Saturday, November 10, 2012

Disaster Capitalism and Sandy

In 2008 I wrote an essay about the application of Naomi Klein's "shock doctrine" thesis in New Orleans in the wake of Hurricane Katrina: Nadesan, M. (2008). Hurricane Katrina: Governmentality, Risk, and Responsibility. Controversia, 5(2) 67-90. Naomi Klein warned recently that the same privatization and exploitation could occur in the wake of Sandy. 

Below find excerpts from my 2008 essay and a link to Klein's recent warning:

Neoconservatives and neoliberals alike found in Katrina’s wake the opportunity space to materialize broad scale economic and social reforms. Representative Mike Pence, a Republican from Indiana who then led the Republican Study Group contended, “The desire to bring conservative, free-market ideas to the Gulf Coast is white hot …We want to turn the gulf Coast into a magnet for free enterprise. The last thing we want is a federal city where New Orleans once was” (cited in Wilke & Mullins, 2005, p. B1). Temporary hurricane response measures that passed legislative and/or executive government approval included the following:
Liability exemptions for hospitals, physicians and Katrina relief workers; Temporary exemptions from environmental laws; Suspension of Davis-Bacon prevailing wage laws; Streamlined approval process for building or expanding oil refineries; Temporary exemptions from estate tax; School vouchers for displaced students. (Wilke & Mullins, 2005, p. B1)
In addition to these approved policies, Republicans worked on “legislation that would limit victims’ right to sue, offer vouchers for displaced school children, lift some environmental restrictions on new refineries and create tax-advantaged enterprise zones to maximize private-sector participation in recovery and reconstruction” (Wilke & Mullins, 2005, p. B1). Enterprise and the privatization of formerly state-supported apparatuses such as education were the order of the day.
In his September 15 speech to the nation, President Bush proposed creating a Gulf Opportunity Zone in Louisiana and Mississippi and Alabama stating: “It is entrepreneurship that creates jobs and opportunity; it is entrepreneurship that helps break the cycle of poverty; and we will take the side of entrepreneurs as they lead the economic revival of the Gulf region” (Bush, 2005). The zone enabled about $2 billion in tax “relief” and credits for small businesses (Bush, 2005). Additionally, tax limits for 2005 donations by corporations and individuals were altered (Rogers, 2005). Bush also suggested identifying government property in the affected region in order to run a lottery that would award sites to low-income “homesteaders” who would pledge to build there.
In the spirit of private enterprise, the federal government contracted with private corporations such as Halliburton and Bechtel to help clean and rebuild New Orleans. According to U.S. Office of Management and Budget spokesman, Scott Millburn, private-sector expertise allows the government to "bring the full strength of American ingenuity to bear as we seek solutions" (cited in Gehlert, 2006, p. A10). Government contracting grew 89% between 2000 and 2006, totaling more than $415 billion in 2006 (Gupta, 2007). 
Unable to rely solely on private, religious-based education in New Orleans, neoconservative public officials drew upon their authority to help privatize New Orleans’ public education by expanding charter-based schools. The federal government gave $45 million to Louisiana to open and reopen charter schools, which a White House fact sheet contends allows “for more flexibility, greater accountability, and better results for New Orleans' students” than public education (“Fact Sheet,” 2007). Although charter schools receive public funds, they operate relatively independently and are not bound by the same curriculum and admissions policies as public schools. Expansion of charter schools is often seen as a first step toward privatized school reform.
Additionally, neoliberal and neoconservative reforms in New Orleans targeted “burdensome” environmental and labor restrictions perceived as impinging against entrepreneurial activity. These efforts in New Orleans are consistent with broader policies pursued by “neo” authorities aiming to undo national environmental protections including the National Environmental Policy Act (NEPA), the Endangered Species Act, and the Clean Water Act (Knickerbocker, 2002; Mooney, 2005). Desired reforms favor market-based solutions and limit the Environmental Protection Agency’s (EPA) regulatory authority while encouraging industry lobbyists to participate in EPA rules and policies (Grimaldi, 2005).
In sum, tax-advantaged “free enterprise zones,” private school vouchers, and easing of environmental and labor regulations together constituted the bundle of free-market responses viewed as capable of re-invigorating the economy and morality of New Orleans’ neediest citizens. Nearly all proposed hurricane response measures were consistent with the general ethos of President Bush’s “Ownership Society” aimed at re-writing the social contract between the American government and its citizens (Calmes, 2005). In the ownership society, government assistance would be directed at expanding people’s choices and fostering their personal responsibility so that they take “ownership” for their own welfare (see Thomma, 2005). In a sense, this “ownership” society is less about capital ownership—at least for the poorer classes—and more about fostering personal ownership of situation, welfare, and morality.

