Economy that spent his way to 220% inflation...)
This is making me sound like a Milei super fan and I'm anything but, I would've voted for Bullrich if I still lived there as I'm not a fan of his populist streak and following. But give credit where credit is due.
I'm married to an Argentine. Just wanted to emphasize your point that Americans have no sense of how expansive the welfare state is in Argentina. Over half of adults in Argentina are "employed" by the government, which is obviously not sustainable when a significant portion of those employees don't actually work. 100% annual inflation is also not something we can conceive of.
Absolutely. People don't really understand just how over regulated, profligate, overprotected, and overtaxed the Argentine economy is. We are so far to the left that any market reforms would yield good results.
And Milei is doing a lot of good things in these areas. He has a minister of Deregulation who has been painstakingly analyzing laws and regulations that make us inefficient and fixing them, he has a surplus, he has proposed law to get rid of ~190 taxes that bring in less than 10% of the state revenue, and he's pushing to access more markets (although being in a trade union with Lula's Brazil is making this challenging). His economic policies are genuinely libertarian, but it will take us over a decade of Milei-like governments to get somewhere sane given our starting point.
That said, it's not true that half the people work for the government, it's "just" 37% of employees. Although some provinces do reach 70% public jobs as a share of all employees.
https://www.lanacion.com.ar/economia/empleos/trabajadores-estatales-el-ranking-de-las-provincias-donde-el-empleo-publico-supera-al-privado-nid23052023/
70% sounds ideal
Matt spent a lot of time on the Ezra Klein pod talking about how Trump had backed himself into a corner with all his wacky tax cut promises, and absent a miracle from DOGE didn't have a mandate to raise taxes/cut spending enough to run a surplus.
Meanwhile Milei is able to enact strict austerity measures without any backlash, even though the measures he's enacting don't include the central policy he ran on.
I think there's an alternate version of this column titled "What Trump can learn from Milei about policy in an inflationary environment", where Milei's ability to back off from dollarization and remain popular due to good overall economic management is contrasted with Trump's inability to drop expensive promises, even when they box in other parts of his agenda.
In today's abundant media realm, "say a bunch of wild shit that gets you elected" is something that we just may have to deal with more. It's annoying and nerve wracking, because one then has to see whether the wild shit will actually get implemented. Zohran Mamdani is poised to be the latest data point in this series. While there were four other options better than him in the primary, among the four options he's in now, at least he doesn't yet have a track record of actually doing bad shit, so I understand taking a chance on the devil one doesn't know for sure is a devil. I'm not familiar at all with Argentine politics, but I could understand a similar dynamic there.
It's a damn shame we just can't have clear cut discussions of proposed policy changes in electoral politics. But what we Slow Borers find excitement in, most people just find boring, and they want zazz. https://www.youtube.com/watch?v=80YTU1J6cmg
I agree with this, but I'm also struck by the fact that so many politicians who overperform are also not Mamdani levels charismatic. Susan Collins, Kristin McDonald Rivet, Adam Gray, etc. Like these are people who do not make waves on social media ever.
It's kind of like health advice. We give a lot of one-size-fits-all directives that do not consider that, given genetic and environmental variation, what is good for one person might be useless or even bad for another. Whether you want a showman or a manager or an ombudsman depends on the electorate, the position, and the timing. There's no easy answer.
Most politicians are not charismatic (like most people). Ergo, most successful politicians win despite not being charismatic. It would be interesting to find out if a stolid, long-term officeholder like Collins would defeat the charismatic equivalent of a Mamdani in Maine. (Though that may tell us more about Maine than any other place.)
There was this segment in the Ezra Klein and Chris Hayes podcast on Mamdani that was sort of buried in there that I thought was fascinating.
It basically bore down to its better to get attention even if you get strong negatives sometimes than to focus on keeping your negative news cycles down at the cost of keeping your attention low.
It reminded me of a bit of business advice from Ben Thompson that lean into your strengths makes more sense today than shoring up weaknesses for internet and media companies. It’s a switch that hasn’t really sank through broadly.
"One thing I’ve learned about the press is that they’re always hungry for a good story, and the more sensational the better. It’s in the nature of the job, and I understand that. The point is that if you are a little different, or a little outrageous, or if you do things that are bold or controversial, the press is going to write about you…
The funny thing is that even a critical story, which may be hurtful personally, can be very valuable to your business. [When I announced my plans to build Television City to the press], not all of them liked the idea of the world’s tallest building. But the point is that we got a lot of attention, and that alone creates value."
