For the second year running Chile becomes the OECD member with the highest GDP expansion which this year will reach 5.2% compared to the 1.4% average. November’s estimate in 0.8 percentage points higher than last May’s forecast.
Likewise the Chilean economy will outperform in 2013, (4.6%) and in 2014 (5.4%) its peers from the “developed countries club” although the slower pace next year is attributed mainly to lesser exports to the Euro zone.

What will the economies of major nations be like in 2042? If current growth rates continue the GDP per capita will resemble the chart below.

Australia is a standout, passing by a wide margin Britain, Canada, Germany and the USA. Clearly, it’s better to be in Asia than Europe. Chile is a standout, too, rising from the bottom to pass Portugal, Italy, Spain, Britain and Germany. Of course, most countries don’t sustain high growth for 30 years; Australia and Chile will probably become overconfident, expand the welfare state, and wreck the economy like Europe, Canada, and the USA. Democracies have a way of slowly disintegrating as soon as voters figure out that becoming wealthy is easier by voting and redistributing than by working and investing.

The outlook seems good for Chile in the next few years; the government anticipates
catching up to Portugal by 2017. Given the dire situation in Portugal, I think Chile will surpass it sooner. The Supreme Court of Portugal recently ruled that it is unconstitutional for the government to cut the budget!

Chilean real estate is skyrocketing so the government has convened a group to warn them when it becomes an unsustainable bubble:

Due to concerns regarding an increase of residential real estate prices, the Chilean Financial Stability Council (Consejo de Estabilidad Financiero) has announced the creation of a new group to monitor residential real estate sector risk. The group, comprised of representatives of the Ministry of Finance, the Central Bank and Superintendents of Pensions, Securities and Insurance and Banks, will seek to identify and monitor systemic threats to local financial stability.

Income taxes are the most destructive taxes. Photo courtesy of Chris Potter via Flickr.

As United Statesians submit their income taxes today, Forbes reports that the Governor of Louisiana, Bobby Jindal, is surrendering the struggle to phase out the income tax in his state, a dismaying development because the nearby southeast states of Texas, Florida, and Tennessee impose no income tax and the economies of these states are booming. The Marxists of the People’s Party who struggled for 20 years to add the graduated income tax to the Constitution, implementing the Second Plank of the Communist Manifesto, would be proud of their successors. As the protest demonstration below shows, United Statesians enthusiastically promote big government.

United Statesians love big government so much that they protest for higher taxes. Photo courtesy of Martha Soukup via Flickr.

Louisiana refused to repeal the state income tax because it requires replacement by a sharp increase in a regressive sales tax paid disproportionately by the poor. The regression could have been easily eliminated by providing exemptions for necessities like clothing, grocery food, and medicine, as in states like New Jersey and Massachusetts. Sales taxes are paid only by rich people who buy luxuries; income taxes are involuntary punishment imposed on people who work and invest.

Taxes are a form of social engineering because a taxed good or service is produced in reduced quantities. The best taxes are sin taxes on alcohol, tobacco, sugar, and pollution as long as the tax rate is not high enough to encourage evasion. The income tax is difficult and vexatious to calculate, rewarding parasites that refuse to work and dishonest people who report false expenses and omit income. Who does the income tax punish? Investors and honest people who work hard.

Office suppliers love income taxes because it increases demand for their products. Photo courtesy of Liz West via Flickr.

I haven’t made time to read Jimmy Buffett’s, A Pirate Looks at Fifty; I started reading it when my wife Mary turned 50. There are so many more books than time! Amazon sends special offers to me every day so my reading queue is 20 books. I’d love to be able to fly a small plane, like Buffett, but we sailed a Catalina yacht one winter in Baja.

I’m most thankful for my amazing health. I don’t need glasses even when reading; how long can this last? I can’t run a marathon but I can run a mile, more than I could run 25 years ago. I hope to run two miles by June. I’m leaner than I was in college and my back is stronger. When I was younger, I anticipated that by now I’d have given up strenuous sports and taken up golf. I’ve given up Rollerblading in favor of bicycling. Now I realize that not only can I continue to enjoy the good health that comes with hard exercise, it’s essential to my happiness. I haven’t played tennis often the last 5 years but I hope to return to it because it’s more enjoyable than other sports.

