Making the Economy ‘Scream’

Exclusive: In the past when the CIA targeted a troublesome government, a key part of the strategy was to make the economy “scream” to get the people ready for regime change. This tactic now appears to have come home to roost in the Right’s efforts to destabilize President Obama’s government, writes Robert Parry.

By Robert Parry

Americans who have studied CIA destabilization campaigns around the world may see some striking parallels to the strategy of Tea Party Republicans who have provoked a government shutdown and now are threatening a credit default. The idea is to make the country appear ungovernable and to make the economy “scream.”

This approach is similar to what CIA operatives do to get rid of disfavored political leaders in other countries, such as when President Richard Nixon ordered the spy agency to sabotage Chile’s economy and upset its political stability in the early 1970s.

President Barack Obama runs to the stage at the M. Luis Construction Company in Rockville, Maryland, before delivering remarks about the government shutdown, Oct. 3, 2013 (Official White House Photo by Pete Souza)

The CIA’s thinking is that most people just want a chance to make a living. So, if an economic crisis can be ginned up while propaganda outlets put the blame on the government leaders who are ostensibly in charge then the people will ultimately turn against those leaders in an effort to restore normality.

In effect, the CIA takes the political process hostage by inflicting economic pain on the average citizen, sponsoring “populist” disorders, spreading confusion through propaganda outlets and then waiting for a weary population to give in. This technique has worked in many countries over the years and surely the idea long predated the formation of the CIA in the late 1940s.

The Chilean Episode

But some of the best-studied examples of CIA operations have similar patterns to what the American Right is doing now to destabilize the U.S. economy and discredit President Barack Obama. For instance, in the early 1970s, Salvador Allende, a socialist politician, won the presidency of Chile through free and fair elections and began taking steps aimed at improving the conditions of the country’s poor.

To stop this perceived spread of “socialism,” President Nixon directed the CIA to engage in psychological warfare against Allende’s government and to make the Chilean economy “scream.” U.S. intelligence agencies secretly sponsored Chilean news outlets, like the influential newspaper El Mercurio, and supported “populist” uprisings of truckers and housewives. On the economic front, the CIA coordinated efforts to starve the Chilean government of funds and to drive unemployment higher.

Worsening joblessness was then spun by the CIA-financed news outlets as proof that Allende’s policies didn’t work and that the only choice for Chile was to scrap its social programs. When Allende compromised with the Right, that had the additional benefit of causing friction between him and some of his most ardent supporters who wanted even more radical change.

As Chile became increasingly ungovernable, the stage was set for the violent overthrow of Allende, the installation of a rightist dictatorship, and the imposition of “free-market” economics that directed more wealth and power to Chile’s rich and their American corporate backers.

There was other fallout from Allende’s ouster and death. Chile’s fascist Gen. Augusto Pinochet executed thousands of dissidents and sent assassins far and wide, including Washington, D.C., where former Chilean diplomat Orlando Letelier and an American co-worker, Ronni Moffitt, were murdered in a car bombing along Massachusetts Avenue in 1976. [For details, see Robert Parry’s Secrecy & Privilege.]

Though the Allende coup in Chile is perhaps the best known example of this intelligence strategy (because it was investigated by a Senate committee in the mid-1970s), the CIA has employed this approach frequently around the world. Sometimes the target government is removed without violence, although other times a bloody coup d’etat has been part of the mix.

In the case of Nicaragua in the 1980s, the leftist Sandinista government was presiding over a reasonably healthy economy when President Ronald Reagan ordered the CIA to achieve “regime change.” The Reagan administration went to work strangling the Nicaraguan economy, while the CIA trained a terrorist army known as the Contras.

Though the Sandinistas prevailed in an election in 1984, Reagan kept up the pressure, eventually breaking the back of the Nicaraguan economy, leaving children searching through garbage dumps for food while U.S.-financed media outlets blamed the Sandinistas and called for reconciliation on terms demanded by the U.S. government.

In 1990, amid threats of renewed Contra terrorism and a worsening economic catastrophe, the coerced Nicaraguan people elected the U.S.-backed presidential candidate Violeta Chamorro. After Chamorro took office, much of the CIA-created pain subsided, but the conditions for many Nicaraguan peasants continued to deteriorate.

Home to Roost

So, it is perhaps fitting that a comparable approach to politics would eventually come home to roost in the United States, even to the point that some of the propaganda funding comes from outside sources (think of the late Rev. Sun Myung Moon’s Washington Times and Australian media mogul Rupert Murdoch’s News Corp.)

Obviously, given the wealth of the American elites, the relative proportion of the propaganda funding is derived more domestically in the United States than it would be in a place like Chile or Nicaragua or some other unfortunate Third World country that has gotten on Washington’s bad side.

