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Video: Sanders Slams Clinton’s Admiration for “Destructive” Former U.S. Secretary of State Henry Kissinger
Testing presidential waters? Haley spoke to secretive conservative group before resigning UN — RT...
Much of what ails society today is the proliferation of sociopaths. I’m not just talking about hardened criminals either; sociopaths are everywhere, in all walks of life. In fact, the traits they possess are the very traits which impel one to succeed and rise to positions of power in a capitalistic society. CEOs, Wall Street billionaires, politicians, military chiefs, intelligence operatives, and right-wing talking heads are among those who have used their sociopathological personality disorders to rule America.
Wouldn’t it be nice if we could identify a sociopath before he/she comes to power? Think of how much better our lives and our country would be if only we knew who the conscienceless bastards really were before we voted for them, came under their employ, listened to their cons, fell prey to their manipulation. The problem is, they are not easily identified because they wear masks. They try to fit in by mimicking normal behavior in public. Some are even charming. They seduce us with their outward appearance of normalcy, but inside they are godless devils bent on perverting the greater good for their own means.
In the past 35 years America has slowly been transformed from a nation of common purpose to a nation of the rich, by wealthy, and for the sociopathic few. That’s because many of the people in power (mostly Republicans) have been crass opportunists concerned with self- advancement at the expense of the greater good. In the age of Reagan, the self-centeredness was heightened to a virtue. The 1980s gave rise to a rogue’s gallery of Gordon Gekkos and their “greed is good” philosophy. It wasn’t just Reagan and his policies though, it was the sociopaths he ushered into public service—the Bushes, Donald Rumsfeld, Dick Cheney, Oliver North, William Casey and a whole band of despicable criminals. The country became more selfish, less communal, and more cynical. It was then that we started letting the Almighty buck rule all facets of American life. The more money you had, the more admired you were. Fuck generosity and compassion for the less fortunate.
Since then, sociopaths have started illicit wars, drained the national treasury, raped Mother Nature, ruined the climate, and given rise to Rush Limbaugh, FOX News, Newt Gingrich, Paul Ryan, Ted Cruz, et al. There seem to be more sociopaths than human beings in positions of power. Maybe that was the whole point. Now the Extreme Court (uh..er…Supreme Court) has gotten in on the act, by making it easier for sociopathic billionaires to control (read subvert) the democratic process. Smarmy Vegas casino operators (like Shel Adelson) and fascist industrialists (like the Koch brothers) have far more say in how our government operates than 99% of us.
As a public service then, I am herewith giving you tips on how to spot a sociopath. If you recognize them in someone, alert authorities and resist the urge to succumb to their wiles.
Traits of a Sociopath (based on the work of psychologists Robert Hare): While some experts believe that sociopathy has a genetic origin, Hare believed that a sociopath’s behavior “is shaped by social forces and is the result of a dysfunctional environment.” Hare formed a list of traits common to sociopaths. Here are the most prevalent:
--Sociopaths are manipulative and very skilled at taking advantage of the good intentions of others . Allen Dulles, former CIA chief, is a good example. He was appointed by President Eisenhower in 1953 after promising Ike that the CIA could avoid WWIII by overthrowing socialist and communist countries around the globe via bloodless coups. Eisenhower, a decent man shaken by the horrors of the second World War, turned over foreign policy to Allen and his brother Foster. The Dulles brothers, sociopaths of the worst kind, turned America into quasi-fascist Orwellian state by using their enormous power to control the media, murder innocent citizens, evoke hatred of America around the globe, and cover up the assassination of JFK. All the while, the Dulleses were enriching themselves and their corporate partners—the Forbeses, the Browns, the Rockefellers, the DuPonts, the Hunts—the oldest, richest families in the country. And Kennedy haters all.
--They have a grandiose sense of self; they think they are better than everyone else, and if they have more money or power than others they use this to their constant advantage. Moreover, the fact that a sociopath may be wealthier than others or in a position of power over others merely confirms in the sociopath’s mind that he/she is better than others. In the modern age, who feels more entitled than the richest among us? The Koch brothers, desperately trying to buy the government, runs roughshod over the poor, the elderly, minorities, and social safety nets. They care only their own profits. We should have carved a big “S” in their foreheads at birth, just as Brad Pitt marked Christoph Waltz with a swastika in “Inglourious Basterds.” Our lives would be much better if we knew whom we were dealing with upfront.
