Missing the point
The magnified Adorni scandal is a huge problem for the government, making nonsense of “morality as a state policy” from Milei’s state-of-the-nation speech or his “cultural battle,” but it also serves as a distraction from more serious problems.
Wednesday was a sad day for the institutional health of Argentine democracy, finding both sides of the political divide wanting. The constitutional purpose of the monthly report of the Cabinet chief to Congress (something Manuel Adorni had yet to do and probably would not have done this time without a presidential insistence on calling the opposition’s bluff) is to make the work of the government as a whole accountable to the representatives of the people with the chief minister seeking to justify what the other ministers are spending (and not spending) – not to dissect the properties and holidays of a single official. Neither the parliamentary opposition nor the media coverage nor President Javier Milei along for the ride as a cheerleader bordering on hooligan seem to have grasped this basic point.
Even if the proper focus were Adorni rather than such questions as, say, explaining university spending cuts with the University of Buenos Aires (UBA) on a total strike that very same day, the obsession with the details of the Cabinet chief’s properties is missing the point. Instead of honing in on Adorni, investigations should be casting a wider net because the Cabinet chief was not the only official earning less than a monthly four million pesos until the start of this year with a more lavish lifestyle to explain – ARCA tax bureau chief Andrés Vázquez and Infrastructure Secretary Carlos Frugoni (until last weekend), both with multiple undeclared housing in Miami, are in all probability the tip of a much bigger iceberg. This leads to a more general question as to how senior officials as a whole are making ends meet – are state funds being paid under the table (as occurred in the Carlos Menem Presidency) or is the money coming from friendly companies (with or without strings attached or a hidden agenda) or what?
The magnified Adorni scandal is a huge problem for the government, making nonsense of “morality as a state policy” from Milei’s state-of-the-nation speech or his “cultural battle,” but it also serves as a distraction from more serious problems. Hardly anybody pays attention to the five percent slump in mass consumption in March on a year-to-year basis (the rise from the previous month is meaningless since March has three more days than February) yet this not only dooms the economy as a whole to stagnation but even jeopardises the revenue base of the government’s top priority of fiscal surplus – something which can only be kept alive by deferring spending and swelling the floating debt (about which Adorni could have been usefully grilled by the deputies last Wednesday). The resulting stagflation makes it equally impossible to either raise or lower interest rates – higher interest rates spell recession but that cannot be countered by reducing them because even the current levels are not competitive to strengthen the currency by attracting deposits in pesos. And if the currency were strengthened, the export boom in mining and energy would only intensify the ‘Dutch disease’ of an appreciated currency causing other sectors to become uncompetitive and languish, destroying industry.
Country risk is rising as a result (even with the Middle East calming down for now) but this might not be for purely economic reasons. The offensive against Adorni seems to have provoked Milei into escalating his natural aggression beyond any presidential dignity and this appears to be drawing notice both at home and abroad. There are questions as to whether Milei’s talents are purely destructive, with his demolition of a dysfunctional Kirchnerite model rating as a positive achievement, or if he has the capacity to construct an economy which works for 46 million Argentines and not 20 – something falling into doubt, given his problems in forming a stable coalition to ensure governance when he cannot even co-exist with his own vice-president or the likes of ex-president Mauricio Macri, quite apart from the infighting in his own party. In short, Milei is starting to become a risk factor in his own right. The business establishment is increasingly asking whether he is the only pro-market option and looking for alternatives.
But perhaps the underlying problem is the weakness of parliamentary democracy, as exposed by Wednesday’s session completely missing its institutional point, because the logic of a hyper-presidential democracy can only lead to populism, even when the top job is held by an economist preaching orthodoxy and calling himself a libertarian (or anarcho-capitalist). To centre all analysis on a single person – whether Adorni or one of the Milei siblings or whoever – is never a road to reality.