Once upon a time, the United Fruit Company had plantations across Central and South America. Its No. 1 crop was bananas. Americans were mad for bananas, which at that time were a novelty and a delicacy, so United Fruit made a lot of money, to put it mildly.United Fruit’s landholdings were extensive, and much of its land was uncultivated, held in reserve as insurance against storms or blights. Latin America was full of landless peasants who could have used that vacant land to support themselves, and United Fruit worried that the governments of the countries where it operated might expropriate the land to quell their people’s restlessness. So it did what any self-respecting corporation would do: It bought the governments.
At that time, Latin America was ruled by either military dictatorships or oligarchies of wealthy landowners—in either case, unaccountable to the populace. This allowed United Fruit to form cozy arrangements in which its monopoly power was unchallenged and even defended. These arrangements came with other perks as well, such as army troops willing to massacre strikers without remorse.
In 1904, O. Henry coined a term for these nations: banana republics.
Gradually, the people of Latin America began to conclude that the political rights and economic opportunities that Americans enjoyed would be good for them, too. Dictators and oligarchs were toppled and replaced by democratically elected governments. Highways were built. Public schools and social security systems were established. Labor unions were legalized. The landless were given land. Citizens built factories, worked in them, profited from them. Economies diversified. And these formerly backward countries rapidly advanced.
This was intolerable.
The first CIA-backed coup d’état happened in Guatemala in 1954, but the most famous—and the one that established the pattern to come—is the one against the Salvador Allende government in Chile in 1973. The installation of a corporation-friendly dictator was accompanied by economic advisers from the University of Chicago, acolytes of Milton Friedman. Friedman was the archetypal free-market fundamentalist: pro-privatization, pro-deregulation, pro-austerity and emphatically anti-Keynes. John Maynard Keynes advocated mixed economies, in which government policies and spending act as a moderating force against the occasional wild swings of the market. Friedmanites didn’t want to moderate those swings. They wanted to profit from them.
The people of those Latin American countries knew that democracy and self-determination had been good for them and that United Fruit had not. They would never have accepted the imposition of a pro-privatization, pro-deregulation, pro-austerity scheme through a lawful political process, and the Friedmanites knew it. So the “Chicago Boys” intentionally precipitated economic and political crises in order to create instability and anxiety, then, as the citizenry demanded that the crises be solved, exploited the mood of urgency to impose their will.
And the newly Friedmanite economies, one after another, imploded. Unemployment spiked. Crime rates spiked. Masses of people literally starved. The monopolies bought up or muscled out the homegrown and formerly state-owned industries. The nascent middle classes disappeared. Political op-ponents disappeared. As the people became even more restless and desperate, the governments employed intimidation, overt violence and torture to restore “order.”
This is an extremely sketchy overview; Naomi Klein goes into fearsome detail in The Shock Doctrine: The Rise of Disaster Capitalism. For now, all you need to know is this: Friedmanites know that they can’t get popular majorities to support their agenda, so they exploit crises—moments of confusion and desperation—in order to impose their agenda over the people’s heads. If no naturally occurring crisis presents itself, they’ll drum one up.
Then their agenda, when it’s imposed, fails spectacularly.
All this is preface to the question of why the Republicans are behaving the way they are with respect to raising the U.S. government’s debt ceiling, which in the past has always been done routinely, with so little fuss and so little comment that it happened 25 times during the administrations of Ronald Reagan and George W. Bush and hardly anyone even remembers.
Speaker of the House John Boehner (R-Ohio) has said, repeatedly, that he knows raising the debt ceiling is necessary. But this is not an innocent statement. If he knows it’s necessary, he can allow a clean debt-ceiling bill to be introduced on the floor of the House, as it’s always been done before, and pass it with a bipartisan vote. Eighty or so members of his own party would reject it, but nearly all House Democrats would approve it, and it would be done. Why doesn’t he do this?
The superficial answer is that Boehner and other Republicans can’t work with Democrats because the right wing has invested too much in portraying Democrats as an internal enemy, illegitimate, un-American, practically subhuman, with no right to say how things should be done. When you’ve shaken hands with the devil, it’s hard to hold your head up in church the next day.
But it’s hard not to speculate that Republicans in Congress precipitated this crisis because they want a crisis. That this manufactured crisis presents them with an opportunity to pass a battery of government-weakening tax cuts and spending cuts in service of an agenda of deregulation and privatization. It’s an opportunity they haven’t had since the end of the Bush administration, and they don’t dare pass it up.
This might be dismissible as a conspiracy theory if not for the fact that across the nation—in Wisconsin, Florida, Michigan, Ohio, New Jersey—Republican governors and statehouses are putting the same agenda into action right before our eyes.
These are policies guaranteed, if not designed, to turn the United States into a banana republic.
A Republican in Speaker Boehner’s position, or in the position of any other member of the House of Representatives, would simply vote to raise the debt limit, because he’d understand that it’s necessary: for America’s reputation, for its creditworthiness, for its stability and, honestly, because Wall Street wants it. He wouldn’t take the radical step of precipitating a crisis simply to push an agenda.
But the House is not controlled by Republicans. It’s controlled by Banana Republicans. We should call them what they are.