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Chile Election Week, Part III: Death Knell for the Private Pension System?

Center for Freedom and Prosperity (CF&P) - Sat, 12/18/2021 - 12:19pm

One reason I’m interested in Chile’s election is that the leftist candidate, Gabriel Boric, wants to eviscerate the nation’s successful private pension system.

Bettina Horst of Libertad Y Desarrollo gave me her analysis.

As an economist and Executive Director of the nation’s pro-market think tank, Ms. Horst understands that Chile’s system has helped workers by giving them real ownership of real assets.

And that’s much better than “pay-as-you-go” systems, like we have in the United States.

Chile’s private retirement accounts have enabled workers to build nest eggs, and the system has also provided a valuable source of capital for the nation’s economy.

So why would Chile’s voters consider a candidate like Boric, who wants to wreck that system?

We’ll find out Sunday night after the votes are counted, but a Boric victory would indicate that Chile’s workers decided to trust the free-lunch promises of a politician.

In a column earlier this year for the Wall Street Journal, another Chilean weighed in on this issue.

Axel Kaiser of the Atlas Research Network wrote that the left has a (long-standing) ideological agenda.

In 1981 Chile became the first country to privatize social security, ending the pay-as-you-go system that had been in place since 1924 and had collapsed. Now Chile’s left wants to resurrect it. …Last year a group of senators even introduced a bill to nationalize the pension funds, as Argentina did in 2008. An expropriation of workers’ savings looks increasingly likely, as the radical left dominates Chile’s recently elected constitutional convention. “The destruction of the AFP system is under way,” a far-left lawmaker recently said. …The attack on the AFP system is all about ideology and power. …Its destruction has long been a goal of the radical left. With the AFP out of the picture, politicians will recover the power they once had over retirees.

That’s Mr. Kaiser’s political analysis.

His column also includes some analysis of the economic benefits of the private system.

The state-run pension system was plagued by corruption and rent-seeking… Pension privatization reversed this perverse dynamic. Instead of taxing active workers to pay pensioners through the bureaucracy, the new system, created by former Labor Minister José Piñera, established that 10% of the employee’s salary is transferred automatically to an account under his name at one of the Administradoras de Fondos de Pensiones, or AFP. These private pension funds compete to attract workers and invest their pensions for a fee. …By subsequently relying on workers’ own savings to fund their pensions instead of taxing younger workers, privatization of social security ended dependency across generations. …Average pensions are also 41% higher in the AFP system than in the old one, according to the Libertad y Desarrollo research center, even as workers contribute a smaller fraction of their salaries. Between 1981 and 2019, the savings accumulated in workers’ accounts at the AFP reached $218 billion, or around three-quarters of GDP. About 70% of these funds weren’t contributions made by workers but profits generated for them by AFP investments. This accumulation of capital contributed an extra 0.5% of GDP a year to economic growth between 1981 and 2001.

As mentioned in the column, Jose Pinera created Chile’s system of personal retirement accounts.

You can click here to see him describing the case for private accounts, both in Chile and the United States.

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Image credit: Pedro Ribeiro Simões | CC BY 2.0.

Parents Group Claims Two Schools Discriminated Against Students Based On Race

Liberty Unyielding - Sat, 12/18/2021 - 11:31am

By Harold Hutchison Parents Defending Education filed complaints with the U.S. Department of Education accusing two schools of racial discrimination. In Colorado, an elementary school held a “Families of Color Playground Night” on a monthly basis. In Illinois, a flyer advertised a field trip for “Students of Color” interested in education as a career field. […]

The post Parents Group Claims Two Schools Discriminated Against Students Based On Race appeared first on Liberty Unyielding.

‘Dehumanizing to White People’: Comedian Torches The Media For Distorting The Waukesha Massacre

Liberty Unyielding - Sat, 12/18/2021 - 11:24am

By David Hookstead Tim Dillon unloaded on the coverage of the Waukesha massacre in a recent podcast episode. In the latest episode of “The Tim Dillon Show,” the star comedian mocked the idea that the SUV allegedly being driven by Darrell Brooks just ran over and killed six people during a Christmas parade without any […]

The post ‘Dehumanizing to White People’: Comedian Torches The Media For Distorting The Waukesha Massacre appeared first on Liberty Unyielding.

