Tuesday, November 11, 2008

Guest editorial — Economic collapse, bailout plan seem stranger than fiction

One of my favorite books of the past decade is “Confessions of an Economic Hitman.” Author John Perkins spent years working for global banks that lured Third World countries into taking out huge loans for hospitals, schools, highways, dams and other necessities, as well as luxuries. Superficially, this appeared benign if not altruistic. In reality, it was ultrapredatory lending aimed only at maximizing corporate profits.

Income from loan interest was but the iceberg’s tip. The modus operandi was convincing governments to borrow more than they could repay. When default occurred, the banks confiscated all collateral — for instance, land with diamonds, gold, timber or other resources — at a fraction of its market value. They also bought up industries at bargain rates.

Obviously, that couldn’t happen here in America. But it certainly would make a great plot for a conspiracy novel. Now that Mideastern countries control banks with more money than Allah, I could easily imagine them lending our federal and state governments massive amounts of money for domestic projects and (in the case of the feds) for foreign aid and wars. Then there are loans to businesses and to private individuals for home mortgages and on credit cards. Finally, when America is overextended beyond all redemption, the global banks would jerk out the rug and bring our economy down like a house of cards — much as the Soviet Union came crashing down after being bankrupted by their war in Afghanistan.

Enriching the credit crisis theme would be subplots about lobbyists blocking attempts to make America energy-independent and about selling out our leadership in technological innovation by letting our universities train foreign students in critical sciences, math and engineering, while American students watch TV, play video games and fantasize about automatic riches from careers on Wall Street or as music stars and professional athletes.

Once countries with cheap labor had enough highly educated personnel, as well as the Internet, massive outsourcing would be inevitable. Other subplots would involve global crime syndicates like those documented in books like “McMafia” (Misha Glenny), “Crimes of Patriots” (Jonathan Kwitny), “Legacy of Ashes” (Tim Weiner), and “Crossing the Rubicon: Decline of the American Empire at the End of the Age of Oil” (Michael Ruppert).

Writing those parts of the novel would be easy. But where to go from there? Would the ultrawealthy banks buy up America on the cheap, injecting money back into our economy, but ever after controlling our politics through lobbyists? That in turn would give them control of our military to enforce their will worldwide. Or would the banks simply leave us a smoking ruin, at the mercy of some newly emergent Mideastern superpower?

Finally, depending on which of those scenarios I chose to follow, how could we ever regain control of our economy, government and democracy? And what role would be played by the Federal Reserve — a private corporation beholden less to the American public, than to its own stockholders?

Brick wall. I’m not an economist, a banker or a business mogul. Envisioning the bare bones of the story was easy. But fleshing it out was beyond me. Anyway, it seemed too far-fetched even for fiction. So I shelved the project, hoping that someone like Tom Clancy would one day pick up on it and develop a first-rate thriller. Little did I dream of how far America was already overextended on borrowing, or how fast and far our economy could plunge. Nor did I imagine that we would funnel hundreds of billions of dollars in bailout welfare back into the same banks that caused the collapse; and then consider giving control of those banks to the Fed. Talk about truth being more bizarre than fiction!

Fortunately, available evidence blames Wall Street’s problems on mistakes by our fellow Americans, not on some global conspiracy. Yet, looked at from a novelist’s perspective, I can’t but wonder whether there’s more going on than meets the eye, and whether evidence against conspiracy is really strong enough to make the novel totally implausible — assuming anyone would have money to buy my novel, should I ever get it written and published.

Now we’ve got a real-world crisis to solve, without much idea what or who can get it done. In novels, most world-shaking crises are solved by a hero like James Bond. In real life, who can we rely on? Barack Obama and his team? Or, heaven forbid, you and me? “The inquiring mind wonders.”

Dr. Stephen Stringham earned his mater of science degree at the University of Alaska studying moose and his doctorate degree studying bears. He is the author of five books on Alaska’s wildlife.

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