DG: Milei receives the worst inheritance of all, it is true. Now, based on Milton Friedman’s model, he sent a hand-picked devaluation shock, he raised the rates a lot, generating a lot of inflation at the beginning, and created a recession so that inflation fell as strongly as possible, using as anti inflation anchor at the nominal exchange rate. However, Friedman said that this disinflation process was useful to lower inflation from 20% to 3% or 4% annually. We are in the presence of a Government that has made construction fall more than one 30% year-on-yearto the industry more than 20% year-on-year, to mass consumption between 7% and 8% year-on-yearfinancial intermediation 12% annually. If sev takes the statistical rebound out of the field in the first semester, closed with GDP falling to -7.5%. This shows that from the point of view of macroeconomic, fiscal and monetary programming, without a doubt something better could have been done. All this explanation without mentioning the increase in poverty in Argentina, which In six months the equivalent of doubling the population of Uruguay increased.
Q.: Whoever hears you talk about the President could never guess that you worked together and maintained a friendly relationship. What led you to distance yourself?
DG: When you see my current analyzes and compare them with those I did in 2012-2014, they have really evolved as a result of theoretical-intellectual progress that reflects that during ten years I studied and learned much more than the previous twenty. On the other hand, when I listen to Milei always give the same monetary classes, he repeats exactly the same thing as when he was teaching assistant in “Money, Credits and Banks” in the Faculty of Economic Sciences of the UBA. He did it ad honorem in 2005. There is no intellectual progress on your part. He didn’t study or internalize anything at all. That’s why it makes copy paste, and increasingly worse, of Netflix movies and series.
Q.: That is, Milei was an ad honorem assistant, so he knows the conditions in which the teaching staff works and the prestige that comes from working at a national university. However, he disapproves of the increase in funding.
DG: There is nothing that the middle class values that the State gives them, except the national public university. But it is not only valued by the citizen, also by companies. The graduate of a national university is as well or better paid than the university degree of the private ones. So, if public spending is 35% of GDP, are you really going to start cutting universities, which are the 1% of that total, and vetoing a 0.14% of that 1%? That’s also going against the market.. What Milei does in this sense is inconsistency, it is wrong in terms ethical.
Q: What was the first disagreement that deteriorated the relationship?
DG: Our first big fight inside was when, very angry, I told him “You stopped teaching a while ago, because you want to form an army of ignorant young people to manage them the way you want and be useful for your political career. “That is very serious.” It is very interesting that Milei talks about the decline of education, but his hard core of voters, who obey without thinking because they have no training or critical thinking, They are the worst trained in Argentina, that is, the youngest. Furthermore, all the people around Milei are very little formedvery right-wing populist conservativewhich parasitizes ethics. That is why they go against national universities, affecting human capital, when they have a Ministry of Human Capital. It is inconsistency elevated to its maximum expression.
“Milei does the work the system needs to expand in the future”
Q.: During the week, Milei said: “lefties, who are based on envy, hatred and resentment, are going to inflate their balls with the Gini Coefficient, inequality.” Does a liberal not believe in inequality?
DG: For the true liberal, the left-handed person is not our enemyis who we most want our ideas to reach. If you tell someone resentful, envious, inferior, you are the donkey. Now the yardstick of what is good and what is just can never pass through equality. Equality does not exist. I teach the same class at the same time and in the same place to thirty different people and each one incorporates it in a different way. It is impossible for there to be equality.
Q: But if it weren’t for the public university, you wouldn’t even have the initial possibility of taking those classes.
DG: When I hear someone say “I am what I am thanks to the UBA”, I think “how much self-contempt”. One is what one is because of one’s effort, ability, interest, how I interact with others and the material world.. That is part of the aberrant construction that says Cristina Kirchnerthat the collective is above all. However, the right-wing conservative, like Milei, the opposite of a left-hander, promises to return to the past, to Alberdi’s Argentina. But Argentina was neither a power nor a panacea in the 19th century.. Therefore, between promising a different and better future and returning to a past that was better, right-wing conservatism can win but for a short time, only to lose again against the left.
Q.: Where was the idea that Milei entered the State to break it from within? Is there such a strategy?
