Naomi Klein: Disaster capitalism--making money out of misery

[BurtWorm]

http://www.guardian.co.uk/commentisfree/story/0,,1860821,00.html?gusrc=rss&feed=1


Disaster capitalism: how to make money out of misery

The privatisation of aid after Katrina offers a glimpse of a terrifying future in which only the wealthy are saved

Naomi Klein
Wednesday August 30, 2006
The Guardian

The Red Cross has just announced a new disaster-response partnership with Wal-Mart. When the next hurricane hits, it will be a co-production of Big Aid and Big Box. This, apparently, is the lesson learned from the US government's calamitous response to Hurricane Katrina: businesses do disaster better.

"It's all going to be private enterprise before it's over," Billy Wagner, emergency management chief for the Florida Keys, currently under hurricane watch for tropical storm Ernesto, said in April. "They've got the expertise. They've got the resources." But before this new consensus goes any further, perhaps it's time to take a look at where the privatisation of disaster began, and where it will inevitably lead.

The first step was the government's abdication of its core responsibility to protect the population from disasters. Under the Bush administration, whole sectors of the government, most notably the Department of Homeland Security, have been turned into glorified temp agencies, with essential functions contracted out to private companies. The theory is that entrepreneurs, driven by the profit motive, are always more efficient (please suspend hysterical laughter).

We saw the results in New Orleans one year ago: Washington was frighteningly weak and inept, in part because its emergency management experts had fled to the private sector and its technology and infrastructure had become positively retro. At least by comparison, the private sector looked modern and competent.

But the honeymoon doesn't last long. "Where has all the money gone?" ask desperate people from Baghdad to New Orleans, from Kabul to tsunami-struck Sri Lanka. One place a great deal of it has gone is into major capital expenditure for these private contractors. Largely under the public radar, billions of taxpayer dollars have been spent on the construction of a privatised disaster-response infrastructure: the Shaw Group's new state-of-the-art Baton Rouge headquarters, Bechtel's battalions of earthmoving equipment, Blackwater USA's 6,000-acre campus in North Carolina (complete with paramilitary training camp and 6,000-foot runway)....

[bryant69]

1. That's depressing

Bryant
Check it out --> http://politicalcomment.blogspot.com

[Double T]

2. When will our government outsource our disaster recovery......

to India or China??? 911 Call Centers are probably already in the works.....

[whistle]

3. Geese, that is what capitalism is all about and Bush wasted....

...no time in setting that up at FEMA

<snip>
FEMA, Capitalism, and Karl Marx's Crystal Ball


By Mike Whitney

October 4, 2005
uruknet.info

The Bush administration began the dismantling FEMA (Federal Emergency Management Agency) as one of the first orders of business when they reorganized the government under the Homeland Security Bill. What masquerades now as FEMA is a public relations smokescreen which disguises the fact that the government will no longer assist in major natural catastrophes. The "free market" approach to disaster requires that FEMA chieftains use their power and influence to divert taxpayer dollars towards private corporations which support the political establishment. "One hand washes the other" as the saying goes. This explains the logic of a self-perpetuating system which eschews public accountability and enriches the corrupt friends of the administration in an endless cycle of criminality and greed.

The neoliberal model, which is the doctrine to which the Bush administration rigorously adheres, does not accept that government should provide any goods or services to the public that can be produced by the private sector. All the traditional responsibilities of the state have been farmed out to private "for-profit" industry. This explains why FEMA has not taken part of even one, large coordinated relief-project in the aftermath of Hurricane Katrina. In fact, there are still numerous stories that the agency is deliberately involved in subverting the relief effort. For all practical purposes, the agency does not exist. It has been replaced by a public relations chimera that produces articulate spokesmen and sham demonstrations for a defunct and powerless bureau.

The evacuation of Houston shows how FEMA has quickly adapted to its new role as part of the Bush "shadow government". FEMA didn't produce the evacuation plan that was required for an impending natural catastrophe. Nor did they care when the fleeing people of the region were stuck in traffic jams for more than 20 hours at a stretch.