Divided appeals court upholds requirement that most private workplaces require vaccination or testing

Liberty Unyielding - Fri, 12/17/2021 - 7:49pm

The Sixth Circuit Court of Appeals has voted 2-to-1 to uphold the Biden administration’s requirement that employers with more than 100 workers either get their workers vaccinated for COVID-19, or have them tested for the coronavirus each week. The court dissolved a stay blocking the requirement that had earlier been issued by a different appeals […]

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Amazon Killed One Of Its Most Popular Features Because China’s Communist Party Demanded It

Liberty Unyielding - Fri, 12/17/2021 - 7:10pm

By Ailan Evans Amazon stopped offering customer ratings and reviews of books sold in China at the request of the Chinese Communist Party, according to a Reuters investigation. The Chinese government ordered Amazon to stop allowing customers to review books following less-than-perfect ratings of a collection of President Xi Jinping’s writings, Reuters reported, citing two […]

The post Amazon Killed One Of Its Most Popular Features Because China’s Communist Party Demanded It appeared first on Liberty Unyielding.

Biden politicizes medicine by bribing doctors to adopt ‘anti-racism’ plans

Liberty Unyielding - Fri, 12/17/2021 - 3:42pm

Many racial differences in health outcomes have nothing to do with racism. For example, Hispanics live three years longer than whites, on average, but that does not mean doctors are giving Hispanics special treatment at the expense of whites. But the Biden administration is now giving doctors a financial incentive to blame “differences in health […]

The post Biden politicizes medicine by bribing doctors to adopt ‘anti-racism’ plans appeared first on Liberty Unyielding.

Prominent COVID-19 Researcher: I Was Called A ‘Race Traitor’ For Investigating Lab Leak Theory

Liberty Unyielding - Fri, 12/17/2021 - 2:46pm

Alina Chan, a postdoctoral researcher at MIT and Harvard University, said she was accused of racism for investigating the possibility of COVID-19 leaking from a Wuhan, China, lab. Today, a thread debunking (unintentional) misinformation on the origins of covid-19 / SARS-CoV-2 virus. Starting with the top 10 easily fact-checked ideas or statements that are not […]

The post Prominent COVID-19 Researcher: I Was Called A ‘Race Traitor’ For Investigating Lab Leak Theory appeared first on Liberty Unyielding.

New York AG questions attempt to recoup Andrew Cuomo’s ill-gotten gains

Liberty Unyielding - Fri, 12/17/2021 - 2:41pm

Earlier, we wrote about how an ethics commission in New York wanted disgraced former New York Governor Andrew Cuomo to return $5.1 million he made writing a book about how great he was at handling the coronavirus pandemic. (During the pandemic, thousands of elderly New Yorkers died in nursing homes that Cuomo ordered to accept […]

The post New York AG questions attempt to recoup Andrew Cuomo’s ill-gotten gains appeared first on Liberty Unyielding.

Chile Election Week, Part II: The Threat of Boricnomics

Center for Freedom and Prosperity (CF&P) - Fri, 12/17/2021 - 12:42pm

explained a few days ago that Sunday’s presidential runoff in Chile should be viewed as the most important election of 2021.

This is because the left’s candidate, Gabriel Boric, wants to turn Chile into Venezuela, as I mention in this radio interview with Ross Kaminsky.

For some reason, you only hear my voice during this Zoom discussion, which means I don’t even have a face good enough for radio.

But let’s set aside that technical glitch and focus on Mr. Boric’s agenda.

Here’s a flyer that a campaign worker gave me as I was walking around Santiago yesterday.

It’s in Spanish, but one of my Chilean friends translated. Here are Boric’s economic proposals.

There was one attractive proposal. He’s proposing to cut the pay of politicians. But that will yield trivial savings if it happens and the odds of it actually happening are laughably small.

Also, he says he wants to fight crime, which is good (in theory).

His worst idea, though, is not on this flyer. If you go to his website, you’ll find this passage in his economic plan (as translated by Google): “The tax reform will collect on the order of 8% of GDP under the regime.”

He is not overly specific on how he will collect so much additional money, but the website mentions higher income taxesgreen taxes, and the imposition of a wealth tax.

All of which sounds like a recipe to drive entrepreneurs and investors (and/or their money) out of the country.

To understand the radical nature of his plan, tax revenues in Chile currently grab about 21 percent of the country’s economic output according to the OECD – so Boric is advocating a 38-percent increase.

By comparison, Biden’s tax plan in the U.S. is awful, but he’s “only” proposing a 4-percent increase in the tax burden (about 1 percent of GDP).

