Exclusive:
For the past decade, the people of the small central European nation of
Slovakia have suffered under a harsh and corrupt “privatization” scheme devised
by the Koch Brothers’ Cato Institute. However, in weekend elections, they
defied their oligarchs by voting for a left-of-center “populist” party, reports
Mark Ames.
By Mark
Ames
On
Saturday, the tiny EU nation Slovakia held parliamentary elections, and the
results surprised the “experts”: The center-left party Smer, derisively
described as “populist” in the American media, won in a record landslide, the
first time a single party will control the majority in parliament in Slovakia’s
post-Communist history.
The
“populist” Smer won on an unexpectedly large turnout of 60 percent –the
so-called experts had been assuring readers there’d be a low turnout of 40percent.
 |
| Billionaires Charles and David Koch, who helped found the libertarian Cato Institute |
The high
turnout reflects real suffering for the people of Slovakia that goes well
beyond mere cynicism — they’re suffering from real, mass impoverishment,
brought on by a decade of brutal free-market reforms, which hit the privatized
pensions especially hard. That’s where we Americans come in, specifically the
Cato Institute — but I’ll get to that in a moment.
Although
there’s been almost no coverage of Slovakia’s mass protest movement, the
country has seen the largest demonstrations since the Velvet Revolution. The
protests were sparked in part by the “Gorilla” scandal, leaked recordings of
Slovakia’s free-market politicians negotiating their bribes with bankers from a
top hedge fund, Penta, in exchange for Penta’s lucrative privatization deals.
But what’s
sustained the protests, and what brought people out to vote in droves for the
“populists,” is the mass impoverishment that’s worsened life for most of
Slovakia’s citizens — and first to suffer have been Slovakia’s pensioners, who
are forced to subsist on roughly $400 per month.
Here’s
where the Cato Institute, the libertarian think-tank founded by the Koch brothers,
comes in — and where Slovakia’s problems become our problems.
In the
early 2000’s, the co-chairman of the Cato Institute’s Project on Social
Security Privatization, José Piñera, played a key role advising and overseeing
Slovakia’s mass pension privatization, which passed in 2003 under the
free-market government of Mikulas Dzurinda. Today, Slovakia’s retirees are
groaning under the austerity pain administered to them by the Cato Institute.
José
Piñera, who has led Cato’s Social Security Privatization Project since the
1990s, has a dark history of administering pain on a nationwide scale: Piñera
served in the military junta under Chile’s Generalissimo Augusto Pinochet,
first as Pinochet’s Minister for Labor, helping suppress unions in one of the
most brutal dictatorships in the world; later, Piñera oversaw Pinochet’s
radical privatization of Chile’s pension program.
Today,
Chile suffers one of the worst wealth inequality problems in the developed
world. And for the past two decades, José Piñera, working at the Cato Institute, has been trying to impose the same pension austerity on Americans.
It’s a
match made in Hell: Cato and the Koch brothers have been pushing to dismantle
Social Security since the Kochs up the Cato Institute in the late 1970s. Thanks
to the Cato Institute’s tireless efforts, today dismantling Social Security is
practically gospel in the Republican Party — and not far off the top of the “To
Do” list for some “centrist” Democrats either.
Sacking
Slovakia
Cato’s José
Piñera was brought in to oversee Slovakia’s pension privatization only after
the 2002 elections put in power the free-market rightwing Democratic and
Christian Union Party, led by Prime Minister Mikulas Dzurinda. The pensions
were privatized in 2003, along with a free-market program that lowered the top
tax rate to a flat 19 percent, eliminated inheritance taxes, and generally
shifted the burden down the economic scale.
The reforms
were wildly unpopular with Slovaks, to the same degree that they were popular
with Western bankers and banking institutions like the World Bank, which named
Slovakia the world’s top economic reformer in 2004, and one of the top 20
business-friendly nations in the world.
In 2005,
Bush’s ambassador to Slovakia co-authored a glowing article with Cato’s Marian
Tupy, praising Dzurinda’s pension privatization, and noting Cato’s José
Piñera’s role in making Slovakia’s pension reforms happen. In their article,
they ominously compared Slovakia’s pre-reform pension “crisis” to America’s
“crisis” in Social Security.
