Sunday, August 15, 2010

How do banana republics get reformed?

This the question of our historical moment here in America, although the MSM does its best not to acknowledge it.  Reading Mark Zandi’s mincing piece on tax reform (don’t do it!  or do it so slowly it never happens!) in the New York Times this morning made me want to investigate how banana republics come to an end.  I thought of the land reform that took place in Hawaii, of the revolutions that have taken place in Central and South America… and wondered how—if it ever happens—the banana republic that America has become will ever be undone.  I think we will see years of political volatility, carefully manipulated by the kleptocracy-controlled media to divide us, before the public wakes up and bothers to educate themselves to what’s really happening.  Meanwhile, see the comments section on the previous post for clarification of my views on the chances of a “double dip” (Robert Reich is with me on this, that we’re in a depression already; and the basic cause is the unbalanced income distribution).


Pretty straightforward and helpful for those who don’t realize that they’re taxed at different levels of their income, not just one bracket.

See, I’ve discovered, through the course of just asking around, that many folks don’t realize that they’re taxed at different levels. Many think that if they make over a certain amount of money, all of their money is taxed at that rate. That’s why you heard all that talk about taxes being a disincentive to making more money, which is obviously nuts and was meant to confuse the average taxpayer who doesn’t understand how our system works.

In any event, the graph via Wash Post

And a little more about where this came from:

A Republican plan to extend tax cuts for the rich would add more than $36 billion to the federal deficit next year — and transfer the bulk of that cash into the pockets of the nation’s millionaires, according to a congressional analysis released Wednesday.

New data from the nonpartisan Joint Committee on Taxation show that households earning more than $1 million a year would reap nearly $31 billion in tax breaks under the GOP plan in 2011, for an average tax cut per household of about $100,000.

Does everybody now understand how big of a giveaway this is to the wealthiest 2%?

Were the rich hurting in the 90s when the tax rate was 39.6%?

Can we all agree that people making between $200 and $500K can take a $400 hit?

And to those who make over $500K, well, you still don’t have to pay Social Security tax on hardly ANY of your income. And since many of the super rich derive their income from investments, which is taxed at 15% since it’s considered long term capital gains, you’re still gaming the system effectively.

Yes, rich people…you’re still rich and you still win.

Meanwhile, teachers, firefighters and cops don’t deserve to keep their jobs according to Republicans, but they want to give $10 billion more to people who are so wealthy that few of us will ever understand what it is to be in that company?

Good times.

Via:  wikipedia

Banana republic

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For other uses, see Banana republic (disambiguation).

A banana republic is a politically unstable country dependent upon limited agriculture (e.g. bananas), and ruled by a small, self-elected, wealthy, and corrupt politico-economic clique.[1] The original concept of banana republic was a direct reference to a "servile dictatorship" that abetted (or supported for kickbacks) the exploitation of large-scale plantation agriculture, especially banana cultivation.[1] As a political science term banana republic is a pejorative first used by the American writer O. Henry in Cabbages and Kings (1904), a book of related short stories derived from his 1896–97 residence in Honduras, where he was hiding from the U.S. law for bank embezzlement in the U.S.[2]




The concept of banana republic originated with the introduction of the banana fruit to Europe in 1870, by Captain Lorenzo D. Baker, of the ship The Telegraph, who initially bought bananas in Central America and sold them in Boston at a 1,000 per cent profit.[3] Yet the banana business was incidentally established by the American railroad tycoon Henry Meigs and Minor C. Keith, his nephew, who started banana plantations, initially along the railroads, to feed their workers, and, upon grasping the potential profit of bananas sold in the U.S., also began exporting the fruit from their plantation to the Southeastern United States.[4] In the event, Keith founded the Tropical Trading and Transport Company, the future half of the corporate merger that established the United Fruit Company at the end of the nineteenth century; he became its vice president.

