Haiti: A Creditor, Not a Debtor
Naomi Klein
February 11, 2010
If we are to believe the G-7 finance ministers, Haiti is on its way to getting something it has deserved for a very long time: full "forgiveness" of its foreign debt. In Port-au-Prince, Haitian economist Camille Chalmers has been watching these developments with cautious optimism.
Debt cancellation is a good start, he told Al Jazeera English, but "It's time to go much further. We have to talk about reparations and restitution for the devastating consequences of debt." In this telling, the whole idea that Haiti is a debtor needs to be abandoned. Haiti, he argues, is a creditor--and it is we, in the West, who are deeply in arrears.
Author's note: The interview with economist Camille Chalmers was conducted by my partner Avi Lewis for an in-depth report that aired today on Al Jazeera English. You can watch the piece, Haiti: The Politics of Rebuilding, here.
Naomi Klein is an award-winning journalist, syndicated columnist, fellow at The Nation Institute and author of the...
Our debt to Haiti stems from four main sources: slavery, the US occupation, dictatorship and climate change. These claims are not fantastical, nor are they merely rhetorical. They rest on multiple violations of legal norms and agreements. Here, far too briefly, are highlights of the Haiti case.
§The Slavery Debt. When Haitians won their independence from France in 1804, they would have had every right to claim reparations from the powers that had profited from three centuries of stolen labor. France, however, was convinced that it was Haitians who had stolen the property of slave owners by refusing to work for free. So in 1825, with a flotilla of war ships stationed off the Haitian coast threatening to re-enslave the former colony, King Charles X came to collect: 90 million gold francs--ten times Haiti's annual revenue at the time. With no way to refuse, and no way to pay, the young nation was shackled to a debt that would take 122 years to pay off.
In 2003, Haitian President Jean-Bertrand Aristide, facing a crippling economic embargo, announced that Haiti would sue the French government over that long-ago heist. "Our argument," Aristide's former lawyer Ira Kurzban told me, "was that the contract was an invalid agreement because it was based on the threat of re-enslavement at a time when the international community regarded slavery as an evil." The French government was sufficiently concerned that it sent a mediator to Port-au-Prince to keep the case out of court. In the end, however, its problem was eliminated: while trial preparations were under way, Aristide was toppled from power. The lawsuit disappeared, but for many Haitians the reparations claim lives on.
§The Dictatorship Debt. From 1957 to 1986, Haiti was ruled by the defiantly kleptocratic Duvalier regime. Unlike the French debt, the case against the Duvaliers made it into several courts, which traced Haitian funds to an elaborate network of Swiss bank accounts and lavish properties. In 1988 Kurzban won a landmark suit against Jean-Claude "Baby Doc" Duvalier when a US District Court in Miami found that the deposed ruler had "misappropriated more than $504,000,000 from public monies."
Haitians, of course, are still waiting for their payback--but that was only the beginning of their losses. For more than two decades, the country's creditors insisted that Haitians honor the huge debts incurred by the Duvaliers, estimated at $844 million, much of it owed to institutions like the IMF and the World Bank. In debt service alone, Haitians have paid out tens of millions every year.
Was it legal for foreign lenders to collect on the Duvalier debts when so much of it was never spent in Haiti? Very likely not. As Cephas Lumina, the United Nations Independent Expert on foreign debt, put it to me, "the case of Haiti is one of the best examples of odious debt in the world. On that basis alone the debt should be unconditionally canceled."
But even if Haiti does see full debt cancellation (a big if), that does not extinguish its right to be compensated for illegal debts already collected.
§The Climate Debt. Championed by several developing countries at the climate summit in Copenhagen, the case for climate debt is straightforward. Wealthy countries that have so spectacularly failed to address the climate crisis they caused owe a debt to the developing countries that have done little to cause the crisis but are disproportionately facing its effects. In short: the polluter pays. Haiti has a particularly compelling claim. Its contribution to climate change has been negligible; Haiti's per capita CO2 emissions are just 1 percent of US emissions. Yet Haiti is among the hardest hit countries--according to one index, only Somalia is more vulnerable to climate change.
Haiti's vulnerability to climate change is not only--or even mostly--because of geography. Yes, it faces increasingly heavy storms. But it is Haiti's weak infrastructure that turns challenges into disasters and disasters into full-fledged catastrophes. The earthquake, though not linked to climate change, is a prime example. And this is where all those illegal debt payments may yet extract their most devastating cost. Each payment to a foreign creditor was money not spent on a road, a school, an electrical line. And that same illegitimate debt empowered the IMF and World Bank to attach onerous conditions to each new loan, requiring Haiti to deregulate its economy and slash its public sector still further. Failure to comply was met with a punishing aid embargo from 2001 to '04, the death knell to Haiti's public sphere.
This history needs to be confronted now, because it threatens to repeat itself. Haiti's creditors are already using the desperate need for earthquake aid to push for a fivefold increase in garment-sector production, some of the most exploitative jobs in the country. Haitians have no status in these talks, because they are regarded as passive recipients of aid, not full and dignified participants in a process of redress and restitution.
A reckoning with the debts the world owes to Haiti would radically change this poisonous dynamic. This is where the real road to repair begins: by recognizing the right of Haitians to reparations.
Labels: COLONIALISM, HAITI, NAOMI KLEIN, NEOCOLONIALISM
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Haiti: A Creditor, Not a Debtor
by Naomi Klein
Published on Friday, February 12, 2010 by The Nation
If we are to believe the G-7 finance ministers, Haiti is on its way to getting something it has deserved for a very long time: full "forgiveness" of its foreign debt. In Port-au-Prince, Haitian economist Camille Chalmers has been watching these developments with cautious optimism. Debt cancellation is a good start, he told Al Jazeera English, but "It's time to go much further. We have to talk about reparations and restitution for the devastating consequences of debt." In this telling, the whole idea that Haiti is a debtor needs to be abandoned. Haiti, he argues, is a creditor-and it is we, in the West, who are deeply in arrears.
Our debt to Haiti stems from four main sources:
slavery, the
US occupation,
dictatorship and
climate change. These claims are not fantastical, nor are they merely rhetorical. They rest on
multiple violations of legal norms and agreements. Here, far too briefly, are highlights of the Haiti case.
The Slavery Debt. When Haitians won their independence from France in 1804, they would have had every right to claim reparations from the powers that had profited from three centuries of stolen labor. France, however, was convinced that it was Haitians who had stolen the property of slave owners by refusing to work for free. So in 1825, with a flotilla of war ships stationed off the Haitian coast threatening to re-enslave the former colony, King Charles X came to collect: 90 million gold francs-ten times Haiti's annual revenue at the time. With no way to refuse, and no way to pay, the young nation was shackled to a debt that would take 122 years to pay off.
