The Meaning of Trump: Spotlight on the Grand Old Party 1854-2016: (Part M)
Since Part J I have been developing my theory, the "Good Cop-Bad Cop Squeeze." I have been saying that, in the United States of America, as far as I can tell, public policy is articulated and executed through the prism of what I call the two-party-system, Democrat and Republican, left-right, liberal-conservative "Good Cop-Bad Cop Squeeze."
I argue that you cannot look at any politician, whichever his party, in isolation. You have to think about how the conservative-liberal ideologies operate as a whole. The reason for this, in short, is because we no longer have a political party that actively opposes corporate power; and we no longer have a party that actively advocates for domestic human rights.
This means that there is no core, no foundation to Democratic and Republican contestation. And so their seemingly adversarial discourse merely serves a disciplinary effect upon certain marginalized sectors of society.
I've been talking about how I see the Good Cop-Bad Cop dynamic playing out over a range of public policy issues. In Part L I got into talking about the Good Cop-Bad Cop Squeeze International Style.
I said that I would show this international phase operating in two ways. For the first way, as I discussed in Part L, I quoted from a book by Nobel Laureate in economics, Joseph E. Stiglitz, who was the chairman of the Council of Economic Advisors for President William Jefferson Clinton. Dr. Stiglitz talks about how the Clinton administration was the "Good Cop" at home but the "Bad Cop" abroad.
I'm going to give a quick example, then move on to the longer 1973-beginning case study.
Between 1991 and 1995, the United States supplied four-fifths of Turkey's military imports, which were among the largest in the world. It so happened that communities like Stratford and Bridgeport, Connecticut, where Black Hawk and Comanche helicopters were made, depended for their economic well-being on continued large-scale arms sales to countries like Turkey (1).
At the time of the first Gulf War, a senior adviser to the Turkish prime minister said to John Shattuck, the Assistant Secretary of State for Human Rights, 'If you want to stop human rights abuses do two things --- stop IMF credits and cut off aid from the Pentagon. But don't sell the weapons and give aid and then complain about the Kurdish issue. Don't tell us about human rights while you're selling these weapons' (2).
This one doesn't require deep thought. First of all, our tendency, in America, to conceptually separate politics and economics lies at the heart of the contradiction.
Bad Cop Mode: The United States sells the weapons to Turkey and other human rights abusers --- due to the economic need of American communities like Stratford and Bridgeport, Connecticut.
Good Cop Mode: U.S. officials apparently "complained" about the Kurdish issue and "told" Turkey about "human rights."
We just sell you the Black Hawk and Comanche helicopters. Its up to you to use them responsibly! (sarcasm).
This scenario will have the Richard Nixon administration acting as the international "Bad Cop." We will see Reagan and Clinton as corresponding "Good Cop" compliments.
Okay, let's begin. Its the early 1970s. There's a recession in America.
"The energy revolution of the 1970s, marked by the price of oil climbing from under $3 per barrel in 1970 to $31 in 1980, quickly forced strategic reappraisals" (3).
In 1973, Secretary of State, Henry Kissinger, and other cabinet members talked about using U.S. airborne forces to seize the oil fields of Saudi Arabia, Kuwait, and Abu Dhabi (4). The idea that the Nixon administration could have actively colluded with the Saudis and Iranians to push oil prices sky-high (5), would only add an additional layer of deviousness to Nixon's "Bad Cop" performance here.
The United States did not invade. The end result was that OPEC agreed to uphold the dollar as the currency in which oil purchases had to be made; and also "recycle" the "petrodollars" through purchases of U.S. bonds and weapons systems (6).
Notice that in the previous example, the Good Cop-Bad Cop Squeeze was carried out by conveniently severing the concept of politics from economics, by claiming no connection between selling Turkey Black Hawk and Comanche helicopters and the human rights abuses carried out against the Kurds.
But in this example, the United States, when convenient, emphatically joins politics and economics together, threatening to invade countries over the price of oil.
David Harvey informs us that, "US banks (rather than the IMF, which was the preferred agent of other capitalist powers) gained the monopoly privilege of recycling the petrodollars into the world economy, thus bringing the Eurodollar market back home. New York became the financial centre of the global economy (this, coupled with internal deregulation of financial markets, allowed that city to recover from its crisis and to flourish to the point of incredible affluence and conspicuous consumption in the 1990s)" (7).
- Nixon is the "Bad Cop," for threatening to invade Middle Eastern countries over the price of oil.
