What Scott Bessent Doesn't Get About Argentina

Argentina is once again dominating financial headlines — and for a familiar reason: The crisis-prone South American nation is experiencing yet another bout of instability, the latest in a decades-long cycle of economic and political turbulence.

Commentators have offered different explanations for this fresh crisis: Some point to an overvalued exchange rate (a weak argument) while others highlight a potential Peronist comeback that could roll back President Javier Milei’s pro-market reforms — a more convincing concern, at least from an investor’s perspective. My own view is that today’s market turmoil stems from a string of missteps by Milei himself, a political newcomer who proved more adept at delivering shock therapy and bringing inflation down than at building the broad coalition needed to sustain his reforms and shield him from their inevitable fallout, including an erosion of real incomes.