I wrote The Shock Doctrine in the hopes that it would make us all better prepared for the next big shock. Well, that shock has certainly arrived, along with gloves-off attempts to use it to push through radical pro-corporate policies (which of course will further enrich the very players who created the market crisis in the first place...).
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.
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.
Naomi has signed this public letter to the U.S. Secretary of State about potential U.S. involvement in recent violence in Bolivia.
An Open Letter to the U.S. State Department Regarding Recent Violence in Bolivia
To Dr. Condoleezza Rice, U.S. Secretary of State
Cc: Phillip Goldberg, U.S. Ambassador to Bolivia
Henrietta Fore, Administrator, U.S. Agency for International Development
Representative Eliot Engel, Chair, Subcommittee on Western Hemisphere, Committee of Foreign Affairs
Senator John McCain
Senator Barack Obama
Dear Dr. Rice,
We are writing out of deep concern over recent events in Bolivia that have left dozens dead and cost millions of dollars in lost revenue to the Bolivian government and the Bolivian people. We are especially concerned that the United States government, by its own admission, is supporting opposition groups and individuals in Bolivia that have been involved in the recent whole-scale destruction, violence, and killings, above all in the departments of Santa Cruz, Pando, and Chuquisaca.
The early results are in: Hurricane Gustav has helped John McCain's bid for the White House. This is nothing short of incredible.
In the combination of New Orleans and hurricanes, we have the most powerful argument possible for the necessity of "change." It's all there: gaping inequality, deep racism, crumbling public infrastructure, global warming, rampant corruption, the Blackwater-ization of the public sector. And none of it is in the past tense. In New Orleans whole neighborhoods have gone to seed, Charity Hospital remains shuttered, public housing has been deliberately destroyed--and the levee system is still far from repaired.
Gustav should have been political rat poison for the Republicans, no matter how well it was managed. Yet, as Peter Baker noted in the New York Times, "rather than run away from the hurricane and its political risks, Mr. McCain ran toward it." If this strategy worked, it was at least partly because Barack Obama has been running away from New Orleans for his entire campaign.
Exactly one year ago, I set off on a book tour to promote The Shock Doctrine. The plan was for it to last three months, quite long by publishing standards. Twelve months later, it is still going. But this has been no ordinary book tour. Everywhere I have traveled– from Calgary, Alberta to Cochabamba, Bolivia – I have heard more stories about how shock strategies have been used to impose unwanted pro-corporate policies. I have also been part of stimulating debates and discussions about how the current round of crises – oil, food, financial markets, heavy weather -- can be transformed into opportunities for progressive change.
So far, the Olympics have been an open invitation to China-bash, a bottomless excuse for Western journalists to go after the Commies on everything from internet censorship to Darfur. Through all the nasty news stories, however, the Chinese government has seemed amazingly unperturbed. That's because it is betting on this: when the opening ceremonies begin friday, you will instantly forget all that unpleasantness as your brain is zapped by the cultural/athletic/political extravaganza that is the Beijing Olympics.
Like it or not, you are about to be awed by China's sheer awesomeness.
Once oil passed $140 a barrel, even the most rabidly right-wing media hosts had to prove their populist cred by devoting a portion of every show to bashing Big Oil. Some have gone so far as to invite me on for a friendly chat about an insidious new phenomenon: "disaster capitalism." It usually goes well--until it doesn't.
For instance, "independent conservative" radio host Jerry Doyle and I were having a perfectly amiable conversation about sleazy insurance companies and inept politicians when this happened: "I think I have a quick way to bring the prices down," Doyle announced. "We've invested $650 billion to liberate a nation of 25 million people. Shouldn't we just demand that they give us oil? There should be tankers after tankers backed up like a traffic jam getting into the Lincoln Tunnel, the Stinkin' Lincoln, at rush hour with thank-you notes from the Iraqi government.... Why don't we just take the oil? We've invested it liberating a country. I can have the problem solved of gas prices coming down in ten days, not ten years."
Barack Obama waited just three days after Hillary Clinton pulled out of the race to declare, on CNBC, "Look. I am a pro-growth, free-market guy. I love the market."
Demonstrating that this is no mere spring fling, he has appointed 37-year-old Jason Furman to head his economic policy team. Furman is one of Wal-Mart's most prominent defenders, anointing the company a "progressive success story." On the campaign trail, Obama blasted Clinton for sitting on the Wal-Mart board and pledged, "I won't shop there." For Furman, however, it's Wal-Mart's critics who are the real threat: the "efforts to get Wal-Mart to raise its wages and benefits" are creating "collateral damage" that is "way too enormous and damaging to working people and the economy more broadly for me to sit by idly and sing 'Kum-Ba-Ya' in the interests of progressive harmony."
