INDEX - ECONOMICSwww.islandbreath.org ID# 0506-05
SUBJECT: US GLOBAL ECONOMY
SOURCE: KEN TAYLOR firstname.lastname@example.org
POSTED: 22 May 2005 - 9:15am HST
Confessions of an Economic Hitman
A Game As Old As Empire
by Amy Goodman published in Alternet.org 16 February 2005
John Perkins, author of Confessions of an Economic Hit Man, worked for years as chief economist at an international consulting firm in Boston called Chas. T. Main. His job was to persuade countries that are strategically important to the U.S. - such as Indonesia, Panama, Ecuador, Iran and Saudi Arabia – to accept enormous loans for infrastructure development and then to make sure the lucrative projects were contracted out to U.S. corporations. Saddled with huge debts they couldn't possibly repay, these countries came under the control of the U.S. government, the World Bank and other U.S.-dominated aid agencies that acted like loan sharks, dictating repayment terms and bullying foreign governments into submission.
AMY GOODMAN: Now, already people are going to be wondering, what is he talking about, "economic hit man"?
JOHN PERKINS: Well, really, over the past 30 to 40 years, we economic hit men have created the largest global empire in the history of the world. And we do this, typically – well, there are many ways to do it, but a typical one is that we identify a third-world country that has resources that we covet. And often these days that's oil, or might be the canal in the case of Panama.
In any case, we go to that third-world country and we arrange a huge loan from the international lending community; usually the World Bank leads that process. So, let's say we give this third-world country a loan of $1 billion. One of the conditions of that loan is that the majority of it, roughly 90 percent, comes back to the United States to one of our big corporations, the Bechtels, the Halliburtons. And those corporations build in this third-world country large power plants, highways, ports, or industrial parks – big infrastructure projects that basically serve the very rich. The poor people in those countries and the middle class suffer; they don't benefit from these loans, they don't benefit from the projects. In fact, often their social services have to be severely curtailed in the process of paying off the debt.
Now what also happens is that this third-world country then is saddled with a huge debt that it can't possibly repay. For example, today, Ecuador. Ecuador's foreign debt, as a result of the economic hit men, is equal to roughly 50 percent of its national budget. It cannot possibly repay this debt, as is the case with so many third-world countries.
So, now we go back to those countries and say, look, you borrowed all this money from us, and you owe us this money, you can't repay your debts, so give our oil companies your oil at very cheap costs. And in the case of many of these countries, Ecuador is a good example here, that means destroying their rain forests and destroying their indigenous cultures. That's what we're doing today around the world, and we've been doing it since the end of World War II. It has been building up over time until today where it's really reached mammoth proportions where we control most of the resources of the world.
Robert MacNamara, you write about him. Talk about his roles from Ford to secretary of defense to World Bank.
I think that what we have here is a world empire that's controlled by a very few men I call the "corporatocracy," and these are the heads of the big corporations, big banks and government, and they tend to be the same person. They jump across these lines and MacNamara is a great example of that. He was president of Ford and then he became secretary of defense under Kennedy and Johnson and then he became president of the World Bank. And in all three roles, his main job was to promote American business, to promote the corporatocracy, to bring the goodies home, to exploit the world. And he was in democratic regimes, Kennedy and Johnson.
Today we've got Dick Cheney who's basically in the same picture. We had George Schultz under the former President Bush. So, the two Bushes both have these types of people, too. Condoleezza Rice. Government is filled with these people.
But it is not just a Republican issue. It's a bipartisan issue. It goes across all the lines, and MacNamara is a very good example of that. I think, at the same time, MacNamara was one of the most important people in terms of framing the new economics, what he called aggressive management. It was aggressive about going out and basically taking the world and bringing it into us so that today, out of the 100 largest economies in the world, 52 are corporations; 47 of them are U.S. corporations – they're not countries, they're corporations.
What about Iran?
Iran is where economic hit men really get started because in the early 1950s, Iran democratically elected a man named Mossadeq as premier. But as soon as he got into power, he went up against the oil companies. And he really stood up for his people. And he said, particularly British Petroleum, if you are going to be here, you are going to give your fair share to our people.
The oil companies were very upset, so the United States made the decision to go in and do something about this. Now, at the time, we were terrified of thermonuclear war. Russia was the enemy after World War II, and Iran is on the Russian border. So we didn't dare send in troops to get rid of Mossadeq, but we've decided we have got to get rid of him because he is opposing the oil companies.
Instead of sending in the troops, we sent in Kermit Roosevelt, a CIA agent who happened to be Teddy's grandson, and we sent him in with a few million dollars, and he managed to create riots, protest, havoc, and to make a long story short, he overthrew Mossadeq, the premier, and brought the Shah back into power. We all know about the Shah.
