Comments on: Chile: The One Country That Was Prepared for the Financial Crisis

By: Jack Outhier

Jack Outhier — Mon, 06 Apr 2009 16:43:21 +0000

Chile was prepared this time because they have already seen the other side of the picture. They were in crisis when I was there in the late 80’s through early 90’s with inflation so bad taxi fares changed several times daily. At one point they changed their currency, simply striking three zeros to change the prices on everything. I have seen armed guards on every street to quell the public outrage at grocery stores that were empty even in the capital.

So, are they a good model today? Perhaps so, considering the lessons they had to learn the hard way. Unfortunately, it appears we may have to learn some difficult economic lessons the hard way as well.

By: Martin Paul

Martin Paul — Mon, 06 Apr 2009 02:07:21 +0000

great article and discussion. We here is Australia have a universal health care system, and we know everyone will get treated. We also have a private “top-up” system, which adds greater choice to the consumer. we are constantly amazed at this ultra private approach to medicine, to the detriment of the populace. we have had one quarter of negative growth, (second one coming soon I guess) but at this stage not in a recession. I can only hope the US policy makers put pride aside, realise they are not the only ones in the world, and learn from other strong economies such as Chile, Canada and Australia.

By: CJF

CJF — Mon, 06 Apr 2009 01:19:39 +0000

This is contradicted by the readily verifiable fact that nearly 50 cents of every dollar spent on health care in the US is disbursed by the public sector.

By: Mike O'Connor

Mike O'Connor — Sat, 04 Apr 2009 21:30:38 +0000

The Chilean government steals a large slice of copper revenues each year and you cheer that on?

By: Frank Hendriksen

Frank Hendriksen — Fri, 03 Apr 2009 18:01:39 +0000

Dr. Robert Buckman, a renowned oncologist, moved to Canada and not the US from Britain exactly for that reason. Every year, many Canadian doctors actually move back. The US spends 17% of GDP or almost double that of most western countries (Canada is around 10%). Yet more than 1/3 of Americans have no insurance, many who do cannot change jobs because they cannot afford to lose their private insurance and the US has insurance companies who employ doctors whose only job is to deny benefits to policy holders (hoping claimants will die before they have to pay out). America can clearly not afford this health care system. No matter, they just keep borrowing from the rest of the world….

By: Miguel Q

Miguel Q — Fri, 03 Apr 2009 14:39:18 +0000

One thing that is very important to clarify Mr Frank Hendriksen.
When the author says “and hired a bunch of advisors from the University of Chicago”, he does not mention that those were Chileans that went to get MBAs and PHDs to the U of Chicago, the so called “Chicago Boys”.

By: Ken Johnston

Ken Johnston — Thu, 02 Apr 2009 23:56:09 +0000

Its always fascinating to hear Canucks and Yanks arguing over which health care system is better-according to the last study that I am aware of Canada was 27 out of 28 in terms of efficency-can you guess who we beat? Yeah-our neighbours. In North America we have the two extremes in healthcare-cradle to grave government care up north and total laissez-faire capitalism down south. Neither works.
There are dozens upon dozens of national health systems around the world that are a mix of private and public care. The one thing that they all have in common is that they deliver care more efficently than either “pure” model.

By: Savage Jungle S.A.

Savage Jungle S.A. — Thu, 02 Apr 2009 23:08:49 +0000

As a Chilean the last ten years (a U.S. expat) I can confirm that Martin’s article is spot on, and very accurate. I would like to clarify one thing: When Martin says the Chilean peso fell this year 23% to the dollar, one must understand in context that the dollar has been falling in a consistent and constant fall for 6 years relative to the Chilean peso and the dollar had lost 56.08% of its total value (765 to 429) or a change of 43.92%! In otherwords, before the stock market crashed, it had already lost 50% of its value due to the crashing dollar relative to a stable currency, or a 300% loss relative to real money–gold. But then the dollar suddenly spiked this year and gained back 23% when the stock market crashed, because too many countries and projects were chasing too few dollars. But since mid November, that TEMPORARY aberration has returned to the normal pattern, but this time the dollar is falling in a far steeper crash from 625 in mid- November to 575 today. That means with the total $25 M investment needed in my Savage Jungle private island resort, one could have gained by converting to pesos $1,250,000,000 Chilean pesos or U.S. $2,173,913 in just 4-1/2 months! And that is just the beginning. If you look at the slope of the dollar crash since mid November it is the same slope as the stock market–very steep. Had someone funded our entire $25 M resort over six years ago, they would have made U.S. $7,196,969 just on their Chilean peso investment alone!

Because the U.S. is printing money out of nothing like there is no tomorrow (something that 10 years from now people will look back and say how could they have been so stupid), I project an absolute minimum of a 50% return on a Chilean peso investment alone.

In response to the ignoramus blogger Frank, the economic “experts” that caused the current crisis were all Keynesians. Even Greenspan, who claims he is not a Keynesian, admits in his book that he strayed far from his Ayn Rand roots, but he devotes a large part of his book to her early influences on him. Martin, in his very accurate article, used the best economic model currently known in the world: That of Nobel Prize Winning economist F.A. Hayek, as well as Ludwig von Mises, and Nobel Memorial Prize winner Milton Friedman, commonly referred to as the “Chicago School.” Had the “Chicago Boys” not stopped at just re-engineering the macro-economy, but also fixed Chile’s bureaucratic, Spanish Mercantilism micro-economy, Chile would not only be ranked above England and Switzerland, as Chile now stands in the Heritage Foundation’s Economic Freedom ranking, Chile would likely be ranked above the U.S. and it soon will be as the macro changes they made in Chile are causing the micro to change very slowly.

By: Ignacio Garino

Ignacio Garino — Thu, 02 Apr 2009 18:16:40 +0000

Chile is definitely one country that has been doing things as they are supposed to be done for a long time, despite all political challenges it has been thru.

Even things are a more complex you can explain the current resilience Chilean economy is showing to the world because two factors.

The first one the counter cyclical economic policy they have been running during the “commodities bubble”.

The second factor is that Chilean economy is highly dependent on copper price, and cooper has been experiencing a wild ride this year.

So nice country, with professional people and economic policy committed to growth that holds over changing governments.

A glimpse of light in a foggy Latin America.

By: Jorge

Jorge — Thu, 02 Apr 2009 16:56:23 +0000

Martin.. wrong way..chile is a third world country and will never improve..and yes..we had the IMF and the so called “chicago boyz”….and as a matter of fact..we just lost40% of our private pension funds ..and of course..the owners didnt loose a dime….70% of the population is in the public health sector…private health works only for a few bacause it’s too expensive….
If Obama keepon printing paper…americans will only get hiperinflation..and the rest will be history..like in Rome !!