far right opinion - Chile after Augusto Pinochet
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Chile after Augusto Pinochet "The problem," said Council on Foreign Relations member Owen Lattimore, "is how to allow governments to fall without making it look as though we pushed them." Since these remarkably candid words were spoken forty years ago, Lattimore's fellow Insiders in the State Department and the White House have been enormously successful at finding ways to solve the "problem." Their methods have ranged from ruthless character assassination to arms cut-offs, financial strangulation, and "rules of engagement" that have set up anti-communist armies and freedom fighters for defeat. Not until last year, however, in a move as remarkable for its simplicity as for its brazenness, had the Insiders managed to seal the fate of a nation with just two grapes. Unlike other South American countries, Chile has a history of over 150 years as a constitutional republic with democratically elected governments. Not surprisingly, however, political freedom alone proved to be no guarantor of economic freedom and consequent well-being. Like the economically untutored everywhere, Chileans consistently voted into office welfare-statists such as Eduardo Frei who drove the country into the usual socialist mire of poverty and stagnation. This economic distress, in turn, played into the hands of communists who hoped to ride to power on the backs of the misguided; by the late 1960s, with its universities become hotbeds of Marxist ideology and revolutionary fervor, Chile had the largest and most obedient (to Moscow) communist party in South America. In 1970 this radicalism culminated in the election of Marxist Salvador Allende as President in a three-way split; although Allende won with only 37 percent of the vote, this was the first time an avowed Marxist had come to power via the ballot box in the Americas. Having put themselves at the mercy of their own worst enemy, the Chilean people quickly paid the price, going from bad to much worse. Allende immediately nationalized most of the country's farms and industries; brought on food shortages, rationing, and severe unemployment; destroyed the value of the peso with hyperinflation of 1000 percent; and bankrupted the national treasury. As top communists enriched themselves through graft and corruption, thousands of impoverished women in Santiago took to the streets banging pots and pans in protest and throwing corn at the military. The corn was a taunt; the military was held to be too "chicken" to act. Although the pro-left U.S. media carried stories about this "pots and pans" uprising, the real facts were obscured; the American public was not to know that a whole nation was demanding that the military overthrow a leftist regime. Nor would the media allow the public to read the unexpected testimony of former President Eduardo Frei, a Christian Democrat "progressive" admired by the Left, but shocked by the ravages of the communist regime. In 1972 Frei wrote:
Finally, in 1973, with the nation driven to the brink of civil war, it was discovered that Allende had surrounded himself with a private army of the Ch� Guevara type and had drawn up enemy lists for liquidation. The communist plan was to destroy the democratic process entirely and seize all power by murdering or jailing the nation's top military leaders. In a lightning coup the generals, led by Army Commander Augusto Pinochet, ousted the communists and took over control of the country. Allende was killed in the fighting. For the first time in world history, a communist party lost the power it had previously gained. Pinochet's Economic Miracle Only a few short years later, a major economic miracle had taken place in Chile. How had it happened? Pinochet began by recruiting into government a number of Chilean economists who had been schooled at the University of Chicago by Milton Friedman. His object was to eliminate poverty by spurring growth through privatization and competition. For starters, his free-market reformers exploded the widely accepted socialist idea that powerful bureaucrats at the top can guide an economy by deciding which resources should be allocated where and at what price. In order to give consumers themselves the freedom to guide the market by their own daily economic decisions, the Chicago Boys junked the entire structure of stifling statist controls. Import tariffs of 100 percent that had protected the most inefficient industries were reduced to 10 percent; huge subsidies were drastically cut or eliminated. Cut loose from government support, some industries couldn't make it on their own and folded. Whereas formerly such failed companies had been routinely taken over by the government, now the market was allowed to determine which should survive. Over 200 businesses were returned to the private sector, while capital inevitably found its way to the most promising new industries, such as fruit farming and salmon fisheries. The country's export base was thus diversified, with reliance on copper declining