Bill Bonner: kleptocracy in America

By Bill Bonner Jun 12, 2009

Bill Bonner.

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Reading the obituaries is such a delight. First, it is a relief when you find your name not mentioned. Then, it is a joy when you find those that are. Not that we wish to see any man's name on the roll of the dead; still, the final audits are always the most revealing. Here on the back page, we admire honest scallywags, and learn from them. Thus was our attention drawn to Mr. Omar Bongo's exit from the mortal stage on 8 June.

Popular government has two major parts. One part is fraud. The other is larceny. As to the first, it is like a professional wrestling match – full of lurid threats, spilled beer, sacred cows, gaudy uniforms and self-delusions; the fans feel their private parts shrink when their man loses. If he wins, they feel they are winners too.  But it is the other part, the more rational part, a balance of larceny and bribery, that interests us today.

Serge Dassault miscalculated. One of France's richest men, he was stripped of his position as mayor of a Paris suburb this week. A court found he'd made cash payments to voters in Corbeil-Essonnes, east of Paris, which could have influenced the outcome of a mayoral election.

We stand dumbfounded, mouths wide open, our fondest hopes for the progress of humanity dashed to pieces. How could an experienced, well-informed man of mature age and sound finances have made such an amateur's error? He bribed the voters unfairly – that is, with his own money – but apparently not enough of them!

Mr. Dassault, meet the late Mr. Bongo. France included in its 'mission civilisatrice' the cultivation of various public officials across Africa. Aspiring Africans were invited to visit French mayors, for example, to learn how the system worked. Upon seeing how well the local officials lived, the cars they drove, the fine antiques in their homes, the typical wide-eyed African would ask: "How is it possible to have so much wealth on a public servant's salary?"

The mayor would then point out the window: "Nothing gets done in this town without my say-so. See that bridge. Ten%," punctuating his brief explanation with a wink of the eye.

Years later, the African reciprocated. This time, the Frenchman marvelled at the even more luxurious appointments in the African's office – paintings, antiques, tapestries. In fact, he might have been visiting Mr. Bongo. The Times described Bongo as "one of the world's richest heads of state". The FT provided details: "An indictment... listed 39 properties, mostly in the chic 16th arrondissement of Paris, nine cars worth nearly $2m, and 70 bank accounts."

And so the familiar question: "how is this possible?" This time, it was the African's turn to wink. "Do you see that bridge?" he said, pointing out the window. "No, I don't see any bridge," said the Frenchman. "One hundred%," said the African.

Mr. Bongo's percentage must have been substantial. He took over the government of Gabon in 1967 at the age of 31, making him the world's youngest head of state. "For the next two decades," continues the obituary, "Bongo was able to rule Gabon almost as a personal fiefdom. With a relatively small population and benefiting from abundant natural resources – principally oil, but also uranium, manganese and timber...."  

The man mastered both carrot and stick. With revenue from Gabon's natural resources flowing into his coffers, he was able to hand out lavish favours. "He placated students in 2000 by providing hundreds of thousands of pounds for the purchase of the computers and books they were demanding," says The Times. He could spend his own money when it suited him too – for he had so much of it. And when the working classes took to the streets in 1990, he had plenty of goons in uniform to beat them with sticks.  

Bongo did not suffer from the typical financing problem of modern democracy. When you rob Peter to pay Paul, Peter gets cheesed off about it. The next thing you know he's voting against you, or plotting a coup. That is why it is better to bribe Paul with money Peter never earned. And do it on a large scale. That is how Bongo won an election as recently as 2005 with nearly 80% of the vote. Not even Obama can match that.

Politicians in Britain and America bribe voters on a breathtaking scale – protecting their bank accounts, shoring up their houses, giving them jobs and healthcare. In America alone, total US government debts, obligations and commitments now come to $112trn. But Congressmen risk neither jail nor insurrection. Cometh the old question: how do they get away with it? 

Currently, 50% of every dollar spent comes from borrowing. This week brought news that the developing countries – led by China – are still adding to their positions in US Treasury bonds. The funds are spent immediately. The payer and the payee – neither of whom vote in current US elections – can worry about settling the debt later. What a marvellous invention is an inter-generational government debt, funded by foreigners! Even Mr. Bongo, RIP, must have been impressed.

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Published in Economics | More articles by Bill Bonner

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