In 2003, Haitian President Jean-Bertrand Aristide, facing a crippling economic embargo, announced that Haiti would sue the French government over that long-ago heist. "Our argument," Aristide's former lawyer Ira Kurzban told me, "was that the contract was an invalid agreement because it was based on the threat of re-enslavement at a time when the international community regarded slavery as an evil."
The French government was sufficiently concerned that it sent a mediator to Port-au-Prince to keep the case out of court. In the end, however, its problem was eliminated: while trial preparations were under way, Aristide was toppled from power. The lawsuit disappeared, but for many Haitians the reparations claim lives on.
The Dictatorship Debt. From 1957 to 1986, Haiti was ruled by the defiantly kleptocratic Duvalier regime. Unlike the French debt, the case against the Duvaliers made it into several courts, which traced Haitian funds to an elaborate network of Swiss bank and lavish properties. In 1988 Kurzban won a landmark suit against Jean-Claude "Baby Doc" Duvalier when a US District Court in Miami found that the deposed ruler had "misappropriated more than $504,000,000 from public monies."
Haitians, of course, are still waiting for their payback-but that was only the beginning of their losses. For more than two decades, the country's creditors insisted that Haitians honor the huge debts incurred by the Duvaliers, estimated at $844 million, much of it owed to institutions like the IMF and the World Bank. In debt service alone, Haitians have paid out tens of millions every year.
Was it legal for foreign lenders to collect on the Duvalier debts when so much of it was never spent in Haiti? Very likely not. As Cephas Lumina, the United Nations Independent Expert on foreign debt, put it to me, "the case of Haiti is one of the best examples of odious debt in the world. On that basis alone the debt should be unconditionally canceled."
But even if Haiti does see full debt cancellation (a big if), that does not extinguish its right to be compensated for illegal debts already collected.
The Climate Debt. Championed by several developing countries at the climate summit in Copenhagen, the case for climate debt is straightforward. Wealthy countries that have so spectacularly failed to address the climate crisis they caused owe a debt to the developing countries that have done little to cause the crisis but are disproportionately facing its effects. In short: the polluter pays. Haiti has a particularly compelling claim. Its contribution to climate change has been negligible; Haiti's per capita CO2 emissions are just 1 percent of US emissions. Yet Haiti is among the hardest hit countries-according to one index, only Somalia is more vulnerable to climate change.
Haiti's vulnerability to climate change is not only-or even mostly-because of geography. Yes, it faces increasingly heavy storms. But it is Haiti's weak infrastructure that turns challenges into disasters and disasters into full-fledged catastrophes. The earthquake, though not linked to climate change, is a prime example. And this is where all those illegal debt payments may yet extract their most devastating cost. Each payment to a foreign creditor was money not spent on a road, a school, an electrical line. And that same illegitimate debt empowered the IMF and World Bank to attach onerous conditions to each new loan, requiring Haiti to deregulate its economy and slash its public sector still further. Failure to comply was met with a punishing aid embargo from 2001 to '04, the death knell to Haiti's public sphere.
This history needs to be confronted now, because it threatens to repeat itself. Haiti's creditors are already using the desperate need for earthquake aid to push for a fivefold increase in garment-sector production, some of the most exploitative jobs in the country. Haitians have no status in these talks, because they are regarded as passive recipients of aid, not full and dignified participants in a process of redress and restitution.
A reckoning with the debts the world owes to Haiti would radically change this poisonous dynamic. This is where the real road to repair begins: by recognizing the right of Haitians to reparations.
The interview with economist Camille Chalmers was conducted by my partner Avi Lewis for an in-depth report that aired today on Al Jazeera English. The piece, Haiti: The Politics of Rebuilding, offers a deeply compelling portrait of a people who are brimming with ideas about how to rebuild their country based on principles of sovereignty and equity -- far from the passive victims we have seen on so many other networks. It was produced by my former colleague Andréa Schmidt, one of the main researchers on The Shock Doctrine, and is crucial viewing for anyone concerned with avoiding a disaster capitalism redux in Haiti.
Labels: DEBT, HAITI, NAOMI KLEIN, NEOLIBERALISM
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Naomi Klein Issues Haiti Disaster Capitalism Alert: Stop Them Before They Shock Again
Journalist and author Naomi Klein spoke in New York last night and addressed the crisis in Haiti: “We have to be absolutely clear that this tragedy—which is part natural, part unnatural—must, under no circumstances, be used to, one, further indebt Haiti and, two, to push through unpopular corporatist policies in the interest of our corporations. This is not conspiracy theory. They have done it again and again.” [includes rush transcript]
AMY GOODMAN: Let’s go back to Naomi Klein. We’re going to try that tape again, her commenting on what is going on in Haiti right now and who is profiting already.
NAOMI KLEIN: But as I write about in The Shock Doctrine, crises are often used now as the pretext for pushing through policies that you cannot push through under times of stability. Countries in periods of extreme crisis are desperate for any kind of aid, any kind of money, and are not in a position to negotiate fairly the terms of that exchange.
And I just want to pause for a second and read you something, which is pretty extraordinary. I just put this up on my website. The headline is “Haiti: Stop Them Before They Shock Again.” This went up a few hours ago, three hours ago, I believe, on the Heritage Foundation website.
“Amidst the Suffering, Crisis in Haiti Offers Opportunities to the U.S. In addition to providing immediate humanitarian assistance, the U.S. response to the tragic earthquake in Haiti earthquake offers opportunities to re-shape Haiti’s long-dysfunctional government and economy as well as to improve the image of the United States in the region.” And then goes on.
Now, I don’t know whether things are improving or not, because it took the Heritage Foundation thirteen days before they issued thirty-two free market solutions for Hurricane Katrina. We put that document up on our website, as well. It was close down the housing projects, turn the Gulf Coast into a tax-free free enterprise zone, get rid of the labor laws that forces contractors to pay a living wage. Yeah, so it took them thirteen days before they did that in the case of Katrina. In the case of Haiti, they didn’t even wait twenty-four hours.
Now, why I say I don’t know whether it’s improving or not is that two hours ago they took this down. So somebody told them that it wasn’t couth. And then they put up something that was much more delicate. Fortunately, the investigative reporters at Democracy Now! managed to find that earlier document in a Google cache. But what you’ll find now is a much gentler “Things to Remember While Helping Haiti.” And buried down there, it says, “Long-term reforms for Haitian democracy and its economy are also badly overdue.”
