Tyler Durden | ZeroHedge.com
Javier Milei's honeymoon is over.
Two months after libertarian firebrand Javier Milei was elected president of Latam basket case Argentina, pledging to overhaul the economy and openly warning a period of brutal austerity and pain is coming, the initial euphoria is fading fast and is being replace with the shock and horror of what comes next. And sure enough, in the biggest show of resistance to date against Milei, Argentinian workers on Wednesday took to the streets for a general strike, bringing swaths of downtown Buenos Aires to a standstill.
In what has been called an "unprecedented mobilization" never before in modern Argentinian history has a mass strike been called less than seven weeks into a new presidency. But leaders from Argentina’s largest labor union - the guys who are used to a steady drip of handouts from the government - said the nationwide protests reflect the urgency they feel as Milei pursues radical economic and political reforms he likens to “shock therapy”.
Thousands of (most labor union) protesters swarmed the square in front of Argentina’s Congress on Wednesday, denouncing Milei’s sweeping plans to overhaul the government, privatize public industries and slash spending. Some banged pots and carried signs accusing Milei of being a “traitor”. Other banners featured the portrait of working-class icon Evita Peron.
Elizabeth Gutierrez made her way to the gathering after working an overnight shift as a nurse. She explained she was motivated by steep increases in food prices since Milei took office.
“Before we used to have asados [barbecues] every Sunday. Not now. Even rice is very expensive,” Gutierrez said. “Rents have shot up. You can’t live off your salary any more: It’s not enough" she raged adding that “the people are here to defend their nation."
Well, here's the problem: the nation has been bled dry by corrupt politicians, and the only thing that can save it is the most aggressive belt tightening in decades. And while Milei is trying it, he is about to find out just how much pushback his plans will cause, and how impossible it will be for his ambitious plan seeking to end the government's parasistism of the economy, to succeed.
Another protester, 63-year-old retiree Alicia Pereyra, voiced opposition to Milei’s efforts to deregulate the economy, including plans to “modernise” labour law and ditch rent regulation. “He wants us to be slaves,” Pereyra said.
Draped in an Argentinian flag, Pereyra worried about her ability to make ends meet in the face of Milei’s reforms. Her retirement income amounts to only 85,000 pesos per month — about $70. She said basic necessities had become so costly under Milei that she is unsure whether she will be able to access the medicine she needs for a chronic illness.
Even small luxuries are now out of reach. Pereyra described how she and her husband opted for orange juice instead of wine to make their New Year’s toast for 2024, breaking a long-running family tradition.
“It’s a horrible feeling of not knowing what’s going to happen tomorrow,” she said. “[Milei] is turning our heads upside down.”
Of course, Argentina had already been suffering from record triple-digit inflation when Milei took office on December 10. Elected on the promise that he would fix the sputtering economy - but not before a period of brutal shock - Milei quickly moved to implement austerity measures that he said were needed to get Argentina’s finances in order.
In his inauguration address, he warned the country that Argentina’s situation would get worse before it got better. And he was right.
One of his earliest measures was to devalue the Argentinian peso by 54%, which only accelerated the already sky-high inflation rates.
According to the National Institute for Statistics and Censuses (INDEC), Argentina ended 2023 with annual inflation of 211% the steepest rate in Latin America, surpassing even Venezuela. The year also clocked the fastest inflation hikes since 1990, resulting in higher prices for consumers.
Santiago Manoukian, chief economist at the consulting firm Ecolatina, told Al Jazeera that December’s price increases will continue hitting consumers’ pocketbooks for the next several months. Salaries will have a hard time keeping up.
“We believe that real wages fell in December more than in any other month since at least 2002,” he said. “Purchasing power is going to continue to go down.”
That trend is expected to slow consumer spending, which Manoukian said will likely result in a recession and an uptick in unemployment and poverty. Four in 10 Argentines were already in poverty when Milei took office, according to national data
Milei coupled his currency devaluation measure with immediate cuts to government spending, including consumer subsidies.
One presidential “mega-decree” in December reformed or overturned dozens of laws and paved the way for the privatisation of state-run companies. Another decree axed 5,000 government jobs. But further changes are on the way. Wednesday’s nationwide strike comes as Congress prepares to consider a slimmed-down version of Milei’s “omnibus law” the following day.
Originally containing 664 articles, the bill sought to reimagine the country’s elections, restructure the lower chamber of Congress and enact tough new restrictions on protests, including through penalties of up to six years in prison. The streamlined version is still massive, with over 500 articles. If passed, it would hand broad legislative powers to Milei’s executive branch for an “emergency” period of one year.
Still, the president dismissed Wednesday’s strike as evidence of backward thinking. “There are two Argentinas,” he told local media. “One wants to stay behind, in the past, in decadence.”
Members of his administration likewise blasted the protesters. On Wednesday, Security Minister Patricia Bullrich — Milei’s erstwhile rival on the campaign trail — called the union groups that organised the strike “gangsters” and “guarantors of poverty”.
“There’s no strike that will be able to stop us,” she wrote on X.
Meanwhile, the establishment - realizing their jobs are about to be rugpulled - is lashing out: Federico Finchelstein, a New York-based historian and fascism scholar, said Milei’s first month in office has demonstrated his “authoritarian style of populism”. He drew parallels to Donald Trump, the controversial — but popular — former president of the United States who sought to claim broad executive authority while in office. Finchelstein likened Milei to a “mini-Trump”.
“It’s a type of populism that looks to undermine democratic institutions,” Finchelstein said, clearly forgetting that it was Argentina's "democratic institutions" that brought pushed it beyond the edge of collapse.
And indeed, despite the criticism and protests he faces, Milei continues to enjoy broad support among Argentinians. One survey this month, conducted by the pollster Escenarios, found that 55% of respondents believed Milei’s reform measures were necessary to improve the economy.
Political scientist Federico Zapata, the director general at Escenarios, credits those poll numbers to the president’s successful messaging to voters.
“In a way, Milei and the libertarians seem to have won the culture war,” he explained. “They managed to have installed a consensus over the diagnosis of the [economic] crisis, and that’s helping build approval over the slate of measures.”
Zapata added that Milei has also been successful in attributing the economic spiral to his left-wing predecessor, former President Alberto Fernandez. “He says that the economic problems are the complete responsibility of the previous government. Based on that, he’s lowered expectations so that people stick with him for longer than the normal honeymoon period,” Zapata said.
Still, Escenarios’ poll showed a majority of respondents felt any major policy changes should take place gradually, and not all at once.
And Milei could face further challenges to his reforms, beyond Wednesday’s large-scale protest. A top Argentinian court has already invalidated a key component of his “mega-decree”, which had sought to cancel a host of worker protections. Both Gutierrez and Pereyra suggested that opposition to Milei may grow to the point where he is unable to finish his term in office.
“The government could find itself in the eye of the storm in just a few months,” Zapata said.
But Milei’s supporters remain optimistic that the firebrand president will make good on his campaign promises.
Luis Testa, a cab driver who voted for Milei, said he still backs the president, even as he makes cuts in his day-to-day expenses.
“We need to give him a chance. Let’s give him a year,” Testa said. “And if, for a year, all of us have to eat beans, we’ll eat beans.”