P.S. Since Ross and I were comparing Argentina and Chile, here’s a chart I put together using the Maddison database.

P.S. Given that Chile’s free-market reforms have been especially beneficial to poor people (see hereherehere, and here), I wonder if they understand how Boric’s election would threaten their upward mobility.

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Image credit: Gonzalo Baeza | CC BY 2.0.

Build Back Better will buy lots of inflation, economists say

Liberty Unyielding - Fri, 12/17/2021 - 8:19am

Economists say Joe Biden’s Build Back Better plan would worsen already soaring inflation, notes J.D. Tuccille at Reason. He points out that “plans by congressional Democrats for trillions of dollars in taxes and spending hikes” may be scaled back somewhat due to the worries of Sen. Joe Manchin (D-W.Va.), who is concerned about the “‘Build […]

The post Build Back Better will buy lots of inflation, economists say appeared first on Liberty Unyielding.

School District Considers Adding Math Textbook That Claims Conservatives Are More Racist Than Liberals

Liberty Unyielding - Fri, 12/17/2021 - 8:02am

By Chrissy Clark Paradise Valley Unified School District in Arizona is considering adding an algebra textbook that discusses social justice issues as part of the district’s high school math curriculum review. One of the math textbooks reportedly being considered for high school algebra teaches students about “racial bias,” “ethnic diversity in the United States” and […]

The post School District Considers Adding Math Textbook That Claims Conservatives Are More Racist Than Liberals appeared first on Liberty Unyielding.

Russiagate forger restored to ‘good standing’ by bar, after getting slap on the wrist from judge

Liberty Unyielding - Thu, 12/16/2021 - 2:05pm

A Russiagate forger got a slap on the wrist for his crimes from a federal judge appointed by Obama. Now, he has been restored to “good standing” by the liberal DC Bar — unlike most convicted felons, who get disbarred. Paul Sperry reports at Real Clear Investigations: A former senior FBI lawyer who falsified a […]

The post Russiagate forger restored to ‘good standing’ by bar, after getting slap on the wrist from judge appeared first on Liberty Unyielding.

Net Neutrality and a Lesson about Regulation

Center for Freedom and Prosperity (CF&P) - Thu, 12/16/2021 - 12:21pm

If you’re a policy wonk, you’ll enjoy this history of how government regulation has hindered the development of telecommunications technology.

I want to focus on the part of the video, beginning about 30:00, which discusses “net neutrality.” The interview with Professor Hazlett took place in 2017, at a time when there was lots of fighting over this issue.

The pro-regulation crowd claimed that net neutrality was needed to protect consumers from slow and expensive service. And they made all sorts of ridiculous claims about the Trump Administration’s plans to get rid of the Obama-era regulation.

At the time, this tweet from the Democratic members of the U.S. Senate got a lot of attention.

So what actually happened after net neutrality was repealed?

I suppose the first question to answer is:

Did..

…the…

…Internet…

…slow…

…to…

…a…

…crawl?

Not exactly. Robby Soave gives us the details in a column for Reason. He starts with some background information.

Exactly four years ago, the Federal Communications Commission (FCC) repealed the internet regulation known as net neutrality, which had forced internet service providers (ISPs) to treat all content identically in terms of download and streaming speeds, for instance. Since the popular policy had come into existence during the Obama administration, and was gutted during President Donald Trump’s term, its demise was treated as the end of the internet as we know it by panic-stricken #resistance liberals. …The term net neutrality was coined by law professor Tim Wu in 2006; his big idea was that the government needed the power to restrict ISPs’ ability to offer different levels of service to different customers. …Wu cautioned that without rules requiring internet service providers to treat all traffic and content equally, the internet as we had come to know it would cease to exist.”

And here are the results.

Today, the internet is still here, and still functioning properly. Expectations that ISPs would practice widespread and improper discrimination did not pan out. On the contrary, the internet is better and faster for basically everybody than it was when net neutrality ended—in fact, it’s better and faster than at any point in the past. …Foes of net neutrality were clearly correct that the internet didn’t need the government to save it, and absent federal direction and regulation, everything is fine.

The moral of the story is that we experienced a major test of regulation vs. deregulation. And we’ve learned that the advocates of red tape were wildly wrong and the supporters of free enterprise were exactly right.

That’s a lesson we can apply to all sorts of other issues involving government intervention (housing subsidiesfinancial marketsfisheriesorgan transplantslabor markets, etc, etc).

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Image credit: andibreit | Pixabay License.

