Adorni is breaking his back

News that Cabinet Chief Manuel Adorni brought his wife along for an official trip to New York rained on the Javier Milei administration’s parade just as it was looking to pat itself on the back for a successful roadshow in Wall Street. 

For a few days, Manhattan’s financial elite saw Argentine officials, businessmen, entrepreneurs parade through town looking to attract fresh investment to sustain the elusive economic “miracle” that President Milei promises is just around the corner. Yet, it was Bettina Angeletti’s presence in that official travel party that drew the most attention. Angelletti is a “life coach,” according to reports – and also Adorni’s wife. She travelled onboard the presidential plane, was invited by the Casa Rosada and stayed with her husband at the Langham Hotel, located at the intersection of 5th Avenue and 36th street, where rooms cost between US$700 and US$1500 a night. It’s the same hotel where President Javier Milei and his sister, Presidential Chief-of-Staff Karina Milei, stayed.

The first anarcho-libertarian president in history was received this week by JPMorgan’s Jamie Dimon, a banking legend, and sought to leave behind in New York an image of confidence and trust in financial circles that would help in attracting productive investment, particularly high-flying sectors such as mining, energy, and the knowledge economy. Instead, Adorni – his former spokesman – was forced to go on television to explain just why an administration that imposes “chainsaw” austerity and rails against the “caste” racked up costs for his personal enjoyment. (Kudos to Eduardo Feinmann, who proved that when he wants to, he can do some decent journalism). He coined a meme by noting he was there to “break his back” – Adorni used the term “deslomarse” which quickly went viral – and that he just wanted his wife by his side, noting, “we didn’t cost the state a single cent.” He went on to contradict himself on several occasions, saying she had already purchased an airline ticket worth more than US$5,000 (business class?) for a previous date and, due to scheduling changes, had been forced to travel with him. He admitted that she stayed in the hotel room with him and shared his meals, then said they covered their own costs. Just a few weeks before travelling to New York, the Cabinet Chief signed a resolution limiting the number of travellers on official state business overseas. Contrapasso, like in Dante Alighieri’s Divine Comedy.

The Adorni affair is made worse by the blatant hypocrisy of one of the guardians of Milei’s culture war. From the pulpit during his days as presidential spokesman, Adorni lashed out against the caste, against Kirchnerism, and anyone and anything that didn’t see the state as an obstacle to individual freedom, corrupting those who went near. How could a stalwart of Milei’s anarcho-libertarianism gang abuse his position of power for personal privilege so clearly? The situation was made worse by emerging reports that the Cabinet chief had flown on a private jet during a recent holiday to the swanky beach town of Punta del Este with his family and a buddy in a two-way flight that cost US$10,000. Fact-checking outfit Chequeado indicates that ministers have a monthly salary of about $3.6 million, or about US$2,600 at the latest exchange rate. According to his last sworn declaration of assets, by the end of 2024 he held monies and goods worth 108 million pesos, or around US$100,000 at the time’s exchange rate, and debts for $95 million, meaning he essentially came out even. Of course, there is his wife’s income to consider and the aforementioned ‘buddy’ says the private flights cost closer to US$3,600, but it’s clear the Adornis have splashed quite a bit of cash on flights of late. 

It wasn’t the only hiccup the Milei administration suffered in New York. Indeed, the President’s much-anticipated speech descended to the dirts of domestic triviality, with Milei taking the opportunity to once again lash out against business tycoons Paolo Rocca and Javier Madanes Quintanilla. In what was effectively a celebration of the new and improved business environment in Argentina that should attract international capital, the President decided to scold and insult two of the country’s top businessmen. While it may sound reasonable under the new political strategy rulebook upheld by controversial top advisor Santiago Caputo, it’s probably not the most encouraging sign for international investors looking for cues that Argentina has left behind the days of “combatting capital,” as the Peronist hymn says. Wall Street remembers all too well Cristina Fernández de Kirchner’s war against the so-called “vulture funds” led by billionaire Paul Singer, as it does the country’s history of sovereign debt defaults and repeated bailouts.

Milei and Economy Minister Luis ‘Toto’ Caputo are looking to continue building a productive relationship with the International Monetary Fund and major investors in order to voluntarily enter international debt markets. It was a requirement set out by US Treasury Secretary Scott Bessent in the context of the latest bailout of Argentina’s economy, ordered by US President Donald Trump in the heat of last year’s midterm elections. Argentina’s country risk-premium is closely watched and a successful bond sale would signal a triumphant return of Caputo and Argentina into global debt markets, but also the country’s capacity to begin rolling over its debt and end its dependence on shorter-term, more expensive financing. It was therefore unlucky for Milei and Caputo to see Trump engage in yet another international military operation, this time together with Israel against Iran. The resistance and retaliation of the Islamic Republic, together with the closing of the Strait of Hormuz, has obviously put the global economy on edge, raising the risk premium all around. Argentina, still not considered an “emerging market” economy by credit rating agency MSCI, suffers a risk-off environment more acutely. Still, the economy appears better prepared for a negative exogenous hit than in the past, with a budget surplus that is partially engineered, tight monetary policy and certain currency controls.

The flip side is the deeply recessive environment for many key sectors of the domestic economy. While extractivist sectors such as the agricultural and energy will carry whatever output the economy cranks out, the industrial sector is in a deep crisis and consumption continues to contract aggressively. A vicious cycle of salaries lagging behind inflation and declining formal labour rates are occurring as factories and stores are closing throughout. Higher quality jobs are being replaced by freelancing and part-time gigs, many associated with digital platforms, including delivery and ride-hailing applications. This, in part, responds to the Milei-Caputo-Federico Sturzenegger plan to deregulate and open up the economy – many goods were much more expensive than in other countries in the region. Imports are flowing in, giving the population much cheaper alternatives, but the flip side is that the domestic population is poorer and increasingly jobless. The President correctly indicates that lowering trade barriers allows for cheaper and many times higher quality goods to be available, but he fails to acknowledge that in the short-to-medium term, it is difficult to imagine how the invisible hand of the market will unleash a wave of expansive output and formal job creation.

Milei needs to keep the momentum going and in great part that requires a functional political narrative. The coming economic miracle together with the epic battle against the caste fits the bill perfectly. It’s what’s gotten them this far. More than two years into his mandate, the President is beginning to see his image trickle down in opinion polls. Adorni, who had become a legend in libertarian circles for his crude, bully-like remarks against the enemies of Milei, could become a negative too, dragging him down further. His time of reckoning, it seems, has come.