Chile is removing freedoms and making their economy less flexible. Higher taxes on capital; higher taxes on consumption.
Capitalism allowed Chile to triple its income over three decades. That helped everyone. Everyone including the poor. On the PPP * basis Chile’s annual GDP per capita is now equivalent to $23,165, putting it just behind Poland ($24,429) and well ahead of Mexico ($17,925)! A 2013 World Bank study showed that between 1992 and 2009 Chile was “the country with the greatest social mobility on the continent.
Capitalism gives and socialism takes away. The socialist President Bachelet wants equality. Equality of mediocrity. And the markets respond: investment dropped by 12.3% in the 4Q 2013. Capital is leaving and it will leave faster since she increased the taxes. A huge self-inflicted wound that will hurt everyone.
Mary Anastasia O’Grady at Wall Street Journal - might require subscription.
* PPP is purchasing power parity. It takes into account that many basic requirements are cheaper in third-world economies. Investopedia
Photo: Puyehue Volcano in Chile. I don’t recall the source.