A few months ago, John Perkins, a former big-name consultant to third-world governments made a splash with a book entitled "Confessions of an Economic Hit Man", which (between tales of sultry Back Bay liaisons with a seductive NSA minx) made the following shocking allegations:

• U.S. trade policy is organized primarily around what the U.S. government sees in its own best interest, as opposed to the interests of, say, the peasantry of Guatemala..
• Those interests can include political and strategic as well as economic goals, including access to resources.
• The government maintains close ties to private-sector entities in these fields of its interest, which can assist with its policies --- close enough that, as in the nature of all these things, the tail sometimes winds up wagging the dog.
• The results of all this for mere residents of third-world countries --- like, say, the aforementioned peasantry of Guatemala --- sometimes aren't pretty at all.

The last of these claims is a matter of public record. As to the others, they are transparently self-evident (except when Noam Chomsky says so, in which case they constitute a crazed conspiracy theory). What Perkins's book regrettably lacks is the kind of detailed evidence that would help you judge how much the peasants are being damaged (and what the alternatives would be).

Well, there's yet another consultant out with a similar book, except this one has meat: "Blood bankers", by James Henry. I'm not all the way through it yet, and I'll probably find something around chapter 10 or so with which I'll disagree violently just as punishment for posting this now. But the list of failed big-spending "aid projects" in Chapter One alone (heck, just the inoperable nuclear power plants in places like Brazil and the Phillipines) is worth more than anything in "Confessions of an Economic Hit Man".

But the most interesting thing, at this point in the book, is the contrast between two Pacific island nations that were devasted by World War II: Japan and the Philippines. In the Philippines, which the U.S. had already run for a few decades, we had ties with the corrupt local elites, and propped them up. In Japan, where we had no connections to the local elites, and no particular reason to like them, we worked on building sound, well-functioning institutions: putting new people in charge of preexisting banks, for instance, and making damn sure they knew their jobs.

The upshot decades later? The Phillipines are still, well, a good way-station for the Navy. But economically, they're a basket case. Japan has done a whole lot better.

So, what of our current nation-building exercise in Iraq, where we have a direct strategic interest in establishing a country that works? Well, instead of trying to build on local business, we're madly privatizing with no controls, so much so that eight billion dollars which were shipped to Bremer's ruling whatever-it-was to fund development have vanished without a trace; auditors literally have no idea what happened to it. (This includes billions of dollars of hard cash which were literally flown in on pallets). Instead of building on pre-existing institutions, and replacing the corrupt elites in charge of them with people who can do the job, we're wiping out pre-existing institutions (most notoriously, disbanding the army) and trying to cut deals with the corrupt factional leaders --- from the dual, dueling ethnic militias of the Kurds to sectarian factional leaders of all stripes --- with a clear eye to stablizing the situation for just long enough to not make it too embarrassing to pull out most of our troops.

Personally, I'm not sure we have a good alternative to doing that, having already screwed things up as badly as we have. But it's still worth noting that it's a pattern which has had bad long-term results in the past...

More: Billmon notes one difference between the local cronies we're cozying up to in Iraq and those we've cozied up to elsewhere: our Iraqi folks won't even avoid embarrassing us in public. The current Iraqi Prime Minister, a long-time Iraqi Shiite activist, just laid flowers on the grave of Khomeini...

Auditors link via several bloggers, including Avedon Carol, Tbogg, and others...