Showing posts with label roosevelt. Show all posts
Showing posts with label roosevelt. Show all posts

Friday, July 18, 2008

Obama and Economics



Illustration: Again, this goes quite well with this edition. I would invite you to visit Keith’s website as he has a wealth of artwork, some of it not political. He is trying to make a go of it. The address is .

Now, onward. This country has been called the United States of Amnesia, and not without merit.

Some of us remember, when we complained about anything, our parents, or grandparents, would say something like “Your generation is spoiled. You wouldn’t complain if you had lived during the Depression.” The real point here is that yes, we were spoiled by comparision, and what happened to rectify the causes of the Depression – what steps were taken to make sure it didn’t happen again?

The Depression started with Herbert Hoover [R] and banks, stocks, and big business running rampant without check.

Some of the measures taken by Franklin Delano Roosevelt [D] were borrowed from Eugene Debs [S]. In fact, Roosevelt was called a “Socialist” by many of those who were the cause of the depression in the first place. He wanted a guaranteed annual income for anyone who wanted to work, whether there was a job for them or not, as the total income of the country was sufficient to provide for it. This idea was reduced to a minimum wage after compromise. Margin buying on the market was curtailed and federal regulation was effected. Banks were regulated and, remembering the long lines of people trying to get their savings out of a failing bank, insured to a certain amount. Social Security was instituted and made mandatory for everyone. Welfare, a social safety net, was considered only humane. A progressive income tax was instituted on the theory that those who had the highest salaries could more afford to support the public good than those with less. Fannie Mae was a government institution created to provide support of less wealthy people who wanted to buy homes. And so on. The last measure of this type, it is surprising to reflect, came during the Vietnam War through the efforts of Lyndon Johnson.

Many who didn’t like the government helping people say only World War II got us out of the Depression. Well, maybe, but certainly to programs of the New Deal kept us out of another one.

So yes, we were spoiled, but starting in the 70s, and with vigor during Ronald Regan’s [R] rule, all that was becoming dismantled. “Get the government off our backs” became the cry. Fannie Mae was privatized, unions were busted (in fact, the only union to support Regan was the air-traffic controllers union and he turned on them first. So-called supply-side economics came into vogue – to hell with Keynes and Gallbraith. To privatize EVERYTHING if possible, even Social Security is still a goal. Deregulate everything!

Well, the few bank failures are only the beginning. There will be hundreds.

But I’m not one to talk with much authority on these matters. I’m including two articles by Naomi Klein who knows what she is talking about as well as an interview of her from Democracy Now. She also talks about Obama’s real mistake or interest economically. Finally, I have one about the Western States and the kind of people who live there. Very interesting material.

I apologize in advance for the formatting – bear with me – it’s worth it.

The Nation.

Barack Obama waited just three days after Hillary Clinton pulled out of

the race to declare, on CNBC, “Look. I am a pro-growth, free-market guy.

I love the market.”

Demonstrating that this is no mere spring fling, he has appointed 37-year-old Jason Furman to head his economic policy team. Furman is one of Wal-Mart’s most prominent defenders, anointing the company a “progressive success story.” On the campaign trail, Obama blasted Clinton for sitting on the Wal-Mart board and pledged, “I won’t shop there.” For Furman, however, it’s Wal-Mart’s critics who are the real threat: the “efforts to get Wal-Mart to raise its wages and benefits” are creating “collateral damage” that is “way too enormous and damaging to working people and the economy more broadly for me to sit by idly and sing ‘Kum-Ba-Ya’ in the interests of progressive harmony.” Obama’s love of markets and his desire for “change” are not inherently incompatible. “The market has gotten out of balance,” he says, and it most certainly has. Many trace this profound imbalance back to the ideas of Milton Friedman, who launched a counterrevolution against the New Deal from his perch at the University of Chicago economics department. And here there are more problems, because Obama—who taught law at the University of Chicago for a decade—is thoroughly embedded in the mind-set known as the Chicago School.

He chose as his chief economic adviser Austan Goolsbee, a University of Chicago economist on the left side of a spectrum that stops at the center-right. Goolsbee, unlike his more Friedmanite colleagues, sees inequality as a problem. His primary solution, however, is more education—a line you can also get from Alan Greenspan. In their hometown, Goolsbee has been eager to link Obama to the Chicago School. “If you look at his platform, at his advisers, at his temperament, the guy’s got a healthy respect for markets,” he told /Chicago/ magazine. “It’s in the ethos of the [University of Chicago], which is something different from saying he is laissez-faire.”

Another of Obama’s Chicago fans is 39-year-old billionaire Kenneth Griffin, CEO of the hedge fund Citadel Investment Group. Griffin, who gave the maximum allowable donation to Obama, is something of a poster boy for an unbalanced economy. He got married at Versailles and had the after-party at Marie Antoinette’s vacation spot (Cirque du Soleil performed)--and he is one of the staunchest opponents of closing the hedge-fund tax loophole. While Obama talks about toughening trade rules with China, Griffin has been bending the few barriers that do exist. Despite sanctions prohibiting the sale of police equipment to China, Citadel has been pouring money into controversial China-based security companies that are putting the local population under unprecedented levels of surveillance.

Now is the time to worry about Obama’s Chicago Boys and their commitment

to fending off serious attempts at regulation. It was in the two and a

half months between winning the 1992 election and being sworn into

office that Bill Clinton did a U-turn on the economy. He had campaigned

promising to revise NAFTA, adding labor and environmental provisions and

to invest in social programs. But two weeks before his inauguration, he

met with then-Goldman Sachs chief Robert Rubin, who convinced him of the

urgency of embracing austerity and more liberalization. Rubin told PBS,

“President Clinton actually made the decision before he stepped into the

Oval Office, during the transition, on what was a dramatic change in

economic policy.”

Furman, a leading disciple of Rubin, was chosen to head the Brookings Institution’s Hamilton Project, the think tank Rubin helped found to argue for reforming, rather than abandoning, the free-trade agenda. Add to that Goolsbee’s February meeting with Canadian consulate officials, who left with the distinct impression that they had been instructed not to take Obama’s anti-NAFTA campaigning seriously, and there is every reason for concern about a replay of 1993.

The irony is that there is absolutely no reason for this backsliding. The movement launched by Friedman, introduced by Ronald Reagan and entrenched under Clinton, faces a profound legitimacy crisis around the world. Nowhere is this more evident than at the University of Chicago itself. In mid-May, when university president Robert Zimmer announced the creation of a $200 million Milton Friedman Institute, an economic research center devoted to continuing and augmenting the Friedman legacy, a controversy erupted. More than 100 faculty members signed a letter of protest. “The effects of the neoliberal global order that has been put in place in recent decades, strongly buttressed by the Chicago School of Economics, have by no means been unequivocally positive,” the letter states. “Many would argue that they have been negative for much of the world’s population.”

When Friedman died in 2006, such bold critiques of his legacy were

largely absent. The adoring memorials spoke only of grand achievement,

with one of the more prominent appreciations appearing in the /New York

Times/--written by Austan Goolsbee. Yet now, just two years later,

Friedman’s name is seen as a liability even at his own alma mater. So

why has Obama chosen this moment, when all illusions of a consensus have

dropped away, to go Chicago retro?

The news is not all bad. Furman claims he will be drawing on the expertise of two Keynesian economists: Jared Bernstein of the Economic Policy Institute and James Galbraith, son of Friedman’s nemesis John Kenneth Galbraith. Our “current economic crisis,” Obama recently said, did not come from nowhere. It is “the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long.”

True enough. But before Obama can purge Washington of the scourge of Friedmanism, he has some ideological housecleaning of his own to do.

Naomi Klein is an award-winning journalist and syndicated columnist and the author of the international and /New York Times/ bestseller /The Shock Doctrine: The Rise of Disaster Capitalism/ (September 2007); an earlier international best-seller, /No Logo: Taking Aim at the Brand Bullies/; and the collection /Fences and Windows: Dispatches from the Front Lines of the Globalization Debate/ (2002). more...

The Nation.


· The Nation

· Economics

· Globalization

Disaster Capitalism: State of Extortion


By Naomi Klein This article appeared in the July 21, 2008 edition of The Nation.

Naomi Klein *:* Nothing terrifies a

repressive regime more than a natural disaster.

Barack Obama

Naomi Klein *:* He should denounce the attacks themselves as racist propaganda.

