Imposing the New World Order
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of the impending Mexican and Latin American debt crisis, which would simultaneously spark increased U.S. industrial investment and export flows. The voices of Wall Street and of Henry Kissinger’s friends in the British Foreign Office and the City of London had more influence over the vacillating Reagan. As part of his preelection ‘deal’ to win backing of the powerful Wall Street establishment, Reagan had agreed to name former Merrill Lynch Wall Street chairman, Don Regan, as his Treasury secretary, along with a number of other key appointments, not least, those of former Trilateral Commission member George Bush as vice president, and Bush’s close friend James Baker as White House chief of staff. They argued, ‘We must save the New York banks at all costs.’ By October 1982, their approach to the exploding Mexico and other debt crises had become Reagan administration policy.6 The day before López Portillo addressed the UN General Assembly, the newly named U.S. secretary of state delivered the American response. George Shultz, a former University of Chicago economist and friend of Milton Friedman, and one of the figures behind the fateful August 15, 1971, Nixon decoupling of the dollar from gold, announced the final Reagan administration response to the assembled United Nations delegates. Shultz unveiled Wall Street’s simple ‘solution’ to the debt crisis. After the Mexican declaration of insolvency in early August, Paul Volcker had met with senior Reagan administration officials and worked out a plan to gradually ease the strains on the major New York banks. This was announced by Shultz as the ‘Reagan economic recovery.’ Rather than addressing the root causes of the crisis in either the United States or the nations of the South, Shultz offered International Monetary Fund policing of debtor country debt repayment combined with a stimulation of U.S. consumer purchases. This, it was argued, would then draw in increased Third World commodity exports as part of the planned ‘recovery.’ It was to be the most costly ‘recovery’ in world history. WALL STREET REPLAYS THE 1920s, IMF-STYLE Shultz’s fateful UN announcement was a carefully staged counter to the anticipated UN address of López Portillo and other Latin American heads of state. What then followed was almost beyond belief to anyone not directly familiar with negotiations between creditor bankers and debtor countries at that time.
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