THE CHAINSAW MASACRES OF ARGENTINA AND THE US

Argentine President Javier Milei with signature chainsaw

 Many Argentines cringed in shame this past week as they watched their president make a clownish spectacle of himself by showing up in the US, to obsequiously and gratuitously pander to his personal heroes, Donald Trump and Elon Musk. This time, he made the pilgrimage to Washington—where he was also courting the IMF to see if he can land an eleven-billion-dollar credit to shore up his faltering economic program—to present Musk with the signature symbol of his own populist regime. Namely, a custom-designed chainsaw.

Musk, who is basically a filthy rich, unelected appointee, with no real political standing—a sort of high-end bureaucrat, if you will—magnanimously granted Javier “Baby Trump” Milei, a head of State, a forty-five-minute audience, in which the visibly excited Argentine president, giddy as a kid at Christmastime, presented Elonius Rex with the prize saw, a gleaming red and chrome machine with Milei’s favorite slogan emblazoned on the blade: ¡Viva la Libertad, carajo! (Which roughly translates as “Long live liberty, damn it!”).

Musk with his new saw, Milei with his bro-crush

It’s a motto with which the far-right libertarian ends even his most formal of speeches,  and which he utters in a guttural, if reedy growl. It is the Mileian equivalent of Donald Trump’s “Make America Great Again”. And, when it comes down to what both those phrases mean to those they are inflicted on, they are rendered Orwellian in terms of their consequences.

For those of you who have never had the pleasure of making George Orwell’s acquaintance, an example of what I mean is that, for instance, in his dystopian novel 1984—which is far more relevant today than it was when it was written—the author’s fictitious country boasts four main ministries: the Ministry of Truth is ostensibly in charge of media, entertainment, education, and the arts, but is actually the creator and purveyor of political lies, propaganda and spin. The Ministry of Peace’s apparent mission is to broker and keep the peace, but it is actually devoted to sparking and incrementing violence. The Ministry of Love is supposedly charged with justice and order, and creating a pleasant climate for all, but its true main mission is torture, punishment and “re-education”. And the Ministry of Plenty is officially at the center of the regime’s allegedly plentiful economy, but is actually the entity in charge of supply rationing and distribution.

Similarly, while both Trump and Milei’s favorite slogans might sound inspiring and rosy, the actions behind them are having contrary effects for just about everyone but the rich and powerful. The actions Donald Trump took during his first term from 2016 to 2020, bolstered the power of the presidency and initiated a sharp decline in the influence of the other two branches of government. His economic policies provided tax breaks to the already vastly undertaxed wealthy, and put additional economic pressures on the middle and lower classes—as reflected in the estimated seven trillion dollars that his administration added to the deficit. He showed contempt for democratic institutions and disdain for the rule of law, but was, in the end, held in final check by the other two branches when he sought to, basically, overthrow democracy and remain in office after losing an election. His legacy was division and chaos, and now, after a four-year hiatus, he is back to finish the job, this time with the indispensable help of the richest man in the world. Fitting, since he was and is the president of the wealthy, who, in Orwellian style, bills himself as “the president of the people.”

Milei has made no bones about being an avid admirer of Donald Trump’s. But he had the initial disadvantage over Trump of following, not a highly popular and highly democratic administration like Barack Obama’s, but rather, the weak, corrupt presidency of Alberto Fernández, which was consumed with party infighting and crippling economic woes.

Like Trump, Milei is fond of puerile displays of showy bravado. Hence, his choice of the chainsaw during his campaign and beyond, as the symbol of his promise to “destroy the government from within”—which, without saying it in so many words, is what Trump and Musk (or Musk and Trump, depending on your point of view) are bent on doing as well.

Milei at one of his Trump-like rallies

The Argentine president is every bit as disdaining of anyone who opposes his most extreme measures, and of those he perceives as his political enemies, referring consistently and publicly to anyone left of the center right as “zurdos de mierda” (fucking leftists). And when numerous governors from Argentina’s twenty-three provinces opposed cuts in federal aid at the beginning of his term, he angrily vowed that he was going to “piss on the governors”.

He also suddenly turns on those who dare criticize him, very much in the dismissive style of Trump, who has dissed his former political allies that have failed to accompany him to some of the extremes to which he has taken his policies and personal misdeeds: Generals John Kelly, James Mattis and H.R. McMaster, as well as former Trump attorney Michael Cohen and former Vice President Mike Pence spring to mind, but there are countless other examples. In Milei’s case, for example, early on he expressed praise and admiration for former Economy Minister Domingo Cavallo, the architect of the late President Carlos Menem’s convertibility and privatization policies, which marked a ten-year neo-conservative era in Argentina. When he was first elected, Milei touted Cavallo as “the best Economy Minister in Argentine history.” Until just a few months ago, he was still referring to Cavallo as “a hero” and saying he hoped to emulate him.

