Interview with Eric Toussaint

Interview with Eric Toussaint, President of the Committee for the Abolition of Third World Debt (CADTM), in Havana.

Obama Picked People
Who Brought You This Crisis
as His Advisers

What is your opinion of Team Obama?

Toussaint: Obama picked the very people who are responsible for this economic fiasco.  Some hoped that Obama would appoint a new economic team to carry out a New Deal and that he would completely change capitalism.  But in fact he chose the most conservative Democrats, the same people who had planned the policy of deregulation with Bill Clinton in the late 1990s.  The consistency of his choices is revealing, as you can see from these three examples:

Robert Rubin was the Treasury Secretary from 1995 to 1999.  As soon as he assumed his office, he had to face the Mexican crisis, the first crisis of the neoliberal model.  With the IMF, he administered a shock therapy that only worsened the situation of the countries in crisis, such as Southeast Asia in 1997-98 and Russia and Latin America in 1999.  He never hesitated to extol the benefits of liberalization and helped impose the policies that made living conditions and degrees of inequality deteriorate enormously in the globalized countries.

In the United States, he helped to repeal the Banking Act, passed in 1933 to ensure that deposits and investments of banks were not in the same hands.  This opened the door to all kinds of excess in the financial sector to make more profits and facilitated the emergence of the current international crisis.  Rubin favored the concentration of power in Citigroup, of which he later became one of the top executives, and to which the US government recently handed 300 billion dollars.  Despite all this, Rubin is one of the most important advisers to Obama.

Lawrence Summers was appointed to the position of the Director of the National Economic Council, a US agency within the White House.  In December 1991, when he was the chief economist for the World Bank, he managed to write: “[U]nder-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City”; “From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages”; “The concern over an agent that causes a one in a million change in the odds of prostate cancer is obviously going to be much higher in a country where people survive to get prostate cancer than in a country where under 5 mortality is 200 per thousand.”  He added in 1991: “There are no . . . limits to the carrying capacity of the earth that are likely to bind at any time in the foreseeable future.  There isn’t a risk of an apocalypse due to global warming or anything else.  The idea that the world is headed over an abyss is profoundly wrong.  The idea that we should put limits on growth, because of some natural limit, is a profound error and one that, were it ever to prove influential, would have staggering social costs.”  In his biography at Harvard University’s Web site, it’s said that he “led the effort to enact the most sweeping financial deregulation in 60 years.”

Timothy Geithner was appointed as Secretary of the Treasury.  The former president and chief executive officer of the Federal Reserve Bank of New York was the Under Secretary of the Treasury for International Affairs from 1999 to 2001, first under Rubin and then under Summers, very actively involved in the issues related to Brazil, Mexico, Indonesia, South Korea, and Thailand — typical cases of risks of ultraliberalism — which suffered crises in those years.  The measures implemented by the trio led to the populations of those countries paying the price of the crisis.

How is Latin America reacting to the crisis?

Toussaint: The Latin American countries accumulated 400 billion dollars in their reserves.  That is no small sum.  The money in the hands of the central banks must be used at the appropriate moment to strengthen regional integration and better resist the effects of the crisis.  Unfortunately, we can’t live in illusions.  Latin America is losing precious time, with its governments, aside from their rhetoric, pursuing traditional policies: signing bilateral investment treaties, accepting or continuing negotiations on free trade treaties, using reserves to buy US Treasury bonds (that is, channeling resources to the dominant countries), making advance payments to the IMF, the World Bank, and the Paris Club, accepting the Tribunal of the World Bank as a place to resolve differences with transnationals, continuing negotiations on free trade through the Doha Agenda, maintaining the military occupation of Haiti.

Why aren’t the negotiations on the organization of the Bank of the South moving forward?

Toussaint: On the Bank of the South, the discussions did not progress.  We have to overcome various confusions and make the bank, whose creation was decided in December 2007 by seven countries of the continent, clearly progressive.  The Bank of the South must be a democratic institution (one country, one vote) and transparent (external auditing).  Rather than using public money to finance grand infrastructure projects that do not respect the environment and that are developed by private corporations whose objective is to make as much profit as possible, we must support the government’s efforts to promote policies such as food sovereignty, agrarian reform, the development of research in the field of health, the establishment of a pharmaceutical industry that produces high-quality generic drugs, ways to strengthen public transportation, use alternative energy to reduce the impact on the depletion of natural resources, protect the environment, and develop the integration of education systems, among others.

The original article “Entrevista com Eric Toussaint” appeared in the “Blog do Emir” section of Carta Maior on 3 March 2009.  Translation by Yoshie Furuhashi (@yoshiefuruhashi | yoshie.furuhashi [at]