As We Go Marching, Part II

When people want the impossible, only liars can satisfy ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ March 7, 2024  |  [Sign Up]( As We Go Marching, Part II “The fact that so many successful politicians are such shameless liars is not only a reflection on them, it is also a reflection on us. When the people want the impossible, only liars can satisfy.” ― Thomas Sowell [Special Reminder: In case you missed our late-day announcement yesterday, [The Real October Surprise]( The Essential Investor has merged with legacy contributors to Agora Financial. The new, larger, more inclusive project is called The Grey Swan Investment Fraternity. If you’re interested in the scope and benefits of our new endeavor, please see what prompted us to merge [here](. If you’ve been a member of The Essential Investor, please keep an eye out for your new benefits.] Dear Reader, March 7, 2024 – At the turn of the last century, the French used the phrase “riche comme un Argentin” to describe people with more money than was good for them. From 1860 until the 1930s, Argentine per capita GDP was higher than that of Austria, Italy, Japan, and of its former colonial master, Spain. Then… well, the century’s “golden decades” gave way to 80 years that were far less prosperous. Here’s how Javier Milei, Argentina’s new president, opened his address at this year’s economic forum: “We're here to tell you that collectivist experiments are never the solution to the problems that afflict the citizens of the world. Rather, they are the root cause. Do believe me: no one is in a better place than us, Argentines, to testify to these two points.” Yesterday, we looked at John T. Flynn’s account of what happened to Italy and the Italian people during the 1930s when they fell, entranced by Mussolini, into fascist rule. Today, we check in on Milei’s attempts to restore prosperity to Argentina after decades of “on-again, off-again” military juntas. “Thirty five years after we adopted the model of freedom, back in 1860,” Milei told a group of tech billionaires, Hollywood a-listers, and political activists assembled in Davos, “Argentina became a leading world power. And when we embraced collectivism over the course of the last 100 years, we saw how our citizens started to become systematically impoverished, and we dropped to spot number 140 globally.” While most countries in Latin America were growing steadily, Milei was running for president of the worst performing economy in the whole region. The value of its currency had been plummeting for decades. By January of 2024, the inflation rate had climbed to 211%. One out of every four Argentinians was living in poverty. In the midst of an economic history lesson from Argentina, Milei asserts: “If the state punishes capitalists when they're successful and gets in the way of the discovery process, they will destroy their incentives, and the consequence is that they will produce less. “The pie will be smaller, and this will harm society as a whole.” “Why do academics, international organizations, economic theorists and politicians,” Milei asked as an open-ended question, “demonize an economic system that has not only lifted 90% of the world's population out of extreme poverty but has continued to do this faster and faster?” On September 14, 2023, Tucker Carlson interviewed then-candidate for president Milei. By last count, the interview has been viewed 428 million times, nearly 200 million more times than Carlson’s interview with Trump. “Never let yourselves be seduced by the siren song of social justice,” says Milei in the interview as a warning to American viewers. "You have to be prepared and fight the culture wars every day… because [socialists] have no problem getting inside the state and applying Gramsci's techniques: seducing artists, culture, the media and getting into educational content.” Tonight, President Biden will give his State of the Union Address. Now that Nikki Hailey has paused her campaign, the televised cage-match between two geriatric populist candidates will begin in earnest. We assume Biden will try to convince voters that his economic policies are working. During a news segment last night on NBC, voters expressing their support for Biden said the president’s only impediment is a PR problem. Heh. We could preempt Sleepy Joe’s speech with real inflation rates – the cost of groceries or fast food, housing expenses, the cost to upkeep a car, health insurance, etc. – but there are going to be more than a few pundits torturing his words aggressively in the days ahead. Instead, we thought we’d check in with Joel Bowman, our man on the scene in Buenos Aires. Mr. Bowman writes from the front lines surrounded by the detritus of Argentina’s decades long infatuation with populist collectivism. Today, he gives a look at the state of the union… in Argentina. – Enjoy, Addison CONTINUED BELOW... >>ADVERTISEMENT<< James Altucher: THIS is my top AI investment pick I’ve been called a “genius investor” by my fans… And an “eccentric millionaire” by some others. I think it’s because I make big predictions that [tend to come true.]