Sunday, February 22, 2009

Right Wing 'Shock Doctrine', Idiocy and Evil Intentions Come Home to Roost

by Len Hart, The Existentialist Cowboy

Shortly before his death, the late Hunter Thompson wrote that '....the American nation is in the worst condition I can remember in my lifetime'. He said that our prospects for the future were even worse. Indeed, we are poised on the brink of a financial collapse that may yet make the crash of '29 and the subsequent Great Depression look like a walks in the park.

The difference is that in 1929, the US still had industries and small farmers many of whom survived the depression very well. As youngster, I recall talking to some of these people and listening in awe. Some of them actually lived off the land like pioneers. For some, 'polk salad' was a staple. Others lived off ' 'Possum'. Still others waged war on the 'game warden' who might have prevented their living off the land. A great Uncle wrapped up a 'Game Warden' in a cow hide, hoisted him over a high limb in the Texas 'Big Thicket'. He left him there --swinging in the high branches. They were inventive, resourceful and ruthlessly determined to survive. The 'man' would not deprive them of a right to survive.

Thompson wrote that he was 'surprised and embarrassed to be a part of the first American generation to leave the country in far worse shape than it was when we first came into it. As I have written on this blog, the US has exported its industries, primarily to China. We have Nixon and the Bushes to thank for that.

Even before the US entry into WWII, Adolph Hitler and his 'inner circle' often ridiculed American automobiles and highways --or lack thereof. Germany had the autobahn. Albert Speer, in his "Inside the Third Reich" recalled an auto 'trip' he took with Hitler. They were overtaken that evening by someone in an American made auto. The Nazis would not be outdone. As I recall, Hitler, himself, was behind the wheel in a Mercedes. In a burst of testesterone, Herr Hitler put his 'pedal to metal', overtook the American car and left it 'in the dust'. Speer recalls that they all had a good laugh. At our expense.
It could be argued that the way in which Thompson wrote a lot of his work is attributed to the New Journalism movement during the 1960's, led mainly by Tom Wolfe. New journalism aimed to revolutionize and break all the rules of traditional journalism, including features like writing as if you are inside the head of a character or documenting everyday events and details. Thompson has adopted many of the features that are deemed to be part of this movement, but he has made a positive contribution and a significant impact on it by taking these features to a new level and putting his own spin on them. Thus publicizing an original branch to this wave of new styles, although what he writes about is largely non-fiction he relies on satirical devices to drive his point's home.

--Hunter S. Thompson's World of Fear and Loathing
As Thompson pointed out:
Our highway system is crumbling, our police are crooked, our children are poor, our vaunted Social Security, once the envy of the world, has been looted and neglected and destroyed by the same gang of ignorant greed-crazed bastards who brought us Vietnam...
Hitler and Goring must be laughing in their graves. The American GOP has achieved in the US almost everything Hitler might have dreamed about except the extermination of Jews, Gypsies other 'untermenschen'. The GOP with key and strategic Democratic sellouts here and there betrayed the people and subverted the Constitution

Thompson called 'disastrous' US defeats all over the world. The 'Gonzo' also predicted that the 'stock market' would never come back.

There were other 'harbingers', prophets warning of impending disasters. In his 'Confessions of an Economic Hit Man' of 2004, John Perkins gave us an insider's account the 'neo-colonist' exploitation of the Third World by what Perkins called a cabal of corporations, banks, and the US government.

It was done against the backdrop of 'economic hitmen' laughing it up, toasting the greatest transfer of wealth from the bottom up that the world had ever seen. As a counter-point, Naomi Klein’s Shock Doctrine seemed to be working according to plan.

Naomi Klein: Shock Doctrine

The book and film argue that free market policies of Milton Friedman and the Chicago School of Economics rose to prominence in Chile under Pinochet, Russia under Yeltsin and in the US under George Bush. The Katrina disaster is the most recent example. The 'privatization of Iraq's economy' under the Coalition Provisional Authority was not popular and was not Democratic. The citizens of Iraq were, in fact, in a state of shock. The US even boasted of its campaign of 'Shock and Awe'. As I have written myself --short a revolution, we are fucked!

