Milei Wants More Government Spending—For the Military, of Course
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Milei Wants More Government Spending—For the Military, of Course


From day one of his presidency, it has been apparent that Argentina’s President Javier Milei wants the Argentinian regime to be a willing member of the US-NATO axis in international affairs. Milei has demonstrated this with a variety of overtures toward the State of Israel and by his repeated meetings with the dictator of Ukraine, Volodymyr Zelenskyy.

This all positions Burenos Aires as a reliable supplicant and friend of Washington. Or, as I summed it up back in June:

[Milei] displays no particular affinity for anti-interventionist foreign policy, and he’s certainly no threat to the established US-dominated geopolitical order. Milei is, and will likely continue to be, a reliable ally of the American security state. More succinctly, we might say that Milei is a “CIA-approved head of state.”

It should be noted that there is no reason why Milei is required to take these positions. Milei could easily stake out a position making Argentina a “non-aligned” country that refuses to participate in US and NATO meddling in Eastern Europe. Milei’s regime could easily choose to not take a position in the multiplying conflicts between Washington-Tel Aviv and half a dozen other states.

After all, Buenos Aires is 12,000 miles from Tel Aviv, and it is nearly 13,000 miles from Kyiv. The idea that Buenos Aires must choose a side in either of these two conflicts is absurd. Moreover, Argentina has a small economy and is an economic basket case so, frankly, the Argentinian military is tactically irrelevant to any global conflict. Support from Milei and Buenos Aires for the US and NATO serves only a diplomatic function—to help Washington manufacture legitimacy for its endless international interventions.

But that is apparently now not enough for Milei who has now signaled that he wants to increase military spending and to increase the strength and prestige of the Argentinian military establishment.

In a speech last month to supporters of the Argentinian military, Milei laid out his vision for what he called “a big Argentina, a strong Argentina, a powerful Argentina.” (And lest there be any question about mistranslation, these are his words: “queremos una Argentina grande, una Argentina fuerte, una Argentina potencia.”)

What exactly does it mean to have a big, strong, and powerful Argentina?

With these words, Milei is not talking about increasing the power and prosperity of the private sector. He doesn’t mention that in his speech. Rather, he means more power for the regime, and that means a lot more government spending. In the speech, Milei brags about buying 24 F-16 fighter jets, and modernization of the TAM tanks. Milei wants higher salaries for government bureaucrats (i.e., military personnel) and he insists that these government employees “deserve” more “respect and recognition.”

Given that Argentina has not been involved in any significant international conflict since the nineteenth century—and faces no real international threats on its land or maritime borders—one might wonder what the regime could possibly need new tanks for. Milei hints at this moments later when he reminds the audience he wants to “join NATO as a global partner.”

(In fairness, it should be noted that Milei’s position is just a continuation of the status quo. In this aspect of his policy agenda, Milei does not appear to be any more pro-NATO than his predecessors of the past 25 years. Indeed, Argentina has been one of the more pro-US regimes in South America for decades.)

Where we do find an alarming new direction, however, is in Milei’s apparent intent to use his intended strong and powerful military against domestic “threats.” According to Milei:

Until now, the Armed Forces have been entrusted with the task of purely and exclusively protecting against potential external threats. … [I]t is imperative that we rethink these old paradigms. Argentina cannot be oblivious to this new reality; it is time to modernize and adapt to these new threats. That is why we are modifying the Internal Security Law so that the Armed Forces can support the Security Forces in exceptional situations, without having to resort to the extreme option of declaring a state of siege.

That last sentence is the most ominous: “we are modifying the Internal Security Law so that the Armed Forces can support the Security Forces in exceptional situations.”

Were an American president to say such a thing, it would be a signal that the regime is going all-in on embracing a police state. In a civilized country, there are legal barriers against the use of the military against the domestic population. The US has many such legal barriers, the chief example of which is the Posse Comitatus act. The US regime frequently ignores these limitations, of course. Washington now routinely uses its military-intelligence apparatus to spy on Americans, and worse. Yet, it’s better to have the legal pretense of limitations on domestic military operations than nothing at all.

In Argentina, Milei says he wants to break down these barriers in his quest to fight domestic enemies. This plan is, essentially, the “Argentina edition” of the Patriot Act, and the Department of Homeland Security.

