As the Brazilian Economy cools Rousseff looks to Tax Cuts and Privatization to Restore Economic Momentum

Posted by PITHOCRATES - July 29th, 2012

Week in Review

The president of Brazil is Dilma Rousseff.  She belongs to the Workers’ Party.  A party that enjoys strong support from the labor unions.  Because it leans towards socialism.  At least in state-ownership of some state assets.  In particular those that employ a lot of people.  But the great Brazilian economic growth is sputtering.  Like an engine no longer firing on all cylinders.  Because of her party affiliation one would expect Rousseff to adopt Keynesian policies.  To stimulate their economy with some government spending.  But no.  She’s talking about doing something completely different (see UPDATE 1-Rousseff ‘very worried’ about Brazil economy by Alonso Soto and Brian Winter posted 7/23/2012 on Reuters).

President Dilma Rousseff is pessimistic about Brazil’s chances for a meaningful economic recovery this year and is pushing ahead with new measures aimed at lowering taxes and increasing investment, hoping they might give the economy a lift by 2013, government officials told Reuters.

The measures include a consolidation of some overlapping federal taxes; a new round of concessions that would allow the private sector to manage more of the country’s congested airports and seaports; and a more aggressive effort to reduce electricity costs for manufacturers and others, the officials said on condition of anonymity because they were discussing private policy discussions…

Rousseff, a trained economist, has reacted with several targeted tax cuts and more than half a dozen packages aimed at stimulating consumption and investment. However, many business leaders and foreign investors have complained that her policies have been too ad hoc and narrow in scope, citing forecasts that now see growth as low as 1.5 percent this year…

Some business leaders have called for Rousseff to take even more dramatic measures, such as an omnibus reform package that could substantially reduce or simplify Brazil’s tax load. Rousseff has opted instead to pursue more targeted reforms to help struggling sectors on a case-by-case basis, believing that Congress would block a more ambitious, organized effort.

So Rousseff would have been a more aggressive tax cutter if it weren’t for Congress.  So one can hardly blame her for her ad hoc ways.  You have to do the best you can with the cards you’re dealt.  Especially when your party tends to favor state ownership of industry and higher taxation to pay for the labor in those state-owned industries.

Lowering taxes and electricity costs?  Privatization?  Other than that part about consumption one would think that Rousseff’s economic training was of the Austrian school variety rather than the Keynesian brand.  Whatever her economic roots with policies like these Brazil should rebound well from this momentary interruption in their economic growth.

The move most likely to stir investors, for both practical and symbolic reasons, is the new round of port concessions. Airports and seaports are routinely cited as some of the country’s most crippling bottlenecks, slowing everything from commodities exports to business travel, as public investment failed to keep up with the boom in the economy over the past decade…

The officials declined to say which additional airports Rousseff was considering, but one of the targets could be Rio de Janeiro’s international airport, which needs renovations ahead of the 2014 World Cup and 2016 Olympics. Rio’s governor, Sergio Cabral, described the airport in an interview with Reuters last year as being like “a third-rate bus station…”

The Brazilian economy had been roaring thanks to the private sector.  What wasn’t keeping up with the private sector was the public sector.  While people were doing remarkable things in the private sector the best the government could do was make Rio de Janeiro’s international airport “a third-rate bus station.”  Which just goes to show you that for the best economic activity you have to release the human capital of the people.  When you let these people think.  When you let them create.  When you let them create the things they thought about you get the kind of explosive economic activity that put Brazil in the BRICS emerging economies.  While running ‘third-rate bus stations’ just doesn’t quite do it.

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Poverty is Down in Chile thanks to Job-Creation and Subsidies paid for by those Newly Created Jobs

Posted by PITHOCRATES - July 29th, 2012

Week in Review

Job-creation reduces poverty in Chile.  And it goes back to the Seventies.  But you wouldn’t know it by reading this (see Poverty indicators decline posted 7/25/2012 on Economist Intelligence Unit).

