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submitted 3 months ago by Shardikprime@lemmy.world to c/news@lemmy.world
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[-] skhayfa@lemmy.world 141 points 3 months ago

And in other news: Argentina's poverty rate jumped from almost 42% to 53% during the first six months of Javier Milei's presidency (https://apnews.com/article/argentina-milei-budget-congress-economy-inflation-c83178217097093d476fab94429768a4)

Appeasing the market needs humans sacrifice! Once the rich get their fill, the poor will... anyway who cares about the poor.

[-] Pyr_Pressure@lemmy.ca 23 points 3 months ago* (last edited 3 months ago)

I mean, I'm not advocating support for the guy but citing stuff that happens within the first 6 months of taking office is a bit disingenuous.

Things generally don't happen immediately after someone takes power, there's a lag before things start to happen and change. I would imagine that the increase in poverty would have happened no matter who was in power and whatever happened after that first 6 months could be attributed to milei more than what happened within the first 6 months.

[-] DeadWorldWalking@lemmy.world 6 points 3 months ago

6 months is negligible but a year is proof of success?

Ok keep licking that boot

[-] Pyr_Pressure@lemmy.ca 3 points 3 months ago* (last edited 3 months ago)

I'm just not hypocritical.

If someone I voted for made it into office I wouldn't be pissed at them if the economy was still shit 6 months later.

The one year mark was arbitrary, there's no set timeframe of course. 6 months is in my personal opinion, which could be wrong, pretty fast for any rate of large-scale change to happen country-wide for anything but the outbreak of war to have an impact.

It's the same reason Republicans think they're system of economics works when the economy is okay going into the presidency of trump but shit going into a new democratic office which needs to pick up the pieces afterwards.

I wouldn't blame Biden for what the economy looked like 6 months after Trump left. But I also would not* blame/attribute the state of the economy 6 months into Trump's term.

[-] iopq@lemmy.world 12 points 3 months ago

Yes, because of austerity. You have to sacrifice spending somewhere to cool the economy and reduce the deficit.

The other way to go about it is to jack up interest rates sky-high, but that doesn't fix the deficit.

[-] FlyingSquid@lemmy.world 39 points 3 months ago

You're defending increasing the poverty rate because of a budget deficit. Are you aware that you're trying to justify human suffering?

[-] iopq@lemmy.world 13 points 3 months ago

Because 200% inflation was so great

During the observation period from 1980 to 2022, the average inflation rate was 206.2% per year. Overall, the price increase was 902.38 billion percent. An item that cost 100 pesos in 1980 costs 902.38 billion pesos at the beginning of 2023.

https://www.worlddata.info/america/argentina/inflation-rates.php

[-] FlyingSquid@lemmy.world 17 points 3 months ago

Less poverty but more inflation sounds better to me than more poverty but less inflation.

Why is more poverty better?

[-] az04@lemmy.world 11 points 3 months ago

Because in the long term, very high inflation leads to everyone being poorer. And Argentina is the very best example of this.

A country that went from being the 6th richest in the world to having over half the population in poverty in 100 years. All thanks to protectionism, subsidized living costs, low taxes and printing money to make up the difference.

And let's not forget fleecing the international community for money to rebuild the economy several times and then not paying it back.

[-] FlyingSquid@lemmy.world 18 points 3 months ago

It's gone from less than half of the population being in poverty to over 60% being in poverty since Milei has started implementing his austerity measures.

So it sounds like exactly the opposite of what you're claiming is happening.

But it's fine. People are starving but it's okay because austerity somehow is always a good thing and fuck those people, they were going to starve anyway. Probably.

[-] az04@lemmy.world 6 points 3 months ago

Lowering inflation when it's too high is always a question of short term pain for some people to get long term benefits for most people.

[-] FlyingSquid@lemmy.world 7 points 3 months ago

Most people are in poverty. 60%. "You'll do better in the long term" is not very accurate when people are starving to death.

This is the most ridiculous attempt to defend something that is causing suffering on a scale of millions that I have seen in a long time.

[-] DeadWorldWalking@lemmy.world 4 points 3 months ago

Just as long as YOU aren't the one who is chosen to be unemployed and homeless right?

It's always acceptable for others to make these sacrifices of course.

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[-] Twentytwodividedby7@lemmy.world 8 points 3 months ago

How well do you think the population would fare if the government goes bankrupt?

[-] FlyingSquid@lemmy.world 22 points 3 months ago

Are you honestly suggesting that Milei's solution to that is the only possible solution? Libertarian austerity or nothing?

