and heres naomi chatting about the new book, interesting talk - bit about thatcher and the falklands war, how the conflict increased her popularity and allowed her to get through the reforms she previously hadn't been able to
It may have been the military that invaded but, with Iraq completely dismantled, the reconstruction was to be the preserve of US corporations ... Thus was born 'disaster capitalism', where oil companies profit from a broken country and private security firms grow rich on political chaos, says Naomi Klein in this final extract from her new book
A Burger King in al-Asad air base, 100 miles west of Baghdad. Photograph: Charles J Hanley/AP
On my flight leaving Baghdad, every seat was filled by a foreign contractor fleeing the violence. It was April 2004, and both Falluja and Najaf were under siege; 1,500 contractors pulled out of Iraq that week alone. Many more would follow. At the time, I was convinced that we were seeing the first full-blown defeat of the corporatist crusade. Iraq had been blasted with every shock weapon short of a nuclear bomb, and yet nothing could subdue this country. The experiment, clearly, had failed.
Now I am not sure. On one level, there is no question that parts of the project were a disaster. US chief envoy Paul Bremer was sent to Iraq to build a corporate utopia; instead, Iraq became a ghoulish dystopia where going to a simple business meeting could get you lynched, burned alive or beheaded. By May 2007, more than 900 contractors had been reported killed and "more than 12,000 wounded in battle or injured on the job", according to a New York Times analysis. The investors Bremer had done so much to attract had never showed up - neither HSBC, nor Procter & Gamble, which put its joint venture on hold, as did General Motors. New Bridge Strategies, the company that had gushed about how "a Wal-Mart could take over the country", conceded that "McDonald's is not opening any time soon". Bechtel's reconstruction contracts did not roll easily into long-term contracts to run the water and electricity systems. And by late 2006, the privatised reconstruction efforts that were at the centre of the "anti-Marshall Plan" [by which western corporations would remake Iraq in their own image rather than help Iraqis rebuild their own economy, as the US did in Germany after the second world war], had almost all been abandoned. And some rather dramatic policy reversals were in evidence.
Stuart Bowen, US special inspector general for the reconstruction of Iraq, reported that in the few cases where contracts were awarded directly to Iraqi firms, "it was more efficient and cheaper. And it has energised the economy because it puts the Iraqis to work". It turns out that funding Iraqis to rebuild their own country is more efficient than hiring lumbering multinationals who don't know the country or the language, surround themselves with $900- a-day mercenaries and spend as much as 55% of their contract budgets on overhead. Jon C Bowersox, who worked as the health adviser at the US embassy in Baghdad, offered this radical observation: the problem with Iraq's reconstruction, he said, was its desire to build everything from scratch. "We could have gone in and done low-cost rehabs, and not tried to transform their health-care system in two years."
An even more dramatic about-turn came from the Pentagon. In December 2006, it announced a new project to get Iraq's state-owned factories up and running - the same ones that Bremer had refused to supply with emergency generators because they were Stalinist throwbacks. Now the Pentagon realised that instead of buying cement and machine parts from Jordan and Kuwait, it could be purchasing them from languishing Iraqi factories, putting tens of thousands to work and sending revenue to surrounding communities. Paul Brinkley, US deputy under-secretary of defense for business transformation in Iraq, said, "We've looked at some of these factories more closely and found they aren't quite the rundown Soviet-era enterprises we thought they were", though he did admit that some of his colleagues had begun calling him a Stalinist.
Lieutenant General Peter W Chiarelli, the top US field commander in Iraq, explained that "we need to put the angry young men to work .... A relatively small decrease in unemployment would have a very serious effect on the level of sectarian killing going on." He couldn't help adding, "I find it unbelievable after four years that we haven't come to that realisation ...To me, it's huge. It's as important as just about any other part of the campaign plan."
Do these about-turns signal the death of disaster capitalism? Hardly. By the time US officials came to the realisation that they didn't need to rebuild a shiny new country from scratch, that it was more important to provide Iraqis with jobs and for their industry to share in the billions raised for reconstruction, the money that would have financed such an undertaking had already been spent.
Meanwhile, in the midst of the wave of neo-Keynesian epiphanies, Iraq was hit with the boldest attempt at crisis exploitation yet. In December 2006, the bipartisan Iraq Study Group fronted by James Baker issued its long-awaited report. It called for the US to "assist Iraqi leaders to reorganise the national oil industry as a commercial enterprise" and to "encourage investment in Iraq's oil sector by the international community and by international energy companies."
Most of the Iraq Study Group's recommendations were ignored by the White House, but not this one: the Bush administration immediately pushed ahead by helping to draft a radical new oil law for Iraq, which would allow companies such as Shell and BP to sign 30-year contracts in which they could keep a large share of Iraq's oil profits, amounting to tens or even hundreds of billions of dollars - unheard of in countries with as much easily accessible oil as Iraq, and a sentence to perpetual poverty in a country where 95% of government revenues come from oil. This was a proposal so wildly unpopular that even Bremer had not dared make it in the first year of occupation. Yet it was coming up now, thanks to deepening chaos. Explaining why it was justified for such a large percentage of the profits to leave Iraq, the oil companies cited the security risks. In other words, it was the disaster that made the proposed radical law possible.
Washington's timing was extremely revealing. At the point when the law was pushed forward, Iraq was facing its most profound crisis to date: the country was being torn apart by sectarian conflict with an average of 1,000 Iraqis killed every week. Saddam Hussein had just been put to death in a depraved and provocative episode. Simultaneously, Bush was unleashing his "surge" of troops in Iraq, operating with "less restricted" rules of engagement. Iraq in this period was far too volatile for the oil giants to make major investments, so there was no pressing need for a new law - except to use the chaos to bypass a public debate on the most contentious issue facing the country. Many elected Iraqi legislators said they had no idea that a new law was even being drafted, and had certainly not been included in shaping its outcome. Greg Muttitt, a researcher with the oil-watch group Platform, reported: "I was recently at a meeting of Iraqi MPs and asked them how many of them had seen the law. Out of 20, only one MP had seen it." According to Muttitt, if the law was passed, Iraqis "would lose out massively because they don't have the capacity at the moment to strike a good deal".
Iraq's main labour unions declared that "the privatisation of oil is a red line that may not be crossed" and, in a joint statement, condemned the law as an attempt to seize Iraq's "energy resources at a time when the Iraqi people are seeking to determine their own future while still under conditions of occupation". The law that was finally adopted by Iraq's cabinet in February 2007 was even worse than anticipated: it placed no limits on the amount of profits that foreign companies can take from the country and placed no specific requirements about how much or little foreign investors would partner with Iraqi companies or hire Iraqis to work in the oil fields.
Most brazenly, it excluded Iraq's elected parliamentarians from having any say in the terms for future oil contracts. Instead, it created a new body, the Federal Oil and Gas Council, which, according to the New York Times, would be advised by "a panel of oil experts from inside and outside Iraq". This unelected body, advised by unspecified foreigners, would have ultimate decision-making power on all oil matters, with the full authority to decide which contracts Iraq did and did not sign. In effect, the law called for Iraq's publicly owned oil reserves, the country's main source of revenues, to be exempted from democratic control and run instead by a powerful, wealthy oil dictatorship, which would exist alongside Iraq's broken and ineffective government.
It is hard to overstate the disgrace of this attempted resource grab. Iraq's oil profits are the country's only hope of financing its own reconstruction when some semblance of peace returns. To lay claim to that future wealth in a moment of national disintegration was disaster capitalism at its most shameless.
There was another, little discussed, consequence of the chaos in Iraq: the longer it wore on, the more privatised the foreign presence became, ultimately forging a new paradigm for the way wars are fought and how human catastrophes are responded to.
This is where the ideology of radical privitisation at the heart of the anti-Marshall Plan paid off handsomely. The Bush administration's steadfast refusal to staff the war in Iraq - whether with troops or with civilian administrators under its control - had some very clear benefits for its other war, the one to outsource the US government. This crusade, while it ceased to be the subject of the administration's public rhetoric, has remained a driving obsession behind the scenes, and it has been far more successful than all the administration's more public battles combined.
Because Rumsfeld designed the war as a just-in-time invasion, with soldiers there to provide only core combat functions, and because he eliminated 55,000 jobs in the Department of Defense and the Department of Veterans Affairs in the first year of the Iraq deployment, the private sector was left to fill in the gaps at every level. In practice, what this configuration meant was that, as Iraq spiralled into turmoil, an ever-more elaborate privatised war industry took shape to prop up the bare-bones army - whether on the ground in Iraq or back home treating soldiers at the Walter Reed Medical Centre in Washington.