Improvements in Chile’s poverty indicators in the past two decades are back on track after a setback in 2009. The proportion of the population living in poverty fell from 15.1% in 2009 to 14.4% in 2011, according to the latest Caracterización Socioeconómica Nacional (Casen) household survey. There was also a substantial drop in the proportion of people living in extreme poverty, from 3.7% in 2009 to 2.8% in 2011. The main factor explaining these trends was the strong level of job-creation recorded in Chile in the past two years, but well-targeted government subsidies also played an important role…

Within the IEF programme, the monthly bonuses under the “dignity” component, worth Ps6,000 (US$12.5) per person in the household, plus Ps13,000 per household, are targeted at those in extreme poverty, and will be unconditional. Beyond that, if the children in the household attend their mandatory healthcare check-ups and achieve a school attendance rate of at least 85%, the household will receive a monthly bonus of Ps8,000 per child. This yields Ps53,000 per month to a household with two adults and two children satisfying these conditions, or US$97 per month for one with one adult and two children.

Yes, job-creation was a strong factor.  Targeted government subsidies?  Not really.  First of all, you can’t do targeted subsidies if you don’t have a lot of jobs creating a lot of tax revenue.  You can have jobs without subsidies but you can’t have subsidies without jobs.  Because jobs pay for subsidies.

Paying people to have children?  Where have I heard this before?  Oh, yes.  LBJ’s Great Society.  That gave us AFDC.  Aid to Families with Dependent Children.  That destroyed poor families by encouraging single mothers to have more babies to collect more benefits.  Allowing men to father as many children as they pleased with as many women as they pleased because they don’t have to pay to raise their children.  The state became the father to these children (and husband to these women).  Raised them in crime-infested housing projects.  And sent them to broken, substandard schools.  Which these kids dropped out of and joined gangs.  Yeah, AFDC worked so well that Bill Clinton, a Democrat, reformed welfare to fix this ill-conceived policy.  Because even he knew you can’t fix problems by simply throwing money at them.  Jobs were better.  And families.  Where a child grew up with a mother and a father to nurture and discipline the child.  To put them on the right path.  Something the state just couldn’t do.

Missing from this piece is any mention of Milton Friedman.  The Chicago Boys.  El Ladrillo.  The economic plan put together by the Chilean economists who studied at the University of Chicago.  In the Chicago school of economics.  It was so thick they called it The Brick.  Or El Ladrillo.  Milton Friedman and these great Chilean economists, the Chicago Boys, turned the Chilean economy around.  The dictator Augusto Pinochet even invited Milton Friedman down to Chile to help.  Friedman went.  Gave some advice.  And Pinochet followed it.  Turning their horrible economy around (see Monetarism, Laissez-Faire Capitalism, Augusto Pinochet, Chile, Hyperinflation, El Ladrillo, Chicago Boys, Milton Friedman and Miracle of Chile).

He ditched the mercantilist policies.  Embraced laissez-faire capitalism.  Privatized the state industries.  Established free trade.  Cut government spending.  And stopped printing money.  Ending the hyperinflation.  Replacing it with a strict monetary policy… Friedman’s monetarism turned the Chilean economy around.  Creating a prosperous market economy.  With a growing middle class.  The strong economic growth led to some healthy tax revenue.  Which in later years funded antipoverty programs.  The Miracle of Chile even replaced the military junta with a democratic government.  Chile now has one of the healthiest and freest economies in the world.

It was these sound economic policies that created the Miracle of Chile in the Eighties.  Not targeted subsidies.  Real economic growth provides prosperity.  People with jobs.  Who earn money to spend in the economy.  And pay taxes.  That’s the way it always works.  Jobs first.  Then prosperity.  And then the tax revenue that funds government spending.  It just doesn’t work the other way around.  If it did Greece wouldn’t be in the trouble it’s in.  The United States wouldn’t still be lingering in the Great Recession.  And President Clinton wouldn’t have reformed welfare to end the family killer AFDC.  No.  Excessive government spending only creates great debt.  High inflation.  And a permanently impoverished underclass.  At least this is what history has shown us.

