The New Confessions of an Economic Hit Man

Rasy takes Perkins to an Indonesian puppet show, where a single puppeteer performs 100 roles and plays all the music on a gamalong. One puppet looks like Richard Nixon, who proceeds to remove Vietnam from a map and eat it, then spits it into a bucket held by an assistant puppet. The Nixon puppet collects “Palestine, Kuwait, Saudi Arabia, Iraq, Syria, and Iran. After that, he turned to Pakistan and Afghanistan” (54).

The Nixon puppet then grabs Indonesia from the map, saying, “Give this one to the World Bank. See what it can do to make us some money off Indonesia” (54). Another puppet, who represents a popular local politician, leaps out and stops the Nixon puppet, shouting, “Indonesia is sovereign” (55); the audience applauds vigorously. Suddenly Nixon’s assistant kills the defending puppet; the audience is wild with anger, boos, and shaking fists. The performance ends.

Later at a coffee house, Rasy’s friends ask Perkins if he thinks the US government regards Indonesia as a bunch of grapes to be plucked. Perkins answers with a question of his own: Why did the Nixon puppet go after Middle Eastern countries? One young woman replies, “Because that’s the plan. The real target is the Muslim world” (56). She claims that, in the future, the real war will be between Christian and Muslim countries.

Puzzled, Perkins asks why they believe this. The woman answers, “the West—especially its leader, the US—is determined to take control of all the world, to become the greatest empire in history” (56). The Soviets will fail to stop the United States, but the Muslims have great religious faith and will resist. Perkins asks how this conflict can be avoided. The woman says Americans should stop being so greedy: “You must open your hearts to the poor and downtrodden, instead of driving them further into poverty and servitude” (57).

A few days later, the popular local politician whose puppet defied Nixon was killed by a hit-and-run driver.

Perkins travels to Paris to try to reconcile with Ann. She gets Perkins to confess that he has had an affair; hours of talking lead nowhere, and they decide to separate.

Greve gets promoted away, and Perkins now reports to Bruno Zambotti. Back in Boston, Perkins meets with Zambotti and learns that Howard Parker has been fired, and Perkins has been promoted to chief economist at MAIN. Perkins wants to talk to Claudine about his adventures but has trouble locating her, as if she’s disappeared off the map. Exhausted and jet-lagged, Perkins despairs; his “promotion seemed meaningless or, even worse, a badge of my willingness to sell out” (59).

Perkins pushes Claudine from his mind, completes the optimistic growth projections for Indonesian electricity demand, and, with swagger and audacity, survives several days of grilling by the lending agencies. The loans are approved.

In the months that follow, Perkins attends meetings in far-flung countries, meets Robert McNamara and the shah of Iran, and enjoys all the sudden attention. His mood, however, vacillates between arrogance and disillusionment, as it “seemed that a glorified title or a PhD did little to help a person understand the plight of a leper living beside a cesspool in Jakarta” (61), and that statistics don’t confer the ability to predict the future. He wonders why other nations want to become like America, which suffers its own pockets of poverty and unhappiness.

Still, most of his fellow workers “believed they were doing the right thing” (62), both for the safety of their country and the prosperity of their families. Perkins sees them like Southern plantation owners who believe their world of servants and slaves is the way things should be.

Since the mid-19th century, the United States has hewed to its Monroe Doctrine that insists on “the right to invade any nation in Central or South America that refused to back US policies” (68). To this end, presidents from Monroe to Franklin Roosevelt become involved in the affairs of many countries in the Western Hemisphere. This involvement ramped up as the communist threat reached into the region.

In 1903 American President Teddy Roosevelt sent the Marines to Panama to take it over so the US could build a canal from the Atlantic to the Pacific. A puppet government was installed that supported American corporate interests, suppressed socialist and communist uprisings, and made a few Panamanian families very rich.

