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Zeitgeist: Addendum - Part Two

Author: Edward L Winston
Added: August 16th, 2009

Peter Joseph (creator of Zeitgeist) believes that I'm mentally ill because I disagree with him. You can read all about it on his forums (linked from this forum post), with a blog-based rebuttal here. You better not disagree with him, or you'll be labeled insane next. Perhaps I'm crazy for pointing out his forum post?

This is part two of four in my series of articles on Zeitgeist: Addendum. Please refer to the introduction if you were lead to this page.

There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.
John Adams
1735 - 1826

I couldn't find an original source for this quote, but it's pretty popular on Federal Reserve conspiracy sites. In any case, if it is real then it's likely referring to the debt that England was putting the colonies into, rather than central banking or anything else the film is implying.

John Perkins
Former Chief Economist for Chas T. Main
Author, Confessions of an Economic Hitman

We economic hit men really have been the ones responsible for creating this first truly global empire, and we work many different ways. But perhaps the most common is that we will identify a country that has resources that our corporations covet, like oil, and then arrange a huge loan to that country from the World Bank or one of its sister organizations. 

But the money never actually goes to the country, instead it goes to our big corporations to build infrastructure projects in that country, power plants, industrial parks, ports, things that benefit a few rich people in that country, in addition to our corporations, but really don't help the majority of the people at all. 

However those people, the whole country, is left holding a huge debt. It's such a big debt that they can't repay it, and that's part of the plan, that they can't repay it. And so at some point we economic hit men go back to them and say listen, you owe us a lot of money, can't pay your debts, so, sell your oil real cheap to our oil companies. Allow us to build a military base in your country or, send troops in support of ours to someplace in the world, like Iraq, or vote with us on the next U.N. vote.

To have their electric utility company privatized, and their water and sewage system privatized, and sold to US corporations or other multinational corporations. So there was a whole mushrooming thing, and it's so typical of the way that the IMF and the World Bank work: they put a country in debt, in such a big debt it can't pay it, and then you offer to refinance that debt, and pay even more interest, and you demand this quid pro quo which you call a "conditionality" or "good governance" which means basically that they've got to sell off their resources, including many of their social services; their utility companies; their school systems sometimes; their penal systems; their insurance systems, to foreign corporations. So its a double, triple, quadruple whammy.

There's a lot of criticism of John Perkins and his book out there and so it's really hard to get a decent view of the book, so I read it myself. After I read it, of course I had to do a lot of research into the World Bank and the IMF, because I knew a decent amount about them but not nearly as much as the book was saying. I must say I was really torn, because while a lot of things he was saying about the World Bank/IMF were true; everything else seemed to tie it all together with shit-covered shoe laces.

He says the money never goes to the countries [governments], but rather to big corporations to build infrastructure. Well, this is only partially true. There are two types of loans given, they are:

Investment loans
These are loans meant for business, companies, etc to help build social projects and other developments.
Development policy loans
These are loans help with the countries government institutions.

There are also grants which don't have to be paid back, these are things such as relief for severely poverty stricken areas; sanitation and water supply (we'll get back to this in a second); vaccinations and immunization programs; HIV/AIDS combating programs; and various initiatives for reducing greenhouse gasses[1].

The Word Bank has a policy that "the freer the market the freer the people" and the "free markets are the best way to alleviate poverty." This doesn't always fail, but if the economy in question is a very weak economy and does not have a fertile ground for competition this can end up badly, such as in Bolivia[2].

Perkins criticizes the World Bank because of their by-proxy loans to businesses that the countries themselves must pay back. This isn't that illogical or evil a situation. Consider that the countries receiving the money are often corrupt and poorly managed and the idea that a third world dictator or unstable government can just take the money and run is a very real possibility. If the money is just given in good faith, or only spent on public programs, then there's no infrastructure built to keep the market in that country going and they in the end become reliant on outside sources for capital because they aren't generating any of their own. The idea that Perkins couldn't understand this, meanwhile admitting how unstable and unpredictable some countries are, is completely mind-blowing.

Perkins then says the country is "left holding a huge debt" but that's usually not the situation. For example, the United States sponsored a grant of $5 million to help strengthen Haiti's agriculture and its development[3b]. Brazil received a $30 million for rural poverty programs[3c]. Romania just received a $423 million development policy loan (for the institutions themselves) and has 14 years until the loan is due and a grace period of 13.5 years[3]. 

The situation always brought up is the one with Bolivia, unlike most other countries, received much larger loans over a much longer period of time, as of 2002 the Bolivian government still owed nearly $4.5 billion[4]. 

Perkins goes on to say that the countries can't repay the debt. That may be the case in a situation like Bolivia, but it's definitely not always the case, especially when it's several millions dollars.

Going further he says the inability to repay the debts is used as a form of extortion to get oil or strategic military locations, but this is easily fitting as nearly all countries have some sort of "exploitable" natural resource or are in proximity to a enemy of the United States. In certain cases where countries have absolutely no natural resources and are not near an enemy, it's hard to find a reason why to loan them money if that is our only motive. Voting with the UN could be a reason, but since the US is one of the few countries with veto power, it exercises that right more than any other.

One of the most interesting facts about the World Bank is starting the late 1990s it required countries receiving investment loans to privatize their water supply. In certain two countries this lead to severe problems, one being Argentina and the other being Bolivia. In the latter country, Bolivia, water was privatized and shortly after an American company, Bechtel signed a contract with the president of Bolivia to have control over the water in the third largest city in Bolivia, Cochabamba (not the entire country as some people believe). After signing this contract Bechtel thought it'd be smart to triple the water rates within the city. Furthering insanity, Bechtel had gathering rainwater and the use of wells made illegal. This caused riots because people could no longer afford clean water[5][6]. 

Bolivia soon after withdrew the water contract and Argentina has also cancelled theirs[7][8][9].

90% of countries have publicly owned and operated water and sanitation systems. Almost all countries with privately owned water supplies are third world countries and are due to influence from the World Bank/IMF to do so[10][11]. However, England has been privatizing their water and sanitation for nearly 20 years, and the United States has been pushing for privatized water in more areas more and more[12][13].

This is what I mean by Perkins saying true things but mixing it with what seemed to be lying by omission. Furthermore, he does admit to being a professional liar and swindler, so I'm not sure what to think about him. He definitely does seem to be leaving out important details an awful lot and sometimes it seems as though he simply makes things up.

Much more can be said about the World Bank/IMF; it does indeed work in the interests of the United States, there's no doubt to me about that, but I'll leave that for some other web site to do.

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