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shock“The Shock Doctrine: The Rise of Disaster Capitalism”

by Naomi Klein

2007 Metropolitan Books

I feel confident saying that The Shock Doctrine is one of the most important political non-fiction works of the last decade. This should be a high school textbook, or at least required reading in college. Naomi Klein applies her extensive vision and intellect to present us with a way of seeing our world that is extremely relevant and powerful: in the pursuit of enormous profits, those running the global economy intentionally exploit terrible catastrophes, or even create them, to take things for themselves that only shocked and traumatized populations would give up. This ambulance-chasing strategy of those in power is defined as the “shock doctrine,” and “disaster capitalism”, alternatively known as “neoliberalism” is the dominant social paradigm it has created.

Although there are flaws here, which I will mention, this book is both timely and well-written; Klein carries the reader through a story about grandiose topics like neoliberalism, torture, psychology, and international politics that is fundamentally readable.

The most important contribution made by this book in my view is the dismantling of the myth that capitalism’s global dominance is a function of democracy or destiny. This is the notion that with the defeat of the Soviet Union, all alternatives to “the free market” have naturally faded into history, presumably because capitalism is so irresistible. To the contrary, Naomi Klein provides numerous case studies to show us the exact opposite is true – the temporary triumph of global capitalism has been fertilized by the victims of natural disasters, terrorist attacks, wars, campaigns of torture, and economic calamity. In short, alternatives to capitalism have been shocked into submission wherever they’ve appeared.

This is no accident, it is part of a conscious crusade by market fundamentalists, those devoted to the pseudo-religious belief that “the market solves all.” Klein explains that the shock doctrine was developed (at least in part) by the patron saint of neoliberalism, free-market economist Milton Friedman. In his words, “only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.” And he intended to provide those ideas. It was Friedman’s opus “Capitalism and Freedom” that proclaimed neoliberalism’s core edicts: deregulation, privatization and cutbacks to social services.

Since the 1970s, these teachings have been vigorously applied across the globe by the “holy trinity” of the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). Read the rest of this entry »

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Very well-spoken article poking fun at our enigmatic president, who continues to flirt with both of the groups who brought him to the Big Dance: the corporate/financial elites who paid for his campaign, and the millions of progressive Americans who mobilized and turned out the vote.

Inspirational words, impressive moves, and boyish good looks have kept the two suitors enamored thus far, but at some point Barack’s going to have to choose his partner for the slowdance. So far he’s been sipping punch with the bankrolling capitalists, who have seduced him with fancy airplanes and false promises, but we, the people have to work up the courage to demand his attention if we have any hope of him coming home with us at the end of the night. And we can’t hide our intentions; let’s make clear that partnering with us means rejecting the system that caused this crisis – capitalism. Let’s be realistic and demand the impossible. [alex]

Fred Astaire in the White House

by Michael Brownstein

Originally published by Reality Sandwich, April 13, 2009.

obamadancebig “You can never awaken using the same system that put you to sleep in the first place.”

–Gurdjieff

This is an appeal, an open letter, a cry in the night: no matter how cranky it may make us to brush the stardust from our eyes, no matter how many friends we think we’ll lose by looking long and hard at what’s going on around us, let’s try to stay awake. Let’s not lose touch with what we really want for ourselves. Let’s not forget what we know about the nature of consumer capitalism: it is unsustainable and unworkable because it depends on infinite expansion in a finite world. It can only survive by a violent takeover of what belongs to others. Let’s not settle for halfway measures.

And let’s not wait for deliverance from on high.

Because the president we elected — out of so much hope for a definitive break with what came before — is not who he seems. It’s true that unlike the previous inhabitant of the White House (remember him?), Barack Obama is sane, intelligent, and mature. He’s responsive to what others think. He hopes to institute real change in education, health care, the environment.

But even with his great charisma and silver tongue, he’s a proper soldier for the system which is ravishing the planet. As he said in his inauguration speech in January, already aware of the huge financial mess he was inheriting, “We will not apologize for our way of life.”

What do these words mean? They mean that the mall-i-zation of the planet will continue. They mean that the commercialization of all of life will not stop. They mean that our massive so-called footprint will never be substantially downsized.

And they mean that the force which has erased indigenous cultures and plant and animal species, which has sullied our air and soil and water, will essentially not be called into question, no matter how many of its most glaring excesses may be curbed.