Then, in 1968, a coup “overthrew Arnulfo Arias, the latest in the parade of dictators, and Omar Torrijos emerged as the head of state” (66). Torrijos was a man of the people who sympathized with the poor and middle classes and sometimes paid from his own pocket to help those in need, yet he was not a communist. Torrijos also helped resolve disputes among other Central American countries. He despised the American military centers located in Panama’s Canal Zone that trained “right-wing death squads and the torturers who had turned so many nations into totalitarian regimes” (69).

Perkins admires Torrijos, but his next job, in Panama in April 1972, is to justify “investment of billions of dollars in the energy, transportation, and agriculture sectors of this tiny and very crucial country” (69), financing that will make it even more indebted and more dependent on the United States.

A man named Fidel shows Perkins around Panama. Fidel gives Perkins a tour of “New Panama,” with its modern skyscrapers and lovely beaches. Perkins chats briefly with picnicking American citizens from the Canal Zone, who take no interest in Panamanian culture or the Spanish language, and who despise Torrijos as “a dangerous man” (71). Then Perkins and Fidel visit a slum area, which reminds Perkins of the poverty in Jakarta.

Finally, they visit the US Canal Zone, where Perkins can “hardly believe the opulence of the place—huge white buildings, manicured lawns, plush homes, golf courses, stores, and theaters” (72). Fidel bemoans the difference between the wealthy Americans and the impoverished Panamanians just outside the Zone.

That night, Perkins and Fidel visit a stripper’s bar where foreign women—but, by law, never Panamanians—disrobe, dance, and sit on men’s laps. The men are mostly American service personnel on leave; the few Panamanian men are nicely dressed, quiet, and observant. The foreign women have escaped oppressive, violent regimes in nearby countries and hope, through stripping and prostitution, to make enough money for a fresh start.

An American soldier makes trouble for a waitress and hurts her arm; immediately the Panamanian bouncer appears and violently subdues the soldier. Two US military police step inside; the bouncer shoves the soldier roughly toward the MPs, who drag the soldier away.

Perkins is called to an audience with Omar Torrijos. The Panamanian leader is fit, relaxed, and well read; he engages Perkins in a wide-ranging discussion about world politics. Torrijos brings up America’s growing collection of puppet regimes in Iran and elsewhere, especially Guatemala, where in 1954 the United Fruit Company and the CIA engineered a coup that replaced a popular land-reform president with a right-wing dictatorship. Torrijos knows the United States dislikes him, but he has the support of his military. He says, “The CIA itself will have to kill me!” (79)

Torrijos wants Panama to retake the Canal Zone; to do so, he must go up against America’s vested interests. Still, he needs to develop infrastructure, especially for the poor. He startles Perkins with a bold offer: “Give me what’s best for my people, and I’ll give you all the work you want” (81).

Torrijos’s path is dangerous—the US may see him as taking over a process it likes to control—but he is also willing to support a huge program. The meeting ends with the understanding that MAIN would win the contract for the master plan, while Perkins would ensure they did Torrijos’s bidding.

In 1973 the OPEC oil cartel embargoes sales to the United States, sending shock waves through the world’s economy. Perkins takes a perverse delight in this event: “some secret side of me enjoyed watching my masters being put in their places. I suppose it assuaged my guilt a bit” (84).

During this time, Perkins holds informal discussions with his friends about world events. Some attendees work for Perkins; “[o]thers were executives at Boston think tanks or professors at local colleges, and one was an assistant to a state congressman” (84). They talk about similarities between the 1970s and the 1930s, when governments began to take a larger role in economic management. Perkins notes, “We were moving away from old assumptions that markets were self-regulating and that the state’s intervention should be minimal” (85).

One recurring name in the news is Robert McNamara, a former Ford Company president who became Kennedy’s defense secretary and, later, president of the World Bank. McNamara favors a hands-on “Keynesian approach to government, using mathematical models and statistical approaches” (86), including the use of data to run the war in Vietnam. His “aggressive management” techniques are adopted by up-and-coming CEOs and help “spearhead the rush to global empire” (86).

McNamara’s transition from leader of a powerful international corporation to top-level US official is replicated later by many others, including George Schultz, George H.W. Bush, Condoleezza Rice, Dick Cheney, and Timothy Geithner.