--They are pathological liars; when they are committing acts that harm the greater good of society, they never tell the truth, even if they are caught in a lie. To this day, Dick Cheney and Donald Rumsfeld and their lackeys still deny that the Iraq war was about oil, despite all evidence to the contrary.
--They have no remorse or guilt, regardless of how heinous their actions are. When recently asked if he would do anything differently, if he had to do it all over again, Cheney responded, “No.”
--They lack empathy and are callous in their treatment of others. Mitt Romney dismissed 47% of the country with one glib comment.
--They are contemptuous of those who seek to understand them. One of Allen Dulles’s protégés, Frank Wisner, head of the CIA’s Operation Mockingbird in the 1950s, once famously bragged, “The press claims to be free and open in America. But they are nothing but my personal puppets. I can pull any string I want and they will follow along.”
--They do not perceive that anything is wrong with them. Even if they are proven wrong, and even if all about them acknowledge their wrongdoing, the sociopath will never admit to wrongdoing. See Dick Cheney quote above.
--They are authoritarians; in many cases, they were raised in authoritarian homes where the appearance of uniformity and conformity far outweighed love, compassion, empathy, and charity as laudable qualities. Henry Kissinger once said of Richard Nixon (a raging sociopath), “Imagine what he could have been if anyone had ever loved him.”
--They are secretive; at all costs they strive to keep their true behaviors and thoughts hidden. Allen and Foster Dulles, Dick Cheney, Donald Rumsfeld, George Bush, Richard Nixon, and Oliver North were nothing if not secretive.
--They are paranoid. Can you imagine anyone more paranoid than Dick Nixon?
--They diligently present a “normal” outward appearance when engaging others. This is what confounds us about all sociopaths. Usually we don’t unmask them until it is too late.
--They experience pleasure from enslaving their victims. And all people they encounter are potential victims, even loved ones. “Loved ones” is a misnomer, because sociopaths are incapable of love. Again, Dick Cheney is the perfect example of someone who seemed to derive pleasure from inflicting pain. Witness the detainees at Guantanamo. Cheney does not consider what he did torture, yet a 600-page nonpartisan report says he did exactly that.
--When they collaborate, they feed off one another, and their actions become even more diabolical. No better example of this than the Cheney-Rumsfeld partnerships during the two Bush presidencies.
Indian Oil and Environment Minister Veerappa Moily has added fuel to the debate about genetically modified organisms (GMOs) by approving field trials of 200 GM food crops on behalf of companies like Monsanto, Mahyco, Bayer and BASF. This is despite Supreme Court appointed Technical Expert Committee (TEC) recommending a ten-year moratorium on GM organism approvals until scientifically robust protocols, independent and competent institutions to assess risks and a strong regulatory system are developed.
The U.S. government and the Russian government have both been forced into positions where neither one of them can afford to back down. If Barack Obama backs down, he will be greatly criticized for being "weak" and for having been beaten by Vladimir Putin once again. If Putin backs down, he will be greatly criticized [...]
Pseudo-Libertarian REASON magazine calls Jenny McCarthy an ‘ENEMY OF FREEDOM’ for daring to question...
The European Model
Keller’s final point is that Putin is being heavy handed over the Ukrainian/EU integration crisis, but Keller avoids discussing the deep historic and ethnic links between the two nations. Most Americans would agree that Russia should stay out of NAFTA negotiations, seeing North America as clearly not within the Russian sphere of influence. Ukrainians are deeply divided over the integration with Europe, so why not let the Ukrainians and Russians work out their trade relations without the American government getting involved?
Khdorkovsky eventually wound up the billionaire owner of Yukos Oil, which he planned to sell to Exxon Mobil . Khdorkovsky also had political ambitions, creating the Open Russian Foundation and putting Henry Kissinger and Lord Jacob Rothschild on the board of directors. He was clearly eyeing political power by making close ties with the West, too close for the Kremlin, even being named to the Advisory Board of the Carlyle Group.
Putin and the American People
Americans probably don't approve of roads where members of one religion can drive, but members of another religion must walk, as occurs in Hebron and reported on by Ynet, "Jewish residents are allowed to cross the road by vehicle, but Palestinians are now only permitted to cross by foot or by bicycle." They probably wouldn't look fondly on back of the bus seating for women, yet in spite of this type of segregation in a country that claims to be democratic, the NY Times doesn't feel compelled to demonize Mr. Netanyahu and his 'socially conservative' Likud party.