But the point is, we need to make sure that the aid that goes to Haiti is, one, grants, not loans. This is absolutely crucial. This is an already heavily indebted country. This is a disaster that, as Amy said, on the one hand is nature, is, you know, an earthquake; on the other hand is the creation, is worsened by the poverty that our governments have been so complicit in deepening. Crises—natural disasters are so much worse in countries like Haiti, because you have soil erosion because the poverty means people are building in very, very precarious ways, so houses just slide down because they are built in places where they shouldn’t be built. All of this is interconnected. But we have to be absolutely clear that this tragedy, which is part natural, part unnatural, must, under no circumstances, be used to, one, further indebt Haiti, and, two, to push through unpopular corporatist policies in the interests of our corporations. And this is not a conspiracy theory. They have done it again and again.
AMY GOODMAN: Naomi Klein speaking last night at the Ethical Culture Society. She’s the author of The Shock Doctrine: The Rise of Disaster Capitalism.
Labels: HAITI, NAOMI KLEIN, NEOLIBERALISM, SHOCK DOCTRINE
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Obama's big silence: the race questionHas the president turned his back on black America?
Naomi Klein
The Guardian, Saturday 12 September 2009
Americans began the summer still celebrating the dawn of a "post-racial" era. They are ending it under no such illusion. The summer of 2009 was all about race, beginning with Republican claims that Sonia Sotomayor, Barack Obama's nominee to the US Supreme Court, was "racist" against whites. Then, just as that scandal was dying down, up popped "the Gates controversy", the furore over the president's response to the arrest of African American academic Henry Louis Gates Jr in his own home. Obama's remark that the police had acted "stupidly" was evidence, according to massively popular Fox News host Glenn Beck, that the president "has a deep-seated hatred for white people".
Obama's supposed racism gave a jolt of energy to the fringe movement that claims he has been carrying out a lifelong conspiracy to cover up his (fictional) African birth. Then Fox News gleefully discovered Van Jones, White House special adviser on green jobs. After weeks of being denounced as "a black nationalist who is also an avowed communist", Jones resigned last Sunday.
The undercurrent of all these attacks was that Obama, far from being the colour-blind moderate he posed as during the presidential campaign, is actually obsessed with race, in particular with redistributing white wealth into the hands of African Americans and undocumented Mexican workers. At town hall meetings across the US in August, these bizarre claims coalesced into something resembling an uprising to "take our country back". Henry D Rose, chair of Blacks For Social Justice, recently compared the overwhelmingly white, often armed, anti-Obama crowds to the campaign of "massive resistance" launched in the late 50s – a last-ditch attempt by white southerners to block the racial integration of their schools and protect other Jim Crow laws. Today's "new era of 'massive resistance'," writes Rose, "is also a white racial project."
There is at least one significant difference, however. In the late 50s and early 60s, angry white mobs were reacting to life-changing victories won by the civil rights movement. Today's mobs, on the other hand, are reacting to the symbolic victory of an African American winning the presidency. Yet they are rising up at a time when non-elite blacks and Latinos are losing significant ground, with their homes and jobs slipping away from them at a much higher rate than from whites. So far, Obama has been unwilling to adopt policies specifically geared towards closing this ever-widening divide. The result may well leave minorities with the worst of all worlds: the pain of a full-scale racist backlash without the benefits of policies that alleviate daily hardships. Meanwhile, with Obama constantly painted by the radical right as a cross between Malcolm X and Karl Marx, most progressives feel it is their job to defend him – not to point out that, when it comes to tackling the economic crisis ravaging minority communities, the president is not doing nearly enough.
For many antiracist campaigners, the realisation that Obama might not be the leader they had hoped for came when he announced his administration would be boycotting the UN Durban Review Conference on racism, widely known as "Durban II". Almost all of the public debate about the conference focused on its supposed anti-Israel bias. When it actually took place in April in Geneva, virtually all we heard about was Iranian president Mahmoud Ahmadinejad's inflammatory speech, which was met with rowdy disruptions, from the EU delegates who walked out, to the French Jewish students who put on clown wigs and red noses, and tried to shout him down.
Lost in the circus atmosphere was the enormous importance of the conference to people of African descent, and nowhere more so than among Obama's most loyal base. The US civil rights movement had embraced the first Durban conference, held in summer 2001, with great enthusiasm, viewing it as the start of the final stage of Martin Luther King's dream for full equality. Though most black leaders offered only timid public criticism of the president's Durban II boycott, the decision was discussed privately as his most explicit betrayal of the civil rights struggle since taking office.
The original 2001 gathering was not all about Israelis v Palestinians, or antisemitism, as so many have claimed (though all certainly played a role). The conference was overwhelmingly about Africa, the ongoing legacy of slavery and the huge unpaid debts that the rich owe the poor.
Holding the 2001 World Conference against Racism in what was still being called "the New South Africa" had seemed a terrific idea. World leaders would gather to congratulate themselves on having slain the scourge of apartheid, then pledge to defeat the world's few remaining vestiges of discrimination – things such as police violence, unequal access to certain jobs, lack of adequate healthcare for minorities and intolerance towards immigrants. Appropriate disapproval would be expressed for such failures of equality, and a well-meaning document pledging change would be signed to much fanfare. That, at least, is what western governments expected to happen.
They were mistaken. When the conference arrived in Durban, many delegates were shocked by the angry mood in the streets: tens of thousands of South Africans joined protests outside the conference centre, holding signs that said "Landlessness = racism" and "New apartheid: rich and poor". Many denounced the conference as a sham, and demanded concrete reparations for the crimes of apartheid.
South Africa's disillusionment, though particularly striking given its recent democratic victory, was part of a much broader global trend, one that would define the conference, in both the streets and the assembly halls.
Around the world, developing countries were increasingly identifying the so-called Washington Consensus economic policies as little more than a clever rebranding effort, a way for former northern colonial powers to continue to drain the southern countries of their wealth without being inconvenienced by the heavy lifting of colonialism.
Roughly two years before Durban, a coalition of developing countries had refused further to liberalise their economies, leading to the collapse of World Trade Organisation talks in Seattle.
A few months later, a newly militant movement calling for a debt jubilee disrupted the annual meetings of the World Bank and the International Monetary Fund. Durban was a continuation of this mounting southern rebellion, but it added something else to the mix: an invoice for past thefts.
Although it was true that southern countries owed debts to foreign banks and lending institutions, it was also true that in the colonial period – the first wave of globalisation – the wealth of the north was built, in large part, on stolen indigenous land and free labour provided by the slave trade.
Many in Durban argued that when these two debts were included in the calculus, it was actually the poorest regions of the world – especially Africa and the Caribbean – that turned out to be the creditors and the rich world that owed a debt. All big UN conferences tend to coalesce around a theme, and in Durban 2001 the clear theme was the call for reparations.