Read the rest of this entry »


“The Tyranny of Oil: The World’s Most Powerful Industry and What We Must Do to Stop it”

by Antonia Juhasz

2008 HarperCollins

Ever wondered why the US government spends trillions of dollars to launch massive wars against Middle Eastern nations that have never attacked us, but refuses to do absolutely anything about the ongoing climate crisis?  This book is for you.

The Tyranny of Oil is an exposee of “Big Oil”, meaning Exxon-Mobil, Chevron, BP, ConocoPhillips, and Royal Dutch Shell, the largest oil corporations in the world (and some of THE largest corporations in the world).  The book exposes how these enormous oil octopi have gained virtually total control over the US government, and use their money and political power to make big profits at the expense of the public and the planet. (For example, Exxon Mobil in 2003 posted the largest profits of any corporation in history, then proceeded to beat that record each of the next 5 years).

It all starts with the origin of Big Oil, the mother, Standard Oil. Juhasz stresses the importance of monopolies and corporate mergers, in a sense missing the deeper analysis of capitalism, but nevertheless we come to understand how enormous companies wielding enormous profits can and do undermine democracy.

The book progresses to tell a story about Big Oil’s development and control over the government agencies that are supposed to be regulating it, and finally Big Oil’s plans for the future (War and Trashing the Planet, basically), before an inspirational chapter on What We Can Do. (There’s also a shoutout to SDS here and to our No War No Warming action in DC last year! Cool!)

This is essential reading for all US citizens, because if you aren’t familiar with the concepts she lays out, you frankly have no understanding of the country you live in.  Environmental racism, corporate lobbyists and corrupt government agencies, the criminal behavior of Cheney’s Energy Task Force, deregulation and Enron-style fraud, tar sands, and the list goes on.

My only major complaint of the book was the virtual silence on the looming and imminent reality of Peak Oil and how this will transform everything.  Juhasz does recognize the scarcity of oil and the likelihood of oil peaking, but chooses to essentially overlook its importance, instead blaming oil companies and speculators for driving up the cost of oil.

This is not just a minor quibble, because the BIG TRUTH is that we’re not just in a struggle against Big Oil, we’re in a struggle against capitalism, and it’s a fight that is reaching perhaps its final act.  Peak Oil will challenge the dominant for-profit institutions of power, and can create an opening for social justice activists and organizers to push for much more radical change than appears possible within the current system.  Nevertheless, this is probably a subject for another book (mine!), and Juhasz treads on steady ground by appealing to a more mainstream audience and demonizing the oil companies exclusively.  This is a very effective book, highly recommended!

Finally, my favorite quote (pg. 325):
“As Paul Wolfowitz said in 1991, ‘The combination of the enormous resources of the Persian Gulf, the power that those resources represent – it’s power. It’s not just that we need gas for our cars, it’s that anyone who controls those resources has enormous capability to build up military forces.'”


I recently posted Dmitry Orlov’s great essay ‘Closing the Collapse Gap‘, and here is his latest piece, which he delivered to the 5th Conference on Peak Oil and Community Solutions.  I am only reposting excerpts, because the original is very long and somewhat repetitive.  I also must warn that although I find Orlov’s insight useful, I have a much more positive view of the collapse of US Imperialism, mainly because I think he is overlooking the benefits of this process for the planet’s ecosystem as well as the possibility of freedom for the majority of the world’s people who are currently suffering under US dominance.  Iraqis certainly will have a different view of the collapse of the US Empire than those in the Pentagon.

How about for Americans? Is the collapse of the US better for people who live here?  Orlov’s conclusion actually indicates that it may be, especially in terms of rebuilding the social fabric that has been worn away by individualism and consumerism.  But he also overlooks the reality of social oppression in the US. Not everyone lives the same “middle class” lifestyle he seems to be taking for granted.  There are already millions of Americans on the brink of poverty, or deep in poverty, who don’t worry about losing their SUVs.

