Greg Palast: “Remove the Bloodsuckers”

The Excavator
May 8, 2010

The solution to the Greek crisis, and the global debt crisis, is simple according to investigative reporter Greg Palast. In his 2001 article called “The Globalizer Who Came In From the Cold,” Palast suggests that we should “remove the bloodsuckers,” who are the global financial wizards that work at the IMF, WTO and the World Bank and practice the art of dark finance. Palast details the step-by-step plan of how these transnational economic parasites bring entire nations to ruin, which he learned after he gained a hold of some precious World Bank documents that laid out the banksters’ game-plan of how to harness the financial will of sovereign nations and use it against them. Palast also talked with Joseph Stiglitz, the former Chief Economist of the World Bank and a Nobel prize winner, for the piece.

Step one, Palast recounts, is ‘Briberization,” and it involves the criminal global financiers paying national leaders of poverty-stricken nations hefty amounts of dough for the direct sale of public assets to oligarchical corporations and private foreign banks. All the illegal dough of the traitorous leaders is then safely stashed in secret Swiss bank accounts, miles and miles away from the nation’s angry citizens whose livelihoods and incomes are stripped in the process.

Step two is what is referred to as the “Hot Money” cycle by Stiglitz. This is how the cycle works, as described by Palast, “Cash comes in for speculation in real estate and currency, then flees at the first whiff of trouble. A nation’s reserves can drain in days, hours. And when that happens, to seduce speculators into returning a nation’s own capital funds, the IMF demands these nations raise interest rates to 30%, 50% and 80%.” Step two is mainly about hijacking of pension funds, gutting employment benefits, and other social safety nets that people work all their lives for.

To put it another way, the criminal oligarchic parasites hypnotize a nation to sleep, bend it over, strip it of its clothes, and then rape it. That is the way the secret relationship works behind doors. The transnational banksters are all about economic rape. Rape of public assets, rape of pension funds, rape of electrical and water systems, rape of currencies, rape of everything that secures nations and keeps them alive.

And when the nation finally wakes up late in the afternoon, it realizes that it was robbed deaf, dumb, and blind the night before. It also discovers that it acquired an economic STD, so the pain has only begun and recovery is far from sight. An even bigger revelation awaits the nation, which will cause panic in the streets, and thrust the nation further into the economic abyss.

The people then begin to find out that the vampires from the IMF and World Bank never left the night before, they were hiding in the nation’s economic closet, where they’ve patiently waited to put the third step into effect, which is a sharp rise in food and gas prices, and other commodities that keep a nation running from day to day on an even keel. This step eventually leads to what Palast calls “Step-Three-and-a-Half,” and what Stiglitz brands as “The IMF riot.” It is attributed to the IMF because they basically engineer the collapse through their crippling policies and proposals for social spending cuts, which create the conditions for riots, public rage and civil unrest.

We are all familiar with the images from these riots around the world, they’ve taken place in Indonesia, Argentina, and now were seeing them in Greece. They include burning buildings. Streets in mayhem. Thuggish Stormtroopers protecting the Capitol and beating kids. Old and young fighting back with pots and pans. Entire roads up in flames. Palast writes:

The IMF riots (and by riots I mean peaceful demonstrations dispersed by bullets, tanks and teargas) cause new panicked flights of capital and government bankruptcies. This economic arson has it’s bright side – for foreign corporations, who can then pick off remaining assets, such as the odd mining concession or port, at fire sale prices.

The fourth and last step is called “poverty reduction strategy” by the World Bank/IMF, or if you don’t like the Big Brother coinage, the more apt term is “monopoly market politics.” People often mistake this last step with free trade policies, but one important thing to keep in mind, as Palast says, is that this is “free trade by the rules of the World Trade Organization and World Bank,” in other words, it is corporatist-monopolist trade in the guise of free market capitalism.

II.

Speaking to Alex Jones in March 2002 about the article, Palast said that the IMF/World Bank/WTO policies amount to “systematically tearing nations apart.” The global economic illusionists have done it to African and Latin American nations, and now they have their bloody, slug-infested eyes set on European and North American nations.

And the economic parasites never have new tricks up their sleeves, but everywhere their tricks work exactly the same, because they’re usually backed up by military muscle, so you’re condemned to believe in them, or face death. But not everybody believes in them. Certainly not Venezuela. They showed them the door. With guns, of course. But guns need not be involved.

Recently, Germany, America, England, and France supported the IMF’s call for a global bank tax, which would be dedicated to a fund that would secure the payment of future bank bailouts. Canada is the only nation in the Western hemisphere to oppose the tax. But it is not the only nation in the world. Brazil, Japan, Switzerland, and Australia are also voicing their dissent.

Simon Nixon writes in The Wall Street Journal that the proposed IMF bank tax doesn’t address structural problems within the global financial system, and should not be implemented. In his article “IMF Bank-Tax Plan Is No Substitute for Proper Regulation of the Sector,” Nixon writes:

But while taxing the banks may be a legitimate way to raise revenue, the IMF is on weaker ground with its claim that its proposed taxes directly address weaknesses in the global financial system exposed by the crisis. It argues that its proposed Financial Stability Contribution (FSC) would charge banks for the cost of implicit government guarantees by levying a fee on their liabilities less their equity and insured deposits, similar to the Obama administrations proposed bank-liability tax. The IMF recommends the money raised goes into a fund to cover the cost of future bailouts. Aware such a fund could encourage banks to run bigger risks, the IMF says governments must also introduce special resolution regimes allowing regulators to seize and restructure failing banks.

The IMF is also proposing a Financial Activity Tax (FAT), which would tax bank profits and banker pay as a way of keeping a lid on bonus payments, or what the IMF calls “excessive rents.” This would be similar to one-off taxes introduced this year by the U.K. and France in response to public outrage over this year’s giant bank bonuses.

But these proposals address only the symptoms and not the cause of the financial crisis. The real challenge for policy makers is to eliminate altogether—or at least minimize as far as possible— the implicit government guarantees that fueled excessive risk-taking in the boom and reduce the systemic risks posed by the failure of large banks that have left taxpayers in this crisis saddled with such huge bills.

That can only be done by much higher capital requirements and radical structural reform. The IMF is right to point out that higher capital requirements are themselves a form of tax. Indeed, from a macroprudential point of view the two approaches may achieve similar outcomes. But taxes don’t provide the same incentive for institutions to avoid excessive risk taking.

Allister Heath, author of “IMF plan: the wrong kind of reform,” has similar complaints about the IMF proposals. He writes:

There is a vital distinction between asking banks to pay a fee to finance this wind-down fund – and telling them the cash will be used for future bailouts, which would fuel more moral hazard. A related, crucial reform would be to set-up automatic procedures for the private sector to recapitalise troubled banks; this would allow bail-ins, as opposed to bail-outs. Banks could issue contingent convertible securities (CoCos); these debt instruments would convert to equity if capital ratios fell below an agreed level. Ordinary debt could also be turned into equity if a bank were to run out of capital. These ideas would transform banking, make it more market-based, introduce incentives to control risk and protect taxpayers. It is a tragedy the IMF and politicians are so obsessed with taxing everything that moves that they are incapable of a grown-up debate.

III.

A democratically mature reform would include smart regulation of credit and financial institutions, the reintroduction of public banking, the reduction of public subsidies to undeserving corporations and banks, the reinstatement of the principles of free economic competition, and lastly, the termination of the IMF, World Bank, and WTO, i.e. the “bloodsuckers,” whose agenda is to establish an oligarchical grip on nations and peoples, and deprive them of all prosperity, as well as economic and political independence.