Their goal was not to improve the situation but to create a wall of disinformation that would make the massive and predictable congestion look like a few unavoidable bottlenecks.
<more>
http://www.globalresearch.ca/index.php?context=viewArticle&code=WHI20051004&articleId=1037

[Toots]

6. No that is not what Capitalism is all about

There used to be laws against "War Profiteering" and "No-Bid Contracts" to profit from others misfortune. Now it is Standard Practice for the GOP. Capitalism works just fine without "War Profiteering"...

[whistle]

10. Oh I see and exactly during what periods of time has capitalism...

...worked just fine without "War Profiteering"? Care to give specifics please.

I have some below that show that this is not the case.

<snip>
UNITED STATES: War profiteering and corporate capitalism

Doug Lorimer

The December 5 directive issued by US deputy defense secretary Paul Wolfowitz provided a clear indication of what the Bush Doctrine is all about. It barred French and German companies from competing for US$18.7 billion in contracts for the reconstruction of Iraq's war-damaged infrastructure.

This doctrine was spelt out in US President George Bush's September 2002 National Security Strategy document. The document explained that the US will “use its unparalleled military strength . . . to extend the benefits of free markets and free trade to every corner of the world”. Wolfowitz's directive made it clear that the Bush Doctrine — being implemented under the so-called global war on terrorism — is about using US military strength to ensure that markets and trade throughout the world benefit US corporations.

Bush's January 13 announcement that Canadian companies could make bids for reconstruction contracts sparked some media speculation about a reversal of Wolfowitz's directive. However, Bush administration officials would not say if companies from France and Germany, which more actively opposed the Iraq invasion, would also be eligible to bid on future contracts.

The January 13 New York Times reported that administration officials “left open the possibility that a major commitment of money and manpower” to the Iraq occupation “would work in their favour”.

The reconstruction contracts have created opportunities for US corporations to reap enormous profits and carry out outright theft of moneys appropriated by the US government.

A Pentagon audit report published on December 11, for example, revealed that Halliburton — the company that Vice-President Dick Cheney used to run and from which he still receives six-figure annual payments — has been looting reconstruction funds through massive price gouging on petrol imported into Iraq. <more>
http://www.greenleft.org.au/back/2004/567/567p14.htm

<other links>
http://www.informationclearinghouse.info/article12706.htm

http://www.sinistra.net/lib/upt/intpap/piso/pisohbiboe.html

http://www.personal.psu.edu/users/w/x/wxk116/antic/

http://www.thornwalker.com/ditch/lights129.htm

<oh, just to show I don't only quote from the left>
http://www.mises.org/story/1134

[leveymg]

30. Read Prof. Joseph Schumpeter's "Creative Destruction of Capitalism"

http://transcriptions.english.ucsb.edu/archive/courses/liu/english25/materials/schumpeter.html

Joseph A. Schumpeter
"Creative Destruction"
From Capitalism, Socialism and Democracy (New York: Harper, 1975) , pp. 82-85:

Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary. And this evolutionary character of the capitalist process is not merely due to the fact that economic life goes on in a social and natural environment which changes and by its change alters the data of economic action; this fact is important and these changes (wars, revolutions and so on) often condition industrial change, but they are not its prime movers. Nor is this evolutionary character due to a quasi-automatic increase in population and capital or to the vagaries of monetary systems, of which exactly the same thing holds true. The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.

As we have seen in the preceding chapter, the contents of the laborer's budget, say from 1760 to 1940, did not simply grow on unchanging lines but they underwent a process of qualitative change. Similarly, the history of the productive apparatus of a typical farm, from the beginnings of the rationalization of crop rotation, plowing and fattening to the mechanized thing of today–linking up with elevators and railroads–is a history of revolutions. So is the history of the productive apparatus of the iron and steel industry from the charcoal furnace to our own type of furnace, or the history of the apparatus of power production from the overshot water wheel to the modern power plant, or the history of transportation from the mailcoach to the airplane. The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation–if I may use that biological term–that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in. . . .