The Interests of the American People
The Money Changers Serenade: A New Plot Hatches Paul Craig Roberts Former Treasury Secretary Timothy Geithner, a protege of Treasury Secretaries Rubin and Summers, has received his reward for continuing the Rubin-Summers-Paulson policy of supporting the “banks too big to fail” at the expense of the economy and American people. For his service to the…
The post The Money Changers Serenade: A New Plot Hatches — Paul Craig Roberts appeared first on PaulCraigRoberts.org.
“Control oil and you control nations,” said US Secretary of State Henry Kissinger in the 1970s. “Control food and you control the people.”
Global food control has nearly been achieved, by reducing seed diversity with GMO (genetically modified) seeds that are distributed by only a few transnational corporations. But this agenda has been implemented at grave cost to our health; and if the Trans-Pacific Partnership (TPP) passes, control over not just our food but our health, our environment and our financial system will be in the hands of transnational corporations.
Profits Before Populations
Genetic engineering has made proprietary control possible over the seeds on which the world’s food supply depends. “Terminator” genes enable the production of sterile seeds, using a synthetic chemical catalyst appropriately called “Traitor” to induce seed sterility. Farmers must therefore buy seeds from their patent owners year after year. To cover these costs, food prices are raised; but the harm is far greater than to our pocketbooks.
According to an Acres USA interview of plant pathologist Don Huber, Professor Emeritus at Purdue University, two modified traits account for practically all of the genetically modified crops grown in the world today. One involves insect resistance. The other, more disturbing modification involves insensitivity to glyphosate-based herbicides (plant-killing chemicals). Often known as Roundup after the best-selling Monsanto product of that name, glyphosate poisons everything in its path except plants genetically modified to resist it.
Glyphosate-based herbicides are now the most commonly used herbicides in the world. Glyphosate is an essential partner to the GMOs that are the principal business of the burgeoning biotech industry. Glyphosate is a “broad-spectrum” herbicide that destroys indiscriminately, not by killing unwanted plants directly but by tying up access to critical nutrients.
Because of the insidious way in which it works, it has been sold as a relatively benign replacement for the devastating earlier dioxin-based herbicides. But a barrage of experimental data has now shown glyphosate and the GMO foods incorporating it to pose serious dangers to health. Compounding the risk is the toxicity of “inert” ingredients used to make glyphosate more potent. Researchers have found, for example, that the surfactant POEA can kill human cells, particularly embryonic, placental and umbilical cord cells. But these risks have been conveniently ignored.
The widespread use of GMO foods and glyphosate herbicides helps explain the anomaly that the US spends over twice as much per capita on healthcare as the average developed country, yet it is rated far down the scale of the world’s healthiest populations. The World Health Organization has ranked the US LAST out of 17 developed nations for overall health.
Sixty to seventy percent of the foods in US supermarkets are now genetically modified. By contrast, in at least 26 other countries—including Switzerland, Australia, Austria, China, India, France, Germany, Hungary, Luxembourg, Greece, Bulgaria, Poland, Italy, Mexico and Russia—GMOs are totally or partially banned; and significant restrictions on GMOs exist in about sixty other countries.
A ban on GMO and glyphosate use might go far toward improving the health of Americans. But the Trans-Pacific Partnership, a global trade agreement for which the Obama Administration has sought Fast Track status, would block that sort of cause-focused approach to the healthcare crisis.
Roundup’s Insidious Effects
Roundup-resistant crops escape being killed by glyphosate, but they do not avoid absorbing it into their tissues. Herbicide-tolerant crops have substantially higher levels of herbicide residues than other crops. In fact, many countries have had to increase their legally allowable levels—by up to 50 times—in order to accommodate the introduction of GM crops. In the European Union, residues in food are set to rise 100-150 times if a new proposal by Monsanto is approved. Meanwhile, herbicide-tolerant “super-weeds” have adapted to the chemical, requiring even more toxic doses and new toxic chemicals to kill the plant.
Human enzymes are affected by glyphosate just as plant enzymes are: the chemical blocks the uptake of manganese and other essential minerals. Without those minerals, we cannot properly metabolize our food. That helps explain the rampant epidemic of obesity in the United States. People eat and eat in an attempt to acquire the nutrients that are simply not available in their food.