from 80 percent to below 40 percent. With the economy no longer revolving around copper and Santiago, prosperity flowed to the provinces and the rural poor. When the Chicago Boys liberalized foreign investment laws, giving Chile the most favorable investment climate in South America, sure enough -- capital flowed back to Chile in the hundreds of millions of dollars from the U.S., Switzerland, Germany, and elsewhere, including millions in flight capital from Chile's own citizens. Going further, the reformers cut the costs of business with an aggressive deregulatory program. Wage and price controls, inflexible labor laws, and "closed-shop" rules were all abolished. The level of domestic investment shot up from 12 percent of GNP to 20 percent. Decreased taxes and drastically curtailed government spending brought inflation down to 40 percent from 1000. The standard of living skyrocketed. Anti-Pinochet Propaganda All this prosperity -- brought about by free-market economists under a military dictatorship that had overthrown a Marxist regime -- was a formula sure to infuriate the Insiders in Washington, the United Nations, and the U.S. media. As early as 1975 Chile had become a prime target on the CFR's hit list. In that year President Gerald Ford (CFR) shepherded through Congress a ban on the exportation of arms and military equipment to Chile, while the United Nations overwhelmingly passed a resolution pledging aid to those forces, within and without, that sought the overthrow of the Pinochet regime. As cover for their attack, the Insiders trotted out the cry of "gross violator of human rights," while at the same time the UN maintained absolute silence about the horrendous communist genocide going forward in Cambodia and Uganda. Communist Cuba, with thousands of political prisoners rotting in its jails, many of them abominably tortured, was visited by admiring Congressmen and consistently credited by the media with having made extraordinary "advances." Panama, its people denied even elementary rights by a tyrannical Marxist dictator, was paid hard tax dollars by President Jimmy Carter, now a member of the CFR, to accept our $7.5 billion canal. How bad were human rights in Chile under Pinochet? At the time of the military coup, the government was implicated in the verified disappearance of about 600 well-known communists. About 4300 were either exiled or imprisoned, but these were all released by 1978. About a dozen political opponents of the regime have been murdered since 1980; each time the media jumped to its own conclusion and condemned the government without a shred of evidence. The rumor mills have never left off grinding out stories of kidnappings and torture, unfazed by the fact that no evidence has ever been forthcoming. In retrospect, it seems that the military in 1973, faced with an armed communist conspiracy on the verge of taking over the country, managed to save the nation from Soviet-style catastrophe with a minimum of repression and abuse. Compared to the bloodshed and horror that has accompanied every communist revolution from Russia to China, Cuba, Nicaragua, and Afghanistan, the 600 Chilean "disappeareds," whom we are never allowed to forget, seem like an exercise in humane restraint. What the media have prevented the public from grasping is that these were dedicated communist subversives owing obeisance to Moscow, preparing to inflict wide-spread death and suffering on the Chilean people. As Eduardo Frei put it after the coup:
Soviet-Cuban Subversion One who kept the world from knowing was Nathaniel Davis, U.S. Ambassador to Chile at the time of the coup and a member of the CFR. In his book The Last Two Years of Salvador Allende, Davis practically beatified Allende. His astonishing statements were only the beginning of an intense anti-Pinochet campaign that was in high gear by 1976. In his syndicated column of January 31, 1978, William Rusher reported that in 1976 the Washington Post, a CFR newspaper, ran nine human rights articles on Cambodia, four on Cuba, one on North Korea, and 58 on Chile. The New York Times, a CFR newspaper, conditioned its readers with four human rights stories on Cambodia, three on Cuba, none on North Korea, and 66 on Chile! Small wonder that the American public has the impression that the Pinochet government was the all-time worst offender against the liberties of mankind. The truth is that the trend was always in the opposite direction -- that is, toward abolishing any restrictions on human freedom remaining from the Allende regime. A temporary exception to this trend occurred in 1986 when an attempt was made to assassinate Pinochet; five presidential bodyguards were killed. Just prior to this bloody ambush, Chilean security forces discovered the largest clandestine arsenal ever found in the Western Hemisphere, buried in the north of the country. Consisting of thousands of East bloc bazookas, Soviet rocket-propelled grenades, and over 3000 U.S. M-16s "left behind" in Vietnam, the weapons had been brought to Chile on Cuban trawlers as part of a communist plan to organize