Economic Shock Therapy

This "crisis" on Wall Street reminds me so much of something....hmmmm...there was a major crisis, and then some more scares, letters with anthrax, threats, shoe bombers, tightening of the screws, Patriot Act, airport security checks, War.... and here we are, looking at turning over billions, perhaps a trillion dollars, to "rescue" a band of hoodlums who were behind defrauding hundreds of thousands of people who just wanted a decent place to live and raise their families. It all sounds so familiar.

I've read lots of keen little slogans lately, such as "privatizing profits but socializing debts" which state exactly what is going on between Washington and Wall Street these days, but what I have been waiting for has been word from my number one trusted source on these kinds of things - the expert on how government uses these kinds of shocks to put the final screws in the coffin - Naomi Klein.

And here it is, from the Huffington Post, Naomi's take on the "crisis" on Wall Street.

Well, before hearing from Naomi, because thanks to her, I already kind of knew what was going on (when you hear people like Henry Paulson say, "we have to act immediately - I can't tell you why, but not acting will be catastrophic" it kind of raises a red flag for me) - so, using my instincts, I already wrote to my representatives in Washington twice, and I sent a letter to the SF Chronicle (I'm signed up for a service that makes all of this very easy). So, think about how you really feel about our government bailing out these investment bankers rather than putting the money into education, health care, or helping those who have been screwed by these guys and are facing home foreclosure, read Naomi's article, and then write to your representatives in Congress. Act quickly, tell your friends, and do something. There should be massive protests on the streets of every American city and town (there would be here in Argentina), but since that is unlikely to happen, at least send an e-mail.

Disaster Capitalism in Action
Now is the Time to Resist Wall Street's Shock Doctrine

Naomi Klein, Huffington Post, September 22, 2008

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.

It would be a grave mistake to underestimate the right's ability to use this crisis -- created by deregulation and privatization -- to demand more of the same. Don't forget that Newt Gingrich's 527 organization, American Solutions for Winning the Future, is still riding the wave of success from its offshore drilling campaign, "Drill Here, Drill Now!" Just four months ago, offshore drilling was not even on the political radar and now the U.S. House of Representatives has passed supportive legislation. Gingrich is holding an event this Saturday, September 27 that will be broadcast on satellite television to shore up public support for these controversial policies.

What Gingrich's wish list tells us is that the dumping of private debt into the public coffers is only stage one of the current shock. The second comes when the debt crisis currently being created by this bailout becomes the excuse to privatize social security, lower corporate taxes and cut spending on the poor. A President McCain would embrace these policies willingly. A President Obama would come under huge pressure from the think tanks and the corporate media to abandon his campaign promises and embrace austerity and "free-market stimulus."

We have seen this many times before, in this country and around the world. But here's the thing: these opportunistic tactics can only work if we let them. They work when we respond to crisis by regressing, wanting to believe in "strong leaders" - even if they are the same strong leaders who used the September 11 attacks to push through the Patriot Act and launch the illegal war in Iraq.

So let's be absolutely clear: there are no saviors who are going to look out for us in this crisis. Certainly not Henry Paulson, former CEO of Goldman Sachs, one of the companies that will benefit most from his proposed bailout (which is actually a stick up). The only hope of preventing another dose of shock politics is loud, organized grassroots pressure on all political parties: they have to know right now that after seven years of Bush, Americans are becoming shock resistant.