by James Corbett
The Corbett Reoprt
22 June, 2010
It’s an old trick to couch a painful reality inside of a flowery platitude. We hear it all the time in our daily lives, and for the most part we know how to read between the lines when someone tries to do it to us.
When your doctor tells you that “This will only hurt a bit,” you know enough to brace yourself for a painful procedure. When your boss tells you he has an exciting new project for you to work on, you know you’re about to get saddled with the job that no one else wants to do. When a salesman tells you a used car is a fixer-upper, you know you’re looking at a lemon.
Similarly, when the IMF tells a nation that they need to implement “austerity” in order to get themselves out of a financial crisis, here, too, lies a gaping chasm between the language and the reality.
“Austerity” is one of those Orwellian terms that has been injected into our political discourse precisely because it is a nice-sounding word for a very painful reality. “Austerity” implies discipline, self-restraint, even nobility. “Austerity” is prudent. “Austerity” is modest. “Austerity” is a virtue. It is an end in itself.
If the IMF or the European Central Bank come to the people of a collapsing European nation and tell them to sacrifice their pensions and their savings and their very standard of living all for a debt that their government has fraudulently racked up in their name, no one would go for it, and rightly so.
But tell those same people that they need to implement “austerity measures” in order to “get back on their feet” economically, and many will be willing to live in the harshest of conditions, content to put up with the dismantling of their nation itself in the vain hope that by giving more power to the international financial institutions they can somehow avoid economic collapse.
The trick, of course, is that reality is completely the opposite. Like the doctor giving you false assurances that this will only hurt a bit, the economic amputation that the bankers have in store for the once-proud nations of the industrialized world will be excruciating.
Just ask anyone in the third world. They should know. They’ve been going through these “austerity” plans for decades.
Ask the people of Ethiopia if the IMF/World Bank “economic therapy” of the 1990s worked in their nation’s favour. Ask them about the firesale of state assets, public utilities, farms and factories for pennies on the dollar to multinational corporations. Ask them how USAID helped to dump surplus genetically engineered crops that couldn’t be sold in Europe on poor African nations as charitable food aid.
The extent of the horrors inflicted on Ethiopia by the international financiers almost beggars description.
The banksters weren’t content to carve the country into pieces and sell the scraps to their big business cronies. They then had the audacity to steal the very food off the poor farmers’ tables and replace it with GM frankenfoods that the rest of the world wouldn’t even touch.
This is the real face of “austerity.” It is nothing less than economic slavery to an elite group of banksters who have created their own fiat wealth out of thin air.
Nor is Ethiopia the only example of this procedure. Quite the contrary. A similar process has played itself out in almost every country that the international finance oligarchs have tried to “set straight” with their procedures that will “only hurt a little.”
In Brazil, IMF reforms actually altered the nature of the Brazilian constitution, halting transfers of federal funds to state governments so that those funds could be used to pay the bankers their pound of flesh.
The IMF structural adjustment program in Peru devestated the local agricultural economy and made illegal coca production the only viable way for many farmers to make a living. From the first IMF-sponsored “economic reform” package in Peru in 1978 to the second round of IMF reform in the early 1990s, coca production increased over 400%.
A 4.8 billion dollar IMF loan to Russia in the late 1990s never even made it into Russian coffers, with billions being deposited directly into offshore bank accounts connected to mobsters, politicians and banksters. Despite the fact that the Russian people did not see a single Ruble of this siphoned money, they were still responsible for paying it back to the international bankers who were kind enough to lend it to them, at interest.
Time and time and time again in country after country in every corner of the globe, IMF loans spell disaster for the people who are left holding the bag.
The crux of the entire issue is that none of this is unexpected. In fact, it is part of the design of the IMF austerity programs themselves.
As revealed by Joseph Stiglitz, the former chief economist of the World Bank, the IMF’s modus operandi is to conduct economic raids of debtor nations, dismantling and selling off infrasturcture for the benefit of foreign corporations, and making sure that all public money is used to pay off the bankers.
He even has a name for what happens after the “austerity” plan inevitably results in the dissolution of a society: the IMF riot.
Bolivians rioted over water prices, Indonesians rioted over food and fuel subsidies, Ecuadorians rioted over cooking gas prices, Argentineans rioted over the complete collapse of their once-rich nation. The common denominator in all of the cases were “austerity measures” and the IMF.
Now, the beginnings of IMF riots are shaping up in Europe. People are taking to the streets to protest the measures that are about to be taken in the name of paying back to the banksters what corrupt governments stole from the people. On the other side stand the police, increasingly militarized and deployed in the service of the banksters and the politicians. The battle lines are forming.
But is there another way out?
Can the peoples of Europe learn from the examples of Iceland? That tiny North Atlantic island nation, too, found itself facing complete bankruptcy as the derivatives-fuelled bubble of the Icelandic financial sector burst in the wake of Lehman Bros. The people were once again left holding the bag for billions of dollars in debts owed to foreign banks and the quiet streets of sleepy Reykjavik were erupting in violence.
But in Iceland, the people did not fight the government. They became the government. A populist people’s movement forced the early collapse of Iceland’s government and non-politicians were swept into power.
They held a referendum in which the people overwhelmingly rejected the idea that they were going to pay billions of dollars to foreign banksters for a debt that was not theirs. It was fraudulent. They will not pay it.
It remains to be seen whether the G20 nations will be able to follow the Icelandic example as the rot begins to eat away at the economies of the “rich” industrialized nations. The first test of this may happen as early as this week at the G8/G20 in Toronto where the political puppets of the Canadian government have indebted the Canadian people by a staggering one billion dollars to pay for a totalitarian police state operation that will inevitably provoke such mindless, violent reactions.
We stand at a crossroads, where the people can rise up in mass against the financial oligarchs who are puppeteering this downfall and get rid of the political puppets of both the left and the right who fall into lockstep with the vultures of Wall Street no matter who sits in the White House…or, not understanding what is happening or who is really behind it, the people can be led into senseless acts of violence against black-suited policemen in battles that will not address the root of the problem but will lead to pain and suffering.
The first step is to nurture the understanding that the “austerity” offered by the banksters is not the solution to our problems, but the beginning of them. Then we will know what it means when the IMF tells us “this will only hurt a bit.”
The Meaning of “Austerity”
Europe’s Banking Crisis: Latvia’s Third Option by Prof. Michael Hudson
Andrew Gavin Marshall: The American empire is in decline, but the military spending is not following suit
On the edge with Max Keiser: Michael Hudson on Junk Economics and Feudalism
Europe’s Fiscal Dystopia: The “New Austerity” Road to Financial Serfdom by Prof. Michael Hudson
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