PRESS RELEASE

New York Times, Echoing LaRouche PAC Pamphlet, Exposes George W. Bush's `Chile Model' of Social Security

Jan. 27, 2005 (EIRNS)—"Borrowing a page from Lyndon LaRouche, the New York Times reports today how President Bush's model, Chile's privatized Social Security system isn't working so well." This is how ABCNews, on its website, reports on today's New York Times article, entitled "Chile's Retirees Find Shortfall in Private Plan."

As additional evidence of LaRouche's and the LaRouche Political Action Committee's impact on the "Chile model" architects, the Times reports, "The main architect of the Chilean system is José Piñera, who was labor and social security minister from 1978 to 1980 during the Pinochet dictatorship.... Mr. Piñera declined repeated requests to be interviewed for this article." The shameless promoter Piñera flies off, at the drop of a hat, to Texas or California or Russia or China to champion Chile's privatization. But after months of being attacked and ridiculed by the LaRouche movement, George Shultz's protected asset is becoming damaged goods, rendering him afraid to talk on the subject to the New York Times. (See EIR's profile of José Piñera.)

The Times article's content is very familiar to those who have read the LaRouche PAC's pamphlet, "Bush's Social Security Privatization—Foot In the Door for Fascism;" some sections are copied, but using slightly different words. Its main points: half of those retiring in Chile are not in the Social Security system; Chile's AFP private accounts have been a profit-making bonanza for the companies that manage them—fees collect as much as much as one-third of the value of the private accounts—while forcing workers to retire into poverty, etc. The Times reports that Chile now spends 26% of its whole government budget for old age benefits, a larger share than in 1981, when Social Security was privatized.

Being on the ground, the Times is able to interview a few people. It reports on the case of the 66-year old Dagoberto Saez, who earns a moderate income of $950 a month, but who was told that when he retires he will get an annuity of only $315 per month. "Colleagues and friends with the same pay grade who stayed in the old system, people who work right alongside me," he said, "are retiring with pensions of almost $700 a month—good until they die. I have a salary that allows me to live with dignity, and all of a sudden I am going to be plunged into poverty, all because I made the mistake of believing the promises they made to us back in 1981."

"What we have is a system that is good for Chile but bad for most Chileans," said a government official who specializes in pension issues and who spoke on condition of anonymity, fearing retaliation. "If people really had freedom of choice, 90 percent of them would opt to go back to the old system."

The failure of Pinochet-Piñera fascist reform has led Chileans to coin a new phrase to describe what has happened: "pension damage." There is now even an Association of People With Pension Damage, 157,000 members and growing, that consists of Chileans, mostly former government employees, who find that their pensions have been contracted. "They come to us in desperation," said Yasmir Farina, the group's President.

President George W. Bush, on April 16, 2001, welcomed Chile's President Lagos to the White House:

"I'm very honored to welcome the President of Chile to the Oval Office. Chile is a remarkable country... I also look forward to talking about free trade. I'm confident that by the time this year is over we will conclude a free trade agreement with Chile. It's in our nation's best interests to do so. And, finally, I think some members of Congress could take a good— could take some lessons from Chile, particularly when it comes to how to run our pension plans. Our Social Security system needs to be modernized, Mr. President, and I look forward to getting some suggestions as to how do do so, since you have done so, so well."