Thread by @shaunjlawson

THREAD: Argentina. Why has this happened - and what's going to happen now?

The first thing to say about why this has happened is pretty simple. The options facing a desperate, frantic Argentinian public were APPALLING. All of them.

In August, at the primaries, the mostly centre-right Juntos por Cambio (which governed, very badly, through Mauricio Macri between 2015 and 2019) voters made a dreadful, in my view indefensible blunder.

They selected Patricia Bullrich over Horacio Rodriguez Larreta.

Bullrich is right wing. She's also maybe the most completely talentless politician I have EVER seen in this part of the world.

She's charmless, utterly unlikeable, and has made an absolutely preposterous political journey from militant leftist to now, the far right,

She also says incredibly stupid things alarmingly often.

For example: in response to rumours that the Central Bank's reserves were falling dangerously low, Bullrich informed an interviewer that on Day 1 of her presidency, she'd take cameras with her into the Central Bank.

Those cameras would then show the public how many reserves there actually were. Except that, er...

THE RESERVES ARE DIGITALISED AND DEPOSITED IN BANKS ALL OVER THE WORLD, YOU UNBELIEVABLE CRETIN.

And this was the supposedly 'sane' option put up by the centre-right!

By contrast, Larreta, Head of Government of the Buenos Aires metropolitan area, has a reputation for both administrative competence and reaching out to both left and right.

In other words, he's almost unheard of in Argentinian politics: he's actually sensible.

But Bullrich won the primary pretty much entirely because of Macri's backing.

The same Macri who has veered way, way to the right since winning as a moderate in 2015. And who clearly didn't like the idea of Larreta taking the party in a moderate direction.

Plan A for Macri was the laughable Bullrich as President, with him as the real power behind the throne: much as Cristina Fernandez has been while Alberto Fernandez (no relation) has continually embarrassed himself and his nation during his horrendously inept presidency.

When Bullrich was decisively rejected at the general election last month, Plan B became: do the same for Milei.

Milei's result in October was so disappointing, he was now desperate for Bullrich's voters. Macri could bring them across - so they did a deal. In private.

Which left many of his colleagues in Juntos por Cambio utterly apoplectic - and split the group asunder, probably forever.

Larreta rejected it immediately. I think he's the main man to watch as far as the opposition goes over the next 4 years.

If Larreta had been the JxC candidate, I don't think there's a chance in hell that Sergio Massa would've reached yesterday's run-off.

As it was, in October, Massa prospered by picking up large numbers of voters for whom he was the only non-very right wing or fascist option.

But throughout the year, he's been as up against it as any government candidate can ever be.

Because Massa is the Economy Minister - at a time of 140% inflation and between 40% and 50% of the public being in poverty.

Think for a moment. Think what double digit inflation did in the UK. How millions were terribly affected.

Well - now picture something FOURTEEN TIMES AS BAD... and which is getting worse all the time.

In Argentina, it's become customary for workers to spend all their salary at the start of the month. And to beat inflation by using credit cards at the start of the month too.

Why? Because they know their money will be worth quite a lot less by the end of each month!

They've been in a never-ending cycle of soaring inflation for years now... as well as a national currency, the peso, melting down in quite astonishing fashion.

I moved to Uruguay in 2012. Back then, 0.2 Argentinian pesos equalled 1 Uruguayan peso.

The Argentinian currency was five times as strong as its Uruguayan counterpart.

Now, there are 8.94 Argentinian pesos to 1 Uruguayan peso. The Uruguayan peso is almost NINE TIMES stronger - and over that time, that represents a devaluation of FORTY-FIVE TIMES.

And that's not all. Not a bit of it.

Desperate to try and protect Argentinian workers, its economy and especially tourism, Massa brought in a whole host of alternative exchange rates: all of which are much, much higher than the official dollar rate.

I'm unaware of any other country which has ever done such a thing officially. Even the Central Bank itself started trading in one of the other rates: the 'blue dollar'.

The tourist (credit card) rate has often been even higher: a dream for anyone visiting Argentina.

Uruguayans are used to their country being infernally expensive, by far the most expensive in this continent.

Recently, they've been skipping across the River Plate to Buenos Aires and living like kings on next to nothing. But Argentinians have been getting poorer. And poorer.

Utterly unsustainably so. This is certainly Argentina's worst economic crisis since 2001/2: but even that was a terrifyingly deep, relatively short(ish) shock.

This crisis, by contrast, has been getting deeper and deeper for at least the last four years.

The country is an absolute basket case.

All the post-2001 Kirchner governments did was just constantly kick the can further down the road. When Macri came in, and started making the inevitable cuts, Cristina's economy was exposed as having been, essentially, completely fake.

Which had included totally fake inflation rates. And also included her personally stealing 1% of the country's GDP.

But the cuts meant that suddenly, people couldn't afford to heat. Or eat. And hence, Macri's defeat in 2019: which horrified the international markets.

Specifically, his shock hammering at the primary in August 2019 was what started the runaway train devaluation against the dollar which has literally never stopped since.

And on their return to power, the Kirchners just kept doing the same old thing.

Spending money the country does not have. With the Central Bank printing absurd amounts of money to keep paying for it: meaning runaway, impossible inflation.

Imagine someone who, in desperate circumstances, takes out a loan. It bails them out... but to pay it back, they need to take out another loan. Then another loan. Then another loan and ANOTHER loan.

Then imagine it's not an individual - but an entire nation state. Which has to keep printing money like it's going out of fashion to keep roofs over the people's heads and food in their bellies... and thus keeps falling deeper and deeper into the pit.

