Author Naomi Klein Discusses Bailout, Economy at Stanford
"We've been living in a fairy tale" that deregulation and privatization serve the common good, the author of "The Shock Doctrine: The Rise of Disaster Capitalism" said Thursday.
Klein's book paints a dark, troubling picture of a form of capitalism that lets people in power cash in on chaos, catastrophes, wars and financial crises and snatch up lucrative contracts.
Speaking at Stanford University's Kresge Auditorium on Thursday evening as part of the Aurora Forum, Klein minced no words. She insists that deregulating the financial system has created bubbles and busts, and she called the current $700 billion bailout, or rescue plan, a "stickup."
This financial crisis and the Iraq war are examples of how economic shocks and global disasters are used to boost the profits of the elite, she said.
"The president goes on TV and dangles a plan to Congress, saying if we don't get it we're going down, and banks are going to close in your neighborhood," she said. "That's deeply crazy if you look at it. Especially about a plan that almost all economists said couldn't fix the problem."
Klein said the Bush administration's plan was reckless. She bristled at the "comfort level" Treasury Secretary Henry Paulson and President Bush have exhibited with the crisis.
"It's like they're saying, 'Hey, stuff happens,'"‰" she said. "And then a week later the whole idea of buying toxic debt they were pushing died."
Klein's ideas have been criticized by some as extreme and leftist, but her challenges to the myth of the unfettered marketplace are resonating with a growing number of people.
Klein, a former fellow at the London School of Economics, believes the policies of the last few decades have allowed a shadow banking system to flourish. It was a "disaster waiting to happen," she said.
She puts the blame on both parties, though she clearly believes the Bush administration has done more to close the curtains, allowing for deep corruption.
"There was no morality," she said. "It was all based on the get it while you can concept."
Now Klein suggests that Paulson, Bush and Congress are using the bailout to push through radical policies that favor the corporate elite.
"It's a cesspool of conflicts of interest, the people pulling together this plan," she said.
"Where are we now?" asked Terry Karl, a Stanford political science professor who was part of the conversation with Klein onstage. "Are we doomed?"
Klein said she thinks the country is at a crossroads and that this is a "moment of possibilities" that could reverse entrenched corruption. But she fears more of the same policies as the financial crisis deepens.
She believes the financial crisis will be used by Republicans against Democratic Sen. Barack Obama if he is elected president. "No, we can't" may become the new refrain, she said, from social programs that help the disadvantaged to the pursuit of alternative energy and investment in technology to combat climate change.
"Business will be in a slump, and there will be calls for tax breaks and deregulation," she said. "It's going to be a hard fight."
She also expects more attacks on civil rights and undocumented workers, as well as another attempt to privatize Social Security.
"I call for the nationalization of ExxonMobil," she said jokingly, to roaring applause. "They made $40 billion in profits from us."
Twitter
StumbleUpon
Facebook
Delicious
Digg
Newsvine
Google
Yahoo
Technorati
56 Comments so far
Show AllThere is a critique of Klein's SHOCK DOCTRINE over at Left Business Observer, which site belongs to Doug Henwood, who wrote WALL STREET. I read WALL STREET and wasn't able to really digest it. And that's because I'm not educated enough. However, It's been a while. Not much of it stuck with me unfortunately. Henwood, who is supposed to be leftwing (Despite having read his book, I can't say I have a good handle on his politics. As I noted, It's been while and I haven't really examined his work.), liked NO LOGO and he doesn't say that SHOCK DOCTRINE is no good. He simply critiques it and in the course of doing so he lays out what he sees as the book's weakness.
Make of it what you will. You can, apparently, now download his book (PDF) for free from his website. As well, You can listen to some podcasts of interviews he does and talks he gives. He really flies. If you're not an economist, I don't know how much of what he lays down you'll pick up. I put this out there for those who might be interested. I enjoyed the interview he did with Leo Panitch and Sam Gindin (which you can listen to), two academics whose views I have a high regard for.
http://www.leftbusinessobserver.com/
Peace
NAIMO KLEIN FOR PRESIDENT!! !
Can't happen because she is Canadian--but she could be (along with Nomi Prins and Dr. Michael Hudson)a good member of a regulatory reform commission to adminster the "bail-out" monies and the reregulation of Wall Street trading and American banking and brokeraqe practices.
