Tom Palley recently posted an interesting piece by Gabriel Levinas, "Milei's Bible is Missing Entire Chapters," on his website (in Spanish for those that read in it). Palley notes that Levinas's argument about Javier Milei also applies, in his view, to Donald Trump.
Levinas's central point is that Milei's characteristic rhetorical method is not necessarily to say things that are simply false, but to take one part of reality and present it as if it were the whole. Thus, Milei finds in Jewish tradition property, individual responsibility and freedom, while conveniently overlooking its equally strong concern with the poor, the indebted and obligations toward others. The same method appears in his celebration of freedom while routinely attacking journalists, economists, artists and politicians who disagree with him, and in his tendency to collapse radically different political traditions into the single category of communism (also part of Trump’s playbook). As Levinas nicely puts it, one does not have to falsify a book if one simply tears out the inconvenient pages.
Levinas applies the same argument to the economy. Inflation has fallen, and denying that would itself amount to selecting only the convenient facts. But inflation is not the whole economy. There are also wages, pensions, employment, consumption, productive activity, business failures and household indebtedness. The official story of fiscal balance, falling inflation and recovery can therefore coexist with a very different economy experienced by workers and households.
I would go somewhat further on the economic side. The problem is not simply that the government emphasizes inflation while neglecting other indicators. The explanation of the fall in inflation itself leaves out some rather important chapters. Milei began with the enormous December 2023 devaluation, which initially accelerated inflation and produced a drastic decline in real wages. By March 2024, according to the IMF, real wages were 17% below their November level and private consumption had fallen sharply. In my view, that compression of real wages should not be regarded as an unfortunate by product of the stabilization program. It was central to the adjustment.
The subsequent stabilization rested essentially on two anchors, the low real wages and a stable nominal exchange rate. The fall in wages and fiscal contraction compressed consumption, domestic demand and imports. At the same time, after the initial maxi-devaluation, the government held the exchange rate to a predetermined crawl, initially just 2% per month (then 1%), even while domestic prices were increasing much faster. This was hardly the free market determination of the exchange rate suggested by Milei's rhetoric. Indeed, the Argentine central bank itself explicitly described the exchange rate rule as a complementary anchor contributing to the decline in inflation.
Nor was maintaining that exchange rate strategy simply the product of domestic fiscal virtue. It depended crucially on official external financial support. In June 2024 China rolled over the activated portion of its currency swap, worth approximately US$5 billion, precisely when Argentina's foreign exchange position remained extremely fragile. The same month the IMF provided additional funds. Later came the much larger IMF program and, in 2025, extraordinary support from the Trump administration, including a US$20 billion US Treasury swap line and direct Treasury purchases of Argentine pesos.
To put it clearly, there is another missing chapter in Milei's narrative. The stabilization was not a libertarian experiment in allowing markets freely to find their equilibrium. It was a rather recognizable stabilization program based on real wage compression and an exchange rate anchor, sustained by substantial official international financing. Inflation did come down. Fiscal policy explains the harshness of the adjustment, and it should be clear, was NOT relevant for stabilization (other than indirectly by weakening the bargaining power of workers, and reducing pressures on the demand for dollars for imports). Explaining how inflation came down tells a rather different story from the one Milei likes to tell. His Bible might be missing some pages, but the ones that are left are read in a peculiar way.
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