Since Rumsfeld steadfastly rejected all solutions that required increasing the size of the army, the military had to find ways to get more soldiers into combat roles. Private security companies flooded into Iraq to perform functions that had previously been done by soldiers - providing security for top officials, guarding bases, escorting other contractors. Once they were there, their roles expanded further in response to the chaos. Blackwater's original contract in Iraq was to provide private security for Bremer, but a year into the occupation, it was engaging in all-out street combat. During the April 2004 uprising of Moqtada al-Sadr's rebel movement in Najaf, Blackwater actually assumed command over active-duty US marines in a day-long battle with the Mahdi Army, during which dozens of Iraqis were killed.
At the start of the occupation, there were an estimated 10,000 private soldiers in Iraq, already far more than during the first Gulf war. Three years later, a report by the US Government Accountability Office found that there were 48,000 private soldiers, from around the world, deployed in Iraq. Mercenaries represented the largest contingent of soldiers after the US military - more than all the other members of the "Coalition of the Willing" combined. The "Baghdad boom", as it was called in the financial press, took what was a frowned-upon, shadowy sector and fully incorporated it into the US and British war-fighting machines. Blackwater hired aggressive Washington lobbyists to erase the word "mercenary" from the public vocabulary and turn its company into an all-American brand. According to its CEO, Erik Prince, "This goes back to our corporate mantra: We're trying to do for the national security apparatus what FedEx did for the postal service."
When the war moved inside the jails, the military was so short of trained interrogators and Arabic translators that it could not get information out of its new prisoners. Desperate for more interrogators and translators, it turned to the defence contractor CACI International Inc. In its original contract, CACI's role in Iraq was to provide information technology services to the military, but the wording of the work order was vague enough that "information technology" could be stretched to mean interrogation. The flexibility was intentional: CACI is part of a new breed of contractor that acts as a temp agency for the federal government - it has ongoing, loosely worded contracts and keeps large numbers of potential workers on call, ready to fill whatever positions come up. Calling in CACI, whose workers did not need to meet the rigorous training and security clearances required of government employees, was as easy as ordering new office supplies; dozens of new interrogators arrived in a flash.
The corporation that gained most from the chaos was Halliburton. Before the invasion, it had been awarded a contract to put out oil fires set by Saddam's retreating armies. When those fires did not materialise, Halliburton's contract was stretched to include a new function: providing fuel for the entire nation, a job so big that "it bought up every available tanker truck in Kuwait, and imported hundreds more". In the name of freeing up soldiers for the battlefield, Halliburton took on dozens more of the army's traditional functions, including maintaining army vehicles and radios.
Even recruiting, long since seen as the job of soldiers, rapidly became a for-profit business as the war wore on. By 2006, new soldiers were being recruited by private headhunting firms such as Serco, or a division of the weapons giant L-3 Communications. The private recruiters, many of whom had never served in the military, were paid bonuses every time they signed up a soldier. One company spokesperson bragged, "If you want to eat steak, you have to put people in the army." Rumsfeld's reign also fuelled a boom in outsourced training: companies such as Cubic Defense Applications and Blackwater ran soldiers through live combat training and war games, bringing them to privately owned training facilities, where they practised house-to-house combat in simulated villages.
And thanks to Rumsfeld's privatisation obsession (as he first suggested in his speech on September 10 2001), when soldiers came home sick or suffering from post-traumatic stress, they were treated by private health care companies for whom the trauma-heavy war in Iraq generated windfall profits. One of these companies, Health Net, became the seventh-strongest performer in the Fortune 500 in 2005, owing largely to the number of traumatised soldiers returning from Iraq. Another was IAP Worldwide Services Inc, which won the contract to take over many of the services at the Walter Reed military hospital.
The greatly expanded role of private companies was never openly debated as a question of policy (much in the way Iraq's proposed oil law suddenly materialised). Rumsfeld did not have to engage in pitched battles with federal employees' unions or high-ranking generals. Instead, it all just happened on the fly in the field, in what the military describes as "mission creep". The longer the war wore on, the more it became a privatised war, and soon enough, this was simply the new way of war. Crisis was the enabler of the boom, just as it had been for so many before.
The numbers tell the dramatic story of corporate mission creep. During the first Gulf war in 1991, there was one contractor for every 100 soldiers. At the start of the 2003 Iraq invasion, the ratio had jumped to one contractor for every 10 soldiers. Three years into the US occupation, the ratio had reached 1:3. Less than a year later, with the occupation approaching its fourth year, there was one contractor for every 1.4 US soldiers. But that figure includes only contractors working directly for the US government, not for other coalition partners or the Iraqi government, and it does not account for the contractors based in Kuwait and Jordan who had farmed out their jobs to subcontractors.
British soldiers in Iraq are already far outnumbered by their countrymen working for private security firms at a ratio of 3:1.
When Tony Blair announced in February 2007 that he was pulling 1,600 soldiers out of Iraq, the press reported instantly that "civil servants hope 'mercenaries' can help fill the gap left behind", with the companies paid directly by the British government. At the same time, the Associated Press put the number of contractors in Iraq at 120,000, almost equivalent to the number of US troops. In scale, this kind of privatised warfare has already overshadowed the United Nations. The UN's budget for peacekeeping in 2006-2007 was $5.25bn (£2.6bn) -that is less than a quarter of the $20bn (£9.8bn) Halliburton got in Iraq contracts, and the latest estimates are that the mercenary industry alone is worth $4bn (£2bn).
So while the reconstruction of Iraq was certainly a failure for Iraqis and for US taxpayers, it has been anything but for the disaster capitalism complex. Made possible by the September 11 attacks, the war in Iraq represented nothing less than the violent birth of a new economy. This was the genius of Rumsfeld's "transformation" plan: since every possible aspect of both destruction and reconstruction has been outsourced and privatised, there is an economic boom when the bombs start falling, when they stop and when they start up again - a closed profit-loop of destruction and reconstruction, of tearing down and building up. For companies that are clever and far-sighted, such as Halliburton and the Carlyle Group, the destroyers and rebuilders are different divisions of the same corporations.
The Bush administration has taken several important and little-examined measures to institutionalise the privatised warfare model forged in Iraq, making it a permanent fixture of foreign policy. In July 2006, Bowen, the inspector general for Iraq reconstruction, issued a report on "lessons learned" from the various contractor debacles. It concluded that the problems stemmed from insufficient planning and called for the creation of "a deployable reserve corps of contracting personnel who are trained to execute rapid relief and reconstruction contracting during contingency operations" and to "pre-qualify a diverse pool of contractors with expertise in specialised reconstruction areas" - in other words, a standing contractor army. In his 2007 State of the Union address, Bush championed the idea, announcing the creation of a brand-new civilian reserve corps. "Such a corps would function much like our military reserve. It would ease the burden on the armed forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them," he said. "It would give people across America who do not wear the uniform a chance to serve in the defining struggle of our time."
A year and half into the Iraq occupation, the US State Department launched a new branch: the Office of Reconstruction and Stabilization. On any given day, it is paying private contractors to draw up detailed plans to reconstruct 25 different countries that may, for one reason or another, find themselves the target of US-sponsored destruction, from Venezuela to Iran. Corporations and consultants are lined up on "pre-signed contracts" so that they are ready to leap into action as soon as disaster strikes. For the Bush administration, it was a natural evolution: after claiming it had a right to cause unlimited pre-emptive destruction, it then pioneered pre-emptive reconstruction - rebuilding places that have not yet been destroyed.
So in the end, the war in Iraq did create a model economy - it was just not the "tiger on the Tigris" that the neo-cons had advertised. Instead, it was a model for privatised war and reconstruction - a model that quickly became export-ready. Until Iraq, the frontiers of the Chicago crusade had been bound by geography: Russia, Argentina, South Korea. Now a new frontier can open up wherever the next disaster strikes.
Rapture Rescue 911: Disaster Response for the Chosen
I used to worry that the United States was in the grip of extremists who sincerely believed that the Apocalypse was coming and that they and their friends would be airlifted to heavenly safety. I have since reconsidered. The country is indeed in the grip of extremists who are determined to act out the biblical climax—the saving of the chosen and the burning of the masses—but without any divine intervention. Heaven can wait. Thanks to the booming business of privatized disaster services, we're getting the Rapture right here on earth.
Just look at what is happening in Southern California. Even as wildfires devoured whole swaths of the region, some homes in the heart of the inferno were left intact, as if saved by a higher power. But it wasn't the hand of God; in several cases it was the handiwork of Firebreak Spray Systems. Firebreak is a special service offered to customers of insurance giant American International Group—but only if they happen to live in the wealthiest ZIP codes in the country. Members of the company's Private Client Group pay an average of $19,000 to have their homes sprayed with fire retardant. During the wildfires, the "mobile units"—racing around in red fire-trucks—even extinguished fires for their clients.