Poet
"Klein said she thinks the country is at a crossroads and that this is a "moment of possibilities" that could reverse entrenched corruption. But she fears more of the same policies as the financial crisis deepens."
GOOD LUCK. I think that I can agree with C. Klein, so far, and as per this article, but ... good luck. A real revolution is what's needed, and I don't see or perceive a real solution for this; therefore, "good luck" for all who think and desire otherwise. To do this, we have to be willing to even be killed, and most people will always try to avoid this outcome, so we're left with right voices, but awfully weak do they really amount to.
Better is it to be weak, rather than wrong, though! Being weak, but right, is right.
I don't want to be wrong or Wrong; only trying to be [just].
Good luck, to ... humanity.
The moneyed class corruption is so deep that even with the bankruptcy of their ideology and the collapse of the economy, they compete for the spoils in the foggy darkness of false rhetoric and robbery. We need a hundred Naomi Kline's.
I'll take David C. Korten over Naomi Klein any day. Korten has actually been out there in the trenches working for capitalist economic development and has come to many valid conclusions in addition to making concrete suggestions for the future. Klein, on the other hand, seems to be a slick, self-promotion business unto herself who is settled into a comfortable pseudo anti-establishment writing niche.
Orcan is making a false comparison. Both authors have done good work, but it's a misunderstanding, and not very deep, to try to pigeon-hole one into the positivist group and the other in the negativist camp.
Having read both authors, I'd say that Klein lays out the problem more emphatically. I've no problem with Klein taking her message on the road. It's something seldom heard in our media lock-down. Let's have more.
Actually, I'd say both authors are "anti-establishment." The question is why anyone would think being antiestablishment is a bad thing. Haven't we had enough perpetual wars and fleecings? And the worst is yet to come.
If you are not questioning the fruits of capitalism by this time, you'll probably be part of the counter-revolution! It's very important to see that raw capitalism is not much more noble than outright theft.
-TIA
There s no such thing as 'working in the trenches' for the 'development of capitalism.'
Check his hands, see if his knuckles are enlarged, see if his hands are one big callous. No. His hands are soft as a baby's ass.
DogLeg,
David C. Korten has worked in the trenches of economic developement in the Third World, and realized after 25 years he could bring about more radical social change by writing about the fraud of global corporate capitalism. Read his book When Corporations Rule the World, go to his website The People-Centered Development Forum, http://www.pcdf.org/
More neo-liberal, laizzes-faire, supply side capitalism.
More World Bank, more Intl Monetary Fund, more Chicago Schools, more Schools of the Americas, more privitiizing everything, and, more chance Blackwater will shoot you.
We've been doing this for so long----why the hell hasnt it worked , when more and more Americans are falling into poverty?
Why is the entire planet getting more and more striated by class? Why are more peopel starving to death everyday?
Purist capitalism's day is done--they have killed enough.
I just went to the website---it seems to be in direct contradiction to what you are saying. I dont get it.
I don't completely agree with Naomi Klein about things, but she's definitely not the enemy. We need more writers like her. She's anything but stuffy. Regular folks, like myself, can read and understand her. Then, We can talk to each other. Otherwise, We are just going to know what the compromised major media want us to know. Whatever solutions we come up with, they will begin with us learning and talking to each other. Each has his and her own unique position, talent, etc.. But, Not caring is the first step you take to nowhere.
Anyone who reads Naomi Klein's "Shock Doctrine" can only have respect and awe for the work she's done.
"She believes the financial crisis will be used by Republicans against Democratic Sen. Barack Obama if he is elected president. "
Well that's certainly deep. As if they wouldn't have done that anyway. Isn't there a certain irony in the whole notion when Obama actively campaigned for the bailout?
"Klein said she thinks the country is at a crossroads" (more like crosshairs)
Fire sale prices, just around the corner.
Who forgot to tell the servants that the party ended - years ago. They're gonna have one, big, stinking, mess to clean up in the morning.
Wait till they get the bill! f********ck! Hope they at least left some booze behind.
I guess you can't buy your class consciousness at the London School of Economics. Klein is rehashing lite versions of critiques that were made seriously by Marx, Bordiga, Debord, Luxemburg, to name just a few.
