LIBERTARIAN ECONOMIC PRINCIPLES PROVE THEMSELVES-ARGENTINA

The idea that one should disassociate intellectually and personally from a person because he might not implement the full libertarian ideal is not only at odds with common sense but rejected as a sensible policy by Murray Rothbard himself, who in 1990 assimilated this attitude to “the disastrous and crackpot path of orthodox Randianism”. While one might expect, desire and invite Milei to do more and to do it faster, while one may criticize him for this or that compromise, one cannot fail to see that he has moved Argentina in the right direction and that his entry into politics has implied a paradigm shift for the spread and implementation of libertarian ideas

Milei repealed more than 300 regulations that had been stifling business since the days of dictator Ongania (1966-70), from rent control to legal tender laws.

Milei popularizes Austro-libertarian ideas that are opposed to statism and neoconservatism. He continually quotes and encourages reading libertarian authors, from “Murray Rothbard” to the “great Hans-Hermann Hoppe”.

https://mises.org/power-market/defense-milei

While often criticized as a "bailout," a central bank swap line is technically a reciprocal currency exchange, not a traditional bailout. Unlike a bailout, which directly rescues a failing entity, a swap line is a preventative measure designed to provide liquidity to stable financial institutions during a market crisis. 

Swap lines vs. bailouts

Swap Line Purpose

To provide short-term liquidity and stability to financial markets during a crisis.To rescue a specific institution (e.g., a bank or country) from failure and insolvency.

Mechanism

A currency exchange agreement between two central banks. The receiving central bank gets foreign currency (e.g., US dollars) in exchange for its own currency as collateral.A direct injection of funds, often with conditions attached, to prevent collapse.

Risk

The credit risk is borne by the receiving central bank, not the lending central bank. The currency exchange is fully unwound at a pre-agreed rate.The lending government or institution takes on significant risk of not being repaid.

Reciprocity

Swap lines are often reciprocal, allowing both central banks to access each other's currency if needed.Bailouts typically flow in one direction, from a stronger entity to a weaker one.

How swap lines support financial stability

When a global crisis occurs, such as in 2008 and 2020, foreign banks often face a dollar liquidity shortage. This happens because investors and lenders become risk-averse and pull back from lending dollars. This can trigger a downward spiral of asset sales that can harm global markets. Swap lines address this by doing the following:

• Preventing fire sales: They prevent foreign banks from being forced to sell their dollar-denominated assets at low prices to raise cash.
• Providing a backstop: They assure the market that central banks can supply the needed dollars, which calms markets and eases funding conditions.
• Preventing contagion: By stopping financial distress from spreading from foreign markets back to the United States, they also protect the domestic economy. 

The political controversy of swap linesThe use of swap lines can generate controversy, especially when the recipient is perceived as an ally receiving special treatment. For example, the 2025 swap line involving the US and Argentina was criticized by some as a politically motivated bailout, while supporters argued it was a move to stabilize a key ally and advance U.S. interests. 

The following are some accomplishments from Milei’s first year:

• The end of Argentina’s extensive rent controls has resulted in a tripling of the supply of rental apartments in Buenos Aires and a 30 percent drop in price.
• The new open-skies policy and the permission for small airplane owners to provide transportation services within Argentina has led to an increase in the number of airline services and routes operating within (and to and from) the country.
• Permitting Starlink and other companies to provide satellite internet services has given connectivity to large swaths of Argentina that had no such connection previously. Anecdotal evidence from a town in the remote northwestern province of Jujuy implies a 90 percent drop in the price of connectivity.
• The government repealed the “Buy Argentina” law similar to “Buy American” laws, and it repealed laws that required stores to stock their shelves according to specific rules governing which products, by which companies and which nationalities, could be displayed in which order and in which proportions.
• Over-the-counter medicines can now be sold not just by pharmacies but by other businesses as well. This has resulted in online sales and price drops.
• The elimination of an import-licensing scheme has led to a
  20 percent drop in the price of clothing items and a 35 percent drop in the price of home appliances.
• The government ended the requirement that public employees purchase flights on the more expensive state airline and that other airlines cannot park their airplanes overnight at one of the main airports in Buenos Aires.