One customer described a scene of modern-day Revelation. "Just picture it. Here you are in that raging wildfire. Smoke everywhere. Flames everywhere. Plumes of smoke coming up over the hills," he told the Los Angeles Times. "Here's a couple guys showing up in what looks like a firetruck who are experts trained in fighting wildfire and they're there specifically to protect your home."
And your home alone. "There were a few instances," one of the private firefighters told Bloomberg News, "where we were spraying and the neighbor's house went up like a candle." With public fire departments cut to the bone, gone are the days of Rapid Response, when everyone was entitled to equal protection. Now, increasingly intense natural disasters will be met with the new model: Rapture Response.
During last year's hurricane season, Florida homeowners were offered similarly high-priced salvation by HelpJet, a travel agency launched with promises to turn "a hurricane evacuation into a jet-setter vacation." For an annual fee, a company concierge takes care of everything: transport to the air terminal, luxurious travel, bookings at five-star resorts. Most of all, HelpJet is an escape hatch from the kind of government failure on display during Katrina. "No standing in lines, no hassle with crowds, just a first class experience."
HelpJet is about to get some serious competition from some much larger players. In northern Michigan, during the same week that the California fires raged, the rural community of Pellston was in the grip of an intense public debate. The village is about to become the headquarters for the first fully privatized national disaster response center. The plan is the brainchild of Sovereign Deed, a little-known start-up with links to the mercenary firm Triple Canopy. Like HelpJet, Sovereign Deed works on a "country-club type membership fee," according to the company's vice president, retired Brig. Gen. Richard Mills. In exchange for a one-time fee of $50,000 followed by annual dues of $15,000, members receive "comprehensive catastrophe response services" should their city be hit by a manmade disaster that can "cause severe threats to public health and/or well-being" (read: a terrorist attack), a disease outbreak or a natural disaster. Basic membership includes access to medicine, water and food, while those who pay for "premium tiered services" will be eligible for VIP rescue missions.
Like so many private disaster companies, Sovereign Deed is selling escape from climate change and the failed state—by touting the security clearance and connections its executives amassed while working for that same state. So Mills, speaking recently in Pellston, explained, "The reality of FEMA is that it has no infrastructure, and a lot of our National Guard is elsewhere." Sovereign Deed, on the other hand, claims to have "direct access and special arrangements with several national and international information centers. These proprietary arrangements allow our Emergency Operations Center to…give our Members that critical head start in times of crisis." In this secular version of the Rapture, God's hand is unnecessary. Not when you have retired ex-CIA agents and ex–Special Forces lifting the chosen to safety—no need to pray, just pay. And who needs a celestial New Jerusalem when you can have Pellston, with its flexible local politicians and its surprisingly modern regional airport?
Sovereign Deed could soon find itself competing with Blackwater USA, whose CEO, Erik Prince, wrote recently of his plans to offer "full spectrum" services, including humanitarian aid in disasters. When fires broke out in San Diego County, near the proposed site of the controversial Blackwater West base, the company immediately seized the opportunity to make its case. Blackwater could have been the "tactical operation center for East County fires," said company vice president Brian Bonfiglio. "Can you imagine how much of a benefit it would be if we were operational now?" To show off its capacity, Blackwater has been distributing badly needed food and blankets to people of Potrero, California. "This is something we've always done," Bonfiglio said. "This is what we do." Actually, what Blackwater does, as Iraqis have painfully learned, is not protect entire communities or countries but "protect the principal"—the principal being whoever has paid Blackwater for its guns and gear.
The same pay-to-be-saved logic governs this entire new sector of country club disaster management. There is, of course, another principle that could guide our collective responses in a disaster-prone world: the simple conviction that every life is of equal value. For anyone out there who still believes in that wild idea, the time has urgently arrived to protect the principle.
has anyone read her new book, the shock doctrine? i'm a cheapskate and have been waiting for the paperback version - but from the articles/videos it sounds ... um ... goods not the word, maybe depressing and accurate ( thanks brown sauce! ) - but like shes said in articles, if you understand the mindset of these bastards, we can be better equipped for when these things happen. and when i say we i mean some mythical magical organisation on the left whos going to save the world ...
i read an article the other week and she said it was doing well with business people - i bet they're using it as some sort of new step by step guide!
the book was a bit like the exorcist, not one smile all the way through it. Constant depressive fact after fact after fact. Was just too much, the book is staring at me now, maybe I'll pick it up again .... after harry potter
Remember the “ownership society,” fixture of major George W. Bush addresses for the first four years of his presidency? “We’re creating…an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property,” Bush said in October 2004. Washington think-tanker Grover Norquist predicted that the ownership society would be Bush’s greatest legacy, remembered “long after people can no longer pronounce or spell Fallujah.” Yet in Bush’s final State of the Union address, the once-ubiquitous phrase was conspicuously absent. And little wonder: rather than its proud father, Bush has turned out to be the ownership society’s undertaker.
Well before the ownership society had a neat label, its creation was central to the success of the right-wing economic revolution around the world. The idea was simple: if working-class people owned a small piece of the market—a home mortgage, a stock port-folio, a private pension—they would cease to identify as workers and start to see themselves as owners, with the same interests as their bosses. That meant they could vote for politicians promising to improve stock performance rather than job conditions. Class consciousness would be a relic.
It was always tempting to dismiss the ownership society as an empty slogan—“hokum” as former Labor Secretary Robert Reich put it. But the ownership society was quite real. It was the answer to a roadblock long faced by politicians favoring policies to benefit the wealthy. The problem boiled down to this: people tend to vote their economic interests. Even in the wealthy United States, most people earn less than the average income. That means it is in the interest of the majority to vote for politicians promising to redistribute wealth from the top down.
So what to do? It was Margaret Thatcher who pioneered a solution. The effort centered on Britain’s public housing, or council estates, which were filled with die-hard Labour Party supporters. In a bold move, Thatcher offered strong incentives to residents to buy their council estate flats at reduced rates (much as Bush did decades later by promoting subprime mortgages). Those who could afford it became homeowners while those who couldn’t faced rents almost twice as high as before, leading to an explosion of homelessness.
As a political strategy, it worked: the renters continued to oppose Thatcher, but polls showed that more than half of the newly minted owners did indeed switch their party affiliation to the Tories. The key was a psychological shift: they now thought like owners, and owners tend to vote Tory. The ownership society as a political project was born.
Across the Atlantic, Reagan ushered in a range of policies that similarly convinced the public that class divisions no longer existed. In 1988 only 26 percent of Americans told pollsters that they lived in a society bifurcated into “haves” and “have-nots”—71 percent rejected the whole idea of class. The real breakthrough, however, came in the 1990s, with the “democratization” of stock ownership, eventually leading to nearly half of American households owning stock. Stock watching became a national pastime, with tickers on TV screens becoming more common than weather forecasts. Main Street, we were told, had stormed the elite enclaves of Wall Street.
Once again, the shift was psychological. Stock ownership made up a relatively minor part of the average American’s earnings, but in the era of frenetic downsizing and offshoring, this new class of amateur investor had a distinct shift in consciousness. Whenever a new round of layoffs was announced, sending another stock price soaring, many responded not by identifying with those who had lost their jobs, or by protesting the policies that had led to the layoffs, but by calling their brokers with instructions to buy.
Bush came to office determined to take these trends even further, to deliver Social Security accounts to Wall Street and target minority communities—traditionally out of the Republican Party’s reach—for easy homeownership. “Under 50 percent of African Americans and Hispanic Americans own a home,” Bush observed in 2002. “That’s just too few.” He called on Fannie Mae and the private sector “to unlock millions of dollars, to make it available for the purchase of a home”—an important reminder that subprime lenders were taking their cue straight from the top.
Today, the basic promises of the ownership society have been broken. First the dot-com bubble burst; then employees watched their stock-heavy pensions melt away with Enron and WorldCom. Now we have the subprime mortgage crisis, with more than 2 million homeowners facing foreclosure on their homes. Many are raiding their 401(k)s—their piece of the stock market—to pay their mortgage. Wall Street, meanwhile, has fallen out of love with Main Street. To avoid regulatory scrutiny, the new trend is away from publicly traded stocks and toward private equity. In November Nasdaq joined forces with several private banks, including Goldman Sachs, to form Portal Alliance, a private equity stock market open only to investors with assets upward of $100 million. In short order yesterday’s ownership society has morphed into today’s members-only society.
