Tuesday, September 23, 2008

The Shock Doctrine with Extortion and a side of Chicken Little

The Shock Doctrine, in its late-20th-century form, is attributed more or less to Milton Friedman, who advocated facilitation of greed at any cost.

The Shock Doctrine itself is simple: prepare for, then manufacture, an extremely shocking event. Then, in the ensuing disarray, facilitate even more egregious concentrations of power and wealth. In Friedman's world view, bolstered by his Ayn-Rand-certainty, those who rise to the top in these Machiavellian situations, deserve to.

But what happens if The Shock itself isn't sufficient to install your "new order"? You call Chicken Little, of course, to whip up hysteria.

But, this too may not work. What's next?

Well, how about extortion? "If you don't accept the new order, we will bring down the global financial system."

The general population is not invited to do more than nod their heads, and try to believe that, somehow, phenomenally powerful people like Bush and Paulson are really just interested in helping the average Jane and Joe. Just like Bush and Cheney were interested in helping "the people of Iraq" ... by colonizing them.

The Continental

Invest in misery. And then advocate for charity.

At the end of the revolutionary war, many US residents were stuck with dollars issued by the Continental Congress. Prominent investors bought this currency for pennies on the dollar.

Then they advocated for charity from the new Federal Government. They successfully lobbied the government to buy these continental dollars at face value ... of course claiming that such a buy-back would be charitable to all the holders of these dollars.

This is a devious, yet somewhat cooperative attempt to help people and speculators. But today, the Treasury is only offering to cover the losses of speculators. They will buy millions of mortgages for pennies on the dollar, but not offer to pass those savings to the actual mortgagees ... only the mortgage banks.