Is it April Fool’s Day? Has somebody in Paris hacked the website at the Organization for Economic Cooperation and Development? Have we been transported to a parallel dimension where up is down and black is white?

Please forgive all these questions. I’m trying to figure out why any organization—even a leftist bureaucracy such as the OECD—would send out a press release entitled, “Rising tax revenues: a key to economic development in Latin American countries.”

Not even Keynesians, after all, think higher taxes are a recipe for growth.

Ah, never mind. I just remembered that the OECD is a hotbed of statism, so the press release makes perfect sense. After all, the U.S.-taxpayer-funded organization has become infamous for reflexively advocating big government.

• The OECD has an anti-tax competition project designed to prop up Europe’s bankrupt welfare states.
• The OECD is pushing a “Multilateral Convention” that is designed to become something akin to a World Tax Organization, with the power to persecute nations with free-market tax policy.
• The OECD has endorsed Obama’s class-warfare agenda, publishing documents endorsing “higher marginal tax rates” so that the so-called rich “contribute their fair share.”
• The OECD pulled off a hat trick of bad policy in a 2010 document, promoting a value-added tax, Obama’s global warming agenda, and failed Keynesian stimulus.
• The OECD endorsed Obamacare, as I explain in this video.
• The OECD even advocates higher taxes when nations are in the middle of economic crisis.

With this dismal track record, it’s hardly a surprise that the Paris-based bureaucracy is now pushing to undermine prosperity in Latin America. Here’s some of what the OECD said in its release.

Additional tax revenues enable governments to simultaneously improve their competitiveness and promote social cohesion through increased spending on education, infrastructure and innovation. Latin American countries have made great strides over the past two decades in raising tax revenues.

You won’t be surprised when I tell you that the Paris-based bureaucrats do not bother to provide even the tiniest shred of proof to support the silly claim that higher taxes improve competitiveness. But that shouldn’t be surprising since even Keynesians don’t believe something that absurd.

And the claim about social cohesion also is a bit of a stretch given the riots, chaos, and social disarray in many European nations.

The only accurate part of the passage is that Latin American nations have increased tax burdens over the past 20 years. To the tax-free bureaucrats at the OECD, that is making “great strides.”

Let’s see what else the OECD had to say.

Despite these improvements, significant gaps between Latin America and OECD countries remain. The average tax to GDP ratio in OECD countries is much higher than in Latin American countries (33.8% compared to 19.2% in 2009, respectively). As the countries in the region still find themselves in relatively strong economic conditions, now is the time to consider reforms that generate long-term, stable resources for governments to finance development.

Wow. The OECD is implying that Latin American nations should mimic OECD nations. In other words, the bureaucrats in Paris apparently think it makes sense to tell nations to copy the failed high-tax, welfare-state model of countries such as Greece, Italy, and Spain.

Is that really the lesson they think people should learn from recent fiscal history? Are they really so oblivious and/or blinded by ideology that they issued the release as these European nations are in the middle of a fiscal crisis?

To further demonstrate their bias, the folks at the OECD even acknowledged that the Latin American nations, with their less oppressive tax regimes, are enjoying “relatively strong economic conditions.” Normal people would therefore conclude that the failed high-tax European nation should copy Latin America on fiscal policy, not the other way around. But not the geniuses at the OECD.

Now that we’ve addressed the awful policy advice of the OECD, let’s take a moment to look at the real policy challenges facing Latin America.

The Fraser Institute, in cooperation with dozens of other research organizations around the world, produces every year a comprehensive survey measuring Economic Freedom of the World.

The report ranks 141 nations based on dozens of variables that are used to construct scores for five key measures of economic freedom. Of those five categories, the Latin nations have the highest average ranking on…you guessed it…fiscal policy.

Yet the OECD wants policies that will undermine the competitiveness of the Latin nations, hurting them in the area where they are doing a halfway decent job.

If the bureaucrats actually wanted to boost economic performance in Latin America, they would be pressuring those nations to make reforms in the two areas where the burden of government is most severe—legal structure/property rights and regulation.