I’m eating better than ever thanks to Loren Cordain, author of The Paleo Diet, and blogger Karen De Coster, who introduced me to Cordain. I don’t follow the diet strictly because the human body can tolerate some abuse. I can lose weight whenever I chose by exercising two hours daily and eating mostly healthy food. There’s no need to run 5 or 10 miles; doing so might even be unhealthy because excessive exercise stresses knees and feet.

I’m glad to have an optimistic outlook. I perceive Against All Odds as a happy song because it celebrates the ecstasies of knowing someone really well and playing the black piano keys; others say the song is sad because the narrator suffered a great loss. As Monty Python says, “If life seems jolly rotten, there’s something I’ve forgotten.”

I’m glad to have the time to learn to write and program WordPress and hope to continue blogging until my 60th birthday or longer, producing more posts as my most popular. Blogging has become a lower priority lately as I’ve composed music using the open source Python programming language and Csound software synthesizer for signal processing and sound rendering. I’m also taking courses on Coursera because I want to be part of the revolution that pops the higher education bubble.

The White House thinks calligraphers are more important than public tours of the White House. Photo courtesy of Wikipedia.

President Obama has eliminated tours of the White House to the public, the people who paid for the opulent building, as part of budget sequestration, an arcane political procedure whereby the USA government budget will increase by $7 trillion during the next decade rather than $8 trillion as politicians had planned. Some contend that he eliminated tours so that disappointed tourists might contact their Congressional representatives to lobby for eliminating the sequester, restoring the large planned budget increase.

One prominent Republican, Senator Rand Paul, suggested some alternatives that deserve to be eliminated more than White House tours:

“Only in Washington could an increase of $7 trillion in spending over a decade be called a cut,” Paul said of the sequester. And added to raucous applause: “Meanwhile the President found an extra $250 million to send to Egypt. … I say-not a penny more to countries that burn our flag.”

Paul contended that instead of eliminating White House tours, he should cut research for “monkeys on meth,” robotic squirrels, and menus for colonization on Mars that were developed by college students given all-expense paid trips to Hawaii.

“Mr. President, maybe we could have cut robotic squirrels before White House tours,” Paul said.

Others have suggested that eliminating White House calligraphy jobs:

With the White House closing its doors to public tour groups in order to save money for the sequester, it’s worth remembering some of the other costs the White House incurs annually. Like the “Chief Calligrapher,” Patricia A. Blair, who has an annual salary of $96,725, and her two deputies, Debra S. Brown, who gets paid $85,953 per year, and Richard T. Muffler, who gets paid $94,372 every year. In all, the White House appears to employ 3 calligraphers for a yearly total of $277,050. Despite sequestration, there’s been no announcement of the White House scaling back on calligraphers.

These are good suggestions but I think the best spending to eliminate would be reverse Robin Hood programs like NPR, formerly National Public Radio, entertaining the rich with “cultural” offerings. Should governments produce entertainment? What would happen if politicians allowed the private sector to participate exclusively? Would people become bored? Is the entertainment enjoyed by poor and middle income people really so bad? Should the government decide?

I’m not sure that anything would change or anyone would notice the difference if NPR funding were eliminated because it received a $235m grant in 2003 from Joan Kroc, wife of the founder of McDonald’s, increasing the large endowment NPR enjoys. Rich people seem capable of entertaining themselves even without government help.

If you live in the USA hoping the economic malaise will end, consider that the government cannot make easy budget decisions even though it only collects revenue for 60% of government spending. This will continue indefinitely so it might be prudent to consider Plan B, an alternative country for possible emigration. Singapore is a good destination for rich people and Santiago, Chile is suitable for middle income earners.

Eduardo Saverin, a Facebook founder, has emigrated from the USA to Singapore. Photo courtesy of Wikipedia.

