Markets aren’t perfect, but they generally get things right in the long run, as long as they are left alone. Argentina’s wonderful Javier Milei seems to have assimilated that fact, even if his American counterparts mostly have not. In the most recent evidence of El Presidente Milei’s economic acumen, we see that he has trashed Argentina’s rent control program – and the rental housing market is now booming.
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For years, Argentina imposed one of the world’s strictest rent-control laws. It was meant to keep homes such as the stately belle epoque apartments of Buenos Aires affordable, but instead, officials here say, rents soared.
Now, the country’s new president, Javier Milei, has scrapped the rental law, along with most government price controls, in a fiscal experiment that he is conducting to revive South America’s second-biggest economy.
The result: The Argentine capital is undergoing a rental-market boom. Landlords are rushing to put their properties back on the market, with Buenos Aires rental supplies increasing by over 170%. While rents are still up in nominal terms, many renters are getting better deals than ever, with a 40% decline in the real price of rental properties when adjusted for inflation since last October, said Federico González Rouco, an economist at Buenos Aires-based Empiria Consultores.
This probably comes as a surprise to anyone who doesn’t understand market economics – like, say, Kamala Harris or Tim Walz. And that’s a trifle baffling, because rent controls have failed everywhere they’ve been tried; the cap on rents results, every single time, in reductions in rental properties available.
Milei’s move to undo rent-control regulations has resulted in one of the clearest-cut victories for what he calls “economic shock therapy.” He is methodically taking apart a system of price controls, closing government agencies and lifting trade restrictions built up over eight decades of socialist and military rule in an effort that has upended the lives of many Argentines.
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A government that governs least governs best. But our current Democrat politicians don’t understand this, and wouldn’t believe it in any case.
President Biden recently called for some rent increases to be capped at 5% annually. And Vice President Kamala Harris said that if elected president she “will take on corporate landlords and cap unfair rent increases.”
González Rouco, the economist, warned against such plans. “With good intentions or a law,” he said, “you can’t modify how markets work. They have their own dynamic.”
Add this to the long, long list of reasons to vote for anyone other than Kamala Harris for president. Not only is the Harris/Biden proposal to cap rent increases stupid, but it’s also unconstitutional; the federal government has no authority under the Constitution (especially in light of the 10th Amendment) to impose any such cap, by legislation, by regulation, or by executive order. They simply can’t do this, and while in other election cycles, I would have opined that they probably know they can’t do this and are engaging in an election-year ploy, in the case of Kamala Harris I’m inclined to believe that she really doesn’t understand the Constititution’s restrictions on the federal government; in fact, I doubt she’s ever read the founding document.
See Related: Argentina’s Javier Milei and His Plan: It’s Starting to Work!
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Argentina’s Javier Milei Proves the Market, Not Government Regulations, Provides Affordable Housing
Javier Milei’s plans are working. There are growing pains, but overall they are working, and things in Argentina will continue to improve. Why? Market freedom. Markets, I say again, aren’t perfect. But left alone, they generally get things right in the end. Javier Milei and Argentina are providing us with a stellar example of precisely that.
Can we get a Javier Milei here, in the United States? We sure could use one.