But that would make sense, which is contrary to the OECD’s mission of promoting statism.

The only semi-positive thing to say about the OECD is that it is consistent. As this video explains, the Paris-based bureaucrats are advocating bigger government in the United States. And to add insult to injury, they’re using American tax dollars to push that agenda.

What a scam. Politicians from various nations send taxpayer money to Paris. The bureaucrats at the OECD then issue reports and studies saying the politicians in those countries should raise taxes and increase the burden of government. Everybody wins…except for taxpayers and the global economy.

Per dollar spent, OECD subsidies may be the most destructively wasteful part of the federal budget. And that says a lot.

Acting as the Typhoid Mary of the Global Economy, the OECD Urges Higher Taxes in Latin America is a post from Cato @ Liberty - Cato Institute Blog

In the New York Times, Ethan Nadelmann takes aim at the “reefer madness” of the Obama administration, which despite promises and expectations has stepped up the war on marijuana:

But over the past year, federal authorities appear to have done everything in their power to undermine state and local regulation of medical marijuana and to create uncertainty, fear and confusion among those in the industry. The president needs to reassert himself to ensure that his original policy is implemented.

The Treasury Department has forced banks to close accounts of medical marijuana businesses operating legally under state law. The Internal Revenue Service has required dispensary owners to pay punitive taxes required of no other businesses. The Bureau of Alcohol, Tobacco, Firearms and Explosives recently ruled that state-sanctioned medical marijuana patients can not purchase firearms.

United States attorneys have also sent letters to local officials, coinciding with the adoption or implementation of state medical marijuana regulatory legislation, stressing their authority to prosecute all marijuana offenses. Prosecutors have threatened to seize the property of landlords and put them behind bars for renting to marijuana dispensaries. The United States attorney in San Diego, Laura E. Duffy, has promised to start targeting media outlets that run dispensaries’ ads.

President Obama has not publicly announced a shift in his views on medical marijuana, but his administration seems to be declaring one by fiat.

As bad as the drug war is in the United States, it’s wreaking far more havoc in Mexico and Latin America. That’s why the Cato Institute is holding an all-day conference next week, “Ending the War on Drugs,” featuring:

• the former president of Brazil
• the former drug czar of India
• the former foreign minister of Mexico
• the author of Cato’s study on decriminalization in Portugal
• the Speaker of the House in Uruguay
• plus video presentations by former Secretary of State George Shultz and former Mexican President Vicente Fox.

Check it out. And be there November 15.

Reefer Madness Here and Abroad is a post from Cato @ Liberty - Cato Institute Blog

It is traditional for a Latin American nationalist to criticize people who take their money out of their country and invest it somewhere else. President Rafael Correa has done it several times. In 2009 he forced private banks to repatriate part of their assets.

What is unusual is finding evidence that he who preaches does not necessarily practice what he preaches. Last week, Ecuadorians were surprised to hear the news—with our tax authority (Servicio de Rentas Internas–SRI) and then the presidency as a source—that Correa had transferred $330,000 to his bank account in Germany. The President then clarified (“…don’t be stupid, the money was sent to Belgium not Germany”) [in Spanish] that the money was transferred to pay for an apartment for his family in Belgium, given that his children may pursue studies in that country.

But the story did not end there. Earlier this week, the director of the SRI, Carlos Marx Carrasco, announced [in Spanish] that he will publish a list of all citizens that have taken money out of the country with the amount they have paid in taxes for doing so (currently there is a 2% tax on all transactions that imply taking money out of Ecuador). Marx Carrasco said that this has to be done “so that the citizens can see (the behavior) of those who represent El Universo, Diario Hoy, El Comercio and all media, who with human misery have allowed themselves to question (what the president has done)”.

This is how, those who concentrate political power in Ecuador, use information collected for the purpose of charging taxes to take reprisals.

Rafael Correa’s Flat in Belgium is a post from Cato @ Liberty - Cato Institute Blog

President Obama’s trip to Latin America is likely to focus on economic topics, but two security issues deserve scrutiny during his stops in Brazil and El Salvador. 

