“Shock Doctrine” Author, Naomi Klein Speaks at MSU; Addresses Economic Crisis

Author Naomi Klein Spoke at MSU on Disaster Capitalism, Resistance, and the Current Economic Crisis

Canadian author, activist, and filmmaker Naomi Klein spoke at Michigan State University on Tuesday. Klein is on a tour promoting her book The Shock Doctrine: The Rise of Disaster Capitalism.

Klein began her talk by saying that what inspired her to write The Shock Doctrine was what she discovered in her reporting from Iraq in 2003-2004. The author said that one of the most grotesque myths about the Bush administration is the idea that they had no plan for Iraq. Klein firmly believes they did and the plan was to remake Iraq’s economy.

Iraq War leads to “The Shock Doctrine”

Restructuring Iraq’s economy was the mandate that Paul Bremer received from the Bush administration, with a particular emphasis with how restructuring the economy would be beneficial to foreign banks and investors. Privatization was the mantra, according to Klein, and what better way to bring this change about than by the 2003 US invasion. Her reporting in Iraq led her to look at “the relationship between the various shock doctrine techniques, both legal and economic, which when resisted led to military shock.” The military shock most often meant the repression of popular dissent by a variety of civil society sectors throughout Iraq.

The problem, Klein said, was using a crisis to get around democracy. Klein then went to New Orleans to continue her research and discovered very similar patterns to policy decisions after Katrina.

“Developers had pre-disaster plans to redevelop New Orleans, so the flooding provided the mechanism to allow this to happen. They decided to not rebuild public schools, but gave parents vouchers to go to private education systems.”

Another recent example of disaster capitalism, according to Klein, was what happened after 9/11. It wasn’t just the Patriot Act and the War on Terror that the Bush administration promoted, but the restructuring of the economy.

“The War on Terror was in a sense a business plan. What happened under Bush wasn’t new, but a process that really began with Reagan as a counter-revolution to the New Deal policies. What Bush has done differently, was to privatize the military and border patrol.”

What about the Current Crisis?

Klein argued that the Obama campaign realized that blaming the crisis on these right-wing policies would give him the edge to win the election, even though Obama supported the Paulson-led bailout. Klein feels that Obama’s victory was a referendum against these economic policies and that there are openings in American society. She said that there is a consensus that there needs to be a shift in the economy. Klein believes that the Obama administration is not applying a shock therapy to the current crisis. However, “they are giving over massive amounts of public money, unlimited access to the public ATM. So, who needs privatization when you have this public trough?” Since the banks and other Wall Street sectors keep coming back to the public, US taxpayers are going to be stuck with a huge debt. Klein said that even though much of the mainstream media is putting the bailout price tag at roughly $3.5 trillion, it is more accurately around $10.5 trillion.

The Shock Doctrine author went on to say that it is interesting that the right is claiming that what the Obama administration is doing with the stimulus is socialism. Klein is amazed at how many people believe that Obama’s policies are socialist, when in fact they are really corporatist in nature. The stimulus is really “public money being transferred to the private sector.” Klein says that when we look at the bailout the numbers are amazing. Citigroup alone has received $45 billion. They are worth $20 billion on paper, according to Klein. “Taxpayers have already given the banks more than the market is able to. The government has voluntarily surrendered the power it could have with the bailout, by not enforcing any accountability.” She went on to say that we all hear about the corporate scandals – AIG’s spa vacation, etc., yet Congress continues to give them money. The banks have been nationalized in a sense, because of the bailout, but in effect, they still operate as private entities.

Klein advocated for the nationalization of US banks, because it would not only mean that the public would have their losses, but also their profits. It would allow the public to have a say in how the money is used and who would get it. Statistically, the bailout is equivalent to being able to pay off every mortgage in the country. “Can you imagine,” Klein said, “if people did not have mortgage payments how much more vibrant the real economy would be?”

What about the Stimulus?

For Klein, the stimulus is just the other side of the coin of the bailout. It is not the green dream that was promised. Money for mass transit was cut in half and funding to states was also cut. Another thing that Klein pointed out is that with the stimulus there will be no breakthrough on health care. The California Nurses Association study shows it makes no sense to provide subsidies to a health care system that doesn’t want to provide health benefits to people who are not insured. A single-payer system would not only provide health care to everyone, it would also create a tremendous amount of jobs.

We can Take our Cue from People Around the World

Klein then shifted the discussion to looking at how the rest of the world has been reacting to the global economic crisis.

In Iceland, one government has come down because of the crisis. Italy has been cutting back funding for schools and the students have rebelled and are using the slogan, “We won’t pay for your crisis!” Students have been on the frontlines of this crisis in most countries around the world, according to Klein. In France, it was announced that when teachers retired, the President would not replace them. How did the French people respond? There was a massive strike, with massive public support. In Greece, it has been farmers blocking the roads. Klein wrote about this global resistance in a recent Nation magazine article, one that includes great video links to public resistance globally.

Klein then mentioned the Republic Doors and Windows factory strike. She said that one of the reasons that they won is because they were not just picking a fight with the factory owner, but also with Bank of America. Their slogan was, “You got bailed out. We got sold out.” What was also amazing about what these workers did was that they were willing to break the law. Klein said, “We need more of Republic Doors and Windows. If there is going to be a progressive movement, we need a radical labor movement in this country.”

Another point that Klein stressed to the audience was the need to remember what it was that got the New Deal policies put in place. The author said that the popular notion was that FDR devised the New Deal policies because of his liberal orientation. However, Klein’s take on that part of US history is that the New Deal policies were advocated by FDR because he knew that if those reformist policies were not adopted there might have been a revolution. The US labor movement was so big and so well organized that it scared the political establishment into adopting the New Deal policies as a way of preventing serious social upheaval. Klein thinks we need to learn from this history and not wait for politicians to make changes. Instead, she emphasized that we have to build movements to demand changes.

Q & A

There were several questions from the audience, many of which were asking for clarification of comments made during the talk.

One of the more important questions asked was, “Why are we not resisting here?” Klein responded by saying:

“In Europe people don’t treat their politicians like rock stars. They don’t treat them with reverence. Because there is this reverence in the US, we wait for the great man to give us good news. What we do not hear about is the tremendous pressure from the grassroots, the kind that lead to the New Deal. Since we have this distorted understanding of history, we are just waiting for Obama to just deliver us from evil.”

Klein was also asked if she thought that Obama would be as bad as Bush, to which she responded:

“Of course I don’t think that he is as bad as Bush, but the question kind of misses the point. The danger is that we are so relieved from eight years of Bush that we will lie to ourselves about what is really happening. The worst of the economic policies, the one that are haunting us now, were passed under Clinton. Clinton pushed much of the deregulatory policies that Bush just drove home. There is a real price to this kind of intellectual dishonesty, because if we don’t own up to this history we will suffer for it. Look at what MoveOn did. They built their data-base as an anti-war group, but never challenged Obama on his military platform, particularly is financial support for the wars in Iraq and Afghanistan and his current push to intensify the war in Afghanistan and probably Pakistan. Those of us on the left need a movement based on principle and truth, not just strategy, if we are going to seriously make any changes.”


Author: mediamouse

Grand Rapids independent media // mediamouse.org