Shock Doctrine and Wisconsin and Michigan

Author Naomi Klein wrote a book a few years ago called Shock Doctrine.  It is a powerful antidote to the pro-free markets, pro-globalization stories of authors such as Daniel Yergin and Stanislaw who wrote Commanding Heights.  I wish Shock Doctrine were a full-length video to juxtaposition against Commanding Heights. In the book, Klein documents how repeatedly over a 40 year period various crises have been exploited by right-wing, free-market fundamentalists to implement policies that could not be implemented via ordinary democratic means.  Further, Klein documents how the exploitation of these crises was not accidental. It was intentional. Amy Goodman notes of the book:

In it, she reveals how those in power use times of crisis to push through undemocratic, radical, free market economic policies.

The book, published in early 2008, mostly deals with crises in other countries. Some were political, some economic, some war-related, and some natural disasters. It is a disturbing and yet riveting tale.  The “reforms” forced through in country after country inevitably work to the benefit of the global elite corporations and banks. Yet in the book most of the crises and forced “reforms” are in either poor or developing countries. It’s possible to read the book and think that we in the developed, industrialized countries are immune to such anti-democratic exploitation of either real or contrived crises.  Yes, Klein offers the example of Katrina striking New Orleans to illustrate that it “can happen here”, yet it’s possible to think not. Now it’s time to think again.

Now it’s 2011 and the crises have come to the U.S. and other developed countries. In the U.K., a new conservative government has chosen to whip up a fear of a sovereign debt crisis. “We don’t want to be like Greece”, despite the reality that the U.K., having it’s own currency, can never be in the circumstances Greece is.  They are exploiting the fear of crisis to mount a massive dismantling of public benefits that would not otherwise be possible. A dismantling they didn’t explain prior to the election.

But what I want to observe is that Shock Doctrine tactics have come to the U.S.  In Congress, Republicans are claiming the government is “broke” despite the evidence that the government can borrow unlimited amounts at near-zero interest rates and despite the fact that the U.S. cannot go “broke”. But they are using this supposed “crisis” to try to reduce or dismantle a fundamentally sound, socially beneficial program like Social Security. Heck, even if there were a budget crisis for the government, Social Security isn’t the cause and cutting isn’t the solution.  Yet the tactic here is pure shock doctrine.

I’ve mentioned before how we’re seeing Shock Doctrine in Wisconsin, Ohio, and other states that are attempting to repeal collective bargaining rights for public workers and to bust unions is pure Shock Doctrine. There is now an extensive interview with Naomi Klein where she talks about these events:

we are seeing right-wing ideologues across the country using economic crisis as a pretext to really wage a kind of a final battle in a 50-year war against trade unions, where we’ve seen membership in trade unions drop precipitously. And public sector unions are the last labor stronghold, and they’re going after it. And these governors did not run elections promising to do these radical actions, but they are using the pretext of crisis to do things that they couldn’t get elected promising to do.

And, you know, that’s the core argument of and the thesis of the book, is not that there’s something wrong with responding to a crisis decisively. Crises demand decisive responses. The issue is this backhanded attempt to use a crisis to centralize power, to subvert democracy, to avoid public debate, to say, “We have no time for democracy. It’s just too messy. It doesn’t matter what you want. We have no choice. We just have to ram it through.” And we’re seeing this in 16 states. I mean, it’s impossible to keep track of it. It’s happening on such a huge scale.

Teachers’ unions are getting the worst of it. March 8th was International Women’s Day. This is—you know, as you pointed out on your show, it’s overwhelmingly women who are providing the services that are under attack. It’s not just labor that’s under attack; it’s the services that the labor is providing that’s under attack: it’s healthcare, it’s education, it’s those fundamental care-giving services across the country, which could be profitable if they were privatized.

Later in the interview, Klein touches on what’s happening here in Michigan. In Michigan we have Governor Rick Snyder, a man who won a landslide by specifically not telling anyone what he planned to do other than “re-invent” Michigan.  Yet within days of taking office he announces plans to raise taxes on senior citizens and poor people. He further cuts state funding of local governments and school districts. Then he and the Republican legislature pass a new law to allow the governor to appoint an “emergency financial manager” with dictatorial powers to take over any local government or school district in financial trouble. All of this it is claimed is necessary because of a budget “crisis”.  Yet the budget “crisis” is itself largely the result of Snyder’s own proposal to repeal existing business taxes and replace them with business taxes that collect much less money.  It’s a crisis that Snyder largely creates and then proposes to “solve” by repealing voters rights’ to run their own local governments.

AMY GOODMAN: Well, let me ask you about Michigan. About a thousand people rallied in Michigan—

NAOMI KLEIN: Yeah.

AMY GOODMAN:—reminiscent of Wisconsin. Talk about the proposal there.

NAOMI KLEIN: … there’s so much going on that these extraordinary measures are just getting lost in the shuffle. But in Michigan, there is a bill that’s already passed the House. It’s on the verge of passing the Senate. And I’ll just read you some excerpts from it. It says that in the case of an economic crisis, that the governor has the authority to authorize the emergency manager—this is somebody who would be appointed—to reject, modify or terminate the terms of an existing contract or collective bargaining agreement, authorize the emergency manager for a municipal government—OK, so we’re not—we’re talking about towns, municipalities across the state—to disincorporate. So, an appointed official with the ability to dissolve an elected body, when they want to.

AMY GOODMAN: A municipal government.