The mass eviction from the ownership society has profound political implications. According to a September Pew Research poll, 48 percent of Americans say they live in a society carved into haves and have-nots—nearly twice the number of 1988. Only 45 percent see themselves as part of the haves. In other words, we are seeing a dramatic return of the very class consciousness that the ownership society attempted to erase. Class is back. And the free market ideologues have lost their most potent psychological tool.
excellent show from democracy now with amy goodman interviewing naomi klein, covering all sorts of things from oil in canada and iraq to monsanto and the food crisis to obama and the emerging hi tech police state in china ( with the help of american defense contractors who were previously banned after the tiananmen sqaure massacre ) which is ready 'to export' ...
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With Crises in Fuel, Food, Housing and Banking, What Gvt. Policies Are Being Pushed Through? Naomi Klein Reexamines “The Shock Doctrine”
As the country and the world reel from crises ranging from skyrocketing oil prices and global food shortages to housing and climate change, how best to understand the government policies being pushed through? We spend the hour with Naomi Klein, author of The Shock Doctrine: The Rise of Disaster Capitalism. Klein also discusses Barack Obama’s economic advisory team, whom she calls “Obama’s Chicago Boys”; why she’s suing the US government for spying on journalists like her; as well as her recent trip to China, where she says the government is building a high-tech police state with the help of US military contractors.
AMY GOODMAN: President Bush has lifted an almost two-decade-old executive order banning offshore and natural gas drilling. With prices at the pump over $4 a gallon, Bush has been pushing to allow more drilling in the Outer Continental Shelf and the Arctic Wildlife National Refuge, amidst strong opposition from environmentalists.
The executive drilling ban was issued by President George H.W. Bush in 1990. His son’s lifting of the ban yesterday is largely symbolic, because a separate congressional ban has prohibited offshore drilling since 1981. Speaking on the White House lawn Monday, the President urged lawmakers to lift the ban.
PRESIDENT GEORGE W. BUSH: The failure to act is unacceptable. It’s unacceptable to me, and it’s unacceptable to the American people. So today I’ve issued a memorandum to lift the executive prohibition on oil exploration in the OCS. With this action, the executive branch’s restrictions on this exploration have been cleared away. This means that the only thing standing between the American people and these vast oil resources is action from the US Congress. Now the ball is squarely in Congress’s court.
AMY GOODMAN: In President Bush’s final months of office, the economy is at the top of the agenda. Oil prices now exceed $140 a barrel, more than double $70 a year ago. The high cost of oil has helped exacerbate the global food crisis that threatens to push over 100 million people below the poverty line due to rising food prices. This all comes amidst an ongoing housing crisis, with the US Treasury and Federal Reserve unveiling sweeping steps to possibly bail out the nation’s two largest mortgage lenders, Fannie Mae and Freddie Mac.
Amidst these multiple crises, how best to understand government policies being enacted? Naomi Klein is the author of The Shock Doctrine: The Rise of Disaster Capitalism. The book is out in paperback this month. It was first published in September, and in some ways, much of what Naomi writes about in the book is more relevant today. Naomi Klein joins us in our firehouse studio for the hour. Welcome to Democracy Now!
NAOMI KLEIN: Thank you, Amy.
AMY GOODMAN: Food, fuel, housing, climate change—talk about these crises. First, start with oil.
NAOMI KLEIN: Yeah, it’s—I mean, there really is a kind of a tsunami of shocks facing not just the economy but people’s lives, people’s real lives. They’re all intersecting. They’re making each other worse. And I think we really are seeing some very live examples of what a write about in the book, which is how there is a strategy. And this is what I mean by “the shock doctrine.” There is a clear political strategy, and has been for several decades, to exploit these moments when people are desperate for quick-fix solutions and more inclined to believe in a kind of a magical cure, to push through very, very unpopular policies that don’t actually solve the crisis at hand, that don’t actually help people, but are incredibly profitable for multinational corporations.
And I think we are seeing a very vivid example of this with this speech from George Bush yesterday, where he is taking a very real crisis, which is demanding complex and profound changes in the way we live, in the way we organize our economy, but particularly in the need to diversify our energy sources. And I think there’s a tremendous actual amount of support for this idea from the public. And he comes in—and I call him in my recent column the “extortionist-in-chief.” Basically what he’s saying is he’s holding the country ransom. He’s not taking any of these long-term policy routes to dealing with climate change, to dealing with high oil prices. It’s just let us drill, or, you know, nobody can go on summer vacation. And he’s selling a myth, which is that by allowing drilling, the price at the pump is going to go down, which is really interesting, because just yesterday, in response to Bush’s announcement, oil went up, and oil futures went up. And so, the price of oil is going to keep going up.
AMY GOODMAN: What would—how long would it take the oil drilled offshore, if he succeeds in getting his father’s ban reversed, to get into the supply?
NAOMI KLEIN: Yeah. Well, first of all, I think it’s really important for people to understand that we are being subjected to an incredibly aggressive media campaign sponsored by the oil and gas industry. And, you know, it’s to the point where it really is impossible to tell the difference between the paid advertisements, which we’re being bombarded with on cable news from the oil and gas industry, talking about how they can solve the problem of high prices with more drilling, and all of these commentators, from Larry Kudlow to Sean Hannity, repeating these talking points, and not to mention Dick Cheney, who just propagated a complete lie, saying that China was drilling off the coast of Cuba, and the Vice President’s office actually had to retract that. It turns out his source was George Will, who also had to issue a correction. China is not drilling off of Cuba. And so, there’s a very aggressive campaign going on.
The reality is, it would take between five to ten years to see any of that oil. Everybody admits this. Everyone knows this. You have to do the exploration, then you have to build the rig, which takes a huge amount of time. So it takes—we’re talking about as long as a decade to see any of this oil.
So when you press people who are selling this drill in ANWR, more offshore oil drilling, also drilling into the shale in places like Montana, what they actually say is that the reason why it will lower prices at the pump, you know, soon, this summer, is because it will send a message to the stock market, it will send a message to the oil speculators that more supply is on the way. So, essentially, what they’re saying is, let’s play the market, let’s collectively play the market.
And that’s why it’s significant that yesterday, in the face of Bush’s announcement—and it was a significant announcement, because it was a real indication of the seriousness of this administration to really make this their, you know, final push in office, and they could well win, because this media campaign is really bringing public opinion on side, and we know that the Democrats are pretty weak in the face of that public opinion, and the only thing that they could fight this with is with real commitment to green policies. And, you know, don’t hold your breath.
AMY GOODMAN: What does this offshore drilling, lifting the ban—how would you relate this to what’s happening in Iraq right now and what’s happening at the Oil Ministry and the pushing through the permanent occupation that the Bush administration is pushing hard for?
NAOMI KLEIN: Well, I think we’re seeing the Bush administration in its final months just handing out a series of gifts to the oil and gas industry, both at home, pushing for opening up the Arctic National Wildlife Refuge, and then in Iraq, the prize, the biggest prize of all, which is allowing foreign multinationals to gain control of Iraq’s oil fields. And we’re seeing a two-stage process now, and it isn’t over yet, where first there was the service—the short-term service agreements, no-bid contracts, that were announced. They haven’t been signed yet, but they’re going to the big oil companies that were kicked out of Iraq in the ’70s. They’re coming back.
AMY GOODMAN: Explain how that works, these no-bid contracts, how it is—who’s signing these contracts?
NAOMI KLEIN: OK. Well, at the moment, Iraq does not have an oil law, so Iraq can’t sign long-term exploration agreements, although they are doing it in Iraqi Kurdistan, and we’ve heard about this with Hunt Oil. But that’s—those are illegal contracts. They’re very precarious. There could be future expropriations. It’s really risky to go that route, because there isn’t a law. And we know it’s been a major push of this administration to get the Iraqi parliament to accept a US-backed oil law. This has been sold as a symbol of Iraqi unity. That’s not the way it’s seen in Iraq.
In Iraq, the reason why it has been years in resisting this oil law is because nationalizing the oil in Iraq was the centerpiece of the anti-colonial struggle, as it was in neighboring nations throughout the Arab world. And it is not just a pro-Saddam idea. It is not just a Baathist idea. It’s the core of Arab nationalism. And that victory is being protected by many political forces in Iraq, and most notably by the oil workers’ unions in Iraq, who said, “We don’t need these foreign multinationals to get the oil out of the ground. We can do it ourselves. We can bring in technical support without giving away management control, without giving away ownership control.”