[-] Wrufieotnak@feddit.org 15 points 3 months ago

I mean, that is how the libertarians argue since time immemorial, isn't it? "Cut the welfare state or the EcOnOMy never improves"

[-] lorty@lemmy.ml 3 points 3 months ago

It's okay because he is on the side of the empire

[-] chemicalwonka@discuss.tchncs.de 51 points 3 months ago* (last edited 3 months ago)

Obviously, for neoliberals starving their own population to increase the imaginary numbers for foreign imperialist rentiers is more than acceptable, it is essential

[-] aleats 49 points 3 months ago

Seems a bit early to tell if this will have much of a lasting effect. So-called economic "shock therapies" have a long history of working for a year or so, and then unraveling later. And especially for Argentina, the cycle of decades of growth followed by decades of recession has been going on for a while now. I'll be genuinely impressed if he manages to actually fix the economy long-term, but that still remains to be seen.

[-] iturnedintoanewt@lemm.ee 4 points 3 months ago

Do you have examples of previous failed shock therapy attempts at economy?

[-] Foreigner@lemmy.world 13 points 3 months ago

General Pinochet's rule in Chile is a good example:

In fact, when Milton Friedman—one of the principal architects of the so-called Chicago School of economics—traveled to Chile in 1975, it was still not clear whether Pinochet would fully embrace the Chicago School’s economic program. It was only after Friedman met personally with the dictator that Pinochet was persuaded to fight inflation with “shock treatment”—that is, steep budget cuts that would cause high unemployment but, Friedman promised, would also put the country on a more secure economic path.

[-] IHeartBadCode@fedia.io 48 points 3 months ago

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.

[-] buttfarts@lemy.lol 9 points 3 months ago

I thought he was another right wing populist demagogue but apparently there is method to his madness. I hope he pulls off this stunt perfectly and is able to land the plane.

[-] FlyingSquid@lemmy.world 20 points 3 months ago

The method to his madness is "fuck the poor."

It's a lot easier to win the fight against inflation when you don't give a shit who suffers because of it.

[-] porous_grey_matter@lemmy.ml 7 points 3 months ago* (last edited 3 months ago)

Could you give some examples of where this has worked in the past?

[-] veganpizza69@lemmy.world 13 points 3 months ago

Here's a fun one:

Neoliberalism: Oversold? -- Finance & Development, June 2016 https://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm

Finance & Development, June 2016, Vol. 53, No. 2

Instead of delivering growth, some neoliberal policies have increased inequality, in turn jeopardizing durable expansion

Milton Friedman in 1982 hailed Chile as an “economic miracle.” Nearly a decade earlier, Chile had turned to policies that have since been widely emulated across the globe. The neoliberal agenda—a label used more by critics than by the architects of the policies—rests on two main planks. The first is increased competition—achieved through deregulation and the opening up of domestic markets, including financial markets, to foreign competition. The second is a smaller role for the state, achieved through privatization and limits on the ability of governments to run fiscal deficits and accumulate debt.­

[...]

•The benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries.­

•The costs in terms of increased inequality are prominent. Such costs epitomize the trade-off between the growth and equity effects of some aspects of the neoliberal agenda.­

•Increased inequality in turn hurts the level and sustainability of growth. Even if growth is the sole or main purpose of the neoliberal agenda, advocates of that agenda still need to pay attention to the distributional effects.­

[...]

Austerity policies not only generate substantial welfare costs due to supply-side channels, they also hurt demand—and thus worsen employment and unemployment. The notion that fiscal consolidations can be expansionary (that is, raise output and employment), in part by raising private sector confidence and investment, has been championed by, among others, Harvard economist Alberto Alesina in the academic world and by former European Central Bank President Jean-Claude Trichet in the policy arena. However, in practice, episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output. On average, a consolidation of 1 percent of GDP increases the long-term unemployment rate by 0.6 percentage point and raises by 1.5 percent within five years the Gini measure of income inequality (Ball and others, 2013).­

In sum, the benefits of some policies that are an important part of the neoliberal agenda appear to have been somewhat overplayed. In the case of financial openness, some capital flows, such as foreign direct investment, do appear to confer the benefits claimed for them. But for others, particularly short-term capital flows, the benefits to growth are difficult to reap, whereas the risks, in terms of greater volatility and increased risk of crisis, loom large.­

[...]

Moreover, since both openness and austerity are associated with increasing income inequality, this distributional effect sets up an adverse feedback loop. The increase in inequality engendered by financial openness and austerity might itself undercut growth, the very thing that the neoliberal agenda is intent on boosting. There is now strong evidence that inequality can significantly lower both the level and the durability of growth (Ostry, Berg, and Tsangarides, 2014).­

[-] porous_grey_matter@lemmy.ml 5 points 3 months ago

That doesn't sound like a positive outcome...

[-] veganpizza69@lemmy.world 5 points 3 months ago

And it's coming from inside the IMF house.

[-] t_chalco@lemmy.world 2 points 3 months ago

Thank you for posting this. It is good to see studies, even metanalysis or otherwise, enter the forum discourse.

