Not long ago, author Naomi Klein came out with a book called "The Shock Doctrine" -- its premise is that the government, especially the neo-cons and friends largely running America during the 2000s, have come to rely on the kind of horrific crises like 9/11 or Katrina to push through massive, radical changes that would never happen in normal times. Her theory was the first thing I thought of when I learned of the federal power grab that's taking place as Wall Street collapses.
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.
Read the whole thing -- and then get on your knees and pray we don't get fooled again.
Posted by Will Bunch @ 11:18 PM
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34 comments
It's time for people to wake up and exploit this disaster to address the best interests of America just as the conservative have exploit every situation over the last 7 years. There are many complex issues that have led to where we are today that are too complicated to unravel. However, the fundamental problem can be stated quite simply: lobbyist and the corruption of power in the Federal gov that lobbyist have fostered. Both parties have been corrupted. Even completely changing every member of Congress will have no lasting impact if we don't have significant campaign finance reform and the reigning in of the power that lonnyist have over our country. An immediate action that every citizen should demand to protect us from being fleeced with this bailout is to demand that any company, or intertwined company, is barred from any lobbying of any member of the government at the federal and state level as well as forbid any campaign contributions. At the very least, the companies that are being bailed out should not be able to use our money to lobby Congress to take actions that are not in our best interest.
"Unless you live under the delusion that there is any fundamental difference between Dems and Repugs" Apparently you see enough of a difference that you'll use a derisive term for Reps, and not for Dems.
Apparently things in general (The war in Iraq, the economy etc) haven't gotten bad enough for some people. Vote McCain/Palin to see just how bad it CAN get! God help us.
"I love it. An Obamaton quoting those two." . . . . Laugh off the irony at your own risk, db. It's becoming quite clear to me that the establishment is ready to write McCain off. The new lipstick on their pig is Obama. Unless you live under the delusion that there is any fundamental difference between Dems and Repugs, you can certainly see why it has to be that way, can't you?
"When the Wall Street Journal and George Will blast McCain as un Presidential, reactionary and incompetent about the Wall Street mess. " I love it. An Obamaton quoting those two. Have you ever thought that the likes of the WSJ and George Will have been very, very wrong about the amount of risk the largely unregulated derivatives market represented? Chris Cox basically halved the margin requirements for investment banks. So it's no small wonder that they got created when the derivative WMDs (Warren Buffet's term, not mine) finally blew up. The only thing that makes me think that McCain might be hitting the hash pipe in that regard is his fondness for Andrew Cuomo, who helped create the subprime mess in the first place.
Good point, RG. The visa policy is a good one also. I am very suspicious of the calls for rolling back Sarbanes-Oxley. Yeah, businesses don't like it, yeah, it may negatively affect investment in this country, but for a long time Europe has had much more highly regulated accounting practices - and for good investors, a well-controlled accounting practice is an enticement. I'm not saying that consideration shouldn't be made to adjust Sarbanes-Oxley, but to talk of deregulating accounting practices even further, in this environment, given what has gone in recently, is insane.
Gibba, I see your handlers downloaded a couple new talking points. But see if they can upgrade your storage drive to something larger than a 3 1/2 floppy - we could use a bit more variety, your points are getting stale from overuse.....When the Wall Street Journal and George Will blast McCain as un Presidential, reactionary and incompetent about the Wall Street mess. That is a direct shot at McCain conservative credability, which he appears to have lost.
"I thought you lefties would be dancing in the streets now that the federal government almost completely controls the economy." . . . . . . . . . . Alas, we haven't gotten our Little Red Books yet.
I sympathize with you Ramon. It must be terrible to get paid more, either through overtime, or by the fact that the industry pays higher salaries to skilled SOX-compliance accountants. And making sure your company is responsible for its illegal activities certainly doesn't add any value to your firm, but what can we all do? Guess we just have to pray that Gingrich gets his proposal through, huh? Idiot.
Ramon - I agree, Sarbanes/Oxley sounded like a good idea at the time, but it has only encumbered business without providing any benefit which doesn't help the economy. It has been a real unnecessary pain at my company.
I think Newt understands the way business and a free market economy grow and I like his ideas. I really like vouchers that provide freedom of choice to empower parents to choose which school their kids attend. The wealthy already have this freedom, it's time the middle and lower class have it also.
