The New Confessions of an Economic Hit Man
John Perkins
Berrett-Koehler Publishers 2016

This is a true story that has all the elements of a real thriller, sex, espionage, deception, murder, blackmail, you name it. In this follow up to the original Confessions published in 2004 John Perkins chronicles recent developments in corporatocracy greed. In his words, Economic Hit Men, (EHMs) are highly paid professionals who are brought in to convince the political and financial leadership of underdeveloped countries to accept enormous development funds as “loans”.

The money comes from the World Bank, the US Agency for International Development, (USAID), and other foreign “aid” organizations and winds up in the hands of huge corporations who actually perform the development, (airports, bridges, dams, etc.), and the pockets of a few wealthy families who control the world’s natural resources. When it comes time to repay the loans, alternative arrangements are usually made in terms of political influence, US military installations, or other forms of blackmail. If the country’s leaders refuse to comply, as many have, the jackals are sent in and the ruling powers are overthrown or assassinated. Examples are Jamie Roldos of Ecuador, and Omar Torrijos of Panama, both killed by US government sanctioned murders.

It all started in 1951, when Iran rebelled against a British petroleum company that was exploiting Iran’s natural resources and its people. The democratically elected prime minister, Mohammad Mossadegh, nationalized all Iranian petroleum assets. England sought US help but feared military retaliation. Washington sent in CIA agent Kermit Roosevelt who succeeded in causing Mossadegh’s overthrow and the installation of US puppet Mohammad Reza Shah Pahlavi.

The book follows Perkins recruitment by the engineering company MAIN, (actually a front for the CIA), out of college and the Peace Corps not just because of his abilities, but because of his ambition and willingness to endure hardship and what he now calls personality weaknesses. His job as an economist was to forecast and justify the huge loans necessary to approve whatever massive engineering or construction project in whatever country looked ripe. Most MAIN employees thought they were doing countries favors when they build power plants, highways, and ports, but it was all actually very self-serving.

One kind of an aside in the book that really struck me relates a talk Perkins had with Indonesian students in 1971 where they say that Arnold Tonybee, a British historian, predicted in the 1950’s in Civilizations on Trial and The World and the West that the next century’s real war would be between Christians and Muslims. You need religion, faith, substance behind your ideology. History demonstrates that faith, soul, a belief in higher powers is essential. Muslims have that more than anyone.

As Perkins rose to partner at MAIN he was a key player in many projects throughout the world, most under very dubious circumstances. Plenty of names like Bush and Cheney pop up when relating stories of political and military intervention in places like Panama. It was an EHM failure in the 1980s that led to war in Iraq. He had a few good things to say, such as, President Carter may have been an ineffective politician but he had a vision of America that was consistent with the one described in our Declaration of Independence. This is an anomaly when compared to his immediate predecessors and successors. It seems the others all think America should control the world and all its resources.

That was all in the original part of the book. The new part starts off with the warning that things are even worse now and we still haven’t woken up. NAFTA, CAFTA, TPP, TTIP, and other so called “free” trade agreements are all aimed at achieving sovereignty over governments in countries around the world. Rain forests auctioned off to oil companies in Ecuador, prevention of rise in hourly wage rates in Honduras. Exploitation of the natural resources in under developed countries continues at an alarming pace.

Gadhafi, Hussein, and many others who, although were harsh dictators in their own right, were eventually brought down not because of their treatment of their constituents, but because they stood in the way of profit for the West.

EHM activities of today are reflected in the behavior of some of the largest banks such as in the Libor scandal, and later the foreign currency price rigging in 2014. EHM behavior can also be seen in large companies like Walmart siphoning off billions of dollars from US taxpayers by establishing overseas tax havens.

Today’s jackals are the drone operators that according to Michael Flynn do more harm than good. The feeling of many countries is that they would rather accept loans from Beijing than Washington because Beijing doesn’t overthrow or kill the country’s leaders.

We need to change our mindset about pollution, buying the cheapest goods, achieving market share as primary goal, and not caring about sustainability.

Four pillars of the modern empire shackle us to a feudal and corrupt system.
  • fear
  • debt
  • insufficiency, (the temptation to keep consuming more)
  • divide-and-conquer mindset

The last chapters are devoted to what you can do. Here are a few examples:

  • Start with your individual behavior, (but don’t believe that that is enough).
  • You must act. Every day.
  • Develop an awareness of your own biases
  • Speak out. Join an organizations
  • Build communities and networks
  • Support a culture of ethical behavior and accountability

Blockchain Revolution
Don Tapscott and Alex Tapscott
Penguin Random House. 2016

The following is not so much of a book review – more like a Cliff-notes, since I am essentially repeating what I learned from the book. This is the best blockchain book of all so far. Highly recommended. These are just some of the main points

Why should it take days or weeks for transactions to settle? As much as technology has progressed we are still paper based. Erik Voorhees of ShapeShift tells us we suffer from the productivity paradox – layering new technology over existing infrastructure.

First 4 decades of the Internet brought e-mail, the World Wide Web, dot-cons, social media, the mobile Web, big data, cloud computing. Along comes Blockchain - distributed, public, encrypted. The ledger itself is the foundation of trust.

And now we have the Internet of Things, (IoT). We register our devices, assign them an identity and coordinate payment among them without using, multiple fiat currencies. You can define new business cases using existing network infrastructure without having to bootstrap a new blockchain.

