Wednesday, September 24, 2008

Naomi Klein on the Bailout...

Now is the Time to Resist Wall Street's Shock Doctrine

The best summary of how the right plans to use the economic crisis to push through their policy wish list comes from Former Republican House Speaker Newt Gingrich. On Sunday, Gingrich laid out 18 policy prescriptions for Congress to take in order to "return to a Reagan-Thatcher policy of economic growth through fundamental reforms." In the midst of this economic crisis, he is actually demanding the repeal of the Sarbanes-Oxley Act, which would lead to further deregulation of the financial industry. Gingrich is also calling for reforming the education system to allow "competition" (a.k.a. vouchers), strengthening border enforcement, cutting corporate taxes and his signature move: allowing offshore drilling.


Well, the thesis of my book, what I mean by the “shock doctrine,” is that it is in times of crisis, it is in times when people are panicked, when we’ve seen again and again the right push through radical pro-corporate policies, what they call “free market reforms,” precisely because it is in a crisis where the space for debate rapidly closes, and you can invoke this state of emergency to say we have no choice.

And I think we’re seeing a very dramatic example of this tactic right now with this really extortionist kind of tactics playing out in Washington. You know, “Sign this blank check, or we’re all going down, or Main Street is going down, or taxpayers—you know, the sky will fall in on them.”

I’m also arguing that this is only stage one of the shock doctrine. They’re getting this—they’re lobbying for this huge bailout, obviously, but this bailout is a kind of a time bomb, because it’s all these bad debts, and they are going to explode on the next administration. I mean, we know that the Bush administration has already left the next administration with huge debt and deficit problems. They’ve just exploded those, expanded them. And what that means is that whoever the next president is is going to be inheriting this economic crisis that is being exacerbated by this bailout.

So, in the case of McCain, I think—if he’s the president, then I think we know what he’ll do, because we know he wants to privatize Social Security, which is something that Wall Street’s been wanting for a long time, another bubble. We know he has said in the next—in the first 100 days of his administration he’ll look at every program and either reform it or shut it down. This is really a recipe for economic shock therapy. So, while you have all of these trivial issues being discussed in the election season, I think what we could—what we’re really—you know, under the surface, they’re actually being quite clear. They’re going to take—if they take power, it will be in the midst of an economic emergency. They’ll invoke that emergency to push through very, very radical changes. So, you know, what I’ve been saying is, this is not four more years of Bush; it’s much, much worse in the case of another Republican administration.

But there’s huge problems for Democrats, as well, if they win this election, because, you know, we need to only think back to the situation in which Clinton took power, where he ran an election on an economic populist platform, promising to renegotiate NAFTA. Then there was an economic crisis. Clinton came under intense lobbying by people like Robert Rubin, who’s also advising Obama right now, and by the time he took office, he had embraced economic austerity.

So, people need to understand these tactics, need to put pressure on the candidates, the parties, and reject this tactic. And I’ve actually been really heartened, Amy, that people are onto these shock tactics and aren’t falling for it. And, you know, to the extent that we’re seeing a little bit of spine from the Democrats, it is only, as Chris Dodd said, because they are hearing it from their constituents. So people need to keep up this pressure right now.
Henry Paulson is one of the key people, the top people, responsible for creating the crisis that he is now claiming he will solve,



What can I add? Don't believe the hype. There is an agenda behind these tactics. There are no accidents. This has been planned for months.

There is this ridiculous pretense that Republicans don't overspend and don't raise taxes. Well, that was never true - but it is especially not true of Republicans that have supported the Bush administration in fighting wars on two fronts while simultaneously borrowing money, thereby increasing the national debt while simultaneously cutting back on taxes for the very wealthy. What that means is that whoever wins the presidency has a huge economic mess to clean up and the enormity of that economic challenge will tend to make that president look quite bad - their first term is likely to be one long slog.

It will take a second FDR with a strong socially democratic agenda to fix the troubles we have created in the last few decades. Don't look for quick fixes, they aren't there to be had.

And for fuck's sake, never vote for a Republican ever again.

Vote your own interests.