Ryan Dubay (2:01)

Yeah, it's incredibly significant. You know, the Trump administration is betting heavily on Javier Belay in Argentina, trying to pick, you know, the winners in Argentina's domestic politics as well, which is pretty unprecedented.

Jessica Mendoza (2:17)

Welcome to the Journal, our show about.

Narrator/Reporter (2:19)

Money, business and power. I'm Jessica mendoza. It's Friday, October 24th.

Jessica Mendoza (2:30)

Coming up on the show, why Trump.

Narrator/Reporter (2:32)

Is trying to rescue Argentina's president.

WhatsApp Advertiser (2:47)

When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans, send event invites and pin messages so no one forgets mom 60th and never miss a meme or milestone. All protected with end to end encryption. It's time for WhatsApp message privately with everyone. Learn more@WhatsApp.com this episode is brought to.

Rumchata Advertiser (3:15)

You by Rumchata, a delicious creamy blend of horchata with rum. It's Best enjoyed over ice or in your coffee. Ramchata. Delivering vacation vibes anyway, or anywhere you drink it. Find out more@rumchata.com Drink responsibly. Caribbean rum with real dairy cream, natural and artificial flavors. Alcohol 13.75% by volume 27.5 proof. Copyright 2025 Agave Loco Brands Pojoaaukee, Wisconsin. All rights reserved.

Jessica Mendoza (3:53)

When Javier Millet ran for office in 2023, he would often campaign with a chainsaw.

Ryan Dubay (4:03)

So he went on the campaign trail. He was out on the street with his chainsaw, waving it around. And it was kind of to show that this was going to be really a drastic cut to the public sector and public spending in Argentina.

Jessica Mendoza (4:15)

So literally like taking a chainsaw to all of it.

Ryan Dubay (4:17)

Exactly.

Jessica Mendoza (4:19)

And it sounds like this worked. He got elected.

Ryan Dubay (4:22)

I think that tells you he was a political outsider coming into this with really no strong establishment support. So that tells you a lot about, I think, the situation, economic situation in Argentina before he was elected. Just, it was so bad that people were willing to go a drastically different direction. So it appealed to a lot of people who were really suffering from this very high inflation.

Jessica Mendoza (4:47)

To say Argentina has money problems would be an understatement. The country has received more than 20 bailouts from the International Monetary Fund since the 1950s, and Argentina has struggled to control spiraling inflation. When Milei was elected, inflation was in the triple digits.

Narrator/Reporter (5:04)

So he put his chainsaw to use.

Jessica Mendoza (5:06)

He quickly cut regulations, slashed public spending by 30% and fired thousands of government workers.

Ryan Dubay (5:13)

You know, it worked. I mean, he was able to bring down inflation pretty quickly. It was painful, but people went along with it. It seemed.

Jessica Mendoza (5:21)

Milei's cuts helped him balance the budget and they earned him a huge fan base amongst prominent right wing figures around the world. One of his biggest supporters is Elon Musk, who oversaw big cuts to US Government spending. Earlier this year, Musk appeared on stage with Milei, also wielding a chainsaw.

Rumchata Advertiser (5:39)

This is the chainsaw for bureaucracy chains.

Jessica Mendoza (5:49)

But Milei's dramatic cuts also hurt a lot of Argentinians.

Ryan Dubay (5:53)

To cut spending, you had to stop construction projects. So a lot of the workers lost their jobs because of that. They had to, you know, they reduced the real increase of pensions. So pensioners, the amount of money that they had, at the end of the month, it would go less than it would before, I guess, you know, they closed ministries. So a lot of those public workers, they lost their jobs as well. And that had a ripple effect across the economy. So consumption declined across the economy and that impacted private businesses, for example, factories, shops that are selling clothes, for example.

Jessica Mendoza (6:28)

And what are you hearing from people that you've spoken to in Argentina?

Ryan Dubay (6:32)

So I think, I mean, it depends who you ask. There's still a lot of people who defend him, who thinks that you got to give him more time, that he inherited a terrible situation. Other people are saying, we're closing our factories, we can't make it to the end of the month, and how much longer is this going to go on for?

