In The Nation magazine this week Naomi Klein makes a powerful pronouncement:
Klein was on Democracy Now! today and elaborates hear argument in light of the G 20 summit and provides some important commentary:
NAOMI KLEIN: First of all, the equity deals that were negotiated with the largest banks and also some smaller banks, representing $250 billion worth of the bailout money, this is the deal to inject equity into the banks in—to inject capital into the banks in exchange for equity. The idea was to address the so-called credit crunch to get banks lending again. The legislation that enabled this was quite explicit that it had to encourage lending. Barney Frank, who was one of the architects of that legislation, has said that it violates the act if the money is not going to that purpose and is instead going to bonuses, is instead going to dividends, going to salaries, going to mergers. He said that violates the acts, i.e. it’s illegal. But what we know is that it’s going precisely to those purposes. It is going to bonuses. It is going to shareholders. And it is not going to lending. The banks have been quite explicit about this. Citibank has talked about using the money to buy other banks….
But if we look at what just came out of the G20 summit, it’s really been a reassertion of the very—this very ideology of deregulation. On the one hand, you have the statement that you started the program with, where the world leaders said that this crisis was born of the shadow banking industry, not enough oversight, not enough regulation, too much complexity. At the same time, when they talk about solutions, they’re calling for resurrecting the failed World Trade Organization talks that collapsed this summer. And we heard, if you recall, this summer, when the Doha talks collapsed, that globalization and the Washington Consensus were dead, because developing countries had rejected it.
The other thing that they’re calling for is a greater role for the International Monetary Fund. And it’s important to understand that the reason why the International Monetary Fund and the World Trade Organization and the whole free trade agenda, generally, has been in collapse in recent years is because countries around the world are no longer willing to accept the conditions attached to joining this club, the conditions attached to an International Monetary Fund loan. In reasserting a greater role for the International Monetary Fund, in calling for the World Trade Organization talks to get back on track, these world leaders are actually calling for more financial market deregulation, more of the same….
Yeah, this bailout is really not a bailout at all; it’s a parting gift to the people that the Bush—that George Bush once referred to jokingly as “my base.” You know, in one of my columns recently, I likened it to what European colonial rulers used to do when they finally realized they had to hand over power; they would loot the treasury on the way out the door.
And the reason why there has been this dramatic change in policy just in recent days, where Henry Paulson has said, “OK, well, we’re not going to do what we originally had said at all,” which is use the bailout money to buy distressed assets, to buy bad debts, “Now we’re going to go from these equity deals with the banks to bailing out credit card companies”—the reason for that is that that first $250 billion was essentially money down the drain. They are admitting that it didn’t do what it was supposed to do, which was increase lending. So, now they’re making it up as they go along. It’s take three, take four, take five. But we’re supposed to somehow not notice that $250 billion, an astronomical sum, was just wasted, going to bonuses, going to shareholder payouts, going to CEO salaries. And now they’re trying another method to get lending going. But it really was the parting gift, Amy.
And if we think about what this money means, and this is—you know, this crisis isn’t over, and the same people who justified this bailout, who clamored for this bailout, are the very people who are going to turn around and say to Barack Obama, “We can’t afford for you to make good on your election promises. We can’t afford universal healthcare. In fact, we can’t afford what meager services Americans get in exchange for their tax dollars, like Social Security payments.” We’re already hearing this lowering of expectations now in the national discourse. So, the money—this really is, you know, reverse Robin Hood gone mad. The money has been given to the people who needed it least, and it’s going to be used to justify austerity measures imposed against those who need it most. It’s going to be used to justify cuts to food stamps. It’s going to be used to justify cuts to Social Security, to healthcare, let alone being used to justify why more ambitious plans for a national healthcare program, for green energy are not affordable. So people have to be ready for this. You know, the next shock is yet to come….
AMY GOODMAN: Your final thought, this, on the bailing out of the auto industry, the Big Three in Detroit, starting with General Motors?