The timing
of the joint Cato-Bush praise for Slovakia’s pension privatization was
interesting for a couple of reasons:
First,
because the same free-market government that Cato advised and Cato-Bush praised
has now been implicated in cutting secret kickback deals with leading hedge
fund to sell off Slovakia’s state assets in exchange for millions in bribes;
and secondly, that year, 2005, was the year President Bush made his big push to
privatize America’s Social Security program, with the Cato Institute as both
the lead adviser and promoter.
The
Bush-Cato plan to privatize Social Security began over dinner in 1997, when
Bush was still governor of Texas. Ed Crane, the president of Cato, and José
Piñera, Cato’s co-chair of the Social Security Privatization Project, flew to
Austin to sell the future president on their plan to privatize Social Security.
According
to the Washington Post: “Crane said that after Pinera’s presentation, Bush
declared, ‘This is the most important policy issue facing the United States
today.’”
As soon as
Bush was elected President, he set up a commission to privatize Social Security,
and staffed it with the Cato Institute’s free-market zealots. Unfortunately for
them, the 9/11 attacks distracted the Administration. But in 2005, Bush made
Social Security privatization his top priority for his second term — and once
again, he put the Cato Institute in charge.
By the end
of 2005, however, Bush’s presidency was practically in tatters as the country
turned against his wars, and Hurricane Katrina made privatizing Social Security
politically impossible. The project to do to America what Cato did to Slovakia
was essentially abandoned, and the Cato Institute turned critic of Bush’s war
on terror policies.
A Family
Project
Lately,
Cato’s José Piñera has seen his younger brother, billionaire Sebastian Piñera,
making international news as Chile’s most unpopular president since democracy
replaced the free-market military junta of Generalissimo Augusto Pinochet in
1990.
Thanks to
younger brother Sebastian’s free-market privatization of Chile’s education
system, the country has erupted in nationwide protests and violence on a level
not seen since, well, Generalissimo Pinochet overthrew Chile’s democratically
elected government in 1973, and installed a brutal regime that crushed dissent
and murdered and tortured thousands — handing the economy over to free-market
fanatics including Friedrich von Hayek, Milton Friedman, and Sebastian’s
brother, José Piñera.
Neither
age, nor time, nor working at the American-based Cato Institute, dining with
future presidents and convincing them to gut the population’s Social Security,
has mellowed this former Pinochet sidekick’s distaste for democracy. As Piñera
wrote in 2003,
“To hand
over a blank check to inherently unstable majorities concerning virtually all
the major economic, social, and political issues of a society is to
institutionalize instability, open the way to more serious abuses, and condemn
a country to underdevelopment. How is anyone to make rational decisions about
work, savings, and investment if key variables — such as taxes, labor legislation,
and regulations — can be altered by 50.01 percent of the citizens through a
vote that, in countries with low levels of education, can almost never be said
to show the characteristics of an ‘informed vote’?”
On
Saturday, the Slovaks voted overwhelmingly to reject the damage and plunder
that the Cato Institute’s advisers wreaked on that tiny country’s citizens.
Naturally, to free-market zealots like the Piñeras, the Kochs, the Cato
Institute and the rest of the oligarchy’s minions, this only proves their point
about why democracy must be “limited.”
The people
can’t be relied on to vote the way oligarchs want them to — they can’t be
relied on to react with cynicism and defeatism to all the news of political and
corporate corruption.
The hope
among the elites in Slovakia and elsewhere was that the voters’ mass
impoverishment and anger would lead to a withdrawal from politics — but the
high voter turnout turned out to be perhaps the greatest victory for the people
of Slovakia. The politicians are to be expected to sell out and disappoint —
but the more engaged in their democracy the people are, the more power they’ll
have to eventually change their politics for the better, and finally bring an
end to the rotten politics of oligarchy and plunder that mark our age.
Mark Ames
is editor of The eXiled Online and author of the book Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine and
co-author with Matt Taibbi of The eXile: Sex, Drugs and Libel in the New Russia.
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