Why Argentina's Javier Milei has the attention of Trump advisors
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This is On Point. I'm Meghna Chakrabarty. Argentina's President Javier Millay loves a chainsaw. That's him on the campaign trail last year promising to take a chainsaw to Argentina's state spending. He even brandished an actual chainsaw at campaign rallies.

In a 2023 TikTok video, Milene stands in front of a whiteboard with stickers labeled with the names of Argentina's different governmental agencies. One by one, he reads agencies' names and then rips them off the board shouting, "'Afuera' or out." "'Afuera'!"

The Ministry of Public Works, out! Millet has delivered on his promise. He's a libertarian economist and a self-described anarcho-capitalist. He proclaims nothing but contempt for government. And in his first year in office as Argentina's president, his administration has slashed at least 30,000 government jobs and cut the number of state agencies roughly in half in order to combat a deep deficit.

In that time, Argentina's inflation rate has dropped from where it was a year ago, an eye-watering monthly rate of 25% a year ago. Now it's down to below 3%.

However, Millet's chainsaw approach is cutting into the overall standard of living in Argentina as well. Many social service programs have been eliminated, as well as subsidies and price controls for certain goods and services. Water, gas and electricity are five times more expensive now. Fares for public transit have increased sevenfold. I don't know much about inflation. I know that when I'm going to pay the salary, I don't have it anymore.

Aida Sego, a teacher, told the Indian news organization The Economic Times, quote, I don't know much about inflation, but I know that when I get my salary, it's gone in two days, end quote. In fact, in the first six months of Millet's presidency, Argentina's poverty rate soared to almost 53 percent. A man interviewed by NBC News could not contain his frustration. Bad, bad, bad. The guys don't have time to eat, my friend.

Bad, bad, bad, he's saying. The children have nothing to eat. They are starving to death and many neighborhoods aren't receiving aid, end quote. However, far away from Buenos Aires or Mendoza, Millet has influential fans. Two of them happen to be advisors to President-elect Donald Trump.

Elon Musk and Vivek Ramaswamy. Governments around the world should be actively deleting regulations, questioning whether departments exist. Obviously, President Milley seems to be doing a fantastic job on this front, just deleting entire departments. Fantastic. That's Musk speaking at the Cato Institute conference in June of 2024. Milley and Musk have met in person several times.

Vivek Ramaswamy also met Millay at this year's Conservative Political Action Conference, or CPAC, where Ramaswamy made a joke referencing Millay's whiteboard afuera video. Marxismo afuera!

You're more of a Mises guy. I'm a Hayek guy. But there's good synergies between the two. And we want to bring that mentality to the U.S. So that's what we need to learn. Hayek, you can't reform these agencies. You have to shut them down as you're doing. And so I'm proud of you for doing that. You set a good role model. We want to bring that to the U.S.

You heard Ramaswami say you can't reform these agencies. You have to shut them down as you're doing, referring to Millais. In fact, Ramaswami posted on X, a.k.a. Twitter, in November, quote, a reasonable formula to fix the U.S. government? Millais-style cuts on steroids, end quote.

Well, Musk and Ramaswamy are set to co-chair a Trump administration initiative called the Department of Government Efficiency, or DOGE. It's not yet clear exactly how DOGE will work or what will it do, but its goal is purportedly to eliminate some $2 trillion out of the United States federal government. So can Javier Millet's so-called shock therapy fix decades of financial crises in Argentina? And if so, at what cost?

And therefore, what, if anything, can the United States learn from Argentina, given the members of the incoming Trump administration so admire Argentina's President Milley? That's what we're going to try and understand today. And we will begin with Natalie Alcoba. She's an Argentine-Canadian journalist based in Buenos Aires. That's where she joins us from. Natalie, welcome to On Pointe.