Washington’s diplomatic relationship with Brazil has become somewhat frosty, especially over the past year.  U.S. leaders did not appreciate Brazil’s joint effort with Turkey to craft a compromise policy toward Iran’s nuclear program.  The Obama administration regarded that diplomatic initiative as unhelpful freelancing.  And when Brazil joined Turkey in voting against a UN Security Council resolution imposing stronger sanctions on Tehran, the administration’s resentment deepened.  Obama should not only try to soothe tensions, he should shift Washington’s policy, express appreciation for Brazil’s innovative efforts to end the impasse on the Iranian nuclear issue, and consider whether the milder approach that the Turkish and Brazilian governments advocate has merit.

In El Salvador, worries about Mexico’s spreading drug-related violence into Central America are likely to come up.  El Salvador and other Central American countries are seeking a bigger slice of Washington’s anti-drug aid in the multi-billion-dollar, multiyear Merida Initiative.  President Obama should not only resist such blandishments, he should use the visit to announce a policy shift away from a strict prohibitionist strategy that has filled the coffers of the Mexican drug cartels and sowed so much violence in Mexico, and now increasingly in Central America as well.  Prohibition didn’t work with alcohol and it’s not working any better with currently illegal drugs.

Obama’s Latin America Trip is a post from Cato @ Liberty - Cato Institute Blog

In yesterday’s Brazilian daily, O Globo, Pedro Abramovay, the drug czar of the new Brazilian administration, said that Portugal’s experience with drug decriminalization should be considered as an alternative to Brazil’s current anti-narcotics policy. This comes on top of Rio Governor Sergio Cabral’s call for drug legalization and of former President Fernando Henrique Cardoso’s criticism, along with other prominent Latin Americans, of drug prohibition. By officially weighing in on the side of harm reduction, Latin America’s giant can have a significant effect on the debate over this hemisphere’s drug war.

Brazil’s Drug Czar: Let’s Look at Portugal’s Experience with Decriminalization is a post from Cato @ Liberty - Cato Institute Blog

Three of the world’s largest companies involved in wireless telecommunications—Nokia, AT&T, and Verizon—this week asked the Obama administration to further loosen the U.S. embargo against Cuba. According to a Bloomberg News story this morning:

Nokia, the world’s biggest mobile-phone maker, is urging the U.S. to ease its 47-year-old trade embargo so it can sell handsets to Cuba. AT&T and Verizon, the largest U.S. wireless providers, urged regulators to make it easier for U.S. companies to directly connect calls to and from Cuba.

The almost half-century-old embargo no longer serves any legitimate national security purpose, as I’ve argued before. The remaining restrictions on providing wireless communication services only demonstrate how the embargo actually undermines our stated goal of bringing more freedom to the long-suffering people of Cuba.

To President Obama’s credit, he has done more than most presidents to ease the embargo, including modest steps such as easing travel restrictions for Cuban-Americans and authorizing telecommunications firms to offer limited service in Cuba. In practice, however, President Obama’s efforts have had little effect, and they have not gone far enough.

If the basis of current U.S. policy toward Cuba is democratic empowerment of its people, then removing telecommunications restrictions would be a logical and healthy next step. According to the Bloomberg story, Cuba still has the lowest mobile-phone penetration rate in Latin America. What better way to empower nearly eleven and a half million people than by easing restrictions on their communications with free residents of the democratic United States?

President Obama himself argued in a White House statement in April 2009 that two of the best ways to promote Cuban democratization were by “facilitating greater contact between separated family members in the United States and Cuba” and “increasing the flow of … information to the Cuban people.”

Here is an opportunity to translate those sound words into action.

Let’s Open a Wireless Window to Cuba is a post from Cato @ Liberty - Cato Institute Blog

A $600-million bill to enhance border enforcement has hit a temporary snag in the Senate, but it is almost inevitable, with an election only a few months away, that Congress and the president will spend yet more money trying to enforce our unworkable immigration laws.