The best outcome is for not just a collapse, but a transformation, so that nobody has to go hungry or work their life away just so that the wealthy can take cruises or visit the spa.  The current Bailouts are the most striking example of the government having the exactly opposite priorities.  Instead of bailing out homeowners, or the poor who lack access to public transportation, they are dumping money into the hands of the real estate and automaking profiteers!  We must continue to oppose this nonsense, from Obama or anyone, and make sure that our money is used for the benefit of the majority, not the wealthy few.  In a world of shrinking wealth, there should be no rich, and there doesn’t have to be any poor either.  [alex]

The Five Stages of Collapse

by Dmitry Orlov
Originally published by Energy Bulletin, Nov. 11, 2008.

1.
Hello, everyone! […] My specialty is in thinking about and, unfortunately, predicting collapse. My method is based on comparison: I watched the Soviet Union collapse, and, since I am also familiar with the details of the situation in the United States, I can make comparisons between these two failed superpowers.

I was born and grew up in Russia, and I traveled back to Russia repeatedly between the late 80s and mid-90s. This allowed me to gain a solid understanding of the dynamics of the collapse process as it unfolded there. By the mid-90s it was quite clear to me that the US was headed in the same general direction. But I couldn’t yet tell how long the process would take, so I sat back and watched.

I am an engineer, and so I naturally tended to look for physical explanations for this process, as opposed to economic, political, or cultural ones. It turns out that one could come up with a very good explanation for the Soviet collapse by following energy flows. What happened in the late 80s is that Russian oil production hit an all-time peak. This coincided with new oil provinces coming on stream in the West – the North Sea in the UK and Norway, and Prudhoe Bay in Alaska – and this suddenly made oil very cheap on the world markets. Soviet revenues plummeted, but their appetite for imported goods remained unchanged, and so they sank deeper and deeper into debt. What doomed them in the end was not even so much the level of debt, but their inability to take on further debt even faster. Once international lenders balked at making further loans, it was game over.

What is happening to the United States now is broadly similar, with certain polarities reversed. The US is an oil importer, burning up 25% of the world’s production, and importing over two-thirds of that. Back in mid-90s, when I first started trying to guess the timing of the US collapse, the arrival of the global peak in oil production was scheduled for around the turn of the century. It turned out that the estimate was off by almost a decade, but that is actually fairly accurate as far as such big predictions go. So here it is the high price of oil that is putting the brakes on further debt expansion. As higher oil prices trigger a recession, the economy starts shrinking, and a shrinking economy cannot sustain an ever-expanding level of debt. At some point the ability to finance oil imports will be lost, and that will be the tipping point, after which nothing will ever be the same.

This is not to say that I am a believer in some sort of energy determinism. If the US were to cut its energy consumption by an order of magnitude, it would still be consuming a staggeringly huge amount, but an energy crisis would be averted. But then this country, as we are used to thinking of it, would no longer exist. Oil is what powers this economy. In turn, it is this oil-based economy that makes it possible to maintain and expand an extravagant level of debt. So, a drastic cut in oil consumption would cause a financial collapse (as opposed to the other way around). A few more stages of collapse would follow, which we will discuss next.[…]

I don’t mean to imply that every part of the country will suddenly undergo a spontaneous existence failure, reverting to an uninhabited wilderness. I agree with John-Michael Greer that the myth of the Apocalypse is not the least bit helpful in coming to terms with the situation. The Soviet experience is very helpful here, because it shows us not only that life goes on, but exactly how it goes on. But I am quite certain that no amount of cultural transformation will help us save various key aspects of this culture: car society, suburban living, big box stores, corporate-run government, global empire, or runaway finance. Read the rest of this entry »


On President-elect Barack Obama’s first trip to the White House yesterday to meet privately with his predecessor, lame duck George W. Bush, reportedly the first and most pressing message Obama delivered to the man in charge was “bail out General Motors.”

Cartoon by The Rag Blog's Charlie Loving

Cartoon by The Rag Blog

The American taxpayers are sick and tired of their money being doled out to corporate crooks like the carbon-polluting, oil-guzzling auto industry, or banks like AIG who apparently weren’t satisfied by the first two bailouts and now want another. (They apparently spent too much of their last check on trips to the spa.)

Is this really Obama’s highest priority? Giving public money to private companies that will use it to pollute the planet?

If YOU had the opportunity to sit down with President Bush for an hour and have him actually listen to you, what would YOU ask him to do?

Why not instead bail out homeowners by ending foreclosures to keep people in their houses?

Why not bail out the poor, sick, and elderly, by instituting single-payer universal health care like every other industrialized nation does?