Disowned by the Ownership Society

Economic Policy

Naomi Klein *:* Bush turns out to be the undertaker of the free market’s false promises to ordinary Americans.


Zapatista Code Red


Naomi Klein *:* Ten years after the massacre of indigenous people in Chiapas, Zapatistas are reading signs that the Mexican government is poised for another wave of repression.


Guns Beat Green: The Market Has Spoken

Disaster Capitalism

Naomi Klein *:* If you’re looking for

a sure bet in the new growth market, sell solar and buy

surveillance. Forget wind, buy weapons.

For instance, “independent conservative” radio host Jerry Doyle and I

were having a perfectly amiable conversation about sleazy insurance

companies and inept politicians when this happened: “I think I have a

quick way to bring the prices down,” Doyle announced. “We’ve invested

$650 billion to liberate a nation of 25 million people. Shouldn’t we

just demand that they give us oil? There should be tankers after tankers

backed up like a traffic jam getting into the Lincoln Tunnel, the

Stinkin’ Lincoln, at rush hour with thank-you notes from the Iraqi

government.... Why don’t we just take the oil? We’ve invested it

liberating a country. I can have the problem solved of gas prices coming

down in ten days, not ten years.”

There were a couple of problems with Doyle’s plan, of course. The first was that he was describing the biggest stickup in world history. The second, that he was too late: “We” are already heisting Iraq’s oil, or at least are on the cusp of doing so.

It’s been ten months since the publication of my book /The Shock Doctrine: The Rise of Disaster Capitalism/, in which I argue that today’s preferred method of reshaping the world in the interest of multinational corporations is to systematically exploit the state of fear and disorientation that accompanies moments of great shock and crisis. With the globe being rocked by multiple shocks, this seems like a good time to see how and where the strategy is being applied.

And the disaster capitalists have been busy—from private firefighters

already on the scene in Northern California’s wildfires, to land grabs

in cyclone-hit Burma, to the housing bill making its way through

Congress. The bill contains little in the way of affordable housing,

shifts the burden of mortgage default to taxpayers and makes sure that

the banks that made bad loans get some payouts. No wonder it is known in

the hallways of Congress as “The Credit Suisse Plan,” after one of the

banks that generously proposed it.

Iraq Disaster: We Broke It, We (Just) Bought It

But these cases of disaster capitalism are amateurish compared with what

is unfolding at Iraq’s oil ministry. It started with no-bid service

contracts announced for ExxonMobil, Chevron, Shell, BP and Total (they

have yet to be signed but are still on course). Paying multinationals

for their technical expertise is not unusual. What is odd is that such

contracts almost invariably go to oil service companies—not to the oil

majors, whose work is exploring, producing and owning carbon wealth. As

London-based oil expert Greg Muttitt points out, the contracts make

sense only in the context of reports that the oil majors have insisted

on the right of first refusal on subsequent contracts handed out to

manage and produce Iraq’s oil fields. In other words, other companies

will be free to bid on those future contracts, but these companies will


One week after the no-bid service deals were announced, the world caught

its first glimpse of the real prize. After years of back-room

arm-twisting, Iraq is officially flinging open six of its major oil

fields, accounting for around half of its known reserves, to foreign

investors. According to Iraq’s oil minister, the long-term contracts

will be signed within a year. While ostensibly under control of the Iraq

National Oil Company, foreign firms will keep 75 percent of the value of

the contracts, leaving just 25 percent for their Iraqi partners.

That kind of ratio is unheard of in oil-rich Arab and Persian states,

where achieving majority national control over oil was the defining

victory of anticolonial struggles. According to Muttitt, the assumption

until now was that foreign multinationals would be brought in to develop

brand-new fields in Iraq—not to take over ones that are already in

production and therefore require minimal technical support. “The policy

was always to allocate these fields to the Iraq National Oil Company,”

he told me. This is a total reversal of that policy, giving INOC a mere

25 percent instead of the planned 100 percent.

So what makes such lousy deals possible in Iraq, which has already

suffered so much? Ironically, it is Iraq’s suffering—its never-ending

crisis—that is the rationale for an arrangement that threatens to drain

its treasury of its main source of revenue. The logic goes like this:

Iraq’s oil industry needs foreign expertise because years of punishing

sanctions starved it of new technology and the invasion and continuing

violence degraded it further. And Iraq urgently needs to start producing

more oil. Why? Again because of the war. The country is shattered, and

the billions handed out in no-bid contracts to Western firms have failed

to rebuild the country. And that’s where the new no-bid contracts come

in: they will raise more money, but Iraq has become such a treacherous

place that the oil majors must be induced to take the risk of investing.

Thus the invasion of Iraq neatly creates the argument for its subsequent


Several of the architects of the Iraq War no longer even bother to deny

that oil was a major motivator. On National Public Radio’s /To the

Point/, Fadhil Chalabi, one of the primary Iraqi advisers to the Bush

Administration in the lead-up to the invasion, recently described the

war as “a strategic move on the part of the United States of America and

the UK to have a military presence in the Gulf in order to secure [oil]

supplies in the future.” Chalabi, who served as Iraq’s oil under

secretary and met with the oil majors before the invasion, described

this as “a primary objective.”

Invading countries to seize their natural resources is illegal under the

Geneva Conventions. That means that the huge task of rebuilding Iraq’s

infrastructure—including its oil infrastructure—is the financial

responsibility of Iraq’s invaders. They should be forced to pay

reparations. (Recall that Saddam Hussein’s regime paid $9 billion to

Kuwait in reparations for its 1990 invasion.) Instead, Iraq is being

forced to sell 75 percent of its national patrimony to pay the bills for

its own illegal invasion and occupation.

Oil Price Shock: Give Us the Arctic or Never Drive Again

Iraq isn’t the only country in the midst of an oil-related stickup. The

Bush Administration is busily using a related crisis—the soaring price

of fuel—to revive its dream of drilling in the Arctic National Wildlife

Refuge (ANWR). And of drilling offshore. And in the rock-solid shale of

the Green River Basin. “Congress must face a hard reality,” said George

W. Bush on June 18. “Unless members are willing to accept gas prices at

today’s painful levels—or even higher—our nation must produce more oil.”

This is the President as Extortionist in Chief, with gas nozzle pointed

to the head of his hostage—which happens to be the entire country. Give

me ANWR, or everyone has to spend their summer vacations in the

backyard. A final stickup from the cowboy President.

Despite the Drill Here. Drill Now. Pay Less bumper stickers, drilling in

ANWR would have little discernible impact on actual global oil supplies,

as its advocates well know. The argument that it could nonetheless bring

down oil prices is based not on hard economics but on market

psychoanalysis: drilling would “send a message” to the oil traders that

more oil is on the way, which would cause them to start betting down the


Two points follow from this approach. First, trying to psych out hyperactive commodity traders is what passes for governing in the Bush era, even in the midst of a national emergency. Second, it will never work. If there is one thing we can predict from the oil market’s recent behavior, it is that the price is going to keep going up regardless of what new supplies are announced.

Take the massive oil boom under way in Alberta’s notorious tar sands.

The tar sands (sometimes called the oil sands) have the same things

going for them as Bush’s proposed drill sites: they are nearby and

perfectly secure, since the North American Free Trade Agreement contains

a provision barring Canada from cutting off supply to the United States.

And with little fanfare, oil from this largely untapped source has been

pouring into the market, so much so that Canada is now the largest

supplier of oil to the United States, surpassing Saudi Arabia. Between

2005 and 2007, Canada increased its exports to the States by almost 100

million barrels. Yet despite this significant increase in secure

supplies, oil prices have been going up the entire time.

What is driving the ANWR push is not facts but pure shock doctrine

strategy—the oil crisis has created the conditions in which it is

possible to sell a previously unsellable (but highly profitable) policy.

Food Price Shock: Genetic Modification or Starvation

Intimately connected to the price of oil is the global food crisis. Not

only do high gas prices drive up food costs but the boom in agrofuels

has blurred the line between food and fuel, pushing food growers off

their land and encouraging rampant speculation. Several Latin American

countries have been pushing to re-examine the push for agrofuels and to

have food recognized as a human right, not a mere commodity. United

States Deputy Secretary of State John Negroponte has other ideas. In the

same speech touting the US commitment to emergency food aid, he called

on countries to lower their “export restrictions and high tariffs” and

eliminate “barriers to use of innovative plant and animal production

technologies, including biotechnology.” This was an admittedly more

subtle stickup, but the message was clear: impoverished countries had

better crack open their agricultural markets to American products and

genetically modified seeds, or they could risk having their aid cut off.