https://www.cato.org/free-society/spring-2025/deregulation-argentina-milei-takes-deep-chainsaw-bureaucracy-red-tape

Many people in America hope that the new Trump administration will take an axe to a bloated and overbearing government, cutting spending and rolling back regulation. Whether this goal is even plausible any more is a crucial question for America and the world, after two decades in which government debt globally has risen relentlessly, fuelled by the financial crisis of 2007-09 and the pandemic. For an answer, and a case study of taming an out-of-control Leviathan, head 5,000 miles south from Washington, where an extraordinary experiment is under way.

Javier Milei has been president of Argentina for a year. He campaigned wielding a chainsaw, but his economic programme is serious and one of the most radical doses of free-market medicine since Thatcherism. It comes with risks, if only because of Argentina’s history of instability and Mr Milei’s explosive personality. But the lessons are striking, too.

The left detests him and the Trumpian right embraces him, but he truly belongs to neither group. He has shown that the continual expansion of the state is not inevitable. And he is a principled rebuke to opportunistic populism, of the sort practised by Donald Trump. Mr Milei believes in free trade and free markets, not protectionism; fiscal discipline, not reckless borrowing; and, instead of spinning popular fantasies, brutal public truth-telling.

https://www.economist.com/leaders/2024/11/28/javier-milei-my-contempt-for-the-state-is-infinite?utm_campaign=a.the-economist-this-week&utm_medium=email.internal-newsletter.np&utm_source=salesforce-marketing-cloud&utm_term=11/28/2024&utm_id=2018674

• Milei is NOT Libertarian in his foreign policy
• nor have many Argentinian drug policies changed yet. 
• He argues for Trump's position on tariffs vis a vis China. 
• His approach to free speech is questionable
• He does not believe that the philosophical is the practical. 
• He supports the United States and its foreign policies. 
• He still wants the Falkland Islands for Argentina using diplomatic means, admiring Margret Thacher, who won the Falklands War against Argentina.
• He is against the freedom of a woman to have an abortion.

Last fall, Milei eliminated what The Wall Street Journal termed one of the world's "strictest" rent-control laws. Per its report: "The Argentine capital is undergoing a rental-market boom. Landlords are rushing to put their properties back on the market, with Buenos Aires rental supplies increasing by over 170 percent. While rents are still up in nominal terms, many renters are getting better deals than ever, with a 40 percent decline in the real price of rental properties when adjusted for inflation."

https://reason.com/2024/10/11/argentina-ended-rent-control-guess-what-happened-next/

 Those of us who oppose such controls have for years pointed to reams of economic evidence proving that rent control reduces the amount of overall housing (by 15 percent in San Francisco, according to federal research) and reduces the quality of housing. While it reduces rent for some tenants, it creates scarcity in the housing market and dramatically increases prices for available units. 

 Argentine President Javier Milei has taken steps to reduce inflation in the country, including:

• Cutting spending Milei has cut spending on construction, education, cultural centers, and energy subsidies. He also reduced consumer subsidies and froze spending on some government advertising and contracts.  
• Devaluing the peso Milei devalued the Argentine peso by 54% to put the exchange rate closer to the market's valuation.  
• Decreasing tariffs  Economy Minister Luis Caputo announced it would lower a levy known as the PAIS tax on imports from 17.5% to 7.5%. The Milei administration actually increased the tax after taking office Dec. 10 in an effort to boost federal revenues and close a fiscal deficit, but the higher tariff has elevated prices on imports. .  
• Prohibiting central bank financing Milei has prohibited the central bank from financing the fiscal deficit.  

These measures are part of Milei's "economic shock therapy" plan to address Argentina's economic crisis. The International Monetary Fund (IMF) has called the measures "bold" and said they will help create an environment for private sector growth.  While inflation has come down, some say that the measures have brought short-term pain and squeezed families. Others question whether there are adequate safety nets for the poorest Argentines.