With inflation and poverty rates soaring, few expect major changes after Argentina’s election

By Andres Oppenheimer

If Sergio Massa wins the Nov. 19 elections, he should enter the Guinness Book of Records as the world’s first sitting economy minister who wins a democratic election despite having led his country to a 140% inflation rate and driving up poverty to more than 40% of the population.

It sounds crazy, but it may happen. Massa, appointed economy minister 16 months ago and who has kept his job while running for office, is running neck and neck in the polls with Javier Milei, the eccentric right-wing libertarian opposition candidate.

There are five major reasons why Massa could win, despite his disastrous performance as economy chief:

In Argentina, his detractors call presidential candidate Javier Milei ‘El Loco.’

First, Argentina’s leftist populist government, in part led behind the scenes by Vice President Cristina Fernandez de Kirchner, has poured huge state resources into Massa’s campaign.

Economist Claudio Zuchovicki has been quoted saying that Massa spent up to $10 billion in his campaign, including cash bonuses, increases in social subsidies and propaganda expenditures. Argentina’s streets and highways are lined with Massa campaign signs, while there are relatively few Milei posters, Argentine friends tell me.

Second, Massa has run an effective fear campaign, claiming that Milei — a free-market zealot who vows to reduce Argentina’s gigantic public spending — would cut subsidies to the poor and pensioners. In recent weeks, the Massa campaign covered Buenos Aires with streets signs reading: “A train ticket under Massa: 56 pesos; a train ticket under Milei: 1,100 pesos.” Milei has denied that he would raise train fares anywhere close to that.

Third, Massa is a smooth talker and a superb performer, in sharp contrast to Milei’s strident personality, which has earned him the nickname of “el loco” — the crazy one.

In the Nov. 12 debate, Massa managed to divert the discussion from the economy and the government’s massive corruption and shift it to Milei’s history of controversial statements. Milei, among other things, has criticized Pope Francis, who is from Argentina, calling him an “imbecile,” and praising former British Prime Minister Margaret Thatcher, under whose rule Britain invaded the Argentine-claimed Falkland/Malvinas islands.

Sergio Massa has directed the Argentinian economy to one of the world’s highest inflation rates and could still be elected president.

Fourth, on the few occasions that Massa has been forced to address Argentina’s economic mess, he promised a bright future and came across as if he were the economy minister of Switzerland.

Fifth, Milei either has very bad campaign advisers, or — more likely — he doesn’t listen to them. Instead of focusing on the economy and government corruption, and staying on message, Milei opines about almost everything, giving his rival ample opportunities to attack him.

The country has lived beyond its means for decades and has only 6.2 million people working in the private sector paying taxes to subsidize an estimated 18.7 million people receiving government handouts, including public workers, pensioners and beneficiaries of social subsidies.

If Massa wins, he will be beholden to the Kirchner-led populist party base, because he will owe his election to its votes and is unlikely to make much-needed public spending cuts. That means that the country will almost surely run out of cash and suffer a hyper-inflation or a hyper-recession, followed by the Kirchner government’s traditional cop-out of blaming the International Monetary Fund for its self-inflicted economic disaster.

If Milei wins, he will be an outsider with few allies in Congress or provincial governorships. If he tries to implement his plan to close the Central Bank to stop currency emission and dollarize the economy, powerful unions may take to the streets and paralyze the country.

Complicating things, Milei — as he told me in an interview earlier this year — admires Donald Trump and Brazil’s former President Jair Bolsonaro. He believes he could rule like these and other right-wing authoritarian wannabes. Problem is, Milei doesn’t have a big party behind him, like Trump’s Republican Party, or strong support from the military, like Bolsonaro had.

But while a Massa victory would almost surely result in Argentina continuing its downward spiral toward a bankrupt populist state with an ever-growing number of poor, there is the odd chance that Milei could control his narcissistic personality, make a deal with center-right and centrist parties and change the country’s course.

That would be the best outcome, although it may be wishful thinking. Milei is a one-man show who is not known to listen much to others. No matter who wins, Argentina’s near-term future looks grim.
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Credit: Miami Herald