[-] WalnutLum@lemmy.ml 4 points 3 months ago

The harder your freeze, the more you'll need to rewarm the markets to get your economy going again.

Milei is pumping millions into shale oil pipelines and lithium mines, I assume that's his game plan for "rewarming the markets".

[-] catloaf@lemm.ee 34 points 3 months ago

But the people are unemployed and in poverty.

[-] Ullallulloo@civilloquy.com 13 points 3 months ago

They would be either way. For the moment there is some hope and evidence things are getting better instead of just endlessly sliding worse and worse.

[-] FlyingSquid@lemmy.world 12 points 3 months ago

The evidence is it's getting worse, not better. Poverty is increasing significantly.

How is there hope?

[-] FireTower@lemmy.world 6 points 3 months ago

Because inflation rate is decreasing. It's still triple digits but it's going down.

Imagine a wildfire spreading rapidly. Remedial action is taken and then it continues to spread but notably slower. Obviously there's more to do but it is still good news for a place where that is in short supply.

[-] FlyingSquid@lemmy.world 7 points 3 months ago

Why is low inflation but high poverty a good thing?

[-] FireTower@lemmy.world 5 points 3 months ago

It's not a good thing. No one here is arguing that poverty is good. It's that their current choice is 'still pretty high inflation w/ high poverty' is preferable to 'holy shit that's their monthly inflation w/ high poverty'.

Low poverty is no longer in Argentina's deck for the foreseeable near future. Inflation will rob the working class people of any thing they are given or earn.

[-] FlyingSquid@lemmy.world 4 points 3 months ago

The poverty was far lower before Milei started implementing austerity measures, so yes, by saying his measures are a good thing, you are saying high poverty is a good thing.

[-] FireTower@lemmy.world 6 points 3 months ago

Only if you believe there is no direct connection between the devaluation of people's savings paired with increased costs of goods and poverty.

Hyper inflation in itself leads to poverty.

[-] FlyingSquid@lemmy.world 3 points 3 months ago

Then why is poverty so much higher now than it was before Milei started implementing his libertarian ideas?

[-] FireTower@lemmy.world 3 points 3 months ago

Because inflation is compounding in nature just like interest is. The longer you have a high inflation rate the worse the situation gets.

[-] FlyingSquid@lemmy.world 3 points 3 months ago

Inflation is getting lower and poverty is rising. You're not making sense. Meanwhile, child mortality is also going way up.

You're not justifying Milei's liberarianism because it's not doing what you are claiming.

[-] FireTower@lemmy.world 4 points 3 months ago

Their rate of inflation iis decreasing but they still experience inflation rather than deflation. INFLATION IS COMPOUNDING even if the rate of increase of inflation is slightly lower there is still a lot of inflation.

If you owe $100 and inflation is stuck at 200% per year after one year you'll owe $300, after two years $900, three years $2,700.

Now if you owe $100 and inflation starts at 200% per year then drops to 190% for year 2, and then falls again to 180% for year three you're looking at this: year 1 $300, year 2 $870, year 3 $2,436.

It's better to owe someone $2,436 than it is to owe them $2,700. But owing someone $2,436 sucks a lot more than owing them $100.

I don't know how this couldn't be clear to anyone who understands the concept of inflation.

https://youtu.be/T8-85cZRI9o

https://youtu.be/BHw4NStQsT8

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[-] az04@lemmy.world 6 points 3 months ago

Inflation is going down. That brings hope. A year ago some saw their life savings' purchasing power cut to a third. That brings despair. This year it only went down by half, which brings hope because it's an improvement. Once inflation is at a reasonable level, economic growth will have to bring hope, which it probably won't, since Milei will be focused on lowering debt and trying to fill the hole in the central bank, which still stands at negative 7 billion dollars in foreign reserves.

[-] FlyingSquid@lemmy.world 3 points 3 months ago

Being in poverty with hope is really not any different from being in poverty without hope. You starve either way.

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[-] az04@lemmy.world 33 points 3 months ago

Milei is a Christian, authoritarian, regressive fascist.

And he would never have gotten into power if the Argentinian left had respected the independence of the central bank, been more pragmatic with their subsidies and let the market decide more of their economy. Protectionism doesn't work and Argentina is a shining beacon letting everyone know that.

The left in Argentina did this to themselves. Even the trade unions in Argentina are struggling with support because they're seen as complicit in the country's wild overspending.

[-] DeadWorldWalking@lemmy.world 16 points 3 months ago

*at the cost of widespread unemployment

They are siphoning all the money into corporations and then using the success of corporations (GDP) to evaluate their success.

Well they sure did make the GDP go up and now everyone is unemployed.

[-] kandoh@reddthat.com 15 points 3 months ago

High unemployment means cheaper services

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this post was submitted on 18 Dec 2024
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