Author says 'economic shock' political smokescreen to deflect bigger issues

BY WENDY ELLIOTT

welliott@kentvilleadvertiser.ca

NovaNewsNow.com

Canadian reporter and author Naomi Klein points to the American administration’s penchant for capitalizing upon natural and man-made calamities to push their own political and economic agenda.

“This Wall Street crisis is just another way for them to take money out of the hands of the public and pad their own pocketbooks,” she says. 



Speaking at Acadia University recently, Klein said the current ‘economic shock’ is being used as a smokescreen to deflect the bigger issues at play in the presidential campaign. 



“The right-wing is taking advantage of this so-called ‘emergency’ to shift our focus away from the real challenges at hand,” she said. “Global warming, the environment, education, the illegal war in Iraq … these are the things the candidates should really be discussing.”



The $700-billion bailout package for Wall Street financial firms shows how George

Bush uses the principles of what Klein has coined as "the shock doctrine."

We’re vulnerable to price shocks

In her latest book, The Shock Doctrine: The Rise of Disaster Capitalism, Klein states that right-wing governments use disasters or other crises to push through unpopular free-market policies when the population isn’t in a position to oppose such programs.

She cited Ontario premier Mike Harris’s Common Sense Revolution and Paul Martin’s budget cuts in 1995 as examples from this country. “Canada’s economy is vulnerable to price shocks.”

She described how free-market programs were espoused by the late Milton Friedman, a conservative economist and Nobel laureate. Klein used examples from Chile, Russia, Iraq and the United States of the shock doctrine being used to encourage free-market policies.

"We saw it before this economic crisis; we even saw it in the midst of the Iraq war when Iraq was being looted. There were warnings in all these cases."

In terms of the bailout, Klein said there aren’t many officials talking about prevention in a serious way that would prevent future bubbles.

"Look at John McCain’s platform. He wants to privatize social security, which is just giving Wall Street another bubble. So they want even more deregulation, more instability in the markets in the name of economic stimulus."

This will lead to more crisis management and crisis exploitation, which is why public response to this bailout has been so heartening, she said. Many Americans let their elected officials know they oppose the bailout.

With enough opposition, she stated, the bailout package won’t allow the financial sector to carry on without restrictions.

Bailout a kind of time bomb: Klein

Klein calls the bailout a kind of a time bomb because “it’s all these bad debts, and they are going to explode on the next administration. I mean, we know that the Bush administration has already left the next administration with huge debt and deficit problems.:

Klein quoted Friedman, who said, “only a crisis, actual or perceived, produces real change. And when the crisis occurs, the change depends on the ideas that are lying around.

“That, I believe, is our basic function; to keep the ideas ready until the politically impossible becomes politically inevitable.”

Klein described U.S treasury secretary Henry Paulson’s package as an economic Patriot Act.

According to Klein, the Paulson took over Goldman Sachs in 1999 when they had $20 billion in debts. When he left they had $100 billion, which means he took their risk level from $20 billion to $100 billion.

“So it is absolutely no exaggeration to say that Henry Paulson, far from speaking for Main Street, is actually bailing out his colleagues for some of the very debts he himself accumulated. This is an extraordinary conflict of interest.”