Milei Chronicles (10) Debate One (The Economy)

Milei and his 1st. Presidential Election Debate
October 1st. Santiago de Estero, Argentina

Five Argentine presidential candidates met in the western city of Santiago de Estero for the first of two debates before the second vote in the presidential elections to take place on October 22nd. 2023.

For Javier Milei this was somewhat of a big deal; he’s only been a member of parliament for two years now, when also founded his La Libertad Avanza party (LLA). He was on his best behaviour and quite jovial for once. Though he did come across a little smug in his Harry Potter glasses, this unusually confidence suited Mr. Milei. He wasn’t as unhinged as normal, in fact one might almost say he seemed relaxed. The television debating format was designed to minimize altercations between candidates. This did not allow Mr. Milei to bully other candidates which is his wont. The one time that he did protest vociferously his microphone was turned off and the video of him jumping mad was taken from such a distance that it was largely ignored.

Debating with our beloved candidate for LLA, were four other candidates in order of their latest polling results. First was Sergio Massa of the UxP who was crisply dressed. Could it be the same blue suit he uses for his meetings with the IMF? Massa slipped into doctrinal speech, he was maybe slightly too “Perón Perón” for most people’s liking. Unswayed Massa gave a reasonable performance for one whose personality is so intrinsically dull. One has to imagine that certain audience members stifled a smirk when Massa suggested that tax avoiders do jail-time while his party-colleage Insuarralde appeared in photos drinking cocktails on a Mediterranean yacht with a tattooed “model”. The contrast with 40% poverty rates in the Province led to Insuarralde’s resignation being hastily accepted by Axel Kicillof (UxP Governor of Argentina’s most powerful province, Buenos Aires). He now faces charges.

Next up was Patricia Bullrich, who living up to her name, with her scrunched teddy-bear face, came across as somewhat sullen, one might almost suggest “slow”. Bullrich seemed sightly out-of-it. Maybe this was not the evening for her to pop a Valium at a live debate especially on a such an important topic as the sad state of Argentina’s economy and what to do about it. Bullrich was, to put it mildly, uninspiring.

Next up was Myriam Bregman, a woman whose sartorial style, excellent communication skills and refreshing left-wing viewpoint could not have contrasted more with the four dour figures from the Argentine right-wing. Bregman, a socialist, is relatively unknown to many voters. In the debate she certainly gained some ground with her humour, her capacity to hold a crowd and to stick to her guns. Bregman’s clarity was not lost on the audience nor was her crisp green suit.

Last up, and probably least, was Juan Schiaretti, the conservative centre-right Peronist governor of Córdoba, a secondary province in the center north of the country. Córdoba has that problem, common to those provinces whose capital city ranks next but one to big brother, Buenos Aires. Schiaretti, hardly a sparking entertainer himself (he’s a politician and an accountant by trade) talked mostly about was his beloved Córdoba and the balanced budget he had managed to achieve, which, to give the man his due, is something special these days in Argentina. Schiaretti wasn’t yet ready to advocate the sell off of the Argentine State to the lowest bidder (as are LLA and probably also JxC) however he did suggest that state companies should at least, try to reach break-even point. While this might be a bit of a stretch for Aguas Argentinas and Aerolineas, miracles do sometimes happen. Maybe YPF can make a profit this year?

None of the, albeit few practical, economic ideas for the next government are particularly new. In fact the whole debate was kind of sad. Milei’s reaction was trying to bring up the technicality of banking bonds called Leliqs (an inter-banking time-bomb waiting to destroy the banking system and short term savers in pesos some day soon). Milei knows that they’re important as do some candidates but one suspects that Milei doesn’t really understand the Leliqs either. Milei is a micro-economist after all and these are instruments of macroeconomics at a national, not at a company, scale. At least Milei is familiar with Leliqs which puts him ahead of Bullrich who Milei attacked later as the loser of the debate from his plane seat in a short and somewhat unintelligible interview.

Technicalities aside, even the IMF (which currently has Massa by the proverbials) rarely complains when South American nations rich in resources and with an excellent educated workforce, subsidise transnational companies with state subsidies and tax holidays. Firms like Techint, General Motors, Ford and Newmont (Gold) Mining are ever grateful for the Argentine largesse in state subsidised fossil-fuel energy (which many receive almost free) but since few pay all their taxes, and so much public money is stolen anyway, the costs of these state subsidies end up being added to the national debt.

Massa recently told the EU was to take a hike with their Mercosur trade deal when they tried to add clauses on the environment, he doesn’t take instruction well on debt or the environment. EU officials like the German Greens had suggested that maybe fracked gas (a filthy alternative to coal and oil which is openly subsidised by the Argentine government in Vaca Muerta) is hardly a “transition fuel” (as in transitioning away from fossil fuels).

“Those who defend the energy transition and renewable energy agenda without considering gas as a transition energy will try to put limits on us.” Massa retorted, “Argentina will defend gas as a transitional energy because Argentina has the possibility today in Vaca Muerta to provide not only Argentina but also Paraguay, Brazil, Uruguay and Chile with cheap energy for the next 120 years”

Sergio Massa

By 2140 we’ll be all dead by now if we keep burning fossil fuels.

Also very damaging to the Argentine balance of payments are the direct subsidies to local medium and large scale businesses in wages and energy costs in industries such as Cement, Oil, Chemicals and Auto Manufacturing, Airlines etc… Of particular concern are the foreign owned, but massively subsidised, natural monopolies EDENOR and EDESUR. Give him his due these also received mention from Schiaretti and noone else did. It is believed that at least one of these is owned by Argentine resident Joe Lewis, friend of Mauricio Macri (who regularly visits Lewis’s Patagonian mansion) not to be confused with Trump Mar al Lago. Joe Lewis is currently indicted for insider trading in New York.

As the main theme of the debate was the Argentine Economy (and its balance of payments and debt issues) and the two main parties JxC (Bullrich) and the current minister for the Economy the UxP candidate (Massa) blamed each other for failures and corruption and, most of the electorate suspects, both are correct; which only plays into the hand of El Loco, Javier Milei.

The right-wing JxC members had been in power recently and paid off the vulture funds for previously defaulted debt then returned to the market only to have the hot spikes of 10% bond rates in dollars shoved you know where (while even more indebted nations like Japan and the US were paying less than 1% to fund their deficits. Massa’s UxP was equally in-adept at dealing with Argentina’s debt problems, using stimulating employment as their excuse, through energy subsidies to state friendly industries with high energy requirements and deep pockets in Swiss bank accounts. Give them their due the UxP leaders haven’t appeared in the Panama Papers as did former President Mauricio Macri (founder of the PRO party) Bullrich’s party grouping. The cesspool of corruption runs deep in both political groupings and so each blame the other for their own avarice (leaving space for Milei).

Economic and political Results from the debate? ¡Nada! (or at least not a lot…) Plans for economic improvement? Zilch (except if one can run the country like Córdoba) but that ain’t happening any time soon. This means smug little Milei can rest quietly that he was hardly challenged on the economy that he personally plans to destroy, rebuild it in 25 years as a Dickensian dystopia. Night night Milei! Though one does wonder, with Milei’s evident stimulants habits, whether sleeping was the first thing on his mind?

Maybe his sister Karina brought some Valium for the flight?

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