Obviously, the earth's plates are shifting. Japan suffered a large quake earlier -- offshore, so it didn't do too much damage on shore. At the other edge of the plate, Chile gets battered. And Haiti? I don't think they're anywhere near the same geologic plate, but all the plates fit together like puzzle pieces. Push one, and there's a chain reaction. Chile is more developed than Haiti and better prepared to handle a disaster, but the quake is a rather huge disaster. They have my hopes and even confidence for recovery.
But let's consider Argentina for a moment, which also suffered a huge disaster -- a man-made disaster, in fact, from which it may never recover.
On Feb. 19, I wrote a blog called "Federal intervention wrecks another maybe-good idea." In that blog, I outlined Argentina's private pension system -- like our Social Security. The citizens had to take so-much out of their incomes to set aside for their pensions, but the money was invested in private commerce and industry, managed by private investment firms. The system was launched in 1994, based on a scheme devised by free market economists. In the blog, I said I didn't know what had become of it. So I looked it up.
From the Wall Street Journal, Oct. 22, 2008:
BUENOS AIRES -- Hemmed in by the global financial squeeze and commodities slump, Argentina's leftist government has seemingly found a novel way to find the money to stay afloat: cracking open the piggybank of the nation's private pension system. The government proposed to nationalize the private pensions, which would provide it with much of the cash it needs to meet debt payments and avoid a second default this decade.
The move came as wealthy nations unveiled fresh steps to fight the credit crunch. The U.S. Federal Reserve said it would bolster money-market funds, which have faced withdrawals, by lending as much as $540 billion to the industry. France said it would inject $14 billion into six banks on condition they agree to increase their lending. In a sign banks were a little more willing to lend to each other, the London interbank offered rate, a benchmark for many business and consumer loans, again declined.
Argentine President Cristina Kirchner said the move to take over the private pension system was aimed at protecting investors from losses resulting from global market turmoil. Funds in the system, which is parallel to a government pension system, are administered by financial firms.
The private system has about $30 billion in assets and generates about $5 billion in new contributions each year.Pretty sad, huh? While the USA was bailing out financial institutions that were better left alone, and nationalizing the auto industry, Argentina raided its citizens' pension funds. How did they get away with it? Here's more from the Washington Post on Nov. 21, 2008:
While no one knows for sure what the government would do with the private system, economists said nationalization would let the government raid new pension contributions to cover short-term debts due in coming years.
"During its 14 years in existence, the private system never achieved what was needed. This project will permit us to undo a path of errors that were committed. It will be a difficult path, but a brave one," said Sen. Julio Miranda of Tucuman, who voted in favor of the bill.
The public system would pay out a set amount to pensioners, unlike a private system that could vacillate more widely depending on the market.
The director of Argentina's social security agency, Amado Boudou, vowed to protect the value of people's investments.
"The income from the government's new system will be better than what the private pension agencies have been giving to its members," he told Argentina's America24 television on Thursday. "We have thought for a long time that the private pension system here did not function well, and when we brought this proposal to the lawmakers, we realized that we were right because the majority of them supported it."
After the proposal was announced last month, stocks in Argentina tumbled and investors dumped Argentine bonds amid fears that the nation's economy faced severe problems and could be heading toward a second debt default, such as occurred during the country's 2001 economic collapse.
"The announced nationalization-expropriation of the Argentine pension funds constitutes one of the most blatant acts of financial piracy in the country's recent history," wrote Claudio Loser, senior fellow at the Inter-American Dialogue, in the Latin American Advisor newsletter. "The proposed expropriation would eliminate individual savings, and convert them into a pay-as-you-go system, with large funds that could be spent almost freely by the Argentine government."
Sen. Ernesto Sanz of Mendoza, who opposed the nationalization, said: "We don't have any doubt that this is violating the right to private property. Not just for us, but for all society and the world. This is clearly confiscation."
The lower house of Argentina's National Congress approved the bill earlier this month. Officials said they expect the new system to be in place by the end of the year.Let's see if I have this right. The Argentine government has suffered financial collapses in the past and fears another. So it nationalizes private pension funds because the private pension fund is "unstable." What's wrong with this picture? Seems the private pension fund was much more stable than the government economy.
So it doesn't seem to matter which nation or which politicians -- they just can't keep their sticky, greedy little fingers out of citizens' cookie jars. What the hell is wrong with these people? And Argentina's excuse for stealing its citizens' pensions is the same song & dance we heard about the bail-outs, etc., and continue to hear about nationalizing the health care industry here.
Anyone who trusts these people must be suffering from some kind of brain damage.
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