Chile Forum

I agree with most of what you said, it was well written.
The only thing for me is that Pinera is a much needed change from the stagnant nature that has existed for some many years and the ridiculous bureaucracy that needs overturning asap in regards to banks, govt offices, etc. I hope these changes will come in the form of modernization of the system.

As well, even if Pinera only affects a certain portion of the country it must be reviewed as positive as no president or govt can ever change all of the classes or all of the people but if perhaps some poor become middle and more middle become wealthy, it is at least a step in the right direction. Even in the US this has never changed as those at the bottom strive no further to achieve any more than live off of the welfare state and we still have education and other issues here. US corruption is as bad or worse in the private sector and in govt.

For me its all about Chiles chance to jump a level and put a foot forward in the grand scheme of South American politics to separate themselves more so than how many become wealthier or what tax cuts are given.

this brings up a point that i am unclear on in the world of chilean politics....in the US, when control of the white house switches parties, the upper tier of government employees get replaced, but the great majority of "civil servants" continue on in their jobs. what happens here?

my chilean girlfriend thinks that the party affiliations are stronger within the national government and that there will be more turnover....but since chile hasn't had a power shift like this since pinochet left, she isn't really sure. but she is sure that party affiliation will a long way towards deciding who stays and who goes...in other words...more of the same kind of networking we saw with concertation, but this time with a right twist. it's not what you know...it's who you know....on the right.

there's a plus and minus to everything.....less turnover means more stability (or stagnation)...more turnover means a fresher start (and more chaos).

well, from what i have heard stagnation is not whats wanted and most of us here know that the infrastructure part must be upgraded in terms of doing biz in chile.
the general consensus is that most will go due to affiliation but not all.
There is a new Ambassador for D.C. but the Ministerio of Agricultura and Economic office, who were center left, will most likely stay.

And if there is one thing I have learned in life, its all about who you know no matter where you are on this planet, thats just the nature of society and relationships, we all do it even if we think we dont.

The US has failed miserably at addressing the huge distribution of wealth disparity (which is getting increasingly wider) among its population. Therefore, I hope Pinera throws away his Harvard economics playbook and focuses on how to achieve a more just society in Chile.

More "just" society means bringing "the rich" down. If everyone had a brand new Honda and one guy had a Mercedes, the class warriors scream "injustice" left and right. The reason half the planet is trying to get into the US is that they want the Honda and a shot at the Mercedes. Many of the places that they are leaving, everyone has the same just share - little or nothing. But hey, those societies are "equal" and that's how the US ought to be. The US success is based on people worrying about how to move up instead of how to rip others down. To the extent that the US is in trouble, it tends to come from "I have no goat, so let's kill yours" type of thinking. How's the 50% of the healthcare system that is already run by the government doing? Lousy, gee, who knew. Solution: Let's screw up the private 50% that is functional, so we'll all be equal.

I'm no Pinera expert, but it sounds like he rejects such inferior thinking. Heck, even Concertacion seemed to have limited how far it took such nonsense. I hope Pinera focuses on making things better for everyone as opposed to some twisted, misery-inducing concept of "justice".

John Hyre, These Guys Never Get It

First, It is kind of reassuring to see the forum slipping back in to a bit of normal political ho hum chewing the fat.

Basic problem of economics being too many wants, insufficient goods. The thing that Chile has going for it is there are sufficient resources relative to such a small population. Chile has the potential to really make everyone rich, or at least not want for much. I kind of envision Chile one day being like a Switzerland the Finland of South America.

Two things: increase and encourage entrepreneurship and dump massive resources in to the education system and R&D. The fastest way to do all of that, is give any Chilean kid that wants to a free ride to go study outside the country at any University they want to.

Admin, are you saying post secondary school education in Chile is lacking? You are 100% correct. Our friends children in college know this and realize they are unemployable upon graduation. All the engineers in my wife's family have to stand aside when a production system goes down and they bring in an American contractor to get the system running.
I believe if you send a student outside Chile for education, most will not return. It's not 1930's Germany or 1960's Soviet Union; you can't hold the families hostage until they return.
Education has to be improved in Chile.
Also, wealth is earned or inherited, not distributed in the U.S.A. Even distribution does not work.
Example: Ben and Jerry's, a socially responsible company felt the highest paid employee should not earn more than five times the lowest paid employee. This was in the 1980's. When they needed to hire a financial executive, they realized they could only pay about $60,000, five times the salary of a maintenance person. Nobody wanted the job. To hire a qualified person, their only choices were to increase the salaries of all the employees to raise the maximum salary available and retain the gaps between the different types of employees, or abandon the scheme.
Common sense and capitalism set in and the plan was quietly abandoned.

I actually think Chileans that leave and don't return in many ways benefits Chile in opening relationships with the World. I honestly see the other trend everyday as we have lots of second and third generation Chileans returning now or requesting their citizenship, that hire us to assist with the paperwork.

