Freezing investment into the country and nuclear grade austerity will always bring inflation to an almost stand still. You’re literally tossing liquid nitrogen on your economy, it’s absolutely going to freeze.
The IMF does not expect the Argentine economy to grow this year, but rather to decline by 3.5%, while it should start growing next year.
And this is the key aspect that usually makes people who consider this pause for a second. Because freezing your economy might solve the right now problem, it also has the ability to ice economic activity completely, triggering an economic depression. This is the “balance” so to say. The harder your freeze, the more you’ll need to rewarm the markets to get your economy going again.
President Milei and the government hope that the new laws, which offer investors decades of tax and customs relief, will quickly attract capital and curb the recession.
This has always been the super tricky part of the weapons grade austerity. The what comes after part. So Milei has done it, he’s cooled the markets and supply has nearly cratered in the country. The next steps is to get production back and start pesos in the country to start flowing again.
I’ve always been a bit irresolute about Milei’s approach on the economy. I’m not against it, it’s just a strategy that’s playing with fire in a gun powder factory. First and foremost, I hope that the people in Argentina find economic stability, because boy do they deserve it. So to that end I hope WHOEVER succeeds in getting that done. And second, I really hope this is something that can be long lasting. Hyper austerity has a history of bad boomerang effects. It can work, it’s just takes a ton of work, more than most governments are willing to invest. And so there’s a big chance that we could start to see some positive only to then watch it completely crumble once again.
If I was a leader, this isn’t exactly a strategy I would pick. There’s just a ton of places where it can go all wrong. But I hope the guy gets it fixed once and for all. But dang, I don’t know how dude is smiling in that photo because if I was going down this road I wouldn’t be able to sleep properly.
To note, the US has not sent an ambassador to the Bahamas since 2011. Nicole Avant, the last US ambassador, left the position to work with then President Obama’s reelection efforts in 2012. Since then we’ve largely left the role to the Chargé d’Affaires in the Bahamas. Nothing big happened, Avant’s tenure as ambassador wasn’t some ordeal or anything. It’s just been a long stream of weirdness and dysfunction that’s left the position open this long.
The fact that Walker is being picked is hilarious because the guy likely has zero ideas about anything related to foreign relations. It’s not some big secret that being Ambassador to the Bahamas carries with it the key to a really nice house in Nassau. And the embassy itself is quite nice though quaint. The real question is, will Walker be ambassador once the new facility gets done? Because the new embassy is supposed to be super fancy.