“Hoodwinked” and John Perkins’ solutions to our economic situation

The book I read for my first book review was “Hoodwinked-An Economic Hitman Reveals Why the Global Economy Imploded-And How To Fix It.” It was written by John Perkins, published by Crown Publishing eISBN 978-0-307-58993-4.

John Perkins is a former self-proclaimed Economic Hit Man (EHM) by way of a consulting firm for the U.S. Government. He has a Bachelor of Science Degree in Business Administration from Boston University.

Perkins writes about the current “mutant” capitalist system that is our current economy, explains how it became  that way and then how he believes it can be fixed. He begins by explaining how he became an economic hit man, the things he witnessed and was even a part of. Having a grandchild gave him a sort-of epiphany about the current condition of the world what kind of world we are leaving to future generations and what prices they will have to pay for our mistakes. He details how the economy has gotten to it’s current “mutant” state, and in the second half of the book explains how he believes it can be fixed.

Mr. Perkins explains how he began working for a consulting firm and was approached to be an economic hit man. He acted as a negotiator with developing countries who had valuable resources that we coveted. His job was to convince these countries to sign for huge debt to have U.S. firms and companies travel to their countries to build the resources, buildings, equipment that was necessary to extract these resources. The problem with these loans is that they were very high interest, and almost doomed to failure. When the countries began to have difficulties repaying these large amounts, the United States then had them hooked….forcing them to provide those resources at a low cost, or lift environmental regulations. This created a large vicious cycle of an economy that was doomed to fail (for the developing countries) and made the rich business owners and corporations even richer.

The effects of these transactions were promised by EHMs to revolutionize these struggling countries, bring them forward and help them thrive and stimulate their own economies. Instead it did quite the opposite, creating conditions where workers were forced to work for lower wages, were still facing poverty, and the environment was being ravaged in the process. The lack of regulations and rising debt to the U.S. allowed the U.S. to monopolize their resources and create a huge inequality.

This basic theory is what Perkins describes as happening in the financial sector of the U.S. economy. When regulations are lightened or disappear, large banks are able to not only monopolize the markets but are almost untouchable because they are so large. If they were to fail, the domino effect that would happen would be devastating.

He explains that our desire to buy things cheap or “1/2” price has driven companies to search for the cheapest way to produce the products but most importantly the best way to translate to large profits for the company. The problem is that the true costs of these goods are not reported. We need to factor in the cost to the environment or to the people, and that should also be considered when calculating the cost of the goods. Accounting for the damages done to the environment would help restore the areas that have been damaged due to production.

Basically, profits have become the main goal of a lot of big business, and this shouldn’t be the only goal. We should not maximize profits while exploiting workers or the environment. There need to be priorities. He refers back to post WWII and how the economy began to thrive with entrepreneurs who wanted to “do well by the stockholders”. Regulations we in tact, and corporations were limited to how large they could get. Once regulations were lifted, the goals shifted to profits.

The second part of the book is the best, and Perkins offers what he believes is a solution. We need to stop blaming everyone else, and actually make something happen. Using China as an example, their optimist attitudes turned their economy around and it continues to grow. Their morals, and response is to do the work and fix the problem. We need to follow their lead in a lot of ways.

First he says we need to have consumer responsibility. We need to support companies that we believe in, even if the goods are more expensive-considering it an investment in the future. If this is done by enough people, the executives will have to listen.

Second we need to create a new economy based on things that we need. Jobs don’t have to be lost only shifted to serve real purposes. Part of that includes the “Green Markets” or stores that provide items that are made locally or at least in the U.S. utilizing our resources, avoiding chemicals, and other undesirable products.

Third is encouraging good stewardship and it kind of goes along with the second one if you ask me. A vendor of one of these green markets would be a great example. We need to honor the people serving REAL purposes instead of idolizing the greedy and the rich. He also talks about adapting an attitude of compassion and protectiveness and how it could make the world more peaceful.

Fourth he talks of new business and government rules and regulations. This goes without saying for me. Tighter regulations and dissolving huge monopolies (like Roosevelt did) would be first on the agenda. Also, making the companies account for those other costs of doing business like the environmental impacts listed above.

Finally he talks of honoring individual passions. Taking the things we are passionate about and figuring out a way to use our skills to be heard. Instead of just making noise, actually doing something about it. The government needs to be pushed and sometimes we need to speak a little louder to be heard.

There wasn’t much that I wish he would’ve included in this book. I was surprised about how much information that he gave, and really believe that his experience has given him great insight as to what a solution might be. It’s also nice to see that he was inspired to make a change and this is his way of doing that.

This book hasn’t really changed my thinking, I knew that there was a lot of economic injustice in the world, it just opened my eyes to how bad things really are with the economy. It has inspired me to explore ways I might make a difference.

 

 

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