—Donald Trump, The Art of the Deal
This is not new. Roosevelt’s 1932 campaign platform attacked Hoover for deficit spending and promised to balance the budget. He talked up tariff reciprocity, monetary orthodoxy, and states’ rights. Nothing about Social Security, bank insurance, or a permanent welfare state. The actual New Deal was miles away from the campaign vibes.
It’s weirdly consistent: the more structural the problems, the more candidates win by channeling mood rather than describing concrete solutions. It’s also why you get things like Zohran Mamdani running on “affordability” while floating policies that would make supply worse. The danger isn’t just bad implementation — it’s that rhetoric becomes the only currency.
You’re right that most voters want zazz. But we do ourselves a disservice if we act like this is new. Lincoln was elected on a platform of stopping slavery from expanding, not abolishing it. In politics, clarity often loses to vibes — and governing sometimes requires betraying the vibes to do anything at all.
Of course it's not new. It's just unfortunate that it's more viable now.
There's no evidence that Lincoln's actual agenda was abolishing slavery until circumstances basically forced that goal on him.
It’s worse than that, because many of Mamdani’s dumbest policy proposals are popular.
Back when Dems won low-info voters, it was right-coded to point out that most voters were dumber than dirt (or “rationally ignorant”, to be more polite), whereas lefties thought increasing democratic participation would lead to better outcomes. Accordingly, right-wingers threw out tons of culture war chum, whereas lefty bloggers wanted politics to be about policy.
Now that low-info voters are on the right, I think it’s time to admit that voters are dumber than dirt and that running on policy is a bad idea, because the policies voters like are bad. Dems have to win elections using non-policy populism or popularism, and then try to govern as well as possible (because despite their dumb policy preferences, voters still judge incumbents mostly on results, not how they got there.)
A big problem is context collapse, because politicians used to be able to promise whatever dumb shit they had to in public while reassuring knowledgeable stakeholders of their true intentions. Now the activists are congressional staffers and the senators are on twitter.
I agree with the base facts here, but wouldn't the side that currently has the low-information-voters want things more vibe-based than policy-based?
No, because "high-info" doesn't mean "has better policy preferences." Unfortunately, getting policy correct is often counterintuitive and demands deep expertise. "High-info" just means "pays more attention to politics," which is why you need to avoid getting into specifics if that's your constituency; those people might remember and expect you to implement the dumb things you promised them!
I think the original mistake was that Democrats felt superior to Republicans because the latter constantly hid their unpopular tax policies behind a cloud of vibes. So the Dems started believing that their route to success was the opposite, i.e. mobilizing turnout by touting popular policies. But elections really are more about vibes. Even debates that seem to be about policy are actually about which groups' status should be raised or lowered. Bernie's appeal wasn't about his democratic socialist policy ideas; his emotional valence was just attractive to low-information voters.
Dems need to start signaling that they care more about citizens than immigrants, more about the law-abiding than criminals, more about normies than the marginalized. They need to avoid talking about policies that are unpopular (for obvious reasons), policies that are bad (because they might be held to them), and for god's sake stop talking about policies that are both (e.g. decriminalizing illegal immigration, federally-funded gender-affirming care for detainees, and other toxic nothingburgers). They can keep signaling the middle class over the wealthy, if they manage to privately assuage high-leverage donors and avoid strongly anti-capitalist vibes. They can keep touting popular, good policies.
Note that this suggests nothing about how Dems should govern, which is what policy discussions are about. Policy is incredibly important. YIMBYism and abundance have to win. But in my opinion it's time to stop fooling ourselves that this is what politics is about, or that discussing it is how we win elections.
High info not equating to better preferences is perhaps the most insightful thing ever posted in this comments section. I tip my hat, sir.
"at least he doesn't yet have a track record of actually doing bad shit"
A fundamental problem with today's politics and their all-encompassing polarization is that everything a politician does is "bad shit" to, at an ABSOLUTE MINIMUM, 45% of the population, so what this means in practice is that nobody with experience (i.e. who knows what the fuck they are doing) is electorally viable.
Big argument against democracy here
Two notes: 1. Menem ran a notoriously corrupt government. Corruption is a big problem! 2. Fostering hatred (especially as to identity groups) and acting utterly arbitrarily with extreme cruelty are not mere “aesthetics.”
Thank you for that! There is more at stake here than just economics.
Not when 60% of your country's children are born in poverty, as they were in 2023. When you're a poor country the economics are by far the most important thing.
