On the bedside table:
Commentary: Disaster Capitalism Fed Style
I recently read Naomi Klein's book The Shock Doctrine:The Rise of Disaster Capitalism. In it she constructs a controversial new framework for analyzing the murky forces that drive major political and economic change. Her argument distilled: during those moments of extreme national stress-- natural disasters, wars and economic crisis for example-- when people are reeling and the situation is confused, agenda driven politicians and bureaucrats (usually working on behalf of corporate executives) have at times chosen to leverage the temporary chaos to ram through policies that might not otherwise see the light of day. The maxim to "do the right thing" frequently does not enter into the political calculation at crucial times, replaced instead by a "window of opportunity" mindset predominantly perpetrated by our friends on the right side of the aisle. Klein cites numerous historical examples that illustrate how over the years neo-liberal economic programs have repeatedly been implemented without the consent of the governed by ideologues seeking gain during moments of national shock-- Milton Friedman and his progeny receive the lion's share of Klein's criticism. In some cases, as in Pinochet's Chile, the goal has been accomplished by bringing tanks into the streets (with Friedmanite shock troops courtesy of the IMF and World Bank deployed in the trenches). Here at home the game frequently involves legislative subterfuge conducted far from public view or in language too arcane and nuanced for the average Joe to fully comprehend.
Lest you think this is a mere artifact of the old days of smoky back-room politics, think again (the Patriot Act and Iraq War leap immediately to mind)-- In fact the latest wheeling and dealing in the investment banking shake-up (Bear Stearns etc.), most notably the proposed expansion of powers for the Fed, I think supplies more fodder for Klein's theory...
In Treasury Plan, a Reluctant Eye Over Wall Street
"The Bush administration is proposing the broadest overhaul of Wall Street regulation since the Great Depression. But the plan, to be unveiled on Monday, has its genesis in a yearlong effort to limit Washington’s role in the market..." More>
Treasury’s Plan Would Give Fed Wide New Power
"While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation. Parts of the plan could reduce the power of the Securities and Exchange Commission, which is charged with maintaining orderly stock and bond markets and protecting investors..." More>>
*** WILL THE DEMOCRATS STAND-UP AND FIGHT FOR A VERSION OF THE FED PLAN THAT CODIFIES MUCH TIGHTER REGULATORY OVERSIGHT OVER ALL BANKS?***
Don't hold your breath...
Also of interest:
3-30-08: Homeowners’ Pleas Put G.O.P. Lawmakers in Bind on Defaults
Read a Previous Post on Federal Reserve
More from Naomi Klein: Baghdad Year Zero