The bitcoin blockchain takes 10 minutes to clear and settle. Every 10 minutes all the transactions are verified, cleared, and stored in a block which is linked to the preceding block creating a chain. It's a Poisson process. While that is certainly better than days by banks, it is much too slow for the IoT. Latency of Litecoin is 2.5 minutes. Ripple and Ethereum are engineered to take seconds.

Blockchain can result in an economy of peers with institutions that are truly distributed, inclusive, and empowering and legitimate. Or it could be constrained or crushed. Worse, it could become a tool powerful institutions use to entrench their wealth, or if hacked or controlled by governments become a platform for a new surveillance society. With cryptology, autonomous agents, and artificial intelligence involved it could get out of control.

An increase in the money supply debases the currency.

Blockchain lowers the cost of transmitting funds:
  • no bank account is required
  • no proof of citizenship
  • no birth certificate
  • no home address
  • no stable local currency

Seven design principals of the Blockchain economy:

  • Networked integrity. Trust is intrinsic. Integrity is encoded in every step and distributed, not vested in any single member.
  • Distributed Power. Peer-too-peer, no single point of control
  • Value as incentive. The system aligns the incentives of all the stakeholders
  • Security. Must use cryptography, no single point of failure. 
  • Privacy. There's is no identity requirement in the network layer. The blockchain doesn't need to know who anybody is.
  • Rights preserved. Ownership rights are transparent and enforceable.
  • Inclusion. It works for everyone.

How cryptography provides security. Digital currency is not stored in a file, it's represented by transactions indicated by a cryptographic hash. uses hold the crypto keys to their own money and transact directly with one another.

Credit card type of transactions are very identity centric allowing personal information to be stolen every time there is a data breech.. Check out startup Personal Black Box Co, LTD. Deploys PKI on the back end so that only consumers have access to their data through private keys. Like the Internet where a TCP/IP address is not identified to a public ID.

Also, governments can subpoena ISPs and exchanges for information related to you, what devices you use and what you do, but they cannot subpoena the blockchain.

Blockchain's proof of work is also a time stamp for transactions so that only the first spend of a coin would clear and settle.

A smart contract provides a means of assigning usage rights to another party. The code of the contract would include all the terms, such as duration and termination.


Bitcoin is meant to circulate and will reach its max limit by 2140. As number of users go up price goes up like gold. But much of bitcoin is lost or held. Our current rules-based monetary policy is intended to prevent inflation triggered by arbitrary and discretionary decisions. Low or no inflation motivates users to hold bitcoin rather than spend it. A number of users are now holding bitcoin as an investment hoping it will go up in price.

Problems to overcome:
  • infrastructure is unevenly distributed
  • security not ready for mainstream usage, (volume)
  • inaccessible to average user
  • finite quantity
  • high latency
  • behavioral change (rely on digital security and storage)
  • societal change (money is social)
  • lack of legal recourse (irrevocable transaction and unavoidable smart contracts)

Hashing, the process of running pending transactions through the secure hash algorithm 256 (SHA-256) to validate them and solve a block uses a lot of electricity, a lot of computing power, all with a large carbon footprint. New Republic in 2015 advised that processing and protecting the more than $3 billion worth of bitcoin in existence required more than $100 million in electricity per year. But, says Erik Voorhes, all forms of money have a relationship to energy.

Alternative consensus algorithms:
  • Ethereum – proof of state while retaining decentralization. 2nd largest and fastest growing public blockchain.
  • Ripple – uses a federated model, a small controlled group like SWIFT. Aimed at wholesale banking.
  • Bram Cohen founder of Tor – proof of disk where owners of disk storage space defines the economic set of users.

Proof of work = new area of computer science.

Satoshi Nakamoto, “You will not find a solution to political problems in cryptography”

What will legislators, regulators, and adjudicators around the world make of blockchain technology?

The bitcoin blockchain was designed for moving Bitcoins, not for handling other financial assets. But the technology is open source, inviting experimentation. Innovators are developing separate blockchains known as altcoins. Others are looking to build “spin off” or sidechains that can be “colored” to represent any asset or liability, physical or digital.

Two-way peg to a cryptographer means transferring assets off the blockchain and back again without a 3rd party exchange.

The so-called “Golden Eight” of financial services:

  • authenticating identity and value
  • moving value
  • storing value
  • lending value
  • exchanging value
  • funding & investing
  • insuring value & managing risk
  • accounting for value

What Wall St. really wants is to be able to quickly, cheaply, and securely process any trade from beginning to end.
The life cycle;
  • execution
  • netting of multiple trades against each other
  • reconciliation

With distributed ledger, traceability, searchability, automatic settlement, and immutable timestamp allows regulators or managers to see what’s happening and to set alerts so they don’t miss anything.

Blockchain is entirely open and permissionless. Permissioned or private blockchains require users to have certain credentials.

New Frameworks for Accounting and Corporate Governance are coming.

Problems with modern accounting:

  • Relies on managers to swear their books are in order. Could lead to cronyism, corruption, and false reporting
  • Human error
  • New rules like Sarabanes-Oxley growing complicated
  • Traditional accounting method cannot reconcile new business models, e.g., most audit software allows for two decimal places – useless for micro transactions.