Shocking Wall Street : Disaster Capitalism and the Promise of Progressive Reform
by Advocate Staff
“Buy the sky and sell the sky and lift your arms up/ to the sky/ and ask the sky and ask the sky/ don’t fall on me.”— R.E.M.
“We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.”
— Franklin D. Roosevelt
In her prescient and controversial international bestseller The Shock Doctrine (2007), author Naomi Klein explains how the free market capitalism espoused by the likes of Milton Friedman and other Chicago School economists feeds and capitalizes upon political crisis and environmental disaster. According to Klein, national governments and international economic organizations like the WTO rely heavily upon the power of crisis, shock, and disaster to help wipe the economic slate clean and pave the way for radical free market reforms that in times of stability would face stiff resistance from the public. Klein compares these unholy and unscrupulous practices to the mind control and shock treatment research performed by Doctor Ewan Cameron and the CIA in the 1950s.
“Friedman’s mission, like Cameron’s” Klein says “rested on a dream of reaching back to a state of ‘natural’ health, when all was in balance, before human interferences created distorting patterns. Where Cameron dreamed of returning the human mind to that pristine state, Friedman dreamed of depatterning societies, of returning them to a state of pure capitalism, cleansed of all interruptions — government regulations, trade barriers and entrenched interests.”
This disturbing and apt comparison between CIA mind control experiments and free market ideologies is at the heart of Klein’s argument, and her book provides the theoretical framework for a salient critique of our response to the current economic meltdown on Wall Street. Like September 11th and Afghanistan, Iraq and Hurricane Katrina, this latest American disaster is being exploited by those in power with the implicit goal of furthering a right wing free market ideological agenda of private, deregulated, militarized globalization.
Although incredibly unpopular among ordinary common sense Americans (whose class consciousness seems to be growing exponentially the longer this crisis carries on) the proposed $700 billion bailout package for US investment banks is just the beginning of a series of corporate giveaways and radical reforms that could be in the works. “The dumping of private debt into the public coffers” Klein wrote on her blog, naomiklein.org,
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.’
Despite the fact that Klein fails to mention here that McCain and Obama both support the October 1 version of the bailout package being sent to the senate, the seeming prescience of her argument is impressive. Indeed, as of October 1, what began as a straightforward bailout package that was supposed to help investment banks stay afloat, had already been manipulated by Democratic and Republican lawmakers to include a series of further tax cuts of $100 billion totally unrelated to the economic crisis. It is clear that Klein is right and that we need to keep our eyes on the big picture here and be wary of what’s in store, but her solution to this crisis is problematic. According to Klein the answer to this dilemma is pretty straightforward: we have to organize to resist this bailout and the subsequent reforms that it foretells. This is a good beginning, perhaps, but, like the proposed bailout package that sparked this debate, it begs the question: is this really our only option? Is the progressive left so weak, demoralized, and ineffectual that it has been reduced to little more than reactionary protest? Of course, we need to resist any government attempts to use this economic mess as an excuse for consolidating corporate and private wealth and power, but who says the left can’t play the shock doctrine game just as well as the right?
Instead of merely resisting the right’s attempt to exploit this crisis shouldn’t the progressive left be exploring the opportunities inherent in this crisis? Isn’t it precisely in moments of economic and political crisis that ordinary citizens become organized, energized, and engaged? Hasn’t it been shown time and time again that the more precarious their economic conditions, the more sympathetic the US public is to ideas of government reform, reconstruction, and public assistance? Bleeding Kansas, the great depression, and the civil rights movement are all instances where progressive reformers used the political and economic crises of their times (the bitter divisions over slavery, the economic collapse of the early thirties, and the racial conflicts of the fifties and sixties) to help push through a series of social and economic reforms that furthered and improved the freedom, equality, prosperity, and health of vast portions of its citizens. The abolition of slavery, banking reform, the introduction of social security, and the 1964 civil rights act, to name only a few of the most important changes, were all achieved through the creation and/or manipulation of crisis and social unrest.
Now is not the time to simply resist: the left must become proactive and demanding. Although it is important that we ask our representatives in the house and senate to unequivocally vote no on this bill, now is the time to go even further than that and push congress to take state control of these banks so that the public coffers will not be wasted on aid to the nation’s wealthiest and most powerful citizens. Now is the time to ask congress for further regulation of investment markets so that investor exploitation of bubble markets does not negatively impact ordinary investors and pension funds. Now is the time to ask congress to do something about the hundreds of thousands of impending foreclosures by offering more legislation that protects homeowners form foreclosure and helps them readjust their mortgages. Rather than quibbling over a clearly flawed bill, now is the time to encourage congress and the next president to take visionary action along the lines of Roosevelt’s unremitting struggle for a New Deal for Americans.
Just as Klein described the proposed bailout as the first nefarious step in a series of free market reforms; increased regulation and public ownership of these investment banks could be the first step in a series of public takeovers, from the re-publicization of electric companies, prisons, and schools, to the public seizure of oil and gas fields, to the creation of a clean energy works program. This kind of necessary and radical readjustment, the kind of visionary change we need to save us from a future of even greater crisis and despair, will never happen so long as both our political and progressive leaders continue to play the game of reactionary politics. Quibbling over compromises in an already compromised bill, will get us nowhere.
