hundredmillionlifetimes
Banned
"The future is death. Long live the future!"
"It's not a matter of what is true that counts but a matter of what is perceived to be true." --Henry Kissinger, principal sponsor of Pinochet's 1973 coup.
I'm reminded of one of the first feature films I saw about Chile, ironically a Hollywood one (from a time when it was still possible to make such exotica questioning US forpol) - Costa Gavras' Missing, featuring a politically innocent what-da-fuck indignant Jack Lemmon spouting "But I'm an AMERICAN! I've got RIGHTS you know!" during his search with daughter Spacek for his disappeared journalist son-in-law.
David Blaine in Undead Pinochet "buried alive" expose ...
"Then they talked about economic growth, the country’s modernization or its insertion in the world market, of Free Trade Agreements and macroeconomic indicators. And then the disappeared disappeared again, as did the assassinated, the tortured, and the prisoners. They disappeared between the interstices of an omnipresent market that pierces the soul of a wounded country. Like it was wounded on September 11th 1973 and every day and every night after by the dictatorship of a dictator that knew, that always knew."
Pinochet, just like David Blaine, performed magical deeds. Pinochet, for instance, was universally credited with the Miracle of Chile, the wildly successful experiment in free markets, privatization, de-regulation and union-free economic expansion whose laissez-faire seeds spread from Valparaiso to Virginia.
But Cinderella’s pumpkin did not really turn into a coach. The Miracle of Chile, too, was just another fairy tale. The claim that General Pinochet begat an economic powerhouse was one of those utterances whose truth rested entirely on its repetition.
Chile could boast some economic success. But that was the work of Salvador Allende - who saved his nation, miraculously, a decade after his death.
"So there we have it. Keynes and Marx, not Friedman, saved Chile."-----Greg Palast
But the myth of the free-market Miracle persists because it serves a quasi-religious function. Within the faith of the Reaganauts and Thatcherites, Chile provides the necessary genesis fable, the ersatz Eden from which laissez-faire dogma sprang successful and shining.
"Stop pointing your finger, dearest! It makes me very sad."
In 1973, the year General Pinochet brutally seized the government, Chile’s unemployment rate was 4.3%. In 1983, after ten years of free-market modernization, unemployment reached 22%. Real wages declined by 40% under military rule.
In 1970, 20% of Chile’s population lived in poverty. By 1990, the year “President” Pinochet left office, the number of destitute had doubled to 40%. Quite a miracle.
Pinochet did not destroy Chile’s economy all alone. It took nine years of hard work by the most brilliant minds in world academia, a gaggle of Milton Friedman’s trainees, the Chicago Boys. Under the spell of their theories, the General abolished the minimum wage, outlawed trade union bargaining rights, privatized the pension system, abolished all taxes on wealth and on business profits, slashed public employment, privatized 212 state industries and 66 banks and ran a fiscal surplus.
Freed of the dead hand of bureaucracy, taxes and union rules, the country took a giant leap forward … into bankruptcy and depression. After nine years of economics Chicago style, Chile’s industry keeled over and died. In 1982 and 1983, GDP dropped 19%. The free-market experiment was kaput, the test tubes shattered. Blood and glass littered the laboratory floor. Yet, with remarkable chutzpah, the mad scientists of Chicago declared success. In the US, President Ronald Reagan’s State Department issued a report concluding, “Chile is a casebook study in sound economic management.” Milton Friedman himself coined the phrase, “The Miracle of Chile.” Friedman’s sidekick, economist Art Laffer, preened that Pinochet’s Chile was, “a showcase of what supply-side economics can do.”
It certainly was. More exactly, Chile was a showcase of de-regulation gone berserk.
The Chicago Boys persuaded the junta that removing restrictions on the nation’s banks would free them to attract foreign capital to fund industrial expansion.
Pinochet sold off the state banks - at a 40% discount from book value - and they quickly fell into the hands of two conglomerate empires controlled by speculators Javier Vial and Manuel Cruzat. From their captive banks, Vial and Cruzat siphoned cash to buy up manufacturers - then leveraged these assets with loans from foreign investors panting to get their piece of the state giveaways.
The bank’s reserves filled with hollow securities from connected enterprises. Pinochet let the good times roll for the speculators. He was persuaded that Governments should not hinder the logic of the market.
By 1982, the pyramid finance game was up. The Vial and Cruzat “Grupos” defaulted. Industry shut down, private pensions were worthless, the currency swooned. Riots and strikes by a population too hungry and desperate to fear bullets forced Pinochet to reverse course. He booted his beloved Chicago experimentalists. Reluctantly, the General restored the minimum wage and unions’ collective bargaining rights. Pinochet, who had previously decimated government ranks, authorized a program to create 500,000 jobs. In other words, Chile was pulled from depression by dull old Keynesian remedies, all Franklin Roosevelt, zero Reagan/Thatcher. New Deal tactics rescued Chile from the Panic of 1983, but the nation’s long-term recovery and growth since then is the result of - cover the children’s ears - a large dose of socialism.
To save the nation’s pension system, Pinochet nationalized banks and industry on a scale unimagined by Communist Allende. The General expropriated at will, offering little or no compensation. While most of these businesses were eventually re-privatized, the state retained ownership of one industry: copper.
