No good deed goes unpunished; smashing the glass ceiling; the dollar rules the world


No Good Deed Goes Unpunished

Plymouth, Mass.

In “The IRS Mess” [June 3], The Nation mentions allegations that the Internal Revenue Service targeted groups with the words “tea party” or “patriot” in their tax documents. Since it is well-known that the Koch brothers have used Tea Party groups as fronts for funneling money to right-wing causes, I believe the IRS did not overstep its bounds in directing extra scrutiny toward them. The IRS was just doing its job. Shame on the Obama administration for caving in to right-wing pressure and on the Justice Department for opening a criminal investigation.


Wooster, Ohio

When will we admit that sorting “charitable” from “political” causes, and figuring out the amount of any budget attributable to each, is impossible? Then we can take the next step: abandon all charitable deductions! This would be a jolt to many churches and causes I support. But why should I subsidize others’ charities and causes, and they mine? Let taxes be paid by the public for public purposes. Let private causes be supported by all who believe in them, without that Pandora’s box of deductibles. Period. Think of the hypocrisy, parsing, agonizing and bureaucratic salaries this would save. And some of that savings would go to the causes we cherish—money honestly recruited, spent and accounted. Why not?


Smashing the Glass Ceiling

Los Angeles

In “Why I’m Voting for Her” [“Body Politic,” June 3], Jessica Valenti writes, “Like most politicians, a woman president could be just another disappointment. So why not a female disappointment? Equal representation of jerks is still equality.” Equality for what? Equal opportunity to continue the same inequality? Look at recent female power figures—put in place, of course, by men: Madeleine Albright, who thought it was OK to starve hundreds of thousands of Iraqi children; Condoleezza Rice, who did the criminal bidding of Bush/Cheney/Rumsfeld; or Margaret Thatcher, who shmoozed with a mass killer, General Pinochet, and whose cruel legacy still haunts Britain (and the United States). Change the system, not the gender!


New York City

Those who will vote only for a woman in 2016 should start mounting a campaign for Senator Elizabeth Warren. She would not only be the “game-changer” Jessica Valenti hopes for; she will stand up for the interests of all of us, not the banksters, whom Hillary Clinton’s husband elevated to the status of gods.


The Dollar Rules the World


A revisionist myth pops up in “Empire States” [June 3], Thomas Meaney’s review of books on the modern history of relations between developing nations and the West. The explanation of why the aspiring New International Economic Order (NIEO) flamed out in the 1970s is often cast in terms of the willingness of third world resource cartels to sacrifice their political solidarity with the poor for the allures of Western compound interest. The central narrative is that the West “broke the trade union” of the Organization of Petroleum Exporting Countries (OPEC) by persuading its members to “join the capitalist system” through major investments in Western banks. In turn, the banks promised to recycle these oil monies back into loans to generate development for poor nations, which didn’t pan out because high oil prices in these borrowing nations ate up the bulk of the loans, leading to massive debt crises in Latin America and Africa that lasted throughout the 1980s. During the early Reagan years, this conventional analysis created historical amnesia on both the right and left. The actual circumstances deserve a deeper look.

After the dramatic oil price hikes in 1973–74, OPEC publicly discussed using its surplus of oil wealth to fight poverty and create trading alliances and development banks in the third world. Meanwhile, the United States, having delinked the world from the gold standard in 1971, was eager to maintain the operational status of the dollar as the world’s monopoly currency. When OPEC nations broke ranks with poor nations and “funneled their dollars through New York and London” banks during the late 1970s, it was not because higher oil prices had led to crippling inflation in the North and higher debt in the South, as Meaney suggests. These were the effects, not the cause, of OPEC’s new economic alliances with the West. To be sure, the financial yield and security of these investments played a part in enticing OPEC to abandon the NIEO agenda, but interventionist threats from the United States, the Soviet Union, Israel and other nations in the Middle East were also stirring the pot. The recycling of oil profits through Western banks took place chiefly because OPEC nations—with Saudi Arabia at the helm—were promised US military protection for their oil fields, pipelines and shipping lanes in return for their promise to continue using US currency in oil trading, thereby assuring US dollar hegemony in the free and nonaligned world. Monetary politics is underestimated and ignored in most historical analyses of this period, not unlike today.

Centre for Global Negotiations

Meany Replies

Saugerties, N.Y.

James Quilligan seems to believe that in the 1970s OPEC nations were bribed into trading away their ambitious development agendas in return for Western finance with military protection. But we do not have to resort to shadowy political deals to explain the OPEC countries’ investments in the United States or their decision to price oil in dollars. The fear of oil being priced in some other currency was never a top concern of US policy-makers. They were far more worried about oil production cuts and price increases, which were a threat even if the dollar maintained its status as the world’s reserve currency. 

The fact is that the political and economic relationship between countries like Saudi Arabia and the West was overdetermined. Saudi Arabia and the United States had a longstanding political relationship based on anticommunism and opposition to leftist nationalism in the Middle East that went back long before 1973. The same was true of Iran. It didn’t need to strike any secret bargains to build a relationship with the United States during the 1970s; that relationship was already there.

Oil producers had plenty of economic incentives to invest their surplus earnings in the West, where the financial markets were larger, more liquid and less risky than in the third world. The promise of OPEC to use its surplus of oil wealth to fight poverty and create trading alliances with third world nations made for good rhetoric, but it shouldn’t be any great mystery why most OPEC members didn’t implement those ideas as policy.


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