- The early-1970s, in America, saw a recession.
- Which means American banks were also in recession; they were not experiencing enough activity.
- "US banks.... gained the monopoly privilege of recycling the petrodollars into the world economy,,,"
- What that means is that the money that OPEC sent to America, which went to the US banks, was inventory not profit.
- As inventory and not profit, that incoming money had to be "sold" to customers.
To that last point, let's hear from David Harvey again:
"The New York investment banks, then flush with surplus petrodollars from the Gulf States and desperate for new investment opportunities at a time when the potential for profitable investment within the United States was exhausted, took to lending massively to developing countries like Mexico, Brazil, Chile and even Poland" (8).
Everything that comes under the "Bad Cop" umbrella
- Nixon administration threatening to invade Middle Eastern countries over the price of oil in 1973
- The response of OPEC ("Please don't invade us") which was to invest in U.S. weapons systems and provide US banks with "surplus petrodollars" for "recycling into "the world economy."
- The New York investment banks then lending that money, gotten from OPEC, to lend "massively to developing countries like Mexico, Brazil, Chile and even Poland.
It seems that more than 40 countries, mainly in Latin America and Africa, had trouble repaying their debts when the interest rates suddenly rose after 1979. Mexico threatened bankruptcy in 1982 (9).
This brings us to the Reagan administration.
Anyway, when Mexico threatened bankruptcy, the United States "promptly reinvigorated" the IMF (International Monetary Fund) to get the money back. The IMF would become the global debt collector and so-called 'structural adjustment' programs would "proliferate around the world" (10).
Other Things To Know:
- We are going to focus on U.S. foreign policy in Latin America.
- Latin American historian Greg Grandin: "It was under Johnson's watch that the United States began to shift the balance of its diplomacy away from development toward the interests of private capital. Increasingly, economic reform in Latin America meant not industrialization and socially responsible investment but lower tariffs on U.S. exports and lower tax rates on U.S. profits, a policy that would come to full bloom under Ronald Reagan" (11).
- Dr. Greg Grandin is talking about the White House of the Lyndon Johnson administration, which proceeded that of Kennedy, 1963-1968.
- Greg Grandin also informs us that it was under Johnson's watch that Washington began either to organize or patronize a cycle of coups: Brazil 1964, Uruguay, Bolivia, Chile, and ending in Argentina in 1976 (12).
Salvador Allende Gossens won the Presidential election on September 4, 1970. This set off a panic in Washington, because Allende had run on a platform of nationalizing the economy, bringing under Chilean control the American-owned firms that dominated the economy. There were Cold War concerns that Allende would take the country into the Soviet-Cuban orbit (13).
Basically, then, the CIA drew up a plan to overthrow Allende (14). What followed was a media propaganda psych op war against Allende (15), a serious economic attack which included an action by the Export-Import Bank and the Agency for International Development, acting under classified instructions from the U.S. National Security Council; they announced that they would no longer approve "any new commitments of U.S. bilateral assistance to Chile" (16).
The U.S. representative at the Inter-American Development Bank, was subsequently instructed to block all proposals for loans to Chile. When the bank's president protested, the Nixon administration forced his resignation. The new president reduced Chile's credit rating from B to D (17).
Private banks followed suit and the Export-Import Bank, citing the reduction, canceled a scheduled $21 million loan intended to pay for new Boeing jets, for Chile's national airline. The World Bank then suspended a $21 million livestock improvement loan to Chile, and then announced that the United States would oppose all new World Bank lending to Chile. These actions were known as an 'invisible blockade' (18).
And on and on and on it went. This is just the economic violence perpetrated against Chile, which is to say nothing of the tremendous physical violence hurled against the regime from every quarter. But let's move on.
The point is that the plot ended successfully on September 11, 1973 --- yes, Chile's September 11th! --- when the Presidential Palace was destroyed (19).
Stay with me!
For our purposes, the Democratic Johnson administration (1963-1968) and the Republican Nixon administration (1968-1974), are our "Bad Cops," with specific reference to Latin America.
The way the formula works out, the Republican Reagan administration (1981-1989) and the Democratic Clinton administration (1993-2001) will be our "Good Cops," with specific reference to Latin America --- as seen through the particular angle of this analysis, I must stress.
Now, whenever a dictator comes to power by coup, he can never have enough guns, as well as trained, loyal personnel to fire them.
