Evita Peron on the Argentine 100 peso note.
"Deja vu All Over Again"
by Bill Bonner
Poitou, France - "What a pity that they are almost all dead. The Argentines who were around in the ‘40s and ‘50s...and old enough to remember Evita and to know what was going on. They could have come to Washington and relived those glory years.
Hannah Cox on X: "It actually is crazy that Argentina elected a libertarian to save them from decades of Peronism. And then the US, after building the greatest country ever known to man on the principles of libertarianism, elected a Peronist." Surely some budding Andrew Lloyd Webber is already planning the Broadway musical: Melania! We will reach for a deeper, more philosophical insight, maybe tomorrow. Today, we will simply recall an Argentine’s comment from a few years ago: "Peronism is our most successful export." Argentines are happy to get rid of it. Much of the US seems happy to get it. The world turns.
But what is Peronismo? Juan Peron was, by most accounts, a charming rascal. He was also the most important person in Argentine politics during the 20th century. Like Trump, he was elected president two separate times. And like Trump he was a Big Man. He was also a disaster. While America stuck (mostly) with consensual democracy and free market policies, Argentina took up tariffs, demagoguery, nationalized industries, censorship, violence and central planning. America got rich. Argentina got poor.
But now, have the two nations reversed roles? That’s the question we’ve put on the workbench today. Many things in the US today would be familiar to the Peronistas of the 1940s and ’50s.
The recent FBI raid on the home of former US Ambassador to the UN, John Bolton, for example. The FBI showed up unannounced last week and carried out many of the documents he was using to write his memoirs. Bolton had been a National Security Advisor to Trump but the two had fallen out. And while Mr. Bolton probably deserves to be hanged for his role in starting the Iraq war, it is very unlikely that he could jeopardize national security by revealing US secrets. More likely, the raid — very un-American for an America First administration — was intended to silence critics.
And he’s not the only one. The Wall Street Journal: "Trump’s team has opened investigations of Democrat Letitia James, the New York attorney general who sued Trump’s company over alleged fraud for falsifying records, and Sen. Adam Schiff, D-Calif., who as a congressman led Trump’s first impeachment. The Republican administration has charged Rep. LaMonica McIver, D-N.J., over her actions at an immigration protest in Newark, New Jersey, after arresting Mayor Ras Baraka, also a Democrat. Under investigation, too, is former New York Gov. Andrew Cuomo, a candidate for New York City mayor."
Also, not surprising to those who lived through the Peron years was the firing of intel chief Jeffrey Kruse or top statistician Erika McEntarfer. Early on, the Peronists politicized Argentina’s statistics, and published phony figures for many years.
So would Trump’s dust ups with universities and the mainstream press. Peron drove hundreds, maybe thousands, of students, professors and intellectuals to leave the country. More than 100 magazines and newspapers closed down in Peron’s first term. The largest newspapers, La Nacion and El Clarin, stayed in business but became very timid about what they said. Now, in America, Trump’s suit against the New York Times, for telling the nation about his alleged birthday card to Jeffrey Epstein, has warned the press to be careful. Even if they win the lawsuits, the legal costs could put them out of business.
This would have brought back memories too; the New York Times: "Intel Agrees to Sell U.S. a 10% Stake in Its Business." The deal is among the largest government interventions in a U.S. company since the rescue of the auto industry after the 2008 financial crisis.
Talk about deja vu all over again; Latin American Economic Review tells us how Peron interfered with trade: "The Argentine Institute for the Promotion of Exchange... withheld around 50% of world agricultural export prices to finance both imports and to support newly created public companies. In the meantime, import tariffs were raised, the multiple exchange rate system was maintained and a scheme of import permits was created. In addition, Argentina suffered from the nationalization of railways, telephones, electricity, public transport, and other utilities and services between 1945 and 1950 (the early Peronist years)."
We have some personal experience with Argentina’s trade protectionism. When we first arrived on our farm, we noticed that the tractor tires were worn out. The rubber was split or torn on some of them, the tires held together with wires and bolts. “There aren’t any tires for sale,” explained the farm manager. “An Argentine company has a monopoly, and they don’t make this kind of tire.” Whether that was an accurate description of Argentina’s ‘substitution policy’ - wherein local products were meant to substitute for imports - we don’t know. But it summed up the situation on the ground.
Argentina had been one of the world’s richest countries. But by the third decade of the 21st century, the Peronists - who governed Argentina for almost 80 years - had pretty much run out of other people’s money. Inflation was running over 250% per year. A Venezuela-style hyper-inflation was widely feared. It was then that Javier Milei came along...brandishing a chainsaw and proposing a radical solution - ‘libertad carajo!’ (Freedom, dammit!)
To almost everyone’s amazement, he was elected...and to their even greater amazement, he actually has done what he said he would do. The budget is balanced (it is non-negotiable, he says). Inflation is coming down. People are beginning to make progress. Joel Bowman: "In June, while monthly inflation came in at 1.6%, wages grew by almost double, at an average monthly rate of 3%. More encouraging still, it was the “non-registered private wages” (representing Argentina’s massive “informal” market) where most of the growth was generated."
Has freedom taken root in Argentina? We don’t know, but north of the Rio Grande, Peronismo grows like cannabis. And fertilized by trillions of other peoples’ money, it is likely to keep growing...until the money runs out."
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