Nice post Zenth. Nothing like a dose of reality to draw attention to the true effect of intention.

John Hyre, God Save Us from Do-Gooders

admin wrote:First, It is kind of reassuring to see the forum slipping back in to a bit of normal political ho hum chewing the fat.

Normality is such a relief. For me, it was yesterday when I found the supermarket down the hill reopened with prices the same (except for the beer) as they were on February 26. Also, no aftershocks thus far today <woops, spoke too soon, another just hit now 12:23 pm>.

All we need now is Rune to get back to posting.

Zenth wrote:I believe if you send a student outside Chile for education, most will not return. It's not 1930's Germany or 1960's Soviet Union; you can't hold the families hostage until they return.
Education has to be improved in Chile.

Well, if education is improved in Chile, by the logic above the graduates will just leave after they qualify anyway... actually Charles' proposal sounds very good, and maybe even do-able for a country with USD11B in the bank and a small population.

Yes, graduates often leave after qualifying, and in basket-case countries they never return... but that's not the case in Chile. European experience (Ireland, Poland, Czech Republic..) suggests that people often do return, with valuable experience and knowledge of different and maybe better ways of doing things.

JHyre wrote:More "just" society means bringing "the rich" down. If everyone had a brand new Honda and one guy had a Mercedes, the class warriors scream "injustice" left and right. The reason half the planet is trying to get into the US is that they want the Honda and a shot at the Mercedes. Many of the places that they are leaving, everyone has the same just share - little or nothing. But hey, those societies are "equal" and that's how the US ought to be. The US success is based on people worrying about how to move up instead of how to rip others down. To the extent that the US is in trouble, it tends to come from "I have no goat, so let's kill yours" type of thinking. How's the 50% of the healthcare system that is already run by the government doing? Lousy, gee, who knew. Solution: Let's screw up the private 50% that is functional, so we'll all be equal.

I'm no Pinera expert, but it sounds like he rejects such inferior thinking. Heck, even Concertacion seemed to have limited how far it took such nonsense. I hope Pinera focuses on making things better for everyone as opposed to some twisted, misery-inducing concept of "justice".

John Hyre, These Guys Never Get It

This "bringing the rich down" stuff is just silly to me. Like the rich should be a protected class. I'm fine with a Honda and I don't want anyone to buy me one-keep your Mercedes, I don't want it.

The US did well in years past because people in general believed they could be successful if they went to university, worked hard, did the right things. Look at the ratio of pay between average chief executive officers and workers in the US-depends on where you read it but it is certainly well over 400-1 now. In the 1960s, 1970s, and 1980s, the compensation ratio between CEOs and ordinary workers oscillated between 30 and 40 to 1. The problem is that when people can't see what they can possibly do to attain the "American Dream", everyone loses (except those at the very top 5-10%). A strong middle class means tax revenue and a more educated population, it means people are hungry to climb that ladder. It means more innovation in science and technology. More wealth equality is not communism. Unconstrained capitalism is all out greed-the catains of industry turned into the robber barons. There are some good old style capitalist reasons to keep it within reason. If you kill the American Dream(on life support now), you kill what was best in the USA. And in Chile, if you wonder about the terrible service etc., keep in mind those people know that no matter what they do, they won't be more than a clerk in Chile. And in the US, I think you're starting to see the same thing.

Pinera gives (at least 53%) of people hope(hope and change lol)-we'll have to see how that goes.

I was out of town for a few days and feel compelled to respond to John Hyre's rebuttal to my post. First, I would like to thank Laura for her usual thoughtful comments in reponse to John's post.

For the record, US standard of living ranks 15th in the world while the US quality of life index places it in 13th place. Since 1975, practically all the gains in US household income have gone to the top 20% of households. To quote Alan Greenspan (a Ayn Rand admirer): "The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threathen the stability of democratic capitalism itself". A couple of other revealing statistics: 1) US life expectancy lags 42nd in the world (behind Chile) and 2) The US infant mortality rate (6.3 per 1000 live births) is almost twice as high as France and higher than the European Union average.

Moreover, the US health care system is the costliest, most inefficient and least accessable health care system in the Western world ... the only part of it that works reasonably well is Medicare. BTW, US Government controlled health care is less than 30% of the total health care system. That is why it is critical that the Obama health care plan be implemented. If the proposed legislation is enacted it would provide insurance coverage to some 30 million plus Americans who currently lack it. In California, one out of five people (8.2 million) do not have health care insurance ... an increase of 16% from 2009 (mostly as a result of lost coverage due to unemployment).
The non-partisan US Congressional Budget Office (CBO) says the final version of the Democrats' healthcare plan will cut the federal deficit by $138bn over 10 years. Democrats say the total savings over 20 years will be $1.2 trillion but the CBO says it is unable to confirm the Democrat claim. The main point here is that passage of the proposed legislation will begin the process of gaining control over health care costs in the US. Unfortunately, the proposed legislation does not contain a "public" option as that is deemed not doable politically ... IMHO, a government controlled "single payer" health care system must ultimately be implemented.