( Today, I’m making my boldest prediction ever.  Revealing the AI stocks I believe… Could turn as little as $10,000… Into $1 MILLION over the next few years. To show you I’m serious about helping you get in on this opportunity, I’m giving away one of my top 5 AI 2.0 stock picks – free. [See my top 5 pick here now.]( CONTINUED... Apocalypse Then Joel Bowman, Notes From the End of the World “The sun had shifted round, and the myriad windows of the Ministry of Truth, with the light no longer shining on them, looked grim as the loopholes of a fortress.” ~ Nineteen Eighty-Four, by George Orwell Well, here we are... almost three months into the “Greatest Political Experiment of Our Time.” Curious readers want to know: How’s it looking down here in sunny “An-Capistan?” (Milei is an avowed anarcho-capitalist). Surely the economy has imploded by now... the nation’s Congreso blown to smithereens... the streets surrendered to gangs of Mad Max-styled looters, who casually while away the summer days, raping and pillaging their way through the charred remains of the scorched countryside… Such were the anguished presentiments of the chattering class last November, when political outsider Javier Milei won the nation’s presidency… by the widest margin in any election since Argentina was returned to democracy more than 40 years ago. Freed from the ravages of Peronism, which had choked off economic growth for nigh on three generations, Chicken Littles in the Progressive Press Corps. dutifully assumed the worst was ahead. A Boot in the Face Never mind that a victory for the Peronist candidate, Milei’s rival, would have all but guaranteed just that. The “ultra-right libertarian,” as directionally challenged pundits labeled Milei, was going to consolidate government power, declare himself El Dictador and stomp his jackboot firmly on the face of humanity... forever. Here, a smattering of headlines, for your recollection... ‘Extremely worrying’: Argentinian researchers reel after election of anti-science president ~ moaned Nature Argentina’s election result is the worst of all possible outcomes ~ wailed The Economist Javier Milei Is the World’s Latest Wannabe Fascist ~ lamented Foreign Policy Parsing the news at the time, one recalled the dystopian description at the end of Orwell’s famous novel, 1984: “There will be no curiosity, no enjoyment of the process of life. All competing pleasures will be destroyed. But always— do not forget this, Winston— always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless.” Grim stuff, to be sure. And yet, fast-forward ~90 days and... where are we? Reading from a different book entirely, it would seem... The Chainsaw, So Far… After taking his trademark chainsaw to the administrative state – shuttering ~50% of the federal government’s parasitic ministries and sacking tens of thousands of “gnocchis” (useless, bottom-feeding bureaucrats) – Sr. Milei’s administration has so far… - Delivered the first monthly budget surplus (of $589 million) in twelve years… - Slowed rampant inflation... from 25.1% in December...to 20.6% in January... to an estimated ~14.5% in February (according to estimates from private consultancy firm Equilibra)... - Announced a bill to criminalize seigniorage – printing money to fund government boondoggles and vote-buying programs... and to jail crooked politicians found doing so to fund the Treasury for political purposes... - Eliminated at least 9 separate fiduciary funds (slush funds for corrupt politicians)... - Deregulated health insurance... - Confirmed he will indeed dollarize the economy, as proposed during the presidential campaign (the central bank has accumulated US$9 billion of reserves under Milei’s watch thus far)... International capital markets have responded to Milei’s fiscal and monetary reforms down here on the Pampas with a massive vote of confidence, pushing Argentine stocks higher and sending the risk index (as measured by JP Morgan) to its