NAOMI KLEIN: A municipal government. And it says specifically, “or dissolve the municipal government.” So we’ve seen this happening with school boards, saying, “OK, this is a failing school board. We’re taking over. We’re dissolving it. We’re canceling the contracts.” You know, what this reminds me of is New Orleans after Hurricane Katrina, when the teachers were fired en masse and then it became a laboratory for charter schools. You know, people in New Orleans—and you know this, Amy—warned us. They said, “What’s happening to us is going to happen to you.”

Think of the power now concentrated in the Governor.  If any local government or school district doesn’t do what Governor Snyder wants, if the local voters don’t want their schools run the way Snyder does, then Snyder cuts the funding to the school district/city.  They fall into “financial trouble”.  Snyder appoints a crony as financial manager.  The financial manager can go so far as to privatize the entire city and dissolve the entire existence of the city.  So much for popular will and voters speaking in a democracy.  Meanwhile, Snyder, the Governor becomes a very, very powerful man. And power can always be converted into great wealth.  Welcome to the banana republic and crony capitalism. Outcomes no voter would support if given a choice. Courtesy of the Shock Doctrine.

Shock Doctrine, Neo-liberalism, and Current Events

Primarily for my Comp Systems and Political Economy students (this is part one):

As previously noted here, the events in Madison, Wisconsin are not unique.  There appears to be a concerted effort to roll-back collective bargaining rights for many workers and roll-back social programs all because of a supposed  “fiscal crisis”- the idea that government budgets are out-of-control in spending.  Yet, this “fiscal crisis” is largely contrived and to the extent it exists at all, it is due not to increased spending but from reduced tax collections resulting from the Great Financial Crisis Wall St. created and repeated tax cuts, especially for the wealthy.

So what we have is a “crisis” that supposedly justifies drastic cut-backs in social support, increased privatization, and reduced tax burden on the wealthy.  If it sounds familiar, that’s because it is.  It sounds a lot like the way neo-liberal “global capitalism” was forced onto much of the world over the last 40 years.  Naomi Klein, in her book Shock Doctrine explains the strategy used, including the fact that leading neo-liberal ideologues (in the U.S. they are called “conservatives” or “libertarians” but not with much accuracy) intentionally do so.  They idea is to use any crisis, be it a natural disaster (Haiti earthquake?), or invasion (Iraq?), or revolution to force political economy changes that people might not otherwise accept.

Paul Krugman at the New York Times observes how the pattern is being applied here at home now in Wisconsin and other states:

Shock Doctrine, U.S.A.

By PAUL KRUGMAN

Here’s a thought: maybe Madison, Wis., isn’t Cairo after all. Maybe it’s Baghdad — specifically, Baghdad in 2003, when the Bush administration put Iraq under the rule of officials chosen for loyalty and political reliability rather than experience and competence.

As many readers may recall, the results were spectacular — in a bad way. Instead of focusing on the urgent problems of a shattered economy and society, which would soon descend into a murderous civil war, those Bush appointees were obsessed with imposing a conservative ideological vision. Indeed, with looters still prowling the streets of Baghdad, L. Paul Bremer, the American viceroy, told a Washington Post reporter that one of his top priorities was to “corporatize and privatize state-owned enterprises” — Mr. Bremer’s words, not the reporter’s — and to “wean people from the idea the state supports everything.”

The story of the privatization-obsessed Coalition Provisional Authority was the centerpiece of Naomi Klein’s best-selling book “The Shock Doctrine,” which argued that it was part of a broader pattern. From Chile in the 1970s onward, she suggested, right-wing ideologues have exploited crises to push through an agenda that has nothing to do with resolving those crises, and everything to do with imposing their vision of a harsher, more unequal, less democratic society.

Which brings us to Wisconsin 2011, where the shock doctrine is on full display.

In recent weeks, Madison has been the scene of large demonstrations against the governor’s budget bill, which would deny collective-bargaining rights to public-sector workers. Gov. Scott Walker claims that he needs to pass his bill to deal with the state’s fiscal problems. But his attack on unions has nothing to do with the budget. In fact, those unions have already indicated their willingness to make substantial financial concessions — an offer the governor has rejected.

What’s happening in Wisconsin is, instead, a power grab — an attempt to exploit the fiscal crisis to destroy the last major counterweight to the political power of corporations and the wealthy. And the power grab goes beyond union-busting. The bill in question is 144 pages long, and there are some extraordinary things hidden deep inside.

For example, the bill includes language that would allow officials appointed by the governor to make sweeping cuts in health coverage for low-income families without having to go through the normal legislative process.

And then there’s this: “Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).”

What’s that about? The state of Wisconsin owns a number of plants supplying heating, cooling, and electricity to state-run facilities (like the University of Wisconsin). The language in the budget bill would, in effect, let the governor privatize any or all of these facilities at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be “considered to be in the public interest.”

If this sounds to you like a perfect setup for cronyism and profiteering — remember those missing billions in Iraq? — you’re not alone. Indeed, there are enough suspicious minds out there that Koch Industries, owned by the billionaire brothers who are playing such a large role in Mr. Walker’s anti-union push, felt compelled to issue a denial that it’s interested in purchasing any of those power plants. Are you reassured?

The good news from Wisconsin is that the upsurge of public outrage — aided by the maneuvering of Democrats in the State Senate, who absented themselves to deny Republicans a quorum — has slowed the bum’s rush. If Mr. Walker’s plan was to push his bill through before anyone had a chance to realize his true goals, that plan has been foiled. And events in Wisconsin may have given pause to other Republican governors, who seem to be backing off similar moves.

But don’t expect either Mr. Walker or the rest of his party to change those goals. Union-busting and privatization remain G.O.P. priorities, and the party will continue its efforts to smuggle those priorities through in the name of balanced budgets.