But the concept remains the same: Control as much as possible what the population gets to see and hear; create chaos for your opponent’s government, economically and politically; blame it for the mess; and establish in the minds of the voters that their only way out is to submit, that the pain will stop once your side is back in power.

Today’s Republicans have fully embraced this concept of political warfare, whereas the Democrats generally have tried to play by the old rules, acquiescing when Republicans are elected to office with the goal of “making government work,” even if the Republicans are the ones setting the agenda.

Unlike the Democrats and the Left, the Republicans and the Right have prepared themselves for this battle, almost as if they are following a CIA training manual. They have invested tens of billions of dollars in a propaganda infrastructure that operates 24/7, year-round, to spot and exploit missteps by political enemies.

This vertically integrated media machine allows useful information to move quickly from a right-wing blog to talk radio to Fox News to the Wall Street Journal to conservative magazines and book publishing. Right-wing propagandists are well-trained and well-funded so they can be deployed to mainstream news outlets to hammer home the talking points, regardless of the truth.

Thus, you have embarrassments like CNN’s “Crossfire,” where it doesn’t matter that the Democrats are actually telling the truth when they cite evidence that the Tea Party, Sen. Ted Cruz, R-Texas, and House Speaker John Boehner, R-Ohio, provoked the government shutdown after refusing to allow House-Senate budget negotiations for six months and even after the Senate agreed to accept the House budget figures.

You still have the Republican voices repeating their talking points, laying the blame for the fiscal crisis on President Obama and the Democrats for refusing to negotiate. The dialogue of pathetic shows like “Crossfire” can be summarized as “talking point, talking point, counter-talking point, cross-talk talking point, another talking point.”

But the GOP’s politics of disruption have not only been the rule during Obama’s presidency. Though the ugliness of the Clinton years has largely faded from memory, the blueprint for the current chaos was drafted then. Barack Obama, like Bill Clinton, was treated as an illegitimate interloper on the rightful Republican ownership of the White House.

The Clinton Case

After getting elected in 1992, Clinton complained that his “honeymoon” period when presidents are generally afforded the benefit of the doubt and their policies get respectful attention in Congress didn’t even last through the transition, the two-plus months before a new president takes office.

Clinton found himself facing especially harsh hazing from the Washington press corps, as the mainstream media seeking to shed its “liberal” label and goaded by the right-wing media as “soft on Clinton” tried to demonstrate that it would be tougher on a Democrat than any Republican.

The mainstream press hyped minor “scandals” about Clinton’s Whitewater real estate investment and Travel-gate, a flap about some routine firings at the White House travel office. Meanwhile, the Right’s news media spread false stories implicating Clinton in the death of White House aide Vince Foster and other “mysterious deaths.”

Republicans in Congress did all they could to feed this press hysteria, holding hearings and demanding that special prosecutors be appointed. When the Clinton administration relented, the choice of prosecutors was handed over to right-wing Republican Appeals Court Judge David Sentelle, who consciously picked political enemies of Clinton to oversee zealous investigations.

The use of scandal-mongering to destabilize the Clinton administration peaked in late 1998 and early 1999 when the Republican-controlled House voted impeachment because of Clinton’s extramarital affair with Monica Lewinsky and Clinton had to endure (but survive) a humiliating trial in the Senate.

The Republican strategy, however, continued into Campaign 2000 with Vice President Al Gore facing attacks on his character and integrity. Gore was falsely painted as a delusional braggart, as both right-wing and mainstream media outlets freely misquoted him and subjected him to ridicule (while simultaneously bowing and scraping before Republican candidate George W. Bush).

When Gore managed to win the national popular vote anyway and would have carried the key state of Florida if all legally cast ballots were counted the Republicans and the Right rose up in fury demanding that the Florida count be stopped before Bush’s tiny lead completely disappeared. Starting a riot at the vote-counting center in Miami, the Republicans showed how far they would go to claim the White House again.

Then, five Republican partisans on the U.S. Supreme Court wanting to ensure that the new president would keep their side in control of the courts and recognizing that their party was prepared to spread disorder if Gore prevailed stopped the counting of votes and made Bush the “winner.” [For details, see the book, Neck Deep.]

Democratic Timidity

Despite the partisan Supreme Court ruling putting Bush in the White House, Gore and the Democrats stepped back from a political confrontation. The right-wing press cheered and gloated, while the mainstream news media urged the people to accept Bush as “legitimate” for the good of the country.

