That the economy is the decisive factor that conditions the development of social and political life is something that intellectuals have been studying since Karl Marx in the 19th century until now. However, the person who best defined this thesis was not the German thinker or any philosopher, but an American political consultant named James Carville: in the campaign that brought Bill Clinton to the presidency in 1992, he immortalized the phrase “it’s the economy, stupid,” the idea that it is that element that explains, in this case, the result of the elections. The government of Javier Milei came to revolutionize profound aspects of Argentine political life, to do and say things that had never been done or said before in these latitudes, but it would seem that the backbone of the matter remains intact. In other words, at the end of the road a President of this country will not be judged based on whether he retired the “caste”, if he managed to eliminate the fiscal deficit or if he received applause from Donald Trump, but rather if he was able to restore the pocketbook of the average Argentine. And in that task it is far from being successful. For this reason, in the midst of the electoral context, all eyes are on Luis “Toto” Caputo, the man at the helm of the economy.
Diary of a season on the Fifth Floor. To judge the management of “Toto” we must start from the two great particularities that surround it. Both are unpublished. The first: moment zero of the second foray of the “Messi of finance” into public administration was, as this magazine reported, an event that could only be defined as supernatural. Milei, before the inauguration, went with her sister to Caputo’s house in Newman country to convince him to accept the invitation. Neither the host nor his wife were inclined to join the adventure, but the libertarian dropped an unexpected card. He told him that “the One,” as he calls God, had told him that he was the one chosen for the moment. Even Caputo’s closest friends swear that since then he has never been the same, something that is evident not only in the public profile that the minister has – which tends to border on the quarrelsome, very different from what he was during the Macrismo – but in the statues of the Virgin of the Hill of Salta with which he adorned his office, which can be seen in the interviews he gives there. This figure, linked to the miracles and mystical visions that a local nun had in the nineties, is not recognized by the Church at an official level.
The second peculiarity of the case is not supernatural but it does not have any record either. Milei is the first economist to occupy the presidency in all of Argentine history. For those who are part of the Government, and especially those who make up the economic team, this is not a minor detail at all. While the libertarian does not get involved at all in any of the other portfolios, and barely flies over the political framework to ask for this or that figure for a position, with the progress of the economy and that ministry he has an almost obsessive interference. An influence that, more than once, Caputo and his team have suffered.
The Government’s list at this point is too long for this note, but one episode from recent months stands out. Not only because of the impact it had on the economy, but because of what it says even those involved get the story out. In July, the Government decided to end LEFI, a short-term debt instrument issued by the National Treasury that sought to absorb surplus pesos from the banking system. This happened at a time of year when agricultural dollars had run out and, for this reason, the demand for the exchange rate began to grow so much that the Government then made the decision to raise interest rates to an astronomical level. The majority of specialists agree in pointing out that moment, and that decision on the end of the LEFI, as the watershed in the direction of the Argentine economy, which had begun to show some minimal signs of recovery after the megadevaluation carried out by the libertarian administration as soon as it began. The most important thing about the case is not, however, all this, but what the economic team itself let slip after the economy began to feel the cold due to the increase in the interest rate: that the decision to end the LEFI had been a “whim” of the president. Some who walk those corridors even dare to suggest that the release from the stocks, in April, would have been motivated by that same divine clairvoyance that Milei believes he has.
That imprint remains until today. The Gordian knot of the economic present would seem to be the exchange rate. From both sides of the economic schools they attack the gang system as the center of the problem. Journalist Leandro Renou published in Página/12 that Caputo, at the end of September, presented the President with two possibilities: definitively releasing the price of the dollar – something that several in the Government maintain, with Federico Sturzenegger, the historical enemy of “Toto”, at the head – or returning to the stocks. Milei, infatuated, did not want to accept any. Neither did his minister’s latest proposal: present his resignation if necessary. The libertarian supports it against all odds, and the decision to have placed one of his own, Pablo Quirno, at the head of the Foreign Ministry after the resignation of Gerardo Werthein, also goes in that direction. Milei, convinced that what remains of his popularity is sustained by this state of affairs, does not want to change anything. There is also another factor: the American bailout, which in several ways allowed the Government to reach the legislative elections, was already carried out with Caputo involved. Scott Bessent, the Secretary of the Treasury who on paper today has more weight than his Argentine counterpart in defining local monetary policy, has already chosen him as his interlocutor. Milei couldn’t move Caputo without seriously damaging himself.
