Slush Fund Bailout: US Treasury's Argentina Gamble Revisited
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Resources & Recommendations
People Mentioned
- Scott Bessent (Treasury Secretary) - Announced the US assistance to Argentina and explained the strategic interest in the Western Hemisphere.
- Brad Setser (Senior Fellow at the Council on Foreign Relations) - Go-to expert on international financial flows who provided analysis on the US loan to Argentina and the Exchange Stabilization Fund.
- Javier Milei (President of Argentina) - Economist and self-described anarcho-capitalist whose budget-slashing policies and political initiatives were the context for the US assistance.
- Franklin Roosevelt (Former US President) - Suspended the gold standard and established the Exchange Stabilization Fund.
- Jeffrey Shafer (Assistant Secretary of the Treasury for International Affairs during President Clinton's first term) - Played a key role in the 1995 bailout of Mexico.
- Ernesto Zedillo (Former President of Mexico) - Took over in Mexico in late 1994 and faced the peso crisis.
- Bob Rubin (Former US Treasury Secretary) - Confirmed as Treasury Secretary during the Mexican debt crisis and supported the bailout.
- Bill Clinton (Former US President) - Agreed to bail out Mexico using the Exchange Stabilization Fund despite political risks.
- Walter Bagehot (19th Century writer, early editor of The Economist) - His "dictum" on the rules for a lender of last resort (lend freely, at a penalty rate, against good collateral) was referenced.
Organizations & Institutions
- Council on Foreign Relations - Brad Setser is a senior fellow here.
- International Monetary Fund (IMF) - Argentina owes money to the IMF, and the IMF's role in international loans to emerging economies was discussed.
Articles & Papers
- Financial Times - Mentioned as the source of an interview with President Milei regarding his stance on the peso.
Other Resources
- Exchange Stabilization Fund (ESF) - The primary subject of the episode, a private slush fund of the US Treasury used for financial interventions.
- NAFTA (North American Free Trade Agreement) - Jeffrey Shafer worked on this deal.
- Badgett's Dictum - A set of three rules for a lender of last resort (lend freely, at a penalty rate, against good collateral) used to evaluate the Argentina loan.