Obama's love of markets and his desire for "change" are not inherently incompatible. "The market has gotten out of balance," he says, and it most certainly has. Many trace this profound imbalance back to the ideas of Milton Friedman, who launched a counterrevolution against the New Deal from his perch at the University of Chicago economics department. And here there are more problems, because Obama--who taught law at the University of Chicago for a decade--is thoroughly embedded in the mind-set known as the Chicago School.
He chose as his chief economic adviser Austan Goolsbee, a University of Chicago economist on the left side of a spectrum that stops at the center-right. Goolsbee, unlike his more Friedmanite colleagues, sees inequality as a problem. His primary solution, however, is more education--a line you can also get from Alan Greenspan. In their hometown, Goolsbee has been eager to link Obama to the Chicago School. "If you look at his platform, at his advisers, at his temperament, the guy's got a healthy respect for markets," he told Chicago magazine. "It's in the ethos of the [University of Chicago], which is something different from saying he is laissez-faire."
Another of Obama's Chicago fans is 39-year-old billionaire Kenneth Griffin, CEO of the hedge fund Citadel Investment Group. Griffin, who gave the maximum allowable donation to Obama, is something of a poster boy for an unbalanced economy. He got married at Versailles and had the after-party at Marie Antoinette's vacation spot (Cirque du Soleil performed)--and he is one of the staunchest opponents of closing the hedge-fund tax loophole. While Obama talks about toughening trade rules with China, Griffin has been bending the few barriers that do exist. Despite sanctions prohibiting the sale of police equipment to China, Citadel has been pouring money into controversial China-based security companies that are putting the local population under unprecedented levels of surveillance.
Now is the time to worry about Obama's Chicago Boys and their commitment to fending off serious attempts at regulation. It was in the two and a half months between winning the 1992 election and being sworn into office that Bill Clinton did a U-turn on the economy. He had campaigned promising to revise NAFTA, adding labor and environmental provisions and to invest in social programs. But two weeks before his inauguration, he met with then-Goldman Sachs chief Robert Rubin, who convinced him of the urgency of embracing austerity and more liberalization. Rubin told PBS, "President Clinton actually made the decision before he stepped into the Oval Office, during the transition, on what was a dramatic change in economic policy."
Furman, a leading disciple of Rubin, was chosen to head the Brookings Institution's Hamilton Project, the think tank Rubin helped found to argue for reforming, rather than abandoning, the free-trade agenda. Add to that Goolsbee's February meeting with Canadian consulate officials, who left with the distinct impression that they had been instructed not to take Obama's anti-NAFTA campaigning seriously, and there is every reason for concern about a replay of 1993.
The irony is that there is absolutely no reason for this backsliding. The movement launched by Friedman, introduced by Ronald Reagan and entrenched under Clinton, faces a profound legitimacy crisis around the world. Nowhere is this more evident than at the University of Chicago itself. In mid-May, when university president Robert Zimmer announced the creation of a $200 million Milton Friedman Institute, an economic research center devoted to continuing and augmenting the Friedman legacy, a controversy erupted. More than 100 faculty members signed a letter of protest. "The effects of the neoliberal global order that has been put in place in recent decades, strongly buttressed by the Chicago School of Economics, have by no means been unequivocally positive," the letter states. "Many would argue that they have been negative for much of the world's population."
When Friedman died in 2006, such bold critiques of his legacy were largely absent. The adoring memorials spoke only of grand achievement, with one of the more prominent appreciations appearing in the New York Times--written by Austan Goolsbee. Yet now, just two years later, Friedman's name is seen as a liability even at his own alma mater. So why has Obama chosen this moment, when all illusions of a consensus have dropped away, to go Chicago retro?
The news is not all bad. Furman claims he will be drawing on the expertise of two Keynesian economists: Jared Bernstein of the Economic Policy Institute and James Galbraith, son of Friedman's nemesis John Kenneth Galbraith. Our "current economic crisis," Obama recently said, did not come from nowhere. It is "the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long."
True enough. But before Obama can purge Washington of the scourge of Friedmanism, he has some ideological housecleaning of his own to do.
When news arrived of the catastrophic earthquake in Sichuan, my mind turned to Zheng Sun Man, an up-and-coming security executive I met on a recent trip to China. Zheng heads Aebell Electrical Technology, a Guangzhou-based company that makes surveillance cameras and public address systems and sells them to the government.
Zheng, a 28-year-old MBA with a text-messaging addiction, was determined to persuade me that his cameras and speakers are not being used against pro-democracy activists or factory organizers. They are for managing natural disasters, Zheng explained, pointing to the freak snowstorms before Lunar New Year. During the crisis, the government "was able to use the feed from the railway cameras to communicate how to deal with the situation and organize an evacuation. We saw how the central government can command from the north emergencies in the south."
With the help of U.S. defense contractors, China is building the prototype for a high-tech police state. It is ready for export.
