PAGE 14
DEBT
ODIOUS
F rom P age 1
new conditions of domestic austerity in exchange for new credit
from the IMF (International Monetary Fund) and the international
banks. Each time a nation approached default, the international
banking system was threatened anew, and each time. Paul
Volcker (Fed Chairman) and his aides from New York and
Washington would play the crisis managers.
In a more fundamental sense, the debt crisis had its
origins in the collision of purposes with the Federal Reserve
itself In the late 70s and early '80s, the Fed and other regula
tors had failed to impose prudent limits on the money-center
banks and the zealous lending to the 3rd World They had issued
mild warnings, but they had not tried to stop the risky lending.
Then starting in 1979 Volcker launched his aggressive campaign
to break inflation, rationing money tightly and imposing stern
discipline on the world economy The global liquidation collided
with the mountain of LDC debt
What began as big banks making excessive loans —
because there was money to be made off the OPEC price
increase — initiated dynamics that would eventually enslave
three-quarters of the world with unpayable debt As the LDCs
lined up one after another at the loan window of the IMF or the
World Bank, the bankers became trustees in each country's
economy as part of the new refinancing program That is, in the
intricate web of international finance, new loans were procured
so that interest payments on old loans could be maintained, so
as not to bring down some of America's biggest banks (Citibank,
Chase Manhattan. Chemical Bank, Morgan Guaranty. Bank of
America, to name a few) and the rest of the international bank
ing community wth them. Stipulated in these new loans was that
the IMF would send its own financial managers, as economic
supervisors, to the LDC in question to make sure this new loan
was used properly. Unfortunately, in many cases a third and
fourth such "austerity" loan was necessitated to keep the system
afloat. This method of maintaining these generations of loans
became a horrid strike against the people, the resources and
environment of the LDCs, as substantiated by the World Food
Summit Technical Papers in November of 1996:
During the mid-and-late 1980s, the conditionality
required by the IMF and the World Bank on stabilization and
sectoral adjustment loans were perceived as stringent, rigid and
unbending The resultant belt-tightening and austerity were often
associated with wrenching drops in real incomes and levels of
living, primarily hurting those least able to adjust Some countries
have rebelled at the severity of the adjustment measures impos
ed by the IMF and the World Bank, often in the face of civil
unrest in opposition of imposed austerity.
In an effort to revitalize the LDC economies and to
accelerate the loan payments, the IMF managers instituted
programs that borrowed heavily from the futures of these 3rd
World countries. Thus to service loan repayments, currencies
were devalued: forests were sold off to transnational lumber
companies to be clearcut; mineral rights were sold off to be
strip-mined; social programs were reduced back to bare bones;
and critical imports, food and medical supplies, were cut for lack
of funds. Though employment temporarily climbed as outside
companies came in to reap the harvest, it was at reduced wages
and with eventual layoffs after a resource had been exhausted.
Generally, all fiscal sources were squeezed to service these
debts — that were generated out of "synthetic money" created
by loans that were foolhardy in the first place! In some cases
half a country's export earnings went (and still do go) to paying
interest on these re-serviced debts Michael Renner of the
Worldwatch Institute describes this in State of the World 1997
Most people in highly indebted African and Latin Ameri
can countries suffered a severe drop in living standards during
the 1980s. In Mexico, for example, real wages declined by more
than 40% in 1982-88 In 1983. a basket of basic goods for an
average family of five cost 46% of the minimum wage; by 1992
it cost the equivalent of 161%. Deepening disparities have widen
ed the political riffs; one result was the uprising of impoverished
peasants in the southern state of Chiapas in early 1994
In his own vivid language, Subcommandante Marcos,
resurrection leader in Chiapas, expressed this ignored reality of
these debt stresses to the rest of the world via the internet from
the La Lacandona Jungles in August of 1992:
In Chiapas. Pemex (the national oil company) has 86
teeth clenched in the townships of Estacio'n Jua'rez, Re forma,
Ostuaca'n, Pichucalco and Ocosingo Every day they suck
92,000 barrels of petroleum and 517,000.000,000 cubic feet of
gas. They take away the petroleum and gas, and in exchange
leave behind the mark of capitalism ecological destruction,
agricultural plunder, hyperinflation, alcoholism, prostitution and
poverty
Loans made in the name of development and economic
independence have become shackles. These over "zealous"
loans of the 1970s were unwarranted, at least in size, from the
beginning They placed undo pressure on LDCs to industrialize
more quickly than their situation allowed. And, in some cases,
corrupt LDC leadership eagerly took the money for immediate
gain while mortgaging away their country’s hopes for the future.