In a book published by Southend Press in 1979, Noam Chomsky and Edward S. Herman wrote:
"Military training and supply, the build-up and cultivation of thhe military and intelligence establishments, as well as CIA surveillance and destabilization, have been key elements of the 'Washington Connection,' employed to protect U.S. interests in its client states in the post-World War II era. The United States trains client military personnel in some 150 bases and training schools, and sends mobile units and advisors to serve on an in-country basis.
"In addition to the ideological cement of this world view, U.S. military training has purposefully helped build a network of personal relationships between the United States and Latin American military cadres. This tie has been further consolidated by military aid from the wealthier power as well as cooperative maneuvers and logistical planning" (20).
Okie Dokie? Stay with me: Guns and trained personnel to fire them!
The next step is money! A dictator needs money to pay for the guns and trained personnel.
On the inside frontpiece of their book, Noam Chomsky and Edward S. Herman compiled a list of twenty-five countries, that were under direct U.S. influence in the 1970s, which used torture on an "administrative basis," that is, as a regular, routine tool of governance.
The table shows the country, number of U.S.-trained personnel between 1950-1975, and total U.S. military aid, that is financial support, betwee 1946-1975. Chile, for example, is listed as one of Latin America's highest recipients, at $216,900,000.
You should know that foreign "aid," military or otherwise, are loans which must be paid back.
Seventy percent (70%) of foreign "aid" that Western countries "give" to developing nations, immediately goes straight to Western corporations to provide the goods and services to the targeted developing nations. Not says me---the person writing this---but said economist Loretta Napoleoni, citing the World Bank as her source (21).
A Little Background
I think its common knowledge that the New Deal did not lift the United States out of the Great Depression. Ultimately, the government did not spend enough; and FDR turned, too soon, to balancing the budget.
It was U.S. participation in World War Two. This set the stage for what would come to be known as the golden age of American capitalism, roughly 1945-1975. A major plank of economic growth was the international arms trade.
"To survive economically," wrote David Harvey, "the defence industries needed a thriving export trade in arms. This came to have a fundamental role in US capital accumulation, but it also resulted in the excessive militarization of the rest of the world" (22).
Twentieth-century historian, William H. Chafe, provides amplification as to the centrality of military spending to post-war civlian economic development of the United States.
"With the war as an impetus," wrote Dr. Chafe, "scientists made lightning breakthroughs in nuclear physics, aerospace, chemicals, and electronics. Not surprisingly, the industries that housed such enterprises experienced a parallel growth.
"After the war, Washington disposed of its investments in aluminum plants, aircraft factories, and machine-tool facilities, giving private business a headstart --- in ready-made facilities --- in some of the nation's fastest-growing industries. Moreover, government-sponsored research in areas like plastics --- which grew 600 percent during the 1950s --- made possible the development of whole new consumer industries.
"With Cold War tensions and the outbreak of fighting in Korea inn 1950, government involvement in the economy remained a primary source of support for research and development, as well as new jobs. As Richard Hofstadter commented, there was a new form of 'military Keynsianism' that made the government almost a guarantor of full employment" (23).
The Next Ingredient: IMF & World Bank
The next ingredient you need is a way to recover the money you loan out to Third World dictators --- recover it whether or not the dictator is overthrown by a democratic government or not --- indeed, actually especially if the dictator is overthrown and replaced by a democratic regime.
Stay with me!
I already referred to the IMF (International Monetary Fund). We're really talking about a IMF-World Bank tag team. I would suggest you have a look at a book by Canadian economist Michel Chussudovsky: The Globalisation of Poverty: Impacts of IMF and World Bank Reforms.
The "reforms" mentioned in the subtitle are never good. Let me give a quick analogy.
Suppose my grandfather was a loan shark that loaned your grandfather money, at a punishingly high rate of interest ("vig") by the way.
Let's suppose that your grandfather, in a desperate attempt to raise the money to repay me, participates in a bank robbery. Suppose he is shot dead by police.
Suppose that I, the loan shark's grandson, comes along to your family; and suppose that I am fully aware that the actual party that borrowed the money, is long dead. But you see there are two things working against you: 1) I am a loan shark just like my grandfather, working for the same "Family," let's say; and 2) Despite your grandfather's death, I hold your family responsible for the debt, as his "blood."
Stay with me!
Now suppose I come into your home and review your "books," as we try to work out a "repayment schedule." I "suggest" certain changes and cutbacks you could make in your family budget in order to pay me back. I may say things to you like:
- You don't really have to eat three times a day, do you?