Two big factors have already made the US a THIRD WORLD nation

  • Reagan's tax cut of 1982 which began a trend in which wealth trickled up to the top one percent. The trend, reversed in Clinton's second term, resumed with Bush Jr. Today--as a direct result of unfair REGRESSIVE taxation --the nation's elite of about 1 percent of the populations owns MORE than about 90 percent of the rest of the population combined.
    Nearly three decades that Reaganomics has been allowed to survive, if not thrive, have been enough to allow the trickle-down theory to come to fruition. Unfortunately, it is debt -- and not wealth --that has been trickling [down].Reagan's economic target was to drown government in a cocktail of lowered government spending, deregulation and reduced tax rates. However, in order to shrink government to bathtub size, the role of private business had to expand to fill basic needs, which was totally fine with Republicans.
    But another consequence of Reaganomics, one that doesn't jive so much with traditional Republican values, is the reduction of states' powers. Local governments are beginning to see the real meaning of trickle-down economics: dwindling federal funds make it harder for states and cities to meet annual budget requirements. While the U.S. government can live on credit, many local budgets are required by law to be balanced. So the largest tax cuts to date were bound to trickle down to local governing structures, and now many governors and mayors are responding in an uncharacteristically Reaganistic fashion.
    Take Obama's home territory, for example. Chicago, under the firm grip of Democratic Mayor Richard M. Daley, is deeply committed to privatization. Not because it's a popular idea, mind you, but because the city is desperate for funds.

    Still, they don't call it the Chicago school of economics for nothing.
    --Local and State Governments are Selling Off Public Property and Services
  • Deals cut by R. Nixon, Ronald Reagan primarily have resulted in the outsourcing of a) jobs; b) entire industries. As a result --the CIA lists the US as leading the entire world with by far the BIGGEST BALANCE OF TRADE DEFICIT! In stark terms, one is hard pressed to name a single industry in which the US still leads the world! Yet --we OWE the world for having picked up and carried our debt.

    The US simply cannot continue to survive as a nation, let alone a world power. And for all of this we owe the GOP for having been its architect and the Democratic party for having caved on crucial issues.

    Supply-side economics is not a 'hands off' policy at all. It is, in fact, an active, deliberate distribution of wealth upward to an increasingly tiny elite. It is pseudo-economics touted to justify big tax breaks for the upper ten percent of the nation's income recipients and wealth-holders. Reagan's own budget director, David Stockman, called 'supply-side economics', a trojan horse advocated by what he called a 'noisy faction of Republicans'.

    If the US should slide off into another great depression, it will be because consumers of all classes and primarily the middle and lower classes do not have money to spend. Another great depression will result for two basic reasons:
    • the investor classes have exported their tax cut windfalls offshore causing net declines --not increases --in jobs;
    • The productive (working) class is taxed disproportionately, effectively robbing them of their purchasing power which alone drives the economy.
    It is easy to understand, then, why economies contract. A contracting economy is an economy that is in depression. GOP supply-siders have a stake in promoting the simplistic 'theory' that the great 'Stock Market Crash of 1929' was the primary cause of the Great Depression.

    As class warfare propaganda, this myth is matched only by 'supply side (trickle down) economics. Indeed, many believe that the crash of Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, there were many causes for the Great Depression which was, in fact, the contraction of the money supply among those who were most likely to spend it.

    Nevertheless, the crash is significant. Stockholders lost more than $40 billion dollars within two months of the crash. The market had regained some of its losses by the end of 1930 --not enough to prevent the nation from entering the Great Depression.
  • Bank Failures

    More significant, is the fact that millions lost their 'savings'. People save in order to spend. It is spending that might have kept a viable economy afloat. In the 1930s, over 9,000 banks failed at a time when bank deposits were uninsured. Surviving banks stopped making new loans, reducing total amount of money in circulation. That's called a 'contraction'; the other word for 'contraction' is 'depression' as in 'Great Depression'. The same thing happened recently, when those favored by Reaganesque 'tax cuts' exported their monies to offshore tax havens. Another 'contraction' occurred! It is often called Reagan's recession. Others, recalling that it was the deepest, longest 'contraction' since Hoover's 'Great Depression' of the 30s will call it what it was in fact! Depression!

