Side by side, Venezuela and Chile, compared in video | Chile embraced free markets.

May 17, 2019

Side by side, Venezuela and Chile, compared in video

By Monica Showalter
Economist Steve Hanke has found a terrific video treasure on Twitter from El Cato, the Spanish-language branch of the Cato Institute, comparing and contrasting the development arcs of Chile and Venezuela. Here it is:

​https://pbs.twimg.com/ext_tw_video_t...jpg&name=small

https://pbs.twimg.com/profile_images...bAT_normal.jpg Prof. Steve Hanke
✔ @steve_hanke

Video at the tweet

#Chile liberalized its economy and enjoys a high quality of life and freedom. #Venezuela embraced socialism and is now one of the world's poorest nations and under a dictatorship.

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10:46 AM - May 16, 2019

The video is in Spanish but don't worry if you don't speak the language, you don't need it in this one. Just turn the sound down and watch the powerful photos and graphics.
The bright beauty of Santiago, Chile is shown in stark contrast to the filthy hellhole Caracas, Venezuela, has become. You can see the grainy, dark, dank dirty inhuman cementiness of that city - which has been so familiar to us in photos it sometimes goes unnoted, with the normality contrast that Santiago provides. This gives us a good whiff abou how far Venezuela has fallen through socialism. There are charts with data, such as this one below, showing how the countries have switched places over the last few decades.
Why did the countries switch places on the development scale - so spectacularly directly? Look - it's almost a straight line up and a straight line down. Why did the countries switch places on the development scale in such an unmistakeably straight line?

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Image credit: El Cato // Twitter screen grab

Well, because Venezuela took the express train to socialism, and Chile embraced free markets.
Once upon a time, Chile was the country that was the socialist dump, in the early 1970s it was literally a vassal state of Cuba's Fidel Castro, who came down to that country under the regime of then-President Salvador Allende, and barked orders. That Castrofication, as well as a long baseline history of soft socialism before Castro showed up in the decades earlier- a long soggy socialist slide - made Chile the country that was the hellhole.
Now it's Venezuela. And by the wildest coincidence, Venezuela, has embraced the ame Castro and all his minions, getting the exact same result.
The uplifting element of the video is that Chile didn't stay a dump.
Chile all by itself embraced free markets. It didn't have any American invasion or nation-builders in the works for it (cripes, when this happened, Jimmy Carter was president in the states), Chile actually did the whole thing itself.
And far from being a U.S. model, or imitation, Chile's embrace of free markets was quite organic, it done at approximately the same time Ronald Reagan and Margaret Thatcher were freeing up the U.S. and U.K. economies, so nobody was under anyone's tutelage at the time. One of the most striking things about it was that Elliott Abrams, who worked at the State Department at the time as the Latin American point man, was actually working to thwart it, based on a backward-looking argument about human rights violations in the country under the constitutionally authorized (same as Juan Guaido in Venezuela) Pinochet military government. It kind of gives reason for doubt to see Abrams at the helm in the U.S. again over Venezuela given his inability to understand how Chile dug out of its socialist morass.
Armed only with a group of young economists schooled in economist Milton Friedman's free market economic philosophy, Chile cut spending, stabilized its currency, got its massive socialist debt paid off, cut taxes, threw out thousands of leftist regulations (some of which had that lefty-we-know-what's-good-for-you-odor, such as the one that prohibited new vineyards from being planted as a means of combating alcoholism), installed unilateral free trade (letting every nation have free trade from its end even if they were charging tariffs on their own, which took guts to do), and most importantly, set itself up for investment and prosperity by initiating the world-famous Chilean Model, the system of private pension savings that works so much better than America's Prussian-Model Social Security system, which is going broke.
Jose Pinera was the young economist who, with great difficulty, set up that revolutionary model, which turned out to be a runaway success, copied by every nation that has decided it doesn't want to have an unfunded pension liability problem - and any nation that wants to have money spent for nice things like roads and bridges (without having to beg the Chinese to build them on their own terms).
I've been to both Chile and Venezuela and the difference couldn't be more startling. Chile looks like a classy version of what California could or would be, minus its Mexican PRI-style "perfect dictatorship" (as Mario Vargas Llosa once put it) socialism. The Chilean roads are beautiful, the subway is efficient, the stores are full of beautiful things to buy (I still want to go back and buy more stuff there!) and the corruption is nil.
Venezuela by contrast is a hellhole of chaos, dilapidated, noisy, graffiti-strewn, full of crooks at every turn, empty store shelves, long lines to buy scarce goods, and utterly miserable.
Both countries embraced socialism, each at the bottom ends of their scales on the charts. But Chile also stands as a model for how Venezuela can get out of its socialist morass once it gets the dictatorship out of there. There isn't much hope for persuading Alexandria Ocasio-Cortez or Bernie Sanders of the importance of rejecting socialism from these charts but it could help educate Millennials, who get nothing like this in their schooling. One can also hope that Abrams doesn't interfere with the embrace of free markets as he did in Chile -- because Chile really does have the solution for how to fix Venezuela down the road. El Cato's video shows it.