When you say everyone knows what happened there, I don't take that for granted. What happened in Iran under the Shah?
We wanted desperately to control all the Middle Eastern oil. We saw the Shah as being the person who could make this happen for us. The plan was that the Shah would help take over the rest of the Middle East, including Syria and Iraq, and we all know there was a war between Iraq and Iran much later. But from the very beginning, the idea was to become allies with the Shah. We did everything we could to shore him up.
At the same time, we realized that he had a lot of oil money and so our companies were benefiting tremendously. Once again, all those engineering firms that we've talked about, my own, Charles T. Main, and Bechtel and Halliburton, and everybody else who was in there building cities, building power plants, building highways, getting very, very, very rich. And we were making tremendous numbers of people angry. Even to this day, Osama bin Laden cites what happened with the Shah, how we overthrew Mossadeq and brought the Shah in, as one of the reasons for his anger.
Oil is the source of so much pain.
Every country in the world that has major supplies of oil has suffered. Oil is not a benefit for these countries. It's a benefit for a few of the very wealthy people at the top of the economic totem pole in these countries. But for everybody else, it's a curse. Oil is a curse to the world. It's destroying our environment, it's destroyed a lot of world economies, it's destroyed tremendous numbers of indigenous people who are suffocating from the results of the carbon dioxide that oil has produced.
You also were tied up in Saudi Arabia.
Saudi Arabia was our greatest success as economic hit men. I mean, that's how we judge ourselves. In the early 1970s, OPEC really flexed its muscle. It didn't like U.S. policies in Israel supporting Israel, and decided to do something about it. So it shut down oil production significantly. And as a result, the U.S. economy went into a tailspin. There were long lines of cars at gas stations, many of us still remember that. And we were afraid that it was going to be another crash like 1929 as a result of OPEC.
And so the treasury department came to me and some other economic hit men, and said 'this must never happen again. You have got to devise a plan. What are you going to do about this? How can you make sure this never happens?' And we knew the key was Saudi Arabia.
For one thing, it had more oil than anybody else. Even at that point in time, the Shah was getting a little bit shaky, and we'd seen that he wasn't probably going to take over the rest of the Middle East. We knew that the House of Saud, the royal Saudi family, was corruptible. They were corrupt, they are corrupt, and they were corruptible.
So, to make a long story short, we put together this deal whereby the House of Saud agreed to send most of their petro dollars, the money we paid for petroleum, back to the United States and invest it in U.S. securities. The interest from those securities would be dealt out by the treasury department to U.S. engineering construction firms to build Saudi Arabia in the Western image, to build huge cities out of the desert, which we've done – power plants, highways, McDonald's, the whole works – to make Saudi Arabia a very westernized country.
And the House of Saud would guarantee to keep oil prices within limits acceptable to us, and we would guarantee to keep the House of Saud in power. And we have. All those things have followed since the early 1970s. The policy still holds. Even to the point where we know that the House of Saud supports Osama bin Laden, supported him at our encouragement, of course, in Afghanistan, continues to support him and a lot of terrorist movements.
What was your personal involvement there?
I was one of the people that structured this plan. There were a number of other people involved. And then we sent an envoy to Saudi Arabia – I was never officially told who it was, but I'm almost positive it was Henry Kissinger – to convince the House of Saud to accept our plan. And the message came back to us that the House of Saud had accepted the plan, but now a number of princes had to be convinced because even though Saudi Arabia is not a democracy, apparently there was a certain amount of democratic consensus building within the family, anyway.
So, I was assigned to one of the princes and told that I needed to bring him around. He was a very, very strict conservative, Wahabi, and he didn't really want to see his country become westernized. He saw this coming. And so I knew my job was a challenge. He made it a little easier for me, in some respects, because at the beginning, he let me know that every time he came to Boston or I visited him in New York or Washington, he would expect to have a companion, a beautiful blue-eyed, blonde woman. And if I couldn't provide him with this, I could forget about meeting with him.
It was one of the few illegal things that I did. Most of my job as an economic hit man was, strictly speaking, legal. What we did to the other countries should not be legal, but it is. Pimping is not legal. So I was pimping in Massachusetts at the time, and the only way I could pay for these services was by basically padding my expense accounts, and that also is illegal.
And so what happened with this?
Well, eventually we worked it out whereby we provided him with a blonde, blue-eyed woman from one of the Scandinavian countries. At that time, there was a large trade in white traffic of women to the Middle East, and we arranged for that for him. He became quite happy with all this and eventually he agreed to the plan that we wanted. He supported it. And the House of Saud completely supported it, and it went into place.
