Economic Meltdown: A Call for Systemic Change – John Perkins

November 22nd, 2009

Whenever I hold my two-year old grandson, Grant, in my arms I wonder what this world will look like six decades from now, when he is my age. I know that if we “stay the course” it will be ugly. The current economic meltdown is a harbinger.

By John Perkins

Panama’s chief of government, Omar Torrijos, foresaw this meltdown and understood its implications back in 1978, when I was an economic hit man (EHM). He and I were standing on the deck of a sailing yacht docked at Contadora Island, a safe haven where U.S. politicians and corporate executives enjoyed sex and drugs away from the prying eyes of the international press. Omar told me that he was not about to be corrupted by me. He said that his goal was to set his people free from “Yankee shackles,” to make sure his country controlled the canal, and to help Latin America liberate itself from the very thing I represented and he referred to as “predatory capitalism.”

“You know,” he added, “what I’m suggesting will ultimately benefit your children too.” He explained that the system I was promoting where a few exploited the many was doomed. “The same as the old Spanish Empire — it will implode.” He took a drag off his Cuban cigar and exhaled the smoke slowly, like a man blowing a kiss. “Unless you and I and all our friends fight the predatory capitalists,” he warned, “the global economy will go into shock.” He glanced across the water and then back at me. “No permitas que te engañen,” he said (“Don’t allow yourself to be hoodwinked.”)

Three decades later, Omar is dead, likely assassinated because he refused to succumb to our attempts to bring him around, but his words ring true. For that reason I chose one of them as the title of my latest book, Hoodwinked.

We have been hoodwinked into believing that a mutant form of capitalism espoused by Milton Friedman and promoted by President Reagan and every president since – one that has resulted in a world where less than 5% of us (in the United States) consume more than 25% of the resources and nearly half the rest live in poverty – is acceptable.

In fact, it is an abject failure. The only way China, India, Africa and Latin America can adopt this model is if they find five more planets just like ours, except without people.

Most of us understand what my grandson does not–that his life is threatened by the crises generated during our watch. The question is not about prevention. It is not about retuning to “normal.” Nor is it about getting rid of capitalism.

The solution lies in replacing Milton Friedman’s mantra that “the goal of business is to maximize profits, regardless of the social and environmental costs” with a more viable one: “Make profits only within the context of creating a sustainable, just, and peaceful world,” and to create an economy based on producing things the world truly needs.

There is nothing radical or new about such a goal. For more than a century after the founding of this country, states granted charters only to companies that proved they were serving the public interest and shut down any that reneged. That changed after an1886 Supreme Court decision that bestowed on corporations the rights granted to individuals–without the responsibilities required of individuals.

As an EHM, I participated in many of the events that propelled us into this dangerous territory. As a writer and lecturer, I spent the past few years touring the United States and visiting China, Iceland, Bolivia, India, and many other countries, speaking to political and business leaders, students, teachers, laborers, and all manner of people. I read books about Obama’s economic plans, current schemes for reforming Wall Street, and other policies. It struck me that most of the discussions dealt with triage and that while we need to stop the hemorrhaging, we must also ferret out the virus that caused these symptoms.

Hoodwinked presents a plan for a long-term cure. During the days following its November 10, 2009 publication, I spoke about this plan at the United Nations, on radio and TV programs, and at a conference attended by 2400 MBA students at Cornell University.

I come away feeling hopeful that we are finally ready to take Omar’s warning to heart and to implement the transformation that will be the salvation for my grandson’s generation.

Source: InformationClearingHouse

One Response to “Economic Meltdown: A Call for Systemic Change – John Perkins”

  1. jp Says:

    Ironically just this morning I wrote the following:

    WAVE ECONOMICS – A Model to Sustainable Prosperity

    I am sure this is not a NEW idea but one that needs more elucidation and permeation within our global societal structure now in the 21st Century.

    To date the model for economic development has been viewed as a Pyramid with the elite profit takers, the minority, at the top fed by the minions or working class, the majority, at the bottom supporting this economic structure and of course, the primary source of government revenue (taxation at all levels) being disproportionately the burden of the majority segment of the overall population.

    The proposed NEW model is simple in its concept and can best be represented as a WAVE: a Wave to sustained prosperity.

    The first element to the WAVE is the elimination of any form of taxation on the majority segment of the population and maximization of earning potential. Let the masses earn as much as they are capable with a zero withholding tax being applied.

    The obvious response to this idea would likely be: but where does government obtain its revenue to provide essential services to support its programs?

    Simply put: Lay the burden of taxation on the profit takers – the minority.

    The obvious response to this idea would likely be: but why should this group be burdened with being the ONLY source of government taxation revenue?

    And the answer to this question is as follows:

    – the primary instrument to generate demand is CONSUMPTION
    – if the majority segment of the population has access to significant DISPOSABLE income it is fully expected that they would CONSUME
    – increased and SUSTAINED consumption will have the affect of increasing DEMAND that translates to INCREASED employment of the majority AND increased and sustained PROFIT for the minority segment of the population and the PRIMARY source of government revenue
    – the sustained and healthy remuneration received by the majority would result in DIMINISHED demand for government services and hence reduced demands on annual OPERATING BUDGETS.

    To use the illustration of the PYRAMID – view it in the same fashion as the majority at the bottom, the minority to the top but viewed in terms of PROFIT. The pyramid is in fact INVERTED. The majority of the monies in the form of profit would flow upward and the source of sustainable revenue for government.

    In short as does a WAVE the energy commences by the Majority earning more and having more to spend – this provides momentum – increased energy – resulting in greater demand for goods and services that translates to greater need for employment that in-turn creates a tsunami of sustained and increasing profits for those willing to make the investment to establish business ventures; a continuous source of government revenue.

    The WAVE model to sustained prosperity creates a situation where: EVERYONE WINS.

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