Tuesday, December 12, 2006

Oh, Clap Your Hands, Media Whores
Every Time You Say You Don't Believe A Fascist Dictator Dies.

In a move more cruel than telling a little girl that Santa Claus is a myth, Greg Palast breaks the spell. Pinochet's miracle, still fervently believed in even by columnists at the WaPo and other such idiots who can't even surf the web - nevermind track down real news - turns out to have been entirely the surrender to Keynes and Marx:

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.”

And just to show that in the world of finance, the lessons of history fade faster than anywhere else:

In 1998, the international finance Gang of Four - the World Bank, the IMF, the Inter-American Development Bank and the International Bank for Settlements - offered a $41.5 billion line of credit to Brazil. But before the agencies handed the drowning nation a life preserver, they demanded Brazil commit to swallow the economic medicine that nearly killed Chile. You know the list: fire-sale privatizations, flexible labor markets (i.e. union demolition) and deficit reduction through savage cuts in government services and social security.

In Sao Paulo, the public was assured these cruel measures would ultimately benefit the average Brazilian. What looked like financial colonialism was sold as the cure-all tested in Chile with miraculous results.

But that miracle was in fact a hoax, a fraud, a fairy tale in which everyone did not live happily ever after.

And we thought it was only here that the best and brightest forgot those lessons such as that which Neil Bush's Silverado Savings and Loan should have taught.

I actually purchased the book.

While looking through an article someone sent me from Greg Palast's website, I noticed one of the research assistants had the same name as this girl I had a huge crush on in 7th grade. Since it was not a common name, I figured I'd contact her and see if it was the same person -- indeed, it was. Anyway, she said she'd be at whatever party it was they had to launch the publication of the updated edition of the book -- so I went. We never really did meet up after that (so much for rekindling long dead "romances" ... anyway, not too long after that night I met my gf), but I did manage to get a very good book out of the whole thing!

And it was a fun evening: I got to meet the Village Voice's Gary Indiana (in a very inebriated state), Jello Biafra, Greg Palast, et al.
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