Every piece of business strategy acquires its true significance only against the background of that process and within the situation created by it. It must be seen in its role in the perennial gale of creative destruction; it cannot be understood irrespective of it or, in fact, on the hypothesis that there is a perennial lull. . . .

The first thing to go is the traditional conception of the modus operandi of competition. Economists are at long last emerging from the stage in which price competition was all they saw. As soon as quality competition and sales effort are admitted into the sacred precincts of theory, the price variable is ousted from its dominant position. However, it is still competition within a rigid pattern of invariant conditions, methods of production and forms of industrial organization in particular, that practically monopolizes attention. But in capitalist reality as distinguished from its textbook picture, it is not that kind of competition which counts but the competition from the new commodity, the new technology, the new source of supply, the new type of organization (the largest-scale unit of control for instance)–competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives. This kind of competition is as much more effective than the other as a bombardment is in comparison with forcing a door, and so much more important that it becomes a matter of comparative indifference whether competition in the ordinary sense functions more or less promptly; the powerful lever that in the long run expands output and brings down prices is in any case made of other stuff.

It is hardly necessary to point out that competition of the kind we now have in mind acts not only when in being but also when it is merely an ever-present threat. It disciplines before it attacks. The businessman feels himself to be in a competitive situation even if he is alone in his field or if, though not alone, he holds a position such that investigating government experts fail to see any effective competition between him and any other firms in the same or a neighboring field and in consequence conclude that his talk, under examination, about his competitive sorrows is all make-believe. In many cases, though not in all, this will in the long run enforce behavior very similar to the perfectly competitive pattern.

[emmadoggy]

16. There was something on PBS last night...

that was interesting. I'm not sure if it was Nova or what - I missed the first half - but it was all about Katrina and the FEMA situation. At the point I started watching, they were discussing FEMA under daddy Bush and the crappy Andrew response and how he appointed cronies who had little or no disaster response experience. Then they went on to tell about the changes that Clinton made to FEMA and his appointment of James Lee Witt and basically how well FEMA functioned during those years, and then, of course, they detailed what Dumbya has done since he took office (back to appointing inexperienced cronies), and especially the changes after 911 and the creation of the Dept. of Homeland Security. They basically were showing how FEMA has become a shell of what it once was and how all the program and funding cuts have rendered it pretty useless and ineffective. There was a program started under FEMA during the Clinton/James Lee Witt years that I can't remember the name of...but they showed how it was set up to help cities take advance preparation and PREVENTION steps for disasters and what a success it was. New Orleans opted out of the program :eyes: . And then after Bush took office that program was killed.

The Bush vision of what this country should be is frightening. Will we EVER be rid of them and get this country turned around???!!!! :scared:

[GETPLANING]

28. It was FRONTLINE The Storm.

You can watch it again at the Frontline web site along with many other really good Frontline special reports. Try "Private Warriors", about the privatization of military logistics, the brain child of Richard Cheney.

[WinkyDink]

19. That may be what CAPITALISM "is all about", but it most decidedly

is NOT what DEMOCRACY ought to be "all about".

[rman]

4. "disaster-response partnership with Wal-Mart". See,

it can always go from bad to worse.

filed under you-can't-make-this-shit-up

[lutefisk]

5. The privatised White House shows where this leads.

From the privatised Cheney on down, this is a nightmare. Privatisation and the US Constitution can't coexist.

[snappyturtle]

7. K&R Naomi Klein is correct in saying only the rich will survive

a diaster and the poor will not all the while offerring tax reductions to the rich and lucratic government contracts to their corporate friends. This administration is not going to use OUR tax dollars for US but for themselves. Jackie Gleason's words: "One of these days Alice".............there's going to be a revolt to regain what the greedy pigs have stolen from the bulk of the U.S. citizens.

