December 2, 2021

Stunning good news from Chile — and not just for them, but for us

In Chile, the presidential election was straightforward: communism or liberty.  Pick one or the other.  No soggy middle.

So guess which one got the most votes!

Yep, liberty, and I’m not talking about some namby-pamby nice-guy RINO kind of liberty, respectable at Santiago cocktail parties.  It was 100-proof hard stuff liberty, prompting shudders from the press.

The Associated Press reports this:

SANTIAGO, Chile (AP) — Two onetime outsiders hailing from opposite extremes of the political spectrum received the most votes Sunday in Chile’s presidential election but failed to garner enough support for an outright win, setting up a polarizing runoff in the region’s most advanced economy.

José Antonio Kast, a lawmaker who has a history of defending Chile’s military dictatorship, finished first with 28% of the vote compared to 26% for former student protest leader Gabriel Boric.Kast, in a victory speech, doubled down on his far right rhetoric, framing the Dec. 19 runoff as a choice between “communism and liberty.” He blasted Boric as a puppet of Chile’s Communist Party — a member of the broad coalition supporting his candidacy — who would pardon “terrorists,” be soft on crime and promote instability in a country that has recently been wracked by protests laying bare deep social divisions.

“We don’t want to go down the path of Venezuela and Cuba,” Kast, speaking from a lectern draped with a Chilean flag, told supporters in the capital. “We want a developed country, which is what we were aiming to become until we were stopped brutally by violence and the pandemic.”

José Antonio Kast is a solid free-market candidate who ran against Gabriel Boric, a self-described communist, and wound up with the most votes on an unapologetic advocacy and defense of free markets.  That was what Chile needed.  I’ve been to Chile twice and learned while I was there that open advocacy of free markets is considered “embarrassing” and not quite respectable among the smart set.  Something obviously changed.

Here’s the most recent report from the Buenos Aires Times:

Kast, 55, pledges lower corporate taxes, the preservation of pro-market rules and campaigned on a law and order, family values platform. Boric, a 35-year-old former student leader, wants to raise levies for companies, overhaul the pension system and boost social welfare benefits.

Kast wasn’t quite an outsider, as President Trump actually was.  He was an experienced pol on the sidelines in the Legislature, sort of a Chilean Ron Paul, and his free-market credentials were impeccable.  He is reportedly the younger brother of respected former Chilean central bank chief Miguel Kast, a Chicago Boys free-market economist who tragically died of cancer in 1983.  (I’m still trying to figure out the age differential with one born in 1948 and the other born in 1966, a pretty big age span for brothers, but this is the reporting.)  For years, Chilean pundits and the press said Kast, with his unapologetic stance on free markets, never had a chance.

All the same, Kast kept speaking sense to voters.  And it seems his moment came.  In the wake of a constitutional referendum put out by wimpy Chilean RINO President Sebastián Piñera, who was pressured by city-burning protests from the left, voters were scared straight into the prospect of seeing the Pinochet-era constitution, which turned their country into a prosperous and free first-world state, scrapped in favor of a communist constitution.  Been there, done that, saw Venezuela.

And that’s good news for us because Chile tends to be a bellwether for what happens here.  Both America (in the time of the great Ronald Reagan) and Chile (during the military government of Gen. Augusto Pinochet with its silver lining, the Milton Friedman–trained “Chicago Boys”) launched free-market revolutions around the same time in the mid-1970s–early 1980s, with the same kinds of results.

Then both countries saw a collapse, with the election of Joe Biden in the States and the passage of the constitutional referendum in Chile, which left the rabid left in charge.  Both countries got Antifa-style city burnings that were ineffectively dealt with.  Both countries got illegal migrant surges.

And now both sets of voters seem to be responding the same big red-wave way.  Chile goes first, and if all goes as planned, it will be the first part of the wave, the vanguard.  The red tsunami comes next over in the States.  (Red is a difficult term to use in Latin America, as it is the color of the naked communist left, but you know what I mean.)

Like Trump, Kast was gutsy.  Kast is the first major candidate ever to defend the Pinochet-era free-market reforms even as the press shuddered.  What he defended was an authentic free-market revolution, so facts are facts and the fact that voters went for it and didn’t consider it a gaffe demonstrated that something has changed.  The left for many years has smeared the revolution as Pinochet-linked, but that was garbage from bitter communists upset that their communist dictator, Salvador Allende, was ordered by the courts and legislator to be thrown out.  Pinochet himself didn’t understand a lot about economics, but he knew what he didn’t like, which was communism, and so he gave the free-market Chicago Boys free rein to clean up all the communism, which they did well, taking Chile from a Venezuelan-style third-world communist hellhole with all the same crime and disorder of Caracas, plus a few Cuban and North Korean torturers and Castro of Cuba giving orders in the mix, to a prosperous first-world independent country.  Kast defended that revolution, which needed to be done.  Chile hasn’t had one of those.

Here’s the kind of thing that was said by voters just before the election, as CNN sourly reported:

(CNN)”This is the first time I will vote for a right-wing candidate. I consider myself a leftist, but today I am 100% sure I will go for José Antonio Kast,” said Rodrigo Álvarez, a 48-old sociologist and public administrator, referring to Chile’s far right presidential candidate, a long-time conservative politician and defender of former dictator Augusto Pinochet’s regime.

“I want Chile to get back in order, the migrant crisis is out of control, we need more economic stability, and to stop the violence we’re still seeing two years after the social uprising. The only candidate who clearly says he will straighten things up is him,” he adds.

Here’s the bitter CNN headline:

Make Chile great again? Meet the far-right presidential candidate tempting voters from Chile’s left and center

And sure enough, Kast, the guy they said could never win, ran away with it.

Here’s what happened just now in Chile’s markets.  Note that Reuters can’t handle it:

LONDON (Reuters) — Chile’s peso surged on Monday after hard-right former congressman Jose Antonio Kast topped the first-round election, with the focus now shifting to composition of congress.

Chile is heading for a runoff with Kast competing with leftist lawmaker and former protest leader Gabriel Boric on Dec. 19. A strong performance by moderate centre right candidates bodes well for Kast.

Chile’s peso jumped 3.7% against the dollar to trade at 797.90 — its best day in almost a year.

“Initial results are very bullish for Chilean assets as the market will have to remove the risk premia priced in last week,” said Alvin Tan at RBC.

That means the guys who are willing to lay their own money on the line think Kast, the conservative free marketer, is going to win in the final round, on Dec. 19.

If he wins, guess what comes next in 2022!

Image: Biblioteca del Congreso Nacional de Chile via Wikimedia CommonsCC BY-SA 3.0.

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