The New Confessions of an Economic Hit Man

by John Perkins

  “What changed it?”

  “I’ve asked myself that question many times. Not sure of the answer. It mostly happened in this millennium. Perhaps it had something to do with 9/11, rising oceans, melting glaciers, fear, our feelings of mortality. Make all the dough you can, as soon as you can, and screw everyone else.” He raised his wineglass. “Drink, dance, consume, and be merry. For us bankers, it was money, money, money. We tried to instill in our clients the idea that there is no tomorrow. Bin Laden will kill us all. So go into debt, buy that big house, fancy car . . .” He took a sip of wine. “When the bottom fell out of the market, the banks foreclosed, repackaged the loans, and ended up earning huge returns, while that young couple and thousands like them filed for bankruptcy.” He looked toward the Intracoastal Waterway and pointed.

  A yacht was motoring past. In addition to two well-tanned blond women in minuscule bikinis and two weightlifting-sculpted men, it featured a bright red Mini Cooper on its deck.

  “Kind of says it all, doesn’t it?” he asked. “You can bet that the guy who owns that yacht made his money by screwing other people out of theirs. It’s all built on debt.” He reached inside his briefcase and pulled out a manila folder. “Here’s an article about an associate of mine. I think you’ll find it interesting.”

  He handed me a New York Times op-ed piece titled “A Banker Speaks, with Regret.” It described a Chase Home Finance vice president named James Theckston, who was quoted as saying that he and his team had written $2 billion in home mortgages. He admitted that some of them were “no documentation” loans, adding that “on the application, you don’t put down a job; you don’t show income; you don’t show assets. . . . That was crazy, but the banks put programs together to make those kinds of loans.”1

  Dinner arrived. As we ate, we talked in more general terms about the economic crisis that had recently enveloped the nation and much of the world. “You know,” the banker said, “the whole system stinks. From inflated home mortgages to college loans, it’s all about servitude to debt. Not that homes or a college education are bad. Of course not. The problem is that we all believe we should do anything to achieve the ‘good life.’ Anything for the American dream. Including burying ourselves in debt.”

  I mentioned a woman who had recently attended one of my workshops. She’d just finished law school and said she’d intended to use her degree to defend homeless people and abused children. But when she discovered that she’d amassed more than $200,000 in student loans, she realized that she was going to have to get a job with a corporate law firm and devote years to paying off her debts. “After that,” I added, “she intends to follow her dream.”

  “Intends,” he scoffed. “Truth is, once she’s in that system, she’s hooked. She’ll get married, take out a home mortgage she and her husband can’t quite afford, have a kid, more loans . . . get sucked in, sell her soul to the bank.”

  By the time we parted, the night had turned dark. We stood under the lights of the parking lot and he held out his hand. “Look,” he said, “I sympathize with everything you write about Ecuador. I volunteered to clean up beaches hit by the BP oil spill. I’ve seen the damage. Please don’t get me wrong. I think Correa’s plan to sell the Amazon to oil companies is a huge mistake, a crime. My point is that it’s part of a disease that’s infected us here in America also. I just want you to include that in your writings.”

  That meeting left me feeling sad, distraught, and — much as I hated to admit it — discouraged. I drove to a nearby beach. The moon reflecting off the water lit a path down to the ocean. I stood looking out over the breaking surf.

  The image of my great-uncle Ernest, my grandmother’s brother, came to me. He had been the president of a bank in Waterbury, Vermont. During the 1950s, my mom, my dad, my grandmother, and I visited him and his wife, Mabel, every summer. Uncle Ernest would drive us around town and proudly point out the homes and businesses his bank supported through loans.

  In the summer after I finished fifth grade, I read a book about the stock market. On the next visit to Waterbury, I asked Uncle Ernest about it.

  “It’s a casino,” he snorted, “a gambling house. I want nothing to do with it. All our money comes from local people, and it all goes back into the local economy. Every single penny.” He told me that he viewed everyone who took a loan from his bank as a partner. “I give them the best advice I can. If one of them has problems making payments, I view that as a reflection on me, personally. I do everything I can to help out. We work together.”