a guerrilla movement bent on tearing apart the country in the manner of Peru's Shining Path. With the full extent of Soviet-Cuban subversion thus revealed and the Manuel Rodriguez Patriotic Front (the armed branch of the Chilean Communist Party) claiming responsibility for the assassination attempt, the government imposed a state of seige. Instead of condemning these outrageous communist acts of sedition and manslaughter, the Reagan Administration condemned Pinochet for -- you guessed it -- violating human rights! President Reagan "protested the harsh government crackdown ... and Secretary of State George Shultz met in New York with Chile's foreign minister to underscore that message." (The Wall Street Journal, October 6, 1986). To believe that the CIA and its Insider masters in the State Department had no knowledge of the delivery of the secret arsenal would be naive indeed. One can imagine the consternation at State and among the top Insider media bosses when news of the discovery broke. Their "noble human rightists" fabrications were immediately rendered ridiculous. As luck would have it, at the very same time that the Chilean security forces were digging up the sophisticated arms supplied by the international communist network, CBS Evening News was airing one of its usual mind-conditioning "documentaries" (August 4, 1986); this one cast the Chilean communists in the role of poorly armed local Robin Hoods fighting for the impoverished against a brutal military dictatorship. The communists were shown hijacking a meat truck and giving food away to the hungry; they were also shown trying to assemble crude weapons from pieces of pipe (the identical line successfully used to sell the Sandinista communists to the public in 1978-79). "Human Rights Abuses" Pinochet could hardly have been surprised by any of this. He was already well acquainted with hostile measures from the "conservative, anti-communist" Reagan Administration. In 1985 Reagan recalled U.S. Ambassador James Theberge, who had refused to toe the State Department line and undercut Pinochet, and replaced him with Harry Barnes, a member of the CFR, who started meeting with "non-communist opposition" groups and protesting "human rights abuses" even before presenting his credentials. This, it was explained, "helped distance the U.S. from the Pinochet regime." Just how far distant was soon apparent. In July 1986 the Chilean communists staged a violent insurrection including firebomb attacks on buses, stores, and residences, and barricading streets with rubber tires soaked with blazing liquids. Molotov cocktails and bombs containing sophisticated chemical blends that burst into flame on contact with oxygen were included in the terrorists' arsenal. Two of these terrorists, part of a group carrying tires soaked with flammable liquids, were burned in an explosion; one subsequently died after implicating the army. Immediately the Reagan State Department seized upon this incident and, without any factual inquiry but simply on the premise that the government must be guilty, claimed that the terrorist had been attacked by Chilean soldiers and then denied medical care. When the communists took advantage of the terrorist's funeral to stage a propaganda field day, boycotted even by the non-communist left, conspicuous in attendance was our own U.S. Ambassador, Harry Barnes (CFR). The facts about the real cause of the terrorist's death or even of the demonstration itself would never have surfaced had it not been for Senator Jesse Helms (R-NC), who visited Chile in the aftermath of the destructive uprising. The extensive documentation he assembled detailing the violence preceding the terrorist's death -- plus the fact that he had, indeed, been given medical care -- was ignored by the media. The misinformation consistently dished out to unwary readers took a heavy toll on the public's perception of Chile, as it was intended to. So it seemed only proper when Reagan took the unprecedented step of proposing a resolution at the UN Human Rights Commission in Geneva condemning Pinochet's regime and calling for an immediate end to "serious violations of human rights," although no verified human rights violations had taken place in Chile for many years. Reagan even sent General John Galvin, head of the U.S. Southern Command and a member of the CFR, to lay down the law personally to General Pinochet. At the same time, Elliott Abrams, Assistant Secretary of State for inter-American affairs, chief policy-maker for Chile and a member of the CFR, testified before a House banking panel that, "without human rights improvements," the U.S. would oppose $600 million in loans to Chile from international lending agencies, even though at this time these agencies were bankrolling many communist regimes, including Poland and Hungary. Economic Crisis Meanwhile, the burgeoning Chilean economy had run into a snag. In 1979 external forces had combined to bring about a crisis when the world price of copper collapsed and the price of oil, a key import, skyrocketed. Then Pinochet's economic team