All Massa offered was more of the same. But it's almost impossible to imagine any country needing real change more than Argentina does.

The left continually failed. The right continually failed. Democracy in Argentina has totally failed.

Even Peronism itself is neither left nor right: it's corporatist, horrifically corrupt and based more than anything on unthinking emotion and flag-waving nationalism.

But with no Larreta to steer a sensible course, the choice left was, for most Argentinians, a crook v a lunatic.

And they are DESPERATE for help. And for change.

Their beautiful country - which has so many resources, so much which should be going for it - has practically started dying in recent times; remarkable numbers have already left for Uruguay, Chile, Brazil or further afield.

In the end, their desperation won out. All things considered, it's actually pretty amazing that Massa came as close as he did.

Don't be fooled. Close to half the country is scared witless of Milei. Most of whose support wasn't pro-Milei - but anti-Massa, anti-Kirchnerism.

Most Argentinians will wake up today knowing that their country's just taken a monumental leap in the dark.

What happens now? The first thing is the exchange rate will go even more nuts than ever. Milei wants to abolish the peso; the markets will view it as worthless.

I don't even disagree with him in wanting to dollarise. The problem is HOW he proposes to do that.

Essentially, he wants to dollarise - without the country having anything like enough dollar reserves to begin with. There's been zero, nothing, responsible in how he's explained it

I'd have all the respect in the world for a politician who levelled with the Argentinian public about just how painful this will be. More painful than if Greece ever left the euro: which is why none of its leaders have ever proposed it.

But such a politician wouldn't be elected

Such a politician would be smashed out of sight.

In amongst the sheer emotion of Argentinians remains, sadly, a level of unseriousness, even delusion, which is all too apparent as they cheerlead candidates at every election as though they're football or movie stars.

"This time, the latest saviour will magically fix things and make our country great again!"

But no. They won't. Because they CAN'T. No-one can.

Milei's militant supporters all think it's all the fault of the left - and criminal politicians. Wrong. It's WAY more complicated.

Milei's militant supporters cry about 'freedom' (which also dates back to the present government's predictably inept handling of Covid), look at the dollar exchange rate and think:

"If we dollarise, we'll be rich!"

Wrong. The opposite.

At the debate last week, Milei made the disgraceful, laughable claim that after dollarising, the average salary will be 1800 USD a month.

The reality? More like a quarter of that if he's lucky.

All at the same time as Argentina voluntarily removes its ability to make its own economic policy.

The dollar rate is only what it is BECAUSE of hyperinflation. BECAUSE of the Central Bank printing money so ludicrously unsustainably. BECAUSE of the can being kicked down the road

Dollarisation gets rid of inflation and puts the Central Bank out of business... and leaves Argentinians quite monumentally poorer. Which no way are they prepared for - no-one anywhere would be.

So what happens then? Violence on the streets of course.

And how does an extraordinarily unstable man who more than anything, needs the idolisation of his followers at all times, react to that?

And how does his simply evil Vice-President, who all but lauds the fascist dictatorship, react?

It's a fair bet they react by sending the army onto the streets.

But it's an equally fair bet that Milei turns and flees. He isn't equipped in any way to handle even 1% of the fury that'll come his way from a desperate public. He is completely, totally unserious.

But here's the thing. It's awfully likely that he'll be able to do almost nothing of what he's proposed in any case.

In the Senate, the Peronists hold 33 of the 72 seats. Milei's party only holds 7 - and Macri has split Juntos por el Cambio, who hold 24, completely.

In the Chamber of Deputies, the lower house, it's the same story.

The Peronists hold 108 seats. Milei's party only hold 38. Juntos por el Cambio have 93 - but there's no chance of all or most of them voting with Milei.

On which basis, the very best he can hope for is having to compromise hugely vote by vote by vote by vote.

There's no prospect of a stable government here: there would be if JxC had all followed Macri, but they didn't, and were appalled at what he and Bullrich did.

So what happens when Milei discovers that in practice, he can hardly do anything?

And what happens when the 56% of Argentinians who just voted for him realise that too?

He turns incandescent, blames 'la casta' (the caste/elite) and starts making absolute merry hell.

Causing utterly horrific, violent levels of division. Probably including arrests of Peronist figures too.

That's what we're headed for here. Either scenario is absolutely appalling and will almost certainly include bloodshed. Maybe considerable amounts of it.

Aware of the dangers, you might find JxC voting for things they really hate just to avoid civil unrest... but there'll be a line somewhere they won't be able to cross.

Larreta and probably, Maria Eugenia Vidal, will ensure that.

Milei? Milei will go mental the moment he doesn't get his own way.

But whereas the United States' institutions were strong enough to protect the country from a first Trump presidency (but warning: not a second), Argentina's are not.

Parliament will have to instead.

I'm pretty confident it will in the end. The numbers say it's practically bound to.

But it may end up a much closer-run thing than most people can bear.

If Milei is forced out (as Fernando de la Rua was in 2001), the prospect of Victoria Villaruel taking over should terrify everyone.

Then democracy truly WILL be under huge threat: even more so if Trump's back in the White House and Putin has triumphed in Ukraine.

But if democracy survives in Argentina, Milei or Villarruel will be swept away in 2027.

It's impossible for them to implement their agenda - and even merely part of it will result in utter misery for most of the population.

There are, in other words, no winners here.

Only losers. Most of all, the poor, benighted Argentinian people. To whom my heart goes out.