Wall Street’s favorite South American President, Argentina’s Javier Milei, suffered a stunning defeat in the Sunday, Sept. 7 Buenos Aires provincial legislative elections. The opposition Peronist Fuerza Patria coalition won by a whopping 13% over Milei’s Freedom Advances (LLA) party in seven of the province’s eight congressional districts, winning 47% vs. the incumbent party’s 34%. The province of Buenos Aires is Argentina’s largest, with 40% of the nation’s population and a good section of Argentine industry, so Milei’s defeat on Sept. 7 bodes badly for him for the legislative elections in the rest of the country on Oct. 26.
It is Milei’s “chainsaw economics” that is now on the line. Milei is a radical libertarian, calling himself an “anarcho-capitalist.” From the beginning he stated that his job as President is to ensure that the country’s gigantic illegitimate debts to the International Monetary Fund and foreign banks and those of the “domestic” Anglo-Argentine oligarchy get paid, no matter how many Argentines he has to starve to death to do so. He admitted Sunday night that the elections were a big defeat, but he insisted there would be no changes in his economic policy; “in fact we’ll redouble our efforts” to ensure its full imposition.
The international financier press are worried about Milei’s “crushing defeat” and “sweeping setback.” Milei’s vote “fell well short of investor expectations,” Bloomberg News wrote, while JPMorgan analysts informed their investors that “the scale of the defeat far exceeded expectations.” On Monday, Sept. 8, the value of the Argentine peso, and dollar bonds and stocks, all plunged; Morgan Stanley retracted its “buy recommendation” for Argentine assets, announced only the week before; and talk of Argentina possibly heading into a “currency crisis” has begun.
