Confessions of an Economic Hit Man: How the U.S. Uses Globalization to Cheat Poor Countries Out of Trillions
Friday, December 31st, 2004http://www.democracynow.org/article.pl?sid=04/12/31/1546207
We spend the hour with John Perkins, a former respected member of the international banking community. In his 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 taking over their economies. [includes rush transcript]
John Perkins describes himself as a former economic hit man - a highly paid professional who cheated countries around the globe out of trillions of dollars.
20 years ago Perkins began writing a book with the working title, "Conscience of an Economic Hit Men."
Perkins writes, "The book was to be dedicated to the presidents of two countries, men who had been his clients whom I respected and thought of as kindred spirits - Jaime Roldós, president of Ecuador, and Omar Torrijos, president of Panama. Both had just died in fiery crashes. Their deaths were not accidental. They were assassinated because they opposed that fraternity of corporate, government, and banking heads whose goal is global empire. We Economic Hit Men failed to bring Roldós and Torrijos around, and the other type of hit men, the CIA-sanctioned jackals who were always right behind us, stepped in.
John Perkins goes on to write: "I was persuaded to stop writing that book. I started it four more times during the next twenty years. On each occasion, my decision to begin again was influenced by current world events: the U.S. invasion of Panama in 1980, the first Gulf War, Somalia, and the rise of Osama bin Laden. However, threats or bribes always convinced me to stop."
But now Perkins has finally published his story. The book is titled Confessions of an Economic Hit Man. John Perkins joins us again in our Firehouse studios for an extended discussion.
John Perkins, from 1971 to 1981 he worked for the international consulting firm of Chas T. Main where he was a self-described "economic hit man." He is the author of the new book Confessions of an Economic Hit Man.
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AMY GOODMAN: John Perkins joins us now in our firehouse studio for the hour. Welcome to Democracy Now!
JOHN PERKINS: Thank you, Amy. It is wonderful to be here.
AMY GOODMAN: Well, it is a remarkable story that you tell. And welcome to non-sound bite radio and TV. We don't just give people the sound bite. We give them the whole meal. And so we are going to spend the hour talking about your life, which --
JOHN PERKINS: What a great opportunity.
AMY GOODMAN: -- affects millions of people around the world. The system that you were a part of and Confessions of an Economic Hit Man is quite remarkable in giving us the details of what you did. So, why don't you start at the beginning. Maybe not where you were born, but how you came to be recruited first by the National Security Agency - far larger than the C.I.A. - and then this so-called international consulting firm of Chas T. Main.
JOHN PERKINS: Right. Yeah, it was in the late 1960s, 1968. I was a student at business school and was recruited by the National Security Agency. They ran me through a series of tests - personality tests, lie detector tests -- very sensitive barrage of testing. And during that process, they discovered that I would be a great candidate for an economic hit man. I was in business school at the time. And also they discovered a number of weaknesses in my character. I think, I have weaknesses that are pretty typical of our culture, the three big drugs of our culture: money, power and sex. And they discovered these weaknesses in me. There's a lot in my book about my personal background that gets into that. Then they encouraged me to go into the Peace Corps. I lived in Ecuador for three years as a Peace Corps volunteer with indigenous people there, who today are at war with the oil companies. We were starting that process then, so I got some very good on-the-job training, so to speak. While I was still in Ecuador in the Peace Corps, a vice president from this private consulting firm in Boston that worked closely with the National Security Agency and the other intelligence communities came to Ecuador and continued my recruitment. When I got out of the Peace Corps, he recruited me. I went to work for his company in Boston, Charles T. Main and went through an extensive training program there with a remarkable woman, who is described in detail in the book, Claudine was her name. And she was extremely intelligent, extremely sharp, extremely seductive, and she hooked me. She knew exactly how to hook me. She benefited from all the tests that I'd gone through, knew my weaknesses. And she made it -- she, first of all, hooked me into becoming an economic hit man and at the same time, warned me that this is a very dirty business and you must be completely committed to it or you shouldn't take your first assignment in Indonesia.
AMY GOODMAN: Now, already people are going to be wondering, What is he talking about, economic hit man? Explain.
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, which 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%, comes back to the United States to one of our big corporations, the ones we've all heard of recently, 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 in those countries. 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 man, is equal to roughly 50% 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 -- it began shortly after 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.
AMY GOODMAN: John Perkins, talk about your experience in Panama. You had the opportunity to meet the Head of Panama before he was killed, Omar Torrijos. How did you end up there?
