Reply #5: It just occurred to me I read he has some "Chicago School" economic advisors,

[Judi Lynn]

and the Chicago school way of doing things was happily implemented by the Pinochet regime in Chile as soon as Nixon installed him on the death of the people's elected President Salvador Allende.CHILE: THE LABORATORY TEST

Many people have often wondered what it would be like to create a nation based solely on their political and economic beliefs. Imagine: no opposition, no political rivals, no compromise of morals. Only a "benevolent dictator," if you will, setting up society according to your ideals.

The Chicago School of Economics got that chance for 16 years in Chile, under near-laboratory conditions. Between 1973 and 1989, a government team of economists trained at the University of Chicago dismantled or decentralized the Chilean state as far as was humanly possible. Their program included privatizing welfare and social programs, deregulating the market, liberalizing trade, rolling back trade unions, and rewriting its constitution and laws. And they did all this in the absence of the far-right's most hated institution: democracy.

The results were exactly what liberals predicted. Chile's economy became more unstable than any other in Latin America, alternately experiencing deep plunges and soaring growth. Once all this erratic behavior was averaged out, however, Chile's growth during this 16-year period was one of the slowest of any Latin American country. Worse, income inequality grew severe. The majority of workers actually earned less in 1989 than in 1973 (after adjusting for inflation), while the incomes of the rich skyrocketed. In the absence of market regulations, Chile also became one of the most polluted countries in Latin America. And Chile's lack of democracy was only possible by suppressing political opposition and labor unions under a reign of terror and widespread human rights abuses.

Conservatives have developed an apologist literature defending Chile as a huge success story. In 1982, Milton Friedman enthusiastically praised General Pinochet (the Chilean dictator) because he "has supported a fully free-market economy as a matter of principle. Chile is an economic miracle." (1) However, the statistics below show this to be untrue. Chile is a tragic failure of right-wing economics, and its people are still paying the price for it today.

The history of Chile and the "Chicago boys"

Unfortunately, Chile has been the site of revolution and experimentation for over 30 years now. From 1964 to 1970, President Eduardo Frei led a "revolution in liberty." From 1970 to 1973, Salvadore Allende embarked on a "Chilean road to socialism." From 1973 to 1989, General Augusto Pinochet and his military regime conducted a "silent revolution" (so-called because the free market quietly brought about drastic social change). After 1990, Chile has returned to democracy, but it will be a long time recovering from its experiments.

Chile's main export to the world is copper, and the United States has long held a keen interest in it. By the 1960s, U.S. companies had invested so heavily in Chile's copper mines that they owned most of them. When the conservative reformer Eduardo Frei became president in 1964, he attempted to nationalize the copper mines, but to no avail — he met stiff resistance from the business community.

In 1970, Salvadore Allende became the first Marxist to be democratically elected president in the Western hemisphere. In the course of his sweeping socialist reforms, he nationalized not only the copper mines but banks and other foreign-owned assets as well. Along with the redistribution of land under land reform, these actions deeply antagonized Chile's business community and right wing. It is now a matter of historical record that the CIA helped organize their opposition to Allende. A massive campaign of strikes, social unrest and other political subversion followed. In September 1973, the CIA helped General Pinochet launch a military coup in which Allende was killed. The Pinochet government claimed he committed suicide; his supporters claimed he was murdered.

The new government immediately began privatizing the businesses that Allende had seized, as well as reversing his other socialist reforms. But Pinochet did not have an economic plan of his own, and by 1975 inflation would run as high as 341 percent. Into this crisis stepped a group of economists known as "the Chicago boys."

The Chicago boys were a group of 30 Chileans who had studied economics at the University of Chicago between 1955 and 1963. During the course of their postgraduate studies they had become disciples of Milton Friedman, and had returned to Chile completely indoctrinated in free market theory. By the end of 1974, they had risen to positions of power in the Pinochet regime, controlling most of its offices for economic planning.

The arrangement was a new one in the history of governments. Although Pinochet was a dictator, he turned the economy over to the Chicago boys, and his only role was to suppress political and labor opposition to their policies. This arrangement was presented to the Chilean people as the removal of politicians and politics from the nation's affairs. Instead, technocrats with Ph.D.'s would run the economy according to the best theory available. Those theories, of course, were the "neoliberal" theories of Milton Friedman. Rational science would decide policy — not political slogans and muddled democracy.

In March 1975, the Chicago boys held an economic seminar that received national media attention. Here they proposed a radical austerity program — "shock treatment," they called it — to solve Chile's economic woes. They invited some of the world's top economists to speak at the conference, among them Chicago professors Milton Friedman and Arnold Harberger. Unsurprisingly, they gave the proposal their highest praise. The plan called for a drastic reduction in the money supply and government spending, the privatization of government services, massive deregulation of the market, and the liberalization of international trade.

More:
http://www.huppi.com/kangaroo/L-chichile.htm