Trump Is Embracing the Same Economic Populism That Destroyed Argentina

When economist Javier Milei won the Argentine presidency in 2023, the international media portrayed his victory in the light of America’s burgeoning populist movement. “Who is Javier Milei?” asked The Guardian. Describing him as the country’s “new far-right president,” the publication compared him to “his fellow right-wing populists Donald Trump and [Brazil's] Jair Bolsonaro.”

PBS wrote that “the fiery freshman lawmaker has thrust the country into the unknown regarding just how extreme his policies will be, following a campaign that saw him revving a chainsaw to symbolically cut the state down to size.” The article also made the obligatory comparisons to Trump. Every new president brings uncertainty, but Milei’s free market policies were certainly known beforehand.

Aside from his norm-breaking appeal, Milei’s approach is far different than Trump’s. Milei vowed free-market reforms to overturn decades of populist Perónism—a statist ideology that infected Argentina’s politics since Juan Domingo Perón won the presidency in 1946. His authoritarian approach has dominated the country’s politics for 80 years, with Milei beating Perónist opponents.

By contrast, Trump is overturning America’s historical embrace of free markets and free trade. He sets himself up as an all-powerful charismatic leader, inserts the feds deeply into the economy, and expands the reach of police and military forces. Like Perón, he’s doing it in the name of the “working class.” The U.S. Department of State once described Perónism as a “vague concept of social justice in some ways more akin to a religion than a political movement,” which sounds eerily like MAGA.

Perónism is more avowedly leftist than Trumpism, but MAGA’s “right-wing” policies sometimes seem indistinguishable from left-wing ones. Argentina’s populist movement has been successful at one thing: turning one of the world’s wealthiest countries into an impoverished basket case. Americans think of Argentina as a benighted third-world nation. But as economist Dan Mitchell explains, it was the 10th wealthiest nation in the world when Perón took over. It was often viewed as a European nation that happened to be in Latin America.

Consider these figures from the Cato Institute: “Milei inherited a country suffering from more than 200% inflation in 2023, 40% poverty, a fiscal and quasi-fiscal deficit of 15% of GDP, a huge and growing public debt, a bankrupt central bank, and a shrinking economy.” So let’s look at how Milei has been doing and compare it to the GOP administration.

Milei, per Cato, slashed the number of government agencies in half, fired 37,000 public employees, and implemented 672 regulatory reforms. In America, Elon Musk did walk around a stage with a chainsaw, but his DOGE (Department of Government Efficiency) only enacted 5% of its promised savings. Whereas Milei has focused more on well-thought-out, actual cuts and reforms, the MAGA government focused mainly on public relations. DOGE was a nice idea foolishly executed.

Milei actually has reined in the size of Argentina’s government. Under Trump, “The U.S. government’s gross national debt has climbed past $37 trillion, a record-breaking milestone that underscores the rapid growth of America’s fiscal obligations and the mounting cost pressures on taxpayers,” according to a report in Newsweek.

The biggest difference between these two movements involves international trade. As a true free-market supporter, Milei understands that heightened trade brings prosperity and tariffs are taxes paid by a nation’s consumers. “The [Argentinian] government has reduced or eliminated various trade regulations, such as import licenses for appliances and clothing, ‘Buy Argentina’ mandates and nationalist shelf-stocking requirements, commercial airline restrictions and strict limits on imports intended for personal use,” per Cato’s Scott Lincicome.

Milei is opening Argentina’s economy, whereas Trump is closing ours and centering power in his pen, as he dispenses restrictions and favors. Milei is making his economy predictable, while Trump is basing ours on his whims. As our president meddles deeply into the private economy, our free markets are morphing into “state capitalism, a hybrid between socialism and capitalism in which the state guides the decisions of nominally private enterprises,” The Wall Street Journal‘s Greg Ip explained. He sees Trump increasingly echoing China’s approach.

Regarding housing, another Journal piece noted that Milei eliminated the country’s strict rent controls, and as a result, “Buenos Aires rental supplies [are] increasing by over 170 percent” and the city is seeing “a 40% decline in the real price of rental properties when adjusted for inflation.” Here, progressives are the biggest fans of these destructive housing policies, and Trump has wisely cut back on rent subsidies, but hasn’t tackled this (mostly local) issue. Trump, however, seems to oppose efforts to reduce zoning regulations that limit supply and drive up prices.

On an unrelated note, Milei isn’t smitten by overseas authoritarians, unlike our president. Overall, Milei is using his power to loosen the government’s grip, whereas Trump—although he occasionally reduces regulations—is centralizing government power. The two men have bad hair and unpredictable temperaments, but beyond that the similarities dissipate quickly.

This column was first published in The Orange County Register.

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