Hi, Meghna. How are you? I'm well. So for Americans who don't really know that much about President Milley's background, can you tell us a little bit about him? Has he been a lifelong politician or where did he come from? Yes. I mean, he's had, I think what we can describe as like a meteoric rise to power. He in some ways has.

came out of nowhere a few years ago, starting to appear on television. I mean, he's an economist by trade,

and worked in companies as an economist. And a few years ago, he started to appear as a pundit on television, kind of showing off what we now see as the Millet brand of this unruly, unvarnished character who spoke in very crude terms.

attacking policies from the government and even, you know, on both sides of the political spectrum, attacking both conservative policies and more left-wing policies. And a lot of that persona kind of took off, you know,

During the pandemic, you know, he became a bit of an internet star, you know, clips of what he was saying circulating on YouTube and on TikTok. And he built this sort of following that at first was really kind of based around, you know, young men kind of turning and seeing this image.

this person, you know, speak to them about, about, you know, the problems that they had been observing in, in their own families and, and, and this sense of being kind of left out of, of the picture in Argentina. And so a couple of years ago, um,

he forms a party, a political party, uh, called La Libertad Avanza, Freedom Forward. Um, and was really like dismissed for, at the beginning as this, you know, this, this eccentric outsider, which he in many ways was, but he turned that into, into really like an attribute. And, and, and it's, it's through that, that he was able, uh,

to connect with the electorate. So he forms this party, he runs in midterm elections, he wins a couple of seats, he's one of them, literally two seats, and then he quickly says he's going to run for president. Again, kind of laughed at, dismissed. He's got this look about him too, he's got this mop of hair, these thick mutton chops, stories around dogs, I mean he has a number of dogs that are cloned, there's so many things about him that are kind of

Yeah.

is rather, at least, shares some similarities with Donald Trump's trajectories. Now, about his dogs, I found this utterly fascinating. You're right. He has four dogs. They're cloned from his original beloved English Mastiff.

And we have a little bit of tape of Millet speaking about his cloned dogs, which he lovingly calls his four-legged children. So Millet there is saying they all have names of economists. Murray is called Murray after Murray Rothbard, the inventor of anarcho-capitalism. Milton after Milton Friedman. Robert after Robert Lucas, who is an heir to Milton Friedman and Lucas. Also after Robert Lucas and, of course, Milton Friedman, the...

famed University of Chicago economist who really brought unfettered free market capitalism to the fore in the United States. So, you know, the other thing about Millet that rings so familiar to me, Natalie, I just happened to be fortunate enough to be in Argentina in January.

of this year, so about a year ago. And I saw a not insignificant number of Make Argentina Great Again hats. They were blue, though. I mean, was I imagining that? Right. Yeah. No, no. Yeah, that's right. I mean, he certainly seized on Omega and given it an Argentine spin. I mean, I think...

I mean so much of of Millet's success is about you know his own persona that he's been able to cultivate as this as this outsider as this as this person who's going to I mean as you as you talked about you know take a sledgehammer take a chainsaw to to the state like literally blow things up um but then he also comes at a time in which uh you know the society was was was looking was looking for that you know

Exhausted after years of economic crisis, moments of boom and bust, succession of governments. Argentina also is a politically polarized country like the United States, and so generally power swings between left and right.

and there have been left and right governments in power in recent years and this sense that things weren't getting better. And so that, of course, is like fertile ground for somebody like Javier Millet to come in and say, well, you need something, we need something different. And he really, truly capitalized on this idea that he wasn't part of the political cast. I mean, yes, he campaigned with a chainsaw, but his message during the campaign really was,

around, you know, it's the politicians, it's corrupt politicians. He uses this term political caste, you know, that's, that is the reason why Argentina is perpetually impoverished. And so the, the, uh, the belt tightening, like the cutbacks won't hurt you. That was his message in the campaign. He wins and he quickly kind of like shifts that of course, still using the same, the same idea that there needs to be a dramatic overhaul and there needs to be huge cutbacks.