Militarism within the Argentinian Context

It is important, however, to not excessively compare the US situation with the Argentinian one. To this day, much of the public’s view of the military in Argentina is influenced by the human rights abuses of the military dictatorship during the so-called Dirty War from 1974 to 1983. During this period, with the help of the American CIA, the regime in Argentina “disappeared” and tortured thousands of dissidents.

Since then, the Argentinian military establishment has suffered from a notable lack of prestige among much of the Argentinian public. Public views of the military are not uniform among members of the public, however. In Argentina, skepticism of military power is generally associated with “the Left” while support for the military establishment is seen as “rightist.”

Milei seems to now be doubling down on this political framing. For example, in his speech last month, Milei claimed the military is being “emptied out” (”vaciamiento”) and “for decades” has been relegated to an “undeserved” low-status position.

When he says “for decades” this is likely a reference to the last forty years during which military spending in Argentina has been well below what it was in the days of the dictatorship. According to SIPRI’s database on military expenditures, military spending increased sharply when the junta came to power, and declined sharpy after the junta was deposed.

Since 1990, however, military spending (in constant 2022 dollars) has been largely unchanged, although it tends to fall below average levels when the Argentinian economy enters one of its many financial crises. The military in Argentina is hardly withering away, but even if it were, we can’t say it has suffered any more than the average Argentinian household. Indeed, because it has access to taxpayers’ dollars, military personnel have done well for themselves compared to the long-suffering private sector.

(In nominal terms, military spending is higher now than during the 1990s, although the incessant devaluing of the peso has meant military spending has fallen in real terms.)

Milei’s framing of how the military has not been treated with proper respect suggests he thinks the military has somehow been treated unfairly since the days of the dictatorship. This is likely to create a closer association—in the public’s eyes—between Milei and the old Argentinian Right which tends to agree that the Left in Argentina is inordinately obsessed with rehashing the old crimes of the military 45 years ago.

This latter position among Rightists is not entirely unwarranted, but Milei’s apparent decision to commit himself to a larger, more powerful and more costly military risks reviving and confirming the Latin American Left’s position that libertarian or free-market candidates are on the side of militarism and human-rights abuses. This association has dogged Chilean “classical” liberals for decades after Augusto Pinochet—quite by accident and against his personal ideological leanings—ended up supporting a turn toward economic freedom as a way to escape Chile’s inflationary downward spiral. Ever since then, the Left in South America—which loathes free markets, of course—has insisted that any candidate that supports free markets is a secret Pinochet clone who wants to bring back the juntas of the bad old days.

Unfortunately, Milei seems to be playing right into the Left’s hands on this. All his rhetoric about overpaid government bureaucrats is conveniently forgotten when he speaks of military officers, and his talk about cutting back military spending apparently does not apply to funding new efforts to waging war on domestic enemies.

With this latest policy turn, the evidence continues to mount that Milei is more a typical conservative or “rightist” than he is a free-market libertarian in any meaningful sense. It’s the usual conservative formula: “government spending is bad unless it’s for my friends at military headquarters.” America has suffered under this bait-and-switch brand of conservative politics since 1945. Milei may be the latest example abroad.

 


Originally Posted at https://mises.org/


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Key Battle On Election-Betting Market Heads To Appeals Court

Key Battle On Election-Betting Market Heads To Appeals Court

Key Battle On Election-Betting Market Heads To Appeals Court

Authored by John Haughey via The Epoch Times,

A legal battle over the future of a website’s election prediction market is set to continue on Sept. 19, when an appeals court hears the case of Kalshi v. CFTC, a decision that could reshape how Americans engage in political discourse.

The three-judge U.S. Court of Appeals for the District of Columbia Circuit will be considering whether individuals should be permitted to purchase contracts to participate in predictive markets that trade on the outcome of elections. If so, should these markets be regulated like other financial exchanges and commodity markets or as a form of gambling?

New York-based KalshiEx LLC argues that the elections market section of its website is a derivatives trading platform where participants buy and sell contracts based on projected outcomes of events, such as elections, and should be regulated no differently than grain futures that investors purchase as hedges against price fluctuations.

These markets provide a “public benefit” by gauging public sentiment in real-time, Kalshi maintains, a valuable guide for policymakers, politicians, and pundits in charting the public pulse.

The Commodity Futures Trading Commission (CFTC), which regulates the U.S. derivatives markets, argues that Kalshi’s platform blurs the line between commodity trading and gambling, and should not be viewed the same as futures contracts.

The commission maintains that Kalshi’s market puts it in a position to be a de facto elections regulator, which it is not designed to be. Such contracts provide no “public interest” and, in fact, pose a risk to electoral integrity and could potentially incentivize manipulation and fraud, the CFTC argues.