DG: Milei is lying to people when she says that. If someone comes from outside and the system lets them reach their peak in just three years, You have to be very naive or very ignorant to believe that this person is destroying the systemon the contrary. Today Milei does the work that the system needs to expand in the futureThat is to say: someone comes, lowers public spending, things don’t end well, it is sold that the State is important and the free market is useless, and a more statist Government returns.
“Milei and Caputo lied when they said they were going to dollarize”
Q: Was the dollarization process interrupted? If so, is it because it is not functional to the system or due to economic management errors?
DG: Milei and Caputo They lied when they said they were going to dollarizebecause all the variables showed that they could not do it. To dollarize you need dollars and no one wanted to give them a dollar. So, they had to go for something unimaginable: the person who talked about weight being excrementwith a correct diagnosis, causes the private sector to dissave to finance the public sector. Caputo said that we are going to have to dissave to pay taxes. Nothing less liberal than that. This means lower consumption, lower investment, lower production and less work. All because you gave it to the State to pay current expenses.
Q: Why do market indicators denote a different panorama than the one you are describing? Is there a dissociation between the market and the real economy?
DG: If the bonds of a sovereign State go up, but on the horizon you register that the US$47 billion from the IMF you have to amortize them in eight years, that 85% of the US$67 billion of New York law bondholders they have to be amortized in the next tenand that the expirations of debt law Argentina are three times the hard dollar maturities that I mentioned previously, you realize the asymmetry between the euphoria of the extreme short term, versus the pessimism of the real economy in the medium and long term.
Q: How is this inconsistency resolved?
DG: It is always resolved with the financial converging to the real, because the real thing takes time, but the financial thing is corrected via prices in two minutes.
P.: So, you don’t see the possibility of getting out of the trap close.
DG: Milei does not open the trap because he is taking care of himself. It violates freedom and private property. It makes the level of activity and investment skyrocket like never before. Poverty increases like never before in history. All his life he said that with the stocks there are exchange rate problems, production problems, inflation and poverty. Even so, he leaves the trap. Because? Because he takes care of his economic and political powerhis seat in Rivadavia’s chair. He knows that if he opens the trap, the exchange rate jumpsinflation accelerates and the lie ends: sell that inflation is going down, although little and slowly, and that pensions and salaries are increasing because they rise in nominal dollars. Therefore, you are afraid to face the costs in person immediately. What are they? The risk of being ejected from where you are sitting for fear of being left without an inflation and exchange rate report. Furthermore, for you to do well, opening the trap is a necessary condition, but not a sufficient one. From the opening, another match begins, which is that of the supply and demand of dollars and pesos. Economists who defend the strong peso and weak dollar model, They say that with a fixed exchange rate the reserves will be the result of the net entry and exit of capital. However, when you look at the international context, Milei’s investment is the lowest of the last five presidents, hovering around 13% or 14% of GDP and continues to fall systematically. In other words, there are no Argentine investments. Neither is foreign direct investment. And the international reports They also do not estimate a large harvest for 2025.
Debt: “Argentina has never had a problem like the one it will have between 2025 and 2031”
Q.: If you were a businessman with the intention of investing in Argentina, would you take advantage of the RIGI, which provides benefits to the private sector, but also seeks to shield them from an inauspicious context in the country?
DG: I see a country that It is aimed at having 60% or 70% poor. Politics will then have to serve these poor people, increasing public spending, because they vote. Plus, you have the debt problem I described above. To increase public spending and pay the debt you are going to have to raise taxes. In the long-term movie, that same Congress that voted for a thirty-year RIGI is going to change the rules of the game, because the country will be poorer and will require greater public spending. I am one of those who would sit outside and wait to see how the other person does for five or ten years. A particular sector, such as lithium or oil, may make some investment. But that it will not save us macroeconomically. Argentina defaulted eight times, but It has never had a debt problem like the one it will have from 2025 to 2031with the most bankrupt Central Bank in all of history.
Q: What does it mean then that Milei gets it according to terms?
DG: Don’t know. In 2020 I told him that with the economic problem that Argentina has and its institutional framework, You cannot make a macroeconomic program aligned with the ethics of freedom with positive results, at least in a permanent film. Therefore, it will fail and blame liberalism. I do not want to mortgage the ideas that I defend. Liberalism was banned after Menem for 20 years. After this, there are chances that the ban will be longer and heavier. I told him personally and I have been repeating it: The damage it does to the philosophy of liberalism in the long term is exponential.
Source: Ambito
