O
n reflection, Joseph Schumpeter is all well and good – but only for others. Javier Milei, Argentina's libertarian president, an ardent advocate of the free market and the "creative destruction" championed by the early 20th-century Austrian economist, has just been saved at the last minute by an intervention from Donald Trump.
For several days, Argentina appeared to be returning to its old troubles. The peso was plummeting, the stock market as well, and the country's dollar reserves were running dry. Investors became increasingly worried after Milei's political camp lost local elections in Buenos Aires, amid a corruption scandal – a poor omen for the midterm legislative elections scheduled for October 26. From their perspective, the risk was that the end of the harsh economic medicine Javier Milei had forced on Argentina since taking office in late 2023 was in sight.
On Monday, September 22, the United States put an end to the panic. Scott Bessent, the US Treasury secretary, stepped in, writing on social media that "Argentina is a systemically important US ally (...) and the US Treasury stands ready to do what is needed within its mandate to support Argentina." He said he was prepared to provide dollar liquidity or to buy Argentine debt. The details were to be finalized on Tuesday, September 23, during a meeting between the Argentine president and Trump in New York.
