Disaster Socialism

In her recent book, The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein describes how catastrophes provide cover for politicians to invoke radical change. In the examples she discusses — including the 2004 Indian Ocean tsunami, Hurricane Katrina, and the Iraq war — the beneficiaries of post-disaster restructuring have invariably been private corporate interests.

The current economic crisis has all the right shock doctrine stuff, and with the bailout we have already seen the all too rapid creation of policy measures that benefit private banks. But hold on, cause the game has hardly begun. And this time around there’s every chance we’ll see disaster capitalism turned inside out to re-emerge as disaster socialism.

Doubt it? Here’s what Obama’s new chief of staff Rahm Emanuel said in an recent interview: “You don’t ever want a crisis to go to waste. It’s an opportunity to do important things that you would otherwise avoid. In 1974 and 1978, we never dealt with it, and our dependence on foreign oil never changed.”

So just maybe, as Paul Krugman advocates, our new leaders will “figure out how much help they think the economy needs, then add 50 percent.” And just maybe, we’ll start making the massive public investment that Al Gore calls for in this poignant and inspiring essay on climate change and energy independence.

Closer to home, Governor Gregoire is seeking an “immediate” $300 million stimulus package that provides relief to those on the lower end of the income spectrum.

And right at home, here in the Seattle area, voters just approved funding for public investments in transit, parks, and the Pike Place Market, but vetoed an initiative designed to appeal to the self interest of those who spend lots of time in a single-occupant vehicle.

But check this: Could it be that the Bush presidency itself is the operative, root catastrophe that will lead to the rise of disaster socialism? And lo, it may well be that the W crew has shocked the country so thoroughly over the past eight years that we may finally be ready for the biggest socialist move since the New Deal: heath care reform.

5 Responses to “Disaster Socialism”

  1. Adam P

    I agree completely. It can go both ways it just depends on who happens to be in power.

  2. joshuadf

    So far, I’ve been very impressed with Hank Paulson. He is running this bailout as if he actually cares about the country, unlike other Bush depts like Justice and Defense. Sure, he’s a banker at heart and won’t cut Wall Street too deep, but he did sneak equity into the bailout.

    I’m also looking forward to this Chicago presidency. We might wake up with bulldozers in the middle of some runways, if you know what I mean.

  3. The Overhead Wire

    Here’s a talk Naomi gave at Stanford. It kind of freaked me out.


  4. Dan Staley

    I, personally, think the BushCo bailout is a sh*t swindle affair that looked to spread the wealth upward to the administrations FIRE buddies. Paulson is a FIRE man, and is approaching this like a FIRE man, with no strings attached to these people. Pathetic.

  5. joshuadf

    My point about Paulson is that unlike Michael Brown in FEMA or Ashcroft or Rumsfeld, as far as I can tell Paulson is not gutting the Treasury Dept for some sort of short-term partisan gain. Whether his approach is best or not, he is actually trying to fix problems. I know bankers like him or even Democrats like Robert Rubin are not popular right now. They made big big mistakes that we are all paying for, but with better regulation I do think the banking system has utility.

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