Two dollar pound

The U.S. Economic Hit Men

Just to complement Dominic's posting of the macro-economic oriented Todd interview, here is an interview of a different kind - about the operational coal-face of the U.S. economic mafia that has long since transmogrified into a routine, rigid, and formulaic U.S. foreign policy instrument: How the U.S. Uses Globalization to Cheat Poor Countries Out of Trillions.

The interview is with John Perkins, a former respected member of the international banking community. In his recent book Confessions of an Economic Hit Man he describes how as a highly paid professional, he helped the U.S. cheat poor countries around the globe out of trillions of dollars by lending them more money than they could possibly repay and then take over their economies.

JOHN PERKINS: Basically what we were trained to do and what our job is to do is to build up the American empire. To bring -- to create situations where as many resources as possible flow into this country, to our corporations, and our government, and in fact we’ve been very successful. We’ve built the largest empire in the history of the world. It's been done over the last 50 years since World War II with very little military might, actually. It's only in rare instances like Iraq where the military comes in as a last resort. This empire, unlike any other in the history of the world, has been built primarily through economic manipulation, through cheating, through fraud, through seducing people into our way of life, through the economic hit men. I was very much a part of that.

AMY GOODMAN: How did you become one? Who did you work for?

JOHN PERKINS: Well, I was initially recruited while I was in business school back in the late sixties by the National Security Agency, the nation's largest and least understood spy organization; but ultimately I worked for private corporations. The first real economic hit man was back in the early 1950's, Kermit Roosevelt, the grandson of Teddy, who overthrew of government of Iran, a democratically elected government, Mossadegh’s government who was Time's magazine person of the year; and he was so successful at doing this without any bloodshed -- well, there was a little bloodshed, but no military intervention, just spending millions of dollars and replaced Mossadegh with the Shah of Iran. At that point, we understood that this idea of economic hit man was an extremely good one. We didn't have to worry about the threat of war with Russia when we did it this way. The problem with that was that Roosevelt was a C.I.A. agent. He was a government employee. Had he been caught, we would have been in a lot of trouble. It would have been very embarrassing. So, at that point, the decision was made to use organizations like the C.I.A. and the N.S.A. to recruit potential economic hit men like me and then send us to work for private consulting companies, engineering firms, construction companies, so that if we were caught, there would be no connection with the government.

AMY GOODMAN: Okay. Explain the company you worked for.

JOHN PERKINS: Well, the company I worked for was a company named Chas. T. Main in Boston, Massachusetts. We were about 2,000 employees, and I became its chief economist. I ended up having fifty people working for me. But my real job was deal-making. It was giving loans to other countries, huge loans, much bigger than they could possibly repay. One of the conditions of the loan - let's say a $1 billion to a country like Indonesia or Ecuador - and this country would then have to give ninety percent of that loan back to a U.S. company, or U.S. companies, to build the infrastructure - a Halliburton or a Bechtel. These were big ones. Those companies would then go in and build an electrical system or ports or highways, and these would basically serve just a few of the very wealthiest families in those countries. The poor people in those countries would be stuck ultimately with this amazing debt that they couldn’t possibly repay. A country today like Ecuador owes over fifty percent of its national budget just to pay down its debt. And it really can’t do it. So, we literally have them over a barrel. So, when we want more oil, we go to Ecuador and say, "Look, you're not able to repay your debts, therefore give our oil companies your Amazon rain forest, which are filled with oil.”" And today we're going in and destroying Amazonian rain forests, forcing Ecuador to give them to us because they’ve accumulated all this debt. So we make this big loan, most of it comes back to the United States, the country is left with the debt plus lots of interest, and they basically become our servants, our slaves. It's an empire. There's no two ways about it. It’s a huge empire. It's been extremely successful.



JOHN PERKINS: ... And when the National Security Agency recruited me, they put me through a day of lie detector tests. They found out all my weaknesses and immediately seduced me. They used the strongest drugs in our culture, sex, power and money, to win me over. I come from a very old New England family, Calvinist, steeped in amazingly strong moral values. I think I, you know, I’m a good person overall, and I think my story really shows how this system and these powerful drugs of sex, money and power can seduce people, because I certainly was seduced. And if I hadn't lived this life as an economic hit man, I think I’d have a hard time believing that anybody does these things. And that's why I wrote the book, because our country really needs to understand, if people in this nation understood what our foreign policy is really about, what foreign aid is about, how our corporations work, where our tax money goes, I know we will demand change.