Why not bail out Iraqis, military families and soldiers by pulling U.S. forces out of Iraq and ending a bloody occupation? (or Afghanistan, or the 100+ countries where the US military is stationed)

Why not bail out human rights by ending torture, closing Guantanamo and allowing all prisoners a trial by jury?

Why not bail out civil rights by ending anti-immigrant raids and the criminalizing of immigration?

Why not bail out students, who are suffering from the greatest debt crisis in history as education becomes increasingly unaffordable?

Why not bail out the planet, by investing heavily in renewable energies controlled by local communities, urban gardens, home weatherization and create 5 million new Green Jobs?

Barack, if you’re going to be a president worthy of the immense praise and expectation placed on you, you’re going to need to stop palling around with terroristic industry and corporate lobbyists, and listen to the people.

[alex]

Sources: Obama pressed Bush for auto industry bailout

Originally published by CNN, November 11, 2008
Jessica Yellin, Candy Crowley, CNN’s Ed Henry

(CNN) – At their private Oval Office meeting on Monday, President-elect Barack Obama urged President Bush to support billions of dollars in aid for the struggling auto industry during the upcoming lame-duck session of Congress, according to three officials briefed on the meeting.

The officials said Bush privately expressed skepticism about taxpayer money for automakers on the heels of a string of government bailouts for other industries, and the president also urged Obama to help push through a free trade pact with Colombia Read the rest of this entry »


[There are many articles (including one I wrote in college), and even whole books written about Petrodollars – the way that US dollars dominate the world economy by their crucial involvement in all global oil trades.  This just happens to be a very clearly written and accessible essay, so I’m reprinting it despite slightly out-of-date numbers. The extent to which the fragility of petrodollar hegemony affects US foreign policy is probably the biggest question mark, but it seems plausible that the much-threatened aggression against Iran has a lot to do with that country’s moves to abandon the dollar for their oil trades. – alex]

Oil prices and the dollar

C. P. Chandrasekhar
Jayati Ghosh

Originally published by Business Line, February 26, 2008.

The depreciation of the US dollar has been closely bound up with the movement of oil prices, as world oil trade is typically denominated in dollars. Yet this relationship may now be under threat as the dollar continues to depreciate and the US economy tips into recession. In this edition of Macroscan, C. P. Chandrasekhar and Jayati Ghosh examine how oil prices have changed with different numeraires, and consider the implications for the future of the oil-dol lar nexus.

The relationship between oil and the US dollar has been at the heart of the way international economic relations have been organised for more than half a century.

International capitalism has relied on the US dollar as the basic reserve currency, and has therefore granted it an essential degree of stability for several decades despite the large external deficits run by the US and the periodic swings in its valuation in currency markets.

More than half of aggregate world exports are denominated in dollars; more than 80 per cent of all international currency transactions similarly involve dollars.

Loans made by the IMF and other multilateral institutions are denominated in dollars. More than 60 per cent of the foreign exchange reserves held by central banks of all countries are in dollar assets.

This has obviously meant huge advantages for the US. It has allowed the US economy to benefit from access to imports that can effectively be paid for simply by printing dollars, and has therefore allowed the US to run enormous current account deficits for prolonged periods. It has encouraged the rest of the world to finance these deficits by providing its savings to be held in US or dollar-denominated financial assets, to the point that all the developing regions of the world are also building dollar reserves that directly or indirectly find their way to the US economy.

Dollarisation of oil markets

A key feature of this entire process has been the dollarisation of world oil markets. Oil is the central commodity of industrial capitalism, absolutely essential for the production of essential and widely used goods. All industrial economies, and most developing ones, would grind to a halt with even a moderate disruption of oil supplies.

Most of the world oil trade has operated and continues to operate in dollars, even when the US is not the trade partner. Oil prices are defined in dollars for most oil exporters. As a result, oil importing countries also pay in dollars. The oil-exporting countries accumulate dollar reserves, which have been preferentially invested back in the US because of the zero currency risk involved in this.

Indeed, this recycling of petrodollars has been very significant as a source of finance for US trade deficits in several periods, including in recent times. Other countries also hold dollars for future oil purchase.

The dramatic increase in the price of oil in the past few years could be argued to have accentuated this tendency. As Chart 1 indicates, oil prices have increased dramatically in dollar terms especially from 2003, going up by nearly 2.5 times between 2003 and 2007.

