Freedom (and poverty) in Argentina: Milei’s 100 frenetic days in power and an unprecedented economic experiment *
The ultra-neoliberal policies of the new president threaten to dynamite the already weak foundations of the welfare state in the South American country

The Argentine president, a 53-year-old economist and TV panelist by profession, defines himself as a libertarian. He is a follower of the Austrian School, a school of thought founded by Carl Menger at the end of the 19th century, which places individual freedom as the basis of progress and maintains that the state should stay away from the economic decisions of individuals. “The state is a criminal organization,” Milei affirmed on March 1, in his opening speech to the 2024-2025 legislative session. This is the same message that made him popular as a talk show guest and on which he based his successful electoral campaign when he made the leap to politics. The difference is that, since December 10 of 2023, Milei is the leading representative of the very institutions he’s attacking.

The president admires the economist Murray Rothbard, of the Austrian School, to the point of naming one of his four dogs after him. The term “anarcho-capitalism” is attributed to Rothbard, who defended the total abolition of the state in favor of individual sovereignty.

Milei considers himself to be an anarcho-capitalist at heart, but a minarchist in practice: that is, he believes that state functions should be limited to justice and security. This explains why, some time ago, he was in favor of the sale of organs — and even the sale of children — and no restrictions on personal firearms. He dropped these ideas in the final months of the presidential campaign.

Milei’s doctrine is radical for any country — “I’m the first libertarian president in the world,” he likes to boast — but much more so in Argentina, where the state is one of the largest employers and the economy receives massive public investment. The resounding victory of a candidate who brandished a chainsaw as a symbol of cutting public spending was possible due to widespread fatigue with the traditional political class, after 12 years of economic stagnation and Argentines’ loss of purchasing power.

Dr. Doom Strikes Again.

Interesting, albeit one-sided discussion from Roubini, a/k/a Dr. Doom. 
A central tenet of his argument is higher inflation and interest rates, although at least recently we have seen both come down.

Economic and financial threats are rising and interacting in volatile ways with social, political, environmental and technological challenges

Since the publication of Megathreats in October 2022, the themes I emphasized have gone mainstream. Everyone now acknowledges that economic, monetary and financial threats are rising and interacting in dangerous ways with various other social, political, geopolitical, environmental, health and technological developments.

Hence, in December 2022, the Financial Times chose “polycrisis” as one of its buzzwords of the year. Whatever one’s preferred term (others have adopted “permacrisis” or “confluence of calamities”), there is growing recognition that not only the global economy but also human survival is at risk.

As I warned in Megathreats, the “Great Moderation” (a long period of low macroeconomic volatility following the mid-1980s) has given way to the “Great Stagflation.” In 2022, we witnessed a surge of inflation in advanced economies and emerging markets, a sharp slowdown of global growth that continued into 2023, and signs of severe private- and public-sector debt problems as central banks raised policy rates to stabilize prices.

You’re not imagining things: The end of the ‘everything bubble’ has made the world more dangerous (msn.com)

YOLO stimulus funds about to run dry....with election season ramping up, when are we going to get another round or another tax cut? We all know deficits don't matter...but don't consumers also need to cut their consumption because we need to save the environment? 


According to Wharton professor Jeremy Siegel, the U.S. economy appears to be “progressing smoothly, with a resilient consumer impervious to the impact of higher borrowing costs.”

These spenders are the “YOLO (you only live once) consumers” who, Siegel believes, are spending the last of their cash reserves on traveling and enjoying the summer.

However, the Russell E. Palmer professor emeritus of finance warned that this could signal “the last good stretches for the economy before the summer ends and credit card bills come due.” He added that in the past, when students return to school in September and October, this has previously made for some “dicey periods for the markets.”

Professor Siegel also issued a warning to the Fed, to which he has previously appealed to pause rate hikes. The finance and economics expert said it would be a “mistake” for the Fed to wait until it saw a downturn in the jobs market before it began easing rate hikes.

Billionaire investor Bill Gross has also said he believes the coffers of American consumers will run dry by the end of the year. The Wall Street titan reportedly worth $2.6 billion tweeted Monday: “4 trillion of COVID spending still dripping into economy with consumers still spending their last $500 billion or so. The trick is when to time the end of it. Fourth quarter is the best guess. 

Economics v. the Earth: New Book Explores the History of a Tense Relationship

(...) In their new book, Scarcity: A History from the Origins of Capitalism to the Climate Crisis, historians Fredrik Albritton Jonsson and Carl Wennerlind warn that capitalist societies will have to overhaul the way we interact with the planet in order to avoid unthinkable consequences. They trace the key economic concept of scarcity as it developed over five hundred years of European thought, showing how a particular interpretation helped bring us to the trouble we’re facing.