  I sat down on the sand and watched the moonlight ripple along the waves. For my uncle, it wasn’t just a matter of not wanting to foreclose. He believed that being a driving force behind the local economy was his job, his duty. It was also his joy in life.

  My uncle and the banker I’d just met at the River House were both humans, both Americans, yet they represented two very different value systems. In Uncle Ernest’s view, debt was a means to an end, a partnership between creditor and debtor. For the modern banker, debt paves the road to windfall profits. It delivers people into the EHM system.

  A chill ran through me as I thought about how I’d led the march of the modern banker. I could almost feel my uncle looking down at me . . .

  Within months of that night, as if to punctuate the extent to which modern bankers are willing to go in order to profit off of everyone else, a huge scandal erupted. The 2012 revelations around the London Interbank Offered Rate, or the Libor, demonstrated that Barclays, UBS, Rabobank, the Royal Bank of Scotland, and other international banks were capable of ruthlessly betraying the public trust.

  The Libor is used to calculate payments on hundreds of trillions of dollars’ worth of loans and other investments. It had been accepted as an objectively and mathematically derived benchmark for establishing interest rates. However, it now was revealed that the Libor had been illegally manipulated by the banks from 1991 until 2012. As a result, the bankers accumulated immeasurable sums of illicit profits. Once found guilty, the banks were fined more than $9 billion.2 As of this writing, only one UBS trader, and not a single bank officer, has been indicted.

  CHAPTER 39

  Vietnam: Lessons in a Prison

  In 2012, I was asked to participate in efforts to help victims of land mines and other unexploded war ordnance in Southeast Asia. Until then, I’d turned down invitations to join boards and other such activities because I was already overextended in my work with Dream Change, the Pachamama Alliance, and speaking engagements. However, this felt like another opportunity to redeem my past.

  The ordnance was the result of the Vietnam War. Had it not been for that war, I would not have spent eight years avoiding the draft and probably would not have completed college, been recruited by the NSA, joined the Peace Corps, lived in the Amazon and the Andes, or become an EHM. Vietnam was also a symbol of the places where EHMs and jackals had failed and the US military had taken over — a sort of harbinger of the current situation in the Middle East. Although it had played a very significant role in my life, I’d never been to Vietnam. I was thrilled to accept an invitation to travel to meetings there in March 2013.

  Late in the afternoon of my last day in Hanoi, after all the meetings were over, I decided to visit the museum of the Ha Lò Prison. Once known as the “Hanoi Hilton,” it was the place where many US soldiers had been held captive. A woman who had attended the meetings, “Judy,” who was about my age and whose life had also been impacted by the Vietnam War, decided to join me.

  When Judy and I arrived at Ha Lò, we were disappointed to see that it had just closed for the day; we were told, through hand gestures delivered by a non–English speaker, to return another time.

  I’d twisted my knee and was using a cane. Now my knee started acting up. I sat down on a nearby bench and laid my cane across my lap.

  Judy sat down next to me. “I’m sorry,” she said. “I know you wanted to go inside.” Then she perked up. “We can come tomorrow morning, before the Bangkok flig
ht.”

  “It’s Sunday,” I replied. “I wonder if it’s even open.”

  Just then, a man in a khaki uniform sauntered over to a desk under an archway near the doorway and sat down.

  “I’ll ask.” I planted my cane in the ground, rose cautiously, and limped to him. “Excuse me,” I said.

  He glared at me. “No speak English.”

  Not willing to be deterred by his gruff manner, I smiled sweetly, gestured toward the door, and, waving my cane in the air, pointed at Judy. “Tomorrow,” I said, “Sunday . . .”

  He pushed back his chair, quickly rose to his feet, and saluted me. He pointed at my cane and at Judy, who had wandered over to stand beside me. “Missus,” he said, and bowed to her. Then he grabbed his own leg, made a face as though in pain, shook his head sadly, uttered a sucking sound, released his leg, and motioned for us to follow him.