Glyphosate’s inhibition of cytochrome P450 (CYP) enzymes is an overlooked component of its toxicity to mammals. CYP enzymes play crucial roles in biology . . . . Negative impact on the body is insidious and manifests slowly over time as inflammation damages cellular systems throughout the body. Consequences are most of the diseases and conditions associated with a Western diet, which include gastrointestinal disorders, obesity, diabetes, heart disease, depression, autism, infertility, cancer and Alzheimer’s disease.
More than 40 diseases have been linked to glyphosate use, and more keep appearing. In September 2013, the National University of Rio Cuarto, Argentina, published research finding that glyphosate enhances the growth of fungi that produce aflatoxin B1, one of the most carcinogenic of substances. A doctor from Chaco, Argentina, told Associated Press, “We’ve gone from a pretty healthy population to one with a high rate of cancer, birth defects and illnesses seldom seen before.” Fungi growths have increased significantly in US corn crops.
Glyphosate has also done serious damage to the environment. According to an October 2012 report by the Institute of Science in Society:
Agribusiness claims that glyphosate and glyphosate-tolerant crops will improve crop yields, increase farmers’ profits and benefit the environment by reducing pesticide use. Exactly the opposite is the case. . . . [T]he evidence indicates that glyphosate herbicides and glyphosate-tolerant crops have had wide-ranging detrimental effects, including glyphosate resistant super weeds, virulent plant (and new livestock) pathogens, reduced crop health and yield, harm to off-target species from insects to amphibians and livestock, as well as reduced soil fertility.
Politics Trumps Science
In light of these adverse findings, why have Washington and the European Commission continued to endorse glyphosate as safe? Critics point to lax regulations, heavy influence from corporate lobbyists, and a political agenda that has more to do with power and control than protecting the health of the people.
In the ground-breaking 2007 book Seeds of Destruction: The Hidden Agenda of Genetic Manipulation, William Engdahl states that global food control and depopulation became US strategic policy under Rockefeller protégé Henry Kissinger. Along with oil geopolitics, they were to be the new “solution” to the threats to US global power and continued US access to cheap raw materials from the developing world. In line with that agenda, the government has shown extreme partisanship in favor of the biotech agribusiness industry, opting for a system in which the industry “voluntarily” polices itself. Bio-engineered foods are treated as “natural food additives,” not needing any special testing.
Jeffrey M. Smith, Executive Director of the Institute for Responsible Technology, confirms that US Food and Drug Administration policy allows biotech companies to determine if their own foods are safe. Submission of data is completely voluntary. He concludes:
In the critical arena of food safety research, the biotech industry is without accountability, standards, or peer-review. They’ve got bad science down to a science.
Whether or not depopulation is an intentional part of the agenda, widespread use of GMO and glyphosate is having that result. The endocrine-disrupting properties of glyphosate have been linked to infertility, miscarriage, birth defects and arrested sexual development. In Russian experiments, animals fed GM soy were sterile by the third generation. Vast amounts of farmland soil are also being systematically ruined by the killing of beneficial microorganisms that allow plant roots to uptake soil nutrients.
In Gary Null’s eye-opening documentary Seeds of Death: Unveiling the Lies of GMOs, Dr. Bruce Lipton warns, “We are leading the world into the sixth mass extinction of life on this planet. . . . Human behavior is undermining the web of life.”
The TPP and International Corporate Control
As the devastating conclusions of these and other researchers awaken people globally to the dangers of Roundup and GMO foods, transnational corporations are working feverishly with the Obama administration to fast-track the Trans-Pacific Partnership, a trade agreement that would strip governments of the power to regulate transnational corporate activities. Negotiations have been kept secret from Congress but not from corporate advisors, 600 of whom have been consulted and know the details. According to Barbara Chicherio in Nation of Change:
The Trans Pacific Partnership (TPP) has the potential to become the biggest regional Free Trade Agreement in history. . . .
The chief agricultural negotiator for the US is the former Monsanto lobbyist, Islam Siddique. If ratified the TPP would impose punishing regulations that give multinational corporations unprecedented right to demand taxpayer compensation for policies that corporations deem a barrier to their profits.
. . . They are carefully crafting the TPP to insure that citizens of the involved countries have no control over food safety, what they will be eating, where it is grown, the conditions under which food is grown and the use of herbicides and pesticides.
