“We had a recession for a few months, as we had anticipated, given the atrocities committed by the previous administration, but we also said that economic output would rise like a scuba diver’s fart. And guess what, we are beginning to see those little bubbles.”
And so, just like that – in those words – Argentina’s President Javier Milei explained what he considers to be the end of the nation’s recession during a recent speech given to the appropriately named CAC chamber (Cámara Argentina de Comercio y Servicios), delivering his second public reference to sub-aquatic flatulence since occupying the Presidency. It’s a peculiar yet spectacular metaphor, not unlike others he’s used in the past. Indeed, within the scuba diving community, the issue of underwater farting is commonly discussed, particularly as it becomes almost impossible while going deeper than 30 metres given increased pressure, otherwise known as Boyle’s Law.
Returning to Milei, coming up with funny metaphors and humiliating nicknames is not a random act of creativity, but a premeditated and specifically crafted strategy. To a certain extent, it was an approach popularised by Donald Trump, who recently won election for a second term in the White House on the back of an extremely successful campaign with a very strong focus on social media. One of the highlights of the 2024 presidential campaign in the United States was when Trump, on stage at a rally in Pennsylvania, focused on the late golf champion Arnold Palmer’s penis size, noting that the sportsman was “all man,” marvelling at his competitors in the locker room and women in general. While he was ridiculed for this and other off-the-cuff remarks during the campaign – including unfounded comments about Haitian immigrants eating cats and dogs in Springfield, Ohio – these bizarre, vulgar, and to a certain extent comical (at least for a portion of society to which Trump appeals) comments quickly go viral online via social media platforms, allowing the candidate to dominate the scene and achieve centrality. Trump and Milei both embrace the concept of chasing memes, which have become the most effective way of reaching massive audiences through simple yet effective messages that can be shared in the form of a funny picture, soundbite, or short video (in previous columns I tried to coin the term “synthetic power” to refer to this form of political capital).
The concept of being “politically correct” ultimately stems from an unwritten rule in politics: blunders and gaffes are fatal for a politician, particularly during the campaign. This axiom has been turned on its head since the eruption of a new wave of political leaders, many of whom are generally bunched together under the “new right” category. Outsiders who rely on a popularity generally derived from appearances on mass media outlets during their pre-politician phase, they go on to confront and offend sectors and concepts associated with progressivism and the traditional “left.” Taking it a step further, Trump’s popularity has only increased after incurring in a series of “offences” that would have been intolerable for the US electorate only a few years before – from sparking an attack on the US Capitol to dispute his electoral loss, to a felony conviction, and facing legal cases for fraud, sexual abuse, paying hush money to a porn star, election subversion, and more. The new rules of the game are very Nietzschean in that whatever doesn’t kill the candidate makes him stronger. In Milei’s case, his vulgarity and aggressiveness are seen as charismatic character traits, while his dislike of democratic institutions and authoritarian ways appear as an indication of his true intention to take on the “political caste.” These attitudes have become increasingly normalised by society as a whole and most political actors, as Gustavo González explained in his latest column published by Perfil.
The veracity of the underlying comments isn’t all that relevant, what matters is the message. In Milei’s “diver’s fart” metaphor, the idea is that the economy has finally turned a corner and is now in a growth phase. From now on, it’s all good news, he told the audience this week. Indeed, the government is celebrating a new decrease in the monthly inflation rate, which has fallen to 2.7 percent to its lowest level in nearly three years, while the peso-dollar exchange rate remains contained and the country-risk premium tumbles. Financial markets are on a tear and gradually the Central Bank is once again gaining foreign exchange reserves. Is the economy actually rebounding, though? According to the INDEC national statistics bureau’s monthly projection of economic activity (EMAE), we’ve seen a second consecutive month of growth in the seasonally adjusted data, yet the trend still indicates decreased output on a month-to-month basis. Not to speak about the year-on-over comparison, where the EMAE report is showing a 3.8 percent contraction in August. A few sectors that are experiencing solid growth are mainly those tied to extractivist industries including mining, energy, agricultural and fisheries. Of the 16 sectors surveyed in the EMAE report, 11 were contracting in August, with construction down 18 percent on an annual basis, commerce down 7.9 percent, and manufacturing down 6.7 percent. In the labour market, 191,000 registered jobs had been lost between December and July, 70 percent of those in the private sector according to CITRA research centre.
Milei and Economy Minister Luis ‘Toto’ Caputo are banking on a strong recovery of the economy after having engaged in draconian austerity measures. Many of those policies, which have incredibly achieved a budget surplus, are temporary in nature, which means that the anarcho-libertarian administration will have to rely on greater economic output if it is to dream of lowering taxes while maintaining a surplus. Furthermore, their cheap dollar/strong peso policy is an obstacle for reserve accumulation, while it incentivises imports and makes Argentine exports less attractive. They need large influxes of capital, not only to shore up reserves but also in the form of productive investments. Milei and Caputo have their eyes on Trump (in order to win Argentina some favour in negotiations with the International Monetary Fund), on Elon Musk and other tech-libertarians who laud Milei on social media, and on Argentines who massively entered a tax moratorium by bringing their own dollar-denominated savings into the financial system. As of now, the timid recovery in purchasing power is only relative, while there are few indications that consumption will jumpstart. The issue of how long society will tolerate this level of belt-tightening remains to be seen, but Milei does retain positive figures in opinion polls.
Which brings us back to the beginning. Is the economy rising like scuba diver flatulence? It doesn’t really matter, as long as Milei says it does, and a substantial portion of society believes him. If it doesn’t soon enough though, then it won’t work out well for the anarcho-libertarian’s aspirations in next year’s midterm elections.
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