The Chilean Central Bank reached out to Friedman's "Chicago boys" for advice on how to stabilize, resuscitate, reform and nurse the economy back to health. Their policy recommendations were technical and apolitical. They ultimately ignited the Chilean miracle, transforming it into the most successful economy in Latin America.
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Originally Posted by lustylad
You lying cocksucker....
http://www.bidstrup.com/economics.htm
. What has become of Chile? Now, twenty-odd years on, we can see the long term results of "neoliberal" economics: From the beginning of the reforms of the Chicago Boys in 1973 through 1986, there was no economic growth. Real mean salaries, adjusted for inflation, have declined by 10% since 1986 and by 18% from what they were during the Allende years. Median salaries have fared even worse, declining by 30% over the same period, signalling a torrent of wealth from the poor and middle class to the rich. When Allende was in power, less than 20% of the country lived in absolute poverty; by 1990 40% did. That figure has remained largely constant since. A third of the nation now survives on less than $30 per week. Some miracle indeed.
Enthusiastic supporters of the Pinochet reforms like to point out that since 1986, there has been a 7 percent annual growth rate; what they fail to mention is that this occurred
only after 1986, after privatization of the banks was reversed, and collective bargaining rights and minimum wage laws were restored; after jobs-creation programs were instituted and privatization of the principal source of foreign exchange was reversed. And they fail to point out that all of that additional wealth has gone into the pockets of the few; the middle class and poor have seen none of it. The much-ballyhooed privatized Social Security system, which is being held up as a model for the United States to follow, is seriously being considered for re-nationalization, since the public system that runs along side it is producing vastly better results (almost twice the benefits of the private systems). When it was privatized, those who opted to remain in the public system are sure glad now that they did.
Yet the remaining "neoliberal" reforms continue to bite. The reforms are the reason why nearly all of that much ballyhooed annual growth has gone straight into corporate profits that benefit the rich, and less than ever into the pockets of the poor and working classes - note the declining median income as mentioned above. Milton Friedman and his Chicago Boys are quite well aware of this, but simply don't care, because social justice is not their concern. All that matters to them is the increase in Gross Domestic Product - evidence of economic growth. The fact that it the increase is going entirely into the pockets of a tiny handful of the rich, suits him just fine. Remember, in his view the wealthy are wealthy because they deserve to be - and the same for the poor. As he often said, fairness was not an issue for him - the theory is apparently more important than the results of the theory - in other words, it was a religion, not a science. Consider that even in the United States, which is hardly a paragon of equitable wealth distribution, 60% of economic output goes into wages, and 40% into corporate profits. Yet in Chile, those numbers are exactly reversed. Chile now rates as the seventh worst nation in the world for equality of wealth distribution - tied with Kenya and Zimbabwe. Nearly all of the wealth being generated by the 7% growth rate is going straight into the pockets of a tiny number of the elite - and the only construction boom in the country in the last fifteen years has been going on in the very richest suburbs of Santiago.
