The Red Folder

Archived from March 25th, 2024

Key stories for the week, brought to you by the distinguished newsman Sasha Morel.

Reading for the sake of reading sucks. Telling yourself to read to win a round is nice but ineffective. This condensed news brief helps you understand current domestic and international issues, analyze the news, and gives you opportunities to read more.

International Stories

3 key international stories for the week:

1) After 100 Days, Is Milei’s Economy at 100%? Sasha Morel

President Javier Milei of Argentina expressed genuine satisfaction during a recent interview on local radio, citing a significant drop in inflation for February, which exceeded expectations by reaching 13%. However, this figure represents only the monthly rate. The cumulative inflation over the past year has soared to 276%, marking the highest globally. Even in more affluent nations, an annual inflation rate of just 8% would cause political turmoil. President Milei's apparent celebration of a 13% monthly inflation rate reflects the dire economic situation he inherited and the monumental task ahead to rectify it.

A maverick figure, self-described as an "anarcho-capitalist," Milei campaigned with a chainsaw as his emblem, symbolizing his promise to cut spending drastically. Upon assuming office on December 10th, he inherited a bloated state burdened with massive budget deficits funded through money printing. Rampant inflation had severely devalued the peso, with the government indebted to foreign creditors, including the IMF, without any reserves. Previous administrations resorted to unsustainable spending, including ineffective macroeconomic interventions such as extensive price controls, to prop up the faltering economy.

Milei faces the delicate challenge of navigating a narrow path, discarding ineffective policies while battling against the entrenched establishment, which he derisively refers to as "the caste." While his confrontational stance against traditional politicians fuels his popularity, he requires their support to implement substantial reforms, given their dominance in Congress. Striking a balance between challenging the status quo and forging alliances presents a precarious political tightrope for Milei, as his outsider image is a crucial asset.

A Quick Biopic: Javier Milei, born in Buenos Aires, Argentina, in 1970, emerged as a prominent figure in Argentine economics and politics through his unorthodox perspectives and charismatic persona. Graduating with a degree in Economics from the University of Belgrano, Milei quickly gained attention for his outspoken critiques of government intervention and Keynesian economics. He rose to prominence through various media appearances, where his fervent advocacy for free-market principles and disdain for traditional political elites struck a chord with many disillusioned citizens. His unconventional approach and fiery rhetoric have garnered both admiration and controversy, making him a polarizing figure in Argentine politics.

Despite facing significant hurdles, Milei's first 100 days have witnessed notable economic achievements. His relentless focus on achieving a budget surplus, where government revenues exceed expenditures, marks a stark departure from the previous year's substantial deficit. January and February saw the government achieving monthly surpluses, a rare feat in over a decade, achieved through substantial spending cuts in various sectors, including energy subsidies and capital expenditures. Additionally, real spending reductions, particularly in contributory pensions, demonstrate Milei's commitment to fiscal discipline.

The government's bold actions, including a significant peso devaluation and interest rate cuts, aimed to address economic imbalances, albeit with short-term inflationary repercussions. Nonetheless, these measures have started to yield results, with foreign reserves increasing and the country's risk of default declining. Despite the economic pain endured by Argentines, Milei's approval ratings remain relatively high, owing to his adept blame-shifting tactics aimed at the establishment.

However, Milei's economic plan faces uncertainties and challenges. The gradual devaluation of the peso risks exacerbating inflation, while the transition to a new monetary and foreign exchange regime remains ambiguous. The prospect of dollarization, once a campaign promise, now appears vague, raising concerns among investors. Moreover, sustaining fiscal surpluses amid declining tax revenues and potential resistance from provincial governors poses significant hurdles.

Politically, Milei's coalition lacks substantial support in Congress, hindering the passage of crucial reforms. The defeat of ambitious legislative proposals underscores the complexities of governing amidst economic turmoil. Milei's uncompromising stance and occasional missteps, such as a controversial pay rise decree, further complicate his political landscape.

In the coming months, Milei faces the intertwined challenges of economic stabilization and political consolidation. Negotiations around a "May Pact'' offer a glimmer of hope for consensus-building, yet Milei's obstinate rhetoric may hinder potential compromises. The extent of Argentina's tolerance for economic hardship and Milei's ability to garner political support will ultimately determine the fate of his presidency. While success could bolster his influence ahead of midterm elections, failure risks unraveling his ambitious agenda and inviting further political turmoil.

Read more here:

2) St. Patrick’s Patricia’s Day Lindsey Zhao

Ireland’s been a relatively low-profile country in recent international news. But now, they’re not so lucky anymore. A few weeks ago, on March 9- International Women’s Day- the Republic of Ireland held a referendum for voters to decide if they wanted to change Article 41 in their constitution, with the first question proposing to widen the definition of “family” from a ‘relationship founded on marriage’ to ‘durable relationships’, such as cohabiting couples.

The other question asked whether the phrase – “mothers shall not be obliged by economic necessity to engage in labor to the neglect of their duties in the home” – should be deleted and another phrase added – “The state recognises that the provision of care, by members of a family to one another by reason of the bonds that exist among them, gives to society a support without which the common good cannot be achieved, and shall strive to support such provision”.

