The Value of Truth

Excerpts from Amy Goodman’s interview with Naomi Klein, author of The Shock Doctrine

September 24, 2008 from Democracy Now.
Naomi starts with a quote from Milton Friedman: “Only a crisis actual or perceived produces real change and when the crisis occurs change depends on the ideas that are lying around . . . that I believe is our basic function . . . to keep the ideas ready until the politically impossible becomes politically inevitable”

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Naomi then says: “It is really important to look at the ideas lying around. There is enormous corporate lobbying going on to – for instance, eliminate the post-Enron-collapse regulations, to actually say that the way to save the American economy -  you know you heard Henry Paulson equating – still equating the interests of the financial sector with the interests of everyone else. We know that’s simply not true, but it’s precisely that logic that then is used to say ok this is what the financial community, this is what the corporate world needs in order to revive the economy – they need less regulation, they need less taxation. So we should be really, really wary of this claim that we’re hearing that free market ideology is dead, that this marks the end of capitalism – you know, I’m sorry that is not the case. It may be going dormant for a little while, to rationalize these massive bailouts, but it will come roaring back and the crisis that is being deepened right now, through these bailouts will be invoked for even more radical de-regulation, privatization, tax cuts and so on.

Amy Goodman then comments that what is clearly needed is speed and pushing the ida of an imminent threat the way the Patriot Act got pushed through after 9/11.

Naomi Klein comments that they may have made a mistake with a 3 pager which people would actually read (i.e. unlike the Patriot Act, which most people did not read).

Naomi goes on to describe a recent interesting article in Time which claims that Paulson and his team have been working on this proposal for six months. So it’s quite surprising that it is as paired down as it is – it’s 3 pages and the craziest thing has happened – people have read it! Regular people have read it. It doesn’t take that much time. Ay, you read aloud section 8, which is just so stunning, so bold in it’s demand for total and complete impunity and that’s really what’s getting in their way – is people are reading this text and they’re frankly shocked by it . . . .

section 2 calls for hiring contractors and we know that means hiring some of the very firms who are going to be bailed out and then it says they would be contracting them without regard to any other provision of law regarding public contracts. Amy, that is Iraq levels of impunity or even more. Basically what they’re saying is that we want to be able to contract with companies, but exempt those companies from the existing laws that bar conflict of interest, that have whistle blowing laws. The laws exist on the books and they are actively excluding contracts from those laws. The idea that they did not want to be presumptuous (i.e. by providing oversight) is complete nonsense. They are being extremely presumptuous, because they are actively excluding these contractors, these would be contractors from existing oversight.

Amy Goodman – it is interesting who Treasury Secretary Henry Paulson is – served as an assistant to Richard Nixon’s assistant John Erlichman and moved right from there to Goldman Sachs, then became head of it.

Naomi Klein – You know Amy, I don’t think we can stress this enough. Henry Paulson is one of the key people the top people responsible for creating the crisis that he is now claiming he will solve . . . . If we think about the 9/11 analogy, you know, that the state of shock that Americans were in after 9/11 and the emergence of Rudy Juliani as the savior – people now have so much regret about that . . . and now Paulson has been cast in this role as this economic Rudy Juliani, saving the day, impartial bi-partisan, strong leader . . . I found this article in Business Week that ran when Paulson was appointed to the Treasury – The headline of the article was “Mr. Risk Goes to Washington” – http://www.businessweek.com/magazine/content/06_24/b3988001.htm – it says think of Paulson as Mr. Risk. He is one of the key architects of a more daring Wall Street, where securities firms are taking greater and greater chances in pursuit of profit. By some key measures the securities industry is more leveraged now than it was at the height of the 1990′s boom. Then Business Week goes on to say that when Paulson took over Goldman Sachs in 1999, they has 20 Billion dollars in debt in these high risk gambles – when he left they had 100 Billion, which means he took their risk level from 20 billion to a hundred billion. So, it is absolutely no exaggeration to say that Henry Paulson, far from speaking for Main Street is actually bailing out his colleagues for some of the very debt that he himself accumulated. THIS IS AN EXTRAORDINARY CONFLICT OF INTEREST