Would the American Right Crash the Economy for Political Advantage? Ask ChileRoundup
tags: debt ceiling, neoliberalism, Henry Kissinger, Chile, Salvador Allende, Shock Doctrine
Ruth Ben-Ghiat is the author of Strongmen: Mussolini to the Present.
"It's pretty remarkable how central a possible US financial collapse/loss of [the] dollar as reserve currency has become to GOP messaging," tweeted political strategist Simon Rosenberg on April 25, adding that the Republican goal is "to crash the US financial system to hurt Biden." He refers to the party's attempt to use the prospect of a US default on its debt to force President Joe Biden to negotiate spending reductions for Medicaid and other vital assistance programs.
Democrats have labeled the Republican bill that furthers these demands as the Default on America Act, or DOA (the habitual meaning of this acronym, dead on arrival, is also relevant). As Senate Majority Leader Chuck Schumer (D-NY) warned, the act "poses two terrible choices: either default on the debt or default on our country, with severe cuts to law enforcement, veterans, families, teachers, kids, even cancer research."
The massive domestic and international damage that a default on U.S. debt would bring might lead some to think that the GOP can't possibly be so vindictive or irresponsible. That would underestimate the Republican party's appetite for chaos and destruction.
Republicans also have a template for crashing a national economy to facilitate right-wing rule. From 1970 to 1973, the Richard Nixon administration, with Henry Kissinger as National Security Advisor, waged economic warfare on Chile to build support for the 1973 U.S.-backed coup that removed democratically elected president Salvador Allende. Under the guidance of U.S. economists, the military dictatorship then adopted neoliberal policies that destroyed Chile's social safety net and privatized education as well as the economy.
As an autocratic entity, the GOP would gladly unleash a "shock event," as I call coups and other cataclysmic occurrences that have allowed authoritarians to damage or destroy democracies. Today's GOP is a far-right party beholden to a violent cult leader. It no longer respects or operates within democratic norms, having liberated itself from democratic ideas of accountability. And it has no interest in bipartisanship or in sustaining a democratic political system --quite the contrary.
Fifty years ago, another episode of economic and psychological warfare meant to prepare the removal of a democratically elected progressive president was underway. Allende, a non-aligned Socialist, alarmed the United States and Chilean conservatives with his anti-imperialist economic and social programs. He nationalized Chile’s copper mines, expropriated 50% of farmlands and businesses to redistribute wealth, and targeted multinational corporations in Chile with a 1971 law against “excess profit.”
Yet plans had been made to end Allende's government as soon as he was declared the victor of the Sept. 4, 1970 election. Kissinger made contact with CIA director Richard Helms about coup planning just eight days later, and a Sept. 15, 1970 meeting of Helms, Kissinger, and Nixon produced the fateful directive to “make the economy scream.”