Shock Doctrine International

In the middle of the debt ceiling debate yesterday, Naomi Klein tweeted a link to this article, describing how the sovereign debt crisis in Europe is eroding democratic and labor rights.

The economic, and democratic, crisis in Europe raises questions. Why were policies that were bound to fail adopted and applied with exceptional ferocity in Ireland, Spain, Portugal and Greece? Are those responsible for pursuing these policies mad, doubling the dose every time their medicine predictably fails to work? How is it that in a democratic system, the people forced to accept cuts and austerity simply replace one failed government with another just as dedicated to the same shock treatment? Is there any alternative?

The answer to the first two questions is clear, once we forget the propaganda about the “public interest”, Europe’s “shared values” and being “all in this together”. The policies are rational and on the whole are achieving their objective. But that objective is not to end the economic and financial crisis but to reap its rich rewards.


The troika (European Commission, ECB and IMF) has decided to improve the mechanisms designed to favour capital at the expense of labour, by adding coercion, blackmail and ultimatum. States bled by their over-generous efforts to rescue the banks, and begging for loans to balance their monthly accounts, are told to choose between a market-led clean-up and bankruptcy. A swathe of Europe, where the dictatorships of António de Oliveira Salazar, Francisco Franco and the Greek colonels ended, has been reduced to the rank of a protectorate run by Brussels, Frankfurt and Washington, the main aim being to defend the financial sector.

After which, we had this exchange:

Me: this entire year must feel like an awkward, sickening, “I told you so” for you.

Klein: if i had a magic riot wand, i would wave it now. #debtdeal

Klein: you did ask me how i felt earlier…

Because, after all, it’s not just in Europe where debt is being used as a cudgel to roll back workers’ and democratic rights. The big news of yesterday’s debt deal–one the Administration is crowing about–is an entity that will sidestep democratic processes so as to make it possible to cut back on Social Security and Medicare. (As I was watching the vote yesterday, probably more than half the calls coming into CSPAN were from people talking about how worried they were that this debt debate might interrupt disability or Social Security checks; I think CSPAN was confused that many of these came in on the Republican line.)

And that fact–the fact that this colossal stupidity is somehow happening on both sides of the Atlantic gets too little attention. As I noted the other night on BlogTalkRadio, we can’t attribute the debt deal just to the Tea Party. Not only has Obama been trying a variety of ways to set up a Catfood Commission that could cut Social Security since he got into office (as DDay points out, the Democrats were the first to try to hold the debt ceiling hostage to get a Catfood Commision), but Greece and France and the UK are all doing effectively the same thing, and they’ve got no Tea Party to blame. In fact, a week ago Saturday (July 23), in the middle of heated negotiations with the Republicans on the debt ceiling here, Obama checked in with Nicolas Sarkozy to see how austerity summer was going on his side of the pond.

The President and President Sarkozy of France spoke by phone today as part of their ongoing consultations on shared U.S.-French strategic priorities.  The two leaders reviewed the results of the July 21 meeting of the Heads of State or Government of the Euro area, agreeing that important steps had been taken to help ensure the stability of the Euro area and to sustain the economic recovery in Europe.

Obviously, there are international organizations where these conversations are designed to take place, all with a financial mandate that doesn’t care about democracy or workers rights. (Though to some degree, it would be churlish for those of us in the developed world to complain that the IMF subverts sovereignty, since we’ve been benefiting from the way it has subverted the sovereignty of developing nations for years.)

Now, you might attribute this seemingly magical obsession of the developed world with austerity to the financial crash: in Europe, these cuts arise directly from the banks’ unwillingness to eat the losses for the mistakes they made during the bubble. Except at the federal level, here in the US, that’s not the false urgency used to justify these cuts: it was two unfunded wars, a set of absurd tax cuts (cutting taxes beyond what governments needed to survive is also one of the main factors driving state-level cuts), and the refusal to institute some kind of national health care system. Ultimately, in the US we need to cut our social safety net because the cost of running a world empire has gotten to be too much to sustain.

But the effect is the same: the elite, particularly the financial elite, has used this crisis–a crisis that is either their own fault or artificially created–to roll back the social contract that has governed the developed world since World War II.

16 replies
  1. ITDog09 says:

    I so agree with everything you and Naomi Klein said. It’s my added 2 cents that we’ve been in a 30 year class war that only one side is fighting.

    The Disaster Capitalism that we started practicing overseas some 60 years ago, came home to roost some 30 years ago. Now it’s more mature, more deeply rooted, more in control of our political process, the Supreme Court, and the media. Both parties and the POTUS worship it.

    Everything will be just great when we return to the model of a few wordly kings, some land owning gentry, and the remaining 99% of humanity are serfs.

