Berlusconi and the ECB Riots
I say that a lot, but I want to start with it this time, because I'm feeling paranoid.
Something looks obvious to me, too obvious for nobody else to be saying it, but Silvio Berlusconi is not really stepping down. As soon as I heard that he was stepping down, I knew that some sort of fix had to be in, because Silvio Berlusconi can't step down without going to jail, and media tycoons don't go to jail voluntarily.
I didn't have to think about it terribly long to see one way that the fix could be in. Now, I know enough enough about cognitive biases to distrust this conclusion: it's the first thing I thought of, my brain latched onto it, and is looking for evidence to back up my initial prejudice. So I'm very probably wrong. But I remember how Silvio Berlusconi came to power in the first place. And I just finished Greg Palast's Vultures' Picnic, which more or less predicted this in chapter 12. Palast was talking about Greece, which also just underwent a suspiciously convenient, suspiciously temporary-looking, change of executive, but the situation applies even more strongly to Berlusconi because of his history. So, even though I'm probably wrong, here's what I keep thinking.
Some of you may remember what I wrote about Haiti, after the earthquake ("The Earthquake Didn't Kill Hundreds of Thousands of Haitians. We Did," 1/17/10). As part of a concerted effort to keep the world's slaves and landless peasants from seeing even one example of a successful slave revolt, it has been US policy since the Jefferson administration that Haiti must fail. Once the Haitian people saved their way out of the financial reparations for their own slave revolt that were imposed on them by the Jefferson administration, the US imposed the Duvalierists on them. The Duvalierists made sure that Haiti failed by taking out huge "development" loans, stealing that money instead of investing it, and then demanding that the Haitian taxpayers repay the loan; any time Haitian voters insist that the people who stole that money be the ones who repay it, the US Marine Corps goes in to reinstall the Duvalierists. Any more, it's not even about a 200 year old slave revolt. It's about an even more important and contemporary principle: banks must not be forced to take losses when they loan money to governments, even if they know that the money will be stolen instead of invested.
In Vultures' Picnic chapter 12, Palast lays out a cache of whistle-blower documents from inside the International Monetary Fund, documenting that the IMF has followed exactly this policy with every country in Latin America, Africa, and south Asia; he quotes a disgusted former IMF president, someone who took the job thinking that the job of the IMF was actual third-world development, as confirming the smuggled-out memos and reports. For several decades now, the IMF has known exactly what was going to happen every time Wall Street, and their counterparts in the City of London and at Deutche Bank and in Switzerland, invest in third-world government debt:
Step one: bankers pay huge bribes to government officials to make sure that it is their bank that gets to loan money to the government. Step two: the people they paid those bribes to steal at least half of the money. Step three: when it comes time to roll over those loans, there is no tax revenue to cover them, because the money was stolen and used to pay for prostitutes, drugs, casino gambling binges, private islands, rare antiques and rarer jewelry for an ever-younger series of trophy wives, and 500-foot yachts, instead of roads or ports or schools or anything else that would actually grow the economy. Step four: the IMF imposes an economic embargo on the country, that can only be lifted if the country agrees to "austerity." Austerity, in the IMF's definition, means stopping all infrastructure repair, closing almost all the schools and selling everything in them to the bankers or their hand-picked friends for pennies on the dollar of what the stuff is worth, doing the same thing to the firehouses, doing the same thing to the water treatment plants, doing the same thing to the electrical generation plants, and giving away (giving away!) the mineral rights to "foreign investment." They must also "liberalize capital flows," that is to say, eliminate any laws that are stopping the people who stole those loans from smuggling their money out of the country. Step five: voters revolt, demanding that the bankers take a haircut on the debt to the extent that it can be proven that they knew the money was being stolen. Step six: since the elections are rigged, and since the local army always takes the side of the kleptocrats, we have "the IMF riots."
Step six is in the memos, in advance, part of the plan. The IMF approved and guaranteed the initial stolen loans knowing that part of making sure that the banks got their money back would be the CIA and the US Army and the US Marine Corps taking the sides of the kleptocrats in the riots, and in many cases all-out civil wars, that followed. They make sure that the kleptocrats, and the local army and the police, know to be prepared for it, because "the IMF riots" are considered an acceptable cost of defending the sacred principles that are at stake. Which sacred principles? One: nobody in Europe or the United States must ever pay face value, fair market value, for any resource in the third world. As Annie Leonard cleverly put it in "The Story of Stuff," third world natural resources is another way of saying "our stuff, which other people somehow ended up living on top of." That's a sacred principle! And two, bankers and other investors in the United States are entitled, as a matter of sacred principle, to earn a rate of return on their investments that exceeds the rate of inflation.
Deutche Bank, and its puppet, the European Central Bank, are at step four now with Greece and Italy. The embargo is somewhat porous, because European governments are a little nervous about having an old-fashioned IMF riot within walking distance of the rest of Europe, but the embargo is being imposed. Deutche Bank and other German banks loaned huge sums of money to Greece and Italy, knowing for a fact that at least half of the loaned money was being stolen by wealthy personal friends and business partners of government officials, and not caring, because they knew that the ECB would enforce "austerity," would demand that people who didn't benefit from those loans, not the wealthy people who did, pay them back by the enforced looting of those countries of every asset. There will be riots; there may well even be civil war, but Deutche Bank will be repaid and those countries' infrastructure and archaeological treasures and other resources will end up in the hands of the banksters and their friends for pennies on the dollar, extracted at gunpoint by the Greek and Italian armies with whatever "stabilization" help they need from NATO - as a matter of sacred principle.
And Berlusconi, more than anyone, knows how to survive that; governmental collapse and the fear of anarchy, combined with ownership of the media, is how he swept himself into the position where he and his personal friends could steal half of the money Italy was borrowing in the first place. Look up the "Clean Hands" affair. When all of Italian politics was collapsing into fear of anarchy because every single politician of every political party was being convicted in a wave of bribery scandals, Berlusconi's cable TV channels portrayed him as the only man in Italy with "clean hands," the only man who could save the country from anarchy.
And here we are, with Italy teetering on the brink of anarchy. And Berlusconi, the man who cannot legally step down because he and his friends stole half of the money that Italy owes Deutche Bank (and Deutche Bank knew it at the time), the man who is only out of prison right now because of presidential immunity and because of his ability to fire prosecutors, is suddenly stepping down? And, oh, how conveniently, handing the government over to a bureaucrat, with the explicitly stated job of enforcing ECB austerity. Everybody who knows anything knows what will happen: ECB riots, maybe even a civil war. And Berlusconi still owns all the cable networks, which will, as surely as the sun shines, report: "As soon as Berlusconi, the man who saved us from anarchy after the Clean Hands scandals, stepped down, the country fell back into anarchy. Only Berlusconi can save us!"
Maybe I'm wrong. It can't be that easy. If it were, everybody would be pointing it out.