    As a result of the '29 crash, fears, and bad news, millions of all classes just stopped buying, leading to sharp reductions in production and jobs. As unemployment increased, people fell behind in their installment payments; homes and items were repossessed. Inventories increased, sat idle, and could not be sold. Meanwhile, the unemployment rate rose above 25%.

    American Economic Policy with Europe

  • As businesses failed, it was hoped that the Hawley-Smoot Tariff of 1930 would protect American companies. The act charged a high tax for imports causing a reduction in US-foreign trade.

    Drought Conditions.

    While not a direct cause of the Great Depression, the drought that occurred in the Mississippi Valley in 1930 was of such proportions that many could not pay their taxes or other debts. They were forced to sell their farms for no profit to themselves.

    This was the topic of John Steinbeck's The Grapes of Wrath. GOP policies are clearly responsible for the income and wealth disparities that are at the root of every GOP recession/depression since 1900. Ronald Reagan's GOP tax cut of 1982 is the easiest target. Several points should be made about this improvident move. One --if 'tax cuts', the GOP panacea for every evil, were in any way effective against depression, then why did a depression of two years follow the Reagan tax cut?

    Instead of making peace with the GOP, the Democrats should have waged JIHAD! By bending over and taking it, by capitulating to the robber barons, the US has been sold down the river.

    It's all over folks. This US may not come back in our lifetimes.


    SadButTrue said...

    Slave State.
    Corporate Feudalism.
    "Ownership Society."

    Clearly these terms are near equivalents only separated by linguistic legerdemain. They all describe a system of permanent indentured servitude, a modern day caste society.

    There were two elements of the Bush agenda that pertain, questionable enough at the time but unforgivable in the context of the economic crisis; tort reform and changes to the bankruptcy laws. The idea was that if a corporation owed you for some damage they inflicted, it would be harder for you to sue. If you owed a corporation money it would be harder to get out from under your debt. Tell me how that was not a deliberate but undeclared attempt to create a new peerage.

    "...short a revolution, we are fucked!"
    No kidding!

    Unknown said...

    SadButTrue said...

    If you owed a corporation money it would be harder to get out from under your debt. Tell me how that was not a deliberate but undeclared attempt to create a new peerage.

    It seems to me that almost every revolution has been preceded by a populace burdened almost unto death by ruinous DEBT and/or HUNGER!

    So you, likewise, seen this parallel?

    kelley b. said...

    The Dust Bowl was a disaster of Bibical proportions, the response of the land to a society that bled it dry.

    As part of the New Deal, Roosevelt put people to work in a Civilian Conservation Corps. In a span of a few years, they planted and nurtured over a billion trees over the American South, MidWest, and Western states. The encroaching desertification of America was halted in its tracks. America kept its breadbasket- no thanks to the banks who were trying to ruin the small family farmers.

    The Republicans, of course, were scandalized by what they considered a waste of money.

    Anything that doesn't put money into the pockets of the oligarchs is a waste of money- even if it saves millions of lives, the forests, and the fields of grains they themselve depend on.

    Shortsighted isn't the proper word to describe Republican policy.

    Sociopathic and psychotic idiocy fits it somewhat better.

    tiago said...

    A comparison of the financial melt down and the great depression, certainly has some merits, but ….
    The great depression did not affect the rest of the world as much as this financial melt down will due to global economics.
    The recovery will be much worse as the economy of the US is not partially based on the small farmer any more. (Most farm land is owned by huge conglomerates who have been feeding at the American treasury trough.)
    Many of the farms lost during the great depression were due the farmers inability to pay taxes. Farmers were then forced into the cities where they did not fare as well. And as you pointed out, the drought did not help at all.
    Although Obama has put forth the plan to put a great deal of money into this country’s infrastructure, ala FDR and the CPA and CCC. This will be like a band aid on a major wound with out regulating the financial industry. I don’t fore see Obama able or wanting to this.
    It's all over folks. This US will not come back in our lifetimes.
    I don’t know about this. Many pundits are fore casting violence here in the United States. If you think 24 million Iraqis gave the US forces a hard time, think what 250 million pissed off Americans can do.
    In this part of the country there is a saying that comes from hard times. ‘If you ain’t got a biscuit and I’ve got one, then you’ve got half.’ It may come down to a revolution/civil war, but the American people can and will come together in a time of crisis.

    sconan said...

