Why the right loves a disaster
Ideologues use times of crisis as an opportunity to foist their economic policies on desperate societies.
Naomi Klein
More than a decade ago, economist Dani Rodrik, then at Columbia University, studied the circumstances in which governments adopted "free-trade" policies. His findings were striking: "No significant case of trade reform in a developing country in the 1980s took place outside the context of a serious economic crisis." The 1990s proved him right in dramatic fashion. In Russia, an economic meltdown set the stage for fire-sale privatizations. Next, the Asian crisis in 1997-98 cracked open the "Asian tigers" to a frenzy of foreign takeovers, a process the New York Times dubbed "the world's biggest going-out-of-business sale.".....
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.
Never mind that that an increasing number of Americans are defaulting on their credit card payments, raiding their 401(k) accounts and losing their homes. If Lindsey had his way, Wal-Mart, rather than lose sales, could just loan out money to keep its customers shopping, effectively turning the big-box chain into an old-style company store to which Americans can owe their souls. ...
Do the free-market policies packaged as emergency cures actually fix the crises at hand? For the ideologues involved, that has mattered little. What matters is that, as a political tactic, disaster capitalism works. ...
Yet while managing (barely) to hold the line, the House Democrats appear to have given up on extending unemployment benefits and increasing funding for food stamps and Medicaid as part of the stimulus package. More important, they are failing utterly to use the crisis to propose alternative solutions to a status quo marked by serial crises, whether environmental, social or economic. ...
The disaster capitalists have held the reins for three decades. The time has come, once again, for disaster populism.
http://www.latimes.com/news/opinion/la-op-naomi27jan27,0,3813752.story