But in his personal blog, Cavallo recently issued a warning to Milei about the dangers of a falsely appreciating peso. The Harvard-educated economist said that since Milei took office, a little more than a year ago, his economic policies had caused the peso to appreciate by twenty percent in real terms. Cavallo said that this was a similar trend to the one witnessed in the last three years of convertibility, leading to the crash of 2001 (the Corralito Crisis).

The former economy minister pointed out that real appreciation had led to “a very costly deflation, because it transformed the recession that had begun in 1998 into a true economic depression.” Cavallo counseled Milei to lift exchange rate restrictions within the next three months before the effects of a (falsely) “strong peso” started affecting domestic industries and discouraging export investment.

Echoing the sort of capricious flipflops Americans have come to expect from Trump, Milei suddenly referred to Cavallo as “a disgrace”, and as “unpresentable”. And in another Trumpesque move, within hours of reacting to Cavallo’s blog, the Argentine president fired the economist’s daughter, Sonia Cavallo, who, until then, had been posted as Argentina’s delegate to the Organization of American States. He justified the vengeance move by saying “Her father is constantly sabotaging the economic program, and you can’t have your cake and eat it. You’re either on one side or the other.”

The grotesque posturing of Milei and Musk on the far-right CPAC stage with a shiny new chainsaw this past week was chillingly symbolic. Tens of thousands of federal workers turned out into the street in Argentina, and thousands so far given the axe by Musk in just one month of the new Trump regime speaks to just how chilling. Milei is fond of crowing to his far-right supporters that the US “is taking its cue from Argentina.” And his presentation of the fashion-designer saw to Musk is an apparent attempt to underscore that exaggeration. But Trump’s first term precedes Milei, so it’s pretty clear who is taking his cue from whom.

The parallel he strikes, however, is worthy of consideration. What I mean by that is, if Americans want a preview of what the Musk-Trump duo’s policies will likely lead to, they need only look to the almost caricaturesque example of Argentina. For one thing, while Milei boasts about his policies reining in hyperinflation, peso inflation in his first year in office has still soared at 117 percent in 2024. But worse still, the consequences of his crawling peg exchange rate policy have also caused prices to explode in dollar terms.

When Milei came to office, it was, in part, on a promise to “dollarize” the economy, since he described the peso as a “shit” currency. But since taking office in December of 2023, he has only “dollarized” in the sense that Argentina has become the most expensive country in dollars in all of Latin America, while he has at the same time “revalued” the peso by removing a lot of local currency from the market, artificially driving its value upward.

No example could be better than my own experience, living here in Argentina’s Patagonian region, to illustrate the consequences to middle and lower class residents of these and other policies imposed under the Milei government. For instance, until December of 2023, my wife and I were paying about two hundred fifty dollars a month for excellent private health care—uphill for two retirees in Argentina, where the standard of living is nowhere near as high as in the US—but doable. Furthermore, it kept us independent from the pensioners’ health care plan paid for, in large part, by the State, since the amount paid into the health plan by pensioners is minimal.

One of the first things Milei did on taking office was completely deregulate private health insurance—and just about every other commercial activity in the country. The result was that, within his first three months in office, our health insurance costs had gone from two hundred fifty dollars a month to six hundred fifty-eight. It became impossible for us to continue to pay, and we ended up on the State retirement health care rolls.

Milei’s own brand of “moving fast and breaking things” also removed all restrictions on price gouging—an even more common practice here in Argentina—especially in remote Patagonia—than in the US, while de-subsidizing all services. Between the artificially bolstered peso and the removal of all restrictions, then, our grocery bills here in Argentina have doubled in dollars, going from between seventy and ninety dollars a week when he took office, to about one hundred fifty to one hundred eighty dollars after his first year in office. And the prices of just about everything else have risen accordingly, especially in areas like clothing, new car sales and electronics, in which local industry is heavily protected.

A noonday luncheon special in downtown Buenos Aires now runs an average of eighteen dollars—more than a minimum wage worker makes in a day—while in other major Latin American capitals, research shows a comparative average of seven dollars. A cup of coffee averages thirty percent more there than in São Paulo (Brazil) or Santiago (Chile) and more than twice as much as in Bogotá (Colombia). Meanwhile, Argentina’s minimum wage is higher than on Brazil’s depressed job market, but considerably lower than minimum wage levels for either Chile or Mexico.  Moreover, forty-five percent of Argentina’s workforce works off the books, with no minimum wage guarantees or benefits of any kind.  

As with the Trump administration, Milei’s regime is doing nothing to address these inequalities. On the contrary, he is, like the Musk-Trump duo, slashing social services wherever he can get away with it, and seeking to break the country’s once powerful Peronist labor unions. He is also, like Trump in his first term, jockeying to try and get himself a more malleable Supreme Court.  

