OK
so all blogs should be original but sometimes an authoritative source is worth
copying. Self confessed “economic hit
man” John Perkins explains the current ‘take-down’ of Greece. I agree
with his analysis because it corresponds to what I discovered in the literature
on economic development which I studied at undergraduate level. Perkins takes this analysis to a new level as
he is a consummate insider when it comes to IMF based “structural adjustment”
aka debt slavery, austerity and asset stripping (aka privatisation). We now have an evidence base of four decades from the 1970's proving conclusively that structural adjustment strangles small economies - which begs some obvious questions.
My
only qualification to Perkins' analysis is that he goes pretty easy on the southern Europeans who
famously like to take long siesta’s and retire with generous benefits at 55
which only a few advanced industrial economies can ever afford. On the other hand lenders also have a
responsibility to consider the credit worthiness of those to whom they lend.
If
you think that what happens to Greece and the EU will have no relevance to Australia think again.
The same types of people have the same agenda for Australia and indeed the rest of the world, they just need
to magic up a crisis or get a sympathetic government elected. Happy reading…
 |
| John Perkins, author Confessions of an Economic Hit Man |
“Greece is being ‘hit’, there’s no doubt about it,” exclaims John Perkins, author of Confessions of an Economic Hit Man, noting that “[Indebted
countries] become servants to what I call the corporatocracy … today we have a
global empire, and it’s not an American empire. It’s not a national empire… It’s a corporate empire, and the big
corporations rule.”
John Perkins, author of Confessions of an Economic Hit Man, discusses how Greece and other eurozone countries have become the new
victims of “economic hit men.”
John
Perkins is no stranger to making confessions. His well-known book, Confessions of an Economic Hit Man,
revealed how international organizations such as the International Monetary
Fund (IMF) and the World Bank, while publicly professing to “save” suffering
countries and economies, instead pull a bait-and-switch on their governments:
promising startling growth, gleaming new infrastructure projects and a future
of economic prosperity – all of which would occur if those countries borrow
huge loans from those organizations. Far from achieving runaway economic growth
and success, however, these countries instead fall victim to a crippling and
unsustainable debt burden.
John Perkins
That’s
where the “economic hit men” come in: seemingly
ordinary men, with ordinary backgrounds, who travel to these countries and
impose the harsh austerity policies prescribed by the IMF and World Bank as
“solutions” to the economic hardship they are now experiencing.
Men like Perkins were trained to squeeze every last drop of wealth and
resources from these sputtering economies, and continue to do so to this day. In
this interview, which aired on Dialogos Radio, Perkins talks about how Greece and the eurozone have become the new victims of such
“economic hit men.”
Michael Nevradakis: In your book, you write about how you were, for many
years, a so-called “economic hit man.” Who are these economic hit men, and what
do they do?
John Perkins:
Essentially, my job was to identify countries that had resources that our
corporations want, and that could be things like oil – or it could be markets –
it could be transportation systems. There’re so many different things. Once we
identified these countries, we arranged huge loans to them, but the money would
never actually go to the countries; instead it would go to our own corporations
to build infrastructure projects in those countries, things like power plants
and highways that benefitted a few wealthy people as well as our own
corporations, but not the majority of people who couldn’t afford to buy into
these things, and yet they were left holding a huge debt, very much like what
Greece has today, a phenomenal debt.
“[Indebted
countries] become servants to what I call the corporatocracy … today we have a
global empire, and it’s not an American empire. It’s not a national empire …
It’s a corporate empire, and the big corporations rule.”
And
once [they were] bound by that debt, we would go back, usually in the form of
the IMF – and in the case of Greece today, it’s the IMF and the EU [European
Union] – and make tremendous demands on the country: increase taxes, cut back
on spending, sell public sector utilities to private companies, things like
power companies and water systems, transportation systems, privatize those, and
basically become a slave to us, to the corporations, to the IMF, in your case
to the EU, and basically, organizations like the World Bank, the IMF, the EU,
are tools of the big corporations, what I call the “corporatocracy.”
And before turning specifically to the case of Greece, let’s talk a little bit more about the manner in
which these economic hit men and these organizations like the IMF operate. You
mentioned, of course, how they go in and they work to get these countries into
massive debt, that money goes in and then goes straight back out. You also
mentioned in your book these overly optimistic growth forecasts that are sold
to the politicians of these countries but which really have no resemblance to
reality.