The overriding message was that even though the most visible signs of racism had largely disappeared – colonial rule, apartheid, Jim Crow-style segregation – profound racial divides will persist and even widen until the states and corporations that profited from centuries of state-sanctioned racism pay back some of what they owe.
African and Caribbean governments came to Durban with two key demands. The first was for an acknowledgment that slavery and even colonialism itself constituted "crimes against humanity" under international law; the second was for the countries that perpetrated and profited from these crimes to begin to repair the damage.
Most everyone agreed that reparations should include a clear and unequivocal apology for slavery, as well as a commitment to returning stolen artefacts and to educating the public about the scale and impact of the slave trade.
Above and beyond these more symbolic acts, there was a great deal of debate. Dudley Thompson, former Jamaican foreign minister and a longtime leader in the Pan-African movement, was opposed to any attempt to assign a number to the debt: "It is impossible to put a figure to killing millions of people, our ancestors," he said.
The leading reparations voices instead spoke of a "moral debt" that could be used as leverage to reorder international relations in multiple ways, from cancelling Africa's foreign debts to launching a huge develop ment programme for Africa on a par with Europe's Marshall Plan. What was emerging was a demand for a radical New Deal for the global south.
African and Caribbean countries had been holding high-level summits on reparations for a decade, with little effect. What prompted the Durban breakthrough was that a similar debate had taken off inside the US. The facts are familiar, if commonly ignored.
Even as individual blacks break the colour barrier in virtually every field, the correlation between race and poverty remains deeply entrenched. Blacks in the US consistently have dramatically higher rates of infant mortality, HIV infection, incarceration and unemployment, as well as lower salaries, life expectancy and rates of home ownership.
The biggest gap, however, is in net worth. By the end of the 90s, the average black family had a net worth one eighth the national average. Low net worth means less access to traditional credit (and, as we'd later learn, more sub-prime mortgages). It also means families have little besides debt to pass from one generation to the next, preventing the wealth gap closing on its own.
In 2000, Randall Robinson published The Debt: What America Owes To Blacks, which argued that "white society… must own up to slavery and acknowledge its debt to slavery's contemporary victims".
The book became a national bestseller, and within months the call for reparations was starting to look like a new anti-apartheid struggle. Students demanded universities disclose their historical ties to the slave trade, city councils began holding public hearings on reparations, chapters of the National Coalition of Blacks for Reparations in America had sprung up across the country and Charles Ogletree, the celebrated Harvard law professor (and one of Obama's closest mentors), put together a team of all-star lawyers to try to win reparations lawsuits in US courts.
By spring 2001, reparations had become the hot-button topic on US talkshows and op-ed pages. And though opponents consistently portrayed the demand as blacks wanting individual handouts from the government, most reparations advocates were clear they were seeking group solutions: mass scholarship funds, for instance, or major investments in preventive healthcare, inner cities and crumbling schools.
By the time Durban rolled around in late August, the conference had taken on the air of a black Woodstock. Angela Davis was coming. So were Jesse Jackson and Danny Glover. Small radical groups such as the National Black United Front spent months raising money to buy hundreds of plane tickets to South Africa.
Activists travelled to Durban from 168 countries, but the largest delegation by far came from the US: approximately 3,000 people, roughly 2,000 of them African Americans. Ogletree pumped up the crowds with an energetic address: "This is a movement that cannot be stopped… I promise we will see reparations in our lifetime."
The call for reparations took many forms, but one thing was certain: antiracism was transformed in Durban from something safe and comfortable for elites to embrace into something explosive and potentially very, very costly. North American and European governments, the debtors in this new accounting, tried desperately to steer the negotiations on to safe terrain.
"We are better to look forward and not point fingers backward," national security adviser Condoleezza Rice said. It was a losing battle. Durban, according to Amina Mohamed, chief negotiator for the Africa bloc, was Africa's "rendezvous with history".
Not everyone was willing to show up for the encounter, however, and that is where the Israel controversies come in. Durban, it should be remembered, took place in the aftermath of the collapse of the Oslo Accords, and there were those who hoped the conference could somehow fill the political vacuum. Six months before the meeting in Durban, at an Asian preparatory conference in Tehran, a few Islamic countries requested language in their draft of the Durban Declaration that described Israeli policies in the occupied territories as "a new kind of apartheid" and a "form of genocide". Then, a month before the conference, there was a new push for changes: references to the Holocaust were paired with the "ethnic cleansing of the Arab population in historic Palestine", while references to "the increase in antisemitism and hostile acts against Jews" were twinned with phrases about "the increase of racist practices of Zionism", and Zionism was described as a movement "based on racism and discriminatory ideas".
There were cases to be made for all of it, but this was language sure to tear the meeting apart (just as "Zionism equals racism" resolutions had torn apart UN gatherings before). Meanwhile, as soon as the conference began, the parallel forum for non-governmental organisations began to spiral out of control. With more than 8,000 participants and no ground rules to speak of, the NGO forum turned into a free-for-all, with, among other incidents, the Arab Lawyers Union passing out a booklet that contained Der Stürmer–style cartoons of hook-nosed Jews with bloody fangs.
High-profile NGO and civil rights leaders roundly condemned the antisemitic incidents, as did Mary Robinson, then UN high commissioner for human rights. None of the controversial language about Israel and Zionism made it into the final Durban Declaration. But for the newly elected administration of George W Bush, that was besides the point. Already testing the boundaries of what would become a new era of US unilateralism, Bush latched on to the gathering's alleged anti-Israel bias as the perfect excuse to flee the scene, neatly avoiding the debates over Israel and reparations. Early in the conference, the US and Israel walked out.
Despite the disruptions, Africa was not denied its rendezvous with history. The final Durban Declaration became the first document with international legal standing to state that "slavery and the slave trade are a crime against humanity and should always have been so, especially the transatlantic slave trade". This language was more than symbolic. When lawyers had sought to win slavery reparations in US courts, the biggest barrier was always the statute of limitations, which had long since expired. But if slavery was "a crime against humanity", it was not restricted by any statute.
On the final day of the conference, after Canada tried to minimise the significance of the declaration, Amina Mohamed, now a top official in the Kenyan government, took the floor in what many remember as the most dramatic moment of the gathering.
"Madame President," Mohamed said, "it is not a crime against humanity just for today, nor just for tomorrow, but for always and for all time. Nuremberg made it clear that crimes against humanity are not time-bound." Any acts that take responsibility for these crimes, therefore, "are expected and are in order". The assembly hall erupted in cheers and a long standing ovation.