[mnhtnbb]

8. This is the essence of fascism. Government to benefit corporations

[Time for change]

9. Excellent and very imporant article

[emmadoggy]

11. Ughhhh. I just can't even put it into words...

This crap is so depressing, infuriating, frustrating and a lot of other 'ings!!! :banghead: You know, reading shit like this makes me want to go back
to my pre-DU days of ignorant bliss. Not knowing about all this sort of stuff meant I could be disgusted with our President and administration just from some
basic knowledge of a few major issues. Now I come to DU every day and there is such an avalanche of disgusting, criminal, evil shit that I learn about this administration
and now I am so depressed and furious and frustrated and in a state of mourning for our country that it makes me want to just find a hole or big pile of sand to stick my
head into and make it go away.

:mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad:

And, oh yeah, K & freakin' R.

[SammyWinstonJack]

23. I hear ya! I feel the same way.

:-( :grr: :mad: :argh: :banghead:

[xchrom]

12. reagan was the ''out of the closet'' moment for neo-cons and neo-liberals.

this has been teh goal for every republick admin since reagan -- and they've all practised it to one extent or another.

reagan's firing the air traffic controllers and bush's ''9-11 changed everything''.

it's been creeping deeper and deeper into our culture and thinking so that{seemingly} we don't noticed we're getting screwed.

the gonzo republicks and faithbased loonies have created a powerful nexus and it won't be undone easily.

k&r

[w4rma]

13. In pre-Republican America this used to be called "profiteering". (nt)

[confludemocrat]

14. You gotta see the Greg Palast/Amy Goodman Katrina special

just when you think they could not go much lower. Especially the pre-Katrina hiring of a big Bush contributor as a contractor for an evacuation plan, which never existed although its "creation" was used to preempt the implemention of any real existing plans such as one created by the LSU Hurricane Center. Then this "contractor" which never delivered was found by Palast to have been hired AGAIN, this time to investigate what went wrong!!!! Market forces? Gimme a goddman fuckin' break, this is just plain criminal.

[emmadoggy]

17. Yep, I watched it.

It was disgusting. And how about the folks who lived in the housing project that was UNTOUCHED by the water, yet have been LOCKED OUT of their homes and told they couldn't come back.
Lovely. Our country is being run by the coldest, most heartless, greediest thugs imaginable. :grr:

[confludemocrat]

21. Yeah, the deliberate, cold lockout of residents from their apartments

for no other reason than a first step of calculated way of getting ahold of that real estate to "gentrify" it is right in line with what the leaders of the white elite said they wanted and were gonna do- "fix" New Orleans. They're just simply criminals and when is the opposition party going to go for the throat rhetorically about this naked criminality?

[glitch]

29. And pointing out what they are doing makes us conspiracy theorists

Quite a racket isn't it?

[burythehatchet]

15. In plain view, we are witnessing a text book example

of neo-fascism in the US. Privatization of essential services.

[CollegeDUer]

18. Not another far left Green-Communino-Pinko hippie editorial!

But all that put aside, she does make some good points.

[catrose]

20. Wal-Mart?

I joined the Red Cross disaster team in 2001. Wal-Mart was on-again, off-again on our list of approved vendors. We used to have to send disaster clients to specific stores. Wal-Mart never wanted to mess with the paperwork. By the time I left the area, we'd taken them off for good and dealt with local stores and, if we needed a big box store, Target. (The teenagers were always thrilled to see TJ Maxx on the list.)

So I feel real good about this partnership. Not that Red Cross doesn't have other partnerships. The Southern Baptist Convention has a fleet of kitchen trailers that they haul out to every big disaster and staff with their members. I've criticized them so much that I feel I have to give them their due.

But Wal-Mart?