Exactly,
we’d show that if these investments were made in things like electric energy
systems that the economy would grow at phenomenally high rates. The fact of the
matter is, when you invest in these big infrastructure projects, you do see
economic growth, however, most of that growth reflects the wealthy getting
wealthier and wealthier; it doesn’t reflect the majority of the people, and
we’re seeing that in the United States today.
“In
the case of Greece, my reaction was that ‘Greece is being hit.’ There’s no question about it.”
For
example, where we can show economic growth, growth in the GDP, but at the same
time unemployment may be going up or staying level, and foreclosures on houses
may be going up or staying stable. These numbers tend to reflect the very
wealthy, since they have a huge percentage of the economy, statistically
speaking. Nevertheless, we would show that when you invest in these infrastructure
projects, your economy does grow, and yet, we would even show it growing much
faster than it ever conceivably would, and that was only used to justify these
horrendous, incredibly debilitating loans.
Is there a common theme with respect to the countries typically
targeted? Are they, for instance, rich in resources or do they typically
possess some other strategic importance to the powers that be?
Yes,
all of those. Resources can take many different forms: One is the material
resources like minerals or oil; another resource is strategic location; another
resource is a big marketplace or cheap labor. So, different countries make
different requirements. I think what we’re seeing in Europe today isn’t any different, and that includes Greece.
What happens once these countries that are targeted are indebted? How do
these major powers, these economic hit men, these international organizations
come back and get their “pound of flesh,” if you will, from the countries that
are heavily in debt?
By
insisting that the countries adopt policies that will sell their publicly owned
utility companies, water and sewage systems, maybe schools, transportation
systems, even jails, to the big corporations. Privatize, privatize. Allow us to
build military bases on their soil. Many things can be done, but basically,
they become servants to what I call the corporatocracy. You have to remember
that today we have a global empire, and it’s not an American empire. It’s not a
national empire. It doesn’t help the American people very much. It’s a
corporate empire, and the big corporations rule. They control the politics of
the United
States,
and to a large degree they control a great deal of the policies of countries
like China, around the world.
John, looking specifically now at the case of Greece, of course you
mentioned your belief that the country has become the victim of economic hit
men and these international organizations . . . what was your reaction when you
first heard about the crisis in Greece and the measures that were to be
implemented in the country?
I’ve
been following Greece for a long time. I was on Greek television. A Greek film company did a
documentary called “Apology of an Economic Hit Man,” and I also spent a lot of
time in Iceland and in Ireland. I was invited to Iceland to help encourage the people there to vote on a
referendum not to repay their debts, and I did that and encouraged them not to,
and they did vote no, and as a result, Iceland is doing quite well now economically compared to the
rest of Europe. Ireland, on the other hand: I tried to do the same thing
there, but the Irish people apparently voted against the referendum, though
there’s been many reports that there was a lot of corruption.
“That’s
part of the game: convince people that they’re wrong, that they’re inferior.
The corporatocracy is incredibly good at that.”
In
the case of Greece, my reaction was that “Greece is being hit.” There’s no question about it. Sure, Greece made mistakes, your leaders made some mistakes, but
the people didn’t really make the mistakes, and now the people are being asked
to pay for the mistakes made by their leaders, often in cahoots with the big
banks. So, people make tremendous amounts of money off of these so-called
“mistakes,” and now, the people who didn’t make the mistakes are being asked to
pay the price. That’s consistent around the world: We’ve seen it in Latin America. We’ve seen it in Asia. We’ve seen it in so many places around the world.
This leads directly to the next question I had: From my observation, at
least in Greece, the crisis has been accompanied by an increase in self-blame
or self-loathing; there’s this sentiment in Greece that many people have that
the country failed, that the people failed . . . there’s hardly even protest in
Greece anymore, and of course there’s a huge “brain drain” – there’s a lot of
people that are leaving the country. Does this all seem familiar to you when
comparing to other countries in which you’ve had personal experience?