Groups of African American activists spent their last day at the conference planning a "Millions for Reparations" march on Washington. Attorney Roger Wareham, co-counsel on a high-profile reparations lawsuit and one of the organisers, recalled that as they left South Africa, "people were on a real rolling high" – ready to take their movement to the next level.
That was 9 September 2001. Two days later, Africa's "rendezvous with history" was all but forgotten. The profound demands that rose up from Durban during that first week of September 2001 – for debt cancellation, for reparations for slavery and apartheid, for land redistribution and indigenous land rights, for compensation, not charity – have never again managed to command international attention. At various World Bank meetings and G8 summits there is talk, of course, of graciously providing aid to Africa and perhaps "forgiving" its debts. But there is no suggestion that it might be the G8 countries that are the debtors and Africa the creditor. Or that it is we, in the west, who should be asking forgiveness.
Because Durban disappeared before it had ever fully appeared, it's sometimes hard to believe it happened at all. As Bill Fletcher, author and long-time advocate for African rights, puts it: "It was as if someone had pressed a giant delete button."
When news came that the Durban follow-up conference would take place three months into Obama's presidency, many veterans of the first gathering were convinced the time had finally come to restart that interrupted conversation. And at first the Obama administration seemed to be readying to attend, even sending a small delegation to one of the preparatory conferences.
So when Obama announced that he, like Bush before him, would be boycotting, it came as a blow. Especially because the state department's official excuse was that the declaration for the new conference was biased against Israel. The evidence? That the document – which does not reference Israel once – "reaffirms" the 2001 Durban Declaration. Never mind that that was so watered down that Shimon Peres, then Israel's foreign minister, praised it at the time as "an accomplishment of the first order for Israel" and "a painful comedown for the Arab League".
When disappointed activists reconvened for the Durban Review Conference this April, talk in the corridors often turned to the unprecedented sums governments were putting on the line to save the banks. Roger Wareham, for instance, pointed out that if Washington can find billions to bail out AIG, it can also say, "We're going to bail out people of African descent because this is what's happened historically."
It's true that, at least on the surface, the economic crisis has handed the reparations movement some powerful new arguments. The hardest part of selling reparations in the US has always been the perception that something would have to be taken away from whites in order for it to be given to blacks and other minorities. But because of the broad support for large stimulus spending, there is a staggering amount of new money floating around – money that does not yet belong to any one group.
Obama's approach to stimulus spending has been rightly criticised for lacking a big idea – the $787bn package he unveiled shortly after taking office is a messy grab bag, with little ambition actually to fix any one of the problems on which it nibbles. Listening to Wareham in Geneva, it occurred to me that a serious attempt to close the economic gaps left by slavery and Jim Crow is as good a big stimulus idea as any.
What is tantalising (and maddening) about Obama is that he has the skills to persuade a great many Americans of the justice of such an endeavour. The one time he gave a major campaign address on race, prompted by controversy over the Reverend Jeremiah Wright, he told a story about the historical legacies of slavery and legalised discrimination that have structurally prevented African Americans from achieving full equality, a story not so different from the one activists such as Wareham tell in arguing for reparations.
Obama's speech was delivered six months before Wall Street collapsed, but the same forces he described go a long way toward explaining why the crash happened in the first place: "Legalised discrimination… meant that black families could not amass any meaningful wealth to bequeath to future generations," Obama said, which is precisely why many turned to risky sub-prime mortgages. In Obama's home city of Chicago, black families were four times more likely than whites to get a sub-prime mortgage.
The crisis in African American wealth has only been deepened by the larger economic crisis. In New York City, for instance, the unemployment rate has increased four times faster among blacks than among whites. According to the New York Times, home "defaults occur three times as often in mostly minority census tracts as in mostly white ones". If Obama traced the Wall Street collapse back to the policies of redlining and Jim Crow, all the way to the betrayed promise of 40 acres and a mule for freed slaves, a broad sector of the American public might well be convinced that finally eliminating the structural barriers to full equality is in the interests not just of minorities but of everyone who wants a more stable economy.
Since the economic crisis hit, John A Powell and his team at the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University have been engaged in a project they call "Fair Recovery". It lays out exactly what an economic stimulus programme would look like if eliminating the barriers to equality were its overarching idea. Powell's plan covers everything from access to technology to community redevelopment. A few examples: rather than simply rebuilding the road system by emphasising "shovel ready" projects (as Obama's current plan does), a "fair recovery" approach would include massive investments in public transport to address the fact that African Americans live farther away than any other group from where the jobs are. Similarly, a plan targeting inequality would focus on energy-efficient home improvements in low-income neighbourhoods and, most importantly, require that contractors hire locally. Combine all of these targeted programmes with real health and education reform and, whether or not you call it "reparations", you have something approaching what Randall Robinson called for in The Debt: "A virtual Marshall Plan of federal resources" to close the racial divide.
In his Philadelphia "race speech", Obama was emphatic that race was something "this nation cannot afford to ignore"; that "if we simply retreat into our respective corners, we will never be able to come together and solve challenges like healthcare, or education, or the need to find good jobs for every American". Yet as soon as the speech had served its purpose (saving Obama's campaign from being engulfed by the Wright scandal), he did simply retreat. And his administration has been retreating from race ever since.
Public policy activists report that the White House is interested in hearing only about projects that are "race neutral" – nothing that specifically targets historically disadvantaged constituencies. Its housing and education programmes do not tackle the need for desegregation; indeed Obama's enthusiasm for privately-run "charter" schools may well deepen segregation, since charters are some of the most homogenous schools in the country. When asked specific questions about what his administration is doing to address the financial crisis's wildly disproportionate impact on African Americans and Latinos, Obama has consistently offered a variation on the line that, by fixing the economy and extending benefits, everyone will be helped, "black, brown and white", and the vulnerable most of all.
All this is being met with mounting despair among inequality experts. Extending unemployment benefits and job retraining mainly help people who've just lost their jobs. Reaching those who have never had formal employment – many of whom have criminal records – requires a far more complex strategy that takes down multiple barriers simultaneously. "Treating people who are situated differently as if they were the same can result in much greater inequalities," Powell warns. It will be difficult to measure whether this is the case because the White House's budget office is so far refusing even to keep statistics on how its programmes affect women and minorities.
There were those who saw this coming. The late Latino activist Juan Santos wrote a much-circulated essay during the presidential campaign in which he argued that Obama's unwillingness to talk about race (except when his campaign depended upon it) was a triumph not of post-racialism but of racism, period. Obama's silence, he argued, was the same silence every person of colour in America lives with, understanding that they can be accepted in white society only if they agree not to be angry about racism. "We stay silent, as a rule, on the job. We stay silent, as a rule, in the white world. Barack Obama is the living symbol of our silence. He is our silence writ large. He is our Silence running for president." Santos predicted that "with respect to Black interests, Obama would be a silenced Black ruler: A muzzled Black emperor."
