Will the Internet Make Chileans More Trustworthy?

Journalist John Stossel wrote an interesting essay about what untrustworthy people like Chileans and other Latin Americans can do to increase business with people from rich countries.

Trust—society depends on it. For most of history, our ancestors lived in clans with other family members, or in small villages. Everyone pretty much knew who was trustworthy. People behaved better because they wanted good relationships with family members and neighbors. It’s one reason that today we trust friends and family more than strangers.

Only recently have humans interacted with lots of people. Today, “50 percent of the population lives in cities,” points out entrepreneur Julien Smith. “We’re surrounded by strangers, and you end up with these systems in place that progressively get built (to determine:) ‘should I trust this person?’”

Smith created the website Breather, which arranges for strangers to rent private spaces—even living rooms—for business meetings. For his business to work, total strangers must have a reason to trust each other. The Internet makes that possible. His customers check his clients’ reputations before they agree to share a workspace….

Internet ratings give us more reason than ever before to interact with new people.

Before the Internet, we at least had word of mouth. It gave us some protection. When I was a consumer reporter in a single city—Portland, Oregon, then New York City—I could find a smalltime scam to report on every week. But when I moved to ABC News to report on national scams, I couldn’t find so many.

That’s because, in a free society, the way for a business to get really rich is to serve customers well. When it does, customers want more of your stuff. If you rip people off, word gets out, and your business doesn’t grow.

Julia Thiel of the Chicago Reader reports that many Chileans are thieves, including flatmates at two different apartments:

When I told the Chileans at the ceramics studio where I took classes what had happened, they seemed unsurprised. “Chileans steal,” said one. “It’s too bad, but it’s just the way it is.” Another said she’d once seen a sign in a store in another Latin American country warning people to be on the lookout for Chileans stealing things. (Earlier this year, a Chilean was even arrested for stealing a glacier.)

I hope that the Internet encourages Chileans to become more trustworthy but I reckon it will take decades to change the culture.

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Will Chile Become Famous for Failure?

Investor’s Business Daily (IBD) opines:

In Chile, the refusal to learn is not from inertia but from success. Michelle Bachelet’s socialist government swapped 6% GDP growth in 2013 for 1.8% growth in 2014. How? By hiking government spending 9% and financing it with a 20% rise in corporate tax rates.

This year’s bid to repeal Chile’s 1979 Pinochet-era labor laws will ratchet growth even lower — back, in fact, to the pre-Pinochet era, when Chile was a Third World country with a per capita GDP just 20% of today’s level. Back then, as strikes engulfed the country, unions got 29,000 laws passed and crippled the economy. Property rights were nil, and the country was a shambles.

Chile learned only when it turned to free markets, due to University of Chicago economists known as The Chicago Boys. In their memoirs of the era, Jose Pinera, Hernan Buchi, Sergio de Castro and other Chicago Boys described the difficulty of changing course after decades of failure and the entrenched interests who resisted it.

The Bachelet camp is willfully clueless about them.

The most important reason the Chilean economy is suffering is the falling price of copper, their biggest export. Nevertheless, IBD is right that dramatically increasing government and labor union power will ruin Chile in the future. Chile has prospered from the Chinese building empty cities of building with copper tubes and wiring but that will not continue indefinitely.

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Chilean Runs 120 Marathons in 60 Days

Chilean runner Matías Anguita ran the length of Chile in 63 days, including 2 marathons nearly each day. He started running long ago as a means of giving up smoking, a habit of many Chileans.

I can’t even run 3 miles each day on a treadmill!

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Tax Increases in Chile

This post is from a Chilean reader of this blog. – Mark

A little help to your readers about a Tax Reform under heavy discussion in Chile presently.

Basically is going to affect much more Chilean business owners than foreigners. The reason? Foreigners have paid since very long a general income tax burden in Chile of 35%. However the higher bracket for wealthy Chileans is 40% today. It has meant a discrimination against wealthy Chileans. Some indications rise above the 40% the taxation for Chileans. Other indication level it to the same level than foreigners. The tax reform is still on the war zone, receiving bullets and bombs from the left wing and the right wing. So, the final outcome is unknown.

