Tale of Two Disruptors, Part II

The chief causes of America’s malaise were largely ignored. As we predicted, after only four months, Elon Musk is already out of the picture. So are the budget cuts needed to bring the deficit down.

Tuesday, May 20^th, 2025

Bill Bonner, from the ranch at Gualfin

‘He’s finished, done, gone. He polls terribly. People hate him.’

An anonymous GOP operative told Politico, speaking of Elon Musk.

And so…the two paths diverged. Donald Trump, elected as a disruptor, chose to blame others — foreigners who had been ‘ripping off’ America for decades. Javier Milei blamed his country’s own leadership — the ‘casta politica’ [the political elite] — for stealing and squandering the nation’s wealth. Trump put up barriers to trade. Milei took them down. Trump wants to keep out foreigners and their products. Milei opens them up. Trump took to the global stage; Milei focused his attention at home.

John Dienner:

‘Voters re-elected Donald Trump hoping that he was enough of an outsider that he would be able to cut back and re-set an obviously broken government. Many hoped he would be the US version of Javier Milei, an economist who was elected president of Argentina - a nation suffocated by decades of socialists who vastly expanded government, ran up monstrous debts, repeatedly defaulted on those debts, turned the Argentine peso into Monopoly money and workers into peasants.’

Once in office, Trump launched a ‘trade war,’ saying they were ‘easy to win.’ Nobody really believed high tariffs were a ticket to prosperity — apparently, not even Trump himself. For when the stock market tanked, he quickly backed off…and offered to negotiate with his erstwhile enemies. Those negotiations produced the expected results. Americans are now forced to pay more for imported products, but nowhere near the prohibitory rates he had proposed. With an average tariff rate of 18.5% — Trump’s tariff tax is very close to Europe’s high VAT sales taxes.

But while life goes on much as before, the damage has been done. Foreigners feel they can no longer trust the goodwill or good sense of their trading partner; they find new ones. Reuters:

China has emerged as the top customer for Canadian oil shipped on the expanded Trans Mountain pipeline, ship tracking data showed, as a U.S. trade war has shifted crude flows in the year since the pipeline started operating. While oil is currently exempt from U.S. tariffs, Canada has sought to diversify its exports due to brief U.S. duties on its crude and Trump’s threats to annex the country.

Yes, the dream of an American Milei became the reality of the Queens Trump…the Long Island brawler — all over the place and nowhere in particular. The Big Man warred with foreign nations… and meddled in the affairs of the Levant and the Steppes. He hustled deals for America’s biggest corporations…threatened Canada, Greenland and Panama… got rich on cryptos… ranted against immigrants, NATO, trannies, Harvard, law firms, Republican grandstanders (members of Congress who actually want to cut spending), etc, etc…

While the chief causes of America’s malaise were largely ignored. As we predicted, after only four months, Elon Musk is already out of the picture. So are the budget cuts needed to bring the deficit down.

Deficits of $2 trillion per year have become ‘normal’…as we head for $60 trillion in debt by 2035.

Donald Trump is on the Argentine path, but it is more like the crisis-strewn path — 1946 to 2023 — that brought the country to the edge of desperation, rather than Milei’s current trajectory.

Taking place on the pampas today is one of the most remarkable and encouraging phenomena in economic history. Without suffering the kind of catastrophe that is normally required for a dramatic change of direction — neither defeat in war, nor revolution, nor hyperinflation (it came close!), nor plague or natural disaster — Argentine voters decided that they had had enough. After seventy years of relative decline — going from fourth or fifth richest nation in the world down to 23rd — citizens were ready for a change.

And they got one.

At the simplest levels, the difference between Milei’s approach and Trump’s pitch can be explained by differences in the two men themselves. Milei is an intellectual…an economist of the Austrian school. He is thoughtful, disciplined and coherent, though maybe crazy. Trump is not.

The efforts of the two disruptors — so different from one another — can also be explained by the historical context. .

After so many years of socialist policies initiated by its own Big Man, Juan Peron, Argentina was almost desperate for a change.

The US, on the other hand, though slipping for the last quarter century, is still on top of the world. Americans are not ready for a major overhaul. They need to be bent by misfortune far more, before they can take a new shape.

Cometh the hour; cometh the man. Donald Trump is their man….

Regards,

Bill Bonner

P.S. We are not naïve enough to believe that Milei’s success is ‘in the bag.’ Argentina’s socialist politicians didn’t die or emigrate. Its parasites and ‘casta politica’ operatives didn’t suddenly become honest capitalists. They could still take him down… and continue wrecking the country. More tomorrow.

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Market Note, by Tom Dyson

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