  I looked at Judy. We both shrugged.

  He motioned again, more vigorously, and said something in Vietnamese. We followed him through a small, sunlit courtyard to a large metal door. He unlocked it and gestured for us to go inside.

  The interior was dimly lit. As my eyes adjusted, I saw that we were standing in a corridor with dark cells off to the side. He reached into his pocket and pulled out a Vietnamese bill worth about ten dollars. He pointed at it, at Judy, and then at me and held out two fingers. I had no idea what the entrance fee was, but twenty dollars for the two of us seemed reasonable.

  “I’ll bet he thinks you’re a former inmate,” Judy said, “and I’m your wife.”

  That struck me. “I think you’re right.” This was an act of compassion. He thought I wanted to show my wife a place that had robbed me of years of my life and had left me crippled.

  After I paid him, he led us down the corridor and into a large room. A huge apparatus loomed out of the shadows, like some prehistoric monster. I took it for a crane of some sort. However, I quickly realized my mistake; this dark contraption was a different sort of monster. I just stood there gawking in disbelief at what I now realized was a guillotine.

  “My God!” Judy exclaimed. She pointed at an inscription on the wall.

  In English, it explained that Ha Lò had originally been a French prison, built in the late 1800s, and that the French had used the guillotine to decapitate hundreds of Vietnamese. As I wandered around the room, I continued to read explanations posted on the walls. This entire section of the prison had once held Vietnamese women as prisoners of the French. Hundreds had been tortured and raped here. A cutaway in one of the walls exposed a solitary confinement cell, about the size of a doghouse. A life-size, shackled manikin sat hunched over on the cement floor, crammed into the small space like a doll in a box.

  I froze to that spot, staring at the manikin and wondering what motivated human beings to do such horrible things to each other. How could the French, who prided themselves on their art, their literature — their humanity — have been so cruel? What had driven them to erect a guillotine? To rape and torture Vietnamese women? I recalled that they’d justified it with religious ideals. Spreading Catholicism. But the real goal was a commercial one, like that of more modern EHMs. The wealthy French upper classes had sent the young men of the poor to the killing fields of Indochina so their corporations could profit off opium, tea, coffee, and indigo. Those young Frenchmen had fallen victim themselves to the depravations of war; in addition to becoming murderers, they’d turned into torturers and rapists. I looked around. Neither the attendant nor Judy was anywhere in sight.

  I hurried out of the guillotine room as fast as my bum knee would allow, back along the corridor, toward a glimmer of light that defined the doorway to the courtyard. Off to my right was a dark opening in the wall. I pulled out my iPhone, flipped on the flashlight app, and peered inside. A cave-like cell. Although it was totally empty, I had a vivid impression that it had been filled with frightened women, ones who had already been raped and tortured or were awaiting their turns. I shut off my light and looked down the corridor toward the courtyard.

  A shadow bisected the halo of doorway light. “I’ve seen enough.” Judy’s voice echoed off the walls. “This place creeps me out. I’m going back to the hotel.”

  “Okay. I’ll stay a bit longer. See you at the dinner tonight.”

  Her shadow slipped away. I glanced back at that dark cell. A shudder ran through me. I turned toward the doorway, let out a long breath, and headed down the corridor, beating my cane against the floor.

  Once in the sunlit courtyard, I changed my mind. I, too, had seen enough. I started for the entrance doorway, and then the uniformed attendant appeared. He solemnly beckoned me toward another corridor. I hesitated. He beckoned again, more insistent than before. Obediently, I followed him.

  As we arrived at a dimly lit room, I was shocked to see that it was populated by two lines of people, sitting facing each other. Then I realized that these also were manikins — replicas of Vietnamese men whose legs were shackled to the floor. I walked between the two lines. Each manikin was different from its neighbors, and amazingly lifelike. Some, despite their shackled legs, were holding others in compassionate poses, obviously offering solace to despairing comrades. One was ministering to the wounded arm of another. All of them were emaciated; their protruding ribs told the story of famished men.

