If the appreciation of the national currency has figured prominently in recent editorials, it is abruptly displaced today by the devaluation of the presidential word via a thoughtless (?) promotion of a cryptocurrency. On the evening of February 14, President Javier Milei launched his own post-modern version of the Saint Valentine’s Day Massacre, posting an endorsement of the brand-new ‘$LIBRA’ cryptocurrency (accompanied by a code of instructions assembled by one of his campaign advisors on the various steps needed to acquire a token) – in less than an hour the $LIBRA had skyrocketed to a stratospheric nominal value of some US$4.5 billion, only to crash to almost nothing an hour later when its main stakeholders launching the scheme did a “rug-pull” (jargon for taking the money and running). Hard to see this as anything but a Ponzi scheme – cryptocurrency might be a bafflingly complex world composed of speculators and specialists, as Economy Minister Luis Caputo rightly said, but if it walks like a duck and talks like a duck, then it probably is a duck.
There can be no excuse for a President turning into an influencer for such a risky venture, even outside working hours and on his personal social network. There is something very strange about a head of state recommending anything other than the currency of his country, even if it were something as solid as the Swiss franc, never mind anything as insubstantial as a recently hatched digital currency. Even accepting Milei’s explanation that he blundered into this gaffe ahead of any complete briefing before changing his mind with fuller information (without mention of a scandal in the making), a trained economist should always check the facts before reaching conclusions – even if cryptocurrency is as mysterious as described by his minister Caputo, he should know when he does not know and he should at least know that it is an extremely dodgy universe where angels should fear to tread.
Milei’s other justification was that no government should take responsibility for a purely private risk – “if you go to a casino and lose money, it’s your problem.” But if he thinks that dabbling in cryptocurrency is equivalent to gambling in a casino, what on earth is he doing giving visibility to such options? He might as well endorse online sports betting, which is the curse of modern youth. Beyond that he does not seem to have grasped the full dimensions of this scandal with the only admitted lesson the need to filter his contacts. During the 2023 election campaign, the libertarian hard core refused to see the sale of candidacies as anything of a scandal – for them electoral candidacies were a market commodity, just like human organs and anything else. By virtually dismantling the Foreign Corrupt Practises Act in the United States, President Donald Trump has come very close to declaring that ethics have no business in business – is Milei swayed by a similar logic in declaring cryptocurrency caveat emptor?
This issue needs to centre on the value of the presidential word while avoiding the distractions emerging from both sides of the fence. Shortly before shooting off to the United States to attend a Conservative Political Action Conference meeting (bereft of any direct national interest), Milei rather crassly tried to change the subject with an attack on the “direct links between corrupt politicians and journalists” on the take in general and former Buenos Aires City mayor Horacio Rodríguez Larreta in particular. Meanwhile, some opposition critics switched their fire from Milei to his star spin doctor Santiago Caputo for his clumsy interruption of the presidential interview (as if manipulation of these interviews were anything new) – this error, admitted by both presidential spokesman Manuel Adorni and Cabinet Chief Guillermo Francos, was over a relatively trivial point (correcting Milei over being represented by his Justice minister rather than legal counsel) and does not warrant the attention it has received.
The first black swan early in an election year, but will it have any impact on the final midterm verdict? The main casualty might well turn out to be the middle ground with the race increasingly polarised between the government and a Kirchnerism baying for impeachment – preliminary opinion polls show a double-digit surge in negative opinions of Milei but at the expense of those in two minds with his support almost intact. Yet with 35 weeks still to go before election day, there is little reason to think much has changed from the key being: It’s the economy, stupid.
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