RUTHFULLY YOURS

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.