NAOMI KLEIN: Well, obviously, it shouldn’t be a blank check. You know, I always think about what the International Monetary Fund does when developing countries come and ask for a loan. Think about what they’re doing right now. The International Monetary Fund says, “You want a loan? Well, here’s our list of conditions.” They used to call it structural adjustment. The same thing could be done to the auto industry. If they’re coming for a bailout, they should be structurally adjusted, and taxpayers should be playing IMF to the auto industry and insisting that they change the way they work, that they build green automobiles, that they protect jobs. It can’t simply be a blank check.
If you want a really good idea about what the IMF and its structural adjustments have meant for the global south, Stephanie Black’s eloquent and smart documentary, Life and Debt is worth watching. Anyone who has read Jamaica Kincaid’s mesmerizing book A Small Place will recognize her words here in the narration.
There is also more bad news on Obama decisions-in-the-making. Also on Democracy Now! and worth listening to are Melvin Goodman and Michael Ratner who discuss various people Obama may be bringing to his team who were responsible for some of the gravest blunders of the last eight years.
John Brennan and Jami Miscik, both former intelligence officials under George Tenet, are leading Barack Obama’s review of intelligence agencies and helping make recommendations to the new administration. Brennan has supported warrantless wiretapping and extraordinary rendition, and Miscik was involved with the politicized intelligence alleging weapons of mass destruction in the lead-up to the war on Iraq.
Ms. Miscik was deputy director of intelligence for Mr. Tenet during the run-up to the Iraq war, when intelligence was manipulated to support the Bush administration’s decision to use force in Iraq. She endorsed the politicized findings of the National Intelligence Estimate on Iraqi weapons of mass destruction in October 2002, as well as the unclassified White Paper of October 2002 that was designed to sway votes on the authorization to use force against Iraq. Ms. Miscik was also a willing participant in the crafting of Secretary of State Colin L. Powell’s regrettable speech to the United Nations in February 2003, which was designed to sway the international community.
Other key members of Mr. Obama’s intelligence advisory panel have been former CIA Deputy Director John McLaughlin, who helped to suppress proof that various sources of intelligence in Iraqi WMD were in fact fabricators, and Rob Richer, a senior clandestine services officer who was a key implementer of the renditions and detentions program.
And while the new Status of Forces agreement between Iraq and the U.S. makes it unlikely that troops will be leaving in substantial numbers any time soon–not that they would all have been removed by Obama regardless of this agreement–what of those private contractors who are responsible for some of the most reprehensible war crimes in occupied Iraq? Here is what Jeremy Scahill has to say:
In a brief interview with Democracy Now! in February, Obama explained his position when asked about the report in The Nation.
“Here’s the problem: we have 140,000 private contractors right there, so unless we want to replace all of or a big chunk of those with US troops, we can’t draw down the contractors faster than we can draw down our troops,” Obama said. “So what I want to do is draw–I want them out in the same way that we make sure that we draw out our own combat troops.”
As Obama’s inauguration day draws near, he is facing increased calls from Democrats who have spent years investigating Blackwater to ban the company. Most prominent among these is Henry Waxman, chair of the House Committee on Oversight and Government Reform. He called on Obama to cancel Blackwater’s security contracts. “I don’t see any reason to have a contract with Blackwater,” says Waxman. “They haven’t lived up to their contract, and we shouldn’t be having these private military contracts. We should use our own military.”
As of now, Blackwater’s Iraq contract expires in April (it was extended for a year by the State Department despite numerous investigations). “I think there should be very strong handcuffs put on this whole outsourcing question, but particularly with these private security contractors like DynCorp and Blackwater,” says Vermont Democrat Peter Welch, who serves on the Oversight Committee with Waxman and supports the calls for Obama to cancel Blackwater’s security contracts. “It’s just an incredible waste of taxpayer money. It dishonors the Code of Military Conduct. Our soldiers are over there. They abide by rules. Blackwater doesn’t.”
Ahhh…the more things “change” the more they stay the same. Unless it comes from the grassroots, the people we will not see change as the ever-hopeful Rania reminds me:
The massive anti-slave movement led by William Wilberforce, the Peasants’ Revolt, the Tolpuddle Martyrs who gave us the trade union movement, suffragettes who gave the women the vote, and the Chartists who helped us on the road to democracy.
So what are you going to do?