If you have ever enjoyed the privilege of visiting Buenos Aires, Argentina, as I did years ago, and taken the long ferry ride across the sprawling Rio De La Plata to the charming town of Colonia del Sacramento in neighboring Uruguay, then you surely appreciate the aesthetic wonder of South America and recognize that the people of that region have a right to enjoy the fruits of their resources and labors without having them stolen by politicians.
Alas, until recently, Argentina’s socialist rulers had so thoroughly mismanaged the country that many residents could not find affordable housing. Thanks to the return of common sense, however, that has begun to change.
According to the Wall Street Journal, Argentine President Javier Milei — sometimes called the “Argentine Trump” for his stylistic and substantive similarities to former President Donald Trump — has produced a “rental-market boom” in Buenos Aires by adopting libertarian free-market principles and removing the socialist rent controls preferred by leftist politicians worldwide, including Vice President Kamala Harris.
In fact, since his election in November, Milei has eliminated most government price controls.
Meanwhile, according to Vox, Harris told rallygoers in Atlanta last month that she would “take on corporate landlords and cap unfair rent increases.”
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The vice president has also proposed socialist-style price controls for groceries.
In other words, Harris has authoritarian instincts. She believes that federal bureaucrats, not individuals operating in a free market, should determine “fair” prices.
If, however, the 2024 Democratic presidential nominee wants to find empirical support for her authoritarian socialist proposals, then she will have to look somewhere other than Milei’s Argentina.
Economist Federico González Rouco quantified Milei’s impact on the rental market. He noted, for instance, that in Buenos Aires, the supply of rental units has increased by more than 170 percent, while inflation-adjusted prices have declined by 40 percent since October, according to the Wall Street Journal.
“With good intentions or a law,” Rouco said, referring to Harris’s proposed rent caps, “you can’t modify how markets work. They have their own dynamic.”
Shockingly but unsurprisingly, under socialist rent-control laws, approximately 200,000 Buenos Aires properties sat empty in 2022. “Landlords [preferred] to keep them vacant, or lease them as vacation rentals, rather than comply with the government’s rent law,” the Journal reported.
According to Newsweek, Milei brought relief on that front when he repealed the 2020 Rental Law. Former leftist President Alberto Fernández enacted the law, which imposed rigid pricing and lease-related terms on landlords and thereby produced a rental shortage.
Soledad Balayan, head of a Buenos Aires-based real estate agency, told a local newspaper that things have changed for the better since Milei’s election.
“We’ve seen a significant increase in rental apartments, and in some cases, we had to lower prices in pesos because of fewer viewings,” Balayan said.
Ryan Bourne of the Washington, D.C.-based libertarian Cato Institute, praised the Argentine president.
“Milei cut rent control and other tenancy regulations,” he told Newsweek. “The result confirmed economic theory: the supply of rental accommodation is surging, and rents have fallen,” Bourne said.
Thus, freedom works.
Of course, greed and dishonesty remain perennial concerns, especially when the powerless must deal with the powerful.
“If men were angels, no government would be necessary,” James Madison wrote in an oft-quoted line from Federalist 51.
Leftists, enamored of government power, love that quote.
But the great Founding Father had more to say.
“If angels were to govern men, neither external nor internal controls on government would be necessary,” he added immediately thereafter.
In other words, landlords are not angels, but neither are government bureaucrats.
Milei, therefore, has recognized that policies preferred by radical leftists like Harris merely make matters worse.
May American voters take heed of Argentina’s results.
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