Food safety is only one of many rights and protections liable to fall to this super-weapon of international corporate control. In an April 2013 interview on The Real News Network, Kevin Zeese called the TPP “NAFTA on steroids” and “a global corporate coup.” He warned:
No matter what issue you care about—whether its wages, jobs, protecting the environment . . . this issue is going to adversely affect it . . . .
If a country takes a step to try to regulate the financial industry or set up a public bank to represent the public interest, it can be sued . . . .
Return to Nature: Not Too Late
There is a safer, saner, more earth-friendly way to feed nations. While Monsanto and US regulators are forcing GM crops on American families, Russian families are showing what can be done with permaculture methods on simple garden plots. In 2011, 40% of Russia’s food was grown on dachas (cottage gardens or allotments). Dacha gardens produced over 80% of the country’s fruit and berries, over 66% of the vegetables, almost 80% of the potatoes and nearly 50% of the nation’s milk, much of it consumed raw. According to Vladimir Megre, author of the best-selling Ringing Cedars Series:
Essentially, what Russian gardeners do is demonstrate that gardeners can feed the world – and you do not need any GMOs, industrial farms, or any other technological gimmicks to guarantee everybody’s got enough food to eat. Bear in mind that Russia only has 110 days of growing season per year – so in the US, for example, gardeners’ output could be substantially greater. Today, however, the area taken up by lawns in the US is two times greater than that of Russia’s gardens – and it produces nothing but a multi-billion-dollar lawn care industry.
In the US, only about 0.6 percent of the total agricultural area is devoted to organic farming. This area needs to be vastly expanded if we are to avoid “the sixth mass extinction.” But first, we need to urge our representatives to stop Fast Track, vote no on the TPP, and pursue a global phase-out of glyphosate-based herbicides and GMO foods. Our health, our finances and our environment are at stake.
Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her blog articles are at EllenBrown.com.
Filed under: Ellen Brown Articles/Commentary
By Andrew Gavin Marshall. Cross-posted from Occupy.com. The world today is in the midst of the most monumental social, political and economic upheavals in human history – a state of continual protests, uprisings and what may be considered inevitable revolution … Continue reading →
World of Resistance (WOR) Report, Part 1: The Global Awakening was originally published on Washington's Blog
In Costa Rica, publicly-owned banks have been available for so long and work so well that people take for granted that any country that knows how to run an economy has a public banking option. Costa Ricans are amazed to hear there is only one public depository bank in the United States (the Bank of North Dakota), and few people have private access to it.
So says political activist Scott Bidstrup, who writes:
For the last decade, I have resided in Costa Rica, where we have had a “Public Option” for the last 64 years.
There are 29 licensed banks, mutual associations and credit unions in Costa Rica, of which four were established as national, publicly-owned banks in 1949. They have remained open and in public hands ever since—in spite of enormous pressure by the I.M.F. [International Monetary Fund] and the U.S. to privatize them along with other public assets. The Costa Ricans have resisted that pressure—because the value of a public banking option has become abundantly clear to everyone in this country.
During the last three decades, countless private banks, mutual associations (a kind of Savings and Loan) and credit unions have come and gone, and depositors in them have inevitably lost most of the value of their accounts.
But the four state banks, which compete fiercely with each other, just go on and on. Because they are stable and none have failed in 31 years, most Costa Ricans have moved the bulk of their money into them. Those four banks now account for fully 80% of all retail deposits in Costa Rica, and the 25 private institutions share among themselves the rest.
According to a 2003 report by the World Bank, the public sector banks dominating Costa Rica’s onshore banking system include three state-owned commercial banks (Banco Nacional, Banco de Costa Rica, and Banco Crédito Agrícola de Cartago) and a special-charter bank called Banco Popular, which in principle is owned by all Costa Rican workers. These banks accounted for 75 percent of total banking deposits in 2003.
In Competition Policies in Emerging Economies: Lessons and Challenges from Central America and Mexico (2008), Claudia Schatan writes that Costa Rica nationalized all of its banks and imposed a monopoly on deposits in 1949. Effectively, only state-owned banks existed in the country after that. The monopoly was loosened in the 1980s and was eliminated in 1995. But the extensive network of branches developed by the public banks and the existence of an unlimited state guarantee on their deposits has made Costa Rica the only country in the region in which public banking clearly predominates.
