Cristina de Kirchner criticized Javier Milei’s economic plan and called on Peronism to straighten out

The former president Cristina de Kirchner released early on Friday an analysis of the economic program of Javier Milei which he titled: “It’s the bimonetary economy, stupid” in which he exposes the contradictions of the Government. In addition, at the end he warns that Peronism was in disarray and claims: “We must be able to straighten out experiences and order new demands in order to align thought, word and action.“.

Throughout eight pages, the former president criticizes Javier Milei’s economic management, and accuses him of lying during his campaign, as he maintains that he promised to eliminate state intervention, but already in office, he has directly controlled three of the four key prices of the economy.

On the political side, he explains that we must be able to straighten out experiences and order new demands in order to align thought, word and action: “an indispensable trilogy.” When formulating a proposal and strategy that will allow the organization of a political force that once again represents the majority, to move from being the opposition to an alternative government,” adds the document, which, according to the document, seeks to contribute to the Argentine debate.

The clash with reality

Nine months into the government of the first global anarcho-capitalist experience, reality has challenged the extravagant theories, incendiary speeches and marketing phrases that Milei used during his campaign. Contrary to his promise to eliminate state intervention, Milei not only intervenes, but controls three of the four fundamental prices of the economysays the text shared by CFK.

• Price of the dollar: through a 2% monthly crawling-peg policy.
• Price of money: establishing an ultra-negative reference interest rate.
• Price of work: limiting wage agreements.

And he adds that the only price that has been partially liberalized is that of goods and services, although some rates such as electricity, gas and transportation remain subsidized in certain sectors, and the State lacks reliable data on the real costs of these services.

Unsustainable fiscal policy

Cristina argues that Milei has implemented a fiscal adjustment based on the non-payment of debts and the withdrawal of the State from essential functions, which creates a “lethal combo” for the Argentine economy, especially in a context of bimonetary economyThis model has resulted in a brutal decline in economic activity, and the country has become more expensive in dollars than many developed countries, he analyzes.

“The government is defending a monthly inflation rate of 3% to 4% as a success, when in reality, in the context of a deep economic recession, this represents a social tragedy,” he says.

Social and economic impacts

CFK maintains that the crisis has generated devastating effects:

• Unemployment on the rise and more than one million children suffering from hunger, according to a UNICEF report.
• The growth of drug trafficking in poor neighborhoods in the face of the State’s withdrawal.
• The decline in the standard of living of the middle class.

“Economic adjustment has been accompanied by repression, as seen with the beatings of pensioners during the demonstrations. These violent measures expose an ideology that reduces citizens to mere variables of adjustment,” he says.

Contradictions in the Liberal discourse and failed theories

For the former president, Milei’s government has left aside its anti-interventionist discourse and has abandoned the monetarist theory that blamed exclusively the monetary emission for inflation. Officials such as the Minister of Economy, Luis Caputo, have admitted that devaluing would increase inflation, revealing that in Argentina, Inflation is tied to the value of the dollar.

International financial agencies, as well as local economists, have begun to express concern about Argentina’s ability to pay its sovereign debt. The country does not have enough dollars to pay its debt, and the markets are aware of this.

Problem of the bimonetary economy

In a document published in February 2024, it was pointed out that the real structural problem of the Argentine economy is not the fiscal deficit, but the shortage of dollars. This problem, Cristina analyses, is aggravated by indebtedness in foreign currency, which reinforces the external constraint of a bimonetary economy like Argentina’s.

“Dollarization, initially proposed by Milei as a solution, could not be carried out due to the lack of dollars in the country, which dismantled one of his stabilization promises.

He says that since 1972, Argentina has experienced 54 currency runsthe most notable being during the Alfonsin era, the Menem era, and the Alliance government. Currency runs were temporarily reduced during the presidency of Néstor Kirchner.

Even the “market-friendly” Macri government had to reinstate exchange controls (“cepo”) in 2019, after a massive outflow of speculative capital. This control is still in force, with a cap of 200 dollars per month for the purchase of foreign currency, which shows that the “cepo” remains a necessary measure in the Argentine economy.

Review and criticism of Peronism

Peronism went awry when it accepted the policies of the International Monetary Fund (IMF) and the multi-million dollar loan granted irregularly to the Macri government. “In addition, Peronism allowed a deterioration in the living conditions of workers, with registered employees who do not reach the total basic basket (CBT),” warns the former president.

Finally, he points out that Peronism also failed to recover the universality of its social policies and to improve the efficiency of the State. “The profound transformations in the labour market, where registered work in the private sector is a minority, were not addressed.”

It is therefore crucial that “the political and social forces that believe in the Nation address the problem of the bimonetary economy. This economy, in which the peso is only used for daily transactions and the dollar is the reserve value, requires a more realistic and rigorous approach, which goes beyond failed economic theories and political slogans. It’s the bimonetary economy, stupid“, he concludes.