The banana proved popular with Americans, because it was a tropical fruit cheaper than local U.S. fruits, such as the apple; in 1913 a dozen bananas sold for twenty-five cents, whilst the same money bought only two apples.[5] The exporters profited from such low prices because the banana companies, via manipulation of the national land use laws, could cheaply buy large tracts of agricultural land for plantations in the Caribbean, Central American, and South American countries, whilst employing the native peoples as cheap manual labourers, having rendered them land-less.[5] In 1899, the largest banana company, the United Fruit Company (Chiquita Brands International), resulted from a merger between Andrew Preston's Boston Fruit Company and Minor C. Keith's Tropical Trading and Transport Company; by the 1930s, its international politico-economic influence granted it control of 80–90 per cent of the U.S. banana trade.[6] Moreover, in 1924, the Vaccaro Brothers established the Standard Fruit Company (Dole Food Company), to export Honduran bananas to New Orleans.

In Honduras, the United Fruit Company, the Standard Fruit Company, and Sam Zemurray's Cuyamel Fruit Company dominated the economy's key banana export sector, and the national infrastructure, such as the railroads and the ports. Moreover, the United Fruit Company's nickname was El Pulpo (“The Octopus”'), because it freely interfered — sometimes violently — with Honduran national politics. In 1910, Zemurray hired mercenaries, led by “General” Lee Christmas, an American soldier of fortune from New Orleans, to effect a coup d’état in Honduras and install a government friendlier to the Cuyamel Fruit Company's business interests. In 1933, twenty-three years later, with a hostile takeover Sam Zemurray assumed control of the rival United Fruit Company.[7]

In the 1950s, the directors of the United Fruit Company convinced the administrations of presidents Truman (1945–53) and Eisenhower (1953–61) that the popular government of Colonel Jacobo Arbenz Guzmán in Guatemala was secretly pro-Soviet for expropriating unused “fruit company lands” to land-less peasants. In the Cold War (1945–91) context of the pro-actively anti-Communist politics of the McCarthy era, said geopolitical consideration facilitated President Eisenhower's ordering the CIA's Guatemalan coup d’état (1954) deposing the elected government of President–Colonel Jacobo Arbenz Guzmán.[1] In the event, with the poem La United Fruit Co., Pablo Neruda denounced foreign banana companies' political dominance of Latin American countries.

The banana republic

The purpose of a banana republic is commercial profit by collusion between the State and favoured monopolies, whereby the profits derived from private exploitation of public lands is private property, and the debts incurred are public responsibility. Such an imbalanced economy reduces the national currency to devalued paper-money, hence the country is ineligible for international development credit and remains limited by the uneven economic development of town and country.

Kleptocracy, government by thieves, features influential government employees exploiting their posts for personal gain (embezzlement, fraud, bribery, etc.), with the resultant deficit repaid by the native working people who “earn money”, rather than “make money”. Because of foreign (corporate) manipulation, the government is unaccountable to its nation, the country's private sector–public sector corruption operates the banana republic, thus, the national legislature usually are for sale, and function mostly as ceremonial government.

. . . a money class fleeces the banking system, while the very trunk of the national tree is permitted to rot and crash. . . .

Christopher Hitchens[8]

Political discontent and insurrection



Guatemala suffers the regional socio-economic legacy of the banana republic: inequitably distributed agricultural land and natural wealth, uneven economic development, and an economy dependent upon a few export crops, usually bananas, coffee, sugar cane. The inequitable land distribution is the principal cause of national poverty and the low quality of Guatemalan life, and the concomitant socio-political discontent and insurrection. Almost 90 per cent of the country's farms are too small to yield adequate subsistence harvests to the farmers, whilst two per cent of the country's farms occupy 65 per cent of the arable land, property of the local oligarchy.