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The Cantona practiced Ritual Human Sacrifice in Mexico 1,000 Years before the Aztecs

Posted by PITHOCRATES - May 5th, 2012

Week in Review

The Founding Fathers owned slaves.  They took the Indians’ land.  They said all men were created equal but they treated women as second class citizens for over a hundred years.  Rich white men wrote the Constitution for rich white men.  These Christian barbarians even burned witches at the stake in their early history.  At least, these are things we hear the Left say all of the time about our Founding Fathers.  Their Constitution.  And the God-forsaken country they created.  These are the things they are teaching in our public schools and in our universities.  With no consideration of the context of time.  Unlike they give to every other culture on the planet.  Including cultures that ritually sacrificed their own people (see ‘Conclusive’ evidence of human sacrifice found in Mexico posted 5/3/2012 on The Telegraph).

Mexico’s National Institute of Anthropology and History said the finding clearly corroborates accounts from later cultures about the use of sharp obsidian knives in sacrificing humans…

The collection of stone knives is from the little-known Cantona culture, which flourished just after the mysterious city-state of Teotihuacan. Cantona preceded by more than 1,000 years the region’s most famous human sacrifice practitioners, the Aztecs…

While historical accounts from Aztec times, as well as drawings and paintings from earlier cultures, had long suggested that priests used knives and other instruments for non-life-threatening bloodletting rituals, the presence of the muscle and tendon traces indicates the cuts were deep and intended to sever portions of the victim’s body…

Gillespie said human sacrifice practices either described by the Spanish conquerors or depicted in pre-Conquest paintings include heart removal, decapitation, dismemberment, disembowelling and skinning of victims.

To hear those on the Left speak all Americans are guilty for the sins of the Founding Fathers.  Which when taken in the grander scheme of things weren’t that bad.  At least they were nowhere as bad as the sins of the Cantona.  Or the Aztecs.  Who did some really horrible things.

Human sacrifice and cannibalism made it into the 20th century in some remote tribes.  But the Left will never condemn these people like they condemn the Founding Fathers.  They will treat their culture with respect for their ancient religious beliefs.  While calling Christians every derogatory name in the book.  They will put the religious ceremonies of the Cantona and the Aztecs into the context of their time.  While judging the Founding Fathers by today’s standards.  Why is that?

When one is blatantly biased against a group of people one can only conclude that they don’t like that group of people.  Or the country they created.  Even though their country never condoned ritual human sacrifice.  And when you put the Founding Fathers into the context of their times they were pretty enlightened when compared to countries in the Old World.  As well as the ancient cultures of the New World.

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Mary O’Grady cites the Problems of Latin America as too Much Socialism and not Enough Economic Liberty

Posted by PITHOCRATES - April 28th, 2012

Week in Review

Latin America has the will and the way for prosperity.  If only they give up on oppressive equality (see Destroying Latin America: Journalist Mary O’Grady on Populism, Protectionism, and Prohibition by Zach Weissmueller posted 4/28/2012 on Reason).

“The inequality produced by liberty: This, for the socialist, is the soft underbelly of pro-market rationale and the best place to attack,” says Mary O’Grady, a columnist who covers Latin America for the Wall Street Journal. “I would argue that it’s the intellectual stream that prevails in Latin America, and it’s the reason the region can not hope to reach its potential any time soon.”

O’Grady made a presentation at Reason Weekend 2012, Reason Foundation’s annual donor event. [Sh]e talked about why Latin American countries are so susceptible to socialism and identified the “three P’s” of “Populism, Protectionism, and Prohibition” as the primary sources of the region’s biggest problems.

