
This is a summary of the New York Times Bestseller Confession of an Economic Hit Man by John Perkins. "Economic Hit men are highly trained professionals who cheat countries around the globe out of trillions of dollars. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder." This book is a personal account from an economic hit man who describes how the United States preys on developing nations as a form of modern colonization.
Economic hit men (EHM) give developing nations loans with the intention of them becoming unpayable in order to accrue power. If a nation defaults then the sought collateral is one of the following: "control over United Nations votes, the installation of military bases, or access to precious resources such as oil or the Panama canal." Moreover, the loans have stipulations that all construction be done by U.S. companies, so the multi-billion dollar projects stays within the U.S. economy and is not put into the developing nations economies.
The toll isn't purely financial. In Ecuador 30,000 indigenous people filed a lawsuit against Chevron for dumping 4 million gallons of toxic wastewater per day for over 20 years, between 1971-1992, that was "contaminated with oil, heavy metals, and carcinogens, and that the company left behind nearly 350 uncovered waste pits that continue to kill both people and animals." Additionally, since 1970 "the official poverty level grew from 50 to 70 percent, and public debt increased from 240 million to 16 billion. Meanwhile, the share of national resources allocated to the poorest segments of the population declined from 20 to 6 percent." This is not just a trend in Ecuador, but across the third world. The cost of servicing third world debt "is more than all third world spending on health and education, and twenty times what developing countries receive annually in foreign aid." Ecuador itself was targeted because "the sea of oil beneath its Amazon region is believed to rival the oil fields of the Middle East." Of each $100 dollars of oil taken from Ecuador, only $25 goes to them and three quarters of that must go to paying off debt. Most of the remainder goes towards other government expenses leaving about $3 per $100 to help those that are negatively impacted by the destruction brought about by modern industry.
Modern colonizing doesn't happen by armed force, it happens through spreadsheets and impressive credentials. Impoverished nations are wowed by talk of humanitarianism, financial projections, and name dropping prestigious universities and their business propaganda. Business titles like "financial analyst, sociologist, economist, econometrician, shadow pricing expert," etc. are displayed as badges of trustworthiness.
The author grew up poor, got a college degree in business administration with an emphasis in marketing, and was accepted to the NSA. He got a job as an economist at a relatively unknown international consulting firm abbreviated as MAIN, which was apparently intentional, and was trained, remarkably candidly, as an economic hit man. The job description was simple, create financial forecasts to ensnare countries in debt in order to take advantage of them. Previously the CIA took over efforts like these, but in order to avoid tricky political situations, they decided to "identify prospective EHMs, who could then be hired by international corporations. These EHMs would never be paid by the government; instead, they would draw their salaries from the private sector. As a result, their dirty work, if exposed, would be chalked up to corporate greed rather than to government policy. In addition, the corporations that hired them, although paid by government agencies and their multinational banking counterparts (with taxpayer money), would be insulated from congressional oversight and public scrutiny, shielded by a growing body of legal initiatives including trademark, international trade, and Freedom from Information laws." In accepting the position, the author said he knew he was also selling his soul to the corporatocracy.
In his first project in Indonesia, he managed to convince Indonesian experts that a 19% growth rate per year was expected and reasonable. The manager of the construction project was against unfair business practices and his report assumed an 8% growth instead. That manager was fired as a result. For comparison a 1% increase in a home loan rate equates to tens of thousands of dollars over a 30 year loan on a $400,000 dollar home. If the extra 1% cost was $20,000 additional dollars that's 5% of the entire loan amount. Apply that to this situation and we are talking about repaying the entire multi-billion dollar loan in addition to a 55% extra capital payment (between 8% and 19% loans) before the loan is paid off. For an equivalent $2,000,000,000 loan that's the difference between paying the loan back plus an extra $800,000,000 vs $1,900,000,000. We are talking many, many billions overcharge. More than half of the countries in the world make less than 30 billion a year according to the World Bank. The author reported Ecuador as spending 50% of their GDP on loan repayment (in 2004).
His next job took him to Panama. Historically the U.S. declared Panama a sovereign nation from Colombia in order to control the Panama canal. America more or less annexed the canal itself and had a U.S. colony around the canal. It was given back to Panama in 1999. The author said the nation's leader at the time, Omar Torrijos, knew about his organization and what the U.S. attempted to do to developing nations and was able to avoid financial indebtedness. Torrijos agreed to hire MAIN as long as fair assessments were made, which they agreed to because at the end of the day what matters is the bottom line. For Torrijos and Panama, this was more about playing to the powers that be so that he wouldn't be assassinated. He recognized that as long as he kept the money flowing, his position would remain secure.
