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Walt Wriston, CEO of Citibank/Citicorp/Citigroup 1967-1984 - the motor that drove neoliberal free-market economics to complete dominance
We lend to countries because... we can always find them
1968 is remembered as the year of assassinations – Martin Luther King and Bobby Kennedy. Also of the My Lai massacre in Vietnam, riots in Paris, the student takeover of Columbia University, and the election of Richard Nixon.
Yet the most significant event of 1968 was arguably none of these. It was the establishment of CitiCorp, the company by which the CityBank CEO Walt Wriston sidestepped American banking law and opened the floodgates to largescale speculative banking.
The usual history of neoliberalism claims that the oil crisis of 1973-74 unleashed a combination of economic stagnation and inflation and that it was Milton Freidman’s brilliant ‘monetarist’ solution that secured his place as the period’s dominant economist.
The real significance of the oil crisis of 1973-74 was not stagflation or monetarism. It was the enormous stash of dollars that now accumulated in the oil rich nations once they had hiked the price per barrel right up. The American Ambassador to Saudi Arabia quietly negotiated an exclusive deal for its new wealth to be invested in CitiCorp and the other financial institutions of New York
1975 was a turning point. Awash with oil cash, CitiCorp now began lending to struggling nations, starting in Latin America – Mexico, Argentina, Brazil, Venezuela. ‘It’s simple,’ said Walt Wriston. ‘We lend to countries because countries don’t go away. We can always find them.’ Other banks followed.
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Nelson Mandela and Bill Clinton,1994. Both were forced to agree that their national economies were now controlled by big business
'Twilight of Sovereignty'
In 1992 Walt Wriston produced a book. He called it Twilight of Sovereignty. The title bears a moment of reflection.
The architect of the runaway financial explosion of the 1960s and 1970s, the out-of-control seizure by financial giants of the world’s economies, was proudly recording that sovereign governments were ceasing to matter. He had, he boasted, launched ‘an attack on the very nature of sovereign power.’
Power now, he bragged belonged to the banks, whose only interest was, he said in one of his most appallingly disingenuous moments, ‘To satisfy the economic desires of the people.’
In 1992 President Bill Clinton was prevented from investing in certain infrastructure projects by opposition from the New York bond markets. Clinton’s reaction was forthright. ‘You mean to tell me that the success of the program and my re-election hinges on the Federal Reserve and a bunch of fucking bond traders?’ Yes, Mr President, he was told, that’s correct.
The same year, 1992, Germany’s vice chancellor told the Financial Times, ‘It is no longer possible for the individual states to dictate the rules of the economic game.’
Nelson Mandela pointed out that for developing nations it was even worse. It was now, he said, ‘Impossible for countries … to decide national economic policy.’
#107 This is Armageddon - Ep 7 Lunatics take over the asylum: Neoliberalism uncut
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