The voice of the student left at St. Louis U. HighSLUH

Wednesday, January 13, 2010Volume 1, Issue 2

Iran has become one of the new focal points of potential aggression of the United States lately. The reason stems from the fear that Iran has for some time been developing nuclear weapons and that those hypothetical nuclear warheads might be pointing at the United States. With these potential threats looming over our heads, lawmakers have been furiously trying to make up their minds about what action they are going to take. Indeed, a difference of opinion has manifested itself between President Obama and the legislative branch of the government: while the president is content to keep with the strategy that he maintained towards the Iranian post-election protests that occurred in 2009 (i.e. distancing the United States altogether from the internal conflicts of Iran), Congress uniformly wants to push the president to using more aggressive methods towards Iran, such as increasing sanctions, attempting to diplomatically isolate Iran from the rest of the world, and even using military action to overturn the government and end the nuclear program. A difficult question arises from this debate: Which method, if either of those presented, is the best way to handle this potential crisis? Despite the vitriolic nature of the debate, President Obama’s stance is far more well-reasoned. For one thing, President Obama seems to have learned something about the events that led to the Iraq War. The circumstances that surround this crisis with Iran are extremely similar to those that surrounded the run-up to the Iraq War: a hostile tyrant is in charge of a Middle Eastern country that may have or may not have the capacity to make WMDs and may or may not channel those weapons through equally hostile terrorist organizations. On top of that, we have a Congress that is pushing for more aggressive measures to head off a potential attack on the United States before it happens. The only difference lies in the fact that the current president seems unwilling to embroil America in another quagmire (or perhaps just not in this particular country). Nearly a year in office has allowed President Obama to develop some prudence about choosing his fights—the same prudence that the senators

and congressmen that started the Iraq War should have learned—giving us cause for hope. He holds a logical viewpoint: that, with or without nuclear weapons, Iran is not large of a threat. Even if the Iranian government did have nuclear weapons, it would still fall under the same international pressures that have kept every other country with nuclear weapons from using them since 1945. At the end of the day, despite whatever religious retaliations they may promise, the leaders of Iran are self-interested men with power, and self-interested men with power do not look to add unstable factors that might undermine their authority. Thus, it is extremely doubtful that Iran would ever use nuclear weapons on any other country or even risk being caught selling nuclear arms to independent terrorist groups. If a nuclear weapon were to ever be used against the United States, the Iranian government would have to deal with a resurgence of revolts amongst the American-friendly populace—not to mention war with the United States itself. With those reasons in mind, there is little to fear in Iran’s possible acquisition of nuclear weapons. However, there is also clear value in reinitiating negotiations with Iran, which is a step farther than President Obama has currently gone and is in complete opposition to the Bush-era strategy of the Congress. If lawmakers are truly worried about the possibility of a war with Iran, then they should try to work out the problems and ill feelings that over fifty years of United States intervention have created in Iran. It is no wonder that the present Iranian administration is so openly hostile; we continue to try to cut the Iranians off from the rest of the world, most recently by preventing other countries from selling oil to them, while at the same time encouraging resistance among the Iranian peoples. However, there are still many diplomatic unknowns, and benign neglect may not be the best way to address Iran. Nonetheless, it is doubtful that opening negotiations could bring our two countries’ relations any lower than they are right now, and the possible benefits are enormous. If we really value the security of our nation, perhaps we should start treating the Iran people as people and the country of Iran as a sovereign nation, and step away from the precipice of brinkmanship before a potential crisis on the horizon becomes reality.

The debate over war in IranObama’s distancing vs. Congress’ aggression

Tony MelliloContributor

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Are you a progressively-minded individual?Contact seniors Jack Newsham (M114) or Ben Minden-Birkenmaier (M114), or sophomore Joe Klein (M209) or

submit articles and ideas to progressive@sluh.org.

