The New Yorker profiles Shock Doctrine author Naomi Klein:

Klein first formulated her thesis in 2004, when she was reporting in Baghdad and noticed that Paul Bremer’s goal seemed to be to establish a perfect capitalist state in Iraq while its population was still reeling from the “shock and awe” bombing. Then she noticed that soon after the tsunami in Sri Lanka the coastline that had been inhabited by fishermen was being sold off to hotels. Then she noticed that Friedman had suggested taking advantage of Hurricane Katrina to replace New Orleans’s disastrous public schools with charter schools. The pattern was striking. But now that a shock had shaken Washington itself, something slightly different seemed to be going on. On the one hand, the initial reaction to the economic crisis followed her theory—the shock (the bank failures and the market’s nosedive) had inspired the government to attempt to seize unprecedented power (seven hundred billion dollars with no strings attached), claiming that in such a crisis everyone should simply trust it to do the right thing, even though the actions it wanted to take would seem to enrich the wealthiest at the expense of everybody else. That was the textbook part. But the plan wasn’t working. Constituents wrote thousands of outraged letters, and bloggers wrote about how this felt familiar, like the aftermath of September 11th, and how the bailout was the economic equivalent of the Patriot Act. It was just as she had written at the end of the book: memory was shock’s antidote. (Another difference, of course, was that the government wanted to enact not Friedman-style reforms but the opposite: enormous interference in the market. Still, since the point of this interference was to bail out banks, this difference did not strike Klein as of much importance.)

“Americans remembered that they thought Rudy Giuliani was their daddy after September 11th, which was why they’re a little less inclined to say that Paulson and Goldman Sachs were going to take care of them this time,” Klein told the audience at the Bloor Cinema. “I think actually their biggest mistake with the bailout was how short it was. It’s just two pages and three paragraphs, and so the weirdest thing happened: people read it.” Everyone laughed. “It sounded like a coup.”

She went on, “It’s worth thinking about what the right has been doing for the past thirty-five years as a counter-revolution that has been waged against our victories.” The New Deal is usually told as a history of F.D.R., she said, but we don’t talk enough about the pressure from below. Neighborhoods organized, and when their evicted neighbors’ furniture was put on the streets they moved it back into their homes. It was that kind of direct action that won victories like rent control, public housing, and the creation of Fannie Mae. The other thing that’s important to remember, she said, is that the organizers were a threat—of socialist revolution—and it was that which allowed F.D.R. to say to Wall Street, “We have to compromise, or else we’ve got a revolution on our hands.” Now, these market shocks are opportunities for the same reason that the crash was in the thirties, because we are seeing the failures of laissez-faire before our eyes. “It’s time to say, ‘Your model failed,’ ” she said. “This is a progressive moment: it’s ours to lose.”

Posted by Laura at December 5, 2008 09:31 PM