Genetically modified crops have emerged as the cureall for the food crisis, at least according to the World Bank, the European Commission president (time to “bite the bullet”) and Prime Minister of Britain Gordon Brown. And, of course, the agribusiness companies. “You cannot today feed the world without genetically modified organisms,” Peter Brabeck, chairman of Nestlé, told the /Financial Times/ recently. The problem with this argument, at least for now, is that there is no evidence that GMOs increase crop yields, and they often decrease them.

But even if there was a simple key to solving the global food crisis,

would we really want it in the hands of the Nestlés and Monsantos? What

would it cost us to use it? In recent months Monsanto, Syngenta and BASF

have been frenetically buying up patents on so-called “climate ready”

seeds—plants that can grow in earth parched from drought and salinated

from flooding.

In other words, plants built to survive a future of climate chaos. We

already know the lengths Monsanto will go to protect its intellectual

property, spying on and suing farmers who dare to save their seeds from

one year to the next. We have seen patented AIDS medications fail to

treat millions in sub-Saharan Africa. Why would patented “climate ready”

crops be any different?

Meanwhile, amid all the talk of exciting new genetic and drilling technologies, the Bush Administration announced a moratorium of up to two years on new solar energy projects on federal lands—due, apparently, to environmental concerns. This is the final frontier for disaster capitalism. Our leaders are failing to invest in technology that will actually prevent a future of climate chaos, choosing instead to work hand in hand with those plotting innovative schemes to profit from the mayhem.

Privatizing Iraq’s oil, ensuring global dominance for genetically modified crops, lowering the last of the trade barriers and opening the last of the wildlife refuges... Not so long ago, those goals were pursued through polite trade agreements, under the benign pseudonym “globalization.” Now this discredited agenda is forced to ride on the backs of serial crises, selling itself as lifesaving medicine for a world in pain.

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About Naomi Klein

Naomi Klein is an award-winning journalist and syndicated columnist and the author of the international and /New York Times/ bestseller /The Shock Doctrine: The Rise of Disaster Capitalism/ (September 2007); an earlier international best-seller, /No Logo: Taking Aim at the Brand Bullies/; and the collection /Fences and Windows: Dispatches from the Front Lines of the Globalization Debate/ (2002). more...

Listen/Watch Donate A daily TV/radio news program, hosted by Amy Goodman and Juan Gonzalez, airing on over 700 stations, pioneering the largest community media collaboration in the U.S.

*AMY GOODMAN: *President Bush has lifted an almost two-decade-old

executive order banning offshore and natural gas drilling. With prices

at the pump over $4 a gallon, Bush has been pushing to allow more

drilling in the Outer Continental Shelf and the Arctic Wildlife National

Refuge, amidst strong opposition from environmentalists.

The executive drilling ban was issued by President George H.W. Bush in

1990. His son’s lifting of the ban yesterday is largely symbolic,

because a separate congressional ban has prohibited offshore drilling

since 1981. Speaking on the White House lawn Monday, the President urged

lawmakers to lift the ban.

*PRESIDENT GEORGE W. BUSH: *The failure to act is unacceptable.

It’s unacceptable to me, and it’s unacceptable to the American

people. So today I’ve issued a memorandum to lift the executive

prohibition on oil exploration in the OCS. With this action, the

executive branch’s restrictions on this exploration have been

cleared away. This means that the only thing standing between the

American people and these vast oil resources is action from the US

Congress. Now the ball is squarely in Congress’s court.

*AMY GOODMAN: *In President Bush’s final months of office, the economy is at the top of the agenda. Oil prices now exceed $140 a barrel, more than double $70 a year ago. The high cost of oil has helped exacerbate the global food crisis that threatens to push over 100 million people below the poverty line due to rising food prices. This all comes amidst an ongoing housing crisis, with the US Treasury and Federal Reserve unveiling sweeping steps to possibly bail out the nation’s two largest mortgage lenders, Fannie Mae and Freddie Mac. Amidst these multiple crises, how best to understand government policies being enacted? Naomi Klein is the author of /The Shock Doctrine: The Rise of Disaster Capitalism/. The book is out in paperback this month. It was first published in September, and in some ways, much of what Naomi writes about in the book is more relevant today. Naomi Klein joins us in our firehouse studio for the hour. Welcome to /Democracy Now!/ *NAOMI KLEIN: *Thank you, Amy.

*AMY GOODMAN: *Food, fuel, housing, climate change—talk about these crises. First, start with oil.

*NAOMI KLEIN: *Yeah, it’s—I mean, there really is a kind of a tsunami of

shocks facing not just the economy but people’s lives, people’s real

lives. They’re all intersecting. They’re making each other worse. And I

think we really are seeing some very live examples of what a write about

in the book, which is how there is a strategy. And this is what I mean

by “the shock doctrine.” There is a clear political strategy, and has

been for several decades, to exploit these moments when people are

desperate for quick-fix solutions and more inclined to believe in a kind

of a magical cure, to push through very, very unpopular policies that

don’t actually solve the crisis at hand, that don’t actually help

people, but are incredibly profitable for multinational corporations.

And I think we are seeing a very vivid example of this with this speech

from George Bush yesterday, where he is taking a very real crisis, which

is demanding complex and profound changes in the way we live, in the way

we organize our economy, but particularly in the need to diversify our

energy sources. And I think there’s a tremendous actual amount of

support for this idea from the public. And he comes in—and I call him in

my recent column the “extortionist-in-chief.” Basically what he’s saying

is he’s holding the country ransom. He’s not taking any of these

long-term policy routes to dealing with climate change, to dealing with

high oil prices. It’s just let us drill, or, you know, nobody can go on

summer vacation. And he’s selling a myth, which is that by allowing

drilling, the price at the pump is going to go down, which is really

interesting, because just yesterday, in response to Bush’s announcement,

oil went up, and oil futures went up. And so, the price of oil is going

to keep going up.

*AMY GOODMAN: *What would—how long would it take the oil drilled offshore, if he succeeds in getting his father’s ban reversed, to get into the supply?

*NAOMI KLEIN: *Yeah. Well, first of all, I think it’s really important

for people to understand that we are being subjected to an incredibly

aggressive media campaign sponsored by the oil and gas industry. And,

you know, it’s to the point where it really is impossible to tell the

difference between the paid advertisements, which we’re being bombarded

with on cable news from the oil and gas industry, talking about how they

can solve the problem of high prices with more drilling, and all of

these commentators, from Larry Kudlow to Sean Hannity, repeating these

talking points, and not to mention Dick Cheney, who just propagated a

complete lie, saying that China was drilling off the coast of Cuba, and

the Vice President’s office actually had to retract that. It turns out

his source was George Will, who also had to issue a correction. China is

not drilling off of Cuba. And so, there’s a very aggressive campaign

going on.

The reality is, it would take between five to ten years to see any of

that oil. Everybody admits this. Everyone knows this. You have to do the

exploration, then you have to build the rig, which takes a huge amount

of time. So it takes—we’re talking about as long as a decade to see any

of this oil.

So when you press people who are selling this drill in ANWR, more

offshore oil drilling, also drilling into the shale in places like

Montana, what they actually say is that the reason why it will lower

prices at the pump, you know, soon, this summer, is because it will send

a message to the stock market, it will send a message to the oil

speculators that more supply is on the way. So, essentially, what

they’re saying is, let’s play the market, let’s collectively play the


And that’s why it’s significant that yesterday, in the face of Bush’s

announcement—and it was a significant announcement, because it was a

real indication of the seriousness of this administration to really make

this their, you know, final push in office, and they could well win,

because this media campaign is really bringing public opinion on side,

and we know that the Democrats are pretty weak in the face of that

public opinion, and the only thing that they could fight this with is

with real commitment to green policies. And, you know, don’t hold your


*AMY GOODMAN: *What does this offshore drilling, lifting the ban—how would you relate this to what’s happening in Iraq right now and what’s happening at the Oil Ministry and the pushing through the permanent occupation that the Bush administration is pushing hard for?