To briefly summarize the ruling elite in Latin America are anti-capitalistic.  Because capitalism leads to income inequality.  So they discourage any capitalistic activity.  The politicians and rulers.  Intellectuals.  And academia.  Which squashes the entrepreneurial spirit.  Because entrepreneurs could become rich.  And that wouldn’t be fair.  So they nationalized industries.  And forced equality on the masses.  Which has kept the masses mired in poverty.  Yet when these same people leave their forced equality and move into capitalistic countries their lives improve.  They become entrepreneurs.  Further expanding the middle class.  Adding more to the vibrant economies they’ve joined.  All of which they could have in Latin America.  If only they stop oppressing the people in the name of equality.

Good presentation by Mary O’Grady.  Watching this video is 32 minutes well spent.

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The Iraqis Support Capitalism while Hugo Chavez and Nancy Pelosi Support the Occupy Wall Street Protesters

Posted by PITHOCRATES - October 8th, 2011

Iraq wants American Technology because neither Cuba nor Venezuela gave the World the iPhone

Some say we invade other countries militarily so we can conquer them with corporate imperialism.  Such as the Iraq War.  It was about getting Iraqi oil.  And letting Halliburton lose to rape and pillage at will.  Well, oil prices shot to their highest during the U.S. ‘occupation’.  And Iraq isn’t covered with McDonalds, KFCs and Wal-Marts yet.  In fact, their ain’t much American corporate imperialism going on in the least.  Much to the chagrin of many Iraqis (see If U.S. Leaves Vacuum in Iraq, Iran’s Deep Influence May Not Fill It by Tim Arango posted 10/8/2011 on The New York Times).

Mr. Sharba continued: “We wish that American companies would come here. I wish the American relationship was that, instead of troops, it would be companies.” Mr. Sharba is a cleric, and he spent 14 years in Iran in exile during Mr. Hussein’s government…

But the troublemaking does not extend to the more important arena of commerce, officials say. “Because of the political sensitivities of Iran, many people say Iran is controlling the economy of Iraq,” said Sami al-Askari, a member of Parliament and a close confidant to Prime Minister Nuri Kamal al-Maliki. “No, the Turks are…”

Iran has also been trying to make inroads culturally, but it is bumping up against the same uneasiness that Iraqis have toward Iran’s business efforts. This year Iran negotiated a deal to refurbish several movie theaters in Baghdad that have been dark for years. Yet the renovations have yet to get under way, and officials say they wish it were the Americans — and their technology — involved in the project. “If a person asks me, who do I want to come help me? I wish that the Americans, by occupying Iraq, would support the culture and theater,” said Fuad Thanon, the head of Iraq’s national theater.

So it’s not the Americans reaping the spoils of war.  It’s the Turks.  And Turkey is doing this because America has chosen not to, apparently.  And the Iranians just plain suck at business.  Which one would expect in a theocracy.

The Occupy Wall Street protestors may hate corporate America and their remarkable technology.  But the Iraqis don’t.  They want it.  Because it’s the best.  I mean, they’re not clamoring for that good Cuban technology.  Or that good Venezuelan technology.  You know why?  Well, suffice it to say that neither Cuba nor Venezuela gave the world the iPhone.

There are more Blacks in the Tea Party than in Nancy Pelosi’s Neighborhood

They say you can judge a lot about a person by the company he or she keeps.  So let’s apply that to the Occupy Wall Street protestors.  Who is the latest to throw her support behind this anti-capitalism mob?  None other than Nancy Pelosi.  One of the most liberal members in the House of Representatives (see Nancy Pelosi Backs Occupy Wall Street Message, Tells Eric Cantor To Shove It by Zeke Miller posted 10/8/2011 on Business Insider).

In an interview with ABC News’ Christiane Amanpour, House Minority Leader Nancy said she supports the message of the Occupy Wall Street protesters that “change has to happen.”

So it’s clear.  Nancy Pelosi is against capitalism.  This comes as no shock.  For she has been against capitalism for years.  She prefers the doling out of privilege.  Where liberal wealth can be confined to her and her liberal friends.  In one of the richest and most exclusive congressional districts in America.  And one of the whitest.  It’s rather ironic, isn’t it?  She calls the Tea Party racist.  Yet there are more blacks in the Tea Party than in her own neighborhood.

