Socialists defeated by free-market conservative in Chile election

Story from Investors Business Daily.

Excerpt:

Amazingly, Concertacion’s center-left candidate, Eduardo Frei, lost the election… to pro-free-market Sebastian Pinera, a self-made billionaire who vows to expand free markets even more. Following his exuberant 52%-48% victory Sunday, Pinera vowed to make Chile “the best country in the world.”

Saying he meant to be an “entrepreneurial president,” Pinera promised to cut red tape, improve investment, make it easier to hire and fire workers, make bureaucrats accountable and improve the climate for Chileans to start businesses.

He wants to partially privatize state copper giant Codelco to attract investment. He also wants to get tough on crime. Because he’ll have to work with the Concertacion congress, he may not achieve all of it. But given the political winds, he’s sure to achieve some of it.

[...]So instead of the 3%-range economic growth seen lately, Pinera vows to grow in the vicinity of the 7.2% pace Chile racked up in the first heady years after Pinochet’s dictatorship, when economist Milton Friedman’s Chilean Chicago Boys were in charge.

Instead of producing just wine, fruit and fish, Pinera wants new measures to encourage new industries to enrich Chile and its buyers around the world.

Can a billionaire like Pinera lead Chile? His past suggests he won’t rest on his laurels. As a businessman, he liked introducing new things to Chile; during the ’80s he introduced credit cards when these were barely known and made them a fact of life.

He also has a knack for rescuing failing industries and transforming them. In the 1990s he bought Chile’s battered state airline and turned it into LAN Airlines, now South America’s biggest carrier.

Chile’s markets are optimistic. The stock market rose 1% to its highest level ever on news of Pinera’s election.

Although Chile was being run by socialists, they were actually really good on fiscal issues.

I blogged before about how a pro-free-trade economic policy had produced so much economic growth that Chile received an invitation to join the prestigious OECD, an organization of 30 economic super-powers! Well, Chile accepted the invitation – they are the first South American nation to ever be in the OECD!

The Wall Street Journal has the new rankings for the freest economies in the world. Chile is #10! Talk about punching above your weight!

Rank	Country	Year	Score	Change
1	Hong Kong	2010	89.7	-0.3
2	Singapore	2010	86.1	-1
3	Australia	2010	82.6	0
4	New Zealand	2010	82.1	0.1
5	Ireland	2010	81.3	-0.9
6	Switzerland	2010	81.1	1.7
7	Canada	2010	80.4	-0.1
8	United States	2010	78	-2.7
9	Denmark	2010	77.9	-1.7
10	Chile	2010	77.2	-1.1

Chile is the number one place I would like to live if I could choose to live anywhere. But they have these terrible earthquakes! I don’t know what to do about that. I have this crazy idea to live in an earth-sheltered house, just to save money on utilities and to lower maintenance costs, so that I have more time for pets and friends. I wonder if they have those in Chile?

I also like Honduras (#99) and Colombia (#58). I was showing off my Honduras-made shirts today at work to one of the atheist-Democrat guys who is suspicious of free trade. I explained the difference between between foreign investment and foreign aid. I prefer foreign investment. The clothes are well-made, and I like to help poorer nations to grow their economy by trading with them – so that they have jobs they can be proud of. Today, clothes, tomorrow, LCD monitors! My parents were born in a poor country, just like Honduras or Colombia.

Filed under: News, Augusto Pinochet, Business, Chile, Developing Nations, Economic Development, Economic Liberty, Economics, Economy, Election, Election Results, Federal Election, First World, Foreign Aid, Foreign Investment, Free Market, Free Trade, Freest Economies, Government, Industrial Development, Latin America, Michelle Bachelet, Milton Friedman, OECD, Politics, Poverty, Sebastian Pinera, South America, Taxes, Third World, Wealth

Indian auto sales surge 71.9% while free trade vaults Chile into the first world

Map of India

Before, I wrote about India’s election results and the decision of the ruling Congress Party to drastically cut income taxes. And I also wrote about China’s decision to cut taxes on purchases of new automobiles. So did those tax cuts work out for India and China?

Story from the Associated Press

Excerpt:

China extended its lead over the U.S. as the world’s biggest auto market in November, with production and sales both surpassing 1 million vehicles, and India saw sales jump 71.9-percent.

[...]China’s auto market is sizzling, thanks largely to tax cuts and subsidies aimed at supporting the industry and encouraging use of more fuel-efficient vehicles. The boom has clinched China’s status as the world’s biggest vehicle market due to languishing sales in the U.S.

[...]The surge is also a sign of how the Indian consumer — encouraged by government tax cuts, a big disbursement of back pay for government employees and falling interest rates — is fueling economic growth in Asia’s third-largest economy.

As everyone knows, the Democrats chose to bail out auto companies with taxpayer money and reward people with taxpayer money for destroying fully functional vehicles. And we all know how well that has worked out.

Chile poised to jump from the third world to the first world

Check out this editorial from Investors Business Daily. (podcast here)

Excerpt:

Chile is expected to win entry to OECD’s club of developed countries by Dec. 15 — a great affirmation for a once-poor nation that pulled itself up by trusting markets. One thing that stands out here is free trade.

[...]It’s not like Chile was born lucky. Only 30 years ago, it was an impoverished country with per capita GDP of $1,300. Its distant geography, irresponsible neighbors and tiny population were significant obstacles to investment and growth. And its economy, dominated by labor unions, wasn’t just closed, but sealed tight.

In the Cato Institute’s 1975 Economic Freedom of the World Report it ranked a wretched 71 out of 72 countries evaluated.

Today it’s a different country altogether. Embracing markets has made it one of the most open economies in the world, ranking third on Cato’s index, just behind Hong Kong and Singapore. Per capita GDP has soared to $15,000.

