Persistent and growing doubts regarding Javier Milei’s capacity to deal with Argentina’s major problems have grown over the past several weeks.
It’s a new state of affairs for the novel anarcho-capitalist libertarian economist, who appeared politically untouchable, despite a draconian reduction in spending and a painful recession used to try and tame inflation. The marked fall in inflation, together with a sense of increased purchasing power, has sustained the government’s political capital, overcoming the painful aspects of his economic plan – such as the aggressive contraction in key sectors including industrial manufacturing, construction, consumer staples, and stationery. Market jitters generated some element of fear among the population, which coupled with scenes of institutional violence in and around Congress, have finally pierced the Milei administration’s armour, prompting its public image to slide.
The President’s ironclad hegemony has become a pathetic circus of blunders lately, threatening to prove campaign predictions of amateurism and incapacity to govern true, just as this year’s campaign gets under way. By no means should Milei’s La Libertad Avanza coalition be seen to be losing its touch though, particularly given the state of the opposition, with Mauricio Macri watching his anti-Kirchnerite coalition dissolve, while Cristina Fernández de Kirchner is stuck in a cold war with her former prodigal son, Axel Kicillof.
There’s no one specific moment in which hegemony turned into a circus. Milei’s ascendancy has always been caricature-esque, surrounded by bizarre characters, juxtaposing Austrian economic theory, anti-caste sentiment and some of the worst figures that the traditional political system has to offer. In great part, that was his appeal: as star political advisor Santiago Caputo is said to have told the business elite, the fact that things fall apart and fail to work efficiently is evidence that they are succeeding in destroying the state from within.
Yet, quickly enough Milei and Caputo — a freelancer with no formal appointment and who sees himself as the political commissar and ideological constructor of the mileist creed — got a taste for the elixirs of power. Milei, the outsider, the grey man, got invited to myriad overseas events, where he was recognised and lauded for having defeated leftist populism at the ballot box. He began to consider himself the greatest exponent of the ideas of freedom at a global level, alongside US President Donald Trump. He lectured the Davos elite on the perils of socialism and received the royal treatment in Giorgia Meloni’s Italy. In tandem, Caputo and Presidential-Chief-of-Staff Karina Milei built the power structures that would execute the President’s political vision. Caputo gained control of key dependencies, including the SIDE spy/intelligence agency, the newly renamed RCA tax office and the Justice Ministry through its deputy, Sebastián Amerio, among others. They turned their back on the legislative branch, governing by emergency decree, while keeping the Judiciary at arm’s length. They played Macri, using his deputies and senators while rejecting any direct interference or role in the Cabinet. They antagonised themselves against Cristina, feeding on the anti-Kirchnerite sentiment that has fed our very own brand of polarisation, a bit out of the everyday parlance today, known as “la grieta.”
Things could backfire. Market jitters have pushed the government into a defensive posture, in which Economy Minister Luis ‘Toto’ Caputo appears to have involuntarily fanned the flames of devaluation. Global markets are in disarray given the re-emergence of Trump and his attempt to restructure the world order through tariffs and real-estate-like negotiations with Vladimir Putin to end the war in Eastern Europe, among other such behaviours. Argentina had managed to dodge the bullet, given its certain isolation from global trends, in great part due to strict currency controls that limit the flow of capital and strict intervention in foreign exchange markets to keep the peso-dollar exchange rate under control. At the end of the day, Toto and Milei know that the international lender of last resort, the International Monetary Fund, needs to lend its support to their programme, along with fresh funds. With Trump in the White House, there’s a good chance of getting anywhere between US$10 billion and US$20 billion, an amount which would help stabilise the expectations of the markets and allow them to win this year’s midterm elections. After all, they gave Macri US$57-billion for the same reason, as Maurice Claver-Carone — now Trump’s special envoy for Latin America — revealed.
The Economy minister and the President have been promising and talking up an IMF deal for a while now, which is why they decided to circumvent legislative approval through a DNU emergency decree, allowing themselves to take on more debt. Heated scenes last week inside Congress saw two national deputies belonging to the libertarian coalition box each other within the Legislative Palace, while the security forces aggressively assaulted protesters in the streets. This time around, the libertarians once again fought each other, with deputy Marcela Pagano using a megaphone to accuse Lower House Speaker Martín Menem of acting like a fascist. She had had a bitter discussion with fellow La Libertad Avanza deputy Lilia Lemoine the previous week and, this time around, made public a series of voice messages from Menem himself asking the libertarian deputies to be rowdy. Out on the streets, Security Minister Patricia Bullrich had militarised the vicinity of Congress, filling the streets of Buenos Aires with 2,000 officers, nearly double the amount deployed to police a football superderby (“superclásico”) between River Plate and Boca Juniors. Ultimately, Menem managed to avoid the embarrassment of having Milei and his sister investigated by the Chamber of Deputies for the Libra crypto-scandal while approving the DNU emergency decree for the IMF deal, albeit pathetically. Macri’s PRO party, Rodrigo De Loredo’s faction of the Unión Cívica Radical, Elisa Carrió’s Coalición Cívica and members of Miguel Ángel Pichetto’s Encuentro Federal all lent their support, as they watched the libertarian spectacle in awe.
Milei was forced to cancel overseas travel given the crescendo of scandals that are rocking his government, including the ‘$LIBRA’ crypto scandal, while Caputo rattled the currency markets further by noting that at some point he’d eliminate the crawling peg and lift the ‘cepo’ currency controls.
As things got serious, José Luis Espert, one of the libertarians musketeers in Congress and a leading contender for a candidacy in the Buenos Aires Province — where they appear to have signed a deal with Cristián Ritondo and Diego Santilli to join forces with PRO, despite or at the expense of Macri — decided to promote another memecoin named, paradoxically, ‘$LIBRA V2’. He later pushed another one called “$BALA” which translates into “bullet,” one of his favourite phrases to use when he calls for a tough stance on crime. Espert, it seems, had been hacked, and the group of digital delinquents were either untrained in the arts of “rug-pulling,” or pulling a joke. Whatever it may be, it put the focus on the amateurism with which the government dealt with the $LIBRA scandal, through which Hayden Mark Davis’ Kelsier Ventures scammed their way to hundreds of millions of dollars with the collaboration of Milei and his inner circle. Espert’s hackers took a page from Hayden’s playbook, but were nowhere near his skill level. Despite being under judicial investigation, the brains of the $LIBRA scandal did it again, this time by launching, and sniping, a token named ‘$WOLF’ inspired by none other than Jordan Belfort, the original Wolf of Wall Street. People close to Belfort told Perfil that the OG Wolf had nothing to do with the token. It is surprising that Hayden, who is still sitting on US$100 million that he says “belongs” to Argentina, is still in operation and that continues to siphon out funds from the $LIBRA proceeds.
This pathetic circus is the context in which Argentina’s political system is operating. To Milei’s advantage, Macri’s coalition – and even the former president’s party – is cannibalising itself, with Bullrich apparently coopting Ritondo and Santilli to join the ranks of the libertarians and former Buenos Aires City mayor Horacio Rodríguez Larreta splintering off. Across the aisle, Cristina is trying to exert control over the main Peronist party, which she dexterously achieved in Congress but failed to do so beyond its halls: Buenos Aires Province. Governor Axel Kicillof has been trying to show signs of independence, though he is failing to push for a break with Kirchnerism and La Cámpora. Cristina needs him. Her son, deputy Máximo Kirchner, despises him. All of this plays into the libertarians’ hands. As things look, though, they could also screw it up.
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