And, I mean, but let’s stress here that unlike the oil offshore, unlike the shale, this is very difficult oil to extract. It’s extremely—it requires a huge amount of technology. It requires a huge amount of investment. And that’s part of the problem with what the Bush administration is selling. These—actually, they—the oil companies need the price of oil to stay high in order for it to be economically viable to do these—to get oil out of solid rock, for instance, which is very hard, very expensive. Offshore oil drilling, also very, very expensive—you have to build the rigs and so on. Iraq, no. Iraq, stick a straw in the ground and suck. I mean, this is incredibly accessible oil. And Iraqis actually know how to extract this oil themselves. So this idea that they need these foreign multinationals to come in is yet another myth.
And not only have companies like BP and Texaco been offered these no-bid contracts, but what’s strange about it is that they’re service contracts, and these are not oil service companies. So what’s significant about these contracts is that they appear to be giving these oil companies the right of first refusal on future, more significant contracts. So, one week after these smaller service agreements were announced, the Iraqi Oil Ministry announced that they also will be handing out longer-term management agreements, which will give oil companies the ability to manage existing fields in Iraq and hold onto 75 percent of the worth of those contracts and leave only 25 percent for Iraqis, which is absolutely unheard of in the region, where 51 percent for the country is the baseline for new exploration, for new fields. These are existing fields. They’re already working. The technology is already there. And these foreign companies are going to be taking 75 percent of the worth of those existing fields in Iraq. So it’s daylight robbery. It’s armed robbery, actually, Amy.
AMY GOODMAN: We’re talking to Naomi Klein. Her book is just out in paperback, The Shock Doctrine: The Rise of Disaster Capitalism. We’ll keep talking about oil. She’s a Canadian journalist, and we’re going to find out about, well, the largest supplier of oil to the United States. No, it’s not Saudi Arabia; it is Canada. And, well, Naomi is just back from China, so we also want to find out what she’s been investigating there, what she says is the building of a police state with the help of US military contractors. And we’ll find out why she’s suing the US government. Stay with us.
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AMY GOODMAN: Our guest for the hour is Naomi Klein, the award-winning journalist and bestselling author. Her book, The Shock Doctrine: The Rise of Disaster Capitalism, is just out in paperback. It’s being translated now into twenty-five languages. And by the way, she’s speaking here in New York at Barnes & Noble, Union Square, tomorrow night at 7:00 p.m.
We’re talking oil. Naomi, how is it that the oil prices are, well, among the highest they have ever been, and yet so are the oil company profits—ExxonMobil, Chevron—why?
NAOMI KLEIN: Well, they have a captive market, and the fact that the price is high means that they are earning more profits.
AMY GOODMAN: But supposedly the price is high because it’s harder to get, not to give them more money.
NAOMI KLEIN: There’s a speculative bubble going on right now, and this market is being played. I mean, I think this is really the new bubble. Actually, it’s replacing the housing bubble. And, you know, any time anything bad happens in the world, that’s the indication for speculators to drive the price up. It happened yesterday. Bush announced that he would be opening up to offshore oil drilling, but at the same time, there was an oil strike in Brazil, so the price of oil went up. So everything drives the price of oil up. I think it’s really a classic bubble. Certainly, there are some supply issues, but I actually don’t think that that is the main reason why the price of oil is going up.
AMY GOODMAN: You’re from Canada. Talk about Canada being the major supplier of oil to the United States. I think most people in this country would not understand this. And I also want to talk about ANWR, the Arctic National Wildlife Refuge.
NAOMI KLEIN: Yeah. Well, it’s really striking, because in all of these discussions—and we heard this just now from President Bush—it was, we need to drill offshore to get away from our dependence on foreign oil, and there is still an overwhelming perception that most of the oil in the United States is coming from countries like Saudi Arabia. There has been, since the invasion of Iraq—and this is the period where the price of oil has skyrocketed—this has already changed. The number one supplier of oil to the United States is not Saudi Arabia, it’s not Mexico—it’s Canada.
And it has all of the elements that these new initiatives that are being proposed—offshore, ANWR, shale—possess. It’s close. It is an absolutely secure source of oil for the United States, and the reason for that is because locked into the North American Free Trade Agreement, locked into NAFTA, is a clause that we Canadians are really not very pleased with, which actually makes it illegal, impossible, under NAFTA, for Canada to turn off the tap, even if we face an oil crisis and are not able to supply oil for our citizens. We have to keep supplying the United States. So it’s a legally binding agreement that this tap will stay open. So Canada is now the number one supplier.
And the other that it holds in common is that it’s ecologically devastating, what’s going on in Canada, because the majority of this new oil coming to the United States is coming from the Alberta tar sands, which are often called the “oil sands.” We call them the “tar sands,” because it’s a more accurate description. And this is another oil industry talking point, to get you to stop calling it the “tar sands” and start calling it the “oil sands.”
But essentially, the oil in Alberta is very linked to the high price of oil, which is to say that when oil was at $30 a barrel, the tar sands, this huge oil deposit, was not counted as part of the global oil reserves. And the reason for that is that it was so expensive to process this very, very thick tar-like substance into liquid oil. It costs between $25 and $30 a barrel, so it just didn’t make sense to count it as part of the global oil reserves, because who was going to make the investment required if they were obviously not going to get a return on their investment? So once the Iraq war started and the price of oil started skyrocketing, oil was discovered in Canada. Everyone knew it was there, but it became part of the global oil reserves. More than that, it is now counted as the largest oil deposit in the world. These are the tar sands.
And, you know, I would argue that this oil should be left in the ground. Environmentalists are calling for a moratorium on the tar sands, because it takes three times the amount of fossil fuels, of burning fossil fuels, to process one barrel of oil from the tar sands as it does to process the kind of oil that they have in Iraq, for instance, which is already in liquid form.
AMY GOODMAN: So you dramatically increase emissions.
NAOMI KLEIN: It’s why Canada has become a climate renegade, along with the United States, because our emissions are increasing because of the tar sands, because it is so carbon-intensive and water-intensive—which is another issue—to do this very, very dirty processing of this tar-like substance into liquid form. So the argument is that it should actually be left alone.
But the other argument that we see is that even with this huge boom going on in Canada—and this is the reason why our economy is actually doing better than the US economy, because of the tar sands—is that it in no way has affected the price of oil. So, here you have a paradigm to look at of what is being proposed right now with ANWR, what’s being proposed with offshore, what’s being proposed with shale. We can see it right now in Canada. And as this huge boom is taking place, the price of oil has gone up month after month after month, and it has had absolutely no effect on the price at the pump.
AMY GOODMAN: We’re talking to Naomi Klein. Naomi, you’ve been writing a lot on a number of issues. One of them is about what you call Obama’s Boys.
NAOMI KLEIN: Obama’s Chicago Boys, yeah. I just want to add one more point, and I just want to take this opportunity, because I feel like people are being so bombarded with these oil industry talking points, and it really is changing public opinion. I mean, people need to know this. There’s—polls are being commissioned that are finding that 67 percent of Americans support offshore oil drilling, because they think it’s going to lower the price at the pump.
What’s actually going on is the oil companies may not even bother drilling. What they’re doing is they’re stockpiling leases. And what that means is that the oil companies will have a much greater control over the oil supply. When the oil companies have a much larger control over the oil supply, they can turn it on and off. They can control price. They can fix the price. So, in fact, what this is doing is the opposite of what they’re saying. It’s actually giving the oil industry much more power to drive the price of oil up by controlling supply, by just giving them all of these leases. And we keep hearing, well, they have all these leases already, and they’re not using them, and they want more. Why? Why do they want all these leases? Because that is what gives them control over supply. That’s what allows them to fix prices.
AMY GOODMAN: In fact, this has united you with people across the political spectrum. You’ve been invited on a number of right-wing radio talk shows, because everyone is deeply concerned about the price of oil. They just have different solutions for what should happen.
NAOMI KLEIN: Right. But, you know, there was this little window, Amy, where even Bill O’Reilly was talking about the obscene profits of the oil industry—it was like three days—where people were—where the logic of the situation was just so glaring, where, you know, you have Shell reporting $7 billion in profits in one quarter. People are very concerned about climate change. And it just makes sense to take some of those profits in the form of a windfall profit tax or some other measure and—because these are the companies that have created this crisis for us—and using this moment.
And let’s remember that this is what countries around the world are doing. They’re using this moment of high oil prices to invest in alternative energy and alternative infrastructure. The way to make solar and wind work, you know, is not just to do venture capitalism for startup solar and wind companies. These companies need major investment, need states to make major investments in infrastructure that can carry these new energy sources, new grids. This can only be done by the public sector. And this is actually a moment of opportunity, when there is such high prices, when people are so angry at the oil companies, to actually take some of this money and invest it in the public sphere, so that alternative energy becomes viable.
