Milei, Chanfallas and the deception of the wonder market

Milei, Chanfallas and the deception of the wonder market
Milei, Chanfallas and the deception of the wonder market

Javier Milei’s visit to Spain to support the far-right VOX, meet with European neo-fascist leaders and present his book – in which it had been falsified that he is a doctor in economics and that he graduated from the prestigious University of Buenos Aires, when the truth is that it was in a private company lacking prestige – it is estimated that it will cost more than half a million euros to the hungry Argentine people. Like other trips to the United States to be photographed with Donald Trump and Elon Musk, he seeks to disguise himself as an official trip by improvising a meeting with some directors of companies with investments in Argentina.

Milei arrived in Madrid shouting false success, amplified by his related media, after five months of failure in his main objectives, masked with trickster tricks. Despite the drastic cuts and the morass in which it has plunged the economy, it maintains high popular support (45%) even among those most affected, the lower-middle-income segment with the lowest educational level and greatest job insecurity, although it is where has lost more in these months. This is explained by the media support that helped him convince half of the population, including twelve million people without labor rights and meager social rights, plunged into poverty for decades in a country that has enormous natural and socially generated wealth. that the solution is the liquidation of the public.

Contextualized data kills stories

Inflation is the first problem for two out of every three people in Argentina and Milei made its eradication its main objective, which is where its credibility is at stake. This explains why the far-right president celebrated that in April monthly inflation was 8.8%, which was the highest monthly inflation in the world in April, tripling that of Venezuela, second in the ranking, with 2.8% (data from the independent OVF; which would be 2% according to the Venezuelan government). The 8.8% is also above the 7% average of the first seven months of 2023, under the failed government of Alberto Fernández. Starting in August 2023, when he won the primaries, inflation is attributable to Milei, since his announced devaluation – which he achieved when he took office in December by increasing the exchange rate by 120% – then made the business oligopolies that dominate the market Argentina will anticipate the increase in prices, raising inflation to 12.4% monthly in August and above that value in three of the four months prior to its definitive triumph in November. The accumulated inflation from July to April of this year exceeds 220% and 300% in essential products: today a liter of milk costs three times as much as before his victory in primaries and a kilo of beef for roasting or a kilo of yerba mate quadrupled its price. In dollars, these and many other products cost more than in Europe or the US, even though the Argentine minimum wage is 15% of the SMI in Spain. This caused a huge loss of purchasing power for the salaried population and also for small and medium-sized merchants due to the drop in sales in a context of strong recession, which is the magic wand that makes monthly inflation decline but keeping it above that of the government. former. Counting only the inflation of the five months of the effective government, Milei accumulates a 107% increase, almost the same as the previous failed government accumulated in an entire year until July 2023: 113.4% year-on-year. At the time Milei took office, year-on-year inflation was 160.9% and in the five months it has not stopped growing, up to 289.4%. The extremist achieved these inflation results with the illusionist’s trick: I take a lot from you today, and then when I take less from you you applaud me, just as we anticipated in different media.

Since taking office, Milei, a supposed defender of private property, expropriated huge incomes from the population by strongly devaluing them to cause brutal inflation and capture social wealth. The devaluation demonstrated the fallacy of the centrality of the monetary issue in the origin of inflation, which in reality is caused by the external imbalance generated by a primary productive and financially extractive structure dominated by transnational capital (foreign and local) that eliminates economic and de facto political sovereignty, forcing devaluations that cause inflation.

The comparison with the frustrated Fernández government makes Milei’s deception more evident: the year-on-year inflation of 113% accumulated by the previous government in July 2023 (when Milei won the primaries), occurred under the financial suffocation of the IMF, which It forced cuts to pay the debt that the Fund ceded without conditions to the right-wing government of Mauricio Macri – current Milei ally -, favoring his victory in partial elections and capital flight. Despite this, there was a level of activity that maintained employment, although with very low real salaries (300 dollars the minimum wage) but higher than today’s 196, which is below the poverty line. On the other hand, the high inflation generated by Milei occurred in a context of a sharp increase in unemployment and a devaluation of salaries, pensions and social programs that caused a strong loss of purchasing power (30% compared to 2023 and 50% with compared to 2015).

The loss of purchasing power shot up poverty from a shameful 40% at the beginning of his government to an insulting 49% (UTD) in April and rising. At the beginning of the 70s, poverty was 4% and after the state terrorism regimes of Isabel Martínez de Perón and the neoliberal military-business dictatorship that Milei does not condemn, it reached 25%. Since then, poverty has been above that percentage, and exceeded 30% in 75% of those years, with peaks of more than 40% and up to 66% in the convertibility crisis that Milei praises. The Kirchnerist governments (2003/2015) reduced it but never below 25%, due to their lack of determination to carry out a tax reform that would modify its unfair regressivity and a structural change that would achieve true social justice, to seriously reform an unsustainable predatory capitalism. socially and environmentally. The lack of a profound reform generated social frustration, opening the door to the leap into the void that the anti-human vision proposed by Milei entails.

Another false success of Milei is the primary fiscal surplus (without debt interest) achieved thanks to a criminal cut in essential spending, such as pensions, whose real cut of 50% explains a large part of the “fiscal savings”, which also includes reduction of subsidies for oncological medications and basic services, drastic cuts to social programs that aggravate the destitution of the most vulnerable population that lives in popular emergency neighborhoods (“villas”), layoffs, etc.

The third misleading success is the recovery of foreign currency reserves, which is not such in real terms because what happens is that instead of providing foreign currency to importers, they are given debt bonds, which must be exchanged for foreign currency.

Even more relevant is that after managing to approve a labor reform typical of the 19th century that liberalizes layoffs, eliminates compensation and sanctions for non-compliance by companies, it is trying to buy wills within the corrupt political caste – which, like the business class, exists – in parliament and among provincial leaders to approve an unconstitutional law on large foreign investments that in practice gives away the exploitation of resources to foreign corporations in exchange for a short-term investment (in three years they can recover it) and also that they delegate absolute, almost dictatorial powers to dismantle the State, and liquidate the common and public assets of society.

Milei emulates the trickster Chanfalla, the Cervantes character from the Altarpiece of Wonders, who gets a large part of a town to “see” the non-existent characters that the trickster Chanfalla says appear in a box as a puppet altarpiece, manipulating common sense. : He assures that only good people see them, according to the morality of the time, something very similar to what Milei calls “good people” who are the only ones who “see” their “great achievements.” The society that he considers that Argentina is not selling itself, but defending itself, gave first warnings with two general strikes and an impressive mobilization in defense of the public university and begins to look for an alternative, which must be eco-social and sovereign.

* Doctor in Economics, professor of international economics at the UCM (honorary) IG:

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