“Getting control of the border” is the buzz phrase of the day for politicians in both parties, from Sen. John McCain, R-Ariz., to Sen. Chuck Schumer, D-N.Y. Never mind that apprehensions are down sharply along our Southwest border with Mexico, mostly I suspect because of the lack of robust job creation in the unstimulated Obama economy.

Meanwhile, since the early 1990s, spending on border enforcement has increased more than 700 percent, and the number of agents along the border has increased five-fold, from 3,500 to more than 17.000. (See pages 3-4 of a January 2010 report from the Center for American Progress and the Immigration Policy Center.) Yet the population of illegal immigrants in America tripled during that period. If this were a federal education program, conservatives would rightly accuse the big spenders of merely throwing more money at a problem without result.

To pay for this politically driven expenditure, Congress plans to nearly double fees charged for H1-B and L visas used by foreign high-tech firms to staff their operations in the United States. The increased visa tax will fall especially hard on companies such as the Indian high-tech leaders Wipro, Infosys, and Tata.

This all has the ring of election-year populism. Congress pretends to move us closer to solving the problem of illegal immigrants entering from Latin America by raising barriers to skilled professionals coming to the United States from India and elsewhere to help us maintain our edge in competitive global technology markets.

‘Border Enforcement’ Bill Driven by Election-Year Politics is a post from Cato @ Liberty - Cato Institute Blog

Nowadays, it’s hard to find an instance where Argentina sets a positive example for the rest of Latin America. However, last night’s vote in that country’s Senate that legalizes same-sex marriages must be praised as that. Argentina has now become the first country in Latin America to recognize marriage equality for all couples.

The fight for marriage equality is just beginning in Latin America. Outside of Argentina, only Mexico City grants gay couples the right to marriage. Uruguay has granted civil union rights to same-sex couples since 2008, and last year in Colombia the Constitutional Court ruled that same-sex couples can be recognized as de facto unions, which enjoy all the rights of marriage. In December, Costa Rica might hold a referendum on this issue. While the referendum is promoted by opponents of gay civil unions, the vote could end up in a big upset victory for the gay community.

Latin America, with its deep-seated conservative Catholic tradition, is not fertile soil for the cause of gay equality. That is one more reason to applaud last night’s brave vote in Buenos Aires.

Argentina Sets an Example of Equality Before the Law for Latin America is a post from Cato @ Liberty - Cato Institute Blog

Arizona’s harsh new law against illegal immigration is being justified in part as a measure to combat crime. The murder of an Arizona rancher in March, allegedly by somebody in the country without documentation, galvanized support for the bill.

The death of the rancher was a tragedy, and drug-related violence along the border is a real problem, but it is a smear to blame low-skilled immigrant workers from Latin America for creating a crime problem in Arizona.

The crime rate in Arizona in 2008 was the lowest it has been in four decades. In the past decade, as the number of illegal immigrants in the state grew rapidly, the violent crime rate dropped by 23 percent, the property crime rate by 28 percent. (You can check out the DoJ figures here.)

Census data show that immigrants are actually less likely to commit crimes than their native-born counterparts, as I unpacked a few months ago in an article for Commentary magazine titled, “Higher Immigration, Lower Crime.”

Misguided Fears of Crime Fuel Arizona Immigration Law is a post from Cato @ Liberty - Cato Institute Blog

The presidential election in Chile that brought Sebastián Piñera to power last month was good news for Chile and the region. It confirmed once again that Chile is Latin America’s most modern country, one in which Chileans chose a center-right candidate to lead the country after 20 years of center-left governments that by and large stuck to the free-market model set in place in the 1970s and 1980s and that has made the country one of the most economically free in the world. In Chile, what’s at stake in presidential contests is not a radical change of the rules of the game, but rather policies that build on or depend on high growth. Chile’s mature democracy and economy serve as a model for Latin America.