But he starts to just very quickly talk about, okay, like now, now it's crunch time. Now, now it's time for this, this shock therapy and it's going to hurt now, but it's going to be worth it in the end. So kind of shifting, you know, to this horizon that will be better that for a country that's

has been through, like I said, you know, years of like this perpetual sense of things not getting better. You know, that horizon of hope was something that really people gravitated to because as even though, you know, his base at the beginning was this idea of like young, you know, politically disaffected men, you know, ultimately he wins because he achieves a broad cross-section. Yes. Natalie, stand by for just a moment. We have to take a quick break. When we come back, I want to hear from you about your,

what it's been like for Argentines on their day-to-day lives in this first many months of the Millet presidency. And there's so much more to talk about regarding what the U.S. could or couldn't learn from Argentina. This is On Point. Support for the On Point podcast comes from Indeed.

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You're back with On Point. I'm Meghna Chakrabarty, and today we are talking about Argentina's President Javier Millay and his strategy to stabilize Argentina's economy by deeply slashing its government. Is it working? Isn't it working? And more to the point, what is it doing?

Does the U.S. have something to learn from Argentina's example? Because Millet has fans in the incoming Trump administration. Natalie Alcoba joins us today. She's an Argentine-Canadian journalist based in Buenos Aires. And Natalie, let me just play a little bit of tape from everyday Argentines here. This is from the Indian newspaper, The Economic Times. They spoke with Dolores Sagasta, who's a business owner here.

And she told them she thinks President Milley needs more time in office. Dolores there is saying, I think it's important to understand that this is the way forward. And while some are struggling, as long as we stay on this path, it's going well. We need to give him more time. It's only been a year. We need to give him more time.

Well, here's another one. This is Aram Boyacian, a textile merchant in Argentina. He told the Economic Times that he thinks Argentina is in fact through the worst of its economic troubles.

Quote, my perception is that we've already passed the worst. It seems to me that the economy hit bottom two months ago. In my sector, where we work with the middle class and lower middle class, those who are stable, we have a formal salary, seem to be recovering purchase power. He goes on and says, we understand the rules of the game and what's next. Six months ago, we did not know where we were heading, but now we do, and everyone has to accept these rules. End quote.

So, Natalie, it seems as if, as with all things, depending on where you are in Argentina's economy, the experience of these cuts, these melee cuts, is quite different. Because, as I mentioned earlier, there's the simultaneous fact that the poverty rate in Argentina has soared to something like 53 percent. So in your reporting there, I mean, what have people been telling you about their personal experience of these massive changes in government?

Yeah, I mean, I think some of those clips do reflect that range, even the clips that you had that you aired earlier about, you know, in particular, you know, poor sectors of society that are literally like having a hard time putting food on the table.

I mean, without a doubt, the first few months of the year were brutal and chaotic because you saw this dramatic increase in the price of various things that came out of China.

You know, the government eliminating price controls, deregulating a whole bunch of services, you know, cutting subsidies. So the cost of using public transit skyrocketed. Cost of utility bills has has gone up dramatically. Rent is up significantly, you know.

you know, your health insurance premiums are up, the price that you might be paying to send your kids to private schools, which are not necessarily an elite experience here in Argentina. All of that jumped in a very, you know, internet bills, all that jumped really quickly, you know, and at the same time, we were seeing this slow, like slow down of inflation, of the price of goods, you know, at the grocery store, of,

that you were buying for your house and so forth. So there was this sense of, okay, so now Javier Mille is in power. What does that look like? How does that feel? You talked about the tens of thousands of public service jobs that had been cut. The government also halted public works projects.

So there were all of these changes and it felt palpable that people were a bit stunned by it all because now we're in this. This is the leader of this country and this is the direction that he's taking it with a strong measure of support. And it sparked, there were some pretty dramatic scenes of protests from different sectors,

From pensioners who weren't seeing like their pensions, being able to keep up with inflation, from students who were out on the street protesting the fact that the government was cutting back on funding for public universities because there are public universities here that are free.