The relationship between the economy and nature has been considered by thinkers all the way back to Aristotle. But as Jonsson and Wennerlind show, the topic gained center stage in the seventeenth century in the form of a new enthusiasm for controlling nature. During this period, thinkers like Francis Bacon spread the notion that with the help of science, humanity could bring nature under control and force it to yield its riches. The sky was no longer the limit of our desires.

The authors divide historical views of scarcity into two camps. “Cornucopians” like Bacon held that nature could be mastered to satisfy boundless human wants – a position that found its way to dominance in the West by the end of the 19^th century, most recently promoted by neoclassical economists. As Jonsson and Wennerlind see it, economists under the sway of cornucopianism came to believe in a “dream of infinite substitutability” whereby natural resources were always available, and if something grew scarce, no problem — a substitute could be found. For example, if rainforests vanished, the price of goods associated with them would increase, thus lowering demand and sparking innovation to yield substitutes.

The authors outline how over the last century, most mainstream economists have been selling the idea that what we need to do is to use natural resources efficiently and develop science and technology to maximize economic growth. The basic premise: more is almost always desirable, the cheaper the better, and we can have it all without destroying the planet. The magic of market forces would take care of any environmental problems.

The authors liken this fantasy to the fervent visions of progress among 17th-century alchemists.

Jonsson and Wennerlind refer to a second group of ideas about scarcity as the “Finitarian” tradition, focused on limits to power over nature and the need to rein in human desires. While Cornucopians pictured the economy as the engine of the endless growth of wants, Finitarians asked, what about simplicity? A meaningful life? Liberation from desire? And by the way, what about living in balance with nature?

The authors note that Finitarianism was the dominant worldview of sixteenth-century Neo-Aristotelians, a perspective that later found expression in a variety of movements, such as Romanticism. When they thought about the economy and nature, Romantics tended to emphasize living within the limits of nature as the foundation of a healthy society. They saw the Cornucopian focus on ever-rising material standards of living as missing much of what makes human life worth the journey: community, artistic expression, imagination, spirituality, and work that is not soul-crushing. (...)

Michael Hudson: A New Bipolar World. US finance capitalism vs. China's mixed public/ private economy

'The Big Myth' exposes the costs of blind faith in free markets

 black321 wrote:

People who didn’t own slaves, in a state that didn’t condone slavery, paying money to people who weren’t slaves.
Folks who even start a thought like this do so much damage to our culture by stoking the embers of intolerance and anger and fear.

Tis the season?


SAN FRANCISCO (AP) — A controversial draft reparations proposal that includes a $5 million lump-sum payment for each eligible Black person could make San Francisco the first major U.S. city to fund reparations, though it faces steep financial headwinds and blistering criticism from conservatives.


https://www.yahoo.com/news/san...

President Biden proposed a $6.9 trillion budget that calls for reducing deficits and raising taxes on wealthy people and large corporations, detailing a policy vision that isn’t expected to gain momentum in Congress, but is an opening salvo in spending talks with Republicans.

Mr. Biden’s fiscal year 2024 budget plan, released Thursday, calls for an increase over the roughly $6.4 trillion that the White House expects the federal government to spend this fiscal year.

Though it is unlikely to be enacted, Mr. Biden’s budget blueprint lays out the president’s policy priorities for the second half of his term.

The budget outlines more than $4.5 trillion in tax increases, including higher tax rates on corporations and high-income individuals, expanded Medicare taxes on top earners and higher taxes on U.S. companies’ foreign income.

If lawmakers take raising taxes and cutting Medicare, Social Security, defense and veterans programs off the table, Congress would need to cut 85% of spending in all other categories to balance the budget in 10 years, according to the Committee for a Responsible Federal Budget, a nonpartisan group that advocates for reducing federal deficits.

While the White House budget broadly aims to rein in the deficit over time, it shows the deficit widening from roughly $1.4 trillion last fiscal year to nearly $1.6 trillion this year and $1.8 trillion next year. The amount of debt held by the public will rise to roughly 110% of gross domestic product in 2033 from roughly 98% this year.

Biden proposed raising the top individual tax rate to 39.6% from 37%, raising the corporate tax rate to 28% from 21%, taxing top earners’ capital gains at higher rates and increasing taxes on U.S. companies’ foreign profits to 21 percent from 10.5 percent. He also said he wants to extend tax cuts that are set to expire after 2025—but only for households making under $400,000. 

The White House said it has not yet determined exactly how to pay for it, and the cost of extending those tax cuts isn’t accounted for in the budget.

Who’s Winning and Losing the Economic War Over Ukraine?

 R_P wrote:
The increased cost of used vehicles is a spurious argument.  Vehicles are a capital item and purchase can be delayed.

Rural people will and do shop locally but will often drive an hour or more to load up on food and household supplies in the nearest urban area.