For the rest of the world, these loan pressures apply needless
hurry to the harvest of Earth's natural resources and exacerbate
an already radical and precipitous financial stratification of the
global populace.
In retrospect the situation seems ludicrous. When the
validity of the loan will eventually depend upon the long-term
health of the borrower, we have loans literally assuring long
term economic malaise Instead of using these loans to
influence a sustainable economy, the financial institutions went
for strip-mining in order to protect their ledger sheets — at the
cost of all involved. Even education, the clearest gift of industri
alization, has been sacrificed And for the most part, all of these
loans remain in serious doubt today, screaming again and again
for restructuring every few years
There is yet another layer of dubious propriety to these
LDC loans. In her book Lent & Lost: Foreign Credit & 3rd World
Development, Cheryl Payer makes a sound argument that World
Bank and IMF conditionality loans are a form of entrapment:
The use of credit to pry markets open is also obvious in
the 'conditionality' of the IMF and the World Bank... Import liberal
ization represents the surrender of all or part of the domestic
market to foreign sellers and is, incidentally, about the worst
possible policy that can be imagined for any country short on
capital. But to sellers, credit is considered a cheap way to buy
markets.
Like credit cards that stream through the U.S. mail, the
offer of credit is a hook, a way to ensnare borrowers of question
able risk in a cascade of accruing interest. Credit in the develop
ing world is no different — except more is at stake. IMF austerity
programs for loan restructuring are just that —imposed austerity.
In addition to the trimming of social programs, education and
unwarranted resource harvest, the catchment of import liberal
ization adds insult to the injury. The strongest national econ
omies of the world today — the United States, Germany, Japan
- attained their success through heavily protectionist import
export laws and tariffs. Import liberalization and trade condition
alities imposed from the outside are not the way to build econ
omies They are certain strikes against the emerging LDC
markets It is 1st World colonialization disguised as financial
assistance
Columbian Cafa
1114 Marina Driva
Astoria, OR 97103
503-325-CAFE (2233)
Houri: Mon • Fri 8am - 2pm
Sat 10am - 2pm
Pinnari: Wad - Sat Opan 5pm
URIAH HULSEY
ÔIGN6
L ettepô
TRUCK LETTERING
PLEX FACES
STORE FRONTS
WINDOWS
SHOW CARDS
LOGOS
BANNERS
BILLBOARDS
ARCHITECTURAL
WHOLESALE TO YOU
CALL 791-6777
110 2ND ST. ASTORIA OR.
R iver S ea
■ ----- GALLERY
CONTEMPORARY WORKS OF ART
ARTFISH
Art related to Fish & Fishing
FEB 25 - MARCH 31
PAINTINGS BY MARION RANEY OMAN
JANUARY 22 - FEBRUARY 23
AUCTION OF ORIGINAL PAINTING
BY NOEL THOMAS
COMMISSIONED BY DAILY ASTORIAN
MARCH 11
503/ 325-1270 1160COMMERCIAL ASTORIA
MON SAT 1O 3OAM-5 3OPM SUN 1 Ì 4PM
L
BETTER OPTIONS REMAIN
BY NORMAN SOLOMON
The arrival of 2000 reminds us that life is short. Dead
ening routines often squander our time, while evasions take
unnecessary tolls in human suffering. But much better possibil
ities remain.