But in just over a month of being in office, Piñera has made two decisions that disappointed his supporters both inside and outside of Chile who believed that he would reinvigorate the Chilean economy and stand firmly against the populist-authoritarian model that Hugo Chávez has exported to the region. Piñera backed the re-election of José Miguel Insulza to head the Organization of American States and has proposed a tax increase on large companies. Insulza and the OAS are widely and correctly viewed as having been silent, incompetent or complicit in the face of repeated violations of basic democratic and civil rights by populist governments in the region. Whatever the domestic political reasons for Piñera’s decision, countless Latin Americans who cherish their rights—not the least of whom are Venezuelans, Hondurans, Bolivians and Ecuadoreans—were disillusioned by the endorsement of Insulza.

On Friday, Piñera proposed to “temporarily” raise taxes on large companies from 17% to 20% (and to increase mining royalties and to permanently increase tobacco taxes) to finance Chile’s post-earthquake reconstruction needs. But a number of Chile’s leading economists are criticizing the tax increase and point to other sources of revenue that would be less damaging to growth. Hernán Büchi, a finance minister in the 1980s, and Luis Larraín, head of Chile’s free-market think tank, Libertad y Desarrollo, have both written op-eds in recent weeks pointing out that one of the country’s main problems has been the steady drop in productivity in recent years. Piñera was elected on a platform to increase productivity. A tax increase would aggravate the problem. According to Büchi, 20 years of center-left governments reduced Chile’s ability to eliminate poverty and followed a path that was politically easy and consistent with their ideology: “It would be a bad omen if the first measures of a government that should represent change in this regard, went down the same path.” Larraín adds that the tax decision will reveal Piñera’s governing approach, in which there is a real danger of avoiding necessary reforms and a president content with simply being a better administrator. We shall see.

A Disappointing Start in Piñera’s Chile is a post from Cato @ Liberty - Cato Institute Blog

Costa Rica – my home country – has suddenly become part of the health care debate after celebrity radio talk show host, Rush Limbaugh said that he would move to Costa Rica go to Costa Rica for health care if  ObamaCare were approved by Congress the federal government gets too involved in health care in the next few years.

Soon after Sunday’s vote in the House of Representatives, a website was set up to buy Limbaugh a one-way, first-class ticket to Costa Rica. Liberals were quick to point out that my country has a socialized health care system that is among the best in Latin America.

People claim that in Costa Rica health care is a right, not a commodity. The problem surfaces when you actually need to exercise your “right.”

Last July, La Nación newspaper carried a report about one hospital that had 5,000 people on a waiting list for surgery, some waiting up to a year. Among those on the list, 900 patients waited months to have possible cancerous tumors extracted. According to the head of the Oncology Department, “We know that 85% to 90% will be cancer cases based on previous medical tests.” For many of these patients, the wait is the equivalent of a death sentence.

Stories like this are common in the Costa Rican press.

Unfortunately, the current nationalized health care system and the state-owned monopoly in health insurance stifle the development of a viable, dynamic private health care system. Thus, many Costa Ricans can’t imagine life without “free” health care. That’s too bad since there’s nothing free about mandatory monthly contributions from workers and nothing just about being forced to pay for deadly delays in health care attention.

A Glance into Costa Rica’s Health Care System is a post from Cato @ Liberty - Cato Institute Blog

A report (PDF) released today by the Inter-American Commission on Human Rights condemns in well documented form the growing violation of human rights under the regime of Hugo Chavez. The 302-page study is yet another confirmation of the multitude of ways in which individuals, NGOs, union leaders, politicians, activists, businessmen, students, judges, the media and others who disagree with Venezuelan government policies are targeted by the government and its supporters through intimidation, arbitrary use of administrative and criminal law, and sometimes violence and homicide.

Among the many cases it documents, the report describes how the government last year shut down a publicity campaign in defense of private property run by our colleagues at the free-market think tank CEDICE. The government claimed that it did so to safeguard public order and the mental health of the population.

Particularly interesting is that the commission issuing this report (produced in December but for some reason only made public today) is part of the Organization of American States, which has proven itself useless at best and counterproductive at worst, in the face of blatant rights violations by the Venezuelan and other populist Latin American governments in the last decade. Will the same OAS that invited Cuba to rejoin the organization last year now debate the new report or will it and its head, Mr. Insulza, remain silent as they have for so many years?