Jessica Mendoza (6:48)

And Milei's dramatic austerity policies didn't address one very big problem in Argentina's economy, the country's currency, the peso. The Argentine peso is pegged to the.

Narrator/Reporter (7:00)

Value of the US Dollar.

Jessica Mendoza (7:02)

That basically means the value of the peso doesn't fluctuate according to market rates.

Narrator/Reporter (7:06)

Like other currencies. One benefit of pegging a currency is.

Jessica Mendoza (7:10)

That it can help control inflation. In Argentina, the policy has also kept.

Narrator/Reporter (7:14)

The peso artificially strong despite its history of economic trouble. But pegging currencies also comes with some big trade offs.

Jessica Mendoza (7:22)

A strong peso can be good in that it makes it cheaper to import.

Narrator/Reporter (7:25)

Goods into Argentina, but at the same time, a strong peso makes Argentine products more expensive in foreign markets, which hurts the country's exporters and businesses.

Ryan Dubay (7:35)

For example, because of the strong peso, then local tourism was really hurt because it was more expensive for people to come to Argentina, to go to restaurants, to stay at hotels, and also for Argentines to stay in Argentina. So a lot of them, they ended up going to Brazil, they ended up going to Chile, where it's actually cheaper, and they would buy goods in those countries as well instead of buying locally.

Jessica Mendoza (8:00)

The problem of the peso has dogged Milei's radical economic vision and it's limited his ability to push through with the.

Narrator/Reporter (8:06)

Rest of his free market overhaul.

Ryan Dubay (8:08)

So that's the situation. I think a lot of people were willing to kind of give Javier Milei the opportunity to turn the economy around, and probably they still are. But there's also, you know, it's kind of, it's two years into this now and there's a lot of fatigue, I think, in Argentina.

Jessica Mendoza (8:26)

And then in September, voters expressed that fatigue with Milei's economic experiment during a local election in Buenos Aires.

Narrator/Reporter (8:33)

The province holds around 40% of Argentina's population.

Ryan Dubay (8:37)

I think in any other year it might not have got a lot of attention, but because it was seen as kind of a bellwether for this midterm election coming up, there was more attention placed on that vote.

Jessica Mendoza (8:48)

Milei went into that local election feeling.

Narrator/Reporter (8:51)

Very confident and declared it would be a death knell for his opponents, the Peronist party.

Jessica Mendoza (8:56)

Instead, Milei's Freedom Advances Party actually lost.

Ryan Dubay (8:59)

Ground and that just raised a lot of concerns. Argentines and investors started pulling their money out of Argentina. The peso began to devalue really quickly and the government kind of had to step in and try to defend it. Things just kind of snowballed very quickly for him.

Jessica Mendoza (9:14)

Would it be a stretch to say that this, the results of this election may have put Milei's economic vision in jeopardy?

Ryan Dubay (9:23)

No, I don't think so. I think that's definitely what happened. Basically what happened is that people start to lose faith that he will be able to continue with his free market reforms.

Jessica Mendoza (9:35)

Coming up, President Trump offers Milei a lifeline.

State Farm Advertiser (9:52)

This episode is brought to you by State Farm. Listening to this podcast Smart move. Being financially savvy Smart move. Another smart move having State Farm help you create a competitive price when you choose to bundle home and auto bundling. Just another way to save with the personal price plan. Like a good neighbor, State Farm is there. Prices are based on rating plans that vary by state. Coverage options are selected by the customer. Availability, amount of discounts and savings and eligibility vary by state.

Maytag Advertiser (10:23)

Upgrade your laundry routine with a durable and reliable Maytag laundry pair at Lowes, like the new Maytag washer and dryer with performance enhanced stain fighting power designed to cut through serious dirt and grime. And what's great is this laundry pair is in stock and ready for delivery when you need it the most. Don't miss out. Shop Maytag in store or online today at Lowe's.

Jessica Mendoza (10:57)

Just weeks after Javier Millie's party suffered.

