Listing of stories about Enron that Greg has covered over the years. ...more
On 15 February, for BBC TV, I reported that inside information from the Consortium of newspapers' conducting a thorough review of Florida's 180,000 uncounted ballos showed Gore picking up about 20,000 votes. The information came from sources involved with newspaper group's contractor, National Opinion Research Center of the University of Chicago. ...more
America Preached The Wonders of Free Markets to The Rest of The World
But Exempted Itself — Until Last Year
Sunday July 1, 2001
Napoleon called England a nation of shopkeepers, but the Little Corporal never tried to purchase dietary staples (organic milk, Red Bull) from a Tesco Express. I tackled the manager as to why they were out of stock AGAIN. ‘It’s Friday,’ he said, as if that were an unforeseen occurrence, like a rogue tidal wave that had engulfed Upper Street and prevented deliveries. I began to explain that ‘Friday’ is what accountants call a ‘recurring event’ and HAVEN’T YOU BRITONS EVER HEARD OF COMPUTERS YOU KNOW THOSE THINGS THAT LOOK LIKE TELEVISIONS WITH TYPEWRITERS ATTACHED… but, by then, everyone was looking around at that despised figure, the Complaining American. …more
How crises, failures, and suffering finally drove a Presidential adviser to the wrong side of the barricades
It was like a scene out of Le CarrÃ©: the brilliant agent comes in from the cold and, in hours of debriefing, empties his memory of horrors committed in the name of an ideology gone rotten.
But this was a far bigger catch than some used-up Cold War spy. The former apparatchik was Joseph Stiglitz, ex-chief economist of the World Bank. The new world economic order was his theory come to life.
He was in Washington for the big confab of the World Bank and International Monetary Fund. But instead of chairing meetings of ministers and central bankers, he was outside the police cordons. The World Bank fired Stiglitz two years ago. He was not allowed a quiet retirement: he was excommunicated purely for expressing mild dissent from globalisation World Bank-style.
Here in Washington we conducted exclusive interviews with Stiglitz, for The Observer and Newsnight, about the inside workings of the IMF, the World Bank, and the bank’s 51% owner, the US Treasury.
And here, from sources unnamable (not Stiglitz), we obtained a cache of documents marked, ‘confidential’ and ‘restricted’.
Stiglitz helped translate one, a ‘country assistance strategy’. There’s an assistance strategy for every poorer nation, designed, says the World Bank, after careful in-country investigation.
But according to insider Stiglitz, the Bank’s ‘investigation’ involves little more than close inspection of five-star hotels. It concludes with a meeting with a begging finance minister, who is handed a ‘restructuring agreement’ pre-drafted for ‘voluntary’ signature.
Each nation’s economy is analysed, says Stiglitz, then the Bank hands every minister the same four-step programme.
Step One is privatisation. Stiglitz said that rather than objecting to the sell-offs of state industries, some politicians – using the World Bank’s demands to silence local critics – happily flogged their electricity and water companies. ‘You could see their eyes widen’ at the possibility of commissions for shaving a few billion off the sale price.
And the US government knew it, charges Stiglitz, at least in the case of the biggest privatisation of all, the 1995 Russian sell-off. ‘The US Treasury view was: “This was great, as we wanted Yeltsin re-elected. We DON’T CARE if it’s a corrupt election.” ‘
Stiglitz cannot simply be dismissed as a conspiracy nutter. The man was inside the game – a member of Bill Clinton’s cabinet, chairman of the President’s council of economic advisers.
Most sick-making for Stiglitz is that the US-backed oligarchs stripped Russia’s industrial assets, with the effect that national output was cut nearly in half.
After privatisation, Step Two is capital market liberalisation. In theory this allows investment capital to flow in and out. Unfortunately, as in Indonesia and Brazil, the money often simply flows out.
Stiglitz calls this the ‘hot money’ cycle. Cash comes in for speculation in real estate and currency, then flees at the first whiff of trouble. A nation’s reserves can drain in days.
And when that happens, to seduce speculators into returning a nation’s own capital funds, the IMF demands these nations raise interest rates to 30%, 50% and 80%.
‘The result was predictable,’ said Stiglitz. Higher interest rates demolish property values, savage industrial production and drain national treasuries.
At this point, according to Stiglitz, the IMF drags the gasping nation to Step Three: market-based pricing – a fancy term for raising prices on food, water and cooking gas. This leads, predictably, to Step-Three-and-a-Half: what Stiglitz calls ‘the IMF riot’.
The IMF riot is painfully predictable. When a nation is, ‘down and out, [the IMF] squeezes the last drop of blood out of them. They turn up the heat until, finally, the whole cauldron blows up,’ – as when the IMF eliminated food and fuel subsidies for the poor in Indonesia in 1998. Indonesia exploded into riots.
There are other examples – the Bolivian riots over water prices last year and, this February, the riots in Ecuador over the rise in cooking gas prices imposed by the World Bank. You’d almost believe the riot was expected.
