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Making the Economy "Scream"

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Source: Consortium News


President Barack Obama runs to the stage at the M. Luis Construction Company in Rockville, Maryland, before delivering remarks about the government shutdown, Oct. 3, 2013 (Official White House Photo by Pete Souza)

Americans who have studied CIA destabilization campaigns around the world may see some striking parallels to the strategy of Tea Party Republicans who have provoked a government shutdown and now are threatening a credit default. The idea is to make the country appear ungovernable and to make the economy "scream."

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This approach is similar to what CIA operatives do to get rid of disfavored political leaders in other countries, such as when President Richard Nixon ordered the spy agency to sabotage Chile's economy and upset its political stability in the early 1970s.

In effect, the CIA takes the political process hostage by inflicting economic pain on the average citizen, sponsoring "populist" disorders, spreading confusion through propaganda outlets and then waiting for a weary population to give in. This technique has worked in many countries over the years -- and surely the idea long predated the formation of the CIA in the late 1940s.The CIA's thinking is that most people just want a chance to make a living. So, if an economic crisis can be ginned up -- while propaganda outlets put the blame on the government leaders who are ostensibly in charge -- then the people will ultimately turn against those leaders in an effort to restore normality.

The Chilean Episode

But some of the best-studied examples of CIA operations have similar patterns to what the American Right is doing now to destabilize the U.S. economy and discredit President Barack Obama. For instance, in the early 1970s, Salvador Allende, a socialist politician, won the presidency through free and fair elections and began taking steps aimed at improving the conditions of the country's poor.

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To stop this perceived spread of "socialism," President Nixon directed the CIA to engage in psychological warfare against Allende's government and to make the Chilean economy "scream." U.S. intelligence agencies secretly sponsored Chilean news outlets, like the influential newspaper El Mercurio, and supported "populist" uprisings of truckers and housewives. On the economic front, the CIA coordinated efforts to starve the Chilean government of funds and to drive unemployment higher.

Worsening joblessness was then spun by the CIA-financed news outlets as proof that Allende's policies didn't work and that the only choice for Chile was to scrap its social programs. When Allende compromised with the Right, that had the additional benefit of causing friction between him and some of his most ardent supporters who wanted even more radical change.

As Chile became increasingly ungovernable, the stage was set for the violent overthrow of Allende, the installation of a rightist dictatorship, and the imposition of "free-market" economics that directed more wealth and power to Chile's rich and their American corporate backers.

There was other fallout from Allende's ouster and death. Chile's fascist Gen. Augusto Pinochet executed thousands of dissidents and sent assassins far and wide, including Washington, D.C., where former Chilean diplomat Orlando Letelier and an American co-worker, Ronni Moffitt, were murdered in a car bombing along Massachusetts Avenue in 1976.

Though the Allende coup in Chile is perhaps the best known example of this intelligence strategy (because it was investigated by a Senate committee in the mid-1970s), the CIA has employed this approach frequently around the world. Sometimes the target government is removed without violence, although other times a bloody coup d'etat  has been part of the mix.

In the case of Nicaragua in the 1980s, the leftist Sandinista government was presiding over a reasonably healthy economy when President Ronald Reagan ordered the CIA to achieve "regime change." The Reagan administration went to work strangling the Nicaraguan economy, while the CIA trained a terrorist army known as the Contras.

Though the Sandinistas prevailed in an election in 1984, Reagan kept up the pressure, eventually breaking the back of the Nicaraguan economy, leaving children searching through garbage dumps for food while U.S.-financed media outlets blamed the Sandinistas and called for reconciliation on terms demanded by the U.S. government.

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In 1990, amid threats of renewed Contra terrorism and an economic catastrophe, the coerced Nicaraguan people elected the U.S.-backed presidential candidate Violeta Chamorro. After Chamorro took office, much of the CIA-created pain subsided, but the conditions for many Nicaraguan peasants continued to deteriorate.

Home to Roost

So, it is perhaps fitting that a comparable approach to politics would eventually come home to roost in the United States, even to the point that some of the propaganda funding comes from outside sources (think of the late Rev. Sun Myung Moon's Washington Times and Australian media mogul Rupert Murdoch's News Corp.)

Obviously, given the wealth of the American elites, the relative proportion of the propaganda funding is derived more domestically in the United States than it would be in a place like Chile or Nicaragua or some other unfortunate Third World country that has gotten on Washington's bad side.

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Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq, can be ordered at secrecyandprivilege.com. It's also available at
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