lowest levels in 30-months. Year-to-date, Argentine bonds have rallied by as much as 30%. Meanwhile, the man they call “El Leon” (The Lion) shows no signs of fatigue. Along with sweeping economic reforms, the “anti-woke” presidente has let the motosierra loose on the vast and thorny bramble of cultural Marxism that strangles the nation’s institutions, from state-sponsored media to the fetid swamp of collectivist ideology running through the academies. Bad News In his historic address before Congress last Friday night, Milei announced the imminent closure of TELAM, the government’s long-standing Propaganda Ministry, which was nationalized by the military dictator, Juan Carlos Onganía, back in 1968 and which Milei identified as one of the myriad government agencies bleeding money and essentially serving “no purpose.” Yesterday morning, jilted propagandists arrived at “work” to find the TELAM offices fenced off and the doors locked. The agency’s website was also down, with the “under construction” sign doing more work than the government-paid staff had done in living memory. Last year alone, the state-funded agency suffered losses of 20 billion pesos ($23 million), while hemorrhaging readership share to private competition. Those who called the closure an “attack on freedom of the press,” had trouble explaining why private news outlets were left untouched. Hmm, here’s a clue: The leading news outlet in the country, Infobae, today has 26 million readers and 340 employees. La Nacion, the second largest, has 20 million readers and 300 employees. Third comes Todo Noticias, with 13 million readers and 303 employees. Before Team Milei took TELAM out behind the shed and filled its cranium with lead, the pitiable beast had a paltry 200 thousand readers... and 770 employees. More than twice the payroll as Infobae, in other words…with barely 1/130th of the readership! Why, exactly, should Argentine taxpayers be forced to subsidize such abject failure, especially, as Sr. Milei unambiguously declared in his inauguration speech those few short months ago, “No hay plata” (There is no money)? If El Señor’s vulturine opponents were hoping to snare a tasty morsel of weakness, of hesitation, of doubt during last Friday’s speech... they went home with empty stomachs. “We are on two paths...” Milei warned his opponents, in no uncertain terms. “If you choose confrontation, you will find a different animal than the one you have seen so far.” The president then reached out to allies and enemies alike, offering cooperation on a 10-point Social Contract – the so-called “Pacto de Mayo” – and warning them that the future is coming, with or without their help.  “We do not live for politics,” he concluded. “We thirst for change.” – Joel Bowman So it goes, Addison Wiggin, The Wiggin Sessions P.S. An exchange in our inbox: “Everyone-especially YOU!-thinks they’re an expert on politics! If YOU think you’re smarter than all the rest of US, then YOU run for public office! Show US how to make better decisions despite the millions of Swamp snakes attacking everything you do! YOU ASSUME THE SWAMP CRITTERS WILL FOLLOW ORDERS! They don’t! At least El Donaldo is a fighter! WHAT THE HELL ARE YOU WAITING FOR?! We eagerly await your announcement! (The ALL-CAPS are Steve’s.) “Why would I run for office?” we began the response. “That's funny.” Frankly, I would be very happy if El Donaldo drained the swamp. I'm a low-tax, limited-government, peace advocate. None of those things buy votes. And looking at the numbers, Trumpista did the exact opposite of draining the swamp when he was in office. Debt exploded. The number of federal employees increased. The pandemic lockdowns were a crime against the middle class. It's going to take historians a long time to sift through the data and distinguish reality from the heated tenor of today's public square. Most historians still haven't figured out that Reagan’s policies accomplished the opposite of the rhetoric in his speeches, too. If anything is true, right now, you can't mention Trump's name without pissing off just about everyone... on both sides. That’s populist politics for you. P.P.S. “The cold hard fact Mr. W.,” wrote a regular correspondent Basil G., “is what is still homegrown. ‘The greatest purveyor of violence on the planet is my very own government’ said Martin Luther King Junior. It truly gives us a (very) false sense of prosperity.” “Thanks for all you do.” Thank you, sir. We’ll get back to the markets tomorrow, promise. 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