Those conflicting contentions are the core of what the appellate panel will deliberate on before it decides to lift or sustain its stay on U.S. District Judge Jia Cobb’s Sept. 6 ruling in favor of the platform. Judge Cobbs found that the defendant, CFTC, exceeded its statutory authority as a Wall Street regulator when it issued a September 2023 order stopping Kalshi from going online with its market because it is a “prohibited gambling activity.”

Judge Cobbs on Sept. 12 also denied CFTC’s motion for a stay while it mounts an appeal.

After the initial stay request was rejected, Kalshi wasted little time getting its market online. Attorneys for the CFTC were also busy, and within hours secured a stay from the appeals court, setting the stage for the 2 p.m. Sept. 19 hearing.

In the brief time before trading was paused “pending court process” late Sept. 12, more than 65,000 contracts had been sold on the questions, “Which party will control the House?” and “Which party will control the Senate?

The appellate panel will essentially be engaged in a technical legal debate over the definition of “gaming” and “gambling,” and how they would apply, in this case, to any potential regulation.

In its Sept. 13 filing calling for the stay to be lifted, Kalshi rejected CFTC’s definition that trading on election prediction markets is “gaming.”

“An election is not a game. It is not staged for entertainment or for sport. And, unlike the outcome of a game, the outcome of an election carries vast extrinsic and economic consequences,” it maintains.

The CFTC said in its Sept. 14 filing that because “Kalshi’s contracts involve staking something of value on the outcome of elections, they fall within the ordinary definition of ‘gaming.’”

‘Horse Has Left the Barn’

Regardless of how the panel rules, “The horse has left the barn,” said data consultant Mick Bransfield, of Pittsburgh, Pennsylvania, who trades on Kalshi’s website and purchased a “Senate control” contract.

There are ample opportunities to place election wagers on offshore websites such as New Zealand-based PredictIt, which imposes strict spending limits; on websites such as Polymarket, a New York-based platform that cannot legally accept wagers from within the United States; or the American Civics Exchange, where businesses and high net worth individuals can purchase “binary derivative contracts” through proxies tied to policy and electoral outcomes as hedges against “unpredictable electoral, legislative, and regulatory events.”

Predictit.org/Screenshot via The Epoch Times

“Elections predictive markets have been around since 1988 in the United States,” Bransfield told The Epoch Times, adding that the issue is “more nuanced than people realize.”

That nuance, said Carl Allen, author of The Polls Weren’t Wrong, is that Kalshi’s platform would be the first federally regulated U.S.-based predictive elections market open to all individuals without spending limits.

“To me, the question is not should it be regulated, the question is how? I think that is where we are,” Allen, who writes about predictive markets on substack, told The Epoch Times.

“It’s challenging to get your arms around this because there are so many organizations involved with it,” he said. “We’re reaching a really interesting point with sports betting going from totally disallowed, except for in Vegas and a few brick-and-mortar [stores], to being everywhere; crypto currency drastically growing; ETFs [Exchange-Traded Funds] getting big;” and Kashi attempting to open a predictive market on election outcomes.

Prediction market trader and Kalshi community manager Jonathan Zubkoff, who also writes about predictive markets and wagering, said the CFTC’s claim that elections markets are betting websites is mistaken.

“It’s not the same as sports betting” where there is “a line posted and billions of dollars are traded against it across different time zones,” prompting the odds to fluctuate, he told The Epoch Times.

“If you are looking at a line [to bet] on a Friday night for a Sunday game, there’s no hedge whatsoever.”

In elections markets, “there actually is a hedge” that gives people an opportunity to put money where “their bias is,” Zubkoff said.

Coalition For Political Forecasting Executive Director Pratik Chougule said another difference between sports betting and other types of gambling and predictive elections markets is that “unlike many other forms of speculation, the wagering here has a real public interest benefit. These markets inform in a way that is very beneficial.”

In October 2023, Chougule told The Epoch Times that elections markets reflect predictive science, citing numerous studies documenting that political betting websites are better indicators of public sentiment than any other measure except the election results themselves, including a study by Professor David Rothschild of the University of Pennsylvania’s Wharton School of Business.

“Polling is very unreliable,” he said. “And so we basically believe that, in order to promote good forecasting for the public interest, we believe that political betting is one solution to that because, at the end of the day when you have people wagering their own money on the line, that creates incentives that are very hard to replicate through other ways.”

