Argentina swung between crises and fixes for decades before Milei brought a chainsaw
Hook
Argentina has tried a currency peg, a default, big-spending booms and now a chainsaw. Each came with a promise that this time it would last.
Claim
Argentina’s modern economic history is a sequence of stabilisation attempts that ended in crises. What the sources support:
- Inflation was above 3,000% in 1989 (PIIE).
- In 1991 the Convertibility Plan, a peg to the dollar, ended hyperinflation for a time (PIIE). It was introduced under President Carlos Menem, a Peronist, and was market-friendly.
- In 2001 the plan was abandoned amid a debt default, a banking collapse and a deep recession (PIIE).
A common story says Argentina is “decades of Peronism”. The record is mixed. A 2014 La Gaceta piece notes that the Radicals governed in the 1989 and 2001 crises (Alfonsin and De la Rua), while Peronism governed in 2014. Peronists also governed through the 1990s and 2003 to 2015, so no single party owns the cycle.
Milei’s chainsaw began as a campaign prop to signal spending cuts, and after taking office he posted a photo of his cabinet behind a golden chainsaw captioned “The best government in history” (Al Jazeera, Dec 2024).
What cannot be shown: that the cycle has one cause. Economists disagree, and advocacy sources on both sides were not used.
Story
Milei’s rally prop is the story: a politician holding a chainsaw in front of crowds that had lived through 211% annual inflation. People voted for a visible tool as much as for a theory.
Sources
- Al Jazeera, 30 Dec 2024, chainsaw symbolism: https://www.aljazeera.com/news/2024/12/30/inflation-down-poverty-up-as-milei-takes-chainsaw-to-argentinas-economy
- PIIE, “Is there a way out for Argentina”: https://www.piie.com/blogs/realtime-economics/there-way-out-argentina
- La Gaceta, 2014: https://www.lagaceta.com.ar/nota/600739/economia/riesgos-nuevo-default.html
Check before posting
- A sourced figure for the size of the 2001 to 2002 output fall (a draft figure of 20% was not supported; some sources say about 28% from 1998 to 2002).
- Kirchner-era (2003 to 2015), Macri (2015 to 2019) and Alberto Fernandez (2019 to 2023) years are not covered by any source opened.
Counterargument
Argentina’s problems predate any one government, so blaming “populism” can be a way to avoid looking at specific policy choices and outside shocks.
Post angles
Facebook (Croatian) Argentina je desetljećima prolazila kroz iste krugove: hiperinflacija, privremeni plan, pa kriza. Mnogi misle da je to samo “peronizam”, ali u krizama 1989. i 2001. vladali su radikali, a peronist Menem uveo je tržišni plan s vezanim tečajem. Mijenjale su se stranke, ciklus je ostao. A onda je došao Milei s motornom pilom.
LinkedIn (English) Argentina is often summarised as “decades of Peronism”. The record is messier: the Radicals were in power for the 1989 and 2001 crises, and the Peronist Menem introduced the market-friendly Convertibility Plan. Different labels, same cycle of fixes that did not last. Against that backdrop Milei’s chainsaw is the latest bet that this time the fix will hold.
Links
Milei cut inflation from 211 to 31 percent, and poverty went up, down and up again DOGE promised 2 trillion in cuts and the checkable claims fell far short