JOHN PERKINS: Well, Panama was one of these pivotal countries at the time and Omar Torrijos, who was the President of Panama. He followed a long line of oligarchy dictators that basically were puppets of the U.S. government that we had installed 50 years prior when we took over the country. Omar Torrijos was the first one to break that cycle, and he was a very, very popular president. He was popular throughout much of the world. Many people believed he should have won the Nobel Peace Prize and might have had he not died or been killed. He protected the downtrodden everywhere. And the United States was at the time, President Carter was negotiating a new Canal treaty with Torrijos and ultimately that Canal treaty went through. But it caused a tremendous amount of turmoil in our own country. In fact, it was passed in Congress by only one vote, that won the ratification of the Canal. So, we economic hit men were really looking beyond that process, or how we could win Panama over regardless of what happened to the Canal Treaty. I was there before the treaty was signed in 1972 and I was trying to bring Torrijos around. I was trying to catch him. I was trying to get him. I was trying to hook him the way we hooked everybody else. He arranged for me to meet with him in this private bungalow one day, and this is described in detail, the conversation, in the book. But basically what he said to me is, Look, I know the game you guys are playing. I know what you're trying to do here. You're trying to saddle us with huge debts. You're trying to make us totally dependent upon you, and you're trying to corrupt me. I know what this game is and I'm not playing. I don't need the money. I'm not looking to get personally wealthy out of this. I want to help my poor people. I want you to build the projects that you're supposed to build, that you build in other countries, but I want you to build them for our poor people, not for our rich people. And he said, if you do that, I'll see to it that you and your company get a lot more work in this country. Good work that will help our people. Well, I was really conflicted at this because, as an economic hit man, I was supposed to get him under our control. I was supposed to hook him. But as a partner in this company and as the chief economist for this firm, I also wanted to get the work for the firm, and in this case it was very obvious that the economic hit men weren't going to get through to Torrijos, so I went along with him. But at the time, I was deeply concerned because I knew that this system is built on the assumption that leaders like Torrijos are corruptible and they are all over the world for the most part. When one stands up to the system as Torrijos was doing, it's not only a threat in his country, like Panama, that we're not going to get our way there, but it also may be seen as setting a very bad example for the rest of the world that once one leader stands up -- and at that time there was another leader standing up, too, who was the President of Ecuador, Jaime Roldos. They were both standing up to the U.S. government. They were both standing up to the oil companies and the economic hit men, and it was a very big concern to me. I knew in my heart that if this continued, something was going to give. Of course, it did. Both of these men were assassinated by what we call the jackals, C.I.A.-sanctioned assassins.
AMY GOODMAN: We're talking to John Perkins, author of Confessions of an Economic Hit Man. The conversation you had with Omar Torrijos as he goes through history, your conversation in the early 1970s. But talking about what happened in Guatemala, the overthrow of the democratically elected leader Arbenz by United Fruit and the C.I.A-backed coup there in 1954, and you reconstruct this conversation about George Bush's company Zapata Oil eventually taking over United Brands, which was United Fruit, and then he talks about giving your company the business, Omar Torrijos, saying that he believed the Japanese would finance the canal that would be built, though turning to your company. And he says "They provide the money, they will do the construction." And you write, "It struck me, Bechtel will be out in the cold." The biggest construction job in recent history. Omar Torrijos paused. Bechtel's President is George Schultz, Nixon's Secretary of the Treasury. You can imagine the clout he's got and the notorious temper. Bechtel is loaded with Nixon, Ford, and Bush cronies. I've been told that the Bechtel family pulls the strings of the Republican Party. You talk about the corporatocracy, the bringing together of government and corporate power.
JOHN PERKINS: Yes. Well, it got worse, of course. At that time, George Schultz was President of Bechtel. Casper Weinberger was their Chief Counsel, a senior officer in the corporation. They were opposed to Torrijos, not only on the U.S. turning the Canal over to Panama, but even more importantly perhaps because Torrijos was actively negotiating with the Japanese to build a new sea level canal. As you know, the current canal is based on locks and the larger ships in the world can't go through it. So, the idea was to build a sea level canal where every ship could go through, and the Japanese were offering to finance this. But if they financed it, it would be their construction companies, their engineering companies that would build it. Bechtel was incensed over this. They absolutely could not tolerate the idea of this happening. We knew this very strongly, we had to win Torrijos over. Now, then --
AMY GOODMAN: And then, as you said, Schultz becomes Secretary of State under Reagan, Casper Weinberger becomes Secretary of Defense under Reagan. They're the, you know, the heads of Bechtel Corporation.