Chougule, who hosts the podcast Star Spangled Gamblers, believes that, while not always accurate, election predictive markets are the best gauge of public sentiment in real-time.

“When they make a prediction, they are putting their money on the line,” he said. “It’s a pretty clear barometer of how an election is going.”

‘Gray Area’ Needs Rules

Chougule said he was “pessimistic” that Kalshi’s elections market would be online by Nov. 5.

“I think when you look at the landscape at the federal and state level, at Congress, at federal agencies, [there is] fear and skepticism and concern about what widespread elections betting could mean for our democratic institutions,” he said. “I don’t agree but it’s a fact.”

Bransfield said he was surprised by Cobb’s ruling against the regulators. “It did not seem the district court would side with Kalshi after the oral arguments in May,” he said. “The judge referred to elections contracts as ‘icky.’ That gave me the assumption that it would be unpalatable to her.”

But there is reason to be deliberative, Bransfield said.

“We should always be concerned about the integrity of our elections but these elections contracts have been around for so long,” he said, noting that more than $1 billion in 2024 U.S. elections contracts have already been purchased in the United Kingdom alone. “All those concerns already exist and have for a long time.”

Certainly, Allen said, “there are a lot of downstream effects that we are going to see from this,” but some fears are unfounded.

Unlike a sports contest where one player can affect the outcome, it would take a widespread concerted effort to “fix” an election, he said. Nevertheless, there is “potential for unscrupulous actors to release a hot tip” that could affect predictive markets.

Allen cited speculation about when former South Carolina Gov. Nikki Haley would end her presidential campaign during the Republican primaries, whether Robert F. Kennedy would pull the plug on his independent presidential campaign, and who both parties would pick as their vice presidential candidates as examples.

“A handful of people knew about [vice president picks] before it was public. It would be financially beneficial for someone to throw a couple [of] thousand dollars into that market,” he said.

Prime Minister Rishi Sunak (C) and his wife Akshata Murty (in yellow) at the launch of the Conservative Party general election manifesto at Silverstone race track in Northamptonshire, England, on June 11, 2024. James Manning/PA

The CFTC, in its challenge, noted that bets had been placed on the July 4 British general election date before Prime Minister Rishi Sunak officially announced it in May.

“It is very hard to see this gray area without some rules,” Allen said.

“Claiming that betting in elections is going to lead to issues with democracy and election integrity is one of the most ridiculous things I ever heard,” Zubkoff said, calling them “elections integrity dog whistles.”

Critics “are sort of lashing out,” he continued.

“It is a total misunderstanding. As someone who has traded in these markets, I haven’t seen anything that remotely constitutes a threat” to election integrity.

Zubkoff said Kalshi “very clearly has the better arguments” and cited the Supreme Court’s Chevron repeal as momentum that “bodes well for the future” of predictive elections markets.

He believes the appellate court will deny CFTC’s motion to extend the stay, and placed the odds of Kalshi getting a “yes” to go online before November’s elections at 60 percent.

Zubkoff noted that just like predictive elections markets, those odds could change in real-time during the hearing. “I could give you much better odds while listening to the hearing just based on the questions the judges ask,” he said.

Allen said the odds are “better than 60-40” that Kalshi will win its case, before qualifying that prediction with the ultimate hedge: “I don’t know how much money I would put on that.”

Tyler Durden
Thu, 09/19/2024 – 09:30

Lebanon PM urges UN to take firm stance over Israel's 'technological war'

Lebanon PM urges UN to take firm stance over Israel’s ‘technological war’

Lebanon’s Prime Minister called Thursday for the United Nations to oppose Israel’s “technological war” on his country ahead of a Security Council meeting on exploding devices used by Hezbollah that killed 32 people. Najib Mikati said in a statement the UN Security Council meeting on Friday should “take a firm stance to stop the Israeli […]

The post Lebanon PM urges UN to take firm stance over Israel’s ‘technological war’ appeared first on Insider Paper.

Russia's Shadow Fleet Is A Ticking Geopolitical Timebomb

Russia’s Shadow Fleet Is A Ticking Geopolitical Timebomb

Russia’s Shadow Fleet Is A Ticking Geopolitical Timebomb

Authored by Antonio Garcia via OilPrice.com,

  • Despite Western sanctions and oil price caps, Russia continues to use an aging “shadow fleet” of tankers to circumvent restrictions, allowing for stable oil exports.