Americans might call this ‘woke’. I call it confusing (and maybe just a little incomprehensible). Clearly, Irish voters felt the same. Both proposals were resoundingly defeated in the polls, with just 44% national turnout but 67% voting no on the ‘family’ amendment, and a whopping 74% voting no on the ‘care’ amendment.

But surprisingly, this wasn’t only because of conservative backlash. It was also rejected by advocacy groups as well. Feminist and activist organizations all called the referendum too vague, worrying about the impact it would have on taxes, social interpretation of the Constitution, and really, really, vague overall wording (and they’re not wrong).

And, while nearly all of the island’s main political parties campaigned for a yes-yes vote to ‘do away with’ sexist language against women, even more critics denounced the heavily confusing, gimmicky campaign that was run by the government.

Quite predictably, this loss was exceptionally embarrassing for the current Irish government, the ruling coalition of Fine Gael, Fianna Fáil and the Greens. The leader (taoiseach) of Fine Gael (the current largest single party in Ireland), Leo Varadkar, experienced a pretty large backlash from the abject failure of the referendums, and his emphasis on the need for the yes-yes vote.

That culminated in Prime Minister Varadkar announcing his abrupt and unexpected resignation on March 21. That was a massive shock to the world, even more so than coffee losing to G2 pens (ifykyk). Mr. Varadkar isn’t just one of the youngest Irish prime ministers to take office at the age of 38 in 2017, but he’s also the first person of South Asian descent to hold the position, and the first openly gay prime minister too. During his time as health minister, he championed a referendum that rolled back the country’s ban on abortion and helped win key concessions from the British on trade agreements between the two independent countries.

While he, and his party, have changed the face of Irish politics, as well as signified its rapidly changing identity, Fine Gael has struggled in recent years, with flatlined political support and the party Sinn Fein getting the most votes over Fine Gael in the 2020 elections. Further, nearly a full third of all Fine Gael parliament members have announced that they’ll be retiring by the next election cycle (expected to come no later than 2025). This will mark a new low for the party moving forward.

The middle-aged taoiseach (Irish for leader) will hold his position until the government can return to government on April 16th. For now, his successor is confirmed to be the young government minister Simon Harris. In the meantime, he’ll be moving his possessions out of the taoiseach’s residence.

Read more here:

3) Ukraine is Short on Time and Money Sasha Morel

Earlier this year, optimism regarding the Ukrainian conflict waned as it appeared to settle into a stalemate following the Ukrainian counter-offensive failure last summer. However, recent developments paint a grimmer picture, suggesting a looming threat of a substantial Russian advancement deep into Ukraine.

Since the fall of Avdiivka in February, a strategically vital town in Donetsk province, Russian forces have intensified their efforts across multiple fronts in eastern Ukraine. Despite significant losses incurred in seizing Avdiivka—estimated at up to 17,000 soldiers and numerous armored vehicles destroyed—Russian troops are relentlessly pushing westward from the town to impede Ukraine's efforts to fortify its defenses. Although their territorial gains have been limited to around seven to ten kilometers so far, a larger offensive is anticipated in the coming summer months.

The next several months are critical. Ukraine's priorities lie in bolstering manpower, fortifications, and ammunition supplies.

Despite Ukraine's remarkable achievements in repelling Russia's Black Sea Fleet and resuming grain exports from Odessa, the conflict predominantly remains a ground war. Ukraine has resorted to unconventional tactics such as launching air campaigns targeting Russian infrastructure, particularly oil refineries, using homemade drones. This aggressive stance has prompted concerns over global oil prices, but the primary battleground remains on land.

Ukraine's struggle with a severe shortage of artillery shells forced its withdrawal from Avdiivka. While drones have partially compensated for this deficit, they cannot match the concentrated firepower of traditional artillery. Political obstacles, such as the blocking of a $61 billion military-support package by pro-Donald Trump Republicans in Congress and the European Union's failure to deliver promised shells, have directly impacted Ukraine's battlefield capabilities.

Russia's overwhelming artillery superiority, firing at least five shells for every Ukrainian one, underscores the urgent need for international support. While Europe has been slow to respond, the Czech government has undertaken efforts to procure munitions globally, securing approximately 800,000 shells with financial contributions from several countries. However, a substantial funding gap remains to access an additional 1.5 million shells.

Shortages extend beyond artillery shells, with Ukraine facing dwindling supplies of air-defense interceptors and other critical munitions. The recent assault on Ukraine's energy infrastructure underscores the urgent need for effective countermeasures and logistical support.

While allies have provided essential support, Ukraine's reliance on external sources for military resources highlights the need for domestic mobilization. Political hurdles, including limitations on conscription, hinder efforts to bolster the Ukrainian military. Despite calls for broader mobilization, bureaucratic delays persist in enacting necessary legislative changes.

Furthermore, Ukraine's sluggish progress in constructing defensive fortifications exacerbates its vulnerability to Russian advances. Although efforts to bolster defenses have commenced, they remain in the early stages, leaving Ukraine exposed to potential incursions.

In light of these challenges, a stalemate appears to be the most optimistic scenario for Ukraine, at least for the foreseeable future. However, without significant improvements in military capabilities and domestic mobilization, the threat of a major Russian offensive looms large over the country's future.