However, there are no indications at all to raise the 35% income tax applied to foreigners. Companies pay thus far a 20% corporate tax on accrued profits, but business owners had been able to deduct from his personal taxation, the amount paid by the company. So, a foreign business owner has to pay the difference when he withdraw his profits. It means the remaining 15%. Chileans do the same, when he withdraw the profits for personal use, he must pay the difference on April of each year.

The tax reform is rising the corporate tax on profits from 20% to 27%. This is one of the big changes. So, it means that foreigners will have to pay the difference: 8% when withdrawing profits. The final tax burden of investing in Chile may be lower for a foreigner if his country has an agreement with Chile to avoid double taxation or of he can use the amount paid in Chile as a credit to deduct from his taxation elsewhere.

However there is another big change against Chilean business owners. Presently we can deduct 100% of the corporate tax from our personal taxation. The taxation alien under cross fire, is coming out with the idea of allowing a 65% use of such corporate tax. So, Chilean business owner will actually pay more taxes. None of this has been said to be applied to foreigners yet.

The tax reform has other edges applied to foreigners, as eliminating DL 600, eliminating advantages for existing companies regarding accumulated gains and losses, etc. but it will make this post too lengthy. The tax reform is going to be revised by the Camara de Diputados ( The House of Representatives) for second time after modifications done on the Senate. So, there are some changes to be cooked by the House Chefs. The left wing Chef wants to add more chili and spices to the seafood paella and the right wing Chef wants to transform it on a chocolate fondue !! So, we still may expect a new dish, that as usual, all politicians from both sides, will celebrate as a victory. Nothing better to raise hope and health, to listen politicians after any election or big reforms: They are all happy and they are all winners. However, on the back stage, some will need more than a glass, they will command for a case of bottles to digest the new tax burden. At the end, as always, all of them will be “winers”.

My best regards

http://chilebusinessopportunities.blogspot.com/p/why-to-invest-in-chile.html

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Colorado Bighorn Sheep Visit Herd of Humans

The herd of bighorn sheep from Georgetown, Colorado descended the mountain last weekend to enjoy the warmer climate of the lowlands. This herd doesn’t fear people.

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Song for Piano, French Horn, and Percussion

I composed a song for piano, French Horn, and percussion using FL Studio Mobile. I also uploaded it to my SoundCloud page.

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A Trip to Richmond and Jamestown, Virginia

Mary and I passed a week in Richmond and Jamestown, Virginia. The galleon pictured below is a replica of the ship that landed in 1608 from Britain. The colonial houses and Jefferson Davis statue are from Monument Avenue in Richmond.

A small drone in the top of the picture is taking a picture of the Jefferson Davis statue in Richmond, capital of the Confederacy.

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The Giant Sequoias of Calaveras

Mary and I drove from Southern California north to the small town of Angel’s Camp, between Lake Tahoe and Yosemite, at the end of October, and visited groves of giant sequoia in Calaveras Big Trees State Park.

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Fall Vacation in Southern Utah and California

Mary and I passed October in Southern Utah, near St. George next to the Nevada border, Palm Springs, and Tehachapi, a small town in the mountains above the Mojave Desert in Southern California. Some of the pictures below are from a tramway that ascends 5000 feet from hot desert floor of Palm Springs to the much cooler mountains. The tramway is twice as long as a ski lift and the ascent is the second steepest in the world. The soil is sandy so the pine trees grow wide trunks and deep strong roots. The temperature the day we went was 95 at the bottom and 70 at the top. The locals take their kids to the mountaintop in winter to introduce them to snow. We visited a horse rescue ranch and farms that raise alpaca and ostritch in Tehachapi.

These bull elk sparred to establish mating rights next to a parking lot in Tehachapi, California.

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Composing Amazing Music on an Android in Your Living Room

The Amazing Randi stars in the popular video below where he laments that everything is amazing and nobody is happy. I find it amazing that $20 buys software that allows any patient person to easily compose music on an Android, FL Studio Mobile while sitting on a couch in the living room. The developer sells a PC version for $100.

I composed a song featuring harp, bass, and percussion in 5-10 hours. Do you think it’s any good? Should I quit my day job and compose music for a living?

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