The next job was in Saudi Arabia. OPEC was an agreement between the Arab nations to take back power through the controlling of oil distribution. After the embargo ended, the U.S. made an agreement to support the royal family in exchange for building Saudi infrastructure and requiring an oil agreement thereby eliminating possible future oil crises. While this may seem reasonable at face value, the Saudi royal family at the time knew that without U.S. backing they were unlikely to remain in power; making a deal wasn't an option, it was a necessity. No nation that created a pact (OPEC) to take back economic power would then turn around and give that power up willingly without a reason to do so. The author's role in this deal was to get as many dollars from the relationship with the Saudi oil industry as possible and extravagant plans were devised to extract Saudi resources. Once again, the U.S. used its power and influence to manipulate a developing nation (a very wealthy one in this case) to control oil and maximize profits.
Indonesia, Panama, and Saudi Arabia were all interesting case studies that were exceptions to the rule. Colombia was more run of the mill. No hiccups in priming the country for debt by falsifying economic forecasts. What the author didn't expect was to meet a woman who he fell in love with whose brother got arrested and thrown in jail for peacefully protesting oil drilling on indigenous lands. Not to mention there was a considerable amount of armed resistance from native Colombians who didn't want the harmful side effects it would cause them while making the rich richer. He credits his role in Colombia as being a turning point for him.
Iraq was an EHM operation gone wrong. Iraq is important for a number of reasons besides the well-known reason that "it sits atop one of the world's most extensive oil fields (by some estimates, even greater than Saudi Arabia's)." It controls water resources, which is becoming critically more important as industry increases and safe water supply around the world decreases and it is geopolitically considered the key to the Middle East. As with nearly all EHM operations gone wrong, the result was invasion. Iraq shared a similar fate to Afghanistan around the same time period, and nearly a similar fate to Venezuela although Hugo Chavez managed to resist the coup America admitted to orchestrating and it was never invaded, possibly due to the wars going on in the Middle East. The author cited the New York Times story that the Bechtel Group "got the first major contract in a vast reconstruction plan for Iraq" and "the Iraqis will then work with the World Bank and the International Monetary Fund, institutions in which the United States enjoys wide influence, to reshape the country." Halliburton won a 7 billion dollar contract to make emergency repairs to the oil infrastructure. We hired our own companies to reconstruct the country we destroyed.
To highlight the necessity of appeasing power, the author brought up Ecuador and Jaime Roldos, a leader who sought to empower the people of his country rather than submit to the powers that be. He attacked and denounced the oil companies that were attempting to drill in indigenous lands. In 1981 he ordered oil companies out of the country. In 1981 he died in a plane crash. Remember Torrijos from Panama? Well, he refused to renegotiate the treaty on the Panama canal (still U.S. owned at the time) and he also died in a plane crash in 1981. A quick google search said the chances of dying in a plane crash are 1 in 11 million AND the typical chances of survival are 95% as determined in a study by the National Transportation Safety Board (granted plane safety likely increased since 1981). To demonstrate the unlikelihood of dying in a plane crash, you are more likely to die of food poisoning, of falling off a ladder, of falling off furniture, of taking a bath, of dying by fireworks, and dying by getting hit by lightning than you are dying from a plane crash (all six combined nearly equate to the same likelihood as dying from a plane crash). Two leaders who were famous for their humanitarian ideals and refusal to submit to American big business were killed by the same highly unlikely event within the same year.
MAIN eventually died out. Enron was the new star with a miraculous upcoming, which the author said was no surprise for those in the know. Then he cites the incredible advantages companies received when they hired George W. Bush Jr. while his dad was in office. The author relates those in power to feudal lords or plantation owners, hence the special benefits given, and lack of surprise by those aware of this reality. Instead of actively selling slaves, the poorest in the world are sought out and taken advantage of with high pay to scale but long work hours or hazardous work while those that truly benefit rationalize their actions by claiming they are helping. The elite benefit while the rest become slaves to the system whether that be by poverty or by greed.
"Globalization, as it has been advocated, often seems to replace the old dictatorships of national elites with new dictatorships of international finance... To make its [the IMF's] programs seem to work, to make the numbers 'add up,' economic forecasts have to be adjusted... GDP forecasts are not based on the best estimates of those who know the economy well, but are merely the numbers that have been negotiated as part of an IMF program."
-Joseph Siglitz, former Chief Economist of the World Bank and winner of the Nobel Prize in Economics
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