    Revolution is THE reason the 1%ers and repug's HATE the French...Their people know its governments that should fear the people not the other way around,and have revolted more that once! We should be taking a cue from them as they seem to be about ready to do so again?

    RubyGlare said...

    The War Crimes Act of 1996 COULD HAVE BEEN USED, just because the Right Milosevic'd it & retro-actively immunized themselves from it....why did the Left conveniently NOT use that tool? As for the Left having a 'pre-9!!" mindset-do I have to link you to the 1996 attempt by Preident Bill Clinton to reinforce commercial airline cockpit doors? & WHY was this NOT mentioned? Is there some sort of etiquette book I don't know about-give the Right a free pass Every(Vitter) time, but if the Left is caught breathing-they are guilty?
    All I could find via a quick google...Again I find that lack of coherency in the Left very fishy & awefully convenient.

    Pete Murphy said...

    Our enormous trade deficit is rightly of growing concern to Americans. Since leading the global drive toward trade liberalization by signing the Global Agreement on Tariffs and Trade in 1947, America has been transformed from the wealthiest nation on earth - its preeminent industrial power - into a skid row bum, literally begging the rest of the world for cash to keep us afloat. It's a disgusting spectacle. Our cumulative trade deficit since 1976, financed by a sell-off of American assets, exceeds $9.1 trillion. What will happen when those assets are depleted? Today's recession may be just a preview of what's to come.

    Why? The American work force is the most productive on earth. Our product quality, though it may have fallen short at one time, is now on a par with the Japanese. Our workers have labored tirelessly to improve our competitiveness. Yet our deficit continues to grow. Our median wages and net worth have declined for decades. Our debt has soared.

    Clearly, there is something amiss with "free trade." The concept of free trade is rooted in Ricardo's principle of comparative advantage. In 1817 Ricardo hypothesized that every nation benefits when it trades what it makes best for products made best by other nations. On the surface, it seems to make sense. But is it possible that this theory is flawed in some way? Is there something that Ricardo didn't consider?

    At this point, I should introduce myself. I am author of a book titled "Five Short Blasts: A New Economic Theory Exposes The Fatal Flaw in Globalization and Its Consequences for America." My theory is that, as population density rises beyond some optimum level, per capita consumption begins to decline. This occurs because, as people are forced to crowd together and conserve space, it becomes ever more impractical to own many products. Falling per capita consumption, in the face of rising productivity (per capita output, which always rises), inevitably yields rising unemployment and poverty.

    This theory has huge ramifications for U.S. policy toward population management (especially immigration policy) and trade. The implications for population policy may be obvious, but why trade? It's because these effects of an excessive population density - rising unemployment and poverty - are actually imported when we attempt to engage in free trade in manufactured goods with a nation that is much more densely populated. Our economies combine. The work of manufacturing is spread evenly across the combined labor force. But, while the more densely populated nation gets free access to a healthy market, all we get in return is access to a market emaciated by over-crowding and low per capita consumption. The result is an automatic, irreversible trade deficit and loss of jobs, tantamount to economic suicide.

    One need look no further than the U.S.'s trade data for proof of this effect. Using 2006 data, an in-depth analysis reveals that, of our top twenty per capita trade deficits in manufactured goods (the trade deficit divided by the population of the country in question), eighteen are with nations much more densely populated than our own. Even more revealing, if the nations of the world are divided equally around the median population density, the U.S. had a trade surplus in manufactured goods of $17 billion with the half of nations below the median population density. With the half above the median, we had a $480 billion deficit!