In summary, Mr. Pinera should be very leary about adapting US economic policies for use in Chile.

I am definitely not going to get involved in sides on this one but here is a view from as much neutrality as I can muster.

1. Government should never have its hand in restricting anyones pay, anyhow, anywhere, it only leads to corruption.
2. Many of us on this board are self-made or self-employed business people, from Docs to Lawyers to Importers, etc., we build our own fortune and lives and I see no need in govt control in this nor would that be fair. If I strive to make a million dollars then I should be able to do it from my own hard work and willingness, it is not my fault that I do and someone else doesnt, this is life, some are fortunate, some are not, some are workers, some are not, this will never change.
3. John- your first paragraph is correct, those are the stats but I believe this lags behind for more reasons than just healthcare, its a style of life we have here that is work focused, fast food focused and less down time than most other countries, this is something I would agree would be nice to change.
4. John- your last paragraph is just a statement of whats been put out by various sources in regards to support of the govt plan, lets be more creative.
1. The govt lies about stats all day long so all bills look good, since when did they ever get an estimate right?
2. Yes healthcare needs reform in the US in many many areas but no one has addressed that specifically in terms of types of plans, access to carriers, pricing reasoning, inflated hospital costs, etc.
3. Many of the decrease in costs from the plan come from 1/2 trillio dollar cut in medicare, I thought we were trying to fix healthcare, not cut those that need it to give to a few more? I dont think the seniors will be happy with that one. Yet, this fact no one knows so I wont uphold it.
4. Can anyone guarantee this will cut costs? Private insurers are already raising rates because of this.
5. where does all of this money come from support a massive system for everyone? It doesnt and never has been done on such a scale effectively, even at state level, so this money factor has to be real, not theorized.

I think like most people we would like to see a real number sometime about now in regards to anything they propose no matter who is in govt, its just all revolving around hearsay and seems to change daily.

Alas, I dont want to get focused on the Obama plan as it wasnt my intention nor do I think it matters here.

As for Pinera, I dont think implementing a structure to push small business is a US economic policy but is rather a policy for all free market countries, small businesses exist and its always good to expand them.
I think with his govt support to promote this that it could drive expansion of employment, especially now during reconstruction and bring in more foreign investment, which I have to say it will. I am working now with CORFO on a project in Chile and they are bending over backwards to get our investment there and for us to build a small business in an area that needs further employment. This is not something new either, it has existed for some time even under the center left for the last 20 years so they knew it was important and a focus that would help the country and employment as the govt cant be and shouldnt be the answer to everything or most things but should rather help facilitate laws that empower people to advance, expand and increase their well-being thus advancing the country.

4heid,

You realize part of Chile's prosperity comes from their universal healthcare? It is mandatory as a percentage is deducted from paychecks. Private insurance companies do very well here and Chile has a very strong government option. Medicare-a huge amount of waste and fraud there. But interesting that arguably the US's biggest "socialist" program you don't want any cuts. I remember seeing a story about an especially fervent protester with a sign "NO GOVT HEALTHCARE! And HANDS OFF MY MEDICARE!" You can't have both statements being correct.

The point was that people should be offered a chance to better themselves-we don't want perfect equality at all-that would be silly. Small business, entrepreneurship is great but US businesses have lost their way. The bigger the better is the norm in the US-then you have "too big to fail". Many smaller companies compete-which is better for everyone. In the US, economies of scale have been popular but bigger is not better for many reasons-like this: http://en.wikipedia.org/wiki/Diseconomy_of_scale

I was reading today about auto rental companies in the US overcharging, getting very expensive. But what was notable is that one "holding company" owns three major rental companies. How is that good capitalism?

Chile has been trying to balance capitalism with regulations and a safety net-call that socialism. As a matter of fact, Bachelet signed about 40 new trade agreements. This means Chile can't be held hostage to one country (like the US). Many things already cheaper. Mr. Pinera shows no signs of taking away the "socialist" programs" -and if he did, I think the left will be back in for another 20 years. I hope he won't embrace "bigger is better" but that would be my fear. He has a pretty good understanding of holding companies-and much of it is in English. But I think what will help the country is that Pinera would like to be immortalized-not just an island or land or wealth-but a statue

But anyone that thinks social programs are socialist, good luck in Chile.

I think it highly ironic that Chile has been called one the 10 "most free" countries (or something like that) but has a better, more universal, more socialist healthcare system than the US seems to be able to muster.

Btw, interesting that some in the US are talking of an IVA tax, similar to Chile but not as much. That sort of tax is fair I think because it is a consumption tax. Buy a $50,000 auto and you pay more tax than someone buying the $10,000 auto. I also like the way they include basic collision insurance in the registration here.