Friday, April 8, 2011

Shocking (WARNING: Political Content)

Canadian scholar Naomi Klein's book The Shock Doctrine: The Rise of Disaster Capitalism was published almost four years ago (which is when I read it) but seems now to be not only relevant once again, but also nearly prescient in its limning of the attempt by radical "Chicago School" economists — disciples of the "free market" ideologue Milton Friedman — to exploit political, social and economic upheaval — as well as natural disasters —  to impose further economic hardships on suffering nations and redistribute wealth upward, thereby further enriching the already-wealthy elites and cruelly immiserating the vast majority of the people in the countries where these neo-liberal economic policies were imposed.

Klein shows the links between the CIA's experiments in using torture, include the technique of electro-convulsive shocks, to make individual victims more compliant and Friedman's disciples' technique of exploiting times of national shock to impose economic "austerity" programs on large populations, on whole nations, thereby, essentially, robbing the vast majority of the people of their rightful share of the wealth. When a nation was reeling from a natural disaster, or a war, or domestic terrorism, or a deep recession — from any type of national "shock" — the Friedmanites at the IMF and World Bank would, vulture-like, swoop in and offer loans as "aid" ... but the loans came with strings attached.

The strings, of course, were that the nations, in order to qualify for the loans, would have to implement "free market" solutions — solutions that turned already-ailing nations that accepted IMF and World Bank funds into kleptocratic, crony capitalist states that stole wealth from the poor via "free" markets and transferred  that wealth to domestic and foreign elites.

These policies were deeply unpopular with the vast majority of the people in the affected nations, which is precisely why they could be successfully imposed only during times of national upheaval, when a country or region was suffering from some kind of collective trauma. Margaret Thatcher's famous (and mendacious) "TINA" (There Is No Alternative) argument was invariably adduced and was used to force on an already-suffering populace policies they would not otherwise have been accepted because those policies were so radically mean-spirited and included needlessly punitive terms.

But those punitive terms benefited the already-wealthy one percent.

Because of the current world-wide economic crisis (caused not by unions, or the poor, or middle-class homeowners, but rather by rapacious banks and Wall Street speculators who have never produced anything other than hardship for the mass of the world's population but who nonetheless continue to reward themselves with multi-billion dollar bonuses, paid for with our bailout tax money), this "Shock Doctrine" is now being used against the population of our own country, as many more qualified to speak on this issue than I are now pointing out:
The new GOP budget unveiled by Paul Ryan is a wildly cruel document. Yet pointing this out [...] seems only to flatter Ryan’s self-conception as a serious man telling hard truths. [... So i]nstead, let’s judge Ryan by his own standards. Does his plan, however cruel, actually address our fiscal realities? No, it doesn’t.

If you want to reduce the deficit, you have to come up with some combination of ways that people will pay more taxes to the government or get fewer services. That’s hard for politicians. Declaring a general intention to make unnamed people pay more, or unnamed programs do less, is easy.

Ryan’s plan does single out a lot of people who would get less from the government. Specifically: the poor and the currently uninsured. Ryan would eliminate all the new coverage in the Affordable Care Act, increasing the ranks of the uninsured by some 30 million. That’s good! (Remember, we’re inhabiting Ryan’s moral universe. If those leeches wanted health insurance, then they should have thought of that before they decided to get breast cancer.) On top of that, he cuts another huge chunk from Medicaid, almost as much from food stamps and other aid to the impoverished, and there we go: about $3 trillion in honest-to-goodness budget savings wrested from the claws of the sick and poor.

But then, alas, Ryan gives all those savings right back and then some by proposing to permanently extend the Bush tax cuts, at a cost of almost $4 trillion. Ryan’s explanation for this decision in this report, which begins by decrying the existential dangers of the national debt in the most lurid terms, is comic. He explains that raising taxes on the rich would not, by itself, solve the problem. “To close the fiscal gap by raising the top rates,” he writes, “the government would have to collect an additional $500,000 each year on average from every taxpayer in the top two brackets.” So, he reasons, let’s just give them a big tax cut instead. Likewise, you don’t have enough time in the day to lose 20 pounds through exercise alone, so you might as well quit the gym and start watching more television.
As Chait points out, Ryan is not ashamed of the fact that his budget plan is nothing more than a transparent plan to transfer yet more wealth to the already-rich ... he is proud of it. Essentially:  I propose fucking you, good people of America, not because you like how I fuck you (you, in fact, hate it); but because I like how I fuck you. So with my plan ... you get fucked; and my rich overlords get richer as they watch me fuck you. It's win-win! I fail to see any losers here. At least, none who matter.