    Our trade deficit with China is getting all of the attention these days. But, when expressed in per capita terms, our deficit with China in manufactured goods is rather unremarkable - nineteenth on the list. Our per capita deficit with other nations such as Japan, Germany, Mexico, Korea and others (all much more densely populated than the U.S.) is worse. My point is not that our deficit with China isn't a problem, but rather that it's exactly what we should have expected when we suddenly applied a trade policy that was a proven failure around the world to a country with one fifth of the world's population.

    Ricardo's principle of comparative advantage is overly simplistic and flawed because it does not take into consideration this population density effect and what happens when two nations grossly disparate in population density attempt to trade freely in manufactured goods. While free trade in natural resources and free trade in manufactured goods between nations of roughly equal population density is indeed beneficial, just as Ricardo predicts, it’s a sure-fire loser when attempting to trade freely in manufactured goods with a nation with an excessive population density.

    If you‘re interested in learning more about this important new economic theory, then I invite you to visit either of my web sites at or where you can read the preface, join in the blog discussion and, of course, buy the book if you like. (It's also available at

    Please forgive me for the somewhat spammish nature of the previous paragraph, but I don't know how else to inject this new theory into the debate about trade without drawing attention to the book that explains the theory.

    Pete Murphy
    Author, "Five Short Blasts"

    jurassicpork said...

    Man, what a good article. I'm not exactly Paul Krugman and as a blogger, economics is not my long suit, to say the least. Still, your post puts thorny and intimidatingly macroscopic issues in layman's terms, ones we can all readily understand. Thanks, lennhart. I wish I'd read this first before doing my blogwhoring post tonight.

    Unknown said...

    RubyEyes said...

    The War Crimes Act of 1996 COULD HAVE BEEN USED

    It's not too late. Any Federal Judge can convene a Federal Grand Jury upon his/her own motion and charge them with investigating any damn thing that 'they' deem a violation of Federal Law.

    Bush CLEARLY violated US Codes, Title 18, Section 2441 which you refer to. It REQUIRES the death penalty for violations resulting in death. There must be MILLIONS OF COUNTS that may be charged to Bush.

    Therefore, any FEDERAL JUDGE reading this, I have a message: GET OFF YOUR LAZY ASS AND DO YOUR PATRIOTIC DUTY!


    Pete Murphy sez...

    Our enormous trade deficit is rightly of growing concern to Americans. Since leading the global drive toward trade liberalization by signing the Global Agreement on Tariffs and Trade in 1947, America has been transformed from the wealthiest nation on earth - its preeminent industrial power - into a skid row bum

    I think that is an accurate assessment...and I think you will agree, this trend began with Reagan's rise to power in 1980.

    sconan said...

    Revolution is THE reason the 1%ers and repug's HATE the French

    Absolument! Les Etats-Unis sont le plus grande terroriste! Ecrasez l'infame. Vive la France! Liberte! Egalite! Fraternite!

    tiago sez...

    The great depression did not affect the rest of the world as much as this financial melt down will due to global economics.

    You're absolutely correct. At the time of the great depression of the 30s, the US was not yet a 'super-power'; secondly, because it was not yet the market in which the rest of the world would dump its crap, the rapid decline of US purchasing power was not nearly as devastating abroad as it is today.

    Sad sez...

    If you owed a corporation money it would be harder to get out from under your debt. Tell me how that was not a deliberate but undeclared attempt to create a new peerage.

    Excellent point! There is a reason that 'corporations' are allowed --literally --to operate outside the law, yet they are considered to be 'people' and accorded 'rights' as if they were not mere legal abstractions but people. That, of course, is PURE BULLSHIT!

    Anonymous said...

    It started with the creation of the fed., the NSAct,the rise of the mil ind complex. The sinking of the Lusitania, Pearl harbor, etc etc. The question is what to do? Violence is out, they're too powerful. Change within the system is futile,we're in a plutocratic police state. Perhaps we can slowly create a separate culture, kind of like the Amish have done. I don't know alot about them, but they do eat well. I wonder if they pay taxes?

    Anonymous said...

    Len, I made up a new post with some economic bits in it. Most of it you will know already but there may be parts of interest to you. Cheers