Looking for Reality
The most significant part of the book, however, concerned the Middle East in general and Saudi Arabia in particular. In the early 1970s, Perkins wrote, the first great oil price spike started a flow of billions of dollars into the region, and a complicated system designed to recycle it grew up to protect U.S. interests. The recycling seems to have taken three main forms: purchases of American securities, contracts for infrastructure projects, and purchases of selected American arms. One key player in this process, the Shah of Iran, fell from power in 1979, and another, Saddam Hussein, emerged as an enemy of American interests and more or less disqualified himself from further participation in the game in 1990-1. Saudi Arabia and the smaller Gulf states, however, have continued to play their parts--with some significant exceptions.
What occurred to me after reading Perkins and several other books was that our problems in the Middle East today relate to the fate of those hundreds of billions of petrodollars. The fall of the Shah showed we could not depend on the survival of overtly pro-western governments. Saddam's invasion of Kuwait showed that we could not depend on him to use his military establishment (most of which had been provided by the Soviet Union) in ways of which we approved, such as a war against fundamentalist Iran. And after 9/11, we had to face the unpleasant truth that the Saudi government had done little or nothing to prevent a good many millions from falling into the hands of Al Queda--although another new book, James Risen's State of War, shows how hard it was to move the American government away from denial on that point. In short, all those billions of dollars have not converted the Middle East to our values--if anything they have apparently done the opposite.
Being more or less obsessed with historical data all my life, I have instinctively fought against the idea that the reliability or significance of data could be evaluated based upon who came up with it. Knaves, fools, and even paranoid conspiracy theorists can, and often do, uncover important facts or suggest important ideas. I do not know exactly how truthful Confessions of an Economic Hit Man is, but I do believe I learned some important things from it, most of them of a general rather than specific nature. One can also observe, all over Latin America, a political rebellion against the multinational economic arrangements that the author described, most recently in Venezuela, Brazil, Argentina, and now, Bolivia.
Here at home, however, an extraordinary change in the power of corporate America has occurred during the last forty years or so with respect to the nation's press. The rise of the press as we know it in the first half of the twentieth century coincided with a great wave of concern about concentrated economic power, and economic muckraking was a staple of reporting from the time of the anti-trust movement through the New Deal. Large sections of the public in those days readily blamed corporate America and Wall Street for a wide variety of evils, including agricultural poverty, the disappearance of small business, American entry into the First World War, and even the eclipse of a supposedly independent American character. And although much of the press remained pro-business, the appeal of such stories was far too great to resist. Editors and publishers showed plenty of hypocrisy over this--a theme of the great film Citizen Kane, which I watched again the other night--but they ran the stories.
One of the more astonishing developments of my middle age has been the influence of my own generation upon American newspapers. Having begun in the 1960s as opponents not only of corporate power but of capitalism itself, most (but not all) of my contemporaries in the media have become almost completely unabashed corporate apologists. No major newspaper has mounted a serious attack on the consequences of globalization, the gradual eradication of the American labor movement, or even the Republican policy of tax cuts at the expense of balancing the budget. Almost alone within major media outlets, Paul Krugman continually hammers at these issues. And thus, it is not particularly surprising that a very long article on Perkins and his book by Landon Thomas, Jr., on the front page of the Sunday New York Times business section, attempts to assure his readers that they do not need to be disturbed by Perkins' book--as well as other exposes of current Wall Street practices--because Perkins is simply a hopeless conspiracy theorist and, he implies, a fabricator--even though the basic facts of Perkins' corporate life have indeed been confirmed by his employers.
This tactic, alas, also plays a big role in Republican propaganda campaigns. If Howard Dean, Michael Moore, or various unidentified "bloggers" (perhaps someday yours truly can make the grade!) say something, we can all giggle and conclude that it must be false. Of course, such an approach does draw on reality. For forty years the American left has harbored a lot of lunatic conspiracy theorists and many are still plying their trade today (the two most recent books on the Kennedy assassination both, I am sorry to say, fall within that rubric), but that does not mean that there is nothing to object about in America's imperial foreign policy, the behavior of corporate elites, or the connections between the two.
As I write, the President of Harvard, Larry Summers, is teetering on the brink of dismissal after having at long last maneuvered the popular Dean that he originally selected in 2002, William Kirby, out of office. For about two years I and a number of my classmates from the turbulent year 1969--none of whom, significantly, work in corporate America--have been campaigning against another aspect of Summers' Administration--his defense of the bonuses paid to the money managers of Harvard's endowment, bonuses which have reached $30 million for each of two managers for one year, and which are based on performance benchmarks which some other professionals regard as ridiculously easy to beat. President Summers, who as an economist and former Secretary of the Treasury has shown no second thoughts about the direction of our economy, has refused to reply directly to any of several letters we have sent him, although at our 44th reunion he informed us that he felt we were deeply misguided and explained that this is what top-level talent costs. We have recently been encouraged that the man responsible for Yale's endowment, David Swensen, who comes from a family of academics and works for a paltry $1.1 million a year, has courageously criticized his Harvard counterparts. But we have been almost unanimously criticized by our classmates in the financial community who see nothing wrong with such compensation, and the business press has usually treated us very condescendingly, when it has mentioned our campaign at all.
Speaking for myself, we have only been suggesting, as so much of western history seems to me to prove, that untrammeled greed is not, in fact, a social good, and that we need ethical standards and, in other realms, a democratic political process to moderate the excesses of capitalism. That, really, was the point of the New Deal. History suggests, indeed, that there is no reason at all to doubt the essentials of the picture John Perkins painted in his book, and as I have suggested, our relations with the Third World, especially in the Middle East, have a great deal to do with the money which we have poured into it in exchange for cheap energy. Our last Gilded Age eventually self-destructed both because of its own excesses and because of the Great Depression. (Curiously enough, while during the 1930s it became generally accepted that too much concentration of wealth had caused the Depression, that idea has now died out among economists.) It seems that only similar catastrophes may now force us to rethink some of these basic issues.
We live, indeed, in a highly politicized culture, and conspiracy theories are rampant on both sides. The major media outlets, meanwhile, seem to be trying to console themselves by writing off anything that partisans on either side say, although because they have not founded a way to counter the information warfare of the Administration, they inevitably have favored it significantly. They also seem eager not to replay the role of the Washington Post in 1972-4. During the last couple of weeks information has surfaced strongly suggesting that Vice President Cheney was behind the whole campaign to intimidate the CIA by leaking Valerie Plume's name, but major papers have buried those stories on the inside pages while wasting a lot of space on a hunting accident. None of this, however, should excuse our media from the task of trying to uncover, and report, genuine facts--even if disreputable, erratic or controversial figures have been the first to come up with them.