This substack is so good and so right my down my lane that I sometimes wonder if it's really just an LLM that's been watching my every internet move and speaking directly to me for some nefarious purpose.
I think this is closer to the Keynes–Churchill debate Adam Tooze has described about the price of restabilization.
In 1925 the question wasn’t whether to restore monetary order—it was who would pay. Churchill chose rigidity (gold at the old parity), forcing adjustment through deflation and unemployment. Keynes warned that imposing the cost directly on labor would fracture legitimacy.
My point in The Trust Protocol is the modern version: today we avoid visible deflation and instead settle the gap through inflation, repression, or time. Different tools, same question—how is the bill paid, and by whom?
That’s not Keynesian advocacy. It’s an argument about trust, legitimacy, and the distribution of adjustment costs when promises outrun capacity. Money always settles the gap—the only variable is whether we admit who’s paying.
Sorry — I don’t think you’re advocating Keynesian-style management here. My concern is the quiet deception that often comes with debasement: it’s justified as “necessary” under the fear of losing legitimacy, but in practice it holds people to ransom and treats them as if they couldn’t understand what’s being done to them.
Milei in Argentina is an interesting counter-example: he paired blunt, honest communication (“this will hurt”) with rapid adjustment, and still delivered a fiscal surplus in his first full month. In broad terms, his government claims a fiscal adjustment on the order of ~15% of GDP.
It’s also worth noting the baseline: Milei took office with poverty already at 41.7% in H2 2023 (INDEC).
After the initial shock — poverty hit 52.9% in H1 2024 — it fell to 38.1% in H2 2024 and 31.6% in H1 2025 (INDEC). And while 2024 GDP still shrank 1.7%, the rebound set the stage for a ~5.5% growth outlook in 2025 (Reuters/IMF).
To me that looks more honest — and ultimately more prudent — than kicking the can down the road until the system collapses. What’s “never done” is often avoided out of fear of the consequences; here, at least, you have a policy-maker willing to risk legitimacy in order to stop quietly passing the costs onto ordinary people, while the Cantillon effect rewards those closest to power.
I think Milei’s Argentina is still early innings, and some of what we’re seeing likely reflects catch-up dynamics after a deeply distortionary period. We’ll have to see how durable it is.
But I agree with the core moral point: the issue isn’t “Keynesian tools” per se — it’s the quiet deception that often accompanies debasement or financial repression. My narrower point isn’t to crown a model, but to contrast explicit adjustment with hidden settlement. Your example is sound in terms of trust and whether people can see and understand how the bill is being paid. Thanks for the thoughtful comment.
Quite enlightening. Thank you
Very well written and articulted. Many thanks,
Nicely explained and anchored with real life effects.
This substack is so good and so right my down my lane that I sometimes wonder if it's really just an LLM that's been watching my every internet move and speaking directly to me for some nefarious purpose.
Well very well done sir
Haha no algo here - I am a guy in Pittsburgh that’s been thinking about these dynamics for a long time, as I am sure you have, too.
Very Keynesian
I think this is closer to the Keynes–Churchill debate Adam Tooze has described about the price of restabilization.
In 1925 the question wasn’t whether to restore monetary order—it was who would pay. Churchill chose rigidity (gold at the old parity), forcing adjustment through deflation and unemployment. Keynes warned that imposing the cost directly on labor would fracture legitimacy.
My point in The Trust Protocol is the modern version: today we avoid visible deflation and instead settle the gap through inflation, repression, or time. Different tools, same question—how is the bill paid, and by whom?
That’s not Keynesian advocacy. It’s an argument about trust, legitimacy, and the distribution of adjustment costs when promises outrun capacity. Money always settles the gap—the only variable is whether we admit who’s paying.
Sorry — I don’t think you’re advocating Keynesian-style management here. My concern is the quiet deception that often comes with debasement: it’s justified as “necessary” under the fear of losing legitimacy, but in practice it holds people to ransom and treats them as if they couldn’t understand what’s being done to them.
Milei in Argentina is an interesting counter-example: he paired blunt, honest communication (“this will hurt”) with rapid adjustment, and still delivered a fiscal surplus in his first full month. In broad terms, his government claims a fiscal adjustment on the order of ~15% of GDP.
It’s also worth noting the baseline: Milei took office with poverty already at 41.7% in H2 2023 (INDEC).
After the initial shock — poverty hit 52.9% in H1 2024 — it fell to 38.1% in H2 2024 and 31.6% in H1 2025 (INDEC). And while 2024 GDP still shrank 1.7%, the rebound set the stage for a ~5.5% growth outlook in 2025 (Reuters/IMF).
To me that looks more honest — and ultimately more prudent — than kicking the can down the road until the system collapses. What’s “never done” is often avoided out of fear of the consequences; here, at least, you have a policy-maker willing to risk legitimacy in order to stop quietly passing the costs onto ordinary people, while the Cantillon effect rewards those closest to power.
I think Milei’s Argentina is still early innings, and some of what we’re seeing likely reflects catch-up dynamics after a deeply distortionary period. We’ll have to see how durable it is.
But I agree with the core moral point: the issue isn’t “Keynesian tools” per se — it’s the quiet deception that often accompanies debasement or financial repression. My narrower point isn’t to crown a model, but to contrast explicit adjustment with hidden settlement. Your example is sound in terms of trust and whether people can see and understand how the bill is being paid. Thanks for the thoughtful comment.