And there was a moment where there seemed to be some agreement about that, even on the right. And then, it just shifted because of this very aggressive barrage coming from the oil and gas industry, which is selling this false hope of “drill now, pay less.”
AMY GOODMAN: Naomi Klein, Obama’s Chicago Boys, who are they?
NAOMI KLEIN: Well, one of them is Obama. Obama spent ten years teaching at the University of Chicago Law School, which is a very conservative law school. You know, I wrote a column recently talking about how conservative Obama’s economic roots are, with his ties to the University of Chicago.
His first response to the mortgage crisis, let’s remember, was he was worried about the government taking action to keep people from being evicted from their homes, because that would create moral hazard. And he was not talking about the big companies, the big mortgage lenders; he was talking about individual low-income people being thrown out of their homes. He was worried about moral hazard. That’s a very University of Chicago take on the situation.
And yeah, one of his—his chief economic adviser was Austin Goolsbee, this University of Chicago economist. And, you know, now his chief economic adviser is Jason Furman, who is not a University of Chicago-affiliated economist, but is certainly on the right of the economic—Democratic economic spectrum, has defended Wal-Mart, has attacked critics of Wal-Mart, saying that they’re doing more harm than good, that actually Wal-Mart is a progressive institution that is helping low-income people with their low prices, and that living wage campaigns, for instance, are actually hurting low-income people. So these are pretty conservative ideas, and I think it is important for people to understand that this is who Obama has chosen to take his advice from.
AMY GOODMAN: This is very interesting, because, of course, he really slammed Hillary Clinton when it came to her tenure on the board of Wal-Mart.
NAOMI KLEIN: Yeah.
AMY GOODMAN: And he said he wouldn’t shop there.
NAOMI KLEIN: It’s true. He said both of those things, and it is a political campaign, and we’re seeing a lot of double talk on these issues. Austin Goolsbee, for instance, got himself into some trouble after he met with Canadian consulate officials. And they left that meeting with the distinct impression that he had told them that they shouldn’t listen to what Obama’s saying about NAFTA and renegotiating NAFTA for labor and environmental standards, because it’s just an election campaign. So it would seem that perhaps we should take Obama’s Wal-Mart comments in the same spirit. But, you know, my message on—
AMY GOODMAN: And yet, you have him speaking—Obama himself being quoted in Fortune magazine, after he had said that that whole—well, what became a sort of little scandal there, with Goolsbee going to the Canadian consulate—
NAOMI KLEIN: Yeah.
AMY GOODMAN: —at the time when he was going through the states where labor was stronger, where he was really slamming NAFTA, saying this wasn’t true, that he was telling them, “Don’t worry. It’s just overheated rhetoric.” And then he said that precise thing, Senator Obama himself, in Fortune.
NAOMI KLEIN: That it was overheated rhetoric. Yeah, exactly.
AMY GOODMAN: That he supports NAFTA and free trade.
NAOMI KLEIN: And it’s—you know, it’s shades of Bill Clinton’s first campaign, where he also campaigned very actively about labor and environmental standards and NAFTA. NAFTA had already been signed, but it hadn’t come into law. And then there was a turnaround, and there was a turnaround in the transition period, after the election but before he took office, where there was a sort of fateful meeting.
And I think the fear is that some of the same people, like Rubin, responsible for, you know, Rubinomics, which turned into Clintonomics, which was, you know, the Democratic full-scale embrace of the ideology of privatization and so-called free trade, that this same sort of group of people are following—are now surrounding Obama. And Jason Furman is a Rubin protégé and worked with him at the Hamilton Project, which is a sort of sub-think tank of the Brookings Institution, which emerged a few years ago to prevent the Democratic Party from embracing what they saw as populist economic policies, the centerpiece of which would have been a reexamine of the ideology of free trade, which is being discredited around the world.
AMY GOODMAN: So, you have Obama on NAFTA, people perceiving that he’s changing his position. And then you have the major issue of FISA, where even on his own website—and many say—
NAOMI KLEIN: Well, just to be clear on economics, I mean, I think what we actually saw with Obama is that he started pretty much at a conservative point on economic policy, and Clinton—and the campaign with Clinton, because she was moving so far to a populist position, he then moved. And as soon as she dropped out of the race, he moved back. So I think there are some real points of disagreement, and I think that there are some places to point to much more progressive outlook in Obama’s roots, particularly on foreign policy, but I don’t think economic policy is one of them.
AMY GOODMAN: He had called the free trade agreement, in the debates with Hillary Clinton and with John Edwards, “a mistake.” He called it “an enormous problem,” but now, with Fortune, said, “Sometimes during campaigns rhetoric gets overheated and amplified. My core position has never changed. I’ve always been a proponent of free trade,” which you say actually is true.
NAOMI KLEIN: And he appointed Jason Furman the day after Hillary dropped out of the race. Yeah. So, it was—as I said, I really think he’s moving back to actually where he started, with his first reaction, as I said, to the subprime mortgage crisis being, well, we can’t keep low-income people from being evicted, because we have the moral hazard of encouraging them to make bad loans, essentially blaming them for having been—having accepted these mortgages in the first place.
AMY GOODMAN: So now you have FISA, and you’re suing on this issue. But on December 17th, a press release from Obama’s Senate office read: “Senator Obama unequivocally opposes giving retroactive immunity to telecommunications companies and has cosponsored Senator Dodd’s efforts to remove that provision from the FISA bill. Granting such immunity undermines the constitutional protections Americans trust the Congress to protect. Senator Obama supports a filibuster of this bill, and strongly urges others to do the same.” Ultimately, of course, he supported the bill, and it just passed, and the telecommunications companies got the retroactive immunity that they had sought.
NAOMI KLEIN: Yeah, and I think we should see this as part of these parting gifts that the Bush administration is handing out to their cronies in the oil and gas industry and also in the telecommunications industry. And we really see the priorities of this administration. It’s a tremendous disappointment.
The lawsuit that you mentioned is, I think, a really forward-looking initiative from the ACLU, where they’ve been anticipating, hoping that this wouldn’t happen, that there would be a legal defeat of this—of the bill in Congress and the Senate. But, of course, they were realistic and knew that there was a good chance of a cave, and so the ACLU has been preparing a lawsuit, and I think it’s really the ACLU at its best, which is defending the law when the lawmakers decide not to.
And they’ve brought together coalition of human rights groups, different NGOs, who do a lot of international work, as well as journalists, who—and we’re all saying—I’m one of the complainants on behalf of The Nation, me and—Chris Hedges and I and The Nation are named in this lawsuit, and we are all saying that the fact that our communications with international sources, with international colleagues, are now open to absolute, free surveillance, with no restrictions whatsoever, severely limits our ability to do our job.
And I think the most disappointing thing about the way in which Obama and other Democrats have defended their reversal on this law is that there’s a tremendous amount of dishonesty about what is in the law. I mean, they’re having to say that they’ve gotten all of these improvements, that it’s much better, that there’s much less to worry about, in order to justify their, I think, deeply immoral position. And so, there’s a lot of misunderstanding now about just how bad this law is.
And it’s just as bad as we feared, not just on the immunity for the telecoms, which is a disaster, but, more importantly, the fact that there, you know, is no burden of proof, except to say that the party being put under surveillance is outside of the United States. So if I’m communicating—I’m in the United States and I’m communicating with somebody in Argentina, they don’t—the government does not have to prove that they have reason to believe that that person in Argentina is affiliated with a terrorist group, is a suspected terrorist, has information about terrorism. All they have to prove is that they are not an American.
AMY GOODMAN: We’re talking to Naomi Klein. We’re going to come back to this conversation. If you’d like a copy of the broadcast, a DVD, you can go to our website at democracynow.org. Naomi Klein’s book has just been launched in paperback, The Shock Doctrine: The Rise of Disaster Capitalism. The Olympics are coming back. Naomi Klein is just back from China. We’re going to talk about what she found there. She’s talking about the rise of a police state with the help of US military contractors. Stay with us.
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AMY GOODMAN: Our guest is Naomi Klein. Her book is just out in paperback. It’s called The Shock Doctrine: The Rise of Disaster Capitalism. We were talking about Obama changing, or not, his positions—also have to talk about Iraq, both Obama and McCain. And then we’re going to go to the food crisis, as well as China, what’s happening there.
NAOMI KLEIN: Well, on Iraq, Obama does not have a plan to end the occupation; he has a plan to downsize the occupation slowly. He’s been clear that he wants to keep the Green Zone intact. You’ve covered this extensively on the show. And that means, as Jeremy Scahill has made clear, that means that they have to keep Blackwater in Iraq.
