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The Rich Get Richer

Global Economics

Book Review

By Richard E. Noble

I just started reading a book entitled The Rich Get Richer, and much of it deals with the World Bank, the I.M.F. etc. It is a lot of boring stuff with a whole bunch of graphs and charts, but I think that I get the idea. Let me see if I can explain to you how it works.

A number of wealthy governments around the world take Taxpayer money from their own countries to invest in the poor countries of the world. They loan this money to the poor governments of these poor countries. These Governments use this money to lure the international business community to their shores or prairies.

Naturally they provide benefits to these international concerns; like no taxes, and no rent on their property or land etc. These concerns build a factory in the target country. Now, understandably, they don’t manufacture anything that can be sold in that poor target country.

Why?

Because it is a poor damn country and these people don’t have any money to buy anything. So these companies manufacture an exportable product.

This is a requirement for these poor-country loans established by the IMF and the World Bank.

The bottom line is this: Some international concern opens a Frisbee factory in Guatemala, Afghanistan or Timbuktu. They pay the workers who get jobs at this Frisbee factory a competitive wage. Last year these workers were making nothing, so now they are paid next to nothing which is a 100% increase over their last year’s salary. They manufacture a zillion Frisbees and sell them to businesses back in L.A. or Paris, London, or Rome. These businesses sell the Frisbees to a bunch of little rich kids who have nothing to do but play on the beach and get high. These huge international concerns or subsidiaries thereof, or the brother-in-law of the president of Guatemala, Afghanistan, or Timbuktu, make huge profits from these no-interest, no-tax, no-environmental-penalty loans. And why not? They get the money for free. They pay no wages to speak of and the host country charges them no taxes. What a deal! So then what do they do with all of these profits? Give huge bonuses to the workers at the factory?

Ha ha haaaa. Excuse me. I was just joking.

No, no, no. You see, the rest of the World has learned the old Swiss bank trick of – hear no evil, see no evil and therefore there is no evil.

Other developed countries, including the United States, provide no-questions-asked, special interest, NO TAX, accounts for non-citizen investors or depositors. So they take their huge profits from manufacturing Frisbees in Guatemala, and deposit them back in their favorite bank in the United States, Paris, London, or Rome.

So good, you say, at least we taxpayers get our money back. NO no no. The money doesn’t go back to the U.S. Government. The Government only gets money back if the government of the country to which the I.M.F. or World Bank loaned the money, pays back the loan. But, of course the government of this poor country can’t pay back the money, because they didn’t charge anything for the money in the first place. They gave it all out as incentives to their ex-brother-in-law Manuel (who has since divorced, Intrigua, the president of Guatemala’s sister to avoid any collusion or corruption charges.)

They do, of course, get the income taxes from the workers at the factory, but unfortunately they invested that money in four hundred Frisbees that they tried to sell to the children of the workers employed at the factory. The kids weren’t interested; they were too busy trying to find food at the local landfill.

So now since nobody can pay back the loans, the World Bank, etc. is thinking of canceling all the loans, and starting all over again – but this time no Frisbees, maybe Ree-bucks.

This book explains similar shenanigans over and over, with statistics, numbers and endless details. It is a sad story but a necessary story. Once again I’m happy there are people who will take the time and provide the effort necessary to make these complicated swindles understandable to the likes of folks like me. Thanks guys.