Naomi Klein, the author of The Shock Doctrine: The Rise of Disaster Capitalism, wrote an op-ed for yesterday's LA Times which should be required reading for every liberal, progressive, every Democratic politician and official, all economists and all Republicans who haven't yet drunk their fill of Bush economic Kool-Aid (all 3 of them).
Moody's, the credit-rating agency, claims the key to solving the United States' economic woes is slashing spending on Social Security. The National Assn. of Manufacturers says the fix is for the federal government to adopt the organization's wish-list of new tax cuts. For Investor's Business Daily, it is oil drilling in the Arctic National Wildlife Refuge, "perhaps the most important stimulus of all."
But of all the cynical scrambles to package pro-business cash grabs as "economic stimulus," the prize has to go to Lawrence B. Lindsey, formerly President Bush's assistant for economic policy and his advisor during the 2001 recession. Lindsey's plan is to solve a crisis set off by bad lending by extending lots more questionable credit. "One of the easiest things to do would be to allow manufacturers and retailers" -- notably Wal-Mart -- "to open their own financial institutions, through which they could borrow and lend money," he wrote recently in the Wall Street Journal.
I don't know which is worse: that these people are using economic decline to cynically push their personal agendas and enrich themselves, or that people might seriously believe that opening ANWR to drilling and letting Wal-Mart become its own bank are good ideas.
All that's missing from Klein's article is the understanding that the financial crises which have provided such fertile ground for conservative mischief-making are themselves the direct result of the conservative economic principles enacted during previous financial crises.
Consider this:
A decade later, John Williamson, a key advisor to the International Monetary Fund and the World Bank (and who coined the phrase "the Washington consensus"), went even further. He asked a conference of top-level policymakers "whether it could conceivably make sense to think of deliberately provoking a crisis so as to remove the political logjam to reform."
Is it really so surprising that "beneficiaries" of IMF and World Bank assistance have been complaining that such assistance is designed to alleviate immediate concerns while setting the stage for long-term dependency upon those institutions? If IMF/WB clients can be kept in a state of low-level economic crisis, it's therefore easier for those institutions' patrons to force their economic agenda: "free" trade, removal of worker protections, etc.
We need to remember that there is no incentive whatsoever for the wealthy to help ensure the existence of a large middle class. Before the rise of America's middle class, the rich in this country actually controlled a higher share of its wealth than after - and when we control for inflation, they were wealthier than the likes of Bill Gates and Warren Buffet. We also need to remember that wealth is only one half of the equation; the other is the power that wealth brings. A healthy middle class not only dilutes the distribution of wealth, it dilutes the distribution of political power.
Klein finishes her article by noting that the public is showing itself resistant to such disaster capitalism and that the "time has come, once again, for disaster populism." Let's hope so. It cannot be said enough that there is already a class war raging in this country, indeed in the whole world. It's time for our side to start fighting.