- Do you really need to go out to the movies? You have a perfectly good television set!
- And by the way, that television looks pretty fancy. You should trade it in or sell it and get a black and white.
- Cable? You have cable? Regular T.V. channels not good enough for you?!
- Does your wife really need all those shoes? She only has two feet!
- You have an awful lot of clothes. Surely you can cut back on your clothing budget!
- Dental appointment! Your teeth aren't that bad. Just don't smile with your mouth open!
- You own this house, don't you? Have you fully explored its mortgage-carrying potential?
You see how intrusive I'm starting to become into the lives of you and your family, and how you run your household --- in order to repay a debt taken out by your petty criminal grandfather, that had absolutely nothing in the world to do with you?
Think about that as the kind of control the IMF exercises of the budgets of other countries. Think about that as we read about how the IMF insists upon, "... precise 'ceilings'... on all categories of expenditure," because "the state is no longer permitted to mobilise its own resources for the building of public infrastructure, road or hospitals, etc --- i.e. the creditors not only become the 'brokers' of all major public investment projects, they also decide in the context of the 'Public Investment Programme' (PIP) (established under the technical auspices of the World Bank) on what type of public infrastructure should or should not be funded by the 'donor community.' The concept of targeted investment is put forth and capital formation in necessary economic and social infrastructure is dramatically curtailed" (24).
Do you really have to eat three times a day?
You should know that the IMF and World Bank are post-World War Two institutions.
You should know that the United States has and has always had, by far, the highest power by voting percentage in both organizations (Wikipedia). Therefore it is reasonable to assume that the U.S. has a decisive role in shaping the policy of the IMF and World Bank.
Stay with me because this next move is tricky!
The IMF-World Bank tag team "reforms" will be joined to democracy promotion in Latin America, to produce the Reagan and Clinton administrations, as relative "Good Cop" White Houses, as opposed to the "Bad Cop" administrations of Johnson and Nixon.
Stay with me.
Let us return to our small family analogy.
Suppose I, the grandson of a loan shark and loan shark myself, the grandson of a gangster-type, a gangster-type myself --- getting tired of dealing with you guys, for the debt accrued by your petty criminal grandfather, who got killed in a bank robbery.
Suppose I am not satisfied with the rate of repayment of the loan on your part, despite our "structural adjustment" reforms ("Do you really have to eat three times a day?").
But, of course, instead of having you all "whacked," as I believe the expression is, I sell the loan to a bank. The bank pays me a fraction of the outstanding debt's worth, and take the burden of collection off my hands.
You are now dealing with a nice, legitimate bank. The option of going to the police and telling them that a gangster is "shaking you down," has been foreclosed.
You could try explaining why your family should not be liable for your petty criminal grandfather's debt, I suppose. But good luck with that, given the many scandals that have attended the fact that major banks have consciously and deliberately engaged in money laundering for the drug cartels (25).
These friendly, professional bankers are not "thug leg-breakers" like me. This move has, in effect, sanitized the transaction.
I, the gangster (as well as my loan shark grandfather) represent the Bad Cop side.
The bank, who now owns the "loan," but no less determined to collect in full than any mobster, nevertheless represent the Good Cop side.
The Last Bit
As we do this last bit, I want you to keep two things in mind.
- The "goodness" of the "Good Cop" is not absolute but relative. It is not innate but contingent. It is not moral but utilitarian. It is transactional, tactical, strategic. To understand what the goal of the "goodness" of the "Good Cop" is, you must understand what he is: a cop just like the "Bad Cop."
- And yet, when I refer to Washington's democracy promotion in Latin America, in the 1980s and 1990s, I want you to accept it with all of the sincerity of its face value.
Now, there is a document I would draw your attention to. It was put out under CATO institute on January 12, 1994. It is called "Washington's Dubious Crusade for Hemispheric Democracy," written by Ian Vasquez. If this means anything to anyone, the document is listed as Policy Analysis No. 201.
First of all, the title tells you an awful lot. He thought Washington was on a "dubious crusade for hemispheric democracy" as of the date the document came out, January 12, 1994. Washington was on a well-meaning, to be sure, but problematic mission.
Let me quote the document "abstract," or executive summary, as it is called. He wrote:
"Numerous U.S. commentators and policymakers have shown enthusiasm for promoting democracy in the Western Hemisphere---even as the justification for doing so has lost any national security rationale" (26). Mr. Vasquez seems to be asking the question, here: "What in it (promoting democracy around the hemisphere) for us?"