This has obviously contributed very significantly to the wealth of oil exporters, and allowed them to generate balance of payments surpluses and build foreign exchange reserves, which have then been invested dominantly in dollar assets in US markets.

However, this is also the period that the US dollar has been depreciating, especially with respect to some of the other major currencies such as the euro and the Japanese yen. As a result, the change in oil prices has been less striking in terms of these currencies than in terms of the dollar.

The currency factor
Read the rest of this entry »



I’ve reposted a nice article which highlights the class dynamics at the heart of the current financial meltdown and potential bailout. It gives a very simple and straightforward summary from a revolutionary point of view, so I’m reposting it.

This is by no means a complete analysis however – for example it overlooks the critical role of oil, which is the lifeblood of the US capitalist economy and motivates many of its military aggression around the world. Specifically, there is a need to understand how the peak in global oil production has affected and continues to undermine the US-led industrial capitalist system, particularly in regards to the bursting of the housing bubble in the first place, along with the rising gas prices, food prices, heating costs, and subsequent inflation of the failing dollar.

Because oil production will never recover to its 2005/6 level, but will continue to decrease more rapidly, there can be no long-term recovery of the global financial markets, and for that reason I disagree with the declaration here that “Capitalism will not collapse…” On the contrary, it WILL collapse, because any system that structurally depends upon constant growth and speculation-upon-that-growth cannot coexist forever on a finite planet where necessary and crucial resources are in permanent and deepening shortage.

The current economic crisis is often compared to other historical crises of capitalism, where after appearing on the verge of death, the system restored itself and came back stronger than ever. Thus we are warned that capitalism is a self-destructive beast, but not a suicidal one. On its face this is solid logic but it overlooks the specific nature of the current crisis and its roots in the global peak oil phenomenon. It is my contention and the purpose of this website to demonstrate that the oil crisis is sucking global industrial capitalism dry like the vampire it is, and that there is no combination of “alternative” energy sources – whether coal, gas, nuclear, ethanol, wind, solar, whatever – that can do for this system what oil does.

Oil is not only the largest energy source, it also provides the material for 99% of pesticides (along with the entire industrial agriculture system), all plastics, almost all pharmaceutical drugs and chemicals, and a massive array of other products and components that keep the industrial economy chugging along. But the real killer is that oil literally fuels almost all transportation of materials and people for this system, including 95% of transportation in the US itself, as well as essentially ALL global air and sea transport. There is simply no way to keep this monster running without more and more petroleum.

Now, just because we’re confident that capitalism won’t recover from the current death-blows doesn’t mean a more vicious and destructive system won’t replace it, which is why this article’s conclusions are relevant and necessary. If we’re headed in the US towards fascism – which is where the rich and their Washington cronies seem to want to take us to protect their wealth and power – the only solution, which will become more and more apparent daily, is to organize a massive resistance here in the US that can stop the vampires and build towards a society based on freedom, justice and democracy.

[alex]

SOME TALKING POINTS ON THE FINANCIAL CRISIS
By Kate Griffiths and Isaac Silver

1. The era of the United States as a “the world’s only superpower” is ending.
The United States economy has not been this bad since the Great Depression. The rulers of the US hoped to retain global power militarily, through the wars in Iraq and Afghanistan, as the country’s raw economic superiority slipped. But these wars cannot be won: opposition among the occupied populations, and growing dissent within the military, prevent any victory on US terms even as the death toll climbs.

2. Beginning during the 1970s, manufacturing stalled, while government and investors focused on the financial sector: banks, real estate, and insurance.
Increasing competition, strong unions, and victories of the Black freedom movement had begun to limit the profits made by US corporations and threaten the power of the ruling class. In response, employers shifted good-paying manufacturing jobs overseas and to nonunionized areas of the USA. As wages stagnated, and workers’ purchasing power declined, workers maintained a precarious hold on our livelihood through working longer hours, sending more household members to work, and buying extensively on credit. The globalization of US capitalism and growth of credit both fueled the financial sector, which provided fluid economic resources that could be quickly moved and re-invested – unlike a physical investment such as a factory or railroad.

3. In 2008, years of government policies favoring the rich provoked instability and sparked collapse of major Wall Street institutions.
As the cost of the basic necessities went up, and wages failed to cover them Read the rest of this entry »

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