It was because after Pinochet gave up power the Chilean government stopped following his disatrous policies. Social spending was significantly increased and the poverty rate fell dramatically.
and things were worse under Pinochet. The poverty rate doubled from 20% to 40% under Pinochet. The public sector became almost non-existant. It was a disaster for most of the Chilean people.
http://www.hartford-hwp.com/archives/42a/086.html
(snip)By 1990, when Aylwin's government went to work, the decline in social services was shocking, Ffrench said. "Public hospitals didn't have sheets and were putting two people in a bed. Public schools were a national embarrassment." (snip)
Anyway, you're making a straw-man argument. I never argued in favor of Allende. There are other alternatives besides Allende's socialism and the extreme right-wing policies followed by the Pinochet regime.
Deregulation had everything to do with it. Deregulation was the reason why wages dropped so dramatically during Pinochet's regime. Deregulation was the reason why Santiago became one of the most polluted cities in the world. Deregulation is why Chile's banks and economy collapsed in the early 1980's.
You just mentioned one above. Chile's economy performed well after raising taxes and increasing social spending. From the same link above:
http://www.hartford-hwp.com/archives/42a/086.html
(snip)
In their first years in power after Pinochet, Chile's democratic leaders raised taxes, boosted social spending and wooed foreign investment while keeping caps on speculative inflows, and hiked the minimum wage by 40 percent.
(snip)
Another obvious example is the United States. The US economy performed very well during the 1990's after President Clinton raised taxes and increased social spending.
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