http://www.naomiklein.org/articles/2008/09/response-attacks

More recently, she’s been talking about this recent economic snarl.
Free Market Ideology is Far from Finished

Now is the Time to Resist Wall Street’s Shock Doctrine, which is interesting because she introduces and links to reforms being made by the Newt Gingrich wing of the Republican party that would result in additional deregulation and privatization.

Most recently, she did an interview on Democracy Now with Amy Goodman. Quoting Klein from the transcript:

So, Newt Gingrich has his list. He’s got eighteen demands. But I think even more important than that is the Republican Study Committee, and I raise this because they’ve just issued their ransom list. It starts with suspending the capital gains tax, privatizing Fannie Mae and Freddie Mac, suspending mark-to-market accounting, which is the rule that requires companies to assess their assets at current market values.

So, what’s so stunning about this, Amy, is that here you have a crisis that everyone seems to agree is borne of deregulation, and they’re actually calling for more deregulation. We have a situation where the debt is exploding on American taxpayers, and they want to suspend corporate profits—sorry, corporate taxes, which is actually what might defray some of those costs from regular taxpayers. So it’s an incredible display of opportunism. And this is what I mean by stage two of the shock doctrine. The first stage is just the bailout, but the second stage are all of these radical reforms that are going to be invoked in the name of the crisis that the bailout is creating, whether it’s pushed through right now or whether it’s pushed through later.

The deal is being negotiated right now, today. And from what I hear, this group of Republicans are the hang-up. Klein’s analysis is so cynical that hearing her say these things depresses me. But so far, she seems to have accurately described what’s happening. Many of the people negotiating the deal are the same ones who caused the problem.

Krugman points out that the economy isn’t being nationalized, as some people seem to think. The Paulson plan’s Section 8, which gave him sole discretionary power over the $700 billion payout, without any oversight or review, is not a populist solution.

Also, see Defaming Milton Friedman

But is that modus operandi some sort of hidden conspiracy or more like just the real way that capitalism always operates – through generating its own disruptions and exploiting unexpected disruptions as they occur. I would see a danger in what I understand of the Klein analysis that by stopping or exposing the hidden conspiracies you will somehow tidy up capitalism and make it more predictable. Whereas, the chaotic, anarchistic nature of its development may be more deeply writ than that and not preventable.

I believe that Stephen Holmes’ criticism, “It is more useful to separate ‘free-market orthodoxy’ from predatory corporate behaviour and to criticise each on its own terms,” may be correct. But Klein’s book, as Joseph Stiglitz points out, is not an academic argument. It’s a work of journalism.

Stiglitz, who was Chief Economist of the World Bank, was also critical of “free market fundamentalists” at the IMF and US Treasury Dept. He admits that Klein often oversimplifies, but believes that Friedmanites have done so, as well. Oversimplification, I would say, is the rule in popular media. This comment from Stiglitz seems to fairly represent Klein’s book:

“Some readers may see Klein’s findings as evidence of a giant conspiracy, a conclusion she explicitly disavows. It’s not the conspiracies that wreck the world but the series of wrong turns, failed policies, and little and big unfairnesses that add up. Still, those decisions are guided by larger mind-sets. Market fundamentalists never really appreciated the institutions required to make an economy function well, let alone the broader social fabric that civilizations require to prosper and flourish.”

This interview with Stephen Holmes explores contradictions and missteps in US foreign policy in Iraq, esp. from about 21:00 to 29:00 minutes.

I would agree with Mark Engler’s statement, “Stripping down politics to the profit motive will get you a long way in this world. It can be an especially useful corrective when the “crusade against communism” and “battling terrorism” are constantly invoked as noble motives, and when nothing so crass as economic interests are ever admitted. But, needless to say, the move is reductionist.” Klein used “shock therapy” as a metaphor to tie various historical events together, and this no doubt has explanatory limitations. However, it is also powerfully useful.

Engler, for instance, points to Iraqi resistance as an example of events that “foil the crisis model.” But as I read Klein, I believe that factional disputes in Iraq may stem from alternate ideas “just lying around” which the US did not adequately anticipate. She doesn’t try to make the case for crisis as necessarily favoring predatory capitalism, but that crisis opens people to suggestion from those who appear to be offering a solution – whatever that may be.

Klein discusses her book, briefly, here.