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From the Daily Caller News Foundation
The current state of Argentina’s economy is a far cry from what “experts” predicted when they warned that President Javier Milei’s pro-free market leadership would devastate the country.
The chainsaw-wielding libertarian rose to power on promises to slash government spending, implement free-market policies and lift strict currency controls to rescue a nation crippled by inflation, debt and entrenched poverty. Though the pundit class warned that Milei’s policies would spark an economic collapse, the results so far have been a rebuke to those warnings.
Just days before the November 2023 presidential election, 108 economists from around the world signed an open letter claiming that Milei’s “simple solutions” were “likely to cause more devastation in the real world in the short run, while severely reducing policy space in the long run.”
“His policies are poorly thought through. Far from building a consensus, he would struggle to govern,” The Economist’s editorial board wrote in a September 2023 piece describing “Javier Milei’s dangerous allure.”
Well over a year into Milei’s presidency, Argentina is showing its strongest economic performance in years. The country’s gross domestic product (GDP) jumped 7.7% in April compared to the same month in 2024, far exceeding expectations.
The GDP is expected to rise by 5.2% in 2025, compared to declines of 1.3% in 2024 and 1.9% in 2023, according to the Organization for Economic Cooperation and Development (OECD).
Inflation, a long-standing hallmark of Argentina’s economic dysfunction, dropped to 1.5% between April and May, reaching a five-year low. Annual inflation has plunged from 160.9% in November 2023 — just before Milei took office — to 43.5% in May.
Meanwhile, poverty rates have also declined sharply, falling from 52.9% in the first half of 2024 to 38.1% in the second half of the year.
Argentina’s rental housing supply also increased by 212% between December 2023 and June 2024, after Milei repealed the country’s rent control laws, according to the Cato Institute.
“Against the background of a difficult legacy of macroeconomic imbalances, Argentina has embarked on an ambitious reform process, starting with an unprecedented upfront fiscal adjustment. Reforms have started to pay off. Inflation has receded and the economy is set for a strong recovery,” the OECD noted in its new analysis of the Argentinian economy. “Maintaining the reform momentum will be key to restore confidence, boost investment and productivity growth.”
Milei — a self-described anarcho-capitalist — has been an ardent supporter of President Donald Trump’s efforts to downsize the U.S. government, including the Department of Government Efficiency’s (DOGE) push to cut spending.
“I come from a country that bought all of those stupid ideas that went from being one of the most affluent countries in the world to one to one of the [poorest],” Milei said in a speech at the Conservative Political Action Conference in 2024. “If you don’t fight for your freedom, they will drag you into misery … Don’t surrender.”
From the Daily Caller News Foundation
America’s carmakers face an uncertain future in the wake of President Donald Trump’s signing of the One Big Beautiful Bill Act (OBBBA) into law on July 4.
The new law ends the $7,500 credit for new electric vehicles ($4,000 for used units) which was enacted as part of the 2022 Inflation Reduction Act as of September 30, seven years earlier than originally planned.
The promise of that big credit lasting for a full decade did not just improve finances for Tesla and other pure-play EV companies: It also served as a major motivator for integrated carmakers like Ford, GM, and Stellantis to invest billions of dollars in capital into new, EV-specific plants, equipment, and supply chains, and expand their EV model offerings. But now, with the big subsidy about to expire, the question becomes whether the U.S. EV business can survive in an unsubsidized market? Carmakers across the EV spectrum are about to find out, and the outlook for most will not be rosy.
These carmakers will be entering into a brave new world in which the market for their cars had already turned somewhat sour even with the subsidies in place. Sales of EVs stalled during the fourth quarter of 2024 and then collapsed by more than 18% from December to January. Tesla, already negatively impacted by founder and CEO Elon Musk’s increased political activities in addition to the stagnant market, decided to slash prices in an attempt to maintain sales momentum, forcing its competitors to follow suit.
But the record number of EV-specific incentives now being offered by U.S. dealers has done little to halt the drop in sales, as the Wall Street Journal reports that the most recent data shows EV sales falling in each of the three months from April through June. Ford said its own sales had fallen by more than 30% across those three months, with Hyundai and Kia also reporting big drops. GM was the big winner in the second quarter, overtaking Ford and moving into 2nd place behind Tesla in total sales. But its ability to continue such growth absent the big subsidy edge over traditional ICE cars now falls into doubt.
The removal of the per-unit subsidies also calls into question whether the buildout of new public charging infrastructure, which has accelerated dramatically in the past three years, will continue as the market moves into a time of uncertainty. Recognizing that consumer concern, Ford, Hyundai, BMW and others included free home charging kits as part of their current suites of incentives. But of course, that only works if the buyer owns a home with a garage and is willing to pay the higher cost of insurance that now often comes with parking an EV inside.
Decisions, decisions.
As the year dawned, few really expected the narrow Republican congressional majorities would show the political will and unity to move so aggressively to cancel the big IRA EV subsidies. But, as awareness rose in Congress about the true magnitude of the budgetary cost of those provisions over the next 10 years, the benefit of getting rid of them ultimately subsumed concerns about the possible political cost of doing so.
So now, here we are, with an EV industry that seems largely unprepared to survive in a market with a levelized playing field. Even Tesla, which remains far and away the leader in total EV sales despite its recent struggles, seems caught more than a little off-guard despite Musk’s having been heavily involved in the early months of the second Trump presidency.
Musk’s response to his disapproval of the OBBBA was to announce the creation of a third political party he dubbed the American Party. It seems doubtful this new vanity project was the response to a looming challenge that members of Tesla’s board of directors would have preferred. But it does seem appropriately emblematic of an industry that is undeniably limping into uncharted territory with no clear plan for how to escape from existential danger.
We do live in interesting times.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
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