  At one end of the two lines was a platform with two holes in the floor and buckets underneath — the toilets. I wondered how often each man got unlocked from his shackles and led, probably in chains, to these.

  I felt despondent and alone. I glanced toward the doorway I’d entered. No sign of the attendant. I was, in fact, alone. I had a strong desire to get out of this place. However, I forced myself to take a last look at those two lines of manikins. They seemed alive. I could feel both their sense of desolation and their determination to survive. I lifted my cane in a salute to them and then slowly walked away.

  The attendant was waiting for me in the courtyard, at the bottom of a metal staircase that led up the outside of the building to the floor above the guillotine. Although my injured knee throbbed, I followed him up the stairs. He opened a door at the top and flipped on a dull light. I went inside.

  The room was a gallery of photographs, taken long after the French had departed. In the ghostly light, they showed US military men, mostly pilots. Some were standing in lines at attention; others performed chores around the prison. There was a particularly touching series of the men preparing a Thanksgiving dinner and sharing it with one another at a long table. This was followed by scenes from the end of the war, of the prisoners marching out to be greeted by US officials, to freedom. There was no attempt in any of the photos to gloss over the fact that the men in the prison were a somber and unhappy lot; yet the contrast between them and the guillotine and manikins in the rooms below delivered a clear message: the Vietcong had treated American prisoners far more humanely than the French had treated the Vietnamese. I had no idea whether this was true. I did know that US soldiers had been tortured into confessing that what they and their country had done was criminal.

  Looking at those photographs, my mind flashed to the famous photo of a naked Vietnamese child fleeing her napalmed village, and to more recent ones of hooded men at the Abu Ghraib prison in Iraq — handcuffed, bleeding, beaten, dragged across the floor on leashes, and attacked by vicious dogs, all at the hands of US soldiers and CIA agents. I hurried on to the next room.

  Its walls were adorned with pictures of the havoc US forces had wreaked on Hanoi during the days prior to the American evacuation of Saigon. Government buildings, schools, and even a Buddhist temple had been reduced to rubble. I thought I recalled Nixon, at the time, claiming that this assault was a final drive to victory, waving his hands at the TV cameras and proclaiming our intent to “bomb them back to the Stone Age.” Yet, judging from all I was seeing and had come to learn, the United States had known by then that it had lost the war. These photos told a story of revenge, not of a march to triumph.

&nbs
p; I took a second look at the rubble of the Buddhist temple and wondered what on earth our leaders were thinking when they did such things. Could they not see how such ruthless disregard for people and cultures eroded the reputation of a nation that had gained the world’s respect for its role in winning World War II?

  I left the room and the photos of Hanoi’s devastation and headed toward the next one. It was pitch black. I stood looking into the darkness. Then I turned on my iPhone flashlight and stepped inside to glance around. It was just an empty room, probably another cell for multiple prisoners. I leaned back against the cool wall and slid to the floor. I sat there, allowing my phone to cast a small funnel of light across the floor, and focused on the emotions that swirled through me. Yes, I felt ashamed and sad and angry. But there was something else I couldn’t quite identify.

  I felt sorry for the people who had suffered in the wars and in this prison, the Vietnamese women and men, the American soldiers, all those who had been tortured, imprisoned, maimed, or killed — and their families. I felt compassion for the prison guards who had committed torture and for the soldiers who had to deal with the fact that they had killed others — the horror of the knowledge that they’d taken a life, made children fatherless, and inflicted the worst sort of tragedy on the parents of those they killed. I felt for the emotionally wounded, the ones who survived and ended up in mental institutions, the far too many who committed suicide.

  My eyes lingered on the funnel of light that spread from my phone, through my outstretched legs, and across the hard floor toward the opposite wall, and finally I got the other piece of what I was feeling. Grateful. I felt a sense of gratitude that I’d managed to avoid being in a war. I hadn’t murdered anyone. I’d not bombed cities, dropped Agent Orange, or planted land mines.