Bank bailout

The Nightly Build...

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Disaster Capitalism

Jim Mitchell, in The Dallas Morning News Opinion blog, says it's irrelevant whether Barack Obama or John McCain warned against the recent financial meltdown on Wall Street or even whether either has a plan to fix the mess. Mitchell says the crisis is upon us, events are moving too fast, and political talking points are mere distractions to the decisions that have to be made now.

The urgency Mitchell feels is exactly how the Bush administration wants Americans to feel about the crisis. The Bush administration, through the Treasury Department and its Secretary Henry Paulson, is rushing through a $700 billion bailout plan, pressuring Congress to act swiftly, without due consideration, without input. Taxpayers ought to be very suspicious of the Bush administration's haste. Check out this sentence buried in the administration's plan:

"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

If that doesn't scare the daylights out of you, I've got a bridge to nowhere in Alaska to sell you. Taxpayers would do well to read The Shock Doctrine: The Rise of Disaster Capitalism, a 2007 book by Naomi Klein. Klein details how practitioners of Milton Freidman's free market economics have exploited (and in some cases, even created) disasters and upheavals in order to impose their radical policies on shocked societies. Chile, Russia, Iraq, even New Orleans after Katrina, all have seen wholesale imposition of economic shock therapy. The beneficiaries of this are a narrow group of the economic elite who control the companies adept at profiting from disasters (think Halliburton and Blackwater). The losers are the devastated communities left picking up the pieces of a destroyed economy and infrastructure. That section of the bailout plan quoted above is the kind of license the free marketers give themselves in order to take advantage of the chaos in a market collapse.

Congress would do well to resist being stampeded into hasty action by an administration whose primary interest may be in applying another dose of economic shock therapy, this time on the American economy itself. They were responsible for the disaster. Now they are exploiting it. It's how disaster capitalism works. Read the book.