The Arabs embargo oil sales to the United States in October 1973 because of its support for Israel in the Yom Kippur War with Egypt and Syria. The embargo lasts five months, and the price of oil goes up sixfold. The United States, suffering economically from this crisis, decides never again to be so vulnerable. It negotiates an elaborate trade deal with Saudi Arabia, but with a twist: “it relied on Saudi money to hire American firms to build up Saudi Arabia” (91). The idea is that the 25-year development plan, managed privately through a commission called JECOR, will help make US and Saudi interests dovetail.

MAIN becomes a chief consultant on the JECOR deal, and Perkins is involved from the beginning. The process is shrouded in secrecy, but Perkins knows that “most of the scenarios that evolved from my studies were ultimately implemented, that MAIN was rewarded with one of the first major—and extremely profitable—contracts in Saudi Arabia” (91). He receives a substantial bonus that year.

Huge petrochemical plants will rise in the desert; the Saudis will need a large buildup of infrastructure to support the new industry. While the “Saudis might manage others, […] they had no desire or motivation to become factory and construction workers” (93).

Saudi Arabia imports workers from nearby countries, which requires the construction of enormous housing complexes as well as “shopping malls, hospitals, fire and police department facilities, water and sewage treatment plants, electrical, communications, and transportation networks” (93).

This project, “the total and immediate transformation of an entire nation on a scale never before witnessed” (94), is a gold mine for Perkins and MAIN. The job is unique, and Perkins has no historical data to go on. Instead, he calculates the construction costs for “what might be possible” (94) and writes glowing forecasts. Service and management contracts alone would be so lucrative that “US engineers and contractors would profit handsomely for decades to come” (95).

For example, a newly modernized Saudi Arabia will spark increased regional military competition, and the US defense industry can profit by building protection into the Arabian Peninsula. This, in turn, requires more housing and infrastructure. MAIN’s job is to propose huge projects that get approved by the treasury department; Perkins and his associates call their efforts “SAMA,” or the “Saudi Arabian Money-Laundering Affair” (95). Other oil-producing countries, including Iran, might come onboard when they see the improvements in Saudi Arabia.

An advantage for the United States is that the Saudis, as part of the deal, agree to stabilize world oil prices. This would, “in the long run, discourage other countries from even considering an embargo” (97). In exchange, America would “provide total and unequivocal US political and—if necessary—military support” (97).

Some members of the Saudi royal family still need convincing. Perkins is assigned one key player to work on, whom he calls Prince W. This man is conservative and understands “the insidious nature of what we were proposing” (99), whereby the West uses modern technological development to make inroads against traditional Muslim culture. Perkins notes, “Religious beliefs aside, Prince W. had one weakness—for beautiful blonds” (100).

When he visits Boston, Prince W. expects a blonde female companion of great discretion, and for this Perkins finds him a woman, Sally, whose husband cheats on her and also travels a lot. Prince W. is pleased. Perkins must tiptoe around corporate ethics rules to make things happen while hiding the expense.

Then Prince W. announces he would like someone like Sally “to come and live in his private cottage in Saudi Arabia” (101). He will bankroll the young lady if Perkins can produce her. Perkins arranges, through European contacts, for such a companion.

Still, it’s hard to convince Prince W. about the value of the MAIN modernization project. Finally, he and the other Saudi royal holdouts relent, and a contract is signed for MAIN to redesign the Saudi electrical grid. The projects begin; before long, “every sector of the Saudi economy was modernized, from agriculture and energy to education and communications” (104).

Part of the price is that the US government must look the other way when the Saudis do things America resents, such as protecting mass killer Idi Amin. When the Ugandan dictator is exiled in 1979, he receives asylum in Saudi Arabia. The United States remains silent.

More complex is the US-Saudi deal to finance guerrillas fighting the Soviets in Afghanistan. The Saudis go further than this, however, financing terrorist training in several countries. Again, the United States says nothing. After the 2001 attacks in New York and Washington, the press reveals that President Bush’s family and the House of Saud have financial ties going back decades.