    We’re all American Indians now! How are the promises of the Great White Father working for you? (ok, now he’s black, but it’s the same deal)

  2. radiofreewill says:

    Brava! Brava!

    Beautiful insights well rendered!

    The national debt under Bush went from $5T to $10T – for the very reasons that you highlight: he spent $5T on our credit card to pay for two wars and tax-cuts for his buddies, the ‘have mores.’

  3. posaune says:

    Marcy, did you see the bit about federal student loan cutbacks? No more subsidized federal loans for grad students (except for selective majors). What’s that going to do a slew of university departments. Bet comparartive lit goes to dust, huh? womens’s studies? social work? will the professions be for the elite now? white shoe law firms redoux.

  4. MadDog says:

    @posaune: An additional thing to consider is with the decrease in availability of student loans, there will be less students attending school.

    Now if they aren’t attending school, a good many of them will be out looking for work thereby inflating the numbers of jobseekers for the static or same number of jobs.

    Add to that factor will be the cost benefit viewed by any potential employers to make any hiring they actually undertake at the entry-level low end of the wage and experience scale thereby exacerbating an already lousy re-employment outlook for the middle-aged and experienced unemployed.

  5. merkwurdiglieber says:

    This has all been a scripted drama cover for the destruction of the social contract as you say. The resistance to that perception by the mass media is deeply ingrained. How to overcome it? Not everyone could read the Shock Doctrine, but something like that level of understanding must be reached by a larger number of people for resistance to be effective. We are looking at a stacked deck at every turn.

  6. rugger9 says:


    Not only that but the contractors for whom we paid top dollar because of their so-called “expertise” electrocuted soldiers in the showers, went way over budget on all of their projects, lost billions of dollars (in addition to the 9 billion in cash lost by Petraeus) and created the police academy that rained sh@#t on the officers, and NO ONE has ever been held accountable in any way. Any USGovt person that has tried (Bunnatine, for example) has been smeared, investigated, and squelched.

    This is our future if the oligarchs win. However, they will realize that when no options exist for redress we peons still have one more….

  7. Gitcheegumee says:


    From page 405 of David Rockefeller’s memoirs:

    “For more than a century, ideological extremists at either end of the political spectrum have seized upon well-publicized incidents to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as “internationalists” and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that’s the charge, I stand guilty, and I am proud of it”. -David Rockefeller.

    At a Bilderberg conference in 1991 in Baden-Baden, Germany, David Rockefeller gloatingly said: “We’re grateful to The Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years. But the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.”

  8. Charles Meyer says:

    Naomi Klein’s book mentioned the ginned-up ‘debt crisis’ in her native Canada during the early 1990’s which was aimed at cutting education and health benefits. Some right-wing think tanks nursed along the pseudo controversy, warning of a national economic collapse and false charges that a downgrade from Moodys was pending. A close parallel to what we have just experienced here: a manufactured crisis to do what voters and taxpayers would normally never allow.

  9. rkilowatt says:

    re “false urgency used to justify these cuts…”

    “used to justify” is the via that bypasses the actual motivation of ThePowersThatBe.

    Consider: American slavery was “justified” many different ways, especially the alleged subhuman/uncivilized nature of non-whites. Never was profit/landholding stated as the driving reason.

    Example: Thomas Jefferson. Addicted to slavery. Never freed his slaves and willed them sold at his death, to help pay his financial debts. [Except for his mistress and their children.]

    TPTB are addicted to their status privileges.
    In literature, not true history, they become “forefathers” and “founders”.
    Example: Thomas Jefferson, who was aAddicted to slavery and lived richly. [Btw, he was not rich, but bought and paid for by his sponsors. He lived in continuous heavy financial debt and died with heavily indebted estate. Never freed his slaves, even at death, but had them sold with his other property except his mistress and their direct children.

  10. a says:

    “if i had a magic riot wand, i would wave it now”.

    A plan to reduce Federal outlays by a mere 1% is sufficient for her to make calls for mass violence.

    That is rather revealing of the extreme left’s liking for violence and of their contempt for democratic processes when those processes produce results these fanatics don’t like

  11. Curtis Walker says:

    @ITDog09: I turn 55 next week, am totally disabled, and a step or two away from life support and know what it is like to depend on a check from Uncle Sam every month. For the life of me I cannot cannot figure out why the riots are not being put into play, for a number of reasons, the Debt Deal from Hell is just the latest, or is it leaving town with FAA & 100K or so construction workers forced once more to file for Unemployment. For God sake they have been simmering so long they are about to run out of water. I hear rumblings about protests locally and in DC, timed to be the same time, but nothing serious. Will the Unions step up and lead this nation back to where it has a chance to survive?

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