Klein seems more of a second international parliamentarian pro-capitalist reformer when I see her articles and interviews. I read two of her books a while back, No Logo, and Fences and Windows. It's become clearer to me that she is advocating for an "improved" or "just" capitalism.
It's a critique that ignores the basic social relations of capital and labor, the process of surplus value extraction, and the horrible suffering inflicted under perfectly healthy and normal capitalism, which is ALWAYS "disaster capitalism," not just in crises.
No war but the class war!
It doesn't sound like Elegant frilly read "The Shock Doctrine."
Frilly's last paragraph is Klein's main point in the book.
-TIA
Really? That's wonderful news! I'm glad to hear that Naomi Klein is now arguing for the abolition of wage labor, markets, surplus value extraction, and not just against _laissez Faire_ capitalism but capitalism as a social relation.
But of course she's not. Her arguments in the two books I have read by her, and the arguments she continues to make in public interviews and articles are for reforming "the dark side" of capitalism. She argues that individual capitalist leaders have made bad decisions based on greed, and that these decisions have distorted capitalism, and got in the way of fair wealth distribution.
Capitalism is a social relation predicated upon theft from the working class by the owning class. She asks for reforms to provide for better welfare oriented capitalism, without acknowledging that whatever capitalism "gives" to the working class is always far less than it took away.
Tinkering with the distribution end, and leaving in place the relation at the point of production guarantees the continued effects of the system.
It seems to me that she is actually arguing against corporatism and crony capitalism, and for worker ownership (in the form of co-ops) and mixed economies (a mix of both public and private sectors).
There can be no theft from the working class if the working class is also the owning class.
But of course, until corporate person-hood is abolished I'm sure this will never happen.
Worker ownership does nothing to abolish self-managed wage slavery and leaves capitalism intact. Mixed economies also leave class society intact. The idea that workers will remain proletariats, forced to sell their labor to survive, but attain some kind of "post-capitalist" society that still has markets and wages does not add up. Being against corporatism and crony-capitalism is not the same as wanting the proletariat to abolish itself. Self-managed capitalism leaves the working class vulnerable to the same logic of the market as any capitalism does. Producing for exchange value rather than use value will reproduce the class system.
Joshua Sperber had a good review of the Shock Doctrine in Z Magazine where he indicates some of the shortcomings of Klein's analysis, even as he respects her research.
You are one illiterate person.
No...I like Klein very much, but , I think that some of this could have a point. Even if you disagree, how does that make the other person "illiterate"?
I am reading her book, "The Shock Doctrine", at this very moment. Excellent, excellent book. I would add another important one to the list - "When Corporations Rule the World" by David Korten.
I will check this out. I did not knwo who he was.
Nader is the status quo, the neoliberal version that is. He made his millions on Wall Street playing the investment game. They guy only shows up around election time to run against Democratic candidates, which is how he sustains his public image. Plus, recall his piece in the WSJ in 2001, when he claimed that Bush would "end corporate welfare as we know it?" Seriously - look at the March 7 2001 WSJ. Nader's article begins:
"If it took Richard Nixon to go to China, could George W. Bush be the president who ends corporate welfare as we know it?"
The real issue here is going to be ending the control of corporate cartels over the U.S. government, the exact same problem that was the hallmark of the Robber Baron era. The 1907 Banker's Panic, which was engineered by Morgan and Rockefeller in order to consolidate market control, was very similar to our current crisis. We are back in the days of the robber barons, no doubt about it.
The country is at a key junction, however. One more Republican Administration and we'll end up with a communist-fascist corporate system in all three branches of government - kind of like Germany in 1933, you know? They've already tried to subvert the Constitution numerous times. That's why going out and voting for Obama is critically important this time around.
There are plenty of left-wing front groups for the corporate cartels, just like there are plenty of right-wing front groups for the corporate cartels. Personally, I think Nader and Palin both fall in that category, and both (perhaps unwittingly) serve the same masters.
However, if Obama is elected and everyone goes back to sleep, nothing will change. The public has to become more effective at lobbying political officials than the corporate cartels are - and that will be a real challenge.
The real struggle may very well begin the day AFTER the election of Obama - keep that in mind, because that's when every corporate lobbyist in the U.S. will be swarming Washington.
Actually, Nader does lots between the elections. In fact, he has accomplished more in his lifetime that has benefited the general public than Obama, McCain, Bush, and Gore combined.