So, I think that the point of this is not just to bash Obama. I mean, what I’ve been trying to—the point I’ve been trying to make is that Obama needs more than super fans. He needs pressure from his base, because he has all the energy of the antiwar movement and the antiwar infrastructure. I mean, you’ve got groups like MoveOn that really built their infrastructure out of the huge anger and desire for change around Iraq, and now the infrastructure of the antiwar movement largely is going to support Obama, but there aren’t clear demands being made of him to deserve that support.
AMY GOODMAN: He’s now calling for 10,000 more troops to go to Afghanistan.
NAOMI KLEIN: And, you know, the corporations who are funding Obama’s campaign, one of—somebody who I referred to as one of Obama’s Chicago Boys, I was talking about Ken Griffin, who is a Chicago hedge fund manager who used to be a Bush campaign pioneer, was a Republican, and has switched to Obama, basically because he’s run the numbers and he believes Obama is going to win.
But I think what we have to understand is, with all the Wall Street money coming to Obama, with the weapons money coming to Obama, with the hedge fund money coming to Obama, these players have leverage. They can go to the Republicans. And so, what’s the leverage of the antiwar movement? You know, what’s the leverage of the grassroots supporters of Obama who have given him their trust, because they want change so badly on the environment, in Iraq, on domestic economic policy?
AMY GOODMAN: Well, isn’t the alternative, McCain says a hundred years in Iraq?
NAOMI KLEIN: Well, that’s the alternative. And I think, you know, this is part of the problem of this two-party system. And, you know, I saw Ralph Nader recently, and he said, “You know, progressives and liberals don’t know how to play poker. There has to be somewhere to go.” And, you know, I think that’s part of it. But I don’t think it’s just about third parties. It’s also about having independent movements that provide conditional support to candidates and not this sort of blank check, rock star, we’ll support you no matter what.
AMY GOODMAN: Well, of course, people do have some place else to go, which is—we’ve seen it over and over—the American people have made it very clear: stay home.
NAOMI KLEIN: Stay home. That’s true, and that’s a credible threat. But I think Obama needs to hear a much more conditional, much more critical, much more demanding kind of support from his base, because his base is far to the left of the types of policies that we’re seeing and that we’re talking about here, whether it’s the mortgage crisis, whether it’s NAFTA, or whether it’s Iraq.
AMY GOODMAN: Food crisis now around the world.
NAOMI KLEIN: Yeah. Well, this is—you know, this is another example of how the shock doctrine, the strategy that I document in the book of using a crisis, using a situation of desperation, often a situation where developing countries need foreign aid, because they’re facing a disaster, to leverage very, very unpopular pro-corporate policies. Now, you know in the book the examples that I give are, for instance, how the tsunami in Asia was used and the fact that countries like Sri Lanka needed aid, and in that moment you had international lenders coming in and saying, “Oh, well, we’ll give you aid, but we want you to privatize your water, your electricity system, hand the coastline over to resorts.”
Well, we’re seeing a version of this. We’re seeing a version of disaster capitalism in the context of the food crisis, where you have that same desperation, you have a need for aid, for debt forgiveness, for new policies, and now we’re hearing another sort of echo chamber response from the World Bank, from the US State Department, from the agribusiness companies, and that refrain is, the cause of the food crisis is that too many of these countries don’t allow genetically modified foods, and genetically modified crops can feed the world and solve the food crisis, so trying to use this crisis to break through a legislative barrier that exists for good reason, just as domestically in the United States the oil crisis is being used by the Bush administration to try to break through the bans on offshore oil, on ANWR.
So now we have this other talking point that we’re hearing again and again, which is genetically modified foods can feed the world. There is no scientific evidence for this. Quite the opposite. Genetically modified seeds do not increase yields for crops. They increase profits for agribusiness companies. They simplify farming. But they don’t increase yields, and in many cases they decrease yields.
AMY GOODMAN: Because?
NAOMI KLEIN: Because this is actually not what they’re genetically modified to do. I mean, if you think about Roundup Ready, I mean, what it’s genetically modified to do is be compatible—
AMY GOODMAN: You mean the soy and the fertilizer?
NAOMI KLEIN: Yeah, to be compatible with Monsanto’s fertilizer. It’s not about increasing crop yields. And they haven’t actually figured out the technology for how to increase crop yields.
One of the things that I find really worrying is that companies—and similar to the oil crisis, Amy, we’re seeing record profits from Monsanto, from Cargill, from all the big players, in the context of the food crisis. We’re also seeing something else, which is that these companies are buying up hundreds of patents on seeds that they claim are “climate-ready.” “Climate-ready” is—we’ve heard about Roundup Ready, which means they’re ready for roundup fertilizer; now, the new phrase is “climate ready,” which means they’re ready for climate change, which means that these seeds apparently can grow in the context of drought, can grow in the context of highly salinated earth because there’s been a flood. And Monsanto and Sargenta, other of these big biotech companies, have bought up hundreds of these patents.
And this is worrying on many levels. I think it’s worrying, because, once again, we’re seeing a disincentive to actually get us out of a future of climate chaos, because we see ways to profit. But then, when we look at how aggressively we know a company like Monsanto protects its patents, when it comes to their Roundup Ready seeds, the suing of small farmers, the surveillance of farmers—there was an incredible story recently in Vanity Fair about the heavy-handed legal tactics and use of private security, just harassing farmers who dare to save their seeds from one growing season to the next, breaking Monsanto’s patent. So if they really are developing seeds that are climate ready and they’re also patenting them and buying them up, then really what we’re seeing is not a future of feeding the world, but once again a future of a kind of climate apartheid, where it becomes less accessible and more expensive to have the crops that will grow in this future.
And so, I think people need to identify this right away, and the discussion needs to be about the right to food, about food being a human right. This is far too important to allow players like Monsanto to privatize the future of the crops that can grow within a context of climate change.
AMY GOODMAN: Naomi Klein, we only have five minutes, and I really want to get to the piece you did in Rolling Stone—you just returned from China—“China’s All-Seeing Eye.” “With the help of US defense contractors, China is building the prototype for a high-tech police state. It is ready for export.” Tell us what you found?
NAOMI KLEIN: Well, yeah, I was in China a couple months ago, and the piece came out recently, and you can read it still on the Rolling Stone website. And I concentrated on the Pearl River Delta, on the city of Shenzhen. And, you know, this is the part of China that is really the—I guess the sweatshop to the world, their workshop to the world. This is where probably half of everything most us own is made. Hundreds of thousands of factories, a lot of technology, a lot of garments. It is now a new kind—it’s always been a laboratory for this manufacturing model, for the globalization manufacturing model, and it was born as a laboratory. The city of Shenzhen didn’t exist in 1980. It was a collection of fishing villages. And now it’s a city of more than 12 million people.
And there’s a new experiment happening in Shenzhen, where a high-tech police state is being built. And there are hundreds of thousands of CCTV cameras, of surveillance cameras, in the city. There are plans to have two million cameras in the city of Shenzhen and to network them, which is the key, so that they’re all part of the same network. They can be monitored from a centralized police location. And it isn’t just the cameras on the streets. It’s cameras in internet cafes, cameras in private restaurants, so a total convergence between the private and the public when it comes to putting the people under surveillance.
And the money for building this high-tech police state—and it includes also biometric IDs, facial recognition software. It’s sort of the future that has already been imagined in multiple sort of science fiction films, but that we actually don’t yet have in North America yet, because there are still some civil liberties and privacy protections that prevent all of the technologies from being networked together to create this all-seeing eye. In China, you have the perfect situation, because you have a government that actually makes no claims for the rights to privacy of its citizens. And so, corporations like General Electric, Honeywell, have been flocking to China, and they’ve been delighted that, first of all, they’ve been able to get contracts—
AMY GOODMAN: And General Electric, which owns NBC.
NAOMI KLEIN: Which owns NBC. A lot of the contracts have been issued in the name of Olympic security. Olympic security is—you know, we know the Olympics are always massive corporate welfare endeavors, with new stadiums, new infrastructure. Well, now, in the post-9/11 context, Olympics are also huge business for the security industry. The Olympics provides the excuse for massive new investments in cameras on public transit, checkpoints and subways, biometric identification cards. And we’re seeing this in Vancouver, which has the 2010 Olympic Games. But in China, it’s completely out of control.