[confludemocrat]

22. Get this Corporate Watch report (pdf) on N. O. profiteering-

http://www.corpwatch.org/

[rrasile]

24. privatization of disaster with pure capitalism

Why would this come as a surprise to us. The perfect way to repay their debt to the Walton's.
Just think of all the items they can get at The Home Depot, another Bush ass lapper. Those suckers will make a killing on roof sheeting. I/2" 9.75 per sheet right now, my guess after the next hurricane is 14.95 per sheet at best. Remember the free Blue Tarps, forget it. I see .25 per sq foot.
They will murder you with power generators and slump pumps, with out any local lumber yards left, thanks to the big box stores they will make their own price and with no one left to compare prices with you won't even feel the screwing you get.
We are so f****** dumb. Our grandfathers had more brains then we do. They must really believe that we are a nation of dumb asses. Get your butts to the poles and kick the MF out and we can make an attempt to start over.

[Jankyn]

25. This kind of stuff always...

...makes me think of Max Barry's great novel, Jennifer Government. It's an action-adventure piece set in a future that is entirely pay-as-you-go. Workers take the names of their companies, and corporations' "strategic alliances" are more important than national borders.

Creepy. Great read, but creepier all the time.

[sandnsea]

26. I wrote this a year ago

It was obvious they were using Katrina to convince folks government couldn't respond, corporations could. The goal of privatization is to avoid accountability so that the weakest give up, leaving the corporation to socially engineer outcomes to their benefit. That's exactly what has happened with Katrina from the gate and I can completely see where this manufactured failed response will end up being manipulated to the benefit of conservatism and corporatism.

http://www.dailykos.com/storyonly/2005/9/5/20924/09707

http://www.dailykos.com/storyonly/2005/9/9/1207/30384

[LSK]

27. kick

Make this madness stop.

:grr:

[TahitiNut]

31. The MAJOR flaw in this 'thinking': "Excess Capacity"

The whole notion of 'responding' to disasters and calamities through private enterprise is completely contrary to current business management principles. Today's managers focus on "just in time" supply chains, very low warehouse inventories, and production capacity that does not exceed the market demand. Today's "business community" is, by virtue of its own values and management principles, totally antithetical to emergency demands and rapid response to peak needs.

The sole 'rationale' for such an approach would be to dump inventories on the taxpayer and set up a subsidy for businesses which would take VERY prolonged periods to respond.

It's a scam!

Indeed, this is also the reason that running government like a business is flawed at the outset. There's NOTHING more "evil" to a capitalist than investments in excess production capacity - invests for which there's no market return. The name of the game has always been falling just a hair short of meeting demand - thereby keeping competition out and maintaining a slight upward pressure on prices due to a marginal demand insufficient to justify a new entrant to the market but just enough to price the least able to pay out of the market.

Government is just the opposite - building excess capacity for the future and raising the standard of living by lowering the cost of living. A military force is a good example - it should be ready to respond but NOT already fully deployed. When a nation's military capacity is over-burdened, that nation has no remaining capacity to respond to an attack.

[mrdmk]

33. You are correct, one law of many concerning economics

Inventories cost money, and cost even more money when sitting around for long periods of time. This became a big deal during the late 1970's and during the 1980's implemented tighter inventory controls. During the 1990's the inventory was computerized (if you did not use a computer to do inventory control you were asking for problems), not to mention demand models are very well known by now, another control on buying inventories. One of the companies of inventory control is Wal Mart, heck they they even want to see where the inventory goes after it leaves the store.

<snip>
But the technology has drawn barbs from consumer privacy groups that worry about potential abuses if product-tracking tags are allowed to follow people from stores into their homes.
<end of snip>
link http://news.com.com/2100-1017_3-1023934.html

Lots of reading here (some for, some against)
http://www.google.com/search?client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial_s&hl=en&q=%22wal+mart%22%2B%22inventory+control%22&btnG=Google+Search

[Monkey see Monkey Do]

32. "Klein's book on disaster capitalism will be published in spring 2007"

Thanks for posting.