Stopping the government’s theft via inflation is peak populism
Tiana Lowe Doescher
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In a rare bit of good news south of the Equator, Argentina elected classical monetarist and proud American ally Javier Milei to replace the Peronist president earlier this week. Not only does Milei want to reorient Argentina’s diplomacy away from ties to communist dictatorships and toward America and its democratic allies, but his marquee campaign promise is to eliminate the country’s triple-digit hyperinflation by adopting the United States dollar as its currency.
For some reason, this has incensed collectivist columnist Sohrab Ahmari. Blasting supporters of former President Donald Trump for their “foolish embrace” of the Argentine libertarian, Ahmari says Milei “rejects nearly everything ‘Maga’ populists in the United States, and analogue movements across the developed world, claim to stand for.”
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“His proposal to dollarise the Argentine economy would leave the country without its own central bank and at the mercy of the US Federal Reserve System,” Ahmari laments in his central contention. “If saying outrageous things while pushing a political-economic agenda that would make Thatcher blush are all it takes to count as a populist, then ‘populism’ has lost all meaning.”
For starters, as a matter of pure self-interest, all Americans, but especially Trump supporters, would be correct to embrace Argentina both as a stronger diplomatic ally and as a more prosperous economic partner. But it is Ahmari’s framing of the dollarization issue that indicates that his populism is more about empowering the government than the people.
It is only in the penultimate paragraph that Ahmari mentions the minor detail that the Argentine inflation rate has reached a scorching 143%, and even then, he understates the case. The Peronists have not just been “lousy stewards” of the Argentine economy — in a span of less than a century, they turned one of the 10 richest nations on the planet into a flaming dumpster fire with a GDP per capita lower than that of Russia and Kazakhstan. Since Juan Peron rose to power, Argentina has defaulted on its debt six separate times, including three times in the last 28 years while the Peronists have had sole control of the presidency.
At its core, inflation is a tax on the paychecks of workers that directly profits the government in charge of monetary policy. In practical terms, Argentine prices are now doubling twice a year, and the value of its paychecks is halving twice a year. That means its people cannot save their money without it massively depreciating in value. And mind you, the central bank intentionally deflates the peso so the government (or the “deep state,” to use MAGA-adjacent parlance) can profit.
Restoring price stability means ending the government’s ability to steal from the real wages of the workers. If that is not populism, then indeed, the term itself has no meaning.