2 1.2January 13, 2010

“The Miracle of Chile” RevisitedFree markets pitted against free people

Jack NewshamEditor

Communism has failed. Apart from a few small examples, it has been conducive to despotism, corruption, and human rights violations. In the most notable examples, Russia and China, it has been born of war and survived on war. Rather than eradicating class, it created the most stratified societies in history, with a powerful party elite leeching off of and terrorizing an impoverished nation. The human rights record of such administrations are grim; disappearances and torture only scratch the surface. Today, as we’ve seen, the policies of totalitarian communism have largely fallen by the wayside. The USSR collapsed, and most of its 225,000 state-firms were sold off. The New Year’s Day establishment of the ASEAN-China Free Trade Area has reduced the tariff on nearly 8,000 product categories between six signatories to zero, according to the Jakarta Post, and has been the most recent step in the past decades of China’s market liberalization beginning with the 1983 opening of China to foreign investments. But what has arisen in their place? The standard answer is that free markets entered the picture and set these countries on the path to liberty, freedom, and the American way. But the truth is far more brutal. In this column, the first in a series, we take a look at the origins of the free market movement in what economist Milton Friedman labeled “the Miracle of Chile.” The “Miracle” has relatively humble roots. Beginning in 1957, hundreds of Chilean students were granted the opportunity to study economics at the University of Chicago under the laissez-faire Milton Friedman. When “the Chicago Boys,” as they came to be called, returned home, however, their new free-market ideologies were drowned by the prevailing socialist attitudes and developmentist economic policies of the region, from Peronists in Argentina to Brazil’s demands that a portion of profits made by multinationals be spent in the country; in the Chilean election of 1970, for example, all three major candidates pledged to nationalize the largely U.S.-owned copper mines which, despite having invested $1 billion in Chile in the past 50 years, had sent over $7 billion home in profits, according to the book Debt Squads: The U.S., the Banks, and Latin America. The election of Marxist Salvador Allende proved to capture the attention of Washington. Though Allende’s administration saw a successful first year, with 8% GDP growth and reductions of inflation, 1972 was not so good. Multinationals and lobbies in Washington conspired to, as President Nixon phrased it, “make the (Chilean) economy scream,” cutting off aid, loans, and trade. Through Operation FUBELT, the CIA attempted to ferment revolution by methods which included paying off the conservative newspaper El Mercurio to encourage a coup. Combined with a roughly 25% drop in the price of copper, Chile’s primary export, and a poor balance of trade, hyperinflation set in, hitting 150% in 1972, according to the 2007 book The Shock Doctrine. When Allende’s party made gains in the 1973 elections

despite the economy, his opponents lost all patience for democracy; on September 11, 1973, General Augusto Pinochet spearheaded a coup d’état, complete with jets bombing government offices and a tank siege of the president’s house, that marked the start of 16 years of economic liberalization—and brutal anti-democratic oppression. Unsurprisingly, the unpopular Chicago Boys saw this as an opportunity, and the world’s economists were watching. The day after the coup, a 500-page economic plan authored by the Chicago Boys known as “The Brick” was on Pinochet’s desk, advocating the speedy institution of privatization and reduced social spending. Pinochet acted on these unpopular ideas immediately. The day he took power, he suspended Congress, and during his first eighteen months, he privatized many state companies, slashed tariffs, eliminated price controls, and cut spending by 10%—except,

of course, for the military, his prime tool of control. Whatever free-market magic was expected did not appear; in 1974, inflation surpassed 500%, according to economist André Gunder Frank. Unemployment rose from 3% to 20%. Prices for staples and even bread skyrocketed, and many businesses shut their doors, unable to compete with the

cheap imports flooding the country. The reason, according to the Chicago Boys? Not enough privatization! After a brief period of growth, the economy crashed yet again in 1982 as the corporations that bought privatized state companies defaulted on the loans they used to do so. Hyperinflation set in, unemployment hit 30%, the government wracked up a $14 billion debt, according to The Shock Doctrine, and Pinochet backtracked on years of privatizations, nationalizing elements of the banking sector. After years of wild swings, booms, and busts, a rather lopsided “miracle” had taken place; Pinochet’s rule resulted in a 45% poverty rate by 1988, while the wealthiest tenth experienced an 83% rise in income. The barbaric and antidemocratic venture into neoliberalism leaves its mark on Chile even to this day: a 2007 U.N. ranking of 123 countries had Chile as the eighth most unequal country in the world. An obvious question is raised: with such economic turmoil, how could Pinochet and his Chicago Boys manage to stay in power through 1990? The answer can be observed in decades of brutality, torture, and repression. From the day of the coup, Chile’s National Stadium became a prison that would make Abu Ghraib look like Candyland, where over 13,500 “subversives” were tortured and hundreds were executed, their corpses appearing alongside major highways and floating in canals, warnings to anyone else who dared to dissent. After the coup, Pinochet’s General Stark and