AMY GOODMAN: We're talking to John Perkins. In your book, you talk about how you helped to implement a secret scheme that funneled billions of dollars of Saudi Arabian petrol dollars back into the U.S. economy, and that further cemented the intimate relationship between the House of Saud and successive U.S. administrations. Explain.

JOHN PERKINS: Yes, it was a fascinating time. I remember well, you're probably too young to remember, but I remember well in the early seventies how OPEC exercised this power it had, and cut back on oil supplies. We had cars lined up at gas stations. The country was afraid that it was facing another 1929-type of crash - depression; and this was unacceptable. So, they -- the Treasury Department hired me and a few other economic hit men. We went to Saudi Arabia. We --

AMY GOODMAN: You're actually called economic hit men --e.h.m.’s?

JOHN PERKINS: Yeah, it was a tongue-in-cheek term that we called ourselves. Officially, I was a chief economist. We called ourselves e.h.m.'s. It was tongue-in-cheek. It was like, nobody will believe us if we say this, you know? And, so, we went to Saudi Arabia in the early seventies. We knew Saudi Arabia was the key to dropping our dependency, or to controlling the situation. And we worked out this deal whereby the Royal House of Saud agreed to send most of their petro-dollars back to the United States and invest them in U.S. government securities. The Treasury Department would use the interest from these securities to hire U.S. companies to build Saudi Arabia–new cities, new infrastructure–which we’ve done. And the House of Saud would agree to maintain the price of oil within acceptable limits to us, which they’ve done all of these years, and we would agree to keep the House of Saud in power as long as they did this, which we’ve done, which is one of the reasons we went to war with Iraq in the first place. And in Iraq we tried to implement the same policy that was so successful in Saudi Arabia, but Saddam Hussein didn't buy. When the economic hit men fail in this scenario, the next step is what we call the jackals. Jackals are C.I.A.-sanctioned people that come in and try to foment a coup or revolution. If that doesn't work, they perform assassinations. or try to. In the case of Iraq, they weren't able to get through to Saddam Hussein. He had -- His bodyguards were too good. He had doubles. They couldn’t get through to him. So the third line of defense, if the economic hit men and the jackals fail, the next line of defense is our young men and women, who are sent in to die and kill, which is what we’ve obviously done in Iraq.

AMY GOODMAN: So, where -- when did your change your heart happen?

JOHN PERKINS: I felt guilty throughout the whole time, but I was seduced. The power of these drugs, sex, power, and money, was extremely strong for me. And, of course, I was doing things I was being patted on the back for. I was chief economist. I was doing things that Robert McNamara liked and so on.

AMY GOODMAN: How closely did you work with the World Bank?

JOHN PERKINS: Very, very closely with the World Bank. The World Bank provides most of the money that’s used by economic hit men, it and the I.M.F. But when 9/11 struck, I had a change of heart. I knew the story had to be told because what happened at 9/11 is a direct result of what the economic hit men are doing. And the only way that we're going to feel secure in this country again and that we're going to feel good about ourselves is if we use these systems we’ve put into place to create positive change around the world. I really believe we can do that. I believe the World Bank and other institutions can be turned around and do what they were originally intended to do, which is help reconstruct devastated parts of the world. Help -- genuinely help poor people. There are twenty-four thousand people starving to death every day. We can change that.
 
However, none of this is supported by the facts, and I notice that no one seems to be discussing actual figures. (Go here http://www.whitehouse.gov/cea/pubs.html). Starting in 1980, every year in which the current account deficit shrank as share of GDP, real GDP growth averaged 1.9 percent. When deficit grew modestly (0.0 – 0.5 percent), GDP growth averaged 3.0 percent. When the current account deficit expanded at an annual rate of more than 0.5 percent, real GDP growth grew by 4.1 percent. Coincidentally, the last time the US had a trade surplus was in 1991, and the economy was in recession. The current account deficit’s share of GDP is currently expanding gradually, as is GDP growth.