Graphic: H/T Balloon Juice

But maybe the super-rich somehow deserve all that lucre?

Not according to Nobel Laureate economist Joseph Stiglitz 1, writing in the latest issue of Vanity Fair:
It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. [...] One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century—inequalities that are but a pale shadow of what we are seeing in America today. The justification they came up with was called “marginal-productivity theory.” In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society. It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. The corporate executives who helped bring on the recession of the past three years—whose contribution to our society, and to their own companies, has been massively negative—went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards “performance bonuses” that they felt compelled to change the name to “retention bonuses” (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.
Later in the same article:
When you look at the sheer volume of wealth controlled by the top 1 percent in this country, it’s tempting to see our growing inequality as a quintessentially American achievement—we started way behind the pack, but now we’re doing inequality on a world-class level. And it looks as if we’ll be building on this achievement for years to come, because what made it possible is self-reinforcing. Wealth begets power, which begets more wealth. During the savings-and-loan scandal of the 1980s—a scandal whose dimensions, by today’s standards, seem almost quaint—the banker Charles Keating was asked by a congressional committee whether the $1.5 million he had spread among a few key elected officials could actually buy influence. “I certainly hope so,” he replied. The Supreme Court, in its recent Citizens United case, has enshrined the right of corporations to buy government, by removing limitations on campaign spending. The personal and the political are today in perfect alignment. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent. When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.
In other words, screwing the 99% and further enriching the already super-wealthy 1% is not a by-product of these policies. It the point of them.

Similarly, Wisconsin governor and Leading Fucktard Indicator Scott Walker proposes using his state's current economic crisis as the shock/excuse he need to try to break the unions (who have already made more than their share of economic concessions for the sake of the state's budget). The economically-shocked-yet-not-stupid populace of the state has responded by turning Walker's until-a-few-weeks-ago-shoo-in-for-reelection-butt-boy Supreme Court Justice out of office2:
Wisconsin voters sent Republican Gov. Scott Walker a clear message about their unhappiness with his muscling through a law restricting union rights by sending a once runaway state Supreme Court race toward a near-certain recount and filling the governor's former post with a Democrat.
Wisconsinites also have enough petition signatures to start recalling the haughty republican state senators who tried to ram Walker's illegal, anti-worker law down their throats.

Wisconsin was to be the radical right wing's bellwether state for their Shock Doctrine attempt to use the current recession as an excuse to screw ordinary people out of a decent life, out of their right to have decent jobs with decent wages and decent benefits.

I, for one, am hoping these are bellwether results.

Recall Walker.

Recall those republican state senators.

Recall Chris Christie (who also wants to screw teachers and other public servants).

Recall Michigan's Snyder.

Recall Ohio's Kasich.

Recall them all.

Fuck them all ... and the Shock Doctrine they rode in on.

1 Stiglitz is an interesting character. (Yes, you read that right. I just called an economist interesting.) He is the former Senior Vice President and Chief Economist of the World Bank, one of the very international institutions that Ms. Klein criticizes in The Shock Doctrine. So ... a World Bank insider. He probably thinks this shrill, bomb-throwing radical feminist Canadian got it all wrong when she presumed to be qualified to discuss economist Milton Friedman or the inner workings of the World Bank — a typical lefty conspiracy theorist.

Um, yeah ... not so much. He's more like: Sister? You're good, as far as you go; but you don't know the half of it.  Because it's even worse than you think:
Klein provides a rich description of the political machinations required to force unsavory economic policies on resisting countries, and of the human toll. She paints a disturbing portrait of hubris, not only on the part of Friedman but also of those who adopted his doctrines, sometimes to pursue more corporatist objectives. It is striking to be reminded how many of the people involved in the Iraq war were involved earlier in other shameful episodes in United States foreign policy history. She draws a clear line from the torture in Latin America in the 1970s to that at Abu Ghraib and Guantánamo Bay.

[...] There are many places in her book where she oversimplifies. But Friedman and the other shock therapists were also guilty of oversimplification, basing their belief in the perfection of market economies on models that assumed perfect information, perfect competition, perfect risk markets. Indeed, the case against these policies is even stronger than the one Klein makes. They were never based on solid empirical and theoretical foundations, and even as many of these policies were being pushed, academic economists were explaining the limitations of markets — for instance, whenever information is imperfect, which is to say always. [emphasis added]
Stiglitz's essay in Vanity Fair is titled "Of the 1%, by the 1%, for the 1%"; the introduction to it reads:

Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

He clearly agrees with the proposition that what is going on in Wisconsin and everywhere else that the rightwing teatard hillbillies are temporarily in control is not about balancing budgets, but transferring more wealth from the common people to the already-super-rich. Breaking unions will help do that. The rightwing canard that unions are all-powerful is risible on the face of it, and is easily refuted by one fact alone that Stiglitz mentions in his article: "[T]he decline of unions, which once represented a third of American workers and now represent about 12 percent" is a contributing factor to the current inequality that exists in America. [emphasis added]. It simply follows that Walker et al's attempts to break the unions is yet another transparent atempt to steal what little wealth the average worker has and transfer it upwards, to the richest 1%. It is class warfare at its most brazen.