Use the same measuring stick against Nader as you do Obama.
As to the possibility that the public can 'pressure' Obama after (and if) he is elected president, talk about hope. Keep dreaming.
The military machine will continue, the human rights violations will continue, corporate corruption will continue, lack of universal health care will continue, increased privacy attacks will continue. Who cares if it is 'less,' none of that behavior should be condoned with our vote. If Obama can't say we are getting our military out of the Middle East, then I can't vote for him.
One of the last ways we have to influence our 'elected' officials is the vote. And we know how messed up the vote is. And that didn't get challenged by the democratic party the last few years. Why? If the vote is defective in your favor, then you don't change it. It is not about integrity anymore.
Did someone mention impeachment? I guess not.
We have allowed ourselves to vote for elected officials who won't follow the law or the constitution when it is not to their benefit (kind of like the 'signing statements').
I am no longer dismayed when people say they want change but will vote for Obama since it happens so often. But every once in a while you meet a Nader supporter and get recharged.
Change will only come when the people demand it. The corporate elite will never voluntarily give up part of the money pot, while we volunteer as soldiers in their wars for profit. Go figure.
I'm voting Nader, and will work with the Green party locally. But I won't support the corporate candidates any longer.
And as long as we continue to consume and allow for wars, which feeds the capitalistic economic machines, which rewards the corporate elite, all at the expense of the common people all around the world, and until the people say 'No' it will continue.
It all starts with supporting a bloated military, which not only produces wars, blood profit for the few, and a militaristic culture, but death and misery on all sides but for the corporate elite who financially benefit.
Don't support the status quo, vote Third Party, vote Nader, vote Green Party.
Ya, and what about the World Bank and the IMF? Don't they have one red cent to help bail out these bankers?
As for Naomi, she did take awhile to "get it" - "No Logo" danced around the edges of the great cleptocracy - but give her a break: she had to go to formal school to learn to write, to learn history, and most who do that become entrenched in the Elite's culture... she is managing to pull her head out of that proverbial sand, and if that takes her three books, so be it. Just be glad she is here now, fighting against the Elites.
Hypocracy files: "its not a meritocracy nor a free market"
*the bankers who made such bad mistakes have nixed the meritocracy idea;
*the free market, as stated above, has been subsidizing a lot of nuclear, Tar Sands, oil exploration, etc. etc.
So if there is all this money whenever they need it, we have to start demanding that energy is produced by renewables - it is cheaper, it is clean, and it really, really, does bring "power to the people" in every way you can think of. Imagine... Imagine what John Lennon would have thought of renewable energy!!
Lennon would have thought heroin was renewable energy. Give me a break.
And instead of your ad hominem attacks on Ms. Klein, your inability to accept your status as not one of the 'Elites' you love to hate, perhaps you could produce something to change the course of events, other than enlarging your mouth.
Thank you for your time, snarkle.
To get specific, Wachovia banks in Atlanta area have a $5,000 limit on withdrawals of your own money from matured CD'S. In some cases, they will transfer the balance to your checking account in a few days, but you can't withdraw more than the 5 G's, no matter what the CD is worth. What's next? Naomi is not some idiot crying wolf. Where is the 700 billion going, if you can't get your own money out of a bank?
disaster capitalism? the free market?
What's so capitalistic and free market about a war on drugs that at least made the US #1 in something : the highest prison population per capita. The good ole USA became numero uno in 1989. You can rape the land with cotton production but can't grow hemp? How is that free market? I'm no great believer in the free market but you got to kidding me to think any of this is much different from fascism or nazism. I guess subsidizing the construction of nuclear plants for centralized power generation is free market or capitalism too? These right wingers aren't capitalists or free market proponents. They're at best fascists.
I also wonder what took Naomi Klein to see some of the light. I read something she wrote that said she only came to her conclusions just recently. Where the hell have you been? I had almost as a good an understanding of these scumbags thirty years ago when I was a teenager. What took you so long Naomi?
If these politicos were really capitalist wouldn't everything and anything be for sale and nothing more than supply and demand would determine prices?
Go back to sleep. You will never learn anything.
FZ
Where has Naomi Klein been? She was in Canada and I believe England after that getting educated and putting this entire mess together for the masses. She was born in Quebec at about the same time you where figuring it all out and spearheading revolutions.