Basically, the current account deficit, while not responsible for a strong economy, is actually a good indicator of one.

An indicator of a fake one (China, growing at 10 percent, has on the contrary a massive trade surplus, but obviously in your alternative rhetorical world, that makes it a weak economy).

Um, you seem to be leaving out the obvious point: these deficits are financed by foreign debt, which eventually has to be repaid (just in case you've forgotton about the inconvenience of the latter). Its really easy to inflate GDP via borrowing-funded deficits - its a mere tautology of centuries-old double-entry book-keeping - simply spending money, any money, is expenditure that is measured as part of GDP!!. The problem now is that the countries giving the U.S. endless, perpetual credit are fed up with being bullied into doing so (money that could properly be invested in their own countries or elsewhere), they see that the U.S. has no actual substantive basis (apart from a now-wasted mafia-military one) for its run-away consumption-driven importing of those countries products (China, Japan, Saudi Arabia etc). They see that the money paid to them for such imports is endlessly re-cycled back to the delirially profligate debtor to pay for yet more imports in an ever-expanding debt hyperspiral - what conservatives once upon an unreconstructed time used to oh-so-quaintly call "living beyond your means".

When this happens in other countries - oh I've lost count - US lapdogs the World Bank/IMF move in and implement "structural adjustment" programmes (install a dictator or compromise an existing one, abolish social welfare systems, civil rights and trade unions, privatise everything under the gaze of multinationals etc, send in the hit squads - oh how they sooo want to whack Chavez). Will the U.S. implement its own medicine on itself or continue being the biggest bullyboy on the block?

Probably both, as the recent record amply shows.
 

old goriot

Well-known member
(ragged trousered capitalist that I am, I ain’t got much cash)

pff yeah right. HMLT has already taken care of the absurd capital account surplus argument, but I have to point out the incoherence of your rhetorical posturing.

Vimothy, any true ragged trouser capitalist is salivating at this possibility, not crusading against smug doomsayers.

here's a description of how ragged trouser capitalists fared in the Weimar Republic:

"The young and quick-witted did well. Overnight they became free, rich and independent. It was a situation in which mental inertia and reliance on past experience were punished by death, but rapid appraisal of new situations and speed of reaction were rewarded with sudden, vast riches. The twenty-one-year-old bank director appeared on the scene, and also the high school senior who earned his living from the stock-market tips of his slightly older friends"

Sebastian Haffner, from Defying Hitler
 

vimothy

yurp
pff yeah right. HMLT has already taken care of the absurd capital account surplus argument, but I have to point out the incoherence of your rhetorical posturing.

Vimothy, any true ragged trouser capitalist is salivating at this possibility, not crusading against smug doomsayers.

Er, I think you're rather missing the point, old goriot.

If you read what I wrote, I was actually suggesting that there was money to be made, only that I didn't have anything to make it with. Hence ragged trousered capitalist. It's supposed to be an allusion to Robert Tressel, and also a self-depreciating joke. In fact, I'm not a capitalist at all - I don't have any money, just a shit job, a load of debt and a rapidly receding hairline.

Out of interest, will you be getting rich soon?
 

vimothy

yurp
An indicator of a fake one (China, growing at 10 percent, has on the contrary a massive trade surplus, but obviously in your alternative rhetorical world, that makes it a weak economy).

It doesn't mean the Chinese economy is weak, it's just at a different stage to the American economy. People are generally not nearly as well off - and if people were better off generally, labour would be more expensive, so manufacturing would move somewhere cheaper and China would have to import more stuff than it exports. Surely, as long as the world economy doesn't self-destruct, we'll see this happen eventually.
 

old goriot

Well-known member
If you read what I wrote, I was actually suggesting that there was money to be made, only that I didn't have anything to make it with. Hence ragged trousered capitalist.

yes, and the whole point of what I wrote is that you need barely any money to make money in a depression. just some balls and a lack of dependants, hence the ragged trousered capitalist's dream. but since you're not a capitalist I guess that doesn't appeal to you.

Out of interest, will you be getting rich soon?

maybe, but it wouldnt have anything to do with a market crash
 
vimothy said:
In fact, I'm not a capitalist at all - I don't have any money, just a shit job, a load of debt and a rapidly receding hairline.