Many of Obama's defenders responded angrily: his silence was a mere electoral strategy, they said. He was doing what it took to make racist white people comfortable voting for a black man. All that would change, of course, when Obama took office. What Obama's decision to boycott Durban demonstrated definitively was that the campaign strategy is also the governing strategy.
Two weeks after the close of the Durban Review Conference, Rush Limbaugh sprang a new theory on his estimated 14 million listeners. Obama, Limbaugh claimed, was deliberately trashing the economy so he could give more handouts to black people. "The objective is more food stamp benefits. The objective is more unemployment benefits. The objective is an expanding welfare state. The objective is to take the nation's wealth and return it to the nation's 'rightful owners'. Think reparations. Think forced reparations here, if you want to understand what actually is going on."
It was nonsense, of course, but the outburst was instructive. No matter how race-neutral Obama tries to be, his actions will be viewed by a large part of the country through the lens of its racial obsessions. So, since even his most modest, Band-Aid measures are going to be greeted as if he is waging a full-on race war, Obama has little to lose by using this brief political window actually to heal a few of the country's racial wounds.
• A longer version of this article appears in the September issue of Harper's Magazine.
Labels: BARACK OBAMA, LAND REFORM, NAOMI KLEIN
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Capitalism, Sarah Palin-Style
by Naomi Klein
The following was adapted from a speech on May 2, 2009 at The Progressive’s 100th anniversary conference and originally printed in The Progressive magazine, August 2009 issue:
We are in a progressive moment, a moment when the ground is shifting beneath our feet, and anything is possible. What we considered unimaginable about what could be said and hoped for a year ago is now possible. At a time like this, it is absolutely critical that we be as clear as we possibly can be about what it is that we want because we might just get it.
So the stakes are high.
I usually talk about the bailout in speeches these days. We all need to understand it because it is a robbery in progress, the greatest heist in monetary history. But today I'd like to take a different approach: What if the bailout actually works, what if the financial sector is saved and the economy returns to the course it was on before the crisis struck? Is that what we want? And what would that world look like?
The answer is that it would look like Sarah Palin. Hear me out, this is not a joke. I don't think we have given sufficient consideration to the meaning of the Palin moment. Think about it: Sarah Palin stepped onto the world stage as Vice Presidential candidate on August 29 at a McCain campaign rally, to much fanfare. Exactly two weeks later, on September 14, Lehman Brothers collapsed, triggering the global financial meltdown.
So in a way, Palin was the last clear expression of capitalism-as-usual before everything went south. That's quite helpful because she showed us-in that plainspoken, down-homey way of hers-the trajectory the U.S. economy was on before its current meltdown. By offering us this glimpse of a future, one narrowly avoided, Palin provides us with an opportunity to ask a core question: Do we want to go there? Do we want to save that pre-crisis system, get it back to where it was last September? Or do we want to use this crisis, and the electoral mandate for serious change delivered by the last election, to radically transform that system? We need to get clear on our answer now because we haven't had the potent combination of a serious crisis and a clear progressive democratic mandate for change since the 1930s. We use this opportunity, or we lose it.
So what was Sarah Palin telling us about capitalism-as-usual before she was so rudely interrupted by the meltdown? Let's first recall that before she came along, the U.S. public, at long last, was starting to come to grips with the urgency of the climate crisis, with the fact that our economic activity is at war with the planet, that radical change is needed immediately.
We were actually having that conversation: Polar bears were on the cover of Newsweek magazine. And then in walked Sarah Palin. The core of her message was this: Those environmentalists, those liberals, those do-gooders are all wrong. You don't have to change anything. You don't have to rethink anything. Keep driving your gas-guzzling car, keep going to Wal-Mart and shop all you want. The reason for that is a magical place called Alaska. Just come up here and take all you want. "Americans," she said at the Republican National Convention, "we need to produce more of our own oil and gas. Take it from a gal who knows the North Slope of Alaska, we've got lots of both."
And the crowd at the convention responded by chanting and chanting: "Drill, baby, drill."
Watching that scene on television, with that weird creepy mixture of sex and oil and jingoism, I remember thinking: "Wow, the RNC has turned into a rally in favor of screwing Planet Earth." Literally.
But what Palin was saying is what is built into the very DNA of capitalism: the idea that the world has no limits. She was saying that there is no such thing as consequences, or real-world deficits. Because there will always be another frontier, another Alaska, another bubble. Just move on and discover it. Tomorrow will never come.
This is the most comforting and dangerous lie that there is: the lie that perpetual, unending growth is possible on our finite planet. And we have to remember that this message was incredibly popular in those first two weeks, before Lehman collapsed. Despite Bush's record, Palin and McCain were pulling ahead. And if it weren't for the financial crisis, and for the fact that Obama started connecting with working class voters by putting deregulation and trickle-down economics on trial, they might have actually won.
The President tells us he wants to look forward, not backwards. But in order to confront the lie of perpetual growth and limitless abundance that is at the center of both the ecological and financial crises, we have to look backwards. And we have to look way backwards, not just to the past eight years of Bush and Cheney, but to the very founding of this country, to the whole idea of the settler state.
Modern capitalism was born with the so-called discovery of the Americas. It was the pillage of the incredible natural resources of the Americas that generated the excess capital that made the Industrial Revolution possible. Early explorers spoke of this land as a New Jerusalem, a land of such bottomless abundance, there for the taking, so vast that the pillage would never have to end. This mythology is in our biblical stories-of floods and fresh starts, of raptures and rescues-and it is at the center of the American Dream of constant reinvention. What this myth tells us is that we don't have to live with our pasts, with the consequences of our actions. We can always escape, start over.
These stories were always dangerous, of course, to the people who were already living on the "discovered" lands, to the people who worked them through forced labor. But now the planet itself is telling us that we cannot afford these stories of endless new beginnings anymore. That is why it is so significant that at the very moment when some kind of human survival instinct kicked in, and we seemed finally to be coming to grips with the Earth's natural limits, along came Palin, the new and shiny incarnation of the colonial frontierswoman, saying: Come on up to Alaska. There is always more. Don't think, just take.
This is not about Sarah Palin. It's about the meaning of that myth of constant "discovery," and what it tells us about the economic system that they're spending trillions of dollars to save. What it tells us is that capitalism, left to its own devices, will push us past the point from which the climate can recover. And capitalism will avoid a serious accounting-whether of its financial debts or its ecological debts-at all costs. Because there's always more. A new quick fix. A new frontier.