Initially, short-story writer O’Henry’s coinage, “servile dictatorship”, bore a civil government face — a white-collar businessman president — yet when he proved an administrative incompetent, the military, usually the army, assumed government, and ruled as juntas (military government by committee) during the thirty-six-year Guatemalan Civil War (1960–96); nonetheless, in 1986, the Guatemalans promulgated a new political constitution, and elected Vinicio Cerezo (1986–91) president, then Jorge Serrano Elías (1991–93) five years later.[9]


Honduras rel 1985.jpg

The long history of political discontent and insurrection in Honduras derives from commercial and political competition between banana exporters, e.g. the United Fruit Company and the Cuyamel Banana Company, for control of Honduran agricultural land and workers. In 1911 Sam Zemurray, owner of the Cuyamel Company hired mercenaries, led by “General” Lee Christmas, to effect a coup d’état to depose the liberal President Miguel R. Dávila (1907–11), [10] with whom the United Fruit Company was colluding for a banana monopoly in exchange for brokering U.S. Government loans for Dávila's government;[6] the Cuyamel Banana Company deposed President Dávila and installed President Gen. Manuel Bonilla (1912–13) in his stead.[11] Contemporarily, internal political instability and a great foreign debt — more than $4 billion — have excluded Honduras from capital investment, thereby continuing its economic stagnation, and reinforcing its banana republic status.[12]

See also


  1. ^ a b c Big-business greed killing the banana - Independent, via The New Zealand Herald, Saturday 24 May 2008, Page A19
  2. ^ Chapman, Peter. Bananas: How the United Fruit Company Shaped the World, Cannongate, New York, 2008; pp. 68-69, 108 ("O. Henry was the first to use the term 'banana republic'...").
  3. ^ Alison Acker, Honduras, The Making of a Banana Republic. Between the Lines, 1988, p. 60.
  4. ^ Dan Koeppel, Banana- The Fate of the Fruit That Changed the World. Hudson Street Press, 2008, p.60
  5. ^ a b Dan Koeppel, Banana- The Fate of the Fruit That Changed the World. Hudson Street Press, 2008, p.68
  6. ^ a b Alison Acker, Honduras, The Making of a Banana Republic. Between the Lines, 1988, p.63
  7. ^ Chapman, Peter. Bananas: How the United Fruit Company Shaped the World, Cannongate, New York, 2008, p. 102.
  8. ^ Hitchens, Christopher. "America The Banana Republic." Vanity Fair. 9 Oct. 2008. Web. 22 Oct. 2009.
  9. ^ Smith, Carol A. "Beyond Dependency Theory: National and Regional Patterns of Underdevelopment in Guatemala." American Ethnologist 5.3 (1978): 574-617. Print.
  10. ^ Alison Acker, Honduras, The Making of a Banana Republic. Between the Lines, 1988, p. 64
  11. ^ Dario A. Euraque, Reinterpreting the Banana Republic, Region and State in Honduras, 1870-1972. University of North Carolina Press, 1996, p. 44
  12. ^ Valentine, W. S. "Need For Capital in Latin America: Honduras." Annals of the American Academy of Political and Social Science 68: 185-87. Jstor. Web. 22 Oct. 2009.

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Categories: Forms of government | Political corruption | Political terms


  1. I think the use of dollar amounts to determine the size of the benefit/cost is less appropriate than if measured on a percentage basis. The tax cut for the rich (10% at $1m?) would only be 20x larger instead of seeming 2,000x larger.

    You can still argue if people with larger pools of money generate a better multiplier effect.

    Would you be OK if all individuals equally paid 10% (some fixed amount) of their income (wages, interest, dividends)?

  2. Casual -

    The problem is that the ruling elite are exploiting everyone else through ridiculous executive compensation in corporations, manipulation of the tax system to their advantage, rigged financial markets, and "privatization of gains, socialization of losses" on Wall Street.

    The ruling elite will strangle the economy, which depends on a vibrant middle class, but they will be better off (they think) for a generation or two.

    It will be the challenge of the next couple of generations to undo the concentration of income, wealth and opportunity that America has wrought in the past couple of generations.