For most of Bush’s disastrous presidency, this dynamic remained the same. Though barely able to complete a coherent sentence, Bush was treated with great deference, even when he failed to protect the country from the 9/11 attacks and led the nation into an unprovoked war with Iraq. There were no combative investigations of Bush like those that surrounded Clinton.

Even at the end of Bush’s presidency when his policies of bank deregulation, tax cuts for the rich and massive budget deficits combined to create the biggest financial crisis since the Great Depression the prevailing message from the Establishment was that it was unfair to lay too much blame on Bush. Shortly after Barack Obama took office in 2009, a Republican/right-wing talking point was to complain when anyone took note of the mess that Bush had left behind: “There you go again, blaming Bush.”

The Republicans and the Right also set to work demonizing and undermining Obama’s presidency. For weeks, instead of letting the Democrats enact legislation to address the financial and economic crisis, Senate Republicans launched filibuster after filibuster.

When Obama and the Democrats did push through emergency legislation, such as the $787 billion stimulus package, they had to water it down to reach the 60-vote super-majority. The Republicans and the Right then quickly laid the blame for high unemployment on the “failed” stimulus.

There also were waves of propaganda pounding Obama’s legitimacy. The Right’s news media pressed bogus accusations that Obama had been born in Kenya and thus was not constitutionally eligible to be president. He was denounced as a socialist, a Muslim, a fascist, an enemy of Israel, and pretty much any other charge that might hit some American hot button.

When Obama welcomed American students back to school in 2009, the Right organized against his simple message urging young people to work hard as if it were some form of totalitarian mind control. His attempt to address the growing crisis in American health care was denounced as taking away freedoms and imposing “death panels.”

Soon, billionaires such as oil men David and Charles Koch and media mogul Murdoch, were promoting a “grassroots” rebellion against Obama called the Tea Party. Activists were showing up at presidential speeches with guns and brandishing weapons at rallies near Washington.

The high-decibel disruptions and the “screaming” economy created the impression of political chaos. Meanwhile, the mainstream press faulted Obama for failing to live up to his campaign promise to bring greater bipartisanship to Washington.

The Tea Party Victory

By November 2010, the stage was set for a big Republican comeback. The party swept to victory in the House and fell just short in the Senate. But Congress was not the Republicans’ ultimate goal. What they really wanted was the White House with all its executive powers. However, following Obama’s success in killing Osama bin Laden on May 1, 2011, the Right’s best hope for regaining complete control of the U.S. government in 2012 was to sink the U.S. economy, which had just recently begun to right itself.

Despite worries about the fragile recovery and a warning from Moody’s about a downgrade on U.S. debt if Congress delayed action on raising the debt limit the Republicans pushed the debt-limit vote to the brink before extracting major reductions in government spending (the so-called “sequester”).

By paying the ransom and avoiding default in 2011, Obama kept the weak economic “recovery” moving forward, achieving sufficient job growth to win reelection in 2012. But the Tea Party Republicans were no more chastened by their political reversals than the Republican “revolutionaries” were in 1998. They simply ramped up the pain.

It was the Clinton impeachment then; it is the double-barreled fiscal crisis of shutting down the government and threatening to default on the debt now. In both cases, there was some method to the madness.

By inflicting maximum political damage on Clinton, the Republicans weakened Al Gore’s candidacy in 2000; by confronting Obama with a new economic crisis now, the Tea Partiers feel they can expect a win-win, either Obama succumbs to their demands or he oversees a new recession, possibly even a depression.

The economy will be screaming so much with the Right’s media blaming the collapse on Obama’s “failed” policies that many Americans may be desperate for a change, perhaps even the radical “free-market” prescriptions and “small government” nostrums of the Libertarians and the Tea Party.

Those tattered old ideas won’t help most Americans, who have seen the middle class shrink over the past several decades amid right-wing economics and deregulatory extremism. More of Ayn Rand’s winner-take-all capitalism will only concentrate more wealth at the top one percent while further hollowing out the 99 percent.

However, if Republicans are allowed to get their way and the Democrats, as usual, give way, the deliberate infliction of pain on the national political structure will likely end. Thus, the public screaming will be more muted, heard only in the desperation of individual Americans scrambling to make ends meet.

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and For a limited time, you also can order Robert Parry’s trilogy on the Bush Family and its connections to various right-wing operatives for only $34. The trilogy includes America’s Stolen Narrative. For details on this offer, click here.

8 comments for “Making the Economy ‘Scream’

  1. Kevin Schmidt
    October 10, 2013 at 18:51

    All Obama has to do is declare a state of emergency and issue an executive order to the Treasury to keep on paying the bills. This single act will disempower the Republicans for a generation.

  2. Bruce
    October 10, 2013 at 11:05

    Pay no attention to that CIA Don behind the curtain!