I agree that economics are by far the most important thing; I moved from the EU to the US* and was shocked to see the difference. An example that was posted recently here at SlowBoring:
https://x.com/AlecStapp/status/1943723803181277562
Being able to afford AC to decrease your risk of dying from heat is REALLY REALLY important. Many Americans just don't understand how lucky they are and take too many things for granted...
* I saw that you wrote elsewhere that you are from Argentina, and I can't imagine the shock, if your move was to the US.
There was an opinion piece in the NYT yesterday: "Europe's Leaders Are Doing Something Disastrous" that led with "It's heat wave season in Europe From late June to early this month, temperatures across the continent soared past 100 degrees Fahrenheit... By initial estimates, the 10-day heat wave left some 2,300 dead ... This was a time to recognize the need for more resolute action"
I was waiting for the obvious answer on what that resolute action would be, subsidizing air conditioner purchases and make power more affordable to run them, but nope - their resolute action was that the EU needed to take more aggressive action on climate change. China's still polluting 5x per citizen than the EU, only one of those solutions will save lives next heat wave!
You're preaching to the choir, friend. I'm now thousands of kilometers away from my family and childhood friends because my people have been voting for a bunch of idiotic policies for decades. I generally avoid the NYT (due to their coverage of the economic crisis back in the day), but I'll read this article. (Link for whomever is interested: https://www.nytimes.com/2025/07/14/opinion/europe-heat-wave-climate.html)
edit: LOLOLOLOLOL. I understood from your comment that the NYT article agreed with the need for AC, but instead I see that it agrees with current European climate policies and opposes reforming them. Just amazing stuff.
Kk
Aesthetics are ethics.
No, they aren’t. There were plenty of Nazis who had a very highly developed sense of aesthetics, who loved Beethoven and Mozart and were educated and cultured, * and* who committed hideous atrocities. I’m guessing the equivalent would have been true in WWII-era Japan.
Gas chambers are a horrible aesthetic. Ditto bodies mangled by irredentist wars.
In reading some of these “left-wing economists” I was struck by a pathological obsession with inequality. Argentina has about the same population as South Korea but South Korea has almost 2x the per capita income. For Argentina to become as rich as SK it needs a lot of billionaire entrepreneurs making their fortunes.
I’d really like to ask them by what mechanism is Argentina going to move back into the first world if not by entrepreneurs getting fantastically rich?
Left-wingers tend to think it's more virtuous to not move back into the first world, especially if it means there are fewer fantastically rich people.
Very few left-wingers think this. Read what Milanovic has to say about Chinese economic reforms. Most left-wing economists are concerned about global inequality and it reduces global inequality for poor nations to become rich. It would be an idiotic position held by almost no one to say that a poor country should stay poor because of equality.
At least in terms of Argentina that doesn’t seem to be the case at all. They would much rather have $25,000 per capital distributed equitably than $50,000 distributed less equitably even if everyone was better off.
No, they just don’t believe Milei’s reforms will double the GDP per capita. And Argentina already has a very unequal distribution of income.
Is Branko Milanovic not someone who stands alone (heh) as a leftist thinker? He strikes me as taking a very different view on things than basically any other leftist I come across.
It’s almost a tautology that a left wing economist is going to have an idiosyncratic model of the world.
I mean, this is true for almost any heterodox economist. If they’re principled, that means the model is falsifiable. Often they’re just cranks trying to dress up vibes with obscurantism whose model can’t be falsified.
A bunch of other prominent left-wing economists take a similar tack—Hickel and Varoufakis come to mind.
Argentina is significantly more unequal than South Korea (Gini of 42 vs. 32): https://data.worldbank.org/indicator/SI.POV.GINI?name_desc=false
There are countries that have been held back by forced equality like Mao-era China but Argentina isn’t one of them. And most left-wing economists including the ones named in this article were significantly supportive of Chinese economic reforms because they reduced global inequality.
Argentina is also actually home to the most successful Latin American company with billionaire founders (MercadoLibre). That by itself doesn’t create widespread prosperity.
>For Argentina to become as rich as SK it needs a lot of billionaire entrepreneurs making their fortunes<
Is this really true?
I'm personally a fan of at non d-bag billionaires, and I think the left in the US (and in many other countries) is foolish to be so hostile to highly successful business people. But I wonder if sharply raising a country's rate of growth actually requires the proliferation of plutocrats. It's an interesting question.
I think the argument for billionaires as such is that you shouldn’t try to legislate them out of existence. Like if they happen they should happen by accident that’s ok, and you should try to make sure that this generation’s billionaires aren’t 1:1 predicted by last generation’s billionaires, but playing whack a mole closing the mechanisms by which people become billionaires hurts normal entrepreneurs much more than it helps poor people.