Besides its embrace of free trade, other reforms — including pension privatization, tax cuts, respect for property rights and cutting of red tape helped the country grow not only richer but more democratic, says Cato Institute trade expert Daniel Griswold.

But the main thing, Griswold says, is that the country didn’t shift course. “Chile’s economy is set apart from its neighbors, because they have pursued market policies consistently over a long period,” he said. “Free trade has been a central part of Chile’s success.”

Democrats oppose free trade, and their hostility to free trade angers many other countries in the world.

What does it take for a country to succeed?

I gave my Dad my copy of “Money, Greed and God” by Jay Richards, and although he thought that it started out slow, he’s warmed up to it. He calls me on the phone at least twice a day, and last night he alerted me to this web site, where you can track each countries average citizen’s life span and per-capita GDP over time. My Dad was pretty liberal on economics before, so naturally I’ve been working on him with lots of introductory books on economics. He’s read about a dozen now, and Thomas Sowell is his favorite.

Anyway, my Dad says that this is what a country needs to succeed:

• free trade with other nations
• the rule of law
• low judicial activism
• low tax rates
• private property protections
• currency not threatened by inflation
• low government spending
• minimal regulation of commerce

And at that web site, you can track the success of countries like Singapore and Hong Kong, which embrace conservative small government free market fiscal policies, and compare them with countries like Zimbabwe and North Korea, which embrace big government protectionist fiscal policies. Countries fail because they adopt the wrong policies. They succeed when they adopt the right policies. It doesn’t matter how poor they start, if they have the right policies, they grow rich over time.

Why are the Democrats so incompetent on economic policy?

Well, it’s because there is almost no one in the Obama socialist regime who has ever run a business or worked in a business. Check out this graphic. (H/T Flopping Aces)

You can read more about the Obama administration’s ignorance of business and economics here in Forbes magazine.

This Reuters article discusses the price of economic ignorance: (H/T Gateway Pundit)

Excerpt:

Hunger is spreading while the number of homeless families is increasing as a result of the recession and other factors, according to a report on Tuesday.

The U.S. Conference of Mayors said cities reported a 26 percent jump in demand for hunger assistance over the past year, the largest average increase since 1991.

Middle-class families as well as the uninsured, elderly, working poor and homeless increasingly looked for help with hunger, which was mainly fueled by unemployment, high housing costs and low wages.

Democrats really don’t know what they are doing. It’s like putting pre-schoolers in charge of Amazon.com. It doesn’t work. Their ivory tower, silver-spoon worldview cannot comprehend real-world, grown-up complexities. So long as the Democrats continue to attack the businesses that employ citizens while redistributing wealth from people who produce to people who vote Democrat, our economic troubles will continue.

Related Cato Institute podcasts

• How to create a job (9 minutes)
• Trade, trade, please go away (6 minutes)
• The rule of law and the Fed (12 minutes)

Filed under: News, Auto Industry, Auto Sales, Automobile Industry, Big Labor, China, Conservative, Currency, Eminent Domain, First World, Free Market, Free Trade, Hayek, Income Tax, India, Inflation, Judicial Activism, Keynes, Labor, Labor Union, Liberal, Manufacturing Sector, OECD, Organized Labor, Private Property, Prosperity, Protectionism, Protectionist, Recession, Regulation, Rule of Law, Sales Tax, Smoot-Hawley, Spending, Strict Constructionism, Strict Constructionist, Tariff, Tax Cuts, Tax Rate, Taxes, The Rule of Law, Third World, Union

How environmentalist extremism hurts the poorest developing countries

I wrote before about how environmentalists banned DDT in Africa, causing 25-50 million innocent deaths. And I also profiled the murderous views of leading environmentalists, including the radical views of Obama’s pick for Science Czar. The real goal of the secular-left is to equalize life outcomes by controlling the economy, and they don’t care how many poor people have to die in order to get control.

Consider this video from the Competitive Enterprise Institute about Ecuador.

It isn’t businesses that hurt the poorest of the poor in these developing countries, it’s eco-socialists who want to restrict development.

And now let’s take a look at an article that provides more detail.

Understanding Eco-Imperialism

Consider this article by policy analysts Willie Soon and Paul Driessen, in which they argue that environmental extremism hurts developing nations by forcing them to remain in poverty.

Excerpt:

Eco-colonialism keeps Africans “traditional” and “indigenous,” by insisting that modern technologies are harmful and not “sustainable” in Africa.

Abundant, reliable, affordable electricity could power homes, offices, factories, schools and hospitals, create jobs, bring clean running water, and generate health and prosperity. But Rainforest Action Network and other pressure groups oppose coal and natural gas electricity generation on the grounds of climate change, and hydroelectric and nuclear power for other ideological reasons. They promote wind turbines and solar panels that provide electricity unreliably and in amounts too small to meet any but the most rudimentary needs.

Biotechnology could produce bumper crops that overcome droughts, floods, insects, viruses, and even global warming and cooling. But Greenpeace and Sierra Club oppose this precision hybrid-making technology, and instead promote land and labor-intensive subsistence farming.

DDT and insecticides could slash malaria rates that Al Gore and other climate alarmists falsely claim are rising because of global warming. But Pesticide Action Network and other activists stridently oppose their use, and the European Parliament recently imposed new pesticide restrictions that will further restrict African access to life-saving chemicals.

This is important, because a lot of well-meaning, uninformed Christians are taken in by environmentalist rhetoric about saving the planet. We need to do good not just feel good while actually doing harm.

Filed under: Commentary, Aid, Capitalism, Developing Nations, Development, Eco-Imperialism, Foreign Aid, Foreign Investment, Investment, Socialism, Sustainable Development, Third World