Thirty years ago, the city of Shenzhen didn't exist. Back in those days, it was a string of small fishing villages and collectively run rice paddies, a place of rutted dirt roads and traditional temples. That was before the Communist Party chose it — thanks to its location close to Hong Kong's port — to be China's first "special economic zone," one of only four areas where capitalism would be permitted on a trial basis. The theory behind the experiment was that the "real" China would keep its socialist soul intact while profiting from the private-sector jobs and industrial development created in Shenzhen. The result was a city of pure commerce, undiluted by history or rooted culture — the crack cocaine of capitalism. It was a force so addictive to investors that the Shenzhen experiment quickly expanded, swallowing not just the surrounding Pearl River Delta, which now houses roughly 100,000 factories, but much of the rest of the country as well. Today, Shenzhen is a city of 12.4 million people, and there is a good chance that at least half of everything you own was made here: iPods, laptops, sneakers, flatscreen TVs, cellphones, jeans, maybe your desk chair, possibly your car and almost certainly your printer.
We are circling over Buenos Aires. The airspace is crowded with other planes, all of them holding like ours. The pilot explains that it is the fault of the humo, or smoke, a word I will hear a great deal in the coming week.
An hour and a half later I am on the ground, head pounding, breathing in the humo. The cover of the Clarín newspaper shows someone gagging and declares: "The Worst Atmospheric Contamination in History."
Some things, such as slight overstatement, haven't changed in Buenos Aires. Still, it's hard not to think of the first time I came here. It was January 2002. The economy had just crashed, the banks had locked out their customers and Argentines had thrown out five presidents in three weeks. There was smoke in the air then, too, but it was from the bonfires in the streets.
Can there be any question that, since the invasion of 2003, Iraq has been unraveling? And here's the curious thing: Despite a lack of decent information and analysis on crucial aspects of the Iraqi catastrophe, despite the way much of the Iraq story fell off newspaper front pages and out of the TV news in the last year, despite so many reports on the "success" of the President's surge strategy, Americans sense this perfectly well. In the latest Washington Post/ABC News poll, 56% of Americans "say the United States should withdraw its military forces to avoid further casualties" and this has, as the Post notes, been a majority position since January 2007, the month that the surge was first announced. Imagine what might happen if the American public knew more about the actual state of affairs in Iraq -- and of thinking in Washington. So, here, in an attempt to unravel the situation in ever-unraveling Iraq are twelve answers to questions which should be asked far more often in this country:
By Naomi Klein and Jeremy Scahill - March 26th, 2008
So said Dick Cheney when asked last week about public opinion being
overwhelming against the war in Iraq. "You can't be blown off course
His attitude about the the fact that the number of U.S. soldiers killed in Iraq has reached 4,000 displayed similar levels of sympathy. They "voluntarily put on the uniform," the Vice-President told ABC news.
This brick wall of indifference helps explain the paradox in which we
in the anti-war camp find ourselves five years into the occupation of
Iraq: anti-war sentiment is as strong as ever, but our movement seems
to be dwindling.
Sixty-four per cent of Americans tell pollsters they oppose the war,
but you'd never know it from the thin turnout at recent anniversary
rallies and vigils.
When asked why they aren't expressing their anti-war opinions through
the anti-war movement, many say they have simply lost faith in the
power of protest. They marched against the war before it began,
marched on the first, second and third anniversaries. And yet five
years on, U.S. leaders are still shrugging: "So?"
Hillary Clinton denied leaking the photo of Barack Obama wearing a turban, but her campaign manager says that even if she had, it would be no big deal. "Hillary Clinton has worn the traditional clothing of countries she has visited and had those photos published widely."
Sure she did. And George W. Bush put on a fetching Chamato poncho in Santiago, while Paul Wolfowitz burned up YouTube with his antimalarial African dance routines when he was World Bank prez. The obvious difference is this: when white politicians go ethnic, they just look funny. When a black presidential contender does it, he looks foreign. And when the ethnic apparel in question is vaguely reminiscent of the clothing worn by Iraqi and Afghan fighters (at least to many Fox viewers, who think any headdress other than a baseball cap is a declaration of war on America), the image is downright frightening.
The past couple of weeks have been rocky on the stock market, but one company that hasn’t been suffering too much is Taser International. At the end of January, its stock jumped by an impressive 8 per cent, and it’s even higher today.
Matthew McKay, a stock analyst at Jeffries & Co. in San Francisco, cites a simple cause: news that the Toronto Police Services Board plans to buy 3,000 new Taser electroshock weapons, at a cost of $8.6 million for gear and training. If the deal goes ahead, tasers would become standard issue weaponry for all of Toronto’s frontline officers, right next to their handcuffs and batons.
On Wednesday night, I participated in a public forum about the prospect of a fully taser-armed police force, organized by the Toronto Police Accountability Coalition. One speaker, who had a history of psychiatric illness, told the room: “We’re worried because we’re the people who are going to get shocked.”