John Perkins and Financial Theory

Suppose you have $200,000 and a bank says it will loan 80% at 10% interest. Further suppose you have an investment that will pay 20%. How much should you borrow from the bank? The textbook answer is, of course, $800,000. You'll pay $80,000 a year in interest, but your investment will pay $200,000 a year. The correct answer is $0. John Perkins job was to convince people to borrow money by promising a 20% return. The banks insisted the money go to the contractors they specified, contractors who built nothing, but who took the $1,000,000, after which, the borrowers had a debt of $800,000 and no way to repay, so the banks foreclosed and got all the assets the borrowers had. With kickbacks from the contractors, the banks got all the borrowers' assets for almost nothing.

Perkins said he did this to Indonesia. After the IMF and World Bank foreclosed, Indonesia had to let mining companies dump toxins in the rivers, so people died. They had to let companies take farms from subsistence farmers to use for cash crops, so people died. Saudi Imams said (quite correctly) that the infidels had killed Muslims, and said (incorrectly) that everyone working in the New York World Trade Center was guilty. Which is why the 9/11 hijackers destroyed the New York World Trade Center. Yes, people were guilty, but the 9/11 hijackers killed few, if any, of the guilty parties, and a lot of people who were completely innocent of the crimes for which they were murdered.

Not clear how to punish the guilty. Perkins said he had no idea who they were, he got his orders (and payment) via a carefully camouflaged trail that hid those ultimately responsible.

So Justice seems unlikely for this world.