"The Shock Doctrine" makes a valid point, but all Klein is doing here is trying to exploit the situation to sell her book. She seems too eager to prove her thesis by jumping on Gingrich's rehash of supply-side economics and conservative dogma. At least Gingrich isn't proposing a gay marriage ban, forced prayer in schools, or a flag burning amendment, and a few of his ideas make sense. I happen to agree in school vouchers (for very socially liberal reasons - the creationists can keep the public schools), as well as capital gains tax relief for small businesses (a hallmark of Obama's plan, by the way). Both concepts are also consistent with Toffler's 'Third Wave' economic theory, which Gingrich claims to admire.
"Will, did you read Newt's plan? " He only cuts and pastes. Reading is apparently above his pay grade.
Gibba, I see your handlers downloaded a couple new talking points. But see if they can upgrade your storage drive to something larger than a 3 1/2 floppy - we could use a bit more variety, your points are getting stale from overuse.
Will, did you read Newt's plan? 1) Protect the dollar against inflation -- weren't you complaining about that yesterday? Yes, Newt wants to repeal SarbOx, which imposes a giant regulatory burden on the economy, but he also calls for greater transparency on Wall Street. A lot of the plan isn't very partisan -- anybody who has ever flown out of the joke of an airport in Philly would support a better air traffic control system.
Oh, and I'm far from an expert on it, but I think hes right when he talks about changing the mark to market accouting rule. That had alot to do with the sudden collapses we've just seen.
McCain is dangerous, reckless and risky. He is flailing around without much intelligence of knoweldge of the WEall Street Crisis. Just look at what George Will had to say today: Under the pressure of the financial crisis, one presidential candidate is behaving like a flustered rookie playing in a league too high. It is not Barack Obama.
Channeling his inner Queen of Hearts, John McCain furiously, and apparently without even looking around at facts, said Chris Cox, chairman of the Securities and Exchange Commission, should be decapitated. This childish reflex provoked the Wall Street Journal to editorialize that "McCain untethered" -- disconnected from knowledge and principle -- had made a "false and deeply unfair" attack on Cox that was "unpresidential" and demonstrated that McCain "doesn't understand what's happening on Wall Street any better than Barack Obama does."......WOW, even George Will thinks McCain hasn't a clue.
McCain and his position of dismateling Social Security and Medicare is extreme and dangerous. Just look at what deregulating Wall Street has done. Can you trust Johnny with your retirement savings? Vote Obama/Biden for Peace and Prosperity.
I think hes right on granting visas to the worlds best and brightest, reigning in fiscal spending, focusing on math and *gasp* science in schools, receiverships for the bailed out instituions, transparency, infrastructure, and a few other topics. How we get there is the challenge
"Newts got some solid proposals there," Huh? There's one proposal that isn't either asinine, or political pandering against "liberals" (by ducking blame for the Republican mantra of deregulation). I agree with Newt that the Social Security surplus should not be diverted to pork projects.
Giving the same thieves who ruined the economy yet another $700 Billion, and then buying BAD DEBTS with that $700 billion is way beyond stupid. It borders on madness!
Obama has pledged to put all federal checkbooks on-line amd accessible to the public. It's about time.
Now I feel less bad about Greenberg losing $6 bil in a month.
Newts got some solid proposals there, gotta give him some credit. As for corporate taxes, I'd glady trade lowering them for more sensible regs and transparency.
If you already have high blood pressure, don't read this:
http://www.nytimes.com/2005/05/19/business/19insure.html?_r=1&oref=slogin
Court Papers Detail Bonuses at A.I.G.
Fresh details have emerged in court papers about the inner workings of a private offshore company that had been paying big bonuses to top executives of the insurance giant American International Group.
The company, Starr International, awarded tens of millions of dollars in payouts over a two-year period at a time when it was ineligible to do so under its own operating laws, according to the court papers, which cite internal A.I.G. documents.
The new details are contained in an amended lawsuit that was filed late Tuesday in Delaware Chancery Court by a Louisiana pension fund that is suing A.I.G. and its directors over what it calls questionable dealings. Those dealings are said to include undisclosed related-party transactions conducted by A.I.G. with Starr International and with another A.I.G.-affiliated private company, C. V. Starr & Company.
