[Adapted from a speech on May 2, 2009 at The Progressive’s 100th anniversary conference and originally printed in The Progressive magazine, August 2009 issue]
We are in a progressive moment, a moment when the ground is shifting beneath our feet, and anything is possible. What we considered unimaginable about what could be said and hoped for a year ago is now possible. At a time like this, it is absolutely critical that we be as clear as we possibly can be about what it is that we want because we might just get it.
So the stakes are high.
I usually talk about the bailout in speeches these days. We all need to understand it because it is a robbery in progress, the greatest heist in monetary history. But today I'd like to take a different approach: What if the bailout actually works, what if the financial sector is saved and the economy returns to the course it was on before the crisis struck? Is that what we want? And what would that world look like?
Now that Washington has ruled out an immediate bailout for California, we know who will pay the ultimate price for the crisis born on Wall Street: the state’s most vulnerable citizens. And with many states facing similar crises, this could be a preview of where the country as a whole is headed.
California is facing a $24.3 billion dollar budget gap, and the governor wants to attack it with cuts to social programs alone. If Schwarzenegger has his way, the price will be paid by 1.9 million people who lose their health care coverage, 1.3 million who lose basic welfare, thousands of state workers who get fired, schools that lose $5 billion in funding, having already survived brutal cuts earlier this year.
In 2004, we made a documentary called The Take about Argentina's movement of worker-run businesses. In the wake of the country's dramatic economic collapse in 2001, thousands of workers walked into their shuttered factories and put them back into production as worker cooperatives. Abandoned by bosses and politicians, they regained unpaid wages and severance while re-claiming their jobs in the process.
As we toured Europe and North America with the film, every Q&A ended up with the question, "that's all very well in Argentina, but could that ever happen here?"
Well, with the world economy now looking remarkably like Argentina's in 2001 (and for many of the same reasons) there is a new wave of direct action among workers in rich countries. Co-ops are once again emerging as a practical alternative to more lay-offs. Workers in the U.S. and Europe are beginning to ask the same questions as their Latin American counterparts: Why do we have to get fired? Why can't we fire the boss? Why is the bank allowed to drive our company under while getting billions of dollars of our money?
Note: The Sunday Outlook section of the Washington Post has a "Spring Cleaning Special" in which ten writers make the case for something that deserves to be tossed out this spring. On the trash heap is everything from academic tenure to the White House press corps to the phrase "Muslim world." I chose to argue for the elimination of Barack Obama's chief economic adviser, Larry Summers.
I vote to banish Larry Summers. Not from the planet. That wouldn't be nice. Just from public life.
The criticisms of President Obama's chief economic adviser are well known. He's too close to Wall Street. And he's a frightful bully, of both people and countries. Still, we're told we shouldn't care about such minor infractions. Why? Because Summers is brilliant, and the world needs his big brain.
All is not well in Obamafanland. It's not clear exactly what accounts for the change of mood. Maybe it was the rancid smell emanating from Treasury's latest bank bailout. Or the news that the president's chief economic adviser, Larry Summers, earned millions from the very Wall Street banks and hedge funds he is protecting from reregulation now. Or perhaps it began earlier, with Obama's silence during Israel's Gaza attack.
Whatever the last straw, a growing number of Obama enthusiasts are starting to entertain the possibility that their man is not, in fact, going to save the world if we all just hope really hard.
This is a good thing. If the superfan culture that brought Obama to power is going to transform itself into an independent political movement, one fierce enough to produce programs capable of meeting the current crises, we are all going to have to stop hoping and start demanding.
Watching the crowds in Iceland banging pots and pans until their government fell reminded me of a chant popular in anti-capitalist circles back in 2002: "You are Enron. We are Argentina."
Its message was simple enough. You--politicians and CEOs huddled at some trade summit--are like the reckless scamming execs at Enron (of course, we didn't know the half of it). We--the rabble outside--are like the people of Argentina, who, in the midst of an economic crisis eerily similar to our own, took to the street banging pots and pans. They shouted, "¡Que se vayan todos!" ("All of them must go!") and forced out a procession of four presidents in less than three weeks. What made Argentina's 2001-02 uprising unique was that it wasn't directed at a particular political party or even at corruption in the abstract. The target was the dominant economic model--this was the first national revolt against contemporary deregulated capitalism.
Read a letter exchange between Robert Pollin, co-director of the Political Economy Research Institute at the University of Massachusetts, and Naomi on the question of one-sided boycotts.
I strongly oppose Naomi Klein’s proposal to begin boycotts and divestment initiatives against Israel, similar to the approach used against South Africa in the apartheid era [“Lookout,” Jan. 26]. Klein anticipates four objections to her proposal and offers responses. But her list ignores the most important and obvious objection: it is entirely one-sided both in blaming Israel for the horrible cycle of violence in the region and in meting out punishment.
It's time. Long past time. The best strategy to end the increasingly bloody occupation is for Israel to become the target of the kind of global movement that put an end to apartheid in South Africa.
In July 2005 a huge coalition of Palestinian groups laid out plans to do just that. They called on "people of conscience all over the world to impose broad boycotts and implement divestment initiatives against Israel similar to those applied to South Africa in the apartheid era." The campaign Boycott, Divestment and Sanctions—BDS for short—was born.