Economist Steve Hanke has found a terrific video treasure on Twitter from El Cato, the Spanish-language branch of the Cato Institute, comparing and contrasting the development arcs of Chile and Venezuela. Here it is:

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https://www.americanthinker.com/blog...new_video.html

Cuba Ration Lines Grow Tense as Economy Flails

06/21/2019 | 05:45am EDT
By José de Córdoba

HAVANA--A 91-year-old former comrade of Cuba's late dictator Fidel Castro recently startled Cubans when he announced government plans to breed ostriches to help feed the masses.
Comandante Guillermo García raved on Cuba's main TV news show about the giant flightless bird, "which produces more [meat] than a cow." The comandante, who runs some of Cuba's cattle-breeding operations, also extolled the meat of the hutia, a giant rodent endemic to the island, as better than beef.
Pushed by the implosion of top ally Venezuela and sanctions imposed by the Trump administration, Cuba has driven into an economic ditch. The government has tightened state rations. Residents stand in lines for hours to buy scarce basic goods such as eggs, flour and chicken.
For many Cubans, ration lines and ostrich farms recall the grim "Special Period" in the 1990s after the collapse of its benefactor, the Soviet Union. As the Communist-run island endured near famine conditions, residents devoured cats and fried "steaks" made of breaded grapefruit rind.
"We are starting to go into a new special period," said Osmary Armas, 45, who owns a neoclassical mansion turned bed-and-breakfast that has been largely bereft of U.S. visitors in recent months. "Things are very bad."
For years, American officials made no secret of their belief that if the U.S. turned the economic screws, the Cuban government would be forced out. But the Cuban regime has had nearly six decades of experience defying the U.S., administering scarcity and dishing out repression.
Cuba's police state is intact. The government has scant opposition, and commands the loyalties of many.
The Trump administration has continued to turn the screws. In early June, the administration banned U.S.-based cruise ships from traveling to Cuba, affecting some 800,000 passenger bookings in the coming months. The U.S., which doesn't allow regular tourism to Cuba, also eliminated a "people-to-people" travel permit that most Americans use to visit the island.
Those moves came after the administration put a cap on remittances from Cuban Americans, among other steps. It has even nixed an agreement with Major League Baseball allowing Cuban baseball players to join its teams.
The administration is trying to pressure Cuba into abandoning its support of Venezuela's beleaguered President Nicolás Maduro. The U.S. says Cuban intelligence services have prevented Venezuela's military from removing him. Cuba denies stationing soldiers or the 2,500 security agents the U.S. says Havana has in Venezuela.
Cuba continues to count on Venezuelan largess, particularly cheap oil and cash in payment for the services of more than 20,000 Cuban doctors, but the support is dwindling. Venezuela's contribution to Cuba's GDP fell to 8.5% in 2017 from 22% in 2013, said Carmelo Mesa Lago, professor emeritus at the University of Pittsburgh and an expert on the Cuban economy.
During the Special Period, Cuba's economy contracted at least 35%. Now, if all Venezuelan ties are cut, the economy could shrink by 8% to 10%, said Pavel Vidal, a Cuban economist now at the Universidad Javeriana in Cali, Colombia.
As Venezuela's economy collapsed, some of Cuba's Communist leaders banked that a rise in U.S. tourism would make up for the shortfall.
For an instant, hopes were high. During the frothy two years after President Obama declared an end to almost six decades of Cold War enmity and visited the island, Hollywood shot a segment of "The Fate of the Furious" on the crumbling streets of Havana, French fashion house Chanel turned the city's once elegant El Prado boulevard into a catwalk, and the Rolling Stones, whose music Cuba once banned as decadent capitalistic noise, held a huge outdoor concert.
Some Cubans who had emigrated seeking a better life came back to the island. There was hope of a future. Private restaurants opened, art galleries boomed, old residences were renovated for rental to the flood of visitors. The number of self-employed workers grew to more than 583,000 in 2017, about 13% of the workforce, from 424,300, or 9%, in 2013, according to official Cuban statistics.
"It was the only boom we've ever had in my 45 years of life," said Ms. Armas.
Mr. Trump slammed the door on this new Cuba. "We were full of hope and Trump arrived and everything started to go bad," said restaurateur Alain Rodriguez. Business is down 60% at "Waoo!", his restaurant in Havana, since Mr. Trump's first months in office, he said.
A few miles away, on a chicken line outside a state-run market, tensions were high. About 100 people waited in the scarce shade of a parking lot, as police kept the peace. The crowd hissed and yelled as an older man tried to break the line. He backed off.
An officer let in several people at a time to buy their ration: two packages of chicken each.
The police presence suggested the government is wary that Cuba's faded revolutionary dream could end in a social conflagration started by a fight over chicken parts.
"They treat us like cockroaches, stepping on us," hissed a woman on the line, referring to Cuba's ruling establishment. She said had been waiting for about two hours. "Everything in Cuba is political, even the chicken. They have everything and we suffer."
She whispered: "The special period is coming, and it's coming hard."
In 1994, during the worst days of the Special Period, frustration with food shortages boiled over. Police battled hundreds of protesters shouting "Libertad!" in a riot known as the Maleconazo. The tide turned when the late Fidel Castro appeared on the street and protesters cheered him.
Nothing like that protest had ever been seen in Communist Cuba, and nothing like it has been seen since.
Soon after, Mr. Castro allowed Cubans to leave to the U.S. Thousands took to the sea in homemade rafts and boats. Some 35,000 made it to the U.S..
Mr. Castro died in 2016, and his brother and successor Raúl has retired from the presidency. But despite the transformative power of the internet, whose use has increased in Cuba, and the lack of a charismatic figure like the late Mr. Castro, regime change appears unlikely.
"No one here is going to go into the streets and go on strike, throw stones or riot," said a 43-year-old former security guard. He was selling guava cakes from a stand in front of his house.
The view was similar from the spacious porch in a bed-and-breakfast in Havana's Vedado district. "Nobody can fix this. But nobody can overthrow it, either," said proprietor Margarita Alvarez, fanning herself against the heat of a summer's day in Havana.
Write to José de Córdoba at jose.decordoba@wsj.com

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They need to fight their own civil war and keep out of our country.