The Wall Street Journal explained why rich people are emigrating to the dictatorship in Singapore:

Many Americans and Europeans just want a place where their investments can keep growing—hardly a problem in Singapore, smack in the middle of the fast-growing Asia.

“This kind of sharp change [in the global economy] brings with it an emergence of the very rich, who seek security and stability and a pronounced need for financial services in wealth management, investment, and facilitating and guiding decisions,” Quah says. “A place like Singapore has developed both the reputation and the expertise along every single one of these dimensions.”

But what really checks all the right boxes for many of the world’s ultra-rich is Singapore’s obsession with order, predictability and control, all of which give comfort to individuals whose fortunes have recently gone down the drain in many parts of the world. It doesn’t hurt that Singapore has some of the lowest taxes in the world, including none on capital gains and most foreign dividends. But it also has relatively secretive private banking laws and zero harassment from paparazzi or protesters, whose activities are narrowly proscribed by Singaporean authorities, further creating an aura of order and stability.

….The irony, as with other earlier boomtowns, is that the very sources of Singapore’s success may ultimately prove its undoing. The gushers of cash that have flooded Singapore in recent years have put relentless upward pressure on property prices, with private-home prices rocketing 59 percent higher since the second quarter of 2009, even as real-estate prices have tumbled or gone sideways in much of the rest of the world. Prime Minister Lee Hsien Loong was only admitting the obvious, some analysts say, when in a recent interview he said that the country’s property boom is “almost a bubble.”

Singapore has enacted a huge tax on real estate tax on foreigners, hoping to contain the bubble. In a rare service to United Statesians, the government has secured an exception to the tax for United Statesians because the free trade agreement with Singapore requires both governments to refrain from unjust discrimination: since citizens of Singapore don’t pay the tax, United States don’t pay, either. There are 5 other countries that have similar agreements with Singapore, all small, none with population greater than 20 million. Equal protection of the law is rare. The Wall Street Journal reports:

This month, the government boosted to 15% from 10% the fee added to the purchase price of residential property bought by many foreign nationals, including the Chinese, who were the second-largest group of foreign buyers last year. In contrast, U.S. buyers don’t have to pay the surcharge, thanks to a bilateral trade accord with Singapore….

Singapore’s government imposed the tax in December 2011 on most foreigners to fight what it contends is excessive speculation in the property market. Private-home prices have surged 59% since the market’s most recent trough in 2009.

The government worries that foreign buying is introducing the risk of a market bubble and making homes less affordable for Singaporeans, which is feeding a growing resentment of foreigners. But the move risks alienating some wealthy foreigners, including the Chinese, whose home-buying activity dropped markedly last year after the government imposed the original 10% surcharge.

One of the founders of Facebook, Eduardo Saverin, emigrated to Singapore a few months before Facebook sold stock to the public. Some people have speculated that he emigrated to reduce his taxes.

Stock fund manager Jim Rogers emigrated to Singapore to provide a better education and prosperous future for his daughter. Photo courtesy of Wikipedia.

Stock fund manager Jim Rogers emigrated to Singapore in 2007. A British newspaper published his thoughts on governments bailing out incompetent businesses:

When asked his advice for a young person growing up in Britain, Jim Rogers, former partner of George Soros and one of the world’s most successful investors, is forthright. “Move to China; learn Chinese.” In an interview with The Independent, Mr Rogers warns that Britain will go bankrupt if the Government continues to follow its present policy of attempting to save the banks through subsidy and nationalisation.

He has sold all his sterling assets and has “no position” in sterling, but Mr Rogers reveals that he had been planning to short-sell sterling in the present financial crisis, before recent disparaging remarks about the pound’s prospects from his own lips had put paid to those plans. “I should have kept my mouth shut.”

Mr Rogers had in mind a repeat of his previous coup, when he and Mr Soros’s Quantum Fund famously “broke” the Bank of England in 1992, when sterling was forced out of the European exchange rate mechanism, costing UK taxpayers $1bn and making Mr. Soros and Mr. Rogers correspondingly wealthier.