The poor who aspire to be filthy rich via capitalism aren't capitalists? Alternatively, only rich people are capitalists? Was virtual capitalist Donald Trump a capitalist when he was insolvent, when he pleaded precisely what you are pleading above (though with a virtual hairline replacement), when he was worse than broke, was massively insolvent?

Vimothy, any true ragged trouser capitalist is salivating at this possibility, not crusading against smug doomsayers.

There's certainly no shortage of these ragged-trouser Pavlovians about ... its a whole new industry, capitalism parasitically reproducing itself ... paranoia about its "collapse" the condition of possibility for its (renewed) perpetuation.

crashproof.jpg
book_real_estate_bust2.jpg
dollarcollapse.jpg


And, above all, they all want their precious MacGuffin once again: Gold
bullion247_free_gram_117x58.gif
 

vimothy

yurp
The poor who aspire to be filthy rich via capitalism aren't capitalists? Alternatively, only rich people are capitalists? Was virtual capitalist Donald Trump a capitalist when he was insolvent, when he pleaded precisely what you are pleading above (though with a virtual hairline replacement), when he was worse than broke, was massively insolvent?

Bloody hell, it's all getting a bit inane, but I would say I'm pro-capitalism, not a capitalist (as in an investor of capital in business).
 

vimothy

yurp
For everyone looking forward to the planetary collapse of capitalism (and all of the death, emiseration and impoverishment that entails), rejoice: free trade is under serious threat:

"It's going to be the perfect storm" is how one knowledgeable Capitol Hill insider described the upcoming efforts by protectionists of both parties in Congress to pass trade legislation punishing China for running a $200 billion-plus trade surplus with the United States. This week's high-level "strategic dialogue" between a Chinese trade delegation and American officials from the White House and Congress did nothing to change that assessment. There's too much momentum behind the push, the insider told me, from members who worry about the economic impact of a weak Chinese currency and from those who fret about China as a potential military threat.

Indeed, the trade meetings were barely over when a Senate committee started considering a measure to allow companies to petition for new duties on Chinese products. Meanwhile, Rep. Charles Rangel, chairman of the House Ways and Means Committee, said his committee will look at a similar measure.

But the protectionist wave sweeping through Congress is not likely to stop there. Analysis from Goldman Sachs, the former corporate home of Treasury Secretary Hank Paulson, thinks the House will most likely pass legislation in June that would allow duties to be applied to Chinese goods. Similar legislation will be introduced in the Senate that will at the very least force the Treasury Department to label the Chinese currency as "misaligned" and lead to further action.

- http://www.usnews.com/usnews/biztech/capitalcommerce/070524/free_trade_under_siege.htm
 

Elvira

New member
2stepfan said:
It'll be down to 1.85 in three months

Again, are you just making this up as you go along? On what basis will it be "down" in three months? Based on all the forecasts I've seen, and - more fundamentally - global exchange-rate trends vis-a-vis the dollar and unchanged U.S. domestic and foreign policies, the pound sterling will be ABOVE 2 bucks in three months. I can guarantee this :D [Just as the Euro, the Yen, the Swiss Franc and many other currencies will be above their current rates against the dollar].

Very revealing, now. They're all way above.

Here you are:

Thursday, July 19, 2007

1 British Pound = 2.05092 US Dollar

1 US Dollar (USD) = 0.48759 British Pound (GBP)

Interbank rate +/- 0%

This means:
You buy 1 British Pound : 2.05092 US Dollar
You sell 1 British Pound : 2.05063 US Dollar
You buy 1 US Dollar : 0.48759 British Pound
You sell 1 US Dollar : 0.48766 British Pound

And the Euro: 1 Euro = 1.37994 US Dollar

1 US Dollar (USD) = 0.72467 Euro (EUR)




What rates will they all be at in another three months? Should I buy some moon rock?
 

Mr. Tea

Let's Talk About Ceps
great time for us yanks to be buying records from boomkat, juno, etc. :p

You wouldn't believe the number of people I know for whom the biggest immediate fallout from the Brexit vote is the implication for buying/selling vinyl internationally.

Actually, I'm sure you would.
 
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