Sure,
that’s part of the game: convince people that they’re wrong, that they’re
inferior. The corporatocracy is incredibly good at that, whether it is back
during the Vietnam War, convincing the world that the North Vietnamese were
evil; today it’s the Muslims. It’s a policy of them versus us: We are good. We
are right. We do everything right. You’re wrong. And in this case, all of this
energy has been directed at the Greek people to say “you’re lazy; you didn’t do
the right thing; you didn’t follow the right policies,” when in actuality, an
awful lot of the blame needs to be laid on the financial community that
encouraged Greece to go down this route. And I would say that we have
something very similar going on in the United States, where people here are
being led to believe that because their house is being foreclosed that they
were stupid, that they bought the wrong houses; they overspent themselves.
“We
know that austerity does not work in these situations.”
The
fact of the matter is their bankers told them to do this, and around the world,
we’ve come to trust bankers – or we used to. In the United States, we never believed that a banker would tell us to
buy a $500,000 house if in fact we could really only afford a $300,000 house.
We thought it was in the bank’s interest not to foreclose. But that changed a
few years ago, and bankers told people who they knew could only afford a
$300,000 house to buy a $500,000 house.
“Tighten
your belt, in a few years that house will be worth a million dollars; you’ll
make a lot of money” . . . in fact, the value of the house went down; the
market dropped out; the banks foreclosed on these houses, repackaged them, and
sold them again. Double whammy. The people were told, “you were stupid; you
were greedy; why did you buy such an expensive house?” But in actuality, the bankers
told them to do this, and we’ve grown up to believe that we can trust our
bankers. Something very similar on a larger scale happened in so many countries
around the world, including Greece.
In Greece, the traditional major political parties are, of course,
overwhelmingly in favor of the harsh austerity measures that have been imposed,
but also we see that the major business and media interests are also
overwhelmingly in support. Does this surprise you in the slightest?
No,
it doesn’t surprise me and yet it’s ridiculous because austerity does not work.
We’ve proven that time and time again, and perhaps the greatest proof was the
opposite, in the United States during the Great Depression, when President
Roosevelt initiated all these policies to put people back to work, to pump
money into the economy. That’s what works. We know that austerity does not work
in these situations.
“What
I didn’t realize during any of this period was how much corporatocracy does not
want a united Europe.”
We
also have to understand that, in the United States for example, over the past 40 years, the middle
class has been on the decline on a real dollar basis, while the economy has
been increasing. In fact, that’s pretty much happened around the world.
Globally, the middle class has been in decline. Big business needs to recognize
– it hasn’t yet, but it needs to recognize – that that serves nobody’s
long-term interest, that the middle class is the market. And if the middle
class continues to be in decline, whether it’s in Greece or the United States or globally, ultimately businesses will pay the
price; they won’t have customers. Henry Ford once said: “I want to pay all my
workers enough money so they can go out and buy Ford cars.” That’s a very good
policy. That’s wise. This austerity program moves in the opposite direction and
it’s a foolish policy.
In your book, which was written in 2004, you expressed hope that the
euro would serve as a counterweight to American global hegemony, to the
hegemony of the US dollar. Did you ever expect that we would see in the
European Union what we are seeing today, with austerity that is not just in
Greece but also in Spain, Portugal, Ireland, Italy, and also several other
countries as well?
What
I didn’t realize during any of this period was how much corporatocracy does not
want a united Europe. We need to understand this. They may be happy
enough with the euro, with one currency – they are happy to a certain degree by
having it united enough that markets are open – but they do not want
standardized rules and regulations. Let’s face it, big corporations, the
corporatocracy, take advantage of the fact that some countries in Europe have much more lenient tax laws, some have much more lenient
environmental and social laws, and they can pit them against each other.
“[Rafael
Correa] … has to be aware that if you stand up too strongly against the system,
if the economic hit men are not happy, if they don’t get their way, then the
jackals will come in and assassinate you or overthrow you in a coup.”
What
would it be like for big corporations if they didn’t have their tax havens in
places like Malta or other places? I think we need to recognize that what the
corporatocracy saw at first, the solid euro, a European union seemed like a
very good thing, but as it moved forward, they could see that what was going to
happen was that social and environmental laws and regulations were going to be
standardized. They didn’t want that, so to a certain degree what’s been going
on in Europe has been because the corporatocracy wants Europe to fail, at least on a certain level.
You wrote about the examples of Ecuador and other countries, which after
the collapse of oil prices in the late ’80s found themselves with huge debts
and this, of course, led to massive austerity measures . . . sounds all very
similar to what we are now seeing in Greece. How did the people of Ecuador and other countries that found themselves in similar
situations eventually resist?