That message was selling, as it always does. It was only when the stock market crashed that people said, "Maybe Sarah Palin isn't a great idea this time around. Let's go with the smart guy to ride out the crisis."
I almost feel like we've been given a last chance, some kind of a reprieve. I try not to be apocalyptic, but the global warming science I read is scary. This economic crisis, as awful as it is, pulled us back from that ecological precipice that we were about to drive over with Sarah Palin and gave us a tiny bit of time and space to change course. And I think it's significant that when the crisis hit, there was almost a sense of relief, as if people knew they were living beyond their means and had gotten caught. We suddenly had permission to do things together other than shop, and that spoke to something deep.
But we are not free from the myth. The willful blindness to consequences that Sarah Palin represents so well is embedded in the way Washington is responding to the financial crisis. There is just an absolute refusal to look at how bad it is. Washington would prefer to throw trillions of dollars into a black hole rather than find out how deep the hole actually is. That's how willful the desire is not to know.
And we see lots of other signs of the old logic returning. Wall Street salaries are almost back to 2007 levels. There's a certain kind of electricity in the claims that the stock market is rebounding. "Can we stop feeling guilty yet?" you can practically hear the cable commentators asking. "Is the bubble back yet?"
And they may well be right. This crisis isn't going to kill capitalism or even change it substantively. Without huge popular pressure for structural reform, the crisis will prove to have been nothing more than a very wrenching adjustment. The result will be even greater inequality than before the crisis. Because the millions of people losing their jobs and their homes aren't all going to be getting them back, not by a long shot. And manufacturing capacity is very difficult to rebuild once it's auctioned off.
It's appropriate that we call this a "bailout." Financial markets are being bailed out to keep the ship of finance capitalism from sinking, but what is being scooped out is not water. It's people. It's people who are being thrown overboard in the name of "stabilization." The result will be a vessel that is leaner and meaner. Much meaner. Because great inequality-the super rich living side by side with the economically desperate-requires a hardening of the hearts. We need to believe ourselves superior to those who are excluded in order to get through the day. So this is the system that is being saved: the same old one, only meaner.
And the question that we face is: Should our job be to bail out this ship, the biggest pirate ship that ever was, or to sink it and replace it with a sturdier vessel, one with space for everyone? One that doesn't require these ritual purges, during which we throw our friends and our neighbors overboard to save the people in first class. One that understands that the Earth doesn't have the capacity for all of us to live better and better.
But it does have the capacity, as Bolivian President Evo Morales said recently at the U.N., "for all of us to live well."
Because make no mistake: Capitalism will be back. And the same message will return, though there may be someone new selling that message: You don't need to change. Keep consuming all you want. There's plenty more. Drill, baby, drill. Maybe there will be some technological fix that will make all our problems disappear.
And that is why we need to be absolutely clear right now. Capitalism can survive this crisis. But the world can't survive another capitalist comeback.
Labels: NAOMI KLEIN, NEOLIBERALISM
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Enough. It's time for a boycott
Naomi Klein
The Guardian,
Saturday 10 January 2009
It's time. Long past time. The best strategy to end the increasingly bloody occupation is for Israel to become the target of the kind of global movement that put an end to apartheid in South Africa. In July 2005 a huge coalition of Palestinian groups laid out plans to do just that. They called on "people of conscience all over the world to impose broad boycotts and implement divestment initiatives against Israel similar to those applied to South Africa in the apartheid era". The campaign Boycott, Divestment and Sanctions was born.
Every day that Israel pounds Gaza brings more converts to the BDS cause - even among Israeli Jews. In the midst of the assault roughly 500 Israelis, dozens of them well-known artists and scholars, sent a letter to foreign ambassadors in Israel. It calls for "the adoption of immediate restrictive measures and sanctions" and draws a clear parallel with the anti-apartheid struggle. "The boycott on South Africa was effective, but Israel is handled with kid gloves ... This international backing must stop."
Yet even in the face of these clear calls, many of us still can't go there. The reasons are complex, emotional and understandable. But they simply aren't good enough. Economic sanctions are the most effective tool in the non-violent arsenal: surrendering them verges on active complicity. Here are the top four objections to the BDS strategy, followed by counter-arguments.
Punitive measures will alienate rather than persuade Israelis.
The world has tried what used to be called "constructive engagement". It has failed utterly. Since 2006 Israel has been steadily escalating its criminality: expanding settlements, launching an outrageous war against Lebanon, and imposing collective punishment on Gaza through the brutal blockade. Despite this escalation, Israel has not faced punitive measures - quite the opposite. The weapons and $3bn in annual aid the US sends Israel are only the beginning. Throughout this key period, Israel has enjoyed a dramatic improvement in its diplomatic, cultural and trade relations with a variety of other allies. For instance, in 2007 Israel became the first country outside Latin America to sign a free-trade deal with the Mercosur bloc. In the first nine months of 2008, Israeli exports to Canada went up 45%. A new deal with the EU is set to double Israel's exports of processed food. And in December European ministers "upgraded" the EU-Israel association agreement, a reward long sought by Jerusalem.
It is in this context that Israeli leaders started their latest war: confident they would face no meaningful costs. It is remarkable that over seven days of wartime trading, the Tel Aviv Stock Exchange's flagship index actually went up 10.7%. When carrots don't work, sticks are needed.
Israel is not South Africa.
Of course it isn't. The relevance of the South African model is that it proves BDS tactics can be effective when weaker measures (protests, petitions, backroom lobbying) fail. And there are deeply distressing echoes of apartheid in the occupied territories: the colour-coded IDs and travel permits, the bulldozed homes and forced displacement, the settler-only roads. Ronnie Kasrils, a prominent South African politician, said the architecture of segregation he saw in the West Bank and Gaza was "infinitely worse than apartheid". That was in 2007, before Israel began its full-scale war against the open-air prison that is Gaza.
Why single out Israel when the US, Britain and other western countries do the same things in Iraq and Afghanistan?
Boycott is not a dogma; it is a tactic. The reason the strategy should be tried is practical: in a country so small and trade-dependent, it could actually work.
Boycotts sever communication; we need more dialogue, not less.
This one I'll answer with a personal story. For eight years, my books have been published in Israel by a commercial house called Babel. But when I published The Shock Doctrine, I wanted to respect the boycott. On the advice of BDS activists, including the wonderful writer John Berger, I contacted a small publisher called Andalus. Andalus is an activist press, deeply involved in the anti-occupation movement and the only Israeli publisher devoted exclusively to translating Arabic writing into Hebrew. We drafted a contract that guarantees that all proceeds go to Andalus's work, and none to me. I am boycotting the Israeli economy but not Israelis.