So there was this real volatile sense. But I do think that in the second half of the year, there is also now, now there's like a sense of something that appears to be more stable in some respects. You know, so there is this contradiction in some ways. You know, 2023 in Argentina, I think,

was really marked by this sense of like literally, you know, prices were jumping in the double digits every month. And so you went to a grocery store and the next time you went, like it was likely that those prices were going to change. You know, you would go looking for certain products and you couldn't find it because merchants said, I don't know what price to give to them because we feel like, you know, our providers are going to,

bump up the price. So you couldn't find stuff because of that sense of economic instability. That was really palpable. Now, that isn't the case. But people are still, you know, swaths of not everybody, of course, but there's still large chunks of society that are having a really hard time to make ends meet because of these, you know, costs that have gone up. I mean, I think

You know, Argentina also, like lots of other countries in Latin America, has like a really high level of informal work. So that's work that's off the books. You know, you asked me, like, how is it that people are making, you know, how are they paying their bills if like their utilities are...

Or more than double, right? Yeah. And I think, I mean, the answer that you get is like people are hustling harder. They're pulling in extra jobs. They're making decisions about, you know, the things that anybody would do, like cutting back on what they're spending. You know, like maybe they're cashing in on savings. Yeah. So now a year in, we're in that, okay, things feel in some ways more stable now.

But we're still just a year into this government. Yeah. So, Natalie, on that point, again, as you said, the people are still trying to figure it out, even though it might be feeling a little bit more stable. That is coming hand in hand with that very high poverty rate that I quoted earlier.

And in fact, on that specific issue, President Millay was asked about that on the Lex Friedman podcast just last month in November of 2024. And you're going to hear his answer through an interpreter. Millay says that he claims that his government did not create the poverty in Argentina, but inherited it from a previous administration.

The poverty was an inherited poverty. The point is that what we did was to reveal it. You are in the middle of an island

and they give you $1 million, what can you do with that? What happens? When you are faced with that situation, the statistics show that you are much better. But the reality is you couldn't buy anything. So if you left the situation as it was, people were going to starve because they couldn't buy anything. Those goods were not available.

What is the only thing you can do to save people? Make the prices transparent and allow products to reappear. Well, when you make the prices transparent, you also make transparent the cost of the basic food basket and the total basic basket, meaning the poverty line, sorry, the indigence line and the poverty line respectively. And when you do that, clearly you will see a jump in poverty.

So that's Argentina's President Javier Millet on the Lex Friedman podcast just last month. Natalie, hang on here for just a minute because I want to bring Monica de Bol into the conversation. She's a senior fellow at the Peterson Institute for International Economics and former director for Latin American Studies and Emerging Markets at the School of Advanced International Studies at Johns Hopkins University. Monica, welcome to On Point. Thank you.

Hello, Megan. Thank you very much for having me on. So what I'd like to do actually is take a few steps back and talk about how Argentina's economy got to where it was at the beginning of President Millet's administration. Because as Natalie accurately described, it kind of didn't matter whose administration there was in power in Argentina for some time, but the fundamentals of the economy were never known.

as strong as they could be. So where would you look to, Monica, for sort of the beginnings of this problem?

So firstly, let me apologize, Meghna, for getting your name wrong in my introduction. Call me whatever you want. It's all right. Don't worry. But with respect to sort of the historical roots of what we're seeing in Argentina, it is correct that, you know, the problems that Millet has inherited are inherited. So he didn't generate those problems. He came in with those problems at hand. They were already present.

And they're the result of years and years and years of just complete mismanagement of the economy under a political system that's been...

you know, for a very long time, extremely turbulent. I mean, Argentina has not really known any situation that has not been politically turbulent in its recent history. So with that kind of history, you can't really have a stable economic history either. So the two things go hand in hand. Right. Just to remind folks, I mean, obviously some folks may know about the Peronism in Argentina, but there's also been military governments, things like that.

That's the kind of instability you're talking about. Exactly. So it's, you know, all constant sort of flips between, you know, authoritarian governments and democratic governments. This was in the past. Argentina has now pretty much established itself as a democracy, like other countries in the region that have military dictatorships in their past or other forms of dictatorship in their past.