*NAOMI KLEIN: *Well, I think we’re seeing the Bush administration in its

final months just handing out a series of gifts to the oil and gas

industry, both at home, pushing for opening up the Arctic National

Wildlife Refuge, and then in Iraq, the prize, the biggest prize of all,

which is allowing foreign multinationals to gain control of Iraq’s oil

fields. And we’re seeing a two-stage process now, and it isn’t over yet,

where first there was the service—the short-term service agreements,

no-bid contracts, that were announced. They haven’t been signed yet, but

they’re going to the big oil companies that were kicked out of Iraq in

the ’70s. They’re coming back.

*AMY GOODMAN: *Explain how that works, these no-bid contracts, how it is—who’s signing these contracts?

*NAOMI KLEIN: *OK. Well, at the moment, Iraq does not have an oil law, so Iraq can’t sign long-term exploration agreements, although they are doing it in Iraqi Kurdistan, and we’ve heard about this with Hunt Oil. But that’s—those are illegal contracts. They’re very precarious. There could be future expropriations. It’s really risky to go that route, because there isn’t a law. And we know it’s been a major push of this administration to get the Iraqi parliament to accept a US-backed oil law. This has been sold as a symbol of Iraqi unity. That’s not the way it’s seen in Iraq.

In Iraq, the reason why it has been years in resisting this oil law is

because nationalizing the oil in Iraq was the centerpiece of the

anti-colonial struggle, as it was in neighboring nations throughout the

Arab world. And it is not just a pro-Saddam idea. It is not just a

Baathist idea. It’s the core of Arab nationalism. And that victory is

being protected by many political forces in Iraq, and most notably by

the oil workers’ unions in Iraq, who said, “We don’t need these foreign

multinationals to get the oil out of the ground. We can do it ourselves.

We can bring in technical support without giving away management

control, without giving away ownership control.”

And, I mean, but let’s stress here that unlike the oil offshore, unlike

the shale, this is very difficult oil to extract. It’s extremely—it

requires a huge amount of technology. It requires a huge amount of

investment. And that’s part of the problem with what the Bush

administration is selling. These—actually, they—the oil companies need

the price of oil to stay high in order for it to be economically viable

to do these—to get oil out of solid rock, for instance, which is very

hard, very expensive. Offshore oil drilling, also very, very

expensive—you have to build the rigs and so on. Iraq, no. Iraq, stick a

straw in the ground and suck. I mean, this is incredibly accessible oil.

And Iraqis actually know how to extract this oil themselves. So this

idea that they need these foreign multinationals to come in is yet

another myth.

And not only have companies like BP and Texaco been offered these no-bid

contracts, but what’s strange about it is that they’re service

contracts, and these are not oil service companies. So what’s

significant about these contracts is that they appear to be giving these

oil companies the right of first refusal on future, more significant

contracts. So, one week after these smaller service agreements were

announced, the Iraqi Oil Ministry announced that they also will be

handing out longer-term management agreements, which will give oil

companies the ability to manage existing fields in Iraq and hold onto 75

percent of the worth of those contracts and leave only 25 percent for

Iraqis, which is absolutely unheard of in the region, where 51 percent

for the country is the baseline for new exploration, for new fields.

These are existing fields. They’re already working. The technology is

already there. And these foreign companies are going to be taking 75

percent of the worth of those existing fields in Iraq. So it’s daylight

robbery. It’s armed robbery, actually, Amy.

*AMY GOODMAN: *We’re talking to Naomi Klein. Her book is just out in paperback, /The Shock Doctrine: The Rise of Disaster Capitalism/. We’ll keep talking about oil. She’s a Canadian journalist, and we’re going to find out about, well, the largest supplier of oil to the United States. No, it’s not Saudi Arabia; it is Canada. And, well, Naomi is just back from China, so we also want to find out what she’s been investigating there, what she says is the building of a police state with the help of US military contractors. And we’ll find out why she’s suing the US government. Stay with us.


*AMY GOODMAN: *Our guest for the hour is Naomi Klein, the award-winning journalist and bestselling author. Her book, /The Shock Doctrine: The Rise of Disaster Capitalism/, is just out in paperback. It’s being translated now into twenty-five languages. And by the way, she’s speaking here in New York at Barnes & Noble, Union Square, tomorrow night at 7:00 p.m.

We’re talking oil. Naomi, how is it that the oil prices are, well, among

the highest they have ever been, and yet so are the oil company

profits—ExxonMobil, Chevron—why?

*NAOMI KLEIN: *Well, they have a captive market, and the fact that the price is high means that they are earning more profits.

*AMY GOODMAN: *But supposedly the price is high because it’s harder to get, not to give them more money.

*NAOMI KLEIN: *There’s a speculative bubble going on right now, and this

market is being played. I mean, I think this is really the new bubble.

Actually, it’s replacing the housing bubble. And, you know, any time

anything bad happens in the world, that’s the indication for speculators

to drive the price up. It happened yesterday. Bush announced that he

would be opening up to offshore oil drilling, but at the same time,

there was an oil strike in Brazil, so the price of oil went up. So

everything drives the price of oil up. I think it’s really a classic

bubble. Certainly, there are some supply issues, but I actually don’t

think that that is the main reason why the price of oil is going up.

*AMY GOODMAN: *You’re from Canada. Talk about Canada being the major supplier of oil to the United States. I think most people in this country would not understand this. And I also want to talk about ANWR, the Arctic National Wildlife Refuge.

*NAOMI KLEIN: *Yeah. Well, it’s really striking, because in all of these

discussions—and we heard this just now from President Bush—it was, we

need to drill offshore to get away from our dependence on foreign oil,

and there is still an overwhelming perception that most of the oil in

the United States is coming from countries like Saudi Arabia. There has

been, since the invasion of Iraq—and this is the period where the price

of oil has skyrocketed—this has already changed. The number one supplier

of oil to the United States is not Saudi Arabia, it’s not Mexico—it’s


And it has all of the elements that these new initiatives that are being

proposed—offshore, ANWR, shale—possess. It’s close. It is an absolutely

secure source of oil for the United States, and the reason for that is

because locked into the North American Free Trade Agreement, locked into

NAFTA, is a clause that we Canadians are really not very pleased with,

which actually makes it illegal, impossible, under NAFTA, for Canada to

turn off the tap, even if /we/ face an oil crisis and are not able to

supply oil for our citizens. We have to keep supplying the United

States. So it’s a legally binding agreement that this tap will stay

open. So Canada is now the number one supplier.

And the other that it holds in common is that it’s ecologically

devastating, what’s going on in Canada, because the majority of this new

oil coming to the United States is coming from the Alberta tar sands,

which are often called the “oil sands.” We call them the “tar sands,”

because it’s a more accurate description. And this is another oil

industry talking point, to get you to stop calling it the “tar sands”

and start calling it the “oil sands.”

But essentially, the oil in Alberta is very linked to the high price of

oil, which is to say that when oil was at $30 a barrel, the tar sands,

this huge oil deposit, was not counted as part of the global oil

reserves. And the reason for that is that it was so expensive to process

this very, very thick tar-like substance into liquid oil. It costs

between $25 and $30 a barrel, so it just didn’t make sense to count it

as part of the global oil reserves, because who was going to make the

investment required if they were obviously not going to get a return on

their investment? So once the Iraq war started and the price of oil

started skyrocketing, oil was discovered in Canada. Everyone knew it was

there, but it became part of the global oil reserves. More than that, it

is now counted as the largest oil deposit in the world. These are the

tar sands.

And, you know, I would argue that this oil should be left in the ground.

Environmentalists are calling for a moratorium on the tar sands, because

it takes three times the amount of fossil fuels, of burning fossil

fuels, to process one barrel of oil from the tar sands as it does to

process the kind of oil that they have in Iraq, for instance, which is

already in liquid form.

*AMY GOODMAN: *So you dramatically increase emissions.

*NAOMI KLEIN: *It’s why Canada has become a climate renegade, along with

the United States, because our emissions are increasing because of the

tar sands, because it is so carbon-intensive and water-intensive—which

is another issue—to do this very, very dirty processing of this tar-like

substance into liquid form. So the argument is that it should actually

be left alone.