Narrator/Reporter (11:00)

A setback in the Buenos Aires election, U.S. treasury Secretary Scott Besant made an unexpected announcement on a rescue package for Argentina.

Jessica Mendoza (11:11)

Besant said that the US Government would.

Narrator/Reporter (11:13)

Step in to bail out Argentina's economy in a few ways.

Jessica Mendoza (11:16)

The US Would buy pesos to prop.

Narrator/Reporter (11:18)

Up the currency's value. The administration would also use taxpayer dollars for a $20 billion currency swap, which.

Jessica Mendoza (11:25)

Is basically a loan. And later, Bessen said the US government.

Narrator/Reporter (11:29)

Would help corral another $20 billion loan backed by the private sector.

Javier Milei (11:33)

Thank It's a great honor to have the leader of Argentina a place that I love, I've been to.

Jessica Mendoza (11:41)

Last week, President Trump invited Milei to meet with him at the White House.

Javier Milei (11:45)

He's a great economist and he was saying a lot of very correct things and he was very much in a conservative mode and I At that meeting.

Narrator/Reporter (11:54)

Trump made a surprising announcement about the rescue package. Turns out it has strings attached.

Jessica Mendoza (11:59)

Milei can only have the money if.

Narrator/Reporter (12:01)

He succeeds in Sunday's midterm election.

Javier Milei (12:03)

So we would not be generous with Argentina if that happen. If he loses, we are not going to be generous with Argentina.

Ryan Dubay (12:13)

Very shortly after, the Argentine market really tumbled. I guess it went down about 40%, the stock market index. So that highlighted the concerns of that kind of comments, I guess.

Jessica Mendoza (12:24)

Besant walked back Trump's comments a day later saying that support for Argentina is.

Narrator/Reporter (12:29)

Not election specific, but policy specific.

Jessica Mendoza (12:32)

Bessant said, quote, as long as Argentina.

Narrator/Reporter (12:34)

Continues enacting good policy, they will have US Support.

Jessica Mendoza (12:38)

But Ryan says some Argentinians are interpreting Trump's bailout condition as election interference.

Ryan Dubay (12:44)

One economist, one analyst said he described it as a lifesaver made out of lead. So it, you know, just going to not help at all. It's going to make you sink. So the concern about that is that it could backlash for sure. And Argentines, you know, they don't like having other countries and especially the US intervening in their domestic politics. So it could end up being unhelpful for President Milei.

Jessica Mendoza (13:10)

According to one pollster, Milei's approval rating.

Narrator/Reporter (13:12)

Has plummeted from 50% last year to 35%.

Jessica Mendoza (13:16)

And this week, the Wall Street Journal spoke to voters in Buenos Aires about what they think of Milei and the.

Narrator/Reporter (13:21)

US Decision to intervene.

Adriana del Carmen Castro Nuovo (13:22)

Adriana del Carmen Castro Nuovo e soy e jubilada.

Narrator/Reporter (13:29)

Adriana del Carmen Castronuovo is a 64 year old retiree.

Jessica Mendoza (13:41)

She believes this agreement between the US.

Narrator/Reporter (13:43)

And Argentina will only help politicians and not the Argentinian people. Another voter, Alejandro Cassano, agrees.

Jessica Mendoza (13:56)

He says Trump only thinks about himself and his country. He added that both Trump and Milei are, quote, deranged. We've been talking about Milei's issues, but is there any financial or political risk for the Trump administration to be bailing out Argentina?

Ryan Dubay (14:19)

Yeah, I mean, the first risk is that they end up holding, you know, pesos that become worthless essentially, and they end up losing financially on that. I think that's a big one.

Jessica Mendoza (14:31)

Beyond the economic risk, there's some political.

Narrator/Reporter (14:33)

Danger for Trump here, too.

Jessica Mendoza (14:35)

Some in Trump's base are critical of.

Narrator/Reporter (14:37)

His decision to help Argentina.

Jessica Mendoza (14:39)

For instance, American soybean farmers. This year, those farmers lost their biggest.

