Economic Shock & Awe

Naomi Klein on the parallels between the George W. Bush’s administration of Iraq and his management of economic crisis:

Under cover of an emergency, Treasury is rapidly turning into an economic Green Zone, overrun with private companies collecting lucrative contracts. Fittingly, one of the first to line up at the new trough was none other than the law firm of Bracewell & Giuliani – yes, that Giuliani. The firm’s chairman, Patrick Oxford, could scarcely conceal his glee over the prospect of cashing in on the bailout. “This one,” he told reporters, “is very, very big.” At least four times bigger, in fact, than the post-9/11 homeland-security bubble, from which Giuliani and his various outfits have profited so extravagantly. Even bigger, potentially, than the price tag for the Iraq War itself.

In Iraq, the contractors were tasked with reconstructing the country from the mess made by U.S. missiles. After years of corruption born of no-bid contracts and paltry oversight, many Iraqis are still waiting for the lights to come back on. Today, a new team of contractors is lining up to reconstruct the U.S. economy – reconstruct it from the mess made by the very banks, brokers and law firms that are now applying for contracts. And it’s not at all clear that America can survive their assistance.

See if any of this sounds familiar: As soon as the bailout was announced, it became clear that Treasury officials would hire outsiders to perform their jobs for them – at a profit. Private companies wanting to help manage the bailout were given just two days to apply for massive, multiyear contracts. Since it was such a mad rush – after all, the entire economy was about to implode – there was no time for an open bidding process. Nor was there time to draft rigorous rules to make sure that those applying don’t have serious conflicts of interest. Instead, applicants were asked to disclose their conflicts and to explain – and this is not a joke – their “philosophy in fulfilling your duty to the Treasury and the U.S. taxpayer in light of your proprietary interests and those of other clients.” In other words, an open invitation to bullshit about how much they love their country and how they can be trusted to regulate themselves.

Read it here

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