But the other argument that we see is that even with this huge boom

going on in Canada—and this is the reason why our economy is actually

doing better than the US economy, because of the tar sands—is that it in

no way has affected the price of oil. So, here you have a paradigm to

look at of what is being proposed right now with ANWR, what’s being

proposed with offshore, what’s being proposed with shale. We can see it

right now in Canada. And as this huge boom is taking place, the price of

oil has gone up month after month after month, and it has had absolutely

no effect on the price at the pump.

*AMY GOODMAN: *We’re talking to Naomi Klein. Naomi, you’ve been writing a lot on a number of issues. One of them is about what you call Obama’s Boys.

*NAOMI KLEIN: *Obama’s Chicago Boys, yeah. I just want to add one more point, and I just want to take this opportunity, because I feel like people are being so bombarded with these oil industry talking points, and it really is changing public opinion. I mean, people need to know this. There’s—polls are being commissioned that are finding that 67 percent of Americans support offshore oil drilling, because they think it’s going to lower the price at the pump.

What’s actually going on is the oil companies may not even bother

drilling. What they’re doing is they’re stockpiling leases. And what

that means is that the oil companies will have a much greater control

over the oil supply. When the oil companies have a much larger control

over the oil supply, they can turn it on and off. They can control

price. They can fix the price. So, in fact, what this is doing is the

opposite of what they’re saying. It’s actually giving the oil industry

much more power to drive the price of oil up by controlling supply, by

just giving them all of these leases. And we keep hearing, well, they

have all these leases already, and they’re not using them, and they want

more. Why? Why do they want all these leases? Because that is what gives

them control over supply. That’s what allows them to fix prices.

*AMY GOODMAN: *In fact, this has united you with people across the

political spectrum. You’ve been invited on a number of right-wing radio

talk shows, because everyone is deeply concerned about the price of oil.

They just have different solutions for what should happen.

*NAOMI KLEIN: *Right. But, you know, there was this little window, Amy,

where even Bill O’Reilly was talking about the obscene profits of the

oil industry—it was like three days—where people were—where the logic of

the situation was just so glaring, where, you know, you have Shell

reporting $7 billion in profits in one quarter. People are very

concerned about climate change. And it just makes sense to take some of

those profits in the form of a windfall profit tax or some other measure

and—because these are the companies that have created this crisis for

us—and using this moment.

And let’s remember that this is what countries around the world are

doing. They’re using this moment of high oil prices to invest in

alternative energy and alternative infrastructure. The way to make solar

and wind work, you know, is not just to do venture capitalism for

startup solar and wind companies. These companies need major investment,

need states to make major investments in infrastructure that can carry

these new energy sources, new grids. This can only be done by the public

sector. And this is actually a moment of opportunity, when there is such

high prices, when people are so angry at the oil companies, to actually

take some of this money and invest it in the public sphere, so that

alternative energy becomes viable.

And there was a moment where there seemed to be some agreement about that, even on the right. And then, it just shifted because of this very aggressive barrage coming from the oil and gas industry, which is selling this false hope of “drill now, pay less.”

*AMY GOODMAN: *Naomi Klein, Obama’s Chicago Boys, who are they?

*NAOMI KLEIN: *Well, one of them is Obama. Obama spent ten years teaching at the University of Chicago Law School, which is a very conservative law school. You know, I wrote a column recently talking about how conservative Obama’s economic roots are, with his ties to the University of Chicago.

His first response to the mortgage crisis, let’s remember, was he was

worried about the government taking action to keep people from being

evicted from their homes, because that would create moral hazard. And he

was not talking about the big companies, the big mortgage lenders; he

was talking about individual low-income people being thrown out of their

homes. He was worried about moral hazard. That’s a very University of

Chicago take on the situation.

And yeah, one of his—his chief economic adviser was Austin Goolsbee, this University of Chicago economist. And, you know, now his chief economic adviser is Jason Furman, who is not a University of Chicago-affiliated economist, but is certainly on the right of the economic—Democratic economic spectrum, has defended Wal-Mart, has attacked critics of Wal-Mart, saying that they’re doing more harm than good, that actually Wal-Mart is a progressive institution that is helping low-income people with their low prices, and that living wage campaigns, for instance, are actually hurting low-income people. So these are pretty conservative ideas, and I think it is important for people to understand that this is who Obama has chosen to take his advice from.

*AMY GOODMAN: *This is very interesting, because, of course, he really slammed Hillary Clinton when it came to her tenure on the board of Wal-Mart.


*AMY GOODMAN: *And he said he wouldn’t shop there.

*NAOMI KLEIN: *It’s true. He said both of those things, and it is a political campaign, and we’re seeing a lot of double talk on these issues. Austin Goolsbee, for instance, got himself into some trouble after he met with Canadian consulate officials. And they left that meeting with the distinct impression that he had told them that they shouldn’t listen to what Obama’s saying about NAFTA and renegotiating NAFTA for labor and environmental standards, because it’s just an election campaign. So it would seem that perhaps we should take Obama’s Wal-Mart comments in the same spirit. But, you know, my message on—

*AMY GOODMAN: *And yet, you have him speaking—Obama himself being quoted

in /Fortune/ magazine, after he had said that that whole—well, what

became a sort of little scandal there, with Goolsbee going to the

Canadian consulate—


*AMY GOODMAN: *—at the time when he was going through the states where

labor was stronger, where he was really slamming NAFTA, saying this

wasn’t true, that he was telling them, “Don’t worry. It’s just

overheated rhetoric.” And then he said that precise thing, Senator Obama

himself, in /Fortune/.

*NAOMI KLEIN: *That it was overheated rhetoric. Yeah, exactly.

*AMY GOODMAN: *That he supports NAFTA and free trade.

*NAOMI KLEIN: *And it’s—you know, it’s shades of Bill Clinton’s first

campaign, where he also campaigned very actively about labor and

environmental standards and NAFTA. NAFTA had already been signed, but it

hadn’t come into law. And then there was a turnaround, and there was a

turnaround in the transition period, after the election but before he

took office, where there was a sort of fateful meeting.

And I think the fear is that some of the same people, like Rubin,

responsible for, you know, Rubinomics, which turned into Clintonomics,

which was, you know, the Democratic full-scale embrace of the ideology

of privatization and so-called free trade, that this same sort of group

of people are following—are now surrounding Obama. And Jason Furman is a

Rubin protégé and worked with him at the Hamilton Project, which is a

sort of sub-think tank of the Brookings Institution, which emerged a few

years ago to prevent the Democratic Party from embracing what they saw

as populist economic policies, the centerpiece of which would have been

a reexamine of the ideology of free trade, which is being discredited

around the world.

*AMY GOODMAN: *So, you have Obama on NAFTA, people perceiving that he’s changing his position. And then you have the major issue of FISA, where even on his own website—and many say—

*NAOMI KLEIN: *Well, just to be clear on economics, I mean, I think what

we actually saw with Obama is that he started pretty much at a

conservative point on economic policy, and Clinton—and the campaign with

Clinton, because she was moving so far to a populist position, he then

moved. And as soon as she dropped out of the race, he moved back. So I

think there are some real points of disagreement, and I think that there

are some places to point to much more progressive outlook in Obama’s

roots, particularly on foreign policy, but I don’t think economic policy

is one of them.

*AMY GOODMAN: *He had called the free trade agreement, in the debates with Hillary Clinton and with John Edwards, “a mistake.” He called it “an enormous problem,” but now, with /Fortune/, said, “Sometimes during campaigns rhetoric gets overheated and amplified. My core position has never changed. I’ve always been a proponent of free trade,” which you say actually is true.

*NAOMI KLEIN: *And he appointed Jason Furman the day after Hillary

dropped out of the race. Yeah. So, it was—as I said, I really think he’s

moving back to actually where he started, with his first reaction, as I

said, to the subprime mortgage crisis being, well, we can’t keep

low-income people from being evicted, because we have the moral hazard

of encouraging them to make bad loans, essentially blaming them for

having been—having accepted these mortgages in the first place.

*AMY GOODMAN: *So now you have FISA, and you’re suing on this issue. But

on December 17th, a press release from Obama’s Senate office read:

“Senator Obama unequivocally opposes giving retroactive immunity to

telecommunications companies and has cosponsored Senator Dodd’s efforts

to remove that provision from the FISA bill. Granting such immunity

undermines the constitutional protections Americans trust the Congress

to protect. Senator Obama supports a filibuster of this bill, and

strongly urges others to do the same.” Ultimately, of course, he

supported the bill, and it just passed, and the telecommunications

companies got the retroactive immunity that they had sought.