Rogers was motivated to provide a prosperous future and better education for his daughter, Happy:

Happy Rogers, age 8, stands among her classmates in the schoolyard at dismissal time, immune, it seems, to the cacophonous din. Her parents and baby sister are waiting outside, but still she lingers, engrossed in conversation. A poised and precocious blonde, Hilton Augusta Parker Rogers, nicknamed Happy, would be at home in the schoolyard of any affluent American suburb or big-city private school. But here, at the elite, bilingual Nanyang Primary School in Singapore, Happy is in the minority, her Dakota Fanning hair shimmering in a sea of darker heads. This is what her parents have traveled halfway around the world for. While her American peers are feasting on the idiocies fed to them by junk TV and summer movies, Happy is navigating her friendships and doing her homework entirely in Mandarin.

Fluency in Chinese, she says—in English—through mouthfuls of spaghetti bolognese at a Singapore restaurant, “is going to make me better and smarter.”

The Wall Street Journal also reports that Nathan Tinkler, the richest Australian younger than 40, has emigrated; and Singapore “has a marginal individual tax rate of 20% for the highest income bracket, which compares with 45% for the top income bracket in Australia. Unlike Australia, Singapore has no capital-gains tax…” and Singapore “boasts the highest percentage of millionaire households in the world…. New Zealand billionaire Richard Chandler relocated to Singapore in 2008.”

Israeli venture capitalist Arnon Kohavi moved from Israel to the USA to Chile to Singapore. Chileans who complain about the vast difference between rich and poor should note that the Gini index of Singapore, 47.3, is almost as high as Chile, 52.1. The Gini index of Hong Kong is even higher (53.7). A country that offers opportunities to become rich won’t entice everyone to embrace those opportunities. According to Matias Mori of the Foreign Investment Committee of Qatar, “Chile in the Latin American context is what Singapore is to Asia. It is the most institutionalised, economically efficient, and transparent business destination.”

Related posts:
Why Apple and Facebook are Governed by Dictators
How Voting is Similar to Child Abuse
Election Boycotts in Chile and the Brigantine Pilgrim

Fritz Catches a Jackrabbit
Fritz was always with me while I was cricketing around on my crutches. He chased ground squirrels and tried to catch meadow larks and now and then flushed a jack rabbit. Usually he knew enough not to try to catch a jack, but one afternoon he flushed the biggest, fattest jack I’d ever seen and it didn’t want to run. Fritz knew it. He took after it.

Instead of running straightaway, as usual, this jack just dodged around the hillside. Several times Fritz almost caught it and I was hoping he would. Finally the jack circled down the slope and came right toward me. Fritz closed in and was just about to make his grab, but the jack stopped short and Fritz went right over it. Then it came straight for me. That time Fritz caught it, not fifteen feet from me. He hardly seemed to touch it. He snapped once and it keeled over and lay there gasping, its eyes closed.

I ran to it. Fritz wasn’t worrying it, the way he did any rabbit I shot when he was along. He just nosed it and stood there, panting. The rabbit twitched and drew up its legs and gasped, and suddenly it had babies. Four baby rabbits were born, right there while I watched. They popped out, one after another, wet little things like mice and not much bigger. Then the old mother went limp and dead. Fritz must have flushed her just as she was settling down to give birth.

I knelt and picked up one of the babies. It squirmed in my hand. Its wet little ears were pink, with black tips. It nosed my hand for a place to suck.

Fritz sniffed the others and began to lick them. Two of them were dead. I picked up the other live one and the two of them weren’t one good handful. They were even smaller than new-born kittens. But their eyes were open. The eyes were a filmy gray at first, then they turned clear and dark.

As they began to dry off in the sun they lifted their ears a little bit and their small black noses wriggled and their ribs throbbed with quick heartbeats.