Our modest publishing plan required dozens of phone calls, emails and instant messages, stretching between Tel Aviv, Ramallah, Paris, Toronto and Gaza City. My point is this: as soon as you start a boycott strategy, dialogue grows dramatically. The argument that boycotts will cut us off from one another is particularly specious given the array of cheap information technologies at our fingertips. We are drowning in ways to rant at each other across national boundaries. No boycott can stop us.
Just about now, many a proud Zionist is gearing up for major point-scoring: don't I know that many of these very hi-tech toys come from Israeli research parks, world leaders in infotech? True enough, but not all of them. Several days into Israel's Gaza assault, Richard Ramsey, managing director of a British telecom specialising in voice-over-internet services, sent an email to the Israeli tech firm MobileMax: "As a result of the Israeli government action in the last few days we will no longer be in a position to consider doing business with yourself or any other Israeli company."
Ramsey says his decision wasn't political; he just didn't want to lose customers. "We can't afford to lose any of our clients," he explains, "so it was purely commercially defensive."
It was this kind of cold business calculation that led many companies to pull out of South Africa two decades ago. And it's precisely the kind of calculation that is our most realistic hope of bringing justice, so long denied, to Palestine.
A version of this column was published in the Nation (thenation.com)
naomiklein.org
Labels: ISRAEL, NAOMI KLEIN, SANCTIONS
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In Praise of a Rocky Transition
Lookout
By Naomi Klein
The more details emerge, the clearer it becomes that Washington's handling of the Wall Street bailout is not merely incompetent. It is borderline criminal.
In a moment of high panic in late September, the US Treasury unilaterally pushed through a radical change in how bank mergers are taxed--a change long sought by the industry. Despite the fact that this move will deprive the government of as much as $140 billion in tax revenue, lawmakers found out only after the fact. According to the Washington Post, more than a dozen tax attorneys agree that "Treasury had no authority to issue the [tax change] notice."
Of equally dubious legality are the equity deals Treasury has negotiated with many of the country's banks. According to Congressman Barney Frank, one of the architects of the legislation that enables the deals, "Any use of these funds for any purpose other than lending--for bonuses, for severance pay, for dividends, for acquisitions of other institutions, etc.--is a violation of the act." Yet this is exactly how the funds are being used.
Then there is the nearly $2 trillion the Federal Reserve has handed out in emergency loans. Incredibly, the Fed will not reveal which corporations have received these loans or what it has accepted as collateral. Bloomberg News believes that this secrecy violates the law and has filed a federal suit demanding full disclosure.
Despite all of this potential lawlessness, the Democrats are either openly defending the administration or refusing to intervene. "There is only one president at a time," we hear from Barack Obama. That's true. But every sweetheart deal the lame-duck Bush administration makes threatens to hobble Obama's ability to make good on his promise of change. To cite just one example, that $140 billion in missing tax revenue is almost the same sum as Obama's renewable energy program. Obama owes it to the people who elected him to call this what it is: an attempt to undermine the electoral process by stealth.
Yes, there is only one president at a time, but that president needed the support of powerful Democrats, including Obama, to get the bailout passed. Now that it is clear that the Bush administration is violating the terms to which both parties agreed, the Democrats have not just the right but a grave responsibility to intervene forcefully.
I suspect that the real reason the Democrats are so far failing to act has less to do with presidential protocol than with fear: fear that the stock market, which has the temperament of an overindulged 2-year-old, will throw one of its world-shaking tantrums. Disclosing the truth about who is receiving federal loans, we are told, could cause the cranky market to bet against those banks. Question the legality of equity deals and the same thing will happen. Challenge the $140 billion tax giveaway and mergers could fall through. "None of us wants to be blamed for ruining these mergers and creating a new Great Depression," explained one unnamed Congressional aide.
More than that, the Democrats, including Obama, appear to believe that the need to soothe the market should govern all key economic decisions in the transition period. Which is why, just days after a euphoric victory for "change," the mantra abruptly shifted to "smooth transition" and "continuity."
Take Obama's pick for chief of staff. Despite the Republican braying about his partisanship, Rahm Emanuel, the House Democrat who received the most donations from the financial sector, sends an unmistakably reassuring message to Wall Street. When asked on This Week With George Stephanopoulos whether Obama would be moving quickly to increase taxes on the wealthy, as promised, Emanuel pointedly did not answer the question.
This same market-coddling logic should, we are told, guide Obama's selection of treasury secretary. Fox News's Stuart Varney explained that Larry Summers, who held the post under Clinton, and former Fed chair Paul Volcker would both "give great confidence to the market." We learned from MSNBC's Joe Scarborough that Summers is the man "the Street would like the most."
Let's be clear about why. "The Street" would cheer a Summers appointment for exactly the same reason the rest of us should fear it: because traders will assume that Summers, champion of financial deregulation under Clinton, will offer a transition from Henry Paulson so smooth we will barely know it happened. Someone like FDIC chair Sheila Bair, on the other hand, would spark fear on the Street--for all the right reasons.
One thing we know for certain is that the market will react violently to any signal that there is a new sheriff in town who will impose serious regulation, invest in people and cut off the free money for corporations. In short, the markets can be relied on to vote in precisely the opposite way that Americans have just voted. (A recent USA Today/Gallup poll found that 60 percent of Americans strongly favor "stricter regulations on financial institutions," while just 21 percent support aid to financial companies.)
There is no way to reconcile the public's vote for change with the market's foot-stomping for more of the same. Any and all moves to change course will be met with short-term market shocks. The good news is that once it is clear that the new rules will be applied across the board and with fairness, the market will stabilize and adjust. Furthermore, the timing for this turbulence has never been better. Over the past three months, we've been shocked so frequently that market stability would come as more of a surprise. That gives Obama a window to disregard the calls for a seamless transition and do the hard stuff first. Few will be able to blame him for a crisis that clearly predates him, or fault him for honoring the clearly expressed wishes of the electorate. The longer he waits, however, the more memories fade.
When transferring power from a functional, trustworthy regime, everyone favors a smooth transition. When exiting an era marked by criminality and bankrupt ideology, a little rockiness at the start would be a very good sign.
About Naomi Klein
Naomi Klein is an award-winning journalist and syndicated columnist and the author of the international and New York Times bestseller The Shock Doctrine: The Rise of Disaster Capitalism (September 2007); an earlier international best-seller, No Logo: Taking Aim at the Brand Bullies; and the collection Fences and Windows: Dispatches from the Front Lines of the Globalization Debate (2002). more...
Labels: BARACK OBAMA, FINANCIAL CRISIS, GW BUSH, NAOMI KLEIN, NEOCONSERVATISM, NEOLIBERALISM, RECESSION
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