Cloaked in a flimsy veil of libertarianism, neoliberalism is not just alive and well in Argentina; it is more virulent and rapacious than ever.
Freedom is on the advance in Javier Milei’s Argentina, as perfectly illustrated in the video below of state security forces beating up pensioners in the street and blasting them with pepper spray and tear gas. Every Wednesday for the past two weeks, thousands of pensioners have congregated outside Congress to protest the rapid loss of purchasing power of their pensions, as the Milei government’s economic shock program continues to, quite literally, bite.
“They are killing us,” one elderly lady cries. “Why? We are just pensioners. One of these brutes just punched an old lady.” In the same video, another grandmotherly protester is asked if she is afraid of the violence, to which she responds:
Afraid? If you are afraid, it paralyses you (NC: otherwise put, “Fear is the mindkiller”). You have to fight for your rights. Lots of blood has flowed for those rights.
“They take more and more money from us instead of taking it from those who have more. The rich are forgiven taxes and evaders are called heroes,” Victor Amarilla, a 72 year old retired bus driver who has to work part time as a doorman to make ends meet, told El País. “We mobilized last Wednesday, we are here today and we will return next Wednesday. We are not going to leave the streets because we come to fight to be better and at the same time we fight for our children and our grandchildren.”
The spark for this latest wave of anti-government protests was Milei’s decision on September 2 to veto an 8.1% increase in public pensions that had already been approved by a large majority in the legislature. The reform sought to partially alleviate the effects of the crushing fiscal adjustment imposed by the Milei government’s hardcore austerity measures as well as the country’s triple digit inflation. According to the Argentine Institute of Fiscal Analysis (Iaraf), roughly one-third of the entire fiscal adjustment is being borne by Argentina’s pensioners.
“The payment of pensions was the budget item most affected by the very heavy cuts in public spending by the government of Javier Milei: almost one out of every three pesos that the public administration stopped spending was the result of paying retirees less,” says Gabriel Puricelli, an analyst at the Public Policy Laboratory. “Milei decides to veto, at the cost of continuing to immediately harm retirees, most of whom are below the poverty line.”
Recent surveys place the poverty rate in Argentina at around 50%-57%. Many of those affected are retirees. From the Spanish online newspaper El Diario:
In Argentina, the majority of retirees, more than five million of them (out of a total of seven million national pensioners), receive the minimum pension of 234,000 pesos (around 221 euros) plus a bonus of 70,000 pesos (66 euros) to bring it closer in line with the basic food basket. According to the latest report from the Center for Argentine Political Economy (CEPA), by keeping the value of the bonus frozen since March, minimum pensions suffered a cut equivalent to 52,000 pesos (49 euros).
With the hike vetoed by Milei’s supporters in Congress, the minimum payment would have risen to 316,000 pesos, which in and of itself was already insufficient… So far this year, official inflation has clocked in at 87%, according to data from the National Institute of Statistics and Census (Indec).
Lower Inflation, But at What Price?
That is certainly an improvement on the situation Milei inherited nine months ago, for which he and his government deserve some credit. Monthly inflation was around 4% in August, compared to 25% in December 2023. Annual inflation was “down” to 236.7%, following four consecutive months of disinflation. But prices are still rising at the fastest rate in the Western hemisphere, including Venezuela, and the collective cost of trying to tame inflation is becoming unbearable for many.
But Milei shows little sign of budging…
Continue reading on Naked Capitalism
Nick Corbishley 