I made a grass nest in my hat and took them home. Mother said they wouldn’t live, but she found a cardboard box and I made a nest for them in it. I offered them a saucer of milk, but they couldn’t drink, so I dipped my little finger in the milk and they licked it off and tried to suck. I fed them that way and they lived three days. Father said that if we’d had an old cat with kittens she might have nursed the baby rabbits and kept them alive. He said he had a baby gray squirrel once that nursed at a cat and grew up to a big, tame squirrel.

“And a big nuisance, I’ll bet,” Mother said.

“It probably was,” Father said, “but I didn’t know it.”

Mother said, “Wild things aren’t supposed to be pets. They’re better off wild.”

“It takes a while to learn that,” Father said. And he helped me bury my baby rabbits.

Fritz Meets a Rattlesnake
The last day I was on crutches Fritz and I were up where the old Indian point-maker had left the flint chips. I was sitting there in the sun, going through the chips for the hundredth time looking for points, when Fritz began to bark up the hillside. I’d never heard him bark like that before, excited and angry at the same time. After a minute I got up and started toward him. It sounded as though something was wrong.

I got halfway up the slope, hurrying and skipping on the crutches, before I heard the buzz. That mad bumblebee buzz. I knew that sound. I shouted, “Fritz! Come back here, Fritz.” But instead of coming he got more excited.

I almost ran. I had to get to him, had to get him away from there, or he was going to be bitten. He was dancing around, leaping in, jumping back. And I saw the snake striking at him. He was going to be bitten by that rattler, and he would bloat up like a sheep and turn black and die. “Fritz!” I ordered frantically. “Come here to me!”

He barked still louder and leaped in again. The snake struck and Fritz leaped back. The more I shouted, the more excited Fritz became.

I got within twenty feet of them, shouting, ordering, pleading. Fritz leaped in again, the snake struck, Fritz jerked his head aside and uttered a little yelp of pain. Then he was a fury, in, out, dodging, feinting, yelping, snapping. He leaped in, caught the snake for an instant, twisted his head and flung the snake spinning into the air, As it struck the ground he was at it again, snapping, flinging it into the air. One more flip and it was all over. Fritz snapped his teeth. The rattler’s back was broken. It couldn’t coil. It writhed, jaws snapping.

I pounded at it with a crutch, beat the head into a pulp. Then Father was there. He had heard the uproar and come running with the spade. He chopped off the head and buried it.

Fritz was panting, shaking his head as though he had been bee-stung, licking his lower lip. There was a tiny spot of blood on the left side of his lip. Father examined it and shook his head. “Too bad,” he said, “too bad.”

“Is he—going to die?” I asked.

Father looked at me, not wanting to say it. “I don’t know,” he said. “Maybe he will. But he seems to have got only one fang.” Then he said, “Don’t take it too hard, son. You’ve had a lot of fun with him.” He put his arm around me, but that wasn’t what I wanted and he knew it.

We went back to the house. I forgot to use the crutches most of the way and the ankle didn’t pain enough to matter. Fritz’s lip was beginning to swell. When we got to the barn he went down to the mud hole and drank, and I called him and we went to the house.

When we told Mother what had happened she said, “I’ll heat some milk, with some grease in it.”

Father said, “This is a different kind of poison.”

“It may help anyway,” Mother said. “Try it.”

Fritz drank a little of the milk and grease and retched, but he couldn’t bring anything up. The poison was in his blood, not his stomach. His whole head had begun to swell. His left eye was swollen almost shut. He tried to lick my hand when I patted him, but his tongue was swollen too. He lay in the shade and I saw the quick beating of his heart against his ribs. He was restless. He went out past the barn and down to the mud hole again. He lay down in the mud and wallowed a hole deep enough so the mucky water almost covered him.

He stayed in the mud all afternoon. By dark his head was swollen as big as a milk pail. Before I went to bed I wanted to take a lantern and go look at him, but Father said, “Not tonight, son. We’ll take care of him in the morning.” I knew he was trying to say, without saving it, that tomorrow we would bury Fritz.

I was up at dawn and thought I was dressing quietly. But Father pushed the curtain aside and said, “Wait for me, son.” So he dressed too and we went together to look.

