First, apologies for neglecting my duties here at Revolutionary Act last week; I was busy with school stuff and family visits. But on to more important things…

Last week, The Rolling Stone published an article on the Wall Street bailout by an author I think is always well worth the read: Naomi Klein. Klein examines the deals made in the immediate aftermath of the U.S.’ most recent economic disaster and contextualizes them. She points out that the orchestration of the bailout is fundamentally the same as that of the Iraq War and its “rebuilding.” Both adhere to the rules of the Shock Doctrine and allow private contractors to profit from the crises they’ve helped to create*. Again, even if you think you already understand how the meltdown came to be, what’s at stake, and why it will take a long, long time to see real results, I recommend always taking what Naomi Klein has to say into consideration. An excerpt:

It didn’t have to be this way. Five days before Paulson struck his deal with the banks, British Prime Minister Gordon Brown negotiated a similar bailout — only he extracted meaningful guarantees for taxpayers: voting rights at the banks, seats on their boards, 12 percent in annual dividend payments to the government, a suspension of dividend payments to shareholders, restrictions on executive bonuses, and a legal requirement that the banks lend money to homeowners and small businesses.

In sharp contrast, this is what U.S. taxpayers received: no controlling interest, no voting rights, no seats on the bank boards and just five percent in dividend payouts to the government, while shareholders continue to collect billions in dividends every quarter. What’s more, golden parachutes and bonuses already promised by the banks will still be paid out to executives — all before taxpayers are paid back.

And a question:

This raises an interesting point: Has the Treasury partially nationalized the private banks, as we have been told? Or is it the other way around? Is it Treasury that has been partially privatized by Wall Street, its massive rescue plan now entirely in the hands of a private bank it is directly subsidizing?

Read the rest here.

*Read her book The Shock Doctrine: The Rise of Disaster Capitalism if you can and haven’t already!

Posted under Economy, Politics