For nearly a century, copper has meant Chile and Chile copper. University of Montana metals expert Dr. Janet Finn notes, “Its absurd to describe a nation as a miracle of free enterprise when the engine of the economy remains in government hands.” Copper has provided 30% to 70% of the nation’s export earnings. This is the hard currency which has built today’s Chile, the proceeds from the mines seized from Anaconda and Kennecott in 1973 - Allende’s posthumous gift to his nation.
Agribusiness is the second locomotive of Chile’s economic growth. This also is a legacy of the Allende years. According to Professor Arturo Vasquez of Georgetown University, Washington DC, Allende’s land reform, the break-up of feudal estates (which Pinochet could not fully reverse), created a new class of productive tiller-owners, along with corporate and cooperative operators, who now bring in a stream of export earnings to rival copper. “In order to have an economic miracle,” says Dr. Vasquez, “maybe you need a socialist government first to commit agrarian reform.”
In 1973, the year General Pinochet brutally seized the government, Chile’s unemployment rate was 4.3%. In 1983, after ten years of free-market modernization, unemployment reached 22%. Real wages declined by 40% under military rule.
In 1970, 20% of Chile’s population lived in poverty. By 1990, the year “President” Pinochet left office, the number of destitute had doubled to 40%. Quite a miracle.
Pinochet did not destroy Chile’s economy all alone. It took nine years of hard work by the most brilliant minds in world academia, a gaggle of Milton Friedman’s trainees, the Chicago Boys. Under the spell of their theories, the General abolished the minimum wage, outlawed trade union bargaining rights, privatized the pension system, abolished all taxes on wealth and on business profits, slashed public employment, privatized 212 state industries and 66 banks and ran a fiscal surplus.
Freed of the dead hand of bureaucracy, taxes and union rules, the country took a giant leap forward … into bankruptcy and depression. After nine years of economics Chicago style, Chile’s industry keeled over and died. In 1982 and 1983, GDP dropped 19%. The free-market experiment was kaput, the test tubes shattered. Blood and glass littered the laboratory floor. Yet, with remarkable chutzpah, the mad scientists of Chicago declared success. In the US, President Ronald Reagan’s State Department issued a report concluding, “Chile is a casebook study in sound economic management.” Milton Friedman himself coined the phrase, “The Miracle of Chile.” Friedman’s sidekick, economist Art Laffer, preened that Pinochet’s Chile was, “a showcase of what supply-side economics can do.”
It certainly was. More exactly, Chile was a showcase of de-regulation gone berserk.
The Chicago Boys persuaded the junta that removing restrictions on the nation’s banks would free them to attract foreign capital to fund industrial expansion.
Pinochet sold off the state banks - at a 40% discount from book value - and they quickly fell into the hands of two conglomerate empires controlled by speculators Javier Vial and Manuel Cruzat. From their captive banks, Vial and Cruzat siphoned cash to buy up manufacturers - then leveraged these assets with loans from foreign investors panting to get their piece of the state giveaways.
The bank’s reserves filled with hollow securities from connected enterprises. Pinochet let the good times roll for the speculators. He was persuaded that Governments should not hinder the logic of the market.
By 1982, the pyramid finance game was up. The Vial and Cruzat “Grupos” defaulted. Industry shut down, private pensions were worthless, the currency swooned. Riots and strikes by a population too hungry and desperate to fear bullets forced Pinochet to reverse course. He booted his beloved Chicago experimentalists. Reluctantly, the General restored the minimum wage and unions’ collective bargaining rights. Pinochet, who had previously decimated government ranks, authorized a program to create 500,000 jobs. In other words, Chile was pulled from depression by dull old Keynesian remedies, all Franklin Roosevelt, zero Reagan/Thatcher. New Deal tactics rescued Chile from the Panic of 1983, but the nation’s long-term recovery and growth since then is the result of - cover the children’s ears - a large dose of socialism.
To save the nation’s pension system, Pinochet nationalized banks and industry on a scale unimagined by Communist Allende. The General expropriated at will, offering little or no compensation. While most of these businesses were eventually re-privatized, the state retained ownership of one industry: copper.
For nearly a century, copper has meant Chile and Chile copper. University of Montana metals expert Dr. Janet Finn notes, “Its absurd to describe a nation as a miracle of free enterprise when the engine of the economy remains in government hands.” Copper has provided 30% to 70% of the nation’s export earnings. This is the hard currency which has built today’s Chile, the proceeds from the mines seized from Anaconda and Kennecott in 1973 - Allende’s posthumous gift to his nation.
Agribusiness is the second locomotive of Chile’s economic growth. This also is a legacy of the Allende years. According to Professor Arturo Vasquez of Georgetown University, Washington DC, Allende’s land reform, the break-up of feudal estates (which Pinochet could not fully reverse), created a new class of productive tiller-owners, along with corporate and cooperative operators, who now bring in a stream of export earnings to rival copper. “In order to have an economic miracle,” says Dr. Vasquez, “maybe you need a socialist government first to commit agrarian reform.”