But that's not to say that political turmoil has gotten any better. In fact, it hasn't, because when we look at the past 20 years or so, what we have seen is mounting political turmoil in Argentina, leading to this situation that Natalie so aptly described of political

Millet coming in as a complete unknown, someone who really didn't have any kind of reverberation or repercussion in Argentinian politics. And then all of a sudden he's there as this figure that's offering people hope just because

He is so different from everything else or every other politician that Argentina has seen. There's a glow. You know that that, of course, rings very familiar, I know. But it is also very Latin American. Ah, OK. Hold that thought for a second, because I do want to come back to it. But for the sake of being very, you know, as detailed as possible, when we talk about the economic problems in Argentina today,

Natalie, once again, she did a really good job in outlining the hyperinflation, right, that's been going on for some time. Then also I mentioned earlier that the government has quite a large deficit in Argentina. I mean, what are the other sort of economic problems you would point to that were so appealing to voters for Millet-style reforms?

So on the one hand, so you've mentioned to the fiscal issue and well, the other issues that Natalie was talking about. The third issue that we haven't touched upon, and it is really critical for Argentina, is the currency and what you do with the currency. Because Argentina is a country that given its very turbulent history,

And given that also this isn't the first time, you know, when Millet was coming into office, Argentina seemed to be heading into hyperinflation. It isn't the first time this has happened in Argentina. Argentina had hyperinflation back in the 1980s for years.

like other countries in the region as well. And at that time, the country kind of chose to deal with the hyperinflationary problem by allowing people to hold U.S. dollars. So Argentina is an economy that functions with two currencies, not one. So it has its own currency, the peso, and it also uses the U.S. dollar in kind of

the same things that it uses the peso for. So people have deposits in dollars. They have their savings in dollars. They may do certain transactions in dollars. And so one major problem, structural problem that Argentina has had is that this kind of dependence on the U.S. dollar makes it vulnerable to

shocks, turns in sentiment, or even domestic problems that make people become more pessimistic with respect to Argentina and move their dollars out of the country. When that happens, it throws the country into crisis. So every time Argentina has had a crisis, it has had that component to it. That component is still there. Let me just jump in here for a second. I'm

I'm so sorry I had to do this, but housekeeping, I'm Meghna Chakrabarty. This is On Point. OK, so you're pointing out the importance of understanding sort of the currency vulnerabilities in Argentina is well taken. In that case, Monica, what has President Millay done to address that particular issue?

Well, that's just it. He hasn't really done anything on this particular issue directly. What he has done is, as Natalie was saying and as we have seen, he has set in motion a number of measures and reforms that have so far managed to bring down inflation from the very, very extremely high levels that they were at.

in 2023 down to something that is a little bit more recognizable as just high inflation. So put differently, the country is by no means out of the woods when it comes to its inflationary situation. I think Natalie made that very clear in the things that she spoke about and the sorts of price pressures that are present in the country. But it is important to say that this

This achievement of bringing down inflation, while it could in principle, you know, sort of induce people to think, well, you know, inflation is coming down. Maybe it's OK for me to hold some pesos because inflation is not going to eat up, eat away the value of my of my currency, the value of my pesos.

But it doesn't quite work like that because currency, when you speak about currencies, yes, there are all the economic policies and institutions attached to that. But holdings.

Holding a currency is about trust. If people don't trust the currency, they're not going to hold it. And that's the basic problem Argentina has. And so far, nothing has been done to kind of try to address that situation. OK, Natalie, thank you so much for listening to Monica along with me. I'm just wondering what you think about the unresolved question of stabilizing Argentina's currency.

I mean, I would echo what Monica says. I moved back to Argentina six years ago, and I was really struck by the presence of the U.S. dollar here. In many respects, it's absolutely a bimonetary economy. I mean, there are items here that you purchase specifically

specifically around real estate, you know, you're buying property in a dollar figure. But this idea that the dollar is, is like the value of the dollar for the average Argentine is very present in relationship to its own peso. So there you're constantly thinking about what the value is of your local currency in relation to this foreign currency. And I, you know, I think some of that has eased in this year because, you know,

the value of that dollar also has stabilized somewhat under Millet.