(continued on the next page)

“People were in prison so that prices could be free.” -Eduardo Galeano

31.2January 13, 2010

Ben Minden-BirkenmaierEditor

A look at the Health Care billAn argument for Congressional approval

his death squads roved the northern provinces, executing high-profile political prisoners dozens at a time in four days that came to be known as the “Caravan of Death.” The 1990 Chilean truth commission found that the Chilean secret police (DINA) repeatedly threw victims into the ocean from helicopters after knifing their stomachs so they would not float. In 1974, Orlando Letelier, Allende’s former U.S. Ambassador, was released from a forced labor camp, where he faced torture, and exiled from the country, only to be assassinated by a CIA/DINA car bomb in Washington, D.C., the very next year for his anti-Pinochet lobbying efforts. By various counts,

more than 3,200 Chileans were killed or “disappeared,” never to be heard from again. Another 80,000 were arrested, and roughly 50,000 were tortured. Over 200,000 Chileans—one in fifty—fled the country for political reasons. As writer Eduardo Galeano put it, “People were in prison so that prices could be free.” Chile marked the bloody genesis of the free-market revolution, a revolution that spread to the rest of South America in equally bloody coups and under equally barbaric and murderous juntas. The free market at the barrel of a gun was oftentimes no better and frequently worse than the communism it sought to combat, leaving a lasting legacy of torture and political oppression. The force of neoliberalism marches on; from Russia to South Africa to Iraq to New Orleans, it has led to the deaths and impoverishment of nations.

Chile(continued from the previous page)

On Christmas Eve, the Senate convened to pass the Patient Protection and Affordable Care Act. With all of the confusion created by misguiding rhetoric, multiple committee versions of one bill, and shifting alliances and voting blocs, it would be prudent to take a look at some of the basic things that the finalized Senate bill offers, as reported by Reuters:

Jack Newsham contributed to this article

For the first time ever, United States citizens would be required to purchase health insurance. This also means that healthcare costs for everyone would also drop because everyone will be required to have insurance, meaning that there will be no free-riders and less uncompensated care (hospitals treating the uninsured and passing on the costs to the insured).

Federal money would be available to help Americans afford that insurance, available to people whose incomes reach up to 400% of the federal poverty level.

Insurance companies would no longer be able to deny people due to pre-existing conditions, and will not be able to charge higher premiums because of health history, gender, or occupation, and can no longer drop people when they become sick, a significant step forward from these practices, which have skewered millions.

Although businesses aren’t required to buy their employees health coverage, they are encouraged to by the fact that they would have to pay a penalty if their workers use federal subsidies to purchase insurance. However, to complement this, small businesses receive tax benefits in order to buy medical plans for employees.

Insurers will be required to spend 85 cents on the premium dollar on medical care for large group plans, and 80 cents on the dollar for small group and individual plans.

Medicaid is expanded, with people of incomes up to 133% of

the poverty rate newly eligible for coverage (many states have current eligibility standards that are far below the poverty line).

Conspicuously absent from this bill is a public option – a government-run health care plan that would compete with private companies to provide coverage for consumers. Republicans and conservative Democrats fought such a move because they believed it threatened the stability of the free market because it would be too powerful of a competitor for the private companies.

Despite their shortcomings, the measures proposed in this bill go a long way toward reforming the U.S. healthcare system, which costs far too much for the coverage it gives. This bill protects consumers by requiring insurance companies to spend more of the money they receive in premiums on healthcare, ensuring that consumers will get more care for their buck. At the same time, it benefits insurance companies by providing them with 31 million new consumers they otherwise would not have, many backed by federal money (these new consumers, needless to say, also benefit by having newly affordable health insurance). It benefits all citizens by driving healthcare costs down—projected by the CBO to save over $100 billion this decade and $1 trillion the next—and keeping them from being booted or penalized by insurance companies for pre-existing conditions, gender, or medical history, things which they cannot control. It provides significant financial support for the required purchase of healthcare, ensuring that this measure will not impose a heavy burden on the consumer. Furthermore, the absence of a public option represents a significant concession by Democrats. The GOP, the party that has threatened to filibuster and has forced all sort of technical stoppages on this bill, made none. Almost everyone agrees that the American healthcare system is broken, and this bill represents a compromise that would go a long way toward fixing this system. It is imperative that it is reconciled with the House bill and passed so that meaningful reform can finally take place.