JOHN PERKINS: Yeah. Yes. Carter negotiated the treaty and then lost the election, partly because of this treaty, partly because of what happened in Iran, which is another story that I was involved in. And then when Reagan became President, Schultz went from President of Bechtel to Secretary of State and Weinberger went from Chief Counsel of Bechtel to Secretary of Defense. They went back to Panama and said, Okay, Omar, now let's talk. We want the canal back, we want the military bases back in the canal zone and more than anything, we want you to stop talking to the Japanese. And Torrijos said, No, I'm a sovereign country. I am not opposing the United States. I'm not a socialist, I'm not a communist, I'm not siding with Cuba or Russia or China, I'm simply standing up for the rights of my people. We have the right to negotiate with whoever can build us the best canal. I have the right to negotiate with the Japanese. He took a very strong stand and within a few months, his plane crashed into a mountain, blew up and crashed into a mountain, and it was very strong evidence that it had been blown up by a tape recorder which was handed to him at the end that was full of explosives. There is no question in my mind and in the mind of much of the world that this was the jackals, the C.I.A.-sanctioned assassins. I've seen them work in many places. Just a couple of months before that, they had done the same thing to Jaime Roldos, President of Ecuador, the first democratically elected president of Ecuador in decades, had replaced a military junta, democratically elected, and he stood up to the U.S. oil companies. We economic hit men couldn't get through to him and his helicopter blew up then and there.
AMY GOODMAN: Why was he standing up to U.S. oil companies?
JOHN PERKINS: Because cnce again, he ran in the first democratic elections in Ecuador in many decades. He ran on a platform of sovereignty for his country. And if there is oil in Ecuador then, he said, the Ecuadoreans should benefit from it. And once he became president, he began to introduce this. He set up a Hydrocarbons Act, he called it, which was basically a petroleum act that would ensure that if oil came out of Ecuador, the majority of the funds from that oil would go to his people. The oil companies would get a reasonable payment. But the majority would go to his people. He was setting a precedent that the oil companies couldn't stand, because throughout the world, they were exploiting all these countries, as they still are. And Roldos said, I'm not going to let that happen to my country. The oil companies couldn't bear to see that, not just because of Ecuador but, again, because of the precedent this would establish. And Roldos and Torrijos were really partners in a way. At the same time, they were supporting each other, and they both had to go. And they both went.
AMY GOODMAN: And what were your thoughts at the time? I mean, you continued doing this work.
JOHN PERKINS: It was a very pivotal point for me that -- throughout my work, as I describe in the book, my conscience was torn. And to me this is one of most interesting parts of my own personal story. I think of myself as a pretty good person. I grew up 300 years a yankee Calvinist in Vermont and New Hampshire. I come from a very patriotic background. I grew up in a very strictly Republican family, very conservative. I have very strong values. I'm very loyal to my country. And --
AMY GOODMAN: Descendant of Tom Paine and Ethan Allen?
JOHN PERKINS: That's right. They're distant relatives. And my parents steeped me in American history and in the values of our founding fathers of our country. Life, liberty, and the pursuit of happiness for all people, all over the world. I believed very strongly in this. And yet at the same time, I was very seduceable to money, power, sex. All these things came my way, and I was doing things that I was patted on the back for by the president of the World Bank, Robert MacNamara. And I was Chief Economist of a big consulting firm in Boston. I had 50 people working for me, PHDs, MBAs. I was doing work that macroeconomics in college had taught me was good work to do. It's all a scam.
AMY GOODMAN: Why have very few people heard of this company, Main?
JOHN PERKINS: We were a very quiet company. We had about 2,000 professional employees, which is not small. We were a closely held company, that means we were owned like a partnership, about 5% of us owned the company so we didn't have to disclose our books to the S.E.C. or anybody. We were a very private, very quiet company and we were serving the interests of empire. The company no longer exists. In the early 1980s, the partners sold out to a larger engineering construction firm, and so the company essentially went out of existence at that point. I think it was getting a little too hot for us at this point. But it was intentional. We were very strictly forbidden from talking to the press. I broke that rule at one point. I wrote an op-ed piece on the Panama Canal for the Boston Globe and was severely chastised within the company. So, it was intentional that we were very quiet.
AMY GOODMAN: We have to break. When we come back, I do want to ask you about Robert MacNamara. As you talk about the corporatocracy, certainly he embodied that, from becoming C.E.O. of Ford to Secretary of Defense, ultimately the President of the World Bank, and what those different roles did and how similar they may well have been from Secretary of Defense, you make the argument, to head of the World Bank in some ways doing the same thing. We're talking to John Perkins. He is author of Confessions of an Economic Hit Man. Our website is democracynow.org, if you'd like to get a copy of this conversation. We'll be back with him in a minute.
AMY GOODMAN: As we continue our conversation with John Perkins, his book is called Confessions of an Economic Hit Man. He joins us in our firehouse studio here at Downtown Community Television, just blocks from where the towers of the World Trade Center once stood, from ground zero, and we're going to talk about the effect of September 11 and how it -- the role it played in John Perkins writing this book. But before we do that, Robert MacNamara, you write about him. Talk about his roles from Ford to Secretary of Defense to World Bank.