"Most people wouldn't know music if it came up and bit them on the ass"
Frank Zappa
Well, then, why didnt YOU write the book? Nostradamus.
Have you read the book? Because she doesnt exactl;y advocate for capitalism
You say, "Klein's ideas have been criticized by some as extreme and leftist."
This in no way can be seen as "criticism," rather, only as the use of two entirely empty words.
I would add, Nationalize the Federal Reserve first.... That is the head of the monster that is still within Our jurisdiction ... and the World bank too... It is gonna be a riot as Naomi predicts as we try to come up with solutions to a government that has taught us socialism is evil since before we were born and now we have to survive the robbing and rape of america by the free market... how do ya like the New World Order So far baby?
What a plot for a REVOLUtion!
Be Cool.
better yet, abolish the national reserve! Did you know that the constitution gives the power to print and distribute money directly to the congress??? So what would be the point of nationalizing the Fed when the government is already supposed to be doing the Fed's job?
Klein is not a banker, Innana, she's an activist. Why not ask her, instead, what you can do to organize your community in protest against this stick-up?
Here's something in which to participate courtesy of ladybroadoak.blogspot.com
http://3.bp.blogspot.com/_eJ5l4VAZnNw/SPetWp8jo0I/AAAAAAAABXM/0ShLcEVb1IU/s1600-h/october24leaflet.gif
thank you for this article and analysis Tim.
Naomi is a brave heart.
Ok Naomi,
So what kind of investment plan do you have? Very practically what do we do with our IRA's, CD's, Bonds, etc.? Is the U.S. monetary system going to go bust soon or what? I am sitting by watching my Roth IRA dwindle. The Capital is now being eaten up! Should I take everything out? Suffer fines on the IRA's not Roth? You can't ask the investment companies....they of course want you to stay the coarse!!! Sure, keep the money in their company so they can use it up! Hey, it's not their money. Any good practical advice out there? That IRA money was supposed to be my ace in the hole to get out of the system. I was going to build my Yurt on a small piece of land and go "off the grid;" not in a "rich" way, but in a small,simple way. I don't have tons of money....like next to nothing....but the small amount I managed to put aside was just enough to have a place to live without paying endless mortgage or rent payments in my old age.
Roll it into money market CDs'. Also, there will be one time withdrawals with no penalty tax and probably protection up to 50Gs.'
Not to bash anyones campaign...but I haven't heard any candidate address this issue of 401k penalties. Has the Treasurer of the US- H. Paulson said anything???
It makes sense to me -'suspend all IRA contractual penalties for early withdrawal' retroactive to Aug. 15 2008, & extend for a year because of the obvious international economic problems.
I guess the Treasury mentality might be continuity of the Wall Street investor management groups - at the contractual expense of the IRA subscribers (that might be you). Further Treasury continuity of the Wall Street investor management groups- at the contractual expense of the 'at risk' mortgage holders (that might be you) is already well understood.
Kinda makes ya wonder tho...how come no one from those 401K broker houses never offered 401K 'insurance' at point of purchace (to you)...not that it would have been any good. Dang those investors could of been selling insurance on those 401K's all this time...oh wait, they DID sell insurance on your 401K's they simply 'renamed' it: Credit Default Swaps. The investors simply 'forgot' to tell you about it. I don't have a 401K contract handy, perhaps lost in the fine print, there is an 'insurance provision' maybe called CDS, or some other imagination.
wild;)
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081012/REG/310139971
401k labor committee considers 'overhaul'
http://www.dol.gov/
wild;)
ps. I heard if your 401k is invested in the stocks, you change it to the less risky non-stock offerings from 401k provider, without the penalty from just pulling out.
Try investing in your local community. This might be investing in your own enlightenment, some means of responsible production, or a good chunk of land. All good investments have minimum exposure/interaction with the power centers (elites). Investments to avoid are stocks, stock funds, or anything that is managed by someone you don't know and trust. If you're not sure you trust someone then don't invest with them. Best to avoid investing in materials, commodities, metals. Those are not means of production so are purely expoitive investments. Best to avoid residential rental property. That adds to scarcity in affordable housing. Best to avoid investing in businesses that cater to the elites for obvious reasons. The best kind of production to invest in is sustainable, responsible, minimally exploitive, and having some cultural value, and supportive of local economies. These businesses will be small, with limited exchange with power centers. So for example, a small repair or recycling shop. A new industrial sector that is urgently needed is a network of supply to small local businesses making it easier for them to compete with the power centers, and deal with regulations, e.g. expansion of codes and standards.