2 Pending recount, of course. Update: Though it's looking more and more as though there won't be a need for a recount because the Wisconsin Republicans have evidently decided to "win" this election by the usual right-wing means: blatant fraud


  1. Recall Michigan's Snyder.

    Around here we call him our Benevolent Overlord.

    I, for one, don't want to become a sacrifice to his "sharing."

  2. I have lots and lots to say. But trying to do it on iPhone near the e d of lunchtime wouldn't be much fun. I'll be back.

  3. Now I'm back. I LIKE political stuff, even if it is about putrid American politics, and recently that's the only kind.

    They were talking about the upper 1% of Americans, and yes they are filthy rich. But if you break that down, the upper 10th of that 1 percent make the lower 90% look poor. The graph of the wealth and income breakdown is extraordinary. Mother Jones had some infographics on that a little while ago. They ought to shame every American, except the problem is that the people that have been getting have no shame, and the people who have been shut out of the gravy train have no power.

    There is a book, Confessions of an Economic Hit Man that our book club read a little while ago. The guy talks about his experience in bullying small countries into accepting the IMF loans, or letting the big corporate interests have their way. It's just amazing what the rich and powerful can get away with.

    I heard a joke the other day. An investment banker, a trade unionist, and a tea partier are in a meeting. When a dozen cookies are sent in with the coffee, the banker takes 11 of the cookies, then leans over and tells the tea partier, watch out for that unionist, he's going to steal that cookie.

    There is no doubt in my mind that you are following the Canadian election with fevered interest, featuring a Republican lite Harper, and some other partys. No shit, Harper had a guy working in his office that had been convicted of fraud in the past, and was involved in influence peddling on behalf of his hooker girlfriend while working for Harper. Yet they throw people out of election rallies because they have a liberal picture on their facebook page, or have an NDP bumper sticker. I'm going to take great pleasure in voting against Harper, since he's actually my Member of Parliament. But too many of my neigbours like him. Looking around Calgary, you'd hardly know there was an election.

    You would like Griftopia by Matt Taibbi. It includes the following sentence in relation to Goldman Sachs "The worlds most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." I love that kind of writing.

  4. Maybe we need to start calling the bankers and their pet politicians "bogart".

  5. Gotta tell you that was well-written. Love the Paul Ryan quote, but that can't be real?! Anyway, I agree with you, also that Walker is a fucktard. I am a socialist from Wisconsin afterall. But living here in Denmark, it is so easy to forget how angering American politics can be. But yeah, as you say, it's not just American because the free market mentality screws the entire world.

  6. @slg - to be clear: The Walker "quote" was meant as satire. I thought of just putting it in italics, which might have made it clearer that that's what it was. So maybe I'll just do that.

    It is hard to satirize teabaggers because what they actually say, and believe, is so fucking stupid and cartoonishly cruel that it verges on self-parody.

    I don't know how Colbert manages to do it so well every night.

  7. Not so many comments on this post, G., but it might be just that people don't even know what to say. I've read and reread this post several times, and it just pisses me off because it's so true. I'd like to think that Walker is atypical, some ignorant ass who WILl be recalled for his idiocy. Something tells me, though, that that is not the case. As an American and a union member, I'm both terrified and appalled at the direction in which we're heading.

    PS - More political content, please. If most of your readers are at all like me, then they're diligent about exercising their bodies, but they could use some work with their political consciousness. Ian stories and running stories are awesome, but I really LOVED this post, too.

  8. The Belarus fashion queen strikes again! I sure miss her blog.

  9. Next, please.

    (I've been refraining from my own political commentary because what I have to say is obvious to those who agree with me and, if noticed at all by those who disagree, is immediately discounted and ignored.)

  10. Do I have to check tweets to see if you're still extant?

  11. So the Twins now have a record of 5-10 and our injury-prone hometown all-star has "flu-related muscle weakness." Our star closer has been relegated to mid-relief until his Tommy John surgery recovery (last year) is complete. Watching the highlights of the last game, snapping a 4 game losing streak, I had not heard of three of the players, as they were all brought up from the minors this week. You can't win a pennant in April, but you can lose one that early.

  12. Where are you GQH????????? We miss you :)