Surrealpolitic for surreal times.: Loansharking with the IMF

8.31.2006

Loansharking with the IMF

Like any good mob boss, they'll tell you the best way to keep anyone in line is by employing two methods: the first is the threat of violence and the other is by making them dependent on you financially. And then threatening them with violence if they don't pay it back. Such is the philosophy of the IMF with the muscle of the Pentagon and they are making offers some are refusing.

The IMF was formed near the end of World War II when America saw that it was going to be the predominant economic global power. Forty-four nations met at Bretton Woods, New Hampshire, to design a system that would establish a stable economic standard by which all nations could agree. In short they wanted to set a standard for the price of gold to which every government could affix their currencies, make sure that no nation would place restrictive tariffs on trade and control devaluations of principal rates. All good things. Until you read the fine print. The IMF would also loan money to poor and developing nations to promote infrastructural programs aimed at returning short term dividends to the IMF. And let's be clear on what the IMF is: it's an extension of the U.S. Treasury and Washington's political will.

Basically, what the IMF does is work with Washington's client states, a good example was Suharto of Indonesia, one of the bloodiest dictators to ever wear a sash. We loaned him, through the IMF, millions of dollars to help "develop" Indonesia. What did that mean exactly? It meant that Suharto let American and European corporate interests into his nation to grab whatever raw materials they needed while he purchased a new palace and whatever military hardware he needed to keep the sash from disgruntled citizens (it is estimated that he killed nearly a million - all under Washington's watch). This would be a dispicable enough policy if it weren't for the deep and unabiding hypocrisy that followed. If Suharto himself were responsible for the loan that would be fair and adhering to the rules of capitalism which the IMF purportedly promotes. Instead, however, Suharto "socialized" the loan forcing his people pay it back through taxes which drove his population into deeper poverty while providing no social services such as hospitals, public transportation or roads. And don't think because you're an American you're exempt. In the 1990s, when Mexico defaulted on its IMF loan, the American goverment was there, with your tax dollars, to make sure they stayed solvent. We did this to show the world that no one is getting out of their debt even if it means we loan you more money. Not exactly the way a normal bank operates, but then again most banks, after making a loan, don't come into your house, sell your furniture and clothes and then your youngest daughter into slavery.

Things are changing however, and that means Washington is getting nervous. Argentina, after suffering its worst economic disaster in their nation's history had the comforting words of U.S. Secretary of the Treasury, Paul O'Neill to assuage any fears: "... the key factor underlying recent financial crises is not a failure of capitalism, but an 'absence of capitalism'." What he failed to mention was that the IMF was the reason why there was an "absence of capitalism". If Argentina were free to export their own goods and keep the money for themselves to reinvest in their own growth, that would be capitalism. So, Argentina said enough to the IMF and now is looking at an economic recovery of about 8 percent annually. And they're not the only ones. Brazil has done it, Bolivia is following suit by nationalizing their petroleum industry and Venezuela's Hugo Chavez is leading the anti-American/IMF cry for all to hear.

But Washington isn't lying down. Like any mob, if they can't use the threat of violence (as in the failed U.S. coup of Hugo Chavez) they'll actually use the real thing. Already military training is being shifted from the State Department to the Pentagon where there is no Congressional oversight. This only happens when the American Goverment is about to break some kneecaps. They are also sending "military advisors" to the region to train a new breed of contras. We've seen this all before, but this time it might be different. There are no communists to blame anymore and no one is going to believe that Latin American terrorists are going to attack us. Who knows? Maybe the American people will stand up and tell their goverment to leave Latin America alone before Hugo Chavez wakes up with a severed horse head.

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