What has Javier Milei been up to?

Trying to stay true to his “chainsaw” campaign imagery, Javier Milei, Argentina’s libertarian president, has been slashing public spending and regulations in droves since taking office. 

His first decisions at the helm included a significant currency devaluation and austerity package, followed by a vast emergency decree deregulating everything from land ownership to credit cards, as well as labor laws, agriculture, energy, air travel, and much more.

A few days later, Mr. Milei also sent a massive bill to Congress to further his deregulation efforts, including key chapters on privatization, street protests, and a delegation of congressional faculties to the executive branch to streamline even more reforms.

The bill also raised income taxes and levies on exporters to balance the country’s deficit-laden budget, though this was contrary to the president’s campaign promises.

The first setbacks came when courts blocked parts of Mr. Milei’s mega-decree, arguing that it encroached on matters that should be debated in Congress instead.

Then, governors from agro-exporting provinces rebelled against the new export taxes, forcing the national administration to withdraw some chapters from its congressional bill.

Eventually, the entire bill collapsed when the Milei administration realized it did not have enough votes to pass a chapter on privatization. “We decided to withdraw the bill in full rather than pass an empty shell of it,” the president said, explaining his decision.

Retaliation

To retaliate against the provincial governors and lawmakers who blocked his bill, Mr. Milei decided to replace all the extra revenue he hoped his reforms would generate by withholding as much money as possible from local administrations.

The first victim was the governor...