had made a disastrous error. For reasons still not clear, the Chicago Boys forsook free-market principles and fixed the exchange rate of the peso to the dollar when Chilean inflation was still at forty percent. This interventionist gamble paid off for awhile. But then the U.S. Federal Reserve, which had been diluting the value of the dollar by recklessly inflating the currency during the Carter years, suddenly turned off the money spigot. As the value of the dollar began to shoot up, the peso went with it, becoming fatally overvalued and killing Chile's exporters, the backbone of the economy. Industries began collapsing; then massive unemployment hit. Pinochet's Finance Minister multiplied interventions by taking over the nation's banks, doubling tariffs, imposing exchange controls, and borrowing money abroad to the tune of $17 billion. The economy was once again in ruins. Needless to say, this turn of events gave the pro-socialist U.S. media a field day. "Chile's Free Market Economy Fails"; "Chileans Victims of Theory Pushed by Chicago Boys"; "Chicago Boys Ruin Economy" were some of the front-page headlines. Then suddenly in 1983 Pinochet fired his Finance Minister and replaced him with a brilliant, 33-year-old, long-haired economist of the Chicago School, Hernan Buchi Buc. Buchi quickly launched free-market initiatives that put Washington to shame, including elimination of the budget deficit and privatization of social security, turning the accumulated funds over to professional pension managers. A favorable balance of trade in the billions soon developed, while domestic investment shot up as a result of savings incentives. The foreign debt was steadily reduced by debt-for-equity shares in Chilean companies, which introduced technical innovations and expanded production facilities. The centralized bureaucracy was diminished, while State-owned companies were privatized through a combination of employee stock purchases and public offerings that produced a spectacular expansion on the stock exchange. In short, in an insolvent, unstable Third World, Chile became an outstanding economic success. Perhaps even more impressive was the increase in social services; Chile became the only Latin country to increase social spending since the Third World debt surfaced. Malnutrition dropped to one of the lowest rates in the developing world. Infant mortality dropped to a record low. Health risks from water and sewage systems were greatly diminished when purified water reached 95.4 percent and sewage systems 70 percent of the urban population. While 60,000 poor families at the start of Pinochet's regime lived in Santiago without minimal housing, toilets, drinking water, or electricity, by the end of 1987 there were only 6000. (Insight, November 16, 1987). Most astounding of all, almost all schools and colleges, formerly centrally controlled by the Ministry of Public Education, were ceded to municipalities or private corporations. As for human rights and freedoms, Chile became the envy of much of the rest of the world. Political parties were legalized and operated openly; opposition politicians were free to speak out. Even under the short-lived state of seige, opposition magazines continued to publish articles and cartoons critical of the regime. Books were always uncensored, theaters full of plays with anti-government themes. Chile's long tradition of religious freedom was always respected. U.S. Harassment Increases In spite of, or rather because of, all this progress, U.S. harassment continued to escalate. Every State Department move, no matter how seemingly insignificant, had a calculated purpose -- to condition American opinion to accept more active measures, should they become necessary (as happened with Batista and Somoza). The State Department was positioning itself to take this lead. The evidence indicates that in 1987 the Insiders did not believe that Pinochet would abide by his own 1980 Constitution, which Chileans had approved by the biggest margin (67 percent) in the country's history. While granting Pinochet eight more years to rule, the Constitution called for a gradual return to democracy, starting with a one-candidate, yes-or-no plebiscite to be held in 1988. In case of a "yes" vote, the candidate would rule for eight years; a "no" vote would mean that a competitive, multi-party election must be held within a year. Even if the plebiscite were held, with, as seemed certain, Pinochet as the candidate, the Insiders feared his popularity would bring him out on top. Thus the first order of business was to see to it that the plebiscite was held and that Pinochet did not win. In spite of reams of scathing predictions that Pinochet would scuttle the plebiscite, the government announced it would be held on October 4, 1988. A broad-based, 17-party coalition campaign for a "no" vote in the plebiscite immediately began to shape up. In addition to the opposition socialist Christian Democrats, and sundry other socialists and Allende "retreads," the U.S. position was supported by the enormous power and influence of the