*NAOMI KLEIN: *Yeah, and I think we should see this as part of these parting gifts that the Bush administration is handing out to their cronies in the oil and gas industry and also in the telecommunications industry. And we really see the priorities of this administration. It’s a tremendous disappointment.

The lawsuit that you mentioned is, I think, a really forward-looking

initiative from the ACLU, where they’ve been anticipating, hoping that

this wouldn’t happen, that there would be a legal defeat of this—of the

bill in Congress and the Senate. But, of course, they were realistic and

knew that there was a good chance of a cave, and so the ACLU has been

preparing a lawsuit, and I think it’s really the ACLU at its best, which

is defending the law when the lawmakers decide not to.

And they’ve brought together coalition of human rights groups, different

NGOs, who do a lot of international work, as well as journalists,

who—and we’re all saying—I’m one of the complainants on behalf of /The

Nation/, me and—Chris Hedges and I and /The Nation/ are named in this

lawsuit, and we are all saying that the fact that our communications

with international sources, with international colleagues, are now open

to absolute, free surveillance, with no restrictions whatsoever,

severely limits our ability to do our job.

And I think the most disappointing thing about the way in which Obama

and other Democrats have defended their reversal on this law is that

there’s a tremendous amount of dishonesty about what is in the law. I

mean, they’re having to say that they’ve gotten all of these

improvements, that it’s much better, that there’s much less to worry

about, in order to justify their, I think, deeply immoral position. And

so, there’s a lot of misunderstanding now about just how bad this law is.

And it’s just as bad as we feared, not just on the immunity for the

telecoms, which is a disaster, but, more importantly, the fact that

there, you know, is no burden of proof, except to say that the party

being put under surveillance is outside of the United States. So if I’m

communicating—I’m in the United States and I’m communicating with

somebody in Argentina, they don’t—the government does not have to prove

that they have reason to believe that that person in Argentina is

affiliated with a terrorist group, is a suspected terrorist, has

information about terrorism. All they have to prove is that they are not

an American.

*AMY GOODMAN: *We’re talking to Naomi Klein. We’re going to come back to

this conversation. If you’d like a copy of the broadcast, a DVD, you can

go to our website at Naomi Klein’s book has just been

launched in paperback, /The Shock Doctrine: The Rise of Disaster

Capitalism/. The Olympics are coming back. Naomi Klein is just back from

China. We’re going to talk about what she found there. She’s talking

about the rise of a police state with the help of US military

contractors. Stay with us.


*AMY GOODMAN: *Our guest is Naomi Klein. Her book is just out in

paperback. It’s called /The Shock Doctrine: The Rise of Disaster

Capitalism/. We were talking about Obama changing, or not, his

positions—also have to talk about Iraq, both Obama and McCain. And then

we’re going to go to the food crisis, as well as China, what’s happening


*NAOMI KLEIN: *Well, on Iraq, Obama does not have a plan to end the occupation; he has a plan to downsize the occupation slowly. He’s been clear that he wants to keep the Green Zone intact. You’ve covered this extensively on the show. And that means, as Jeremy Scahill has made clear, that means that they have to keep Blackwater in Iraq.

So, I think that the point of this is not just to bash Obama. I mean,

what I’ve been trying to—the point I’ve been trying to make is that

Obama needs more than super fans. He needs pressure from his base,

because he has all the energy of the antiwar movement and the antiwar

infrastructure. I mean, you’ve got groups like MoveOn that really built

their infrastructure out of the huge anger and desire for change around

Iraq, and now the infrastructure of the antiwar movement largely is

going to support Obama, but there aren’t clear demands being made of him

to deserve that support.

*AMY GOODMAN: *He’s now calling for 10,000 more troops to go to Afghanistan.

*NAOMI KLEIN: *And, you know, the corporations who are funding Obama’s campaign, one of—somebody who I referred to as one of Obama’s Chicago Boys, I was talking about Ken Griffin, who is a Chicago hedge fund manager who used to be a Bush campaign pioneer, was a Republican, and has switched to Obama, basically because he’s run the numbers and he believes Obama is going to win.

But I think what we have to understand is, with all the Wall Street money coming to Obama, with the weapons money coming to Obama, with the hedge fund money coming to Obama, these players have leverage. They can go to the Republicans. And so, what’s the leverage of the antiwar movement? You know, what’s the leverage of the grassroots supporters of Obama who have given him their trust, because they want change so badly on the environment, in Iraq, on domestic economic policy?

*AMY GOODMAN: *Well, isn’t the alternative, McCain says a hundred years in Iraq?

*NAOMI KLEIN: *Well, that’s the alternative. And I think, you know, this

is part of the problem of this two-party system. And, you know, I saw

Ralph Nader recently, and he said, “You know, progressives and liberals

don’t know how to play poker. There has to be somewhere to go.” And, you

know, I think that’s part of it. But I don’t think it’s just about third

parties. It’s also about having independent movements that provide

conditional support to candidates and not this sort of blank check, rock

star, we’ll support you no matter what.

*AMY GOODMAN: *Well, of course, people do have some place else to go, which is—we’ve seen it over and over—the American people have made it very clear: stay home.

*NAOMI KLEIN: *Stay home. That’s true, and that’s a credible threat. But

I think Obama needs to hear a much more conditional, much more critical,

much more demanding kind of support from his base, because his base is

far to the left of the types of policies that we’re seeing and that

we’re talking about here, whether it’s the mortgage crisis, whether it’s

NAFTA, or whether it’s Iraq.

*AMY GOODMAN: *Food crisis now around the world.

*NAOMI KLEIN: *Yeah. Well, this is—you know, this is another example of

how the shock doctrine, the strategy that I document in the book of

using a crisis, using a situation of desperation, often a situation

where developing countries need foreign aid, because they’re facing a

disaster, to leverage very, very unpopular pro-corporate policies. Now,

you know in the book the examples that I give are, for instance, how the

tsunami in Asia was used and the fact that countries like Sri Lanka

needed aid, and in that moment you had international lenders coming in

and saying, “Oh, well, we’ll give you aid, but we want you to privatize

your water, your electricity system, hand the coastline over to resorts.”

Well, we’re seeing a version of this. We’re seeing a version of disaster

capitalism in the context of the food crisis, where you have that same

desperation, you have a need for aid, for debt forgiveness, for new

policies, and now we’re hearing another sort of echo chamber response

from the World Bank, from the US State Department, from the agribusiness

companies, and that refrain is, the cause of the food crisis is that too

many of these countries don’t allow genetically modified foods, and

genetically modified crops can feed the world and solve the food crisis,

so trying to use this crisis to break through a legislative barrier that

exists for good reason, just as domestically in the United States the

oil crisis is being used by the Bush administration to try to break

through the bans on offshore oil, on ANWR.

So now we have this other talking point that we’re hearing again and again, which is genetically modified foods can feed the world. There is no scientific evidence for this. Quite the opposite. Genetically modified seeds do not increase yields for crops. They increase profits for agribusiness companies. They simplify farming. But they don’t increase yields, and in many cases they decrease yields.

*AMY GOODMAN: *Because?

*NAOMI KLEIN: *Because this is actually not what they’re genetically modified to do. I mean, if you think about Roundup Ready, I mean, what it’s genetically modified to do is be compatible—

*AMY GOODMAN: *You mean the soy and the fertilizer?

*NAOMI KLEIN: *Yeah, to be compatible with Monsanto’s [herbicide]. It’s not about increasing crop yields. And they haven’t actually figured out the technology for how to increase crop yields.

One of the things that I find really worrying is that companies—and

similar to the oil crisis, Amy, we’re seeing record profits from

Monsanto, from Cargill, from all the big players, in the context of the

food crisis. We’re also seeing something else, which is that these

companies are buying up hundreds of patents on seeds that they claim are

“climate-ready.” “Climate-ready” is—we’ve heard about Roundup Ready,

which means they’re ready for roundup [herbicide]; now, the new phrase

is “climate ready,” which means they’re ready for climate change, which

means that these seeds apparently can grow in the context of drought,

can grow in the context of highly salinated earth because there’s been a

flood. And Monsanto and Sargenta, other of these big biotech companies,

have bought up hundreds of these patents.