It is a conundrum. I have nothing.
But, I have friends and family that were heavily invested in IRAs, etc. None were even close to "rich".
The middle class never had any business in this roulette market. The govt de-funded every possible pension plan, poorly fund social secutity, allow coporatation to break pension contracts.
So, its a scam. And, they benefit. We just bailed them out. Not you, though.
That is why we need more than an election to change this unholy oligarchy.
"That is why we need more than an election to change this unholy oligarchy."
I certainly agree with you in this.
The outcome of this election can make things worse, but it is not the answer. The real work needs to be done by us.
Just listen to this................
http://www.informationclearinghouse.info/article21041.htm
Powerful stuff, and something we all know in our bones.
I wrote an op-ed piece recently on this pyramid scheme we call our economy. What we are seeing now is Charles Ponzi's scheme on a global scale.
"It is not true that it's one damn thing after another - it's one damn thing over and over." Edna St. Vincent Millay
One of the commentators to that interview, appended a different but relivant interview which I thought all CD readers here would be interested to read, but unfortunately it is only in Spanish or French, here’s the Spanish version of:
THE END OF CAPITALISM (Intervew of Immanuel Wallerstein)
Entrevista al analista internacional Immanuel Wallerstein
El capitalismo se acaba
http://www.rebelion.org/noticia.php?id=74554
here is the French version :
http://www.lemonde.fr/la-crise-financiere/article/2008/10/11/le-capitalisme-touche-a-sa-fin_1105714_11...
Immanuel Wallerstien is at Yale Sociology department as Senior Research Scholar. He is also a member of the Advisory Editors Council of the Social Evolution & History Journal. In 2003 he received the Career of Distinguished Scholarship Award from the American Sociological Association and was the previous president of the International Sociological Association between 1994 and 1998.
For those who did not read these articles I translate a couple of lines:
“Pero, hoy en día, ese momento de ciclo coyuntural coincide con, y por consecuencia agrava, un período de transición entre dos sistemas de larga duración. Pienso en efecto que hemos entrado después de treinta años en la fase terminal del sistema capital.”
But these days, this moment of joined cycles coincides with, and by coincidence makes more severe, a period of transition between two systems of long duration. In effect I think that we have entered after thirty years into the terminal phase of the capitalist system.
“Los más inteligentes, ya han comprendido que había que establecer algo enteramente nuevo. Pero numerosos actores ya se mueven, de manera desordenada e inconsciente, para hacer emerger nuevas soluciones, sin que se sepa todavía qué sistema saldrá de esos tanteos”
Those more intelligent have already understood the need to establish something completely new. But various players are already in motion, in a disorganized and unconscious way, to bring to the fore new solutions, without really knowing what system will arise from these tries.
“…los conflictos internos se exacerbarán en EE.UU., que está convirtiéndose en el país más inestable del mundo desde el punto de vista político. Y no hay que olvidar que nosotros, los estadounidenses, vamos todos armados...”
…internal conflicts will get worse in the US, which is turning itself into the most instable country in the world from a political point of view. And one should not forget that we, the Americans, all go around armed….
Thanks! Youre right--kleptocracy. I thought oligarchy.
Either way, we're being screwed.
I was pleased to see that, in Berkeley, they call Boehner --BONER! like we do here in Ohio.
This is really scary--everyone shoudl hear it.
So...Anyone have any ideas about what "We The People" can do about this and the alleged future trillions they want?"
Crack open a cynic and you will find an angry idealist!"
We need to stop feeding the beast. We can do that by tuning in to others who know what we know, and by dropping out of the consumerist culture as much as possible. Not easy to do, but with each other's support, we can make an impact.
Interesting...and I thought that Orson Wells' Halloween radio play was scary.
This link is excellent, pointing out that Paulson-Bush ("or this sucker is going to go down") created the panic in order to pose as preventing a panic. The professor on this audio maintains they're all criminals and should be in jail. I second that emotion.
I third, fourth and fifth it!