Meanwhile in Cuba, the country Chavez holds as a model, political prisoner Orlando Zapata Tamayo died yesterday after going on a hunger strike, suffering beatings and having been denied water by prison authorities for 18 days. The mistreatment led to kidney failure. According to Cuba Archive, an NGO that documents deaths attributable to the Cuban regime, Zapata “was then held naked over a powerful air conditioner and developed pneumonia.” What will the Permanent Council of the OAS have to say about that?

The Violation of Human Rights in Venezuela and Cuba is a post from Cato @ Liberty - Cato Institute Blog

Senator Jim DeMint from South Carolina recently traveled to Honduras and found—no surprise—a peaceful country and broad support for the ouster of President Zelaya among members of civil society, the supreme court, political parties and others. In an op-ed in this weekend’s Wall Street Journal, DeMint describes his trip in light of Washington’s continuing support of Zelaya and its condemnation of what it calls a “coup.” U.S. policy is mystifying since the ousted president’s removal from office was a rare example in Latin America of an institutional defense of democracy as envisioned by the constitution and interpreted by the Supreme Court that ruled that the president be removed. (For independent opinions on the case, see here and here.)

However, the Senator reports a legal analysis at the State Department prepared by its top lawyer that apparently has informed Washington’s policy but that has not been made public nor even released to DeMint despite his repeated requests. In the interest of democracy and transparency, the State Department should immediately release its legal report. Maybe then we (which includes much of the hemisphere) will be less mystified about what is driving Washington policy toward Honduras. Or at least we’ll have a better insight on the administration’s understanding of democracy.

What Does the State Department Not Want Us to Know about Honduras? is a post from Cato @ Liberty - Cato Institute Blog

The Washington Post has a great story today on the swelling number of political prisoners in Venezuela. As the story points out, the government of Hugo Chávez is increasingly targeting university students who have been active in the opposition movement. They are jailed under bogus charges of “destabilizing the government,” or “inciting civil war.”

Unfortunately, despite stories and numerous reports from international media outlets and human rights groups, the Organization of American States—which has been very active in trying to reinstall Manuel Zelaya to the Honduran presidency—has remained silent on this issue. Last week, dozens of students went on a hunger strike in front of the OAS headquarters in Caracas, but no official from that organization came out to meet them. After several days some students were allowed to talk with the OAS ambassador in Caracas, who put them in touch with the director of the Inter-American Commission on Human Rights (IACHR). Jose Manuel Insulza, secretary general of the OAS, then asked the Venezuelan government to authorize the visit of a delegation of the IACHR, a request that hasn’t been granted. Judging by the lack of follow up efforts, the OAS, made up of a majority of countries that receive Venezuelan largesse of some form, seems mostly uninterested in pressing this issue.

The OAS seems ready to help deposed would-be autocrats in Latin America. Where is it when it comes to defending the rights of political prisoners in Venezuela?

Political Prisoners in Venezuela: Where Is the Organization of American States? is a post from Cato @ Liberty - Cato Institute Blog

In the 2009 Economic Freedom of the World Report, Chile is now #5, one place ahead of the United States.

In 1975, of 72 countries, Chile was No 71. How did this happen? The explanation lies in what I call the “Chilean Revolution,” because it was as important and transformative to my country as the celebrated American Revolution that gave birth to the United States.

The exceptional political circumstances of this period have obscured the fact that from 1975 to 1989 a true revolution took place in Chile, involving a radical, comprehensive, and sustained move toward economic and political freedom (from a starting point where there was neither one nor the other). This revolution not only doubled Chile’s historic rate of economic growth (to an average of 7% a year, 84-98),  drastically reduced poverty (from 45% to 15%), and introduced several radical libertarian reforms that set the country on a path toward rapid development; but it also brought democracy, restored limited government, and established the rule of law.

