In the bad old days, according to the doctrinal truths of 1992, our Latin American wards didn't listen to our sage counsel. Now, however, with the worldwide victory of economic liberalism and free trade, they understand, at last, the wisdom of our words. The chorus of self-adulation is untroubled by the usual problems, such as the fact that we never followed that model ourselves, nor did any other country that has developed except when it conferred advantage; and that contrary to the doctrine, Latin America quite commonly did follow our advice, as the review of Brazil illustrates. It is hardly the only case. The Kennedy-Johnson Alliance for Progress is another. One of its most highly touted success stories was Somoza's Nicaragua. The catastrophic "miracle" provided a popular base for the Sandinista revolution in 1979. The most respected Nicaraguan economist during the US war against Nicaragua was Francisco Mayorga, who became economic Czar under the US-backed UNO government (soon to be dispatched to oblivion when the recovery policies he initiated to much US acclaim proved an utter failure). During his day in the sun, the media and others who hailed Mayorga were careful to ignore his major scholarly work. This interesting 1986 study examined the failure of the "monetarist paradigm" that had been advocated and enthusiastically backed by the US, which left the economy "on the verge of collapse" by 1978, perhaps unresurrectable, Mayorga argued, no matter what economic policies had been pursued, even without the immense costs of US terror and economic warfare.⁴⁴

Blithely ignoring all relevant facts (and crucially, the unmentionable US contribution), Latin America specialists in the press now inform us that "To the commercial pioneers of the post-Sandinista era, Nicaragua is ripe for a comeback after a decade of revolutionary mismanagement and two years of fiscal rehabilitation under President Violeta Chamorro" (Pamela Constable). True, businessmen still see problems, Constable notes: "the continuing threat of violence from labor unions" and armed factions in the countryside, and "the unresolved status of property" confiscated by the Sandinistas. But the "commercial pioneers" are optimistic. Particularly cheerful are private bankers and their clients. The Sandinistas nationalized banks "and began channeling state loans to farmers, rural cooperatives and small industry high-risk sectors," Tim Johnson writes in the Miami Herald. But, thankfully, such misbehavior is now over, and "the public is beginning to demand a lot more services from their banks," a private banker comments.

"The public" does not include the campesinos whose march against hunger was reported in the Mexican press a few days later, or the huge number of unemployed, or the children sniffing glue, or the semi-human figures celebrating the victory of capitalism and democracy while scavenging in the Managua garbage dump.

Shortly after, the government's National Development Bank (BND) announced a new credit policy under pressure from international lending institutions, CAR reported: "Under the Sandinista government, the BND provided subsidies and low-interest credit to cooperatives and small farmers with very few prerequisites, but those days are over." Now there will be "only guaranteed loans to clients with substantial collateral, leaving most peasant farmers out in the cold." Another feature of the new credit policy is that it "is expected to make it impossible for workers to pay off debts or make monthly bank payments on the companies they intend to buy." That will overcome a serious defect in the privatization process that the US demands as a condition for calling off its economic warfare: under the evil influence of the Sandinistas, the process allowed the wrong class of people -- workers in the enterprise -- to gain a share in ownership. That is quite improper, and inconsistent with the concept of "economic miracle."

To be sure, traditional US idealism will see to it that free market policies are not carried to excessive lengths: "the BND is considering financing large producers...at up to 70 percent of production costs," CAR notes.

The guiding US hand can also be seen in the measures to overcome "the unresolved status of property" that troubles the "commercial pioneers" and their cheerleaders in the US press. Envío reports that "The retrenching of the state banks towards medium- and large-scale production became evident in 1991, when the BND closed 16 branch offices in small towns throughout the country's central regions. Traditional financing mechanisms such as usury credit, futures sales, and sharecropping -- whose costs to the peasantry are well-known -- are coming into use again." Campesinos will be forced to leave their land, and it will return to its rightful owners.

To help the natural evolution along, the Army and National Police have been "utilizing all forms of violence and humiliation" to evacuate rural farmers from their lands, CAR reports; these lands had been distributed by constitutional decrees introduced by the Sandinistas, under which "farmlands and other properties abandoned or liquidated...were parceled out to landless campesinos in the form of small family subsistence plots or cooperative farms." In June 1992, 21 farms were violently "cleaned out" by the security forces, to be returned to their former owners; in 11 cases, to members of the Somoza family, according to the Nicaraguan Center for Human Rights (CENIDH). On June 30, CAR continues, 300 police and army troops "violently evicted 40 campesino families" with attack dogs, beating men, women, and children and threatening to kill campesinos who did not leave, burning homes and crops, and arresting activists of the Rural Workers Association. The security forces have imposed "a state of terror and blackmail" to prevent campesinos from organizing, CENIDH charged.

The police are now almost half ex-contras, it is estimated. The US failure to regain total control of the security forces has caused much outrage in Washington and the press. One major reason for the US war against Nicaragua was to restore that traditional control, so that the security forces can once again impose the "regional standards" of El Salvador, Guatemala, and Honduras, as in the Somoza days.⁴⁵

⁴⁴ Mayorga, Nicaraguan Economic Experience. See DD for further discussion.

⁴⁵ Constable, BG, March 4 (see p. 150); Golden, MH, March 5; wire services, Excelsior, March 12, 1992 (CAN). CAR, July 31, 1992.