And so you're not constantly like bombarded by these headlines. I mean, so much of it is perception, right? Like you're not constantly bombarded by these headlines that it's like, you know, the dollar is up or I mean, typically it's talking, it's interesting also that people will talk about the dollar versus, you know, actually it's at the peso is down, but we're speaking about the dollar because people wanted dollars because people see dollars as, you know, the currency that they can kind of bet on and that they know will

be solid, you know, for their savings and so forth. Well, Natalie Alcoba in Buenos Aires. She's an Argentine-Canadian journalist. Thank you so much, Natalie, for joining us today. Thank you. Monica de Bol, stand by for just a moment. We have to take a quick break, but there's more to discuss in a moment. This is On Point. This is On Point. I'm Meghna Chakrabarty. And before we get back to our conversation about Argentina's President Javier Millet, I just want to let you know about our show for tomorrow, because we're going to be talking about the fact that here in the United States, the

A recent study has found that Americans now more likely use cannabis than alcohol on a daily basis. So if you're one of those Americans, we want to hear about your experience. How and where and why do you use cannabis? Are you a daily user? Do you have questions about the health consequences of daily cannabis use as compared to alcohol? Let us know. Do it on the On Point VoxPop app.

That's On Point Vox Pop, wherever you get your apps. You can also call us at 617-353-0683. Now, back to our conversation about Argentina's President Javier Millet and his deep cuts to Argentina's government in an attempt to stabilize that economy. And what, if anything, the United States does.

can and should learn from Argentina's experience. Here's another taste of the persona that President Millay has. In May of this year, in a book launch event, he was at the event wearing a leather jacket and he performed one of his favorite heavy metal songs before a crowd of 8,000 in Buenos Aires. A different lawmaker was reportedly on drums and Millay's biographer played bass.

The song Millet performed is called Panic Show by the band La Renga. And the lyrics go, I'm the king, I'm the lion, I eat the elite for breakfast. Here's a little bit of that performance. I'm the king, I'm the lion, I eat the elite for breakfast.

Argentina's President Javier Millet shredding there. Monica de Bol is with us. She's a senior fellow at the Peterson Institute for International Economics. And Monica, before we talk about

what the U.S. can learn from what's happening in Argentina, I do want to just get a little bit more nerdy with you, if I could, because you were talking about the currency and then the underlying stability of Argentina's economy. And that reminded me that if I remember correctly, Argentina's biggest creditor right now is still the IMF. Is that correct? Yeah.

It is correct, Meghna. Absolutely. It is the IMF. And once again, Argentina is right now in the business of attempting to negotiate another, yet another IMF program. And the fact that the IMF is still its biggest creditor has kind of put Argentina in this strange position of...

taking new tranches of loans from the IMF in order, in part, to pay back the loans that's already taken from the IMF. And the reason why I bring this up is there's a

There's what, a 23 year long experience that Argentina has with the IMF? Because I remember at the beginning of the 2000s, there was that huge implosion of Argentina's economy that many Argentines blamed on IMF meddling. I mean, has the opinion on the reliance of currency from the IMF or loans from the IMF, has the opinion in Argentina changed about that?

So this is a very frazzled history, to say the least. Yeah.

Argentina and the IMF had been at log horns for, you know, decades. And this business of Argentina having a lot of debt owed to the IMF and the IMF having to lend to Argentina in order to repay itself isn't new either. I mean, this is basically the 1980s, the 1970s and the 1980s.

wrapped up in a bow. You know, this is exactly how the situation has always been. Has popular sentiment or population sentiment changed with respect to the IMF?

Well, I worked on both the Argentinian financial crisis of the early 2000s that you mentioned, Magna, as well as on the Uruguayan financial crisis, which happened at the same time and was a result of Argentina because of the connection between those two countries. And so what I can tell you, you know, having watched Argentina for such a long time, is that

Frankly, you know, it's a country with too much of a convoluted history and too much of a complicated history for us to have any sort of conversation about easy paths out. There aren't any. And there aren't any even formulae with what he's attempting to do. I mean, he has managed to get some stability for the economy, but there's still a long, long road ahead.