In 1998, The Los Angeles Times described the importance of the Chilean Revolution to the world:

In a sense, it all began in Chile. In the early 1970s, Chile was one of the first economies in the developing world to test such concepts as deregulation of industries, privatization of state companies, freeing of prices from government control, and opening of the home market to imports. In 1981, Chile privatized its social-security system. Many of those ideas ultimately spread throughout Latin America and to the rest of the world. They are behind the reformation of Eastern Europe and the states of the former Soviet Union today… which demonstrates, once again, the awesome power of ideas.

The role and achievements of Chile’s team of classical liberal economists is well known. They were the ones who in 1975, once the quasi-civil war was over, decided to carry out a principled, “friendly takeover” of the military government that had arisen from the breakdown of democracy in 1973 (here is my essay, published in “Society”, on that drama). Much less well-known, however, is that they were also the foremost proponents of a gradual and constitutional return to a limited democracy.

In fact, on August 8, 1980, a new Constitution, containing both a bill of rights and a timeline for the restoration of full political freedom, was proposed and approved in a referendum. In the period 1981-1989, what Fareed Zakaria has called the “institutions of liberty” were created—an  independent Central Bank, a Constitutional Court, private television and universities, voting registration laws, etc—since they were crucial for having not only elections but a democracy at the service of freedom. Then on March 11, 1990, an extraordinary event happened: the governing military Junta surrendered its power to a democratically elected government in strict accordance to the 1980 Constitution (here is my note on the restoration of democracy in Chile).

Since 1990, Chile has had four moderate center-left governments and, despite minor setbacks on tax, labor and regulation policies, the essence of the free-market reforms are still intact. The 1980 Constitution is the law of the land, and has been amended by consensual agreements among all parties represented in Congress. Not only is Chile now at the top of rankings on free trade (number 3 in the world after Hong Kong and Singapore) and transparency (less corruption that in most western European countries), but it is expected to be a developed country by 2018, the first in Latin America.

Nobel Laureate Friedrich Hayek proved, again, to have been a visionary when he stated in 1981: “Chile is now a great success. The world shall come to regard the recovery of Chile as one of the great economic miracles of our time.”

Why Chile Is More Economically Free Than the United States is a post from Cato @ Liberty - Cato Institute Blog

An article published this week by National Review magazine blames the many problems of California on—take a guess—high taxes, over-regulation of business, runaway state spending, an expansive welfare state? Try none of the above. The article, by Alex Alexiev of the Hudson Institute, puts the blame on the backs of low-skilled, illegal immigrants from Mexico and the federal government for not keeping them out.

Titled “Catching Up to Mexico: Illegal immigration is depleting California’s human capital and ravaging its economy,” the article endorses high-skilled immigration to the state while rejecting the influx of “the poorly educated, the unskilled, and the illiterate” immigrants that enter illegally from Mexico and elsewhere in Latin America.

Before swallowing the article’s thesis, consider two thoughts:

One, if low-skilled, illegal immigration is the single greatest cause of California’s woes, how does the author explain the relative success of Texas? As a survey in the July 11 issue of The Economist magazine explained, smaller-government Texas has avoided many of the problems of California while outperforming most of the rest of the country in job creation and economic growth. And Texas has managed to do this with an illegal immigrant population that rivals California’s as a share of its population.

Two, low-skilled immigrants actually enhance the human capital of native-born Americans by allowing us to move up the occupational ladder to jobs that are more productive and better paying. In a new study from the Cato Institute, titled “Restriction or Legalization? Measuring the Economic Benefits of Immigration Reform,” this phenomenon is called the “occupational mix effect” and it translates into tens of billions of dollars of benefits to U.S. households.

Our new study, authored by economists Peter Dixon and Maureen Rimmer, found that legalization of low-skilled immigration would boost the incomes of American households by $180 billion, while further restricting such immigration would reduce the incomes of U.S. families by $80 billion.

That is a quarter of a trillion dollar difference between following the policy advice of National Review and that of the Cato Institute. Last time I checked, that is still real money, even in Washington.

Have Mexican Dishwashers Brought California to Its Knees? is a post from Cato @ Liberty - Cato Institute Blog

The First Latin American Conference on Drug Policies was held last week in Buenos Aires, Argentina. This was a high-profile event sponsored by the United Nations, the Pan-American Health Organization, the Anti-Drug Latin American Initiative on Drugs and Democracy, the Open Society Foundation Institute, and the Dutch and British embassies. Among the participants were high ranking government officials and experts from Argentina, Brazil, Ecuador and Peru.