And this is worrying on many levels. I think it’s worrying, because,

once again, we’re seeing a disincentive to actually get us out of a

future of climate chaos, because we see ways to profit. But then, when

we look at how aggressively we know a company like Monsanto protects its

patents, when it comes to their Roundup Ready seeds, the suing of small

farmers, the surveillance of farmers—there was an incredible story

recently in /Vanity Fair/ about the heavy-handed legal tactics and use

of private security, just harassing farmers who dare to save their seeds

from one growing season to the next, breaking Monsanto’s patent. So if

they really are developing seeds that are climate ready and they’re also

patenting them and buying them up, then really what we’re seeing is not

a future of feeding the world, but once again a future of a kind of

climate apartheid, where it becomes less accessible and more expensive

to have the crops that will grow in this future.

And so, I think people need to identify this right away, and the

discussion needs to be about the right to food, about food being a human

right. This is far too important to allow players like Monsanto to

privatize the future of the crops that can grow within a context of

climate change.

*AMY GOODMAN: *Naomi Klein, we only have five minutes, and I really want

to get to the piece you did in /Rolling Stone/—you just returned from

China—“China’s All-Seeing Eye.” “With the help of US defense

contractors, China is building the prototype for a high-tech police

state. It is ready for export.” Tell us what you found?

*NAOMI KLEIN: *Well, yeah, I was in China a couple months ago, and the

piece came out recently, and you can read it still on the Rolling Stone



And I concentrated on the Pearl River Delta, on the city of Shenzhen.

And, you know, this is the part of China that is really the—I guess the

sweatshop to the world, their workshop to the world. This is where

probably half of everything most us own is made. Hundreds of thousands

of factories, a lot of technology, a lot of garments. It is now a new

kind—it’s always been a laboratory for this manufacturing model, for the

globalization manufacturing model, and it was born as a laboratory. The

city of Shenzhen didn’t exist in 1980. It was a collection of fishing

villages. And now it’s a city of more than 12 million people.

And there’s a new experiment happening in Shenzhen, where a high-tech

police state is being built. And there are hundreds of thousands of CCTV

cameras, of surveillance cameras, in the city. There are plans to have

two million cameras in the city of Shenzhen and to network them, which

is the key, so that they’re all part of the same network. They can be

monitored from a centralized police location. And it isn’t just the

cameras on the streets. It’s cameras in internet cafes, cameras in

private restaurants, so a total convergence between the private and the

public when it comes to putting the people under surveillance.

And the money for building this high-tech police state—and it includes

also biometric IDs, facial recognition software. It’s sort of the future

that has already been imagined in multiple sort of science fiction

films, but that we actually don’t yet have in North America yet, because

there are still some civil liberties and privacy protections that

prevent all of the technologies from being networked together to create

this all-seeing eye. In China, you have the perfect situation, because

you have a government that actually makes no claims for the rights to

privacy of its citizens. And so, corporations like General Electric,

Honeywell, have been flocking to China, and they’ve been delighted that,

first of all, they’ve been able to get contracts—

*AMY GOODMAN: *And General Electric, which owns NBC.

*NAOMI KLEIN: *Which owns NBC. A lot of the contracts have been issued

in the name of Olympic security. Olympic security is—you know, we know

the Olympics are always massive corporate welfare endeavors, with new

stadiums, new infrastructure. Well, now, in the post-9/11 context,

Olympics are also huge business for the security industry. The Olympics

provides the excuse for massive new investments in cameras on public

transit, checkpoints and subways, biometric identification cards. And

we’re seeing this in Vancouver, which has the 2010 Olympic Games. But in

China, it’s completely out of control.

Just to put this in context, the estimate is that China is spending $13

billion in the name of security for the Olympics. And let’s remember,

all of these toys that are being sold to the Chinese government by

companies like General Electric are staying after the Olympics and to be

used against the domestic population. So it gets installed in the name

of protecting the athletes, protecting the foreign dignitaries, but it

stays and is able to be used against the local population, and I think

in violation of the sanctions policies that were passed after the

Tiananmen Square massacre, which actually made it illegal for American

companies to sell police equipment to the Chinese government, precisely

because it can be used to repress the population. But now, because it’s

being packaged as antiterrorism security in the context of an

international event, they’ve sort of found a backdoor way into it. But,

yeah, once again, to put it in context, Amy—and I know we’re running out

of time—$13 billion for Olympic security in Beijing this summer. The

first Olympics after 9/11 were in Athens, and they spent $1.5 billion.

So, since Athens, the increase in security spending has gone from $1.5

billion to $13 billion.

*AMY GOODMAN: *You talk about Police State 2.0 not looking good from the

outside, but on the inside it appears to have passed the first major test.

*NAOMI KLEIN: *Right. And that was a reference to the ways in which these technologies were used in Tibet during the crackdown against protesters in riots. What we saw is that the Chinese government really let the riots get out of hand in Lhasa. And what they did is they just concentrated on filming. So there was a lot of violence, and the CCTV cameras that had been installed in Lhasa—

*AMY GOODMAN: *Closed-circuit TV.

*NAOMI KLEIN: *The closed-circuit TV cameras. Also the police and

military did a lot of their own filming. And then they cut together this

sort of “Tibetans Gone Wild” videos, and that’s what passed for

journalism, because, of course, they kept the foreign journalists out of

Lhasa, and so it was just the surveillance footage that they showed to

the world to try to turn public opinion against the Tibetans.

But more than that, we also saw the ways in which the internet companies

cooperated with the Chinese government. So they used the surveillance

cameras to extract photographs and made a most-wanted list of twenty-one

Tibetans who they wanted to arrest, and then those wanted lists were

posted on all of the portals in China, including briefly Yahoo’s portal

and MSN’s portal.

*AMY GOODMAN: *And what does that mean? They posted them, and then…?

*NAOMI KLEIN: *And then they took them down, because, of course, there’s

been a lot of controversy about American companies, like Google and

Yahoo and Microsoft, cooperating with the Chinese government to go after

dissidents and so on. So they’ve been called before Congress on this.

It’s been a public relations disaster for Yahoo. And this was another

example of that kind of cooperation.

*AMY GOODMAN: *Well, as we move into the Olympics, we’re going to have you back, Naomi. Thank you so much for being here. Her book is called /The Shock Doctrine: The Rise of Disaster Capitalism/, just out in paperback.

Preliminary Notes From No Man’s Land

July 14, 2008 By Jeffrey St. Clair

and Joshua Frank

Jeffrey St. Clair’s ZSpace Page

/The following is an excerpt from the new book /Red State Rebels: Tales

of Grassroots Resistance in the Heartland/, published this month by AK

Press. To learn more about the book, please visit



We are not supposed to exist.

According to the political Steinberg map of the nation, we come from no

man’s land, fly-over country, the unredeemable middle, where political

progressives are as rare as a Hooters in Provo, Utah.

We are children of the wasteland. The rural outback. Where folks carry

guns and use them. Where fenced compounds and utopian communes exist

side-by-side with a cyanide heap-leach gold mine. Out here cell phones

don’t work. Not yet, anyway. And some of us would like to keep it that way.

Frank grew up on the wheated plains of eastern Montana. St. Clair hails

from the humid cornfields of central Indiana. These states span the

glaciated heart of the continent, a region carved and ground-smooth by

the weight of ice. From a distance, the terrain of the Great Plains

appears homogenous.

From a distance so do its politics and demographics. You must look closer to discover the diversity, the radical nuances.

Even the Republicanism of Indiana, sired as it was by the rigid

Lutheranism of German immigrants, is wildly different from the

libertarian, anti-government Republicanism of Montana and the Rocky

Mountain Front. They are not one. Except on the two-color map of

American politics, or Barack Obama’s electoral playbook, which writes

off this vast region almost completely.

* *

Neither of us fit in the geo-ideological matrix contrived by the

mainstream political establishment. Neither do thousands of others,

left, right and anarcho-libertarians, who reside in the forgotten

midsection of the nation.

And not all of us are children of Ken Kesey and Ed Abbey. Some follow in

the footsteps of David Koresh, Reies Tijerina, Randy Weaver, Elvira

Arellano or Mary Dann.

A Red States rebellion is breaking out. It’s been going on for some

time. Since Reconstruction in the South and even longer in the West. The

true West of Wyoming and Utah, Idaho and Arizona. Where the stakes are

high and the odds are long. And the battles are waged over the

essentials of life: water, food, wilderness, human liberty.