Fritz was still in the mud hole. His head didn’t look quite so badly swollen. I called to him and he opened his good eye and lifted his head just enough to show he was still alive.

That afternoon he crawled out of the mud hole and went to the tank at the pump for a drink of clean water. Then he went back and lay in the mud again. And the second morning he came out of the mud hole when I called him. He shook himself and drank more clean water and Father said, “Maybe he’s going to pull through.”

He was in and out of the mud all that day, and that evening he drank a quart of fresh milk. By the next day his head was almost back to normal. He lay around, stiff and uncertain on his legs for a week, eating nothing but drinking lots of milk. Then he was his old self. The only thing he had to show for his bite was a little hard knot in his lip, half the size of a pea. He killed dozens of rattlers, over the years, and I don’t know whether he ever was bitten again. If so, he had an immunity, because he never was sick again after a snake fight.

Clarence Darrow courtesy of Wikipedia.

I have noticed that most autobiographers begin with ancestors. As a rule they start out with the purpose of linking themselves by blood and birth to some well-known family or personage. No doubt this is due to egotism, and the hazy, unscientific notions that people have about heredity. For my part, I seldom think about my ancestors; but I had them; plenty of them, of course. In fact, I could fill this book with their names if I knew them all, and deemed it of the least worth….

It is obvious that I had nothing to do with getting born. Had I known about life in advance and been given any choice in the matter, I most likely would have declined the adventure. At least, that is the way I think about it now. There are times when I feel otherwise, but on the whole I believe that life is not worth while. This does not mean that I am gloomy, or that this book will sadden the Tired Business Man, for I shall write only when I have the inclination to do so, and at such times I am generally almost unmindful of existence.

But as I write these words the sun is shining, the birds are making merry in the bright summer day, and I am asking why I sit and plague my brain to recall the dead and misty past while light and warmth and color are urging me to go outdoors and play.

Doubtless a certain vanity has its part in moving me to write about myself. I am quite sure that this is true, even though I am aware that neither I nor any one else has the slightest importance in time and space. I know that the earth where I have spent my life is only a speck of mud floating in the endless sky. I am quite sure that there are millions of other worlds in the universe whose size and importance are most likely greater than the tiny graveyard on which I ride. I know that at this time there are nearly two billion other human entities madly holding fast to this ball of dirt to which I cling. I know that since I began this page hundreds of these have loosened their grip and sunk to eternal sleep. I know that for half a million years men and women have lived and died and been mingled with the elements that combine to make our earth, and are known no more. I know that only the smallest fraction of my fellow castaways have even so much as heard my name, and that those who have will soon be a part of trees and plants and animal and clay. Still, here am I sitting down, with the mists already gathering about my head, to write about the people, desires, disappointments and despairs that have moved me in my brief stay on what we are pleased to call this earth.

Doubtless, too, the emotion to live makes most of us seek to project our personality a short distance beyond the waiting grave. But whatever the reason may be, I am doing what many, many men have done before, and will do again–talking and gossiping about the past. I am doing this as a boy plays baseball by the hour or dances through the night. I am doing it because all living things crave activity, and I am still alive. Whether the movement is a journey around the globe or an unsteady walk from the bedroom to the dining room and back, it is but a response to what is left of the emotions, appetites and energies that we call being.

The young man’s reflections of unfolding life concern the future–the great, broad, tempestuous sea on whose hither shore he stands eagerly waiting to learn of other lands and climes. The reactions and recollections of the old concern the stormy journey drawing to a close; he no longer builds castles or plans conquests of the unknown; he recalls the tempests and tumults encountered on the way, and babbles of the passengers and crew that one by one dropped silently into the icy depths. No longer does the aging transient yearn for new adventures or unexplored highways. His greatest ambition is to find some snug harbor where he can doze and dream the fleeting days away. So, elderly men who speak or write turn to autobiography. This is all they have to tell, and they cannot sit idly in silence and wait for the night to come.