You tried to write this book over several decades. What happened?
It always bothered my conscience, what I was doing, and I really wanted to expose it because I didn't like what was going on in the world, what I saw my country doing. I'm a very loyal American and I believe very deeply in the principles of this country, the founding fathers. And as time went on, I began to see how we were cheating those principles, how we were distorting them, how we're losing our sense of democracy almost completely and becoming such a capitalistic corporatocracy-oriented country, a great empire, an imperialistic country.
Other empires have been created militarily and everybody in the country knows the armies are going out there and creating empire. But this one has been done so subtly that most Americans have no idea that it is going on.
I knew deep in my heart I needed to write this book. I needed to expose the truth behind what's going on in the world. I had a young daughter. She was born in 1982. So during the 1990s, she was very young. I was concerned about her safety and comfort, but I was also concerned about her future. But I could justify constantly not writing this book on many, many levels. And I was sworn to secrecy on it.
But when 9/11 struck, I was in the Amazon at the time. I went up to New York a few weeks later and sat there and I could still smell the burning flesh and see the smoke coming out of that hole, and I sat there and I knew that I had to take responsibility for what had happened there. I knew that I had to expose the truth because what happened at Ground Zero is a direct result of the empire building, of what we economic hit men did, and I knew as I sat there that if we don't do something to change the course we're on in the world, my daughter basically has no future and certainly her children don't.
This empire that we've created that's made so many people around the planet angry, that's resulted in destitution for billions of people on this planet: 24,000 people starve to death every day; 30,000 children die every single day from lack of medicines for diseases that could be cured and we have to take responsibility for that. We can change that and we will change it. But we'll only change it when we really come to understand what's going on.
Iraq: How does that fit in?
Well, Iraq followed Saudi Arabia. After our tremendous success in Saudi Arabia, we decided we should do the same thing in Iraq. And we figured that Saddam Hussein was corruptible. And, of course, we had been involved with Saddam Hussein anyway for some time. And so the economic hit men went in and tried to bring Saddam Hussein around, tried to get him to agree to a deal like the royal House of Saud had agreed to. And he didn't. So, we sent in the jackals to try to overthrow him or to assassinate him. They couldn't. His Republican Guard was too loyal and he had all these doubles.
So, when the economic hit men and the jackals both failed, then the last line of defense that the United States, the empire, uses these days, is the military. We send in our young men and women to die and to kill, and we did that in Iraq in 1990. We thought Saddam Hussein at that point was sufficiently chastised that now he would come around, so the economic hit men went back in the 1990s, failed once again. The jackals went back in, failed once again, and so once again the military went in – the story we all know – because we couldn't bring him around any other way.
Iraq had become very, very important to us for many reasons. Its strategic location, the fact that it controls a great deal of the water of the Middle East, the Tigris and Euphrates both flow through and out of Iraq and, of course, its oil.
And now we're not so sure we can keep the House of Saud in control. It's become extremely unpopular amongst its own people. Over 100 assassinations this year. We've been recently reading about the U.S. Consulate being attacked in Saudi Arabia. The House of Saud is losing control. It's very unpopular, partly because it accepted this deal with the West. It did a lot like what the Shah of Iran has done. And Osama bin Laden, of course, is very against it. But so are a tremendous number of Muslims around the world. So we've been afraid that we're going to lose the grip on the House of Saud. One way to protect against that is by taking over Iraqi oil fields, which may be larger than those in Saudi Arabia.
You work with a lot of people in other countries and right here in the international financial institutions, for example, like the World Bank. What understanding do they have? Do a lot of people feel the same way you do?
Well, that's a good question. It's hard to answer for a lot of other people. Within those organizations, most of the people don't realize what's going on. The engineers at Bechtel and Halliburton and the financial specialists at the World Bank and so on and so forth don't really realize what's going on. They should. They ought to look into it and find out. But there is every excuse not to on their part. They do their jobs.
I'm struck by the fact that as I travel around the world how many people in these countries, even people we consider illiterate, question their government. They assume their government is corrupt, they assume ours is corrupt, but we don't. It is amazing to me how many of us don't, at least not openly. The fact is that Americans, for the most part, don't really want to know what's going on. But we need to. We really need to question that.
So within these organizations, you've got tremendous numbers of people that are just going along with the system, getting paid really well to do it, and getting jobs that they were trained to do. But then you always have a number of people like me at the top of the organizations who know what's going on. They are part of this and they use every means they can to keep the system moving.