And it is. What Stiglitz did not know is that Newsnight obtained several documents from inside the World Bank. In one, last year’s Interim Country Assistance Strategy for Ecuador, the Bank several times suggests – with cold accuracy – that the plans could be expected to spark ‘social unrest’.
That’s not surprising. The secret report notes that the plan to make the US dollar Ecuador’s currency has pushed 51% of the population below the poverty line.
The IMF riots (and by riots I mean peaceful demonstrations dispersed by bullets, tanks and tear gas) cause new flights of capital and government bankruptcies This economic arson has its bright side – for foreigners, who can then pick off remaining assets at fire sale prices.
A pattern emerges. There are lots of losers but the clear winners seem to be the western banks and US Treasury.
Now we arrive at Step Four: free trade. This is free trade by the rules of the World Trade Organisation and the World Bank, which Stiglitz likens to the Opium Wars. ‘That too was about “opening markets”,’ he said. As in the nineteenth century, Europeans and Americans today are kicking down barriers to sales in Asia, Latin American and Africa while barricading our own markets against the Third World ‘s agriculture.
In the Opium Wars, the West used military blockades. Today, the World Bank can order a financial blockade, which is just as effective and sometimes just as deadly.
Stiglitz has two concerns about the IMF/World Bank plans. First, he says, because the plans are devised in secrecy and driven by an absolutist ideology, never open for discourse or dissent, they ‘undermine democracy’. Second, they don’t work. Under the guiding hand of IMF structural ‘assistance’ Africa’s income dropped by 23%.
Did any nation avoid this fate? Yes, said Stiglitz, Botswana. Their trick? ‘They told the IMF to go packing.’
Stiglitz proposes radical land reform: an attack on the 50% crop rents charged by the propertied oligarchies worldwide.
Why didn’t the World Bank and IMF follow his advice?
‘If you challenge [land ownership], that would be a change in the power of the elites. That’s not high on their agenda.’
Ultimately, what drove him to put his job on the line was the failure of the banks and US Treasury to change course when confronted with the crises, failures, and suffering perpetrated by their four-step monetarist mambo.
‘It’s a little like the Middle Ages,’ says the economist, ‘When the patient died they would say well, we stopped the bloodletting too soon, he still had a little blood in him.’
Maybe it’s time to remove the bloodsuckers.
The Hinduja-Funded Spirit Zone Wasn’t The Only Corporate Cash Deal Done at The Dome
For The Observer
Sir Anthony Hammond was so busy, busy, busy last month clearing absolutely everyone in Government over the Hinduja affair that he had no time to speak to the key witnesses. ‘I have not interviewed any of the Hinduja brothers,’ he writes in his report to the Prime Minister. ‘There were obvious practical difficulties in visiting them in India.’ Yes, and sea monsters had eaten all the phone lines to the sub-continent, I assume.
If on his way to investigate the Hinduja-funded Spirit Zone at the Millennium Dome Sir Anthony hadn’t been as hurried as the March Hare, I would have invited him on The Observer ‘s special tour of the Dome. Had he followed me through the doorway marked ‘Privileged Access’, he might have asked whether there was a flea market in favours surrounding Geoffrey Robinson, Peter Mandelson, John Prescott and others at the top of a Government obsessed with funding the Greenwich sinkhole and other New Labour projects. But Sir Anthony was not asked to ask questions about the Dome. …more
For Gtech, an In With The Bush Family is Worth More Than Anything Lottery Players Have in Their Hand
Congratulations to George W Bush and to Camelot on their victories.
More than a year ago, we reported that the Government had decided to let Camelot retain control of the National Flutter in perpetuity. That was two weeks before the formal bidding process began. Despite our announcement, Richard Branson soldiered on, refusing, like the last dinosaur, to heed the voice whispering: ‘Excuse me, but you’re extinct.’ …more
It would give me great pleasure to report, as did the New York Times earlier this month, that Bill Clinton has saved Africa. ...more
Of Blackbeard and Bill Gates
Rip-off Software and CDs, Price-Rigged Pig Feed, Human Rights Abusers – a US Network is now on to them all
Rip-off software and CDs, price-rigged pig feed, human rights abusers - a US network is now on to them all ...more
Currency Rules – But it’s not OK
The Euro: Made in America by the Father of Reaganomics as a Tool to Smash the Power of Governments
The euro: made in America by the father of Reaganomics as a tool to smash the power of governments ...more
The daring escape of three very expensive headmasters from the schools to which they were confined, prompted a flummoxed Education Secretary David Blunkett to do what he does best at times of crisis: issue a press release announcing a new programme to expand the privatisation of state schools ...more
In Brazil, the rich are nearly naked. In other countries, the wealthy distinguish themselves by what they wear. Here, itï¿½ï¿½ï¿½s what you DONï¿½ï¿½ï¿½T wear that marks the difference. The affluent and blonde wear no more than what look like cast-off eye-patches below their navels, while dark-skinned servants and heavily armed guards are uniformed head to toe. It is mid-summer, and the wealthy have retreated to their beach homes by helicopter - a new fad - so they can fly over Sao Pauloï¿½ï¿½ï¿½s threatening, lawless slums. ...more