Interview with Naomi Klein, rabble.ca, December 3, 2008
Kim Elliott: As you outline so well in your book and in various interviews in the U.S. media, the current financial crisis holds the possibility of being one of those moments when the shock doctrine can best be applied. Can you comment on both the Harper government's economic and fiscal statement introduced last week, and on the Opposition's response to that - that is, the formation of a coalition - in the context of the shock doctrine?
Naomi Klein: Yes, absolutely. What I think we are seeing is a clear example of the shock doctrine in the way the Harper government has used the economic crisis to push through a much more radical agenda than they won a mandate to do.
At the same time we are seeing an example of what I call in the book a "shock resistance," where this tactic has been so overused around the world and also in Canada that we are becoming more resistant to the tactic - we are on to them - and Harper is not getting away with it.
What I think is really amazing about this moment is whatever happens next - whether we end up with this coalition or not, we will have an extremely chastened Harper. So the attempted shock doctrine has failed. I think we can say that decisively.
In a moment of high panic in late September, the US Treasury unilaterally pushed through a radical change in how bank mergers are taxed--a change long sought by the industry. Despite the fact that this move will deprive the government of as much as $140 billion in tax revenue, lawmakers found out only after the fact. According to the Washington Post, more than a dozen tax attorneys agree that "Treasury had no authority to issue the [tax change] notice."
Of equally dubious legality are the equity deals Treasury has negotiated with many of the country's banks. According to Congressman Barney Frank, one of the architects of the legislation that enables the deals, "Any use of these funds for any purpose other than lending--for bonuses, for severance pay, for dividends, for acquisitions of other institutions, etc.--is a violation of the act." Yet this is exactly how the funds are being used.
Then there is the nearly $2 trillion the Federal Reserve has handed out in emergency loans. Incredibly, the Fed will not reveal which corporations have received these loans or what it has accepted as collateral. Bloomberg News believes that this secrecy violates the law and has filed a federal suit demanding full disclosure.
Since I already sent my serious post, I just wanted to chime in with an anecdote. I was in Washington D.C. last night, staying two blocks from the White House. At 11:30 pm, a half hour after the results were announced, I happened to walk past a very stuffy private club, one that, as far as I can tell, is populated exclusively by hardcore Republican men in their later years. It's the kind of place where you can imagine lobbyists slipping bribes to judges, and Central American coups being plotted... or maybe it's just me. Anyway, as I passed by, two men in black uniforms were high-fiving each other and hooting with delight. From what I could tell, one man was the doorman at the club, the other the chauffeur for one of the club members. Both were African American.
To understand the meaning of the U.S. election results, it is worth looking back to the moment when everything changed for the Obama campaign. It was, without question, the moment when the economic crisis hit Wall Street.
Up to that point, things weren’t looking all that good for Barack Obama. The Democratic National Convention barely delivered a bump, while the appointment of Sarah Palin seemed to have shifted the momentum decisively over to John McCain.
Editor’s note: The online version of this story has been amended to reflect developments since the publication of the print edition.
On October 13th, when the U.S. Treasury Department announced the team of "seasoned financial veterans" that will be handling the $700 billion bailout of Wall Street, one name jumped out: Reuben Jeffery III, who was initially tapped to serve as chief investment officer for the massive new program.
On the surface, Jeffery looks like a classic Bush appointment. Like Treasury Secretary Henry Paulson, he's an alum of Goldman Sachs, having worked on Wall Street for 18 years. And as chairman of the Commodity Futures Trading Commission from 2005 to 2007, he proudly advocated "flexibility" in regulation — a laissez-faire approach that failed to rein in the high-risk trading at the heart of the meltdown.
In the final days of the election, many Republicans seem to have given up the fight for power. But don’t be fooled: that doesn’t mean they are relaxing. If you want to see real Republican elbow grease, check out the energy going into chucking great chunks of the $700 billion bailout out the door. At a recent Senate Banking Committee hearing, Republican Senator Bob Corker was fixated on this task, and with a clear deadline in mind: inauguration. “How much of it do you think may be actually spent by January 20 or so?” Corker asked Neel Kashkari, the 35-year-old former banker in charge of the bailout.
When European colonialists realized that they had no choice but to hand over power to the indigenous citizens, they would often turn their attention to stripping the local treasury of its gold and grabbing valuable livestock. If they were really nasty, like the Portuguese in Mozambique in the mid-1970s, they poured concrete down the elevator shafts.
NOTE TO JOURNALISTS ABOUT FALSE QUOTATION: A September 26 AFP wire story incorrectly attributed a quote to Naomi Klein that should have been attributed to Arun Gupta. The error has been corrected by AFP but please note that the call-out below was NOT written by Naomi Klein and though she supported the original protest call, the statement is correctly attributed to Gupta, as stated in the corrected AFP article also posted below. We would greatly appreciate if this error was not repeated.
This week the White House is going to try to push through the biggest robbery in world history with nary a stitch of debate to bail out the Wall Street bastards who created this economic apocalypse in the first place.
This is the financial equivalent of September 11. They think, just like with the Patriot Act, they can use the shock to force through the “therapy,” and we’ll just roll over!