Confessions of an Economic Hitman by John Perkins is an inside look at the collusion between corporate interests, governments, and banks. Perkins was an analyst working for electric power companies who won contracts for developing power supply and national infrastructure projects for less developed countries (LDCs). He was not in the top of his class in statistics or engineering, expertise that would have made him more qualified to produce his economic projections, but he was willing to produce the reports and studies necessary to get the World Bank, the IMF, and other banks to lend huge amounts of money to other countries if they would award contracts to his company (MAIN) in which he quickly rose to Chief Economist.
Perkins was involved with contracts in many LDCs, particularly Indonesia, Panama, Ecuador, Iran, Saudi Arabia, and Columbia. He outlines a system of pulling these countries into the U.S. empire through the issuance of loans that would beholden these countries to contracts and debt they might never be able to repay. Unlike the Marshall Plan, in which US aid was given to German and Japanese companies to get them back on their feet and provide the basis of sound national economies, this era of Cold War development created client states by using U.S. companies and personnel to do most of the work, thus pouring all of the loaned money back into the coffers of U.S. companies.
Perkins outlines another development of this scheme in Saudi Arabia, where Saudi Oil Money was poured into the US Treasury and held on account for large infrastructure projects, water desalinization plants, roads and other facilities built by U.S. companies. This locked the Saudis and Americans into and Economic and Military relationship paid for by Saudi Oil income.
He explains that the U.S. war in Iraq was a result of Sadaam’s unwillingness to lock Iraq into a similar arrangement propped up on Iraqi oil. Behind these schemes was an effort to prevent OPEC from ever again be able to embargo oil to the US the way they did in 1973, by controlling key oil producing countries through these economic deals.
In the course of the book, Perkins hints at the role of the CIA and the military in eliminating regimes that did not go along with this U.S. hegemony through selling products through debt financing. His story is very revealing and, so far as I can tell, is quite accurate even thought at some points overstated.
In my own study of the United Nations in grad school in New York in the 1970s, I uncovered an interesting document created by the UN General Assembly in 1949. The policy outlined in this document on technical development stated that all loans from the World Bank or the IMF would go through the head of state. I do not think this doctrine was foisted by the banks on the General Assembly in some conspiracy.
I am more likely to believe that since the members of the General Assembly were representatives of the heads of states, they did not want the banks to lend money directly to individuals or companies within their countries, bypassing them and enabling them skim off of the top of these funds for their personal use. This doctrine, more than any other, forced banks and corporations to make deals with politicians. I think we all should know by now that this does not bring about economic efficiency. One of the key points of my own book, Life, Liberty and the Pursuit of Happiness, Version 4.0 is to explain how the collusion between government and the economic sector can be better prevented.
At any rate, that technical development law was not reversed until after many of the first rounds of intentional loans had failed to get repaid, yet as Perkins observes, there are new qualifications that international lenders have put on loans such as “good governance” and “transparency,” that still aim at making lenders and developers wealthy at the expense of the middle class in the less-developed countries.
This story of government and economic collusion, while seemingly well-known in other parts of the world–particularly enemies like Al Qaeda that the system itself created–has been withheld from Americans in the news media. Perkins book is one of those rare stories to become a best-seller because he was himself a key player in that system.
If you understand Perkins’ story, you should understand why the U.S. went from a country whose republican ideals lit up the world to a corrupt empire that causes the world to spew its venom back on us.
If you understand the nature of the collusion of government and business disclosed in this book, you should be able to understand why the proposed Federal Health Care bill would be a travesty. This bill is nothing other than the pharmaceutical and insurance companies doing with government funds–backed by middle class taxpayers–what Bechtel, Haliburton, Brown&Root, and MAIN did to other countries. This time instead of some foreign dictator agreeing to exploit his people for the sake of foreign corporate profits, the American people are the ones being exploited in an elaborate (and totally unconstitutional) powerplay by the U.S. Congress in collusion with insurance, medical, and pharmaceutical lobbies. These deals have never really been done to protect the American middle class or the American way of life, nor will this bill be done in the genuine interest of American health.
I once had a lengthy talk about these things with a former President of Ecuador who described the entire system as one of international blackmail. He said, “these people were coming with money for loans, and catalogs of the things we were allowed to buy with the loans. We bought tractors but had no system that supported their use so they sat and rusted.”
Worse, since the international funds had to go through the official heads of states, many coups were employed to install dictators that got rich on the system. Many of these crooks did not live up to their end of the already corrupt bargains, but, rather than completing infrastructure projects, some would set up Swiss bank accounts, take the money, move to Europe and then “declare democracy.” The people were left holding the bag. This is exactly what happened in Brazil, and how they got back the democracy they have today.
I can only hope that if we let things get that bad in the United States that the Federal government will throw up its hands in default and give power back to the states and say “Here, deal with the mess we created,” rather than attempting military control or depopulation measures.