  3. F. G. Sanford
    October 10, 2013 at 05:05

    Frances makes an interesting point. One wonders why the events of 1929 inspired the rise of Franklin D. Roosevelt and the “New Deal” instead of a Tea Party analogue and a coup d’etat engineered by corporate cronies. Actually…there WAS a coup, but there isn’t time here to rehash Major General Smedley Butler and his role in exposing the CONSPIRACY. The subversive elements were woefully ill-prepared to summon the forces necessary to quell what likely would have been mass insurrection. In those days, before FBI agents carried weapons and there was no such thing as militarized law enforcement, the general public out-numbered and perhaps out-gunned what was left of the professional Armed Forces. The recent purchase by Homeland Security of 1.6 billion (with a “B”) rounds of frangible ammunition may confirm a grim assessment that they plan to be better prepared the next time. That ammunition, by the way, is banned by the Geneva Conventions.

    By the end of World War Two, SIXTEEN MILLION Americans had served in uniform, and 300,000 had given their lives to defend what they believed in: DEMOCRACY. This was a massive segment of the population who knew all too well how to fight bullets, bombs and above all, bureaucracy. They were not easy to bamboozle. At the end of the war, it would have been suicide to disenfranchise them. Things are different know. We are a drug-addled, delusional mix of culture cliques bombarded by constant media falsehood and distraction. We have been transformed into an incarceration nation by a phony drug war which has in some instances been perpetrated on target populations by elements of our own government. We have abandoned the protections afforded by union representation and collective bargaining. Perpetual low-grade conflict has numbed us to wars-for-profit and unfettered defense spending.

    Bush may have been less than stellar, but he effectively accomplished what the brightest minds in the country failed to combat, let alone recognize. I wouldn’t call that stupid. His most telling quote? “Let us never tolerate outrageous conspiracy theories…” This was before anyone had proposed one, and nobody noticed. Massive increases in public debt, borrowed from the financial class, will be paid back by the working poor resulting in transfer of wealth to the rich. If the scheme collapses, law enforcement agencies will be standing by to insure order. Interest on the public debt is paid to the rich just like “welfare” used to be paid to the poor…but it is thousands of times greater than any “handout” the poor ever got. Pretty slick, huh? Nobody even noticed.

    Historians should know better. Conspiracy is the rule rather than the exception in power politics. There is nothing “outrageous” or unusual about it. From the murder of Julius Caesar to the assassination of Salvador Allende, it happens all the time. What’s most disturbing is the lack of outrage among those we used to call “liberals” and “intellectuals”. They were bribed and bought off with token gestures to their pet causes. Whether it’s the defense industry lackeys among Republicans or the financial sector stooges among Democrats, neither side seems motivated to stop this. The revolution won’t be televised…it was over before it started.

  4. rosemerry
    October 10, 2013 at 02:58

    “the average recidivist violent prisoners filling our prisons” Morton, you are showing vast ignorance. Most are “drug offenders”, non violent, who would not be in prison in any sane nation. As Howard Zinn said, most of the criminals are outside the prisons, which is obvious and demonstrated in Bob’s article.

    October 9, 2013 at 22:07


  6. Morton Kurzweil
    October 9, 2013 at 20:01

    The Tea Rags are not that smart. They are replaying the States rights advocacy of pre-bellum claims for slavery. They felt the same moral right to treat slaves as objects as the average recidivist violent prisoners filling our prisons. They can’t hep it. The same percent of anarchists with autistic personality defects exist in 20 to 28 % of any population. They are held in check when populations are not stressed by fear of hunger or deprivation of freedom.
    There is no reasonable way to control these psychotics.
    The response must be violent refusal to permit violence or threats of violence to effect the rights of sane people to live without fear.

    • F. G. Sanford
      October 9, 2013 at 21:58

      Morton, I hope you realize that your comment represents an intrinsically racist statement. Any sociologist will confirm that minorities are vastly over-represented among prison populations, and a two-tiered justice system definitely works to disproportionately convict them. White people and white collar criminals are unlikely to serve prison time regardless of the nature of their offenses. There is also no evidence that autism necessarily leads to criminal behavior or that these handicaps exist in anywhere near 20% of the population. You remind me that Gene Wilder’s conversation with Cleavon Little in Blazing Saddles was accurate. “These are just simple American people, the common clay of our society. You know…morons.”

  7. Frances in California
    October 9, 2013 at 18:03

    So we still laud and honor the spooks and criminals who torture the American people. Torches and pitchforks time, people. Every one of ours they make scream will burst their eardrums. They will wish they’d listened to their real constituents when we were still willing to talk.

Comments are closed.