Ecuador elected a pretty remarkable president, Rafael
Correa, who has a PhD in economics from a United States university. He understands the system, and he
understood that Ecuador took on these debts back when I was an economic hit man and the country
was ruled by a military junta that was under the control of the CIA and the US. That junta took on these huge debts, put Ecuador in deep debt; the people didn’t agree to that. When
Rafael Correa was democratically elected, he immediately said, “We’re not
paying these debts; the people did not take on these debts; maybe the IMF should
pay the debts and maybe the junta, which of course was long gone – moved to
Miami or someplace – should pay the debts, maybe John Perkins and the other
economic hit men should pay the debts, but the people shouldn’t.”
And
since then, he’s been renegotiating and bringing the debts way down and saying,
“We might be willing to pay some of them.” That was a very smart move; it
reflected similar things that had been done at different times in places like Brazil and Argentina, and more recently, following that model, Iceland, with great success. I have to say that Correa has
had some real setbacks since then . . . he, like so many presidents, has to be
aware that if you stand up too strongly against the system, if the economic hit
men are not happy, if they don’t get their way, then the jackals will come in
and assassinate you or overthrow you in a coup. There was an attempted coup
against him; there was a successful coup in a country not too far away from
him, Honduras, because these presidents stood up.
We
have to realize that these presidents are in very, very vulnerable positions,
and ultimately we the people have to stand up, because leaders can only do a
certain amount. Today, in many places, leaders are not just vulnerable; it
doesn’t take a bullet to bring down a leader anymore. A scandal – a sex
scandal, a drug scandal – can bring down a leader. We saw that happen to Bill
Clinton, to Strauss-Kahn of the IMF; we’ve seen it happen a number of times.
These leaders are very aware that they are in very vulnerable positions: If
they stand up or go against the status quo too strongly, they’re going to be
taken out, one way or another. They’re aware of that, and it behooves we the
people to really stand up for our own rights.
You mentioned the recent example of Iceland . . . other than the referendum that was held, what
other measures did the country adopt to get out of this spiral of austerity and
to return to growth and to a much more positive outlook for the country?
It’s
been investing money in programs that put people back to work and it’s also
been putting on trial some of the bankers that caused the problems, which has
been a big uplift in terms of morale for the people. So Iceland has launched some programs that say “No, we’re not
going to go into austerity; we’re not going to pay back these loans; we’re
going to put the money into putting people back to work,” and ultimately that’s
what drives an economy, people working. If you’ve got high unemployment, like
you do in Greece today, extremely high unemployment, the country’s
always going to be in trouble. You’ve got to bring down that unemployment,
you’ve got to hire people. It’s so important to put people back to work. Your
unemployment is about 28 percent; it’s staggering, and disposable income has
dropped 40 percent and it’s going to continue to drop if you have high
unemployment. So, the important thing for an economy is to get the employment
up and get disposable income back up, so that people will invest in their
country and in goods and services.
In closing, what message would you like to share with the people of Greece, as they continue to experience and to live through
the very harsh results of the austerity policies that have been implemented in
the country for the past three years?
I
want to draw upon Greece’s history. You’re a proud, strong country, a country of warriors. The
mythology of the warrior to some degree comes out of Greece, and so does democracy! And to realize that the
marketplace is a democracy today, and how we spend our money is casting our
ballot. Most political democracies are corrupt, including that of the United States. Democracy is not really working on a governmental
basis because the corporations are in charge. But it is working on a market
basis. I would encourage the people of Greece to stand up: Don’t pay off those debts; have your
own referendums; refuse to pay them off; go to the streets and strike.
And
so, I would encourage the Greek people to continue to do this. Don’t accept
this criticism that it’s your fault, you’re to blame, you’ve got to suffer
austerity, austerity, austerity. That only works for the rich people; it does
not work for the average person or the middle class. Build up that middle
class; bring employment back; bring disposable income back to the average citizen
of Greece. Fight for that; make it happen; stand up for your
rights; respect your history as fighters and leaders in democracy, and show the
world!
Source: this article has been copied to several outlets. I found it here:
http://thesaker.is/greece-is-being-hit-theres-no-doubt-about-it/