You should tax, not legislate them out of existence.
’m far from egalitarian, but billionaires are distasteful. Sinking hundreds of thousands of hours of skilled labor into a mega yacht or a private jet is a very wasteful way of organizing incentives. But I’d really like to ask the inequality-obsessed left: by what mechanism is Argentina going to move back into the first world, if not through people getting seriously rich by building businesses?
Most industrialists in Victorian Britain didn’t become grotesquely rich. They got solidly wealthy and reinvested. That was enough. Poland today has converged a long way toward Western Europe—not because it minted a thousand billionaires, but because it built a functioning capitalist economy full of competent mid-tier capitalists.
Argentina needs something similar: not robber barons, but builders. And that means tolerating inequality for a while—not celebrating it, but accepting it as part of the price of real development.
Why is it better to be Poland “ full of competent mid-tier capitalists” than to be the US, full of billionaires, but with the average person having a dramatically higher standard of living?
If we are talking growth, we are comparing first derivatives, and Poland has a much better first derivative than the U.S.. Poland’s real GDP per capita grew about 6.8× from 1993 to 2023. That’s nearly triple the growth of the best 30-year period in U.S. history (1940–1970, ~2.5×). And Poland did it without minting a billionaire class — just with stable institutions, EU integration, and a thick layer of competent business owners. That's what real convergence looks like.
Right, Poland had catch up growth but it’s not on track to be twice as rich as the US. Do you think it could on the backs of its middling capitalists?
Because having more billionaires doesn’t guarantee the average person a dramatically higher standard of living. China had a large deliberate reduction in the number of billionaires over the last few years but this hasn’t prevented it from still significantly increasing living standards for the average person or producing extremely successful companies like BYD that must be kept out of the US by enormous tariffs. Elon Musk is much richer than the founder of BYD but the founder of BYD created more economic value. And most American billionaires aren’t even like Elon Musk who at least founded something but just have inherited money they keep in real estate and wealth funds where they ride the market.
Econ 101 says that the best market for society is perfect competition, where profits (counting opportunity costs) go to zero. The US has deviated very far from that and there is plenty of room for consumers and workers to be able to capture more economic value without weakening incentives for innovation.
“ Elon Musk is much richer than the founder of BYD but the founder of BYD created more economic value.”
False. Elon’s wealth is now mostly his stake is SpaceX. His SpaceX stake is worth $147 billion vs $98 billion for Tesla.
Tesla is still worth 8x the market cap of BYD, so it’s created quite a lot more billionaires while the US lags in electric car adoption and it also loses global market share to BYD. Americans having to pay higher prices to pad Tesla’s tariff-protected profit margins to mint more billionaires does not contribute to average Americans’ prosperity.
Ford made slightly less than half as many electric vehicles as Tesla did in in 2024 but its stock trades for roughly 1/30th of Tesla's. I think it's clear that whatever's driving Tesla's valuation is not directly tied to its ability to manufacture electric vehicles alone.
“ Americans having to pay higher prices to pad Tesla’s tariff-protected profit margins to mint more billionaires does not contribute to average Americans’ prosperity.”
Tesla is hardly the one being protected by the tarrifs.
“Econ 101 says that the best market for society is perfect competition, where profits (counting opportunity costs) go to zero. The US has deviated very far from that and there is plenty of room for consumers and workers to be able to capture more economic value without weakening incentives for innovation”
You don’t think profits going to zero weakens incentives?
The only thing that really matters here is air conditioning, and seems like that’s a fixable problem without having to mint a rapacious class of billionaires
How are they rapacious? They’ve largely made their money providing goods and services people really like.
By accumulating all the money. Billionaires do useful things, but only to the extent that they build things and create jobs for others. It’s rapacious when you allow billionaire fortunes to be accumulated, redistribution has to be forced (it’ll all trickle up back to the top anyway if they’re providing useful goods and services)
Japan, as an example, does a ton of redistribution and they have a weak economy to show for it. Now it’s certainly debatable how much is due to their “redistribution” of their billionaires (not to mention their executive compensation is laughably low by US standards) but it’s certainly possible.
If in 50 years the median household income is an inflation adjusted $250k and the UBI is $100k, does it matter if there are 1500 trillionaires?
Did industrialists in Victorian Britain want to become grotesquely rich? Or did they want to make enough money so they could enter the House of Lords, be awarded the Order of the Garter, take over some impressive albeit decaying estate from a poor aristocrat, and devote their time to fox hunting?