Starr International, which is registered in Panama, is A.I.G.'s largest shareholder, with nearly 12 percent of A.I.G. stock, now worth around $16 billion. The company is run by A.I.G.'s recently ousted chairman and chief executive, Maurice R. Greenberg, and by a handful of other senior former A.I.G. executives, all hand-picked by him. Mr. Greenberg is president and chief executive of Starr International, and owns about 8.3 percent of the private company.
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As an accountant, I would dance in the streets if Sarbanes Oxley was repealed. It has created so much busy work that adds zero value to what my company does.
The state of local journalism is now down to who can cut and paste better than the rest. Good thing this fishwrap still has LEGIT journalists who write LEGIT stories (John Baer, Smallwood, Conlin, Phil Jasner, Jon Takiff).
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jmc - It's the old saying, "government isn't bad, but the way YOU run it is"......This group of criminal sleazebags has screwed up everything it has touched. Why on earth would ANYBODY let them do this? This isn't a question of implementing a national health care plan, this is a case of giving the slugs who created this mess 700B dollars to eff it up more. Look at the paperwork you have to go through to get a 100K mortgage (if you could get one today). They want 700B in the form of a three page gift letter. The same guys who were j-o while this was happening, saying that "it's leveling off", or "the worse is over". Nah, I think it's time to let some of these pigs die, and the few that should be saved must give up a stake. And this idiot BushCo, saying there shouldn't be "punitive" measures? WTF? I think tar and feathering is more than appropriate. Great changes in the bill by the Dems - especially the one that would let a bankruptcy judge attach the PRIMARY RESIDENCE of the criminal CEO's behind this meltdown. Let THEM face foreclosure on their McMansions. Perfectly appropriate.
Will loves to quote music. Todays its the Who. I guess when you are unable to put things into your own words, you go back to the well over and over.
u2 monday. Who tuesday.
The request lines are open, people. DJ Willie-lame taking calls.
Will loves to quote music. Todays its the Who. I guess when you are unable to put things into your own words, you go back to the well over and over.
u2 monday. Who tuesday.
The request lines are open, people. DJ Willie-lame taking calls.
I thought you lefties would be dancing in the streets now that the federal government almost completely controls the economy. Instead your scared that that people will end up with a choice of where they send their kids to school, or how their Social Security money is handled. There's a limit to "pro-choice" on the left. If you want to kill your baby, they'll hold the vaccum, but if you want to educate your kids or have control over your retirement, you can go scratch.
So exactly what is so horrific about these proposals? "Gingrich is also calling for reforming the education system to allow "competition" (a.k.a. vouchers)" Obama and most leading Dems send their kids to private schools. I guess the job of their constituents is to make sure the teacher's unions have pupils to fill their classrooms.
"strengthening border enforcement" Exactly what is wrong with that - beyond illegal immigration, a huge amount of meth comes over the border as well.
"cutting corporate taxes" Pro-and-con cases can be made here.
"and his signature move: allowing offshore drilling." And what is wrong with getting as much oil domestically as possible while we figure out how to develop alternative energy? This is twaddle. Oh, and regarding Sarb-Ox - I think it should be revisited, not repealed, and the sections that were make-work for the big accounting firms that lobbied for the bill should be scaled back, and replaced with regulations for an accurate assessment of risk.
Nothing scares people more than being poor. After 7+ years of poorly conceived plans & bungled management, giving this Administration full authority to disburse $.7T (& QUICKLY) is the dumbest thing we can do. We've been down this road before...
I don't agree with Klein on a lot of her book (mostly because she feels the "shock" part is often created by conservatives). I have no doubt that, reactively, conservatives see opportunity in "shocks" but they don't proactively create them.
Klein, at some point, will probably try to claim that conservatives and "de-regulation" created this current financial crisis, but that's hogwash (not to mention that thinking that way leads to conspiracy theory insanity). But just because they didn't create it, doesn't mean conservatives aren't trying to manipulate the situation, to suit their ends. Thank goodness the Democrats control congress... Chris Dodd's proposal looks about 700 billion times better than Paulson's.
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About Will Bunch
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Will Bunch, a senior writer at the Philadelphia Daily News, blogs about his obsessions, including national and local politics and world affairs, the media, pop music, the Philadelphia Phillies, soccer and other sports, not necessarily in that order.
Will Bunch, a senior writer at the Philadelphia Daily News, blogs about his obsessions, including national and local politics and world affairs, the media, pop music, the Philadelphia Phillies, soccer and other sports, not necessarily in that order.
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