That is where I was going to go next. Thank you for predicting my next question. So what are the next steps that you think are on that long road ahead? So I think currency reform has got to be on that long road because if it isn't, you know, the perennial problem that Argentina always has, which is, you know, not enough dollars to quench a thirst when that thirst arises, um,

will always land it into a crisis. And so it's kind of a matter of time, unless you deal with that problem, it's a matter of time until expectations and sentiments shift, you know? So right now, overall, people are looking at Argentina in very positive

tones, you know, everyone's seeing the, you know, the stability that seems to have more or less been achieved. Everyone is very optimistic about that. When I say everyone, that's financial markets, both within Argentina and outside of Argentina, as well as a chunk of the population in Argentina, as we heard from Natalie.

Um, but then, you know, the, the, the, the question that remains is still the same, you know, what happens when that sentiment switch swift changes, you know, when there's a swift change, because these changes are usually very fast, you know, it's the snap of a finger, um,

And if people suddenly turn pessimistic because the poverty situation is very bad, because there are no real prospects for growth in Argentina with such high levels of poverty, you know, and so on and so forth, the moment that that flip switches, you know, on sentiment, that's a moment when Argentina heads back into crisis mode. And, you know, that is still the case. That hasn't changed. So then...

I mean, I guess I'm asking if you have a crystal ball, Monica, which maybe is not fair. I mean, do you hazard to guess what would it take to, let's say, bring down that poverty level to position Argentina, let's put it this way, for more long-term growth rather than even just stability, which, as you're saying, is not enough?

Exactly, exactly. And I think now you've summarized it perfectly, Meghna, because it's exactly that. Stability will only get you so far. It's going to give you a little bit of grounding, but you will lose that grounding unless you complement it with something else. And that something else has to be real hope, you know, real hope that the country is going to get out of this funk that it's been in for such a long time.

Where is that hope? Well, right now it's in popular sentiment, at least those who are supporting Millet's government. But it's just that, you know, it's just a feeling because there's nothing really in...

the reform efforts and in the way that the country is set up that is, you know, conducive to the sorts of growth, sustained growth that Argentina needs to reduce poverty. What do you mean by in the way the country is set up? So it's a very complicated country, Argentina. And one thing that I think, you know, needs to be very well understood is that

In Argentina, you have the federal government and then you have a whole bunch of local governments, the provincial governments, the provinces. Argentina is kind of like an octopus. If you can think of the federal government sort of the head of the octopus and the provinces are the arms of the octopus and the arms do their own thing, that's very much how Argentina behaves.

And the fact that the provinces have this kind of autonomous behavior, they have the ability to spend on their own, they have the ability to issue debt on their own, leaves the federal government in a very difficult position.

position because when Millet has to do the kinds of cuts that he did, he has to do them in a much, much deeper way than would be desirable because the provinces are not going to follow suit. You know, the provinces are in the hands of governors and

which some of them may be supporters of Milley, but by no means are all of them supporters of Milley. I see. So that's a very clear, as you're saying, structural problem in terms of the way governance is set up across the country. OK, so, Monica, this has been absolutely fascinating, right? Because I began this hour thinking, well, the parallels between Milley and Trump are just

Screamingly obvious, right? But as we talk in much more detail about the specifics of Argentina's, obviously, history, its governance structure and its economy, aside from the personalities, the parallels between Argentina and the United States start falling away, right? Which is why it's still so...

Interesting to me that, as we mentioned earlier, Elon Musk and Vivek Ramaswamy are singing Millet's praises to the point where, you know, Ramaswamy says we should do Millet style cuts in the United States on steroids. And here's another sort of maybe accidental example.

Natalie, a little bit earlier, had been saying that during Millet's campaign, he was saying he was going to just cut back on politicians and those cuts wouldn't hurt the average Argentine. But then once the austerity measures started getting put in, President Millet was saying instead, it's going to hurt for now, but it won't hurt for long. OK, so with that in mind, that reminded us of October of this year when Elon Musk held a

a town hall for his America pack on X. And he was encouraging people to vote for Donald Trump then. And in this town hall, he said he was very eager to start cutting the U.S. government spending through the so-called Department of Government Efficiency.