Catholic Church, whose "liberation theology," or Marxism clothed in the vocabulary of Christianity, pulled the uneducated to the left. One of Pinochet's most powerful and articulate foes, Roman Catholic Cardinal Raul Silva of Santiago, took the lead. Foreign money, especially from the U.S., poured in to finance the Left. Although Pinochet, entirely faithful to the Constitution, campaigned up and down the length of Chile, when the votes were counted, the intrepid warrior had lost, 55 to 43 percent. There was still a chance, however, that the government could win in the December 1989 election and save the country from a return to socialism. The chance lay with the government's candidate, Hernan Buchi. By this time Buchi had become something of a cult hero, admired not only for his economic brilliance but also for his outdoorsy, health-oriented lifestyle of jogging and eating yogurt and apples for lunch. Still only 39 years old and immensely attractive to younger people, Buchi began to emerge as a powerful candidate against the 72-year-old Christian Democrat Patricio Aylwin. Before this could get out of hand, the Insiders in the State Department struck. Grape Scare On March 13, 1989, 150 inspectors from the Food and Drug Administration descended upon a Philadelphia port terminal and, out of hundreds of thousands of crates of Chilean fruit, quickly zeroed in on two cyanide-laced grapes bearing white crystalline rings around tiny holes. Although 12,000 more crates were inspected and no tampering was found, the FDA issued a momentous order banning all Chilean fruit cargoes at the peak of the shipping season. This included 600,000 crates of fruit waiting to be unloaded and an additional 1.4 million tons en route. Since Chile exports 65 percent of its fruit to the U.S., this extraordinary action rocked the economy of Chile with a $1 billion loss and idled tens of thousands of vineyard workers, packers, dock workers, and freighter crews. The story given out was that the FDA search had grown out of a terrorist call to the U.S. Embassy in Santiago claiming that fruit there had been poisoned. But researchers at the University of California at Davis working for Chilean exporters soon proved that the cyanide contamination had occurred in the U.S., not in Chile. Experiments showed that. the grapes must have become contaminated while in FDA hands, that is, about four hours before the lab tests. (The Wall Street Journal, November 16, 1989). Additionally, a study of thousands of pages of FDA documents obtained under the Freedom of Information Act showed the whole affair to be riddled with inconsistencies and implausibilities. The dual purpose of this criminal act, carried out by the FDA but believed to have been ordered by the State Department, is self-evident. The economic hardship and disruption it caused among the poor was exploited by the Left as being linked to the government, while a message was sent to the military and business class as to what the power of the U.S. could do in the event of a government victory. Eight months later, the statist Christian Democrat Aylwin became President; the Soviet Union promptly restored relations and announced that the new Chilean leadership and the Soviets "share many view points." The brilliant economist who had done so much to help the people of Chile, and whose knowledge would have assured continued growth and prosperity, was safely out of the way. The general who had clung so tenaciously to his belief -- that limited government, private property, and a free market are the only way to help the poor -- was back in the barracks. International Economy The full story of the Insider machinations that have doomed Chile to socialist decline will never be known. But we do know enough about the interventionist Christian Democrats (they blamed the free market for the depression of 1980) to see that they are headed for exactly the kind of economic debacle that the Insiders promote worldwide. Although it may seem that the Insiders bring about the demise of governments because they (the governments) are anti-communist, this is actually secondary. Their primary objective is, and always has been, to destroy economies. Since most anti-communist governments, even authoritarian ones, tend to have viable economies, it is this sort of government that the Insiders target. Once an economy is reduced to a basket case, the Insiders move into a position of control with tax dollars (as we are seeing now in Eastern Europe and Nicaragua) followed by commercial monopolies. No one has said it better than Barry Goldwater in speaking of the Trilateral Commission:
A crucial point to keep in mind about Chile is that it developed into an economic showcase with virtually no U.S. financial aid. Yet, in April of this year, a remarkable thing happened in the U.S. Senate. During the debate about new aid for Panama and Nicaragua, a proposal was offered that included $10 million to "help the new Chilean government address health-care problems." The Insiders never sleep. |
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