Nor have vital services been spared: fuel prices rose one hundred eighteen percent in Milei’s first year in office, while de-subsidized natural gas services rose by more than five hundred percent. Water was up more than three hundred percent for the year, and electric power services increased more than two hundred sixty percent.

Milei, like Trump, promotes himself as a political outsider, bent on dismantling the “political caste”, which, according to him, has led to the country’s economic decline. Also like Trump, however, he is seeking to replace that “political caste” (i.e., elected representatives of the people), with a corporate elite, seeking a country where a place at the international business table is sought using the average Argentina’s impoverishment as a stepping stone.

While Trump and Milei’s ideologies strongly overlap—Milei was a guest at Trump’s latest victory celebration and got a shout-out from the then president-elect as “a true MAGA guy”—the political and economic contexts in which they govern differ substantially. The US economy under Trump was the world’s largest and still relatively stable, despite challenges, mostly of Trump’s own making. In Argentina, however, Milei came to office already struggling with high inflation, widespread poverty, and significant public debt. This fundamental difference in starting conditions means that while Trump’s policies could often be masked or justified by a booming economy, Milei faces the much more immediate consequences of severe economic disarray.

Both Trump and Milei’s governments have been criticized for their exacerbation of social polarization. Trump’s rise has been  marked by deep divisions within American society, particularly on issues of race, immigration, and cultural identity. His inflammatory rhetoric and policies have often targeted minority groups, including immigrants and African Americans. His current campaign to forcibly eliminate diversity, equity and inclusion by decree in the US is only deepening the divide.

Milei’s rise to power in Argentina has similarly highlighted the nation’s profound political divide. While he has framed himself as a defender of individual liberty and economic freedom, his rhetoric, like Trump’s, often smacks of authoritarianism, with frequent attacks on the media, the judiciary, and his political opponents. His presidency has already seen increased protests from various sectors of society, particularly labor unions and public sector workers who fear the consequences of his austerity measures. Milei’s confrontational approach to governance, much like Trump’s, risks further fracturing of the social fabric of Argentina, deepening divisions between those who support his vision and those who see his policies as an existential threat to their livelihoods.

While Milei has managed to get fairly good international press from business media and multi-lateral organizations such as the IMF and World Bank, none of these are known for being concerned about the social devastation wreaked by the kind of cruelly radical  neo-conservative programs being implemented by Milei and his Economy Minister Luis Caputo to wipe out a decades-long deficit overnight. All these sectors care about is hammering developing nations into good credit customers who pay their debts in timely fashion—unlike major economies like the US which, despite admonishing the developing world to be good citizens and keep their debts in check  if they want aid, are the world’s biggest debtors (as of last year the US had eight trillion dollars in foreign debt, or a little more than a fifth of the country’s entire federal debt).

Multiple studies have shown over the decades that IMF and World Bank ultra-conservative economic prescriptions in regions like Latin America have bolstered the international profiles of neo-conservative governments at the expense of the common people’s well-being. This was true of the military dictatorship that ruled the country with an iron fist and at the point of a gun from the mid-seventies through the early eighties, and that is certainly the current case of Milei’s Argentina.

Despite being the darling of the MAGA crowd in Washington, however, Milei may find his forward momentum stalled on his quest “to move fast and break things.” Back from his meetings with the IMF and Trump in Washington, and his clown show with Musk at the CPAC extravaganza, the Argentine president begins work Monday in the face of a scandal sparked—also not unlike Trump—by a blunder on social media that cost local investors big-time. It’s being called “Cryptogate”, and it promises to haunt the president’s government.

A week ago in his social media feed, Milei, a self-styled “anarcho-capitalist”, touted a cryptocurrency meme coin known as $LIBRA. Sharing information about its launching on his feed, the president wrote, “This private project will be dedicated to encouraging the growth of Argentina’s economy.” The local currency market reaction to the post was immediate, with the coin’s value surging to five dollars almost immediately, only to plummet by ninety percent two hours later.

The practical result of the meme coin fiasco was that Argentine investors lost approximately two hundred fifty million dollars in the blink of an eye.  Milei immediately took his post down and claimed he really hadn’t had all the details of the deal. Worse still, he tried to foist blame off on the investors who had followed his cue, saying that they knew the risks, just as they would if they went to a casino to gamble.

Investors aren’t buying it. Both at home and abroad, he is facing accusations of crypto-fraud, and lawsuits are being filed against him in both Argentina and the US. Opposition members of Congress, meanwhile, are calling for his impeachment, and although they don’t yet have the votes necessary, the fact that Milei has consistently referred to Congress as “a rat’s nest” is unlikely to garner a lot of sympathy.

At best, Milei will have to try and convince people that he was duped by some of his acquaintances involved in the scheme, in which case he will look like a guileless fool. At worst, he will face multiple legal actions, and the possibility of more opponents climbing onto the impeachment train.

Time will tell.