  • Russian oil is now primarily heading to ‘friendly markets’ like China, India, and Turkey.

In response to Russia’s full-scale invasion of Ukraine in February 2022, the European Union and several other Western countries imposed extensive sanctions on Russia, attempting to stop the trade of Russian oil. In December 2022, the G7 countries decided on an oil price cap. However, Russia has found ways to circumvent these sanctions, primarily through the creation of a “shadow fleet” of oil tankers.

Despite robust US Treasury sanctions targeting the shadow fleet, Russia continues to expand it by incorporating new tankers, allowing for stable exports and further evasion of oil price caps. Only 36% of Russian oil exports were shipped by IG-insured tankers. For other shipments, Russia utilized its shadow fleet, which was responsible for exports of ~2.8 mb/d of crude and 1.1 mb/d of oil products in March 2024.

Kpler data shows that in April 2024, 83% of crude oil and 46% of petroleum products were shipped on shadow tankers. The shrinking role of the mainstream fleet fundamentally undermines the leverage of the price cap.

The shadow fleet is a collection of aging and often poorly maintained vessels with unclear ownership structures and lack of insurance. The number of old, outdated ships departing from Russia has increased dramatically. The EU has recently introduced legislation aimed at cracking down on the sale of mainstream tankers into the Russian shadow trade, but the problem persists. Russia managed to expand its shadow tanker fleet, adding 35 new tankers to replace 41 tankers added to OFAC’s SDN list since December 2023. These tankers, all over 15 years old, are managed outside the EU/G7. With 85% of the tankers aged over 15 years, the risk of oil spills at sea is heightened.

The shadow fleet poses a significant and rising threat to the environment. The aging and underinsured vessels increase the risk of oil spills, a potential catastrophe for which Russia would likely refuse to pay. The vessels can cause collisions, leak oil, malfunction, or even sink, posing a threat to other ships, water, and marine life. With estimates suggesting over 1,400 ships have defected to the dark side serving Russia, the potential for environmental damage is substantial. For instance, since the beginning of 2022, 230 shadow fleet tankers have transported Russian crude oil through the Danish straits on 741 occasions. Also, a shadow fleet tanker on its way to load crude in Russia collided with another ship in the strait between Denmark and Sweden. Last year, a fully loaded oil tanker lost propulsion and drifted off the Danish island of Langeland for six hours. Recovery after any potential oil spill could take decades.

Added to the environmental issue, seaborne Russian oil is almost entirely heading to the Asian markets, with India, China, and Turkey being the biggest buyers. In 2023, 86% of oil exports went to friendly countries compared to 40% in 2021, and 84% of petroleum product exports compared to 30% in 2021. This shift in export destinations highlights the changing geopolitical landscape of the oil market due to the sanctions and the rise of the shadow fleet.

Several measures have been proposed to address the challenges posed by the shadow fleet. These include stricter sanctions on individual vessels, increased scrutiny of financial institutions involved in Russian oil deals, and fines that would limit sales or decommission tankers. The G7 countries are taking measures to tighten control over the price cap and further pressure Russia. The US has introduced a series of sanctions against ships and shipowners suspected of violating the price cap. However, concerns remain that these measures could lead to higher energy prices and escalate tensions with Russia. The Danish foreign ministry has stated that “The Russian shadow fleet is an international problem that requires international solutions.”

The shadow fleet has allowed Russia to circumvent Western sanctions and continue profiting from its oil exports, but it has come at a significant cost. The environmental risks posed by these aging and poorly maintained vessels are alarming, and the shift in oil trade patterns is reshaping the geopolitical landscape. Addressing this complex issue will require concerted international efforts and a delicate balance between maintaining sanctions and ensuring stable energy markets. The situation is unsustainable, and the need for action is becoming increasingly urgent.

Tyler Durden
Thu, 09/19/2024 – 03:30

North Korea claims it tested ballistic missile with 'super-large' warhead

North Korea claims it tested ballistic missile with ‘super-large’ warhead

North Korea claimed Thursday that its latest weapons test had been of a tactical ballistic missile capable of carrying a “super-large” warhead, and a strategic cruise missile, state media reported. Leader Kim Jong Un “guided the test-fires”, the official Korean Central News Agency said, of the “new-type tactical ballistic missile Hwasongpho-11-Da-4.5 and an improved strategic […]

The post North Korea claims it tested ballistic missile with ‘super-large’ warhead appeared first on Insider Paper.