The Chainsaw Messiah Stumbles

Upon taking office in December 2023, Argentina’s new President Javier Milei was hailed by many as a savior, a chainsaw-wielding libertarian ready to slash the bloated state and unleash economic freedom. Milei promised a radically liberal agenda that would transform the country overnight, vowing to dismantle decades of Peronist interventionism and restore prosperity through shock therapy. Within months, he implemented over 300 individual measures aimed at comprehensive deregulation, privatization, and drastic cuts in government spending.

Subsidies for energy, transport, and basic services were abruptly eliminated, thousands of public sector jobs were axed—including entire ministries like those for women and gender equality—and social benefits were massively reduced. Milei’s mantra was clear: withdraw the state, unleash the market, and watch Argentina soar.

Indeed, initial successes garnered international acclaim. The inflation rate plummeted from a staggering 300 percent in April 2024 to around 34 percent by the summer of 2025, thanks to aggressive fiscal austerity. The budget was balanced for the first time in years, and international donors like the IMF extended loans totaling over $40 billion, praising Milei’s bold reforms. Yet, these victories masked profound incompetence in execution, revealing a leader more adept at rhetoric than governance.

For instance, Milei’s hasty deregulation of the energy sector led to blackouts in major cities like Buenos Aires during the 2024 winter, as privatized utilities struggled without transitional support, leaving hospitals and schools without power for days. This not only eroded public trust but also highlighted his failure to anticipate basic infrastructure needs.

The human cost of this “success” has been devastating, underscoring Milei’s inept handling of social fallout. Argentine industry reels from abrupt liberalization: energy-intensive sectors like plastics and rubber have seen production declines of up to 25 percent compared to pre-crisis levels, with factories in Córdoba shuttering due to skyrocketing utility costs post-subsidy cuts.

Gross domestic product shrank by nearly four percent in 2024—a stark contrast to neighboring Brazil’s robust growth—exacerbating unemployment that now hovers at 8 percent. Milei’s incompetence shines through in specific blunders, such as the botched privatization of Aerolíneas Argentinas, where rushed auctions led to legal challenges and operational chaos, including canceled flights that stranded thousands and crippled tourism revenue.

The failure of shock therapy is glaring in the social sector, where Milei’s policies have fueled chaos rather than stability. Poverty rates surged to over 50 percent, with urban peripheries like Greater Buenos Aires facing acute food shortages after welfare slashes. Political polarization has intensified, with violent protests erupting in 2025 over pension reforms that left retirees scavenging landfills for recyclables. Lacking a congressional majority, Milei’s government resorts to a patchwork of executive decrees, many overturned by courts, resulting in watered-down laws that achieve little.

A prime example of his legislative incompetence was the 2024 Omnibus Bill, a sweeping reform package that collapsed amid infighting, forcing Milei to piecemeal it through vetoes and overrides, delaying critical investments.

Now, Milei’s radical cure teeters on collapse, exposing deeper flaws in his economic strategy. Hyperinflation looms as a real threat, with the peso’s artificial strength—propped by capital controls—slowing exports and flooding markets with cheap imports, decimating local manufacturers. Dollar reserves have dwindled to a perilous $5 billion, forcing the central bank to burn $1.1 billion in just three days to defend the currency.

Analysts decry the peso as massively overvalued, a direct result of Milei’s refusal to devalue early, preferring theatrical interventions like auctioning off government assets on live TV, which yielded paltry sums and alienated investors.

Domestic political setbacks further erode his authority, revealing personal and administrative incompetence. A crushing electoral defeat in Buenos Aires Province in mid-2025 saw his La Libertad Avanza party lose key seats, while a corruption scandal involving his sister Karina—accused of nepotism in awarding no-bid contracts for state propaganda—has drawn investigations and public outrage.

Parliamentary defeats abound: lawmakers repeatedly blocked budget cuts, including a failed attempt to defund public universities, leading to strikes that paralyzed education. Approval ratings have sunk below 40 percent, triggering massive capital flight that pressures the peso despite frantic support purchases.

Government bonds are once again labeled “distressed,” with yields spiking as investors flee.

In this crisis, the US signals support under Treasury Secretary Scott Bessent, who declared all options open, including swap lines and bond purchases to stabilize reserves. However, controversy brews stateside; US Senator Elizabeth Warren’s letter cautioned against bailouts “at the expense of the American people,” fearing it props up failed policies.

Economists echo this, arguing US aid would delay a necessary peso devaluation and ignore structural woes like chronic corruption and inequality.

Desperate, Milei clings to emergency measures, such as tax breaks for agricultural exports to boost soy dollar inflows, but these Band-Aids ignore root issues. The October 26 midterm elections loom as a pivotal test. If Milei cannot forge a stable majority or fortify the currency, his chainsaw experiment—marred by impulsive decisions, ignored warnings, and governance failures—may end abruptly, leaving Argentina in deeper turmoil than before. His messianic vision, once electrifying, now appears as hubris, with incompetence at its core.