To continue quoting: "Unfortunately, Washington's record of exporting democracy to the region has been dismal, and the renewed U.S. commitment to do so may prove similarly difficult to satisfy in the 1990s" (27). Washington has been enthusiastic but chronically unsuccessful at promoting democracy in the hemisphere. What could be the reason for the government's Quixotic bull-headedness?
"Washington's endorsement of a fortified Organization of American States as a vehicle for undertaking that mission," in Mr. Vasquez's opinion, "hardly guarantees that U.S. goals will be met. Instead, a stronger OAS may pull the United States into an assortment of domestic conflicts impervious to solutions imposed from without" (28). Washington's naiveté may caused it to get sucked into unsolvable regional problems unique to Latin American culture.
"Recent interruptions in the constitutional order of Haiti, Peru, and Guatemala, and bloody coup attempts in Venezuela, indicate that democracy has not securely taken root in many of the region's countries. And the democracy-promotion mission can cause far more harm than good. For example, embargoes imposed by the OAS and the United Nations on Haiti have worsened the harsh living conditions of the vast majority of Haitians. Regional peacekeeping operations run the risk of turning into open-ended military missions. The OAS, either impressed by democratic formalism or realizing the limits of its influence, may embrace as 'democratic' leaders who are in fact authoritarian. Washington may also use the veil of promoting democracy to conceal items on its agenda that run contrary to the wishes of Latin American nations" (29).
"Washington may also use the veil of promoting democracy to conceal items on its agenda that run contrary to the wishes of the Latin American nations." It is important to understand that the "Good Cop" is the Bad Cop with a smile.
And lastly: "The most effective ways for the United States to encourage civil society and prosperity in Latin America are to open U.S. markets to the region's goods and to serve as an attractive example of limited constitutional government" (30).
Question: Is there a contradiction between toppling constitutionally elected governments and installing dictators, in the 1960s and 1970s, in Latin America---as Washington did---and promoting democracy in the region, in the 1980s and 1990s?
Answer: No, not necessarily. Not if you understand the logic of the Good Cop-Bad Cop Squeeze. Just as replacing the gangster loan shark-type with the professional banker legitimizes the debt and its collection---so too, does replacing dictators with democrats sanitize the transaction, the collection of the debt, which originated in the dictatorship days.
Does that make sense?
I hope so!
Okay, thank you so much for reading!
1. Johnson, Chalmers. BlowBack: The Costs and Consequences of American Empire. Metropolitan Books, 2000. 15
3. Phillips, Kevin. American Theocracy: The Peril And Politics Of Radical Religion, Oil, And Borrowed Money In The 21st Century. Viking (Penguin Group), 2006. 40
4. ibid, 40-41
5. Harvey, David. The New Imperialism. Oxford University Press, 2003. 62
6. Phillips, Kevin. American Theocracy. 41
7. Harvey, D. The New Imperialism. 62
8. Harvey, David. The Enigma of Capital And The Crises of Capitalism. Oxford University Press, 2010. 19
11. Grandin, Greg. Empire's Workshop: Latin America, The United States, And The Rise Of The New Imperialism. Metropolitan Books, 2006. 49
13. Kinzer, Stephen. OverThrow: America's Century of Regime Change From Hawaii To Iraq. Times Books (Henry Holt & Company), 2006. 170, 172
14. ibid, 178-179
15. ibid, 181
16. ibid, 185
18. ibid, 185-186
19. ibid, 192-194
20. Chomsky, Noam & Herman, Edward S. The Washington Connection And Third World Fascism: The Political Economy Of Human Rights. Volume I. Southend Press, 1979. 47
21. Napoleoni, Loretta. Rogue Economics. Seven Stories Press, 2008. 196
22. Harvey, David. The New Imperialism. Oxford University Press, 2003. 60
23. Chafe, William H. The Unfinished Journey: America Since World War II. Oxford University Press, 1995 (paperback). 113
24. Chussudovsky, Michel. The Globalisation of Poverty: Impacts of IMF and World Bank Reforms. Zed Books (Third World Network), 1997. 60
25. Santi, C. (2010, June 29). Money Laundering: The Drug Problem at Banks. Retrieved August 21, 2016. (The New York Times).
26. Vasquez, I. (1994, January 12). Washington's Dubious Crusade for Hemispheric Democracy. Retrieved August 21, 2016. (The CATO Institute).
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