AFAIK, all 52 states are surveyed for the prices of consumer baskets.   If there was a big difference, it would show up in state-level data.  And lo and behold, it does according to Republican committee using Bureau of Economic Analysis data:

State Inflation Tracker October 2022

JEC REPUBLICANS | NOVEMBER 10, 2022

Rural folks tend to rely on home production.  This is from out-of-the-window observation; I am not aware of hard data.  More home production will tend to offset the impact of unexpected, runaway inflation.

The real story is the impact of inflation on the poor and low-income workers whether they live in rural or urban areas.  They may fare well compared to many in poor countries but are likely to proportionately suffer more than other citizens.     Congress should delete the Fed's employment mandate.  US policy elites should think hard about this tradition of using massive monetary stimulus to offset/paper over blowback from questionable US foreign policy decisions.  

Rural Americans Aren’t Included in Inflation Figures – and for Them, the Cost of Living May Be Rising Faster

 kurtster wrote:

Well said!

/s

 kurtster wrote:
Making it a complete bailout was an idiotic idea. How would you NOT get pushback from the loan companies? They should've presented forgiveness of student loan interest and that might've gotten through without such a fuss.

 kurtster wrote:
Skimming, I thought this was another Trump topic with the Trump Organization convicted of skirting taxes by providing for themselves in illegal ways. Guess that teaches me to not read closely. Carry on.

 kurtster wrote:
Appeasement!

 islander wrote: 
Really ?  Neither of these two that you mention as well as most other big box outfits do not have unionized workers.

Former Teamster here.  Remember Jimmy Hoffa ?  The Central States Pension Fund based here in Cleveburg (Jackie Presser ?), or it used to be, was used as a slush fund for all kinds of activities including funding organized crime.  The Teamsters hierarchy over the years has done more for themselves than the rank and file.

This bailout will only encourage more bad behaviour as others have mentioned.

This bailout is also just as bad as the student loan bailout, which is currently being fought out in the courts.

 islander wrote:

I can see it two ways.
One,  you increase the funding requirements, or two, you improve the disclosure requirements.
The accounting is there, you can track it easily each year, though this is beyond the understanding of most employees. I would argue for better disclosure to employees so they understand the risks to their pensions...but under no situation should the public be held accountable for their failure.  It's the same political fumble as the student loan forgiveness. 

Outside of private/gov employment and public unions, pension or defined benefit plans virtually don't exist.  

As for the rest, I certainly support an extremely progressive estate state, once you get above a certain threshold of $x million. Put the $ back in the pot. 

 black321 wrote:
There's the bingo square right there ^^^^^^

too bad there is little apatite for government regulation/oversight.   But again, we are all for privatizing profits when things are good and socializing losses when it comes to PPP loans and other politically connected bailouts (again, disclosure: I got a small PPP loan and it was eventually forgiven - it covered about 30% of the salaries of my employees when there was no work being done and they weren't let go). 

With people living much longer, we really need to look at the way we structure work and retirement funding. There are some serious crisis items looming for the current and future generations.   We have the resource to fix this, but we have to be smarter and stop worshipping billionaires. If someone has accumulated a billion dollars, then you've benefitted greatly from our system and you owe something back to it. If you've accumulated 10 billion, you've probably exploited our system and or people and you really owe something back. 

 Lazy8 wrote:

Well, there's a whole problem in how our retirement systems are set up and where the responsibility/accountability (or lack thereof) is, but that's not what my comment was about.  A lot of people who are relying on a pension are likely to be disappointed and left with little recourse or resource. So yeah, that is one of the places where I think it is appropriate for government to step up and help their citizens.  Should also come with reform of the pension systems and retirement systems as well, but I can't tell how far into fantasy land we want to go so I'll stop at 'try to minimize human suffering'.

While the companies I mentioned don't have unionized work forces, they do rely on a lot of unionized labor - longshoremen who handle goods at import, teamsters (mentioned directly in the article) for distribution/warehousing/etc. Walmart also famously relies on various strategies to indirectly get government subsidies as well (underpaying people so they get public assistance).  These companies and their owners (yes, I'm an owner too, I hold both WMTt and AMZ) make a lot of profit and are happy to collect subsidies and anything else they can get in their favor. So when things go bad I have no problem asking them to kick in. Again, unlikely. The .gov will just tag this to the ongoing tab and we'll all wind up paying for it it drips and drabs. 

The political affiliation isn't the part that bothers me. It's the raw hypocrisy of people who say "no socialism" and  "I got by with no help from anyone else" who then are the first one with their hand out with the slightest crisis.  These people never care about an issue until it affects them personally. And yes, this tends to be one side politically much more than the other.  I would hesitate to call the democrats my ally, but if that's the choice I have to make to support the little guy over the giant corporations (who have already had their share of bailouts), then sure put me down for less human suffering.