In other words, perhaps they were just as ambitious as the obscenely wealthy oligarchs in the US but just had different aspirations.
This is why one of my hot takes is that we need to tax billionaires out of existence but bring back titles and peerages
I love the idea that one could earn a knighthood by being a really excellent athlete or scientist
You can, just in the UK. When the liberal rhetoric was at its peak in Seattle demonizing Bezos, I kept saying “no, we should obviously tax his wealth, but we should honor him in exchange. Make him the Duke of Amazon and offer him a permanent seat in the state legislature in exchange. Cultivate a sense of noblesse oblige in our modern nobility”
This is far more efficient than building mega yachts. Even Bleinheim Palace is probably cheaper to build than a mega yacht, and it was a ducal estate conferred to the most decorated English general of the 18th century.
Which industrialists got peerages? Even Clive only got an Irish peerage, and he had the equivalent of a couple ducal fortunes from his plundering.
I'm hardly an expert but a couple minutes of Googling took me to the interesting case of George Carr Glyn, 1st Baron Wolverton, the banker behind the explosion of the railway network in the middle of the 19th century.
https://en.wikipedia.org/wiki/George_Glyn,_1st_Baron_Wolverton
I suspect that a couple more minutes of research would reveal that this was far from a one off.
Not be be pedantic, but his father was a baronet and Lord Mayor of London and he was a banker, not an industrialist. Banking was more genteel than industry.
People like Joseph Chamberlain who made (or in his case inherited and expended) fortunes in industry typically entered the commons.
Definitely to be pedantic, he was the chairman or director of several railways. And to really be pedantic, a baron is not a baronet and is allowed to sit in the House of Lords.
He didn't rise from humble roots though, to be sure.
> by what mechanism is Argentina going to move back into the first world
(Knowing nothing about Argentina other than their famous football players..)
In the general case, the literature shows a causality from good institutions (rule of law, property rights, skilled workforce, incentives to invest and innovate, generally "inclusive" institutions the way Acemoglu & Robinson define them) to general prosperity and high net worth individuals. There is some causality in the reverse direction, if the billionaires are the product of inclusive rather than extractive institutions, and that creates a virtuous cycle.
To understand why Trumpists love Millei and why the left hates him, I think you also need to consider his non-economic policies. He’s extremely antiestablishment. He’s anti-abortion. He’s against mandatory vaccines. He’s anti union. He’s anti transgender rights. He has intentionally aligned himself with Trump and Bolsonaro.
anti abortion politics are much more popular in Argentina than the US, right?
One criticism leveled at Mamdani is that he’s very naive. Which is also what you see in the price controls on veterinarians post. I think we’re all aware that we can’t generally walk in and ask for a 50% raise. If you’re selling a house or a car or your old Pelaton you can’t just “raise prices” it will sell for what the market will bear. But for people like Mamdani and the poster they are just fundamentally ignorant of basic aspects of how the world works.
I was aware of the surge of private equity buying up vet practices, and clicked through to the tweet about price controls on veterinarians, and didn't see any calls for price controls.
I clicked through to the paper and it's about trying to stop PE from buying up all the vet shops in town to get monopoly power.
https://www.economicliberties.us/wp-content/uploads/2025/06/20250306-aelp-vet-modelleg-V5.pdf
Maybe futile. But the closest to price controls I found was page 23
> The cost and market impact review (CMIR) may examine factors relating to the
proposed transaction, transacting parties, their relative market position, including, but
not limited to:
...
> c. The prices charged by either of the transacting parties for services, including
their relative prices compared to others’ prices for the same services in the
same geographic area;
The price controls on veterinarians post didn't show naivete; it showed how simple ideology can be used to explain everything not so nice that happens to you. Veterinary prices are going through the roof because private equity is rushing in to buy up practices blah blah blah. One doesn't need evidence to make the claim because one is already convinced that is the way the world works (see: PE buying up all the homes, thus the high cost of housing).
It's not naivete; it's fanaticism.
Is it happening or not, though?
Well, Elizabeth Warren says it's happening, so based on your opinion of her, you can draw your own conclusion.
https://www.warren.senate.gov/newsroom/press-releases/warren-blumenthal-slam-private-equity-company-for-consolidating-veterinary-care-raising-costs-for-pet-owners#:~:text=Over%20the%20past%20decade%2C%20private,Americans%2C%E2%80%9D%20wrote%20the%20senators.
In any case, I don't get it. It's not like the Hunt brothers trying to corner the silver market. Is a single PE firm going to create a monopoly of vet clinics in the country? If they buy up part of the market and increase costs and reduce quality of service, won't that turn out to be a lousy deal for them, as customers vamoose?
