Larry Summers, George Soros Say of Chile's Finance Minister: "He's One of Ours"
April 25, 2009 • 3:28PM

If the Chilean people had reason to dislike their free-marketeer Finance Minister Andres Velasco before this, the gushing praise the monetarist economist has received from Barack Obama's economic advisor Larry Summers and drug kingpin George Soros should make them cringe.

Summers, who is feeding disastrous economic prescriptions to Obama, was at Harvard when Velasco taught economics there, prior to joining the administration of Michelle Bachelet in 2006. He has showered the Chilean with praise for being both "smart" and "practical," and the two continue to be close friends.

Soros, who met with Velasco last week in New York, lavished praise on the Finance Minister, for having built up a $46.8 billion slush fund derived from a large copper windfall, some of which the government is now using as a "stimulus" plan. Chile is the only country in a position to adopt such a program, Soros gushed, adding that if other Ibero-American nations had followed Chile's lead, the "economic climate would be far different" in the region.

What Summers and Soros approve of, is that when copper revenue was pouring into the country, due to the commodity's high price, Velasco disregarded cries to invest the revenues productively, to create jobs or build infrastructure. Instead, he invested half of it abroad, largely in government bonds, and refused to spend anything on what he termed "expansionary" policies. His "stimulus" spending includes a $68.41 handout to poor citizens—a pittance—and helping to put through a social-security reform, which doesn't even begin to address the disastrous situation created by the privatized pension system imposed in 1981 by the Pinochet dictatorship.

Unemployment in Santiago, the capital, has meanwhile soared to 12.6%, and is expected to quickly go higher. Former Christian Democrat and Presidential hopeful Adolfo Zaldivar put it succinctly, in describing Velasco's methodology: "He acted like an accountant."