Biden mandates meager, less pleasant showers for the American people

Liberty Unyielding - Thu, 12/16/2021 - 9:45am

America has plenty of water. But Joe Biden is trying to make sure that you take showers with as little water as possible, by restricting the flow of water from showerheads. That will make it harder for you to get clean, in the name of “efficiency.” The meager amount of water also means you may […]

The post Biden mandates meager, less pleasant showers for the American people appeared first on Liberty Unyielding.

Nike Executives Funneled Money To Democrat Who Just Blocked Bill Against Slave Labor

Liberty Unyielding - Thu, 12/16/2021 - 9:35am

By Thomas Catenacci Several top Nike executives funneled more than $60,000 to the re-election campaign of Democratic Oregon Sen. Ron Wyden over the course of just days in September. On Wednesday evening, Wyden blocked the Uyghur Forced Labor Prevention Act which the House passed unanimously Tuesday and the Senate was expected to overwhelmingly approve. Nike, […]

The post Nike Executives Funneled Money To Democrat Who Just Blocked Bill Against Slave Labor appeared first on Liberty Unyielding.

Google To Fire All Unvaccinated Employees

Liberty Unyielding - Thu, 12/16/2021 - 9:33am

By Harry Wilmerding Google told its employees that they would lose pay and eventually their jobs if they did not abide by the company’s COVID-19 vaccination policy, according to an internal memo obtained by CNBC. Employees had until Dec. 3 to state their vaccination status to the company and upload the required documentation or to […]

The post Google To Fire All Unvaccinated Employees appeared first on Liberty Unyielding.

Freeloading Senator accuses entrepreneur of ‘freeloading off everyone else’

Liberty Unyielding - Thu, 12/16/2021 - 9:28am

Elon Musk will likely pay at least $9 billion in taxes this year, on income he makes partly due to his creativity and risk-taking as an entrepreneur. Most American households will pay no federal income taxes. But Senator Elizabeth Warren, who lives off taxpayers and paid a low tax rate as a wealthy law professor […]

The post Freeloading Senator accuses entrepreneur of ‘freeloading off everyone else’ appeared first on Liberty Unyielding.

Sen. Ron Wyden Blocks Uyghur Slave Labor Bill Over Child Tax Credit

Liberty Unyielding - Thu, 12/16/2021 - 9:06am

By Michael Ginsberg Democratic Oregon Sen. Ron Wyden placed a block on the Uyghur Forced Labor Prevention Act on Wednesday night in an effort to extend child tax credit. Wyden announced his block in response to the failed negotiations between President Joe Biden and Democratic West Virginia Sen. Joe Manchin over the Build Back Better […]

The post Sen. Ron Wyden Blocks Uyghur Slave Labor Bill Over Child Tax Credit appeared first on Liberty Unyielding.

The Two Most Important Things to Understand about Biden’s Budget

Center for Freedom and Prosperity (CF&P) - Wed, 12/15/2021 - 12:06pm

The fight over President Biden’s budget, the so-called Build Back Better plan, has revolved around very important issues.

For today’s column, let’s zoom out and look at two charts that highlight the big issue that should be getting more attention.

First, here’s a comparison of projected inflation with baseline spending (the current spending outlook) and Biden’s budget – all based on economic and fiscal estimates from the Congressional Budget Office.

As you can see, spending was growing far too fast even without Biden’s budget. And if Biden’s budget is enacted, the spending burden will rise more than twice the rate of inflation.

Now let’s look at a chart that illustrates why Biden’s spending spree is just a small part of the problem.

To be sure, it’s not good that the President is exacerbating America’s fiscal problems, but you can see that he’s simply adding a few more straws to the camel’s back.

You’ll also notice that I included both the amount of spending that technically is in Biden’s budget plan (the orange part), as well as CBO’s estimate of the additional spending (the gray part) that will happen if the budget gimmicks are removed.

The bottom line is that America’s fiscal problem is too much government spending.

And that spending burden is getting worse over time because spending is growing faster than the private sector, violating the Golden Rule, which is bad news for jobs and growth.

Making the problem worse, as Biden proposes, will further hurt American prosperity.

P.S. Biden’s plan will increase the deficit, which also is not good, but keep in mind that tax-financed spending is no better than debt-financed spending. In either case, you wind up with the same bad result.

P.P.S. This column has two serious visuals to help understand Biden’s fiscal policy. If you prefer satire, here are two other images.

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Image credit: Biden13 | CC BY 2.0.

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