I like Warren, but I’d have to see the facts on the ground. I mean people are pretty sticky when it comes to vet care, and will be when ownership changes, especially if done quietly. I can see private equity middlemen driving up the costs at a given vet, I don’t see what they add to the transaction (like health insurance companies). But if a young vet starting out needs to come up with start up funds to lease a building, medical equipment, etc, they can either do it with loans or an equity stake. I think traditionally it’s been done with loans. Equity is ok too.
It’s theoretically possible that private equity buyouts are causing prices to be raised or staff to be cut. I know the big corporate multispecialty vet here is a lot more expensive than the lady that works out of a converted old house that we use, but they can do a lot more complex stuff.
The reflexive reaction “if private equity firms are doing a thing, a decent person should oppose it” seems to be a reasonable one, borne out by plenty of historical examples of vulture capitalism. But the facts of each case matter.
Trumpism is postmaterial nihilism. Republicans don’t care about competent governance or improving material conditions. They want to feel validated and to punish their cultural enemies. The leader is never wrong and there are traitors everywhere who need to be punished. It is so joyless. It is so stupid.
Post material AND post "geopolitical stature" nihilism.
They don't care about their own country's prosperity. And they don't care about their own country's stature or relative power.
Just complete loons.
They’re enjoying the last few moments of people trying to do trade deals with the United States - at least until everyone else decides to just form a free trade bloc with each other.
Stupid but I'm not sure it's joyless. There's a strain in MAGA and its circles that revels in this releasing of their Id.
Britain is going in the same direction in the 21st century as Argentina went in the 20th. Increased taxes are being levied on taxpayers to fund pensions and disability payments to an increasing number of non-workers, without a plan or end in sight. A recent attempt to cut some of these benefits by the current government failed, and now taxes are just going to have to go up again. No other party has a plan to change anything either. The country is cooked, and not just because nobody can afford to run AC with electricity prices as they are.
"Labour MPs have failed to come together and recognise the insanity of a system that has led to the free and tax exempt car scheme Motability (through which enhanced [disability benefit] recipients can choose brand new cars for free, or massively discounted models of swankier cars including BMWs, Mercedes and Audis) taking up almost one in five new car sales in the UK."
https://tomharwood.substack.com/p/why-rachel-reeves-is-so-miserable
Wait what.
Poor Brits get cars for free from the government?
The Motability scheme was originally designed for people with serious physical disabilities that meant they needed a modified vehicle to get around. Now, you can get it for mental conditions as well, for some reason.
"In 2024, there were 361,437 PIP claimants with mixed anxiety and depression listed as their main disabling condition. This makes it the most common condition to get an award of PIP for out of over 500 conditions listed by the DWP.
So, if you have mixed anxiety and depression and it affects your daily living activities, such as cooking, washing, dressing or mixing with other people or your ability to get around, you should definitely consider making a claim."
https://www.benefitsandwork.co.uk/personal-independence-payment-pip/pip-health-conditions/claim-pip-for-mixed-anxiety-and-depression
The webpage later states that 29% of them will be eligible for the Motability (=free car) scheme.
This strikes me as totally unsustainable.
One needs to score 12 points in the mobility element of the PIP scoring criteria, found here: https://www.benefitsandwork.co.uk/personal-independence-payment-pip/pip-points-system
Basically, if you don't have any physical issues you need to meet the criteria: Cannot follow the route of a familiar journey without another person, an assistance dog or an orientation aid.
It's not clear to me that someone with depression and anxiety alone could meet this criteria. Either the eligibility checks are poorly designed, or there's more to these people's mental conditions.
I have no clue if mental conditions alone are sufficient to qualify, but the fact that 20% of new cars in a medium-sized country are being purchased through a government welfare program seems problematic by itself!
It does, though I think this is in part just a consequence of the wider issue of sclerotic economic growth in the UK. A bit of stimulus is low on the list of issues over here - unfortunately!
What’s wrong with the government buying us cars? Why should we have to do it? I want socialized car insurance too. Dumb that you have to fake a disability, though.
Maybe the US gov should buy everyone a new car every 10 years or so, cash for clunkers style. It’d certainly be the best way to do it once we do have fully self-driving cars, because the benefits are only realized if every car on the road is self-driving, as then they can communicate with each other to reduce congestion.
According to the page, 29% meet the criteria of 'Enhanced Mobility' and further down the page it states 'The enhanced rate of the mobility component also gives access to the Motability scheme.'
I contend that the eligibility checks are poorly designed.
