So you think President Trump is doing
badly? Some of the smarter leaders on the world scene are coming to
other conclusions, which is to say the Trump revolution is spreading.
Late last year, Chile held a presidential election, and in its
result, Chilean voters finally dumped its corruption-plagued, soggy socialist
government, up 'til now led by Michelle Bachelet, and re-elected center-right
past president, Sebastián Piñera, instead.
Piñera's finest moment during his last presidency was in 2010,
at the helm of the Chilean mining crisis, when 33 miners were trapped more than
two miles underground amid few hopes for their rescue. Piñera had
been told by his advisers just to keep the cameras away, because it was a
losing political picture. He defied them, visited the campsite out
in the remote Atacama desert up north, heaped resources onto the rescuers, and
the spectacular rescue that followed, which was the result of his keen interest
and willingness to defy the odds, was all his.
He's now done something similar as he prepares to start his new
term. According to El
Mostrador, a Santiago-based Chilean newspaper (in Spanish), he's called in
the ICBMs of the economics world into his cabinet, the Chicago Boys, who are
the embodiment of free-market economics. The Chicago Boys took their
ideas straight from Milton Friedman in the 1970s, predating both Margaret
Thatcher and Ronald Reagan, and their free-market reforms turned Chile into a
first-world country. Chile is the home to the famous Chilean Model
of private savings accounts for pensions that the left screams about, because
that reform did more than anything to transform Chile.
El Mostrador reports that multiple people with high-firepower
economic degrees are being lined up for Piñera's cabinet as he takes office
this month. Here is a Google translation, with a few clarifications
in brackets from me:
The Chicago Boys in the cabinet and undersecretaries of the
next term of office of Sebastián Piñera are Cristián Larroulet, as head of the
Second Floor of La Moneda; Juan Andrés Fontaine, who will be in charge of
the MOP [Ministry of Public Works] this time; José Ramón Valente, the
doctrinaire future holder of Economy; Rodrigo Cerda, acting as Director of
Budgets; and Alfredo Moreno, in the position of Minister of Social Development.
In the first step of Piñera by La Moneda, the Chicago
[Boys] in the front line were Fontaine, Joaquín Lavín, Larroulet and Moreno.
It [was during the Pinochet military government in the
1970s] when the Chicago Boys [last] dominated the government and imposed the
model. José Piñera, brother of [Sebastian Pinera, whom] in March will return to
be President of Chile, probably became the most emblematic. He was minister and
the creator of the AFP system. During the military regime there were more than
a dozen Chicago Boys in positions of influence at the governmental level.
The background Piñera's operating against strongly suggests he's
gotten his courage from the example of President Trump.
For one thing, he's not a hardwired free-marketer himself; he's a
businessman, a successful billionaire, as Trump is, and his instincts are to go
with the practical, not the ideological. In the past, this has
caused him to make some bad decisions in his previous term, based on political
expediency over principle, such as his act to halt the much-needed HidroAysen dam
in Patagonia, bowing to left-wing protests after all the proper permits were
obtained and the project was set to go forward. Very stupid move,
and no surprise he didn't exit office in a very popular state.
Obviously, he learns from his mistakes. The Trump
revolution and maybe his own experience seems to have told him free markets are
doable and, better still, what works.
Piñera did get elected with the wind against his back, given that
several other South American governments, beginning with neighboring Argentina,
have swung rightward amid the rubble of their own socialist experiments and,
above all, the festering horror of Venezuela.
OK, fine. But Latin America tends not to have much of a
hard conservative free-market right at all. There's usually just a
choice of jellyfish right, soggy center, and rabid left. Chile is an
exception, but its famed Chicago Boys have often been stigmatized by the
Castro-financed left as wicked because they made their reforms during the
Pinochet military government, which, actually, is a credit to Pinochet, not a
demerit to the Chicago Boys. Pinochet, in his memoirs, admitted he
knew nothing about economics and let the Chicago Boys take care of it for
him.
The Chicago Boys are utterly different, the real exception to the
rule, and a leading reason why Chile can credibly argue that it is exceptional.
Yet in all of Chile's post-Pinochet years, it's been exceedingly
hard to get the Chicago Boys due to the false narratives of the left.
Not anymore. They're unabashedly back, and some real
free-market reforms are likely to take hold in Chile. That will
happen, even with the annoying absence of Piñera's brilliant brother, José
Piñera, who is not in the lineup, although that may be because of taboos
against nepotism. A pity, because Chile's famed pension system is
under fire from the left as never before. No one can defend it with
as much precision and persuasion as José Piñera. But what's
important here is that the private savings pensions should be safe for now, and
the other necessary reforms Chile needs will be implemented. They'll
work, and Chile will become an economic powerhouse once
again. Piñera's bid to bring them back is obviously a result of his
teaming with a very free-market party to win the election, but it's also a
middle finger to all the leftists who scream "Pinochet" any time the
Chicago Boys are brought up. Piñera obviously knows that allowing
their reforms will supercharge his presidency, no matter how many other
blunders he might make.
He had to have gotten the courage to do this from the example set
by President Trump. Trump makes mistakes, too, and has all kinds of
domestic turmoil in his Cabinet as well as the lunacy of the special counsel
still looking for Russian collusion dogging him. But he did do one
radical thing, which seems to be rendering all his troubles null: he allowed
real free-marketers in to develop most of his economic policy (tariffs
excepted). As a result, the polls here show that the public doesn't
care about the Beltway stuff. The voters here like their tax cuts,
they like their deregulation, and they like the new courage and confidence
brought on by Trump's America First stances. Trump's example is
going to be widely followed as word of its success spreads. Chile's
new leader seems to be one of the first to notice.