Shock Doctrine and The Wake of Reforms:
Less than a year after Hurricane Katrina, the effects of neoliberal and neoconservative policy approaches were clear. In May the Washington Post reported:
Disparities in wealth and in the distance of evacuees from their ruined houses are dictating, in many cases, which neighborhoods will be part of the city's future and which will be consigned to its history. For a city that was two-thirds black and nearly one-third poor before the storm, the uneven pilgrimage back to New Orleans has already changed voter turnout and seems certain to transform the culture and character of the city, making it substantially whiter, richer and less populous than before. (Harden, 2006, p. A1)
Although neoliberal and neo-conservative technologies of government are not alone responsible for the growing gap between the economically privileged and the economically disadvantaged, between whites and blacks (Evans, 2006), critics charge that privatized solutions that render individuals responsible for their circumstances have the effect of abandoning the poor and dispossessed.
Critics are particularly concerned about this tendency for privatization to create and amplify marginalization. For example, the privatized charter school system imposed in New Orleans after Hurricane Katrina locked out 2,000 special needs children in 2006 (Delpit & Payne, 2007). Critics argue that privatized and contracted (e.g., charter schools) education heightens segregation by income, race, and ability because no single entity holds accountability for accommodating the neediest children (Delpit & Payne, 2007).
Critics also point to the tendency for contracting to encourage economic exploitation. In November of 2005 The Washington Post published charges that government-funded private contractors hired to clean and rebuild New Orleans were hiring illegal immigrants who lived in sub-standard conditions and often were denied compensation for their labor, leading to 150 immigrant complaints of non-payment to be forwarded to the Labor Department (Fears, 2005). More generally, critics charge that the privatization of services for low income Americans – e.g., welfare-to-work programs – erodes union jobs, undermines worker rights, and decreases quality of services.

             Naomi Kline (2007) argues in Shock Doctrine: The Rise of Disaster Capitalism for an integral connection between catastrophe and the extension of neoliberal principles and practices of government. “Disaster capitalists” contracted to rebuild areas devastated by natural or human-caused disasters hope to implement neoliberal market practices in the process of their reconstruction (p. 9). As Klein points out, the erosion of funding for public infrastructures and emergency services over the last three decades undermines the public’s faith in the quality and adequacy of the public sector. Widespread suspicion about the quality of public services lends support to neoliberal efforts to privatize roads, schools, transportation, etc. while also fueling secondary “private” markets specializing in providing services to the affluent. Klein suggests the combined decline in public infrastructures coupled with the rise of private services leads to “disaster apartheid” in which the affluent are alone equipped for disaster survival (cited in Yoshino, 2007, p. A5) and/or the rigors of schooling, health services, counseling, etc. [end excerpt]

Hurricane Sandy: Beware of America's Disaster Capitalists By Naomi Klein, Guardian UK 07 November 2012 http://www.guardian.co.uk/commentisfree/2012/nov/06/hurricane-sandy-americas-disaster-capitalists?INTCMP=SRCH
The aftermath of the storm offers a chance to rebuild a fairer society. How can we seize it?

[Excerpt] The prize for shameless disaster capitalism, however, surely goes to rightwing economist Russell S Sobel, writing in a New York Times online forum. Sobel suggested that, in hard-hit areas, Federal Emergency Management Agency (Fema) should create "free-trade zones – in which all normal regulations, licensing and taxes [are] suspended". This corporate free-for-all would, apparently, "better provide the goods and services victims need"....

Yes, that's right: this catastrophe, very likely created by climate change – a crisis born of the colossal regulatory failure to prevent corporations from treating the atmosphere as their open sewer – is just one more opportunity for further deregulation. And the fact that this storm has demonstrated that poor and working-class people are far more vulnerable to the climate crisis shows that this is clearly the right moment to strip those people of what few labour protections they have left, as well as to privatise the meagre public services available to them. Most of all, when faced with an extraordinarily costly crisis born of corporate greed, hand out tax holidays to corporations.

The flurry of attempts to use Sandy's destructive power as a cash grab is just the latest chapter in the very long story I have called the The Shock Doctrine. And it is but the tiniest glimpse into the ways large corporations are seeking to reap enormous profits from climate chaos.

One example: between 2008 and 2010, at least 261 patents were filed or issued relating to "climate-ready" crops – seeds supposedly able to withstand extreme conditions such as droughts and floods; of these patents close to 80% were controlled by just six agribusiness giants, including Monsanto and Syngenta. With history as our teacher, we know that small farmers will go into debt trying to buy these new miracle seeds, and that many will lose their land...[end excerpt]

Majia: The shock doctrine program was applied in New Orleans and may yet be applied on the US east coast in the aftermath of Sandy if the public does not resist.


PREVIOUS POSTS ON THE SHOCK DOCTRINE

Aug 20, 2012
The Financial Crisis and the Shock Doctrine. Emerging in the aftermath of the global financial crisis that began in late 2007 is a world order dominated by a few governments and corporations with unprecedented control over ...
Mar 09, 2011
http://www.democracynow.org/2011/3/9/naomi_klein_on_anti_union_bills. Naomi Klein on Anti-Union Bills and Shock Doctrine American-Style: "This is a Frontal Assault on Democracy, It's a Kind of a Corporate Coup D'Etat" ...
Dec 27, 2011
The real economic contagion afflicting Europe is the austerity-driven “shock doctrine” of financial warfare. ... [i] See Naomi Klein The Shock Doctrine: The Rise of Disaster Capitalism (New York: Metropolitan Books, 2007).
Apr 28, 2012
If you haven't seen Naomi Klein's Shock Doctrine video, watch it now because this doctrine is being applied in Europe and the U.S. http://www.youtube.com/watch?v=aSF0e6oO_tw&feature=email. Joseph Stiglitz, former ...
Jun 09, 2011
The true contagion that has afflicted Europe is that of the austerity-driven “shock doctrine” of financial warfare (Klein, 2007). Countries such as Greece and Belarus are under extreme pressure to sell off national resources such ...

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