Every day. a nationwide media barrage encourages us
to be cynical and passive Endless dramas of politics and grand
commerce — amorality plays — are performed with great zeal.
We're supposed to cheer But many of us find the glorified spec
tacles to be dispiriting rather than uplifting
The words of Amenca's leading politicians reverberate
through a national echo chamber. They tout global supremacy
and higher market share as ultimate virtues. Dissenting voices
are mostly circumspect. Pundits debate how — but not whether
— the U.S government should use such measures as diplomatic
arm-twisting, financial blackmail and military might to impose its
will on the world.
Meanwhile, news outlets are echoing discussions on
Capitol Hill about how to fine-tune the economic status quo —
widely portrayed as wonderful at the end of 1999 But a Boston
based organization, United for a Fair Economy (www stw.org ),
offers a reality check, reporting information that can't be found
in the media spotlights:
'•'The record-breaking economic boom of the 1990s
has left Americans more polarized and debt-ridden," researchers
found A rising tide "has lifted the yachts to tremendous heights,
but many Americans are bailing out their boats after decades of
sinking real wages."
-Ten years ago. there were 66 billionaires and 31.5
million people living below the poverty line in this country Today,
"the United States has 268 billionaires and 34 5 million people
living below the official poverty line — about $13,000 for a three
person family."
-Economic inequality is rampant in America 'The top
1% of households has more wealth than the entire bottom 95%
combined." The situation is much w>rse than it was a quarter
century ago: "Since 1977, the top 1% has doubled its share of
the nation's wealth to 40%."
-Currently, the people on the Forbes 400 list of richest
Amencans "have as much wealth as the 50 million households
in the bottom half of the population "
-While news stories hail the glorious achievements of
the stock market, a lot of people in the United States "are just
plain broke They have nothing to tide them over in case of a
health crisis or unemployment, much less save for college or
retirement Nearly 1 out of 5 households has zero or negative
Wirth (greater debts than assets), compared with 1 in 10 in
1962 "
The questions that journalists pose to elected officials
and candidates rarely confront such economic realities. Instead,
the repeated queries have a pre-fab quality — matching the
slightly zombie-like verbiage of most politicians, whose lang
uage was aptly described several decades ago by George
Orwell: "When one watches some tired hack on the platform,
mechanically repeating the familiar phrases , one often has a
curious feeling that one is not watching a live human being but
some kind of dummy."
Faced with a nonstop swirl of media coverage it's tempt
ing to succumb to chronic cynicism. But journalists — and the
rest of us — are better off if we can develop an attitude of ideal
istic skepticism. In 2000 and beyond, giving voice to candor will
be a minimum prerequisite to create conditions for realistic
hope.
"I have come to believe over and over again," the poet
Audre Lord said, "that vtfiat is most important to me must be
spoken, made verbal and shared, even at the risk of having it
bruised and misunderstood For it is not difference vtfiich
immobilizes us most but silence "
While 14 million people in the United States are
extremely poor — living at less than 50% of the poverty level
— for the most part their plights are dismissed by mainstream
journalists as scarcely more consequential than lint in the
pockets of the powerful The same goes for the approximately
1.000 children around the wirld v4io die every hour from
diseases that are easily preventable. According to UNICEF,
the cost of saving their lives would amount to about 10% of
the Pentagon budget.
To criticize this institutional madness can seem bold,
even brave How sad
"One day posterity will remember," wote Russian poet
Yevgeny Yevtushenko, "This strange era. these strange times,
when / Ordinary common honesty was called courage "
Hopefully, we'll find more strength for such honesty in
the 21st century
Norman Solomon received the 1999 'George Orwell
Award' for his book The Habits of Highly Deceptive Media, a
collection of his syndicated columns about media and politics.
Jonathan Kozol wote that 'The tradition of Upton Sinclair,
Lincoln Steffens and I F. Stone does not get much attention
these days in the mainstream press" but Solomon keeps that
tradition "alive and well". Co-founder of the media-watch organ
ization FAIR. Solomon is a former Oregonian living in California.