That title is a quote from Naomi Klein, whose Shock Doctrine perfectly explains what is currently going on America right now viz. our incredible economic upheaval. According to Milton Friedman, Ã¢â‚¬Å“Only a crisis Ã¢â‚¬â€œ actual or perceived Ã¢â‚¬â€œ produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.Ã¢â‚¬Â The ideas lying around are accurately described by Klein as “disaster capitalism,” which is the modus operandi of neo-conservatives who love to capitalize on crises – actual or perceived – to implement policies that benefit the few at the expense of the many. Even Newt Gingrich seems taken aback: “Watching Washington rush to throw taxpayer money at Wall Street has been sobering and a little frightening.”
They’re throwing taxpayer money at Wall Street via the “Paulson Plan,” a plan so enormous (851 words) that as of Tuesday Sen. John McCain still hadn’t even read it. When he gets around to it (a timeout might help), I suggest he pay particular attention to:
Sections 6 and 10: raise our debt limit by 3 trillion and hands Sec. Paulson $700 billion to play with. Where’d they get this number from? According to a Treasury spokeswoman, “”It’s not based on any particular data point. We just wanted to choose a really large number” (emphasis mine).
Section 8: lets Sec. Paulson do as he wishes without any real oversight – “Decisions by [Paulson] pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency” (emphasis mine). Comforting, eh?
In other words, we supposedly can’t afford $150 billion for universal healthcare but $700 billion for Wall Street fatcats is simply A-OK (not to mention the $400 million per day we’re spending on the unjust Iraq War). I swear off credit cards and my only debts are from school… I get no help whatsoever, but Washington’s corporate drinking buddies can have whatever they need when their own sorry asses get in trouble. It’s enough to convince me that when Vermont secedes I’m definitely going with ’em.
I opened with Naomi Klein and so I’ll leave you with the full text of her analysis of our market meltdown:
Free Market Ideology is Far from Finished
by Naomi Klein
September 19, 2008
Whatever the events of this week mean, nobody should believe the overblown claims that the market crisis signals the death of “free market” ideology. Free market ideology has always been a servant to the interests of capital, and its presence ebbs and flows depending on its usefulness to those interests.
During boom times, it’s profitable to preach laissez faire, because an absentee government allows speculative bubbles to inflate. When those bubbles burst, the ideology becomes a hindrance, and it goes dormant while big government rides to the rescue. But rest assured: the ideology will come roaring back when the bailouts are done. The massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis that will be the rationalization for deep cuts to social programs, and for a renewed push to privatize what is left of the public sector. We will also be told that our hopes for a green future are, sadly, too costly.
What we don’t know is how the public will respond. Consider that in North America, everybody under the age of 40 grew up being told that the government can’t intervene to improve our lives, that government is the problem not the solution, that laissez faire was the only option. Now, we are suddenly seeing an extremely activist, intensely interventionist government, seemingly willing to do whatever it takes to save investors from themselves.
This spectacle necessarily raises the question: if the state can intervene to save corporations that took reckless risks in the housing markets, why can’t it intervene to prevent millions of Americans from imminent foreclosure? By the same token, if $85bn can be made instantly available to buy the insurance giant AIG, why is single-payer health care Ã¢â‚¬â€œ which would protect Americans from the predatory practices of health-care insurance companies Ã¢â‚¬â€œ seemingly such an unattainable dream? And if ever more corporations need taxpayer funds to stay afloat, why can’t taxpayers make demands in return Ã¢â‚¬â€œ like caps on executive pay, and a guarantee against more job losses?
Now that it’s clear that governments can indeed act in times of crises, it will become much harder for them to plead powerlessness in the future. Another potential shift has to do with market hopes for future privatizations. For years, the global investment banks have been lobbying politicians for two new markets: one that would come from privatizing public pensions and the other that would come from a new wave of privatized or partially privatized roads, bridges and water systems. Both of these dreams have just become much harder to sell: Americans are in no mood to trust more of their individual and collective assets to the reckless gamblers on Wall Street, especially because it seems more than likely that taxpayers will have to pay to buy back their own assets when the next bubble bursts.
With the World Trade Organization talks off the rails, this crisis could also be a catalyst for a radically alternative approach to regulating world markets and financial systems. Already, we are seeing a move towards “food sovereignty” in the developing world, rather than leaving access to food to the whims of commodity traders. The time may finally have come for ideas like taxing trading, which would slow speculative investment, as well as other global capital controls.
And now that nationalization is not a dirty word, the oil and gas companies should watch out: someone needs to pay for the shift to a greener future, and it makes most sense for the bulk of the funds to come from the highly profitable sector that is most responsible for our climate crisis. It certainly makes more sense than creating another dangerous bubble in carbon trading.
But the crisis we are seeing calls for even deeper changes than that. The reason these junk loans were allowed to proliferate was not just because the regulators didn’t understand the risk. It is because we have an economic system that measures our collective health based exclusively on GDP growth. So long as the junk loans were fuelling economic growth, our governments actively supported them. So what is really being called into question by the crisis is the unquestioned commitment to growth at all costs. Where this crisis should lead us is to a radically different way for our societies to measure health and progress.
None of this, however, will happen without huge public pressure placed on politicians in this key period. And not polite lobbying but a return to the streets and the kind of direct action that ushered in the New Deal in the 1930s. Without it, there will be superficial changes and a return, as quickly as possible, to business as usual.