The Trump administration got this one right.
Sometimes even the Trump administration acts like a normal American government. The bailout of Argentina is one of those times.
The Trump administration is proposing to lend Argentina up to $20 billion to support its currency on financial markets. The plan is unpopular with Republicans and Democrats alike. Yet at a time when much of U.S. policy seems driven by a perverse hostility to the outside world, assistance to Argentina is a welcome exception that deserves support across the political spectrum.
Yes, the administration’s proposal completely contradicts Donald Trump’s rhetoric of “America First,” but this rhetoric is wrong and self-harming. Yes, the bailout is motivated by Trump’s capricious favoritism. But in this case, Trump has at least chosen an appropriate beneficiary.
Yes, at least one hedge-fund friend of Treasury Secretary Scott Bessent’s stands to benefit. But there are hedge funds on every side of every financial bet, and saying no to the deal will also enrich somebody.
The United States has a big interest in advancing free-market and democratic institutions in the Western hemisphere. We are now in a phase, however, where authoritarian nationalism is gaining ground, from Mexico on southward. At a time when much of Latin America is heading the wrong way, Argentina is progressing toward a more open economy.
Javier Milei came to power in December 2023 promising radical change. Decades of corrupt and authoritarian government interventions had twisted the Argentine economy into a dysfunctional mess. In the year that Milei was elected president, inflation surpassed 211 percent. Impoverished people lived in the streets outside empty dwellings that few could afford to rent. A libertarian economist with little political experience, Milei pledged to let loose a free-market transformation that would put Argentina on the path to monetary stability and sustainable growth.
Milei mostly kept his promise. But along the way, he took a gamble with his management of the exchange rate of Argentina’s troubled currency—not an absurd gamble, but a gamble all the same. That gamble has gone wrong, and this failure now jeopardizes the rest of Milei’s economic agenda. If Milei fails, his failure will discredit market-oriented reformers in every economically troubled country in the Americas and beyond. If Milei succeeds, he will revive economic and political liberalism in a hemisphere where those systems are now in retreat.
Before Milei’s presidency, Argentine real-estate markets were strangled by controls.