JOHN PERKINS: Well, Amy, 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. You know, 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, and it was aggressive about going out and basically taking the world and bringing it into us so that today we have, out of the 100 largest economies in the world, 52 are corporations. 47 are U.S. corporations, and they're not countries, they're corporations. Here we are 5% of the world's population reaching out like a great octopus and sucking in 25% or more of the world's resources. But it's not really 5% of the world's population, the American people. 1% of the American population owns more of the material wealth than 90% of our population. So, it's that 1% that are the corporatocracy that are sucking all this in and the rest of us are supporting it through our taxes, through our purchases, through our silence, through going along with this system. Like me, as an economic hit man, I went along with the system. I did more than go along with the system, I promoted the system. But I did so legally, for the most part, and I did so while being patted on the back by all the people that I was taught to look up to.
AMY GOODMAN: So you worked for this international consulting firm called Main in Boston. You became chief economist there. 2,000 people employed there, working closely with the international financial institutions like the World Bank. You begin your book in Indonesia. Talk about your training there and what you were trying to accomplish.
JOHN PERKINS: Well, Indonesia, this is 1970, 1971, in that area. We know that at this point Vietnam is going to go. We're going to lose Vietnam.
AMY GOODMAN: The midst of the war.
JOHN PERKINS: Yes. It's the midst of the war. But at this point, the people at the top knew we were going to lose, although they weren't admitting it. They knew. So with the domino theory was in effect that if Indonesia went, the rest of Southeast Asia would go like dominos one country at a time. And Indonesia was seen as the key to stopping that process. We didn't want communism to go there. Also, Indonesia happened to have a lot of oil, which we needed or wanted, and it had the largest Muslim population of any country in the world. So, if we could win Indonesia over and basically get Indonesia as our slave in our clutches, we'd accomplished a lot. So I was sent there to make that happen, to arrange a huge loan to Indonesia for Indonesia to build a big electrical system or several large electrical systems that would serve the very wealthy people of Indonesia -- didn't help the poor much at all -- and to make very inflated forecasts so that we would build a huge system, much bigger than anybody could possibly have imagined that a country -- an island like Java, which is the most heavily populated piece of real estate in the world, but we were building this huge electrical system and it did serve the industry in those countries, but it didn't serve the people. At the same time, putting Indonesia in tremendous debt to us, a debt that it would have a hard time getting out of, and therefore, become part of our empire.
AMY GOODMAN: Shoring up Suharto, the dictator there for so many years.
JOHN PERKINS: Right. Right. And an interesting aspect of that whole thing was at that time I was part of a team of 11, and the other 10 men on that team had no idea that we were doing the economic hit man thing. They were engineers. They were designing transmission lines, fuel systems to bring the fuel into the power plants. They were designing the power plants, big power plants, distribution lines. They were engineers. I was the one that made the forecast. I was the one that said that the electrical demand was going to grow at 17% a year for 20 years, which is unheard of, but I was -- that was my job, was to inflate these numbers as much as I possibly could. I mean, that's a huge number when you compound it annually. And they were just going along. You know, for them it was great. They get to design this huge, amazing system, an engineer's dream.
AMY GOODMAN: You were really replacing a man who was in Indonesia who had warned you, said don't make these economic forecasts that you can't support. It's a con game. It's just, you know, you putting it forward and saying you were confident that this is the case, because it would destroy the country. But he was taken out.
JOHN PERKINS: Right. Howard Parker retired from the New England Electric System, load forecast, forecasting electric demand. He was a very bitter man, and he saw what was going on, but he was also a very bitter man, and nobody really got along very well with Howard. And it was -- my job was to forecast the economy of the country. His job was then to forecast the electrical needs of the country. But the two are very highly correlated, so if i would come up with 17 or 18% economic growth in the economic sector, then his load forecast for the electricity would have to be roughly the same, and he told me I'm not going to go along with this. This is a scam. You are buying into the system. This is all based on greed and I'm not going along with it. And in a way that let me off the hook. I felt very relieved. At one point, I realized, my gosh, I can do what my handlers have trained me to do, what Claudine has told me I must do, and that is come up with these high electrical load forecasts, but my conscience is going to be clear, because Howard is not going to pay any attention to them anyway. He's going to come up with much lower electric load forecasts so we're really not going to scam the country. And then, of course, when I get back to Boston, I found that my boss had fired Howard, called me into the office, said Howard didn't do his job. He has got these ridiculous low forecasts. We fired him. We're going to give you his job as well as your own. We're going to make you a department head. You're going to get rich. You know, da da da da da da. But you have got to come up with the kind of forecast that we were looking for from him and we know you can do that because you do that for the economy.
AMY GOODMAN: What about Iran?