What Trump and Musk think they can learn from Argentina’s Javier Milei
Feb 13, 2025
auto_awesome
Federico Sturzenegger, former president of Argentina's central bank and Harvard economist, discusses the populist style of Argentina’s President Javier Milei and his radical economic reforms. He examines the parallels between Milei's and Trump’s economic policies, particularly on free trade versus tariffs. The conversation reveals how Milei’s leadership may inspire similar movements worldwide, and highlights the challenges of economic reform, government involvement, and the potential for international partnerships to boost growth.
Javier Milei's radical economic reforms and focus on free trade serve as a potential model for Donald Trump's vision for the U.S. economy.
Milei's commitment to social programs alongside deregulation demonstrates a balanced approach to economic improvement and poverty reduction in Argentina.
Deep dives
Javier Milei's Populist Appeal
Javier Milei, the President of Argentina, has gained significant attention for his radical economic reforms and populist style, resonating particularly with the MAGA movement. His approach challenges conventional wisdom by openly discussing topics often deemed politically incorrect, positioning him as a refreshing figure in global politics. Under his leadership, measures such as a 30% reduction in government expenditure and achieving a fiscal surplus in his first month have exemplified his commitment to pragmatic governance. These bold actions, along with his ability to articulate clear economic policies, have contributed to his growing popularity and positioned him as an ally to figures like Donald Trump.
Economic Policies and Tariffs
Milei's policies emphasize free trade, contrasting with Trump's more protectionist stance on tariffs. While Trump has historically leveraged tariffs as negotiation tools, Milei has actively sought to establish a free trade agreement with the United States, reflecting his commitment to liberalizing the Argentine economy. The discussion around the potential impact of U.S. tariffs on Argentine exports, particularly in the steel and aluminum sectors, highlights the dynamic relationship between the two nations. Such trade negotiations are critical as Argentina looks to stabilize and incentivize foreign investment in its emerging energy sector.
Deregulation and Economic Growth
Milei's administration has prioritized significant deregulation, leading to the elimination of around 900 regulations and a notable reduction in public spending. This approach has not only aimed to ease bureaucratic burdens but has also contributed to a healthy economic expansion, with a reported 4% growth within a year of Milei taking office. Furthermore, the administration's commitment to social programs, aiding the poorest citizens, has resulted in a reduction of poverty rates from 54% to 38%, showing that economic cuts did not adversely impact employment. Overall, this balance of deregulation and targeted social support reflects a strategy aimed at sustainable economic improvement in Argentina.
Donald Trump may have ruffled feathers with his closest neighbors in recent weeks, but he has a willing ally in South America. Argentina’s President Javier Milei has become something of a hero in the MAGA movement for his populist style and radical economic reforms. Will the love affair outlast an era of tariff-wielding?
Host Anne McElvoy talks to Federico Sturzenegger, the former president of Argentina’s central bank and an economist at Harvard. He is now leading the Ministry of Deregulation and State Transformation under Milei.
They discuss whether the South American free-market experiment provides a catalyst for Trump’s vision for the United States' economy and the wider world, and whether Margaret Thatcher — elected as Britain's Conservative Party leader 50 years ago this week — is an inspiration for Milei.