Disabled Brits but yes:
https://www.motability.co.uk/
Clarkson’s Farm on Amazon really goes into the stasis pathology of the UK. The public has a just deranged level of opposition to any development, economic or otherwise.
>The public has a just deranged level of opposition to any development, economic or otherwise.<
There's been a lot of tut-tutting of Keir Starmer's lack of boldness. Or really, lack of any noteworthy accomplishments at all. But what you mention is the answer: making it easier to build shit is something that's opposed by very large numbers of British voters, many of whem voted Labour in the last election. So (I'm guessing) the current government simply doesn't have the votes in Parliament to get a bold program of reform enacted to enable the UK to build like it used to.
Voters are also very upset about economic stagnation and a falling standard of living - someone with some political talent needs to convince the public that oppositijs to building things is causes the stagnation and falling standards of living.
The time to do that was right after the election. OR, maybe he didn't need to convince the electorate—he just needed to exert mastery over his own parliamentary party ("bitter medicine is sometimes necessary to cure the patient").
He has squandered a whole year. What a disaster.
As a former resident of oxfordshire… hooooooooo boy
But he has (had) five years to do whatever he wants with no constitutional restrictions other than Charles III deciding he wants to end up like Charles I. Five years is enough time for smart but initially unpopular policies to pay off and convince voters through their results (look at the ACA, or at NYC’s congestion pricing).
To defend Britain somewhat, Clarkson lives in the single most NIMBY village in the entire country, not everywhere is quite as bad as depicted in the show (particularly some northern cities are pro-development)
I learned what the pension triple lock is recently, and it is absolutely insane. I didn't know a pension system could be run worse than the State of Illinois' but some how the UK does it.
Yes, in the last two weeks I've learned about the pension triple lock and the Motability program and I'm left jawdropped by the existence of those things, but also baffled as to how I've never heard of either of them before in various libertarian publications. Like, searches for "Motability" and "triple lock" both return no hits in Reason Magazine.
Argentina’s stagnant trajectory in the 20th century was fundamentally because it had a natural resource commodity-based economy and those resources fell in price. The countries that need to watch out for an Argentina-style future are the Middle East oil states. Britain has economic troubles but it’s still fundamentally a human capital-based economy so Argentina isn’t the right historical example to learn lessons from.
No the stagnation was because a huge amount of over regulation, rent seeking and corruption that prevented economic growth combined with over taxation and government spending.
My probably least-contrarian opinion (here) is that the US should roll out some kind of super-streamlined uncapped quantity visa that allows native-born UK citizens ages 18-65 to live, work, and study in the US. The UK seems to waste so much human capital and the British are among the least likely immigrants to cause backlash: they're mostly monoglot anglophones, familiar with US culture, white, and not religious.
The counterargument to that is that it's already fairly easy for someone with that profile from UK or Europe to migrate to the US. They won't be subject to the kind of scrutiny that non-Europeans face during visa issual or multi-year waits to get a green card through employment. The reason they don't is that most Brits don't want the grind of US corporate lifestyle.
It's very easy for the British to visit the US, but living/working here seems pretty onerous.
There's a soft cap of 65,000 H1-B visas per year, something like 35,000 O visas are granted per year, and about 140,000 E visas are available per year. Something like 15,000 total EB1+EB1+EB3 visas are granted per year. The British aren't eligible for diversity visas. Many of these also require existing employment or an offer of employment from a US business. Moving between jobs or between a job and education can risk visa status.
Perhaps I'm wrong and there would be very few takers for a visa like what I propose. But I think it's worth trying.
You're right about H-1B visas but they're not hitting the per country caps for the EB visas, which takes less than 2 years for them, which reduces the risk. Green cards are for future employment, so technically, they can wait for an employer to sponsor the visa while waiting in UK if they miss out on the H-1B lottery. In contrast, the current backlog is 12+ years for India and 5 years for China. It's a lot easier for the Brits to travel to the US for job interviews. No, there isn't a huge pent up demand for Brits to move to the US permanently. I'm pretty sure of it.
https://travel.state.gov/content/travel/en/legal/visa-law0/visa-bulletin/2025/visa-bulletin-for-august-2025.html
>Britain is going in the same direction in the 21st century as Argentina went in the 20th<
As is the United States of America.
One of the upsides of leading a political movement where your base's loyalty to you is highly personalized rather than being a normal political coalition of interests is that it gives you more freedom to ignore prior promises and implement correct policies without losing much support. Of course, just because you can implement correct policies doesn't mean you will. Trump routinely breaks promises without losing base support, but most of the time those policies are still bad, and sometimes even worse than the policies he previously promised.