Scott Bidstrup comments:
By 1980, the Costa Rican economy had grown to the point where it was by far the richest nation in Latin America in per-capita terms. It was so much richer than its neighbors that Latin American economic statistics were routinely quoted with and without Costa Rica included. Growth rates were in the double digits for a generation and a half. And the prosperity was broadly shared. Costa Rica’s middle class – nonexistent before 1949 – became the dominant part of the economy during this period. Poverty was all but abolished, favelas [shanty towns] disappeared, and the economy was booming.
This was not because Costa Rica had natural resources or other natural advantages over its neighbors. To the contrary, says Bidstrup:
At the conclusion of the civil war of 1948 (which was brought on by the desperate social conditions of the masses), Costa Rica was desperately poor, the poorest nation in the hemisphere, as it had been since the Spanish Conquest.
The winner of the 1948 civil war, José “Pepe” Figueres, now a national hero, realized that it would happen again if nothing was done to relieve the crushing poverty and deprivation of the rural population. He formulated a plan in which the public sector would be financed by profits from state-owned enterprises, and the private sector would be financed by state banking.
A large number of state-owned capitalist enterprises were founded. Their profits were returned to the national treasury, and they financed dozens of major infrastructure projects. At one point, more than 240 state-owned corporations were providing so much money that Costa Rica was building infrastructure like mad and financing it largely with cash. Yet it still had the lowest taxes in the region, and it could still afford to spend 30% of its national income on health and education.
A provision of the Figueres constitution guaranteed a job to anyone who wanted one. At one point, 42% of the working population of Costa Rica was working for the government directly or in one of the state-owned corporations. Most of the rest of the economy not involved in the coffee trade was working for small mom-and-pop companies that were suppliers to the larger state-owned firms—and it was state banking, offering credit on favorable terms, that made the founding and growth of those small firms possible. Had they been forced to rely on private-sector banking, few of them would have been able to obtain the financing needed to become established and prosperous. State banking was key to the private sector growth. Lending policy was government policy and was designed to facilitate national development, not bankers’ wallets. Virtually everything the country needed was locally produced. Toilets, window glass, cement, rebar, roofing materials, window and door joinery, wire and cable, all were made by state-owned capitalist enterprises, most of them quite profitable. Costa Rica was the dominant player regionally in most consumer products and was on the move internationally.
Needless to say, this good example did not sit well with foreign business interests. It earned Figueres two coup attempts and one attempted assassination. He responded by abolishing the military (except for the Coast Guard), leaving even more revenues for social services and infrastructure.
When attempted coups and assassination failed, says Bidstrup, Costa Rica was brought down with a form of economic warfare called the “currency crisis” of 1982. Over just a few months, the cost of financing its external debt went from 3% to extremely high variable rates (27% at one point). As a result, along with every other Latin American country, Costa Rica was facing default. Bidstrup writes:
That’s when the IMF and World Bank came to town.
Privatize everything in sight, we were told. We had little choice, so we did. End your employment guarantee, we were told. So we did. Open your markets to foreign competition, we were told. So we did. Most of the former state-owned firms were sold off, mostly to foreign corporations. Many ended up shut down in a short time by foreigners who didn’t know how to run them, and unemployment appeared (and with it, poverty and crime) for the first time in a decade. Many of the local firms went broke or sold out quickly in the face of ruinous foreign competition. Very little of Costa Rica’s manufacturing economy is still locally owned. And so now, instead of earning forex [foreign exchange] through exporting locally produced goods and retaining profits locally, these firms are now forex liabilities, expatriating their profits and earning relatively little through exports. Costa Ricans now darkly joke that their economy is a wholly-owned subsidiary of the United States.
The dire effects of the IMF’s austerity measures were confirmed in a 1993 book excerpt by Karen Hansen-Kuhn titled “Structural Adjustment in Costa Rica: Sapping the Economy.” She noted that Costa Rica stood out in Central America because of its near half-century history of stable democracy and well-functioning government, featuring the region’s largest middle class and the absence of both an army and a guerrilla movement. Eliminating the military allowed the government to support a Scandinavian-type social-welfare system that still provides free health care and education, and has helped produce the lowest infant mortality rate and highest average life expectancy in all of Central America.
In the 1970s, however, the country fell into debt when coffee and other commodity prices suddenly fell, and oil prices shot up. To get the dollars to buy oil, Costa Rica had to resort to foreign borrowing; and in 1980, the U.S. Federal Reserve under Paul Volcker raised interest rates to unprecedented levels.