Just to put this in context, the estimate is that China is spending $13 billion in the name of security for the Olympics. And let’s remember, all of these toys that are being sold to the Chinese government by companies like General Electric are staying after the Olympics and to be used against the domestic population. So it gets installed in the name of protecting the athletes, protecting the foreign dignitaries, but it stays and is able to be used against the local population, and I think in violation of the sanctions policies that were passed after the Tiananmen Square massacre, which actually made it illegal for American companies to sell police equipment to the Chinese government, precisely because it can be used to repress the population. But now, because it’s being packaged as antiterrorism security in the context of an international event, they’ve sort of found a backdoor way into it. But, yeah, once again, to put it in context, Amy—and I know we’re running out of time—$13 billion for Olympic security in Beijing this summer. The first Olympics after 9/11 were in Athens, and they spent $1.5 billion. So, since Athens, the increase in security spending has gone from $1.5 billion to $13 billion.
AMY GOODMAN: You talk about Police State 2.0 not looking good from the outside, but on the inside it appears to have passed the first major test.
NAOMI KLEIN: Right. And that was a reference to the ways in which these technologies were used in Tibet during the crackdown against protesters in riots. What we saw is that the Chinese government really let the riots get out of hand in Lhasa. And what they did is they just concentrated on filming. So there was a lot of violence, and the CCTV cameras that had been installed in Lhasa—
AMY GOODMAN: Closed-circuit TV.
NAOMI KLEIN: The closed-circuit TV cameras. Also the police and military did a lot of their own filming. And then they cut together this sort of “Tibetans Gone Wild” videos, and that’s what passed for journalism, because, of course, they kept the foreign journalists out of Lhasa, and so it was just the surveillance footage that they showed to the world to try to turn public opinion against the Tibetans.
But more than that, we also saw the ways in which the internet companies cooperated with the Chinese government. So they used the surveillance cameras to extract photographs and made a most-wanted list of twenty-one Tibetans who they wanted to arrest, and then those wanted lists were posted on all of the portals in China, including briefly Yahoo’s portal and MSN’s portal.
AMY GOODMAN: And what does that mean? They posted them, and then…?
NAOMI KLEIN: And then they took them down, because, of course, there’s been a lot of controversy about American companies, like Google and Yahoo and Microsoft, cooperating with the Chinese government to go after dissidents and so on. So they’ve been called before Congress on this. It’s been a public relations disaster for Yahoo. And this was another example of that kind of cooperation.
AMY GOODMAN: Well, as we move into the Olympics, we’re going to have you back, Naomi. Thank you so much for being here. Her book is called The Shock Doctrine: The Rise of Disaster Capitalism, just out in paperback.
Now is the Time to Resist Wall Street's Shock Doctrine
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.[/quote]
Enough. It's time for a boycott The best way to end the bloody occupation is to target Israel with the kind of movement that ended apartheid in South Africa
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 was born.
Every day that Israel pounds Gaza brings more converts to the BDS cause - even among Israeli Jews. In the midst of the assault roughly 500 Israelis, dozens of them well-known artists and scholars, sent a letter to foreign ambassadors in Israel. It calls for "the adoption of immediate restrictive measures and sanctions" and draws a clear parallel with the anti-apartheid struggle. "The boycott on South Africa was effective, but Israel is handled with kid gloves ... This international backing must stop."
Yet even in the face of these clear calls, many of us still can't go there. The reasons are complex, emotional and understandable. But they simply aren't good enough. Economic sanctions are the most effective tool in the non-violent arsenal: surrendering them verges on active complicity. Here are the top four objections to the BDS strategy, followed by counter-arguments.
Punitive measures will alienate rather than persuade Israelis.
The world has tried what used to be called "constructive engagement". It has failed utterly. Since 2006 Israel has been steadily escalating its criminality: expanding settlements, launching an outrageous war against Lebanon, and imposing collective punishment on Gaza through the brutal blockade. Despite this escalation, Israel has not faced punitive measures - quite the opposite. The weapons and $3bn in annual aid the US sends Israel are only the beginning. Throughout this key period, Israel has enjoyed a dramatic improvement in its diplomatic, cultural and trade relations with a variety of other allies. For instance, in 2007 Israel became the first country outside Latin America to sign a free-trade deal with the Mercosur bloc. In the first nine months of 2008, Israeli exports to Canada went up 45%. A new deal with the EU is set to double Israel's exports of processed food. And in December European ministers "upgraded" the EU-Israel association agreement, a reward long sought by Jerusalem.
It is in this context that Israeli leaders started their latest war: confident they would face no meaningful costs. It is remarkable that over seven days of wartime trading, the Tel Aviv Stock Exchange's flagship index actually went up 10.7%. When carrots don't work, sticks are needed.
Israel is not South Africa.
Of course it isn't. The relevance of the South African model is that it proves BDS tactics can be effective when weaker measures (protests, petitions, backroom lobbying) fail. And there are deeply distressing echoes of apartheid in the occupied territories: the colour-coded IDs and travel permits, the bulldozed homes and forced displacement, the settler-only roads. Ronnie Kasrils, a prominent South African politician, said the architecture of segregation he saw in the West Bank and Gaza was "infinitely worse than apartheid". That was in 2007, before Israel began its full-scale war against the open-air prison that is Gaza.
Why single out Israel when the US, Britain and other western countries do the same things in Iraq and Afghanistan?
Boycott is not a dogma; it is a tactic. The reason the strategy should be tried is practical: in a country so small and trade-dependent, it could actually work.
Boycotts sever communication; we need more dialogue, not less.
This one I'll answer with a personal story. For eight years, my books have been published in Israel by a commercial house called Babel. But when I published The Shock Doctrine, I wanted to respect the boycott. On the advice of BDS activists, including the wonderful writer John Berger, I contacted a small publisher called Andalus. Andalus is an activist press, deeply involved in the anti-occupation movement and the only Israeli publisher devoted exclusively to translating Arabic writing into Hebrew. We drafted a contract that guarantees that all proceeds go to Andalus's work, and none to me. I am boycotting the Israeli economy but not Israelis.
Our modest publishing plan required dozens of phone calls, emails and instant messages, stretching between Tel Aviv, Ramallah, Paris, Toronto and Gaza City. My point is this: as soon as you start a boycott strategy, dialogue grows dramatically. The argument that boycotts will cut us off from one another is particularly specious given the array of cheap information technologies at our fingertips. We are drowning in ways to rant at each other across national boundaries. No boycott can stop us.
Just about now, many a proud Zionist is gearing up for major point-scoring: don't I know that many of these very hi-tech toys come from Israeli research parks, world leaders in infotech? True enough, but not all of them. Several days into Israel's Gaza assault, Richard Ramsey, managing director of a British telecom specialising in voice-over-internet services, sent an email to the Israeli tech firm MobileMax: "As a result of the Israeli government action in the last few days we will no longer be in a position to consider doing business with yourself or any other Israeli company."
Ramsey says his decision wasn't political; he just didn't want to lose customers. "We can't afford to lose any of our clients," he explains, "so it was purely commercially defensive."
It was this kind of cold business calculation that led many companies to pull out of South Africa two decades ago. And it's precisely the kind of calculation that is our most realistic hope of bringing justice, so long denied, to Palestine.
Canadian journalist Naomi Klein has won Britain's inaugural Warwick Prize for Writing for "The Shock Doctrine," her acclaimed investigation into neoliberal economics which she calls "disaster capitalism."
Canadian journalist Naomi Klein has won Britain's inaugural Warwick Prize for Writing for "The Shock Doctrine," her acclaimed investigation into neoliberal economics which she calls "disaster capitalism."
The 2007 book argues that governments and companies use natural disasters like the Asian tsunami or man-made shocks like the Iraq war or the attacks of September 11, 2001, to push through corporate-friendly policies.
"The Shock Doctrine is a brilliant, provocative, outstandingly written investigation into some of the great outrages of our time," said fantasy fiction author China Mieville who chaired the judging panel.
Klein receives 50,000 pounds for winning the biennial award, which is funded by the University of Warwick and honours any "substantial" piece of writing in the English language, including works in translation.
"At a time when the news out of the publishing industry is usually so bleak, it's thrilling to be part of a bold new prize supporting writing, especially alongside such an exciting array of other books," Klein said in a statement.
Klein was up against "Montano's Malady" by Spanish writer Enrique Vila-Matas, Polish-born Lisa Appignanesi for "Mad, Bad, and Sad: A History of Women and the Mind Doctors from 1800" and U.S. novelist Francisco Goldman for "The Art of Political Murder: Who Killed Bishop Gerardi?."
Rounding off the shortlist of six were U.S. theoretical biologist Stuart Kauffman ("Reinventing the Sacred: A New View of Science, Reason, and Religion") and U.S. music critic Alex Ross ("The Rest Is Noise: Listening to the Twentieth Century").
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