According to the Buenos Aires Herald, the main conclusion of the conference was that:

The tough approach adopted by Latin America and the US over the past two decades to combat drug trafficking and consumption has failed miserably and a new,  more humanitarian view focused on decriminalizing possession for personal consumption and helping addicts while concentrating efforts in fighting large traffickers must be adopted.

My colleague Ian Vásquez and I have written before on how Latin Americans are increasingly getting fed up with the War on Drugs. A serious and open debate about the future of drug policy in Latin America seems to be underway. The question remains on whether Washington is paying any attention to this.

Drug Policy Debate Is Under Way in Latin America. What About the U.S.? is a post from Cato @ Liberty - Cato Institute Blog

Honduran President Manuel Zelaya is just the latest democratically elected Latin American leader to violate his country’s constitution in order to achieve his political goals. Both he and the practice of democracy in Honduras are now paying the price.

The removal from office of Zelaya on Sunday by the armed forces is the result of his continuous attempts to promote a referendum that would allow for his reelection, a move that had been declared illegal by the Supreme Court and the Electoral Tribunal and condemned by the Honduran Congress and the attorney general. Unfortunately, the Honduran constitution does not provide an effective civilian mechanism for removing a president from office after repeated violations of the law, such as impeachment in the U.S. Constitution. Nonetheless, the armed forces acted under the order of the country’s Supreme Court, and the presidency has been promptly bestowed on the civilian figure — the president of Congress — specified by the constitution.

Restoration of stable democracy in Honduras could benefit from two things: one, the Electoral Tribunal and Congress calling for general elections earlier than they are scheduled in November; and two, an international condemnation of moves by strongarm figures like Zelaya to undermine democratic institutions and the rule of law.

Honduras’ President Is Removed from Office is a post from Cato @ Liberty - Cato Institute Blog

President Obama is meeting today with a bipartisan group of lawmakers to talk about reforming our broken immigration system. The challenge for both parties will be whether they can overcome opposition within their respective bases to expanding legal immigration.

For Republicans, the chief opposition remains the faction of talk-radio-driven conservatives who just don’t like immigration, period, especially when it comes from Latin America. For Democrats, who now run Washington, the chief opposition to allowing more foreign workers to enter the country legally is represented by organized labor.

As the Wall Street Journal reports this morning, advocates of immigration reform “worry that Democrats will defer to the AFL-CIO on the issue of legal immigration. The labor confederation has opposed a robust guest-worker program or higher levels of legal immigration, fearing they would depress wages. A larger labor presence would splinter the coalition of business and pro-immigration groups that embraced past immigration efforts, only to see them falter in the Senate.”

As I’ve argued consistently in the past, immigration reform is not worth pursuing if it does not include expanding future flows of legal immigrants, both highly skilled and lower-skilled workers.  If Congress confines itself to legalizing the 8 million or so workers already here illegally, with a vow to get tougher on enforcement, then we are just repeating the mistake of the 1986 Immigration Reform and Control Act.

We will know if President Obama and Democratic leaders in Congress are serious about fixing the problem of illegal immigration if they face down their labor-union allies and embrace a workable, market-oriented expansion of legal immigration. Otherwise, we are in for more futility, frustration and failure.

Are Democrats Serious about Immigration Reform? is a post from Cato @ Liberty - Cato Institute Blog

Mary O’Grady writes in today’s Wall Street Journal on the Kirchners’ threats to press freedom in Argentina. Unfortunately, the attack on free expression is part of a worrying trend that is intensifying in some of the region’s populist countries. For more, see Gabriela Calderón’s post on Ecuador here; and my posts on Ecuador and on Venezuelan President Hugo Chávez’s efforts to close down Globovision TV here and here.

The Populist Assault on the Latin American Press is a post from Cato @ Liberty - Cato Institute Blog