“I didn’t hear him say anything when the Tea Party was out demonstrating, actually spitting on members of Congress right here in the Capitol. And he and his colleagues were putting signs in the windows encouraging them. But let’s not get down to that.”

There have been a lot of Tea Party rallies.  A lot of film covering these rallies.  And yet they never captured this spitting incident.  Or any racial hate speech.  You know why?  Because there was no spitting.  And the percentage of racists in the Tea Party is probably less than the national average.  Why, I bet Pelosi’s neighborhood has a higher percentage of racists than the Tea Party has.  And it’s probably higher than the national average.  Because it’s sooo white.  At least that’s what Nancy Pelosi would be saying if it were a Republican district.

If both Pelosi and Chavez support these Wall Street Protestors they can’t be Good for America

Nancy Pelosi is no friend of laissez faire capitalism.  So it’s no surprise that she supports the anti-capitalist protest on Wall Street.  And it’s no surprise that this guy supports it, too (see Hugo Chavez condemns ‘horrible repression’ of Wall Street protests by Enrique Andres Pretel, Reuters, posted 10/8/2011 on The Globe and Mail).

Not surprisingly, Mr. Chavez expressed solidarity with American activists who have been staging rallies and marches against what they view as corporate greed by Wall Street…

Mr. Chavez, who runs for re-election in a year’s time and traditionally ramps up his anti-capitalist rhetoric to try and rally supporters before a vote, also let rip at Republican presidential hopeful Mitt Romney, who referred to the “malign socialism” of Cuba and Venezuela in a speech on Friday.

That’s why the Iraqis aren’t asking for Venezuelan technology.  They want the best.  And the best comes where capitalism is freest.  Not constrained and maligned.  As in Venezuela.

So Nancy Pelosi and Hugo Chavez see eye to eye on the anti-capitalism protests on Wall Street.  They are simpatico.  They hate capitalism.  They both support the Occupy Wall Street people.  And Chavez hates America.  I’m not saying anything.  But people do judge you by the company you keep.

Since coming to power in 1999, Mr. Chavez has sought to project himself as a leader of a global “anti-imperialist” movement.

He and allies in the ruling Socialist Party have been gloating over economic and social problems in the United States and Europe as evidence of capitalism’s impending downfall.

“Poverty’s growing, the misery is getting worse,” he said, referring to the causes of the U.S. protests. “But that empire is still there, still a threat … (President Barack) Obama is on his way down, for lots of reasons. He was a big fraud.”

Hugo Chavez is no friend of the United States.  Even the Soviets didn’t take such glee in American economic unrest.  Sure, they wanted to win the Cold War.  But not if it imperiled their U.S. food imports.  Which they were dependent on to keep famine at bay.  And this in the country with some of the most fertile soil in the world.  What we call the breadbasket of Europe.  The Ukraine.  But communism just didn’t work.  So they had to import that capitalistic grain.  Despite that great soil.  And a great people.

You know, it just doesn’t look good when you are on the same side of an issue with someone who wants to destroy America.  And if both Pelosi and Chavez support these Wall Street protestors, these protestors can’t be good for America.

These Anti-American People either know Capitalism is the Best Economic System or are just Too Stupid to Know Better

So we didn’t invade Iraq to spread corporate imperialism.  Such as Hugo Chavez would believe.  Even though the Iraqis wouldn’t mind a little bit of it.  Just enough to give them some of the best technology in the world.  To help them back on their feet.  And help them get away from that Iranian crap.

Nancy Pelosi supports the Occupy Wall Street protesters.  As does Hugo Chavez.  Who hates everything American.  He is anti-American.  And anti-capitalist.  But he likes the Occupy Wall Street protesters.  So they can’t be either.  If Chavez likes them.  American.  Or capitalist.  Either that or Chavez is a closet capitalist.  And/or an American lover.

Truth be told these anti-American people are slinging their anti-capitalism BS just for personal gain.  They either know capitalism is the best economic system in the world.  Or they’re just too stupid to know better.

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