We'll see what Mamdani does. Progressives and leftists are generally ill-equipped to pull a Milei because inclusion and participation and not "throwing the little guy under the bus" are (mostly to their credit) intrinsic to their political philosophy. But there are always exceptions.
Some of Trump's cultists aren't liking what he is doing with the Jeffrey Epstein mess.
My prediction: in a month, no one will care about this anymore, as MAGA closes ranks against the Hated Others, and Trump provides any number of new shiny objects for them to obsess about.
But I'm enjoying it while it lasts.
Sincere question, not trolling: Suppose the Epstein files reveal that Trump is guilty as hell, that he enjoyed sex with underage girls on Epstein's Pleasure Island or whatever.
How many of his supporters would care?
How many more of his supporters would feel a slight sense of distaste but would assuage it immediately with "But the Woke Scumbag Immigrant-Coddling Anti-White America-Hating DemocRATS are so much worse"?
Am I being overly cynical or am I simply drawing the correct conclusion from ten f**king years of "surely THIS is too much, this will bring Trump down and make everyone abandon him/whoops, no, actually it didn't"?
I think they won't say "but he's guilty as hell" but are more likely to find a way to rationalize that it isn't true.
I _do_ think that crimes against the underaged would be heinous enough to cost him support among people who _believe_ the theoretical evidence.
Oh, they wouldn't care about *that* but they would be bitterly disappointed if the released files didn't show all the crimes that Hillary and Bill committed.
But they would just assume that the Biden crime family scrubbed the files and then move on to the next outrage.
In 2020, a letter signed by a small percentage of the US public health establishment endorsing protesting police as the only valid reason to violate lockdown orders convinced half the country that the entire field of public health is bogus. Maybe don't sign on to stupid letters.
And even signing on to non-stupid letters can have peril....
Don't keep harping on it
As our host knows well
To be fair, the vast majority of the people signing that letter were grad students and low level folks. Not all, but it still didn't represent a consensus or the leading lights of the US public health establishment.
Still, an idiotic idea.
One big takeaway I get from reading this piece and about the hyperinflation-exacerbated rent situation in Argentina is, if you have a well-run independent central bank, don’t mess with it.
What I find important and relevant is Milei's ability to enact extreme fiscal austerity and gain in popularity. I'm thinking of how something similar could translate to the US, maybe starting at the local level. As a Chicagoan, I'd fully support someone coming in and saying-- "the city and state aren't jobs programs. We're enacting huge spending cuts, re-writing pension rules, and focusing on attracting businesses. There will be pain involved, but it's necessary to right the course." Does it come down to having the political talent to sell this message?
I think it was probably only possible because things had gotten SO bad in Argentina.
Same applies to US entitlements and debt levels. We know there is a huge problem, we know it will probably end badly, but voters don't want change until the fiscal apocalypse hits.
The biggest difference between Chicago and Argentina is that at this point, there’s very little Brandon Johnson or any Chicago mayor could do to solve the problem. Chicago needs constitutional reforms to pensions that reduce liabilities and/or the city needs a bailout from the state or federal government to cover past underfunding.
I think it comes down to 1. political talent and 2. things need to be very very bleak.
It worked in DC. Barry turned the city into an utter shithole and the Control Board pulled it out doing essentially what you said
I had a lovely trip to Argentina about two years ago. Part of Matt’s previous writing is to look at the actual impact of policies and who it benefits or harms; eg rent control is a handout to existing tenants, inclusive zoning is a tax on new construction.
Part of what made the trip so lovely was that a large number of Argentinian policies clearly favored me. My AirBnB was cheap because so many units were pulled off the market due to rent control. I feasted on fantastic Argentinian steak and wine for a fifth of the price it would have cost in the US, because of subsidies to ranchers and vineyards. I could walk into a Western Union with a fist full of dollars and walk out with twice as many pesos as I could have gotten at a currency exchange, because the country was so starved for foreign currency to subsidies imports. But of course there’s a cost on the other side of the ledger for all of these, and it was clearly being born by the Argentinian people through the scourge of inflation. More taxi drivers wanted to talk to me about the exchange rate, or inflation rate, or macroeconomic reforms than they did about the River Plate game I was going to, even in that football-mad country.
I understand why Matt would want to downplay the reforms in this column; “hacking the safety net and subsidies to the poor can unleash economic growth” does not follow the cozy paternalistic ideals usually shared here. But it is clearly working, and I wish Milei and the rest of Argentina continued success.