Since the fallout from Donald Trump’s convincing win last week continues to reverberate through the media and since tomorrow is the Day of Peronist Militancy (the 52nd anniversary of Juan Domingo Perón’s return from exile), why not combine the two topics and pop the question of whether the once and future United States president might not have more in common with Peronist than libertarian militancy (not that this columnist can claim to be the first to raise this point)?
Javier Milei might be The Donald’s “favourite president” yet Trump’s campaign rhetoric would seem to be on a collision course with Milei’s track record after almost a year in office. Trump is a brash protectionist nationalist to the point of isolationism while the “forces of heaven” are cautiously seeking to reopen the Argentine economy to the forces of globalisation; the libertarian has slashed state spending to the bone with balanced budgets as his mantra whereas Trump’s fiscal restraint is almost as non-existent as his rhetorical.
Yet the shock value of any overlap between Milei’s idol and Peronism is premised on the libertarian lion himself being the complete antithesis of the “herbivorous lion” (Perón’s chosen self-image following that return 52 years ago tomorrow although not previously) and that is open to question. Milei does not date Argentina’s decline back to the advent of Peronism in 1945-1946, as so many liberal analysts do, and nor to the 1930 coup but to 1916 when the first government elected by universal male suffrage entered office under the Radical Hipólito Yrigoyen – of late another Radical president, Raúl Alfonsín (1983-1989), has featured among his pet targets. The best of a bad bunch in the past century, in his not very humble opinion, is the Peronist administration of Carlos Menem (1989-1999) with various members of that clan as key figures of his entourage, not to mention the Speaker of Congress.
Beyond this professed admiration for Menem, Milei does not even convince as the complete antithesis of Kirchnerism. His penchant for adversary politics with no time for any middle ground and his insensitivity to criticism (not least from the press) strongly echo Cristina Fernández de Kirchner. Yet the resemblance between Fernández de Kirchner and Trump is perhaps even stronger, quite apart from the ex-president coming to share the president-elect’s convicted felon status last week, something which gives them very similar concepts of lawfare – part of a general disdain for being institutionally correct. CFK is the protectionist isolationist which Milei is not (something which Security Minister Patricia Bullrich chooses to call “smart nationalism”) and Trump has been prone to fiscal ink as red as his Republican Party’s colours, printing money as if it were going out of fashion like Kirchnerism and totally contrary to the rigid discipline of Economy Minister Luis Caputo.
Yet this trio also has points in common beyond all of them falling under that all-inclusive mantle of “populism” which embraces such a broad political spectrum, covering a multitude of sins.
For a start all three have scant respect for the independence of local monetary authorities. Milei has vowed to dynamite the Central Bank and while the fuse leading up to the explosives is not especially short for now, that is because there is absolutely no need for intervention with Economy Minister Luis Caputo’s pal and consultancy partner Santiago Bausili installed as Central Bank governor. Fernández Kirchner constantly raided the Central Bank for Treasury deficit financing, placing worthless scrip in exchange – in 2010 she ejected Martín Redrado from its helm for “malfeasance” when he refused to deplete Central Bank reserves in order to create the Bicentennial Fund for foreign debt guarantees. A vindictive streak common to this trio.
The Donald has named his “only problem” as “Jay [Jerome] Powell and the Fed[eral Reserve]” while magnanimously adding that he would not fire Powell (basically because he cannot, not least because he himself named him back in 2017). Trump would like a weaker dollar to encourage exports as a complement for his protectionism with the Federal Reserve reducing interest rates in support but his tax cuts will lead to fiscal deficits which have pushed up interest rates in the past – Powell will have his work cut out trying to guess what the future president really wants.
Should interest rates shoot up in response to deficit financing, Trump might soon cease to be Milei’s new best friend because a strong dollar sparking the famous “flight to quality” and sucking money away from commodity prices would be bad news for the aspirations of lifting the ‘cepo’ currency and capital controls. Amid the warnings about the adverse consequences of Trump’s protectionism, capital market inflow in general (and a major International Monetary Fund remittance in particular) is the front which worries Caputo the most because, despite his current label as Economy minister, the Finance Ministry assigned to him by Mauricio Macri is the cap which would fit him best since his outlook is defined by his nine years as a Wall Street trader. The indifference of Milei and Caputo to Trump’s protectionism might even be justified because if Latin America faces tariff increases of 10 or 20 percent as against 60 or even 100 percent for China, the region might improve its access to US markets and even outsourcing, especially Mexico (despite all Trump’s invective about immigration). The Donald’s permissive attitude to fracking might dent the Vaca Muerta shale bonanza, however, by enhancing the United States as the world’s leading crude oil producer.
Meanwhile it would be risky to jump the gun on a Donald Trump presidency with Joe Biden in office for the next 65 days as the ultimate lame duck in a war-torn world. At least Biden is a better loser than Trump, aware of the perils and opening doors to the Republican transition team. And Milei could have chosen worse than the unicorn creator Alec Oxenford as his man in Washington.
Both the affinities between Trump and Milei and their degree of Peronism can be discussed until the cows come home, but what if it is Elon Musk who ends up running the world?