Take abortion. Largely cast as an urban issue by the flyover press, the

real crisis and militant resistance is happening in Utah, South Dakota,

Mississippi and Idaho-states where unwanted pregnancy rates are high and

abortion clinics are sparse and marked for extermination.

Consigned to death row, the loneliest and most forbidding place in

America? Fighting for your life against the conveyor-belt execution

industry of Texas is qualitatively different from the struggle in

Illinois or California where activists and Ivy-league trained litigators

are lined up to give aid. In the grim chambers of the row of interior

America you can’t expect to enjoy the right to a competent lawyer, a

fair judge or crusading journalism students. It’s just you against the

death machine.

Or try being an environmentalist in the toxic towns of Libby, Montana or

Tonopah, Nevada, where cancer rates are soaring, the death threats don’t

stop at prank calls and the cops are more likely to kick your ass than

rush to your defense. It’s a lonely and dangerous struggle. But people

are doing it. Thousands of them. Fighting as if their lives depended on

it-which, of course, they do.

Out here there are no fixed blueprints for resistance. No organizational

flow charts for how to plot a rebellion. No focus groups or pulse polls

or field-tested PR strategies or genteel formalities for grant

applications. Marx would be confused. The human spirit is the best

guide. When Peabody Coal announces its intention to evict your

grandmother, dynamite her hogan and strip-mine the family sheep pasture,

you don’t have time to consult Weiden and Kennedy for how to spin it to

your advantage or wait around for a year on the infinitesimal chance

that Pew Charitable Trusts might drop you a few* *bucks.

You must act. As a group if you can, unilaterally if necessary.

Militantly if you must.

While the Forest Service sparks a chainsaw in the outback of Wyoming no

progressive from Vermont is going to stop them from ravaging the

countryside. That job is left to the people who inhabit the places that

are under assault day in and day out.

When the ATF or FBI come busting through your kitchen door, rousting you

at gunpoint from your bed, roughing up your children, accusing you of

being a rightwing crazy, an illegal immigrant or an animal liberation

terrorist, the ACLU isn’t likely to speed to Wallace, Idaho to bail you

out of jail and make your case /a cause celebre /for constitutional rights.

In fact, the FBI could burn down your house, incinerate dozens of women

and children, and good liberals in New York and San Francisco will say

you had it coming. They already have. See Waco and Ruby Ridge;

Cove-Mallard and Wounded Knee.

This is the game plan the Feds have used since the inception of our

so-called constitutional republic, and there have always been bloody

consequences. Smoke out the non-conformists, or better yet, murder them.

Of course there is a silver lining for the rest of us, and that’s that

these brave rebels are the true heart of the nation. The people who

bring about real change. They are the freedom fighters. They are the

sons and daughters of César Chávez and Leonard Peltier. Without them,

the government’s assault on its citizens and the environment would

largely go unchecked.

Voting on Election Day, seen as one of the only ways to democratically

vent our collective disgust, doesn’t always do much good. In fact most

of the dissidents in Red America don’t vote at all. And for good reason.

They know the system is rigged. Besides, they don’t trust the government

or its policies anyway. They see what it has done for their families and

loved ones, and that’s not much. They recognize they didn’t enjoy the

benefits of those federal tax cuts. They know their hardware shop went

under because Wal-Mart moved to town. They see that their Grandpa lost

the family homestead because industrialized farms began receiving huge

subsidies from Washington. And they sure as hell don’t trust the

so-called liberal establishment. Why should they? Life under Hillary’s

husband wasn’t any better than it has been under Bush.

The resistance isn’t always about revolution; it’s about maintaining a

semblance of dignity in a world where such a thing is in short supply.

* *

That’s why there has been a resurgence of organic farming in the Red

River Valley of North Dakota where farmers like Todd Leake are fighting

Monsanto and supporting their families through farmer’s markets and

community supported agriculture. If you want to learn about the negative

effects of genetically modified crops, you don’t need to consult a study

by a scientist from Berkeley, just talk to the Nelson family of Amenia,

North Dakota who stood up to Monsanto after the company sued them for

patent infringement.

Or take a trip down to Colorado where feisty environmentalists are

fighting the moneyed interests of billionaire Red McCombs who is trying

to build yet another sprawling ski resort in the heart of the Rockies.

These radical greens are fighting McCombs in the courts and may soon

plant their bodies on Forest Service roads to block his bulldozers.

Since we’re here, may as well take a trip due west to the outback of

Escalante, Utah, where Tori Woodard and Patrick Diehl routinely receive

death threats for their environmental activism. A few years back, a band

of local yahoos vandalized their home, threw bottles of beer through

their front windows, kicked in the front door, trashed the garden, and

cut the phone line to their house. It takes real guts to stand up in the

distant belly of the beast, where defending the Earth usually results in

a face-to-face confrontation with a bulldozer, a taser or a shotgun.

Down in Texas, not far from where the government burned the Branch

Davidians alive, anti-death penalty advocates spared the life of Kenneth

Foster, who was to be put to death for a murder he didn’t commit. Or

traverse Interstate 10 to New Orleans where passionate groups of local

citizens, without much help from the Federal government are slowly

rebuilding their forgotten neighborhoods. Many lost everything in the

devastating, preventable Katrina floods of 2005. But they refuse to give

up. Since we are in Louisiana, why not roll on over to the tiny town of

Jena where protests rage on over the racist incarceration of six black

youths who were unfairly imprisoned for beating a white kid.

This book offers a just a few snapshots of the grassroots resistance

taking place in the forgotten heartland of America. These are tales of

rebellion and courage. Out here activism isn’t for the faint of heart.

Be thankful someone is willing to do the dirty work.

Nope, we’re not supposed to exist. But here we are, in the flesh, with

mud on our boots and green fire in our souls-living examples of what

Greil Marcus calls the Invisible Republic. Deal with it.

Jeffrey St. Clair is co-editor of /CounterPunch/ and author of 11

books, including the best-sellers /Whiteout: CIA, Drugs and the Press/;

/Al Gore: a User’s Manual/; /Five Days That Shook the World/; and most

recently /Born Under a Bad Sky/. St. Clair was born and raised in Indiana.

Joshua Frank, a regular contributor to /CounterPunch/, is the author of /Left Out! How Liberals Helped Reelect George W. Bush/ and with Jeffrey St. Clair of the forthcoming /Green Scare: The New War on Environmentalism/. He hails from Montana.

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We do exist

By Wilson, Brad

/ We do exist, but how well do we all know each other and work with each

other. We do exist. As I recall, the Western Organization of Resource

Councils (WORC) won 7 out of 10 Senators against the GATT/WTO. Can

eastern organizers top that. They’ve since expanded. A key factor is

that they know how to do real organizing, and they have done extensive

training beyond their organization across the region. The Campaign for

Family Farms and the Environment works across Iowa, Missouri, Minnesota

and Illinois on our major social drama: directly confronting the

agribusiness complex. One member, Iowa CCI, has been a national leader

in taking the Community Reinvestment Act into rural areas on behalf of

moderate sized farms and sustainable agriculture. They stopped Senator

Grassley’s “CRA paperwork reduction act in the 1990s. The chairman of

the House banking committee called to concede. CCI’s contribution was to

bring together urban poverty organizing with family farm organizing. Of

course, the victory was won nationally. There too, Working with NTIC in

Chicago and National Peoples Action, midwestern rural people have joined

with inner city people nationwide on common issues. (They have a nice

picture of negotiations with Karl Rove in his garage.) Other groups out

of Des Moines have confronted SAC for years. They tend to just get

arrested, however, and not plan out ongoing negotiation strategies for

those who actually make these decisions. So it’s not what I would call

“real organizing.” I recommend Shel Trapps books “Dynamics of

Organizing” and “Basic of Organizing” which are both online, as well as

Roger Fisher’s books, Beyond Machiavelli and Coping with International

Conflict. The latter books are both what we’d do if we were in power

instead of Bush (which many activists don’t know) as well as how to

achieve real victories. It all needs a lot more discussion, so I’m glad

to join in here. I’d like to see a lot more organized campaigns to hold

local congressional representatives accountable, instead of so much

holding up signs to try to get drivers passing by to do something that

would somehow be effective with whoever actually makes the real

decisions that are wrecking our communities, our region and our world./