Argentinean Economist Celebrates Resignation of “Keynesian” Finance MInister
EspañolArgentina President Mauricio Macri has asked for the resignation of Minister of Finance Alfonso Prat Gay, inciting both criticism and praise.
Among those who celebrate the decision to remove Prat Gay is economist Javier Milei, who said that the now ex-official “missed the diagnosis and the medicine” for Argentina’s economy.
“He leaves the economy on its way to crisis,” he warned.
“The positive part is that a minister that is leaving can see that his way of structuring the economy was not the right one for the country’s situation. Whenever a Keynesian goes, it is positive for the people and for the country,” Milei said.
Milei said had there not been a change in economic policy regarding public spending and taxes, Argentina would have been on the way to a crisis.
Milei blamed the ex-minister for the economic failures of the Macri administration, saying that Prat Gay dismissed the problem of the money surplus when the government decided to exit the foreign exchange bloc.
“When the exchange rate came out,” he said, “the dollar came closer to parallel, and that jump added to the exit of retentions (corn, wheat, fishing, meat) that produced a doubling in food prices. That made people run out of money to buy other goods, which then pushed the economy into a recession.”
According to Milei, President of the Central Bank Federico Sturzenegger had no choice but to leave “in a hurry” to get all the money left over in the economy, and that led to having very high interest rates.
“What he did was increase the fall in the level of economic activity,” he explained. “This impacts employment, poverty indicators and all social indicators.”
The ministry that Prat Gay leaves will be divided into two areas and the economists Nicolas Dujovne (in the Treasury) and Luis Caputo (in Finance) will be in charge.
Milei approved the designation of Caputo for Finance. With regards to Dujovne in the Treasury, Milei said he considers him qualified.
“He did not fall out of nowhere,” he said. “It was the tax rules that set the fiscal disequilibrium in the Pensar Foundation; that is, he is someone who is familiar with making adjustment to public spending.”