In The Gods of Money (2009), William Engdahl fills in the back story. In 1971, Richard Nixon took the U.S. dollar off the gold standard, causing it to drop precipitously in international markets. In 1972, US Secretary of State Henry Kissinger and President Nixon had a clandestine meeting with the Shah of Iran. In 1973, a group of powerful financiers and politicians met secretly in Sweden and discussed effectively “backing” the dollar with oil. An arrangement was then finalized in which the oil-producing countries of OPEC would sell their oil only in U.S. dollars. The quid pro quo was military protection and a strategic boost in oil prices. The dollars would wind up in Wall Street and London banks, where they would fund the burgeoning U.S. debt. In 1974, an oil embargo conveniently caused the price of oil to quadruple. Countries without sufficient dollar reserves had to borrow from Wall Street and London banks to buy the oil they needed. Increased costs then drove up prices worldwide.
By late 1981, says Hansen-Kuhn, Costa Rica had one of the world’s highest levels of debt per capita, with debt-service payments amounting to 60 percent of export earnings. When the government had to choose between defending its stellar social-service system or bowing to its creditors, it chose the social services. It suspended debt payments to nearly all its creditors, predominately commercial banks. But that left it without foreign exchange. That was when it resorted to borrowing from the World Bank and IMF, which imposed “austerity measures” as a required condition. The result was to increase poverty levels dramatically.
Bidstrup writes of subsequent developments:
Indebted to the IMF, the Costa Rican government had to sell off its state-owned enterprises, depriving it of most of its revenue, and the country has since been forced to eat its seed corn. No major infrastructure projects have been conceived and built to completion out of tax revenues, and maintenance of existing infrastructure built during that era must wait in line for funding, with predictable results.
About every year, there has been a closure of one of the private banks or major savings coöps. In every case, there has been a corruption or embezzlement scandal, proving the old saying that the best way to rob a bank is to own one. This is why about 80% of retail deposits in Costa Rica are now held by the four state banks. They’re trusted.
Costa Rica still has a robust economy, and is much less affected by the vicissitudes of rising and falling international economic tides than enterprises in neighboring countries, because local businesses can get money when they need it. During the credit freezeup of 2009, things went on in Costa Rica pretty much as normal. Yes, there was a contraction in the economy, mostly as a result of a huge drop in foreign tourism, but it would have been far worse if local business had not been able to obtain financing when it was needed. It was available because most lending activity is set by government policy, not by a local banker’s fear index.
Stability of the local economy is one of the reasons that Costa Rica has never had much difficulty in attracting direct foreign investment, and is still the leader in the region in that regard. And it is clear to me that state banking is one of the principal reasons why.
The value and importance of a public banking sector to the overall stability and health of an economy has been well proven by the Costa Rican experience. Meanwhile, our neighbors, with their fully privatized banking systems have, de facto, encouraged people to keep their money in Mattress First National, and as a result, the financial sectors in neighboring countries have not prospered. Here, they have—because most money is kept in banks that carry the full faith and credit of the Republic of Costa Rica, so the money is in the banks and available for lending. While our neighbors’ financial systems lurch from crisis to crisis, and suffer frequent resulting bank failures, the Costa Rican public system just keeps chugging along. And so does the Costa Rican economy.
My dream scenario for any third world country wishing to develop, is to do exactly what Costa Rica did so successfully for so many years. Invest in the Holy Trinity of national development—health, education and infrastructure. Pay for it with the earnings of state capitalist enterprises that are profitable because they are protected from ruinous foreign competition; and help out local private enterprise get started and grow, and become major exporters, with stable state-owned banks that prioritize national development over making bankers rich. It worked well for Costa Rica for a generation and a half. It can work for any other country as well. Including the United States.
The new Happy Planet Index, which rates countries based on how many long and happy lives they produce per unit of environmental output, has ranked Costa Rica #1 globally. The Costa Rican model is particularly instructive at a time when US citizens are groaning under the twin burdens of taxes and increased health insurance costs. Like the Costa Ricans, we could reduce taxes while increasing social services and rebuilding infrastructure, if we were to allow the government to make some money itself; and a giant first step would be for it to establish some publicly-owned banks.
Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her blog articles are at EllenBrown.com.
Filed under: Ellen Brown Articles/Commentary