The reality is that there is so much government waste. It's kind of like being in a room full of targets. Like, you can't miss. You fire in any direction, you're going to hit a target. But overall, we just, as a country, obviously, we need to live within our means. And, you know, that necessarily involves some temporary hardship, but it will ensure long-term prosperity. I'm Magna Chakrabarty. This is On Point.

So, Monica, are Millet-style cuts what the U.S. economy needs? No. But before I dive deeper into that, let me say that it is, Meghna, ironic to no end that we have a Department of Government Efficiency in the works.

That is exactly what you don't do if you want government efficiency. You're not going to create yet another bureaucratic arm. But that is precisely where we are. Having said that, it is also fascinating and ironic in equal measure, pretty much, that the U.S. has gone so far.

you know, Latin American in its approach towards, you know, some countries in the region and here in particular, Argentina. Interesting. Okay. We could do a whole hour just about that, but go ahead. Exactly. And, you know, the situation in Argentina could not be more different than

than that of the US. I mean, on the one hand, you have a country that is still struggling with so many huge structural issues that it has. On top of that, you know, it's a country that's had a very fraught history when it comes to financial crises and its role in the world economy and its regional role and its internal issues, you know, the political turbulence that I mentioned and that we talked about a bit.

That if you just step back for a moment and you think that the country, and here I'm speaking of the United States, that is the issuer of the global reserve currency, the currency that is most widely used in the world, and by Argentina in particular, that that country sees Argentina in itself. It's bizarre. It's bizarre.

So I couldn't, you know, I can't stress enough that Millet's approach to cuts is very much context dependent. It's mandated by Argentina's situation.

And Argentina alone. You can't replicate the Millet model anywhere else in the world because it is very particular to that country's history, to Argentina's history. Well, to put it sort of back in the framework of the three major pain points in Argentina's economy...

hyperinflation, the deficit, and the currency issue. As you pointed out, the U.S. issues the dollar, the world's reserve currency, so that's not the same. Deficit, maybe, right? There's a lot of concern over the U.S. deficit. Yeah, but then again, everybody has a deficit, right? Right. And the hyperinflation, I mean, we did have a short period of...

higher than much higher than usual inflation in the United States. But we're not talking about years and years and years of double digit inflation. It's just not the same thing. Exactly. So then so then I mean, it doesn't seem to me to to make much sense as to why aggressive government cutting would be in the in the sort of

wish list of Elon Musk and Vivek Ramaswamy, their point, their goal must be something different. I mean, they won't say yes to interviews with us, but I'm just guessing it's a different goal.

Well, all hazard and educated, I hope, guess if I may. Please. I think it has to do with a push that they represent, but a wider push, which is also within the private sector or parts of the private sector in the U.S. towards greater deregulation of the economy. That's what it's about. I mean, at the end of the day, Elon Musk and the business interests he represents are

does not want the sort of regulation that we should be having on the tech sector, on AI development and all of these other things. So it is very much about that because as part of this reduction of government plan that Millet has, deregulation is a very important aspect of that.

Because it is very easy to do also. So there are two things going on here in Argentina's case. On the one hand, they do desperately need to remove some regulations because the economy is overregulated. It's one of its problems. But on the other hand, you know, if you need to

cut things in government fast because you want to show people that you're delivering on your campaign promise, deregulation is sort of the low hanging fruit. You know, it's kind of like the easy fix because you can sort of do that without much in the way of needing Congress and needing political support and all of these other things.

So that is, I think, the the the let's say the umbilical cord that is now connecting the United States with Argentina. It's the issue of regulation and deregulation. That's what it's about. Well, this has been an absolutely fascinating.

Fascinating conversation. Monica DuBois, senior fellow at the Peterson Institute for International Economics and former director of Latin American Studies and Emerging Markets at the School of Advanced International Studies at Johns Hopkins. Monica, thank you so much for joining us today. Oh, thank you, Meghna. It was my pleasure. I'm Meghna Chakrabarty. This is On Point.