Amerikas Perón

Scott Lincicome: “When the populist strongman Juan Perón ran Argentina’s economy from his presidential palace in the mid-20th century—personally deciding which companies received favors, which industries got nationalized or protected, and which businessmen profited from state largesse—economists warned that the experiment would end badly. They were right. Over decades of rule by Perón and his successors, a country that had once been among the world’s wealthiest nations devolved into a global laughingstock, with uncontrollable inflation, routine fiscal crises, rampant corruption, and crippling poverty. Peronism became a cautionary tale of how *not* to manage an economy.

“President Donald Trump seems to have misunderstood the lesson. His second term has begun to follow the Peronist playbook of import substitution, emergency declarations, personal dealmaking, fiscal and monetary recklessness, and unprecedented government control over private enterprise. And, as with Argentina’s Peronism, much of U.S. economic policy making runs directly through the president himself.

“…Perón, for example, nationalized entire industries—railways, airlines, telecommunications, utilities—creating chronically loss-making state enterprises that endured for decades. Trump hasn’t gone nearly that far, but is exerting an astonishing degree of government control over private companies’ commercial operations. The Trump administration forced Japan’s Nippon Steel to give the U.S. president a “golden share” in U.S. Steel in order to acquire it, and required the U.S. semiconductor firms AMD and Nvidia to give the government a 15 percent cut of their China sales in exchange for export approvals. The administration also took a 15 percent stake in the rare-earth miner MP Materials and a 10 percent stake in Intel, in each case making Uncle Sam the company’s largest shareholder.

“…Trump has also flirted with Peronism in fiscal and monetary policy. Perón took control of Argentina’s central bank and used expansionary monetary policy to finance massive government spending and deficits, which led to chronic inflation. Trump, for his part, has already added trillions of dollars in new U.S. debt via the One Big Beautiful Bill Act, while also seeking to smash the independence of the Federal Reserve in order to adopt expansionary U.S. monetary policy in the face of still-warm inflation.

“…Trumpism isn’t full-blown Peronism yet. Large parts of the U.S. economy fortunately remain outside the president’s crosshairs and grasp. But each emergency declaration, Oval Office favor, and presidential intervention into private enterprise moves us closer to the Argentine model, and will make reversing course more difficult.”

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