Narrator/Reporter (14:44)

Customer, China, who stopped buying soybeans from the US to gain leverage in trade talks. China now imports soybeans from Argentina, and farmers here are wondering why their taxpayer dollars are helping their industry rivals.

Jessica Mendoza (14:58)

One of them.

Narrator/Reporter (14:58)

Scott Brown from Arkansas spoke to msnbc.

J (15:01)

If Argentina fails, okay, they're my second biggest competition. If we're going to make American agriculture great and make it stand on its own two feet, then I need my second biggest competitor to fail.

Jessica Mendoza (15:16)

So the Trump administration is facing a lot of criticism here. What does the president think the US Stands to gain from helping the Malay government?

Ryan Dubay (15:25)

So I think President Trump has taken, I mean, looking more regionally at the US Foreign policy to Latin America under President Trump. They're really trying to kind of pick the winners and losers, I guess, in the region. And it's often based on the personal relationship that different presidents in the region have with President Trump and also the ideological stance. So in Argentina, I think they see a very close ally to the U.S. someone that they want to support, and they want to make an example, I think, for other countries in the region as well, saying that if you are allied with us, then we will help you overcome your difficulties. I think as well, there's an interest in probably pushing China, which has an important and a growing interest in not only Argentina, but in Latin America, kind of sidelining China.

Jessica Mendoza (16:21)

According to Wall Street Journal reporting, the White House is pushing officials in Argentina.

Narrator/Reporter (16:25)

To limit China's access to the country's.

Jessica Mendoza (16:28)

Resources, including critical minerals. They're also encouraging Argentina's leaders to strike.

Narrator/Reporter (16:33)

Deals with US Companies.

Ryan Dubay (16:35)

Argentina does have a lot of potential to be a really strong economic partner in the region. It has a lot of lithium, which is needed for electric vehicles, obviously, and a lot of copper potential as well. So I think the Trump administration also kind of sees that potential.

Jessica Mendoza (16:56)

So all of this is happening in the lead up to this big midterm election on Sunday. And let's say Milei gets the number of seats that he's hoping for, and.

Narrator/Reporter (17:06)

Then the US does give this bailout. Could it save the Argentinian economy?

Ryan Dubay (17:11)

I think it's tough to say. I think it'll save the moment, probably. But I think there's so many issues with Argentina's economy that to say that it will save the economy, probably not. I mean, there's so many things that needs to be done, and it'll give Javier Milei more time in order to try to advance his agenda. But there are so many problems with Argentina's economy that really just bringing down inflation was just one of them. They really need to get investments back in. They need to pass labor reforms, pension reforms, and they need political support to do that. And it's not even clear with that one third of the seats in Congress, they'd have to kind of ally with other different political parties in order to pass those reforms. So I think Argentina has a long ways to go, and this would just be giving Milei a little bit more time.

Jessica Mendoza (17:59)

So it sounds like it's like a deadlight extension more than anything else.

Ryan Dubay (18:02)

Yeah, I think so.

Jessica Mendoza (18:16)

That's all for today.

Narrator/Reporter (18:17)

Friday, October 24th. Additional reporting in this episode from Sylvina Friedlevsky, Santiago Perez, Alexander Saidi and Brian Schwartz. The Journal is a co production of Spotify and the Wall Street Journal. The show's made by Kathryn Brewer, Pia Gadkari, Rachel Humphries, Isabella Japal, Sophie Codner, Ryan Knudson, Matt Kwong, Colin McNulty, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Allen Rodriguez Espinosa, Heather Rogers, Pierce Singhy, Jeevika Verma, Lisa Wang, Catherine Whalen, Tatiana Zamis and me, Jessica Mendoza. Our engineers are Griffin Tanner, Nathan Singapak and Peter Leonard.

Jessica Mendoza (18:56)

Our theme music is by so Wylie Lee. Additional music this week from Peter Leonard, Bobby Lord, Emma Munger, Griffin Tanner, so.

Narrator/Reporter (19:03)

Wiley and Blue Dot Sessions. Fact checking this week by Mary Mathis. Thanks for listening. See you on Monday.