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Naomi Klein Reexamines the Shock Doctrine
In President Bush’s final months of office, the economy is at the top of the agenda. Oil prices now exceed $140 a barrel, more than double $70 a year ago. The high cost of oil has helped exacerbate the global food crisis that threatens to push over 100 million people below the poverty line due to rising food prices. This all comes amidst an ongoing housing crisis, with the US Treasury and Federal Reserve unveiling sweeping steps to possibly bail out the nation’s two largest mortgage lenders, Fannie Mae and Freddie Mac.
Amidst these multiple crises, how best to understand government policies being enacted? Naomi Klein is the author of The Shock Doctrine: The Rise of Disaster Capitalism. The book is out in paperback this month. It was first published in September, and in some ways, much of what Naomi writes about in the book is more relevant today. Naomi Klein joins us in our firehouse studio for the hour. Welcome to Democracy Now!
Yeah, it’s—I mean, there really is a kind of a tsunami of shocks facing not just the economy but people’s lives, people’s real lives. They’re all intersecting. They’re making each other worse. And I think we really are seeing some very live examples of what a write about in the book, which is how there is a strategy. And this is what I mean by “the shock doctrine.” There is a clear political strategy, and has been for several decades, to exploit these moments when people are desperate for quick-fix solutions and more inclined to believe in a kind of a magical cure, to push through very, very unpopular policies that don’t actually solve the crisis at hand, that don’t actually help people, but are incredibly profitable for multinational corporations.
And I think we are seeing a very vivid example of this with this speech from George Bush yesterday, where he is taking a very real crisis, which is demanding complex and profound changes in the way we live, in the way we organize our economy, but particularly in the need to diversify our energy sources. And I think there’s a tremendous actual amount of support for this idea from the public. And he comes in—and I call him in my recent column the “extortionist-in-chief.” Basically what he’s saying is he’s holding the country ransom. He’s not taking any of these long-term policy routes to dealing with climate change, to dealing with high oil prices. It’s just let us drill, or, you know, nobody can go on summer vacation. And he’s selling a myth, which is that by allowing drilling, the price at the pump is going to go down, which is really interesting, because just yesterday, in response to Bush’s announcement, oil went up, and oil futures went up. And so, the price of oil is going to keep going up.
AMY GOODMAN: What would—how long would it take the oil drilled offshore, if he succeeds in getting his father’s ban reversed, to get into the supply?
NAOMI KLEIN: Yeah. Well, first of all, I think it’s really important for people to understand that we are being subjected to an incredibly aggressive media campaign sponsored by the oil and gas industry. And, you know, it’s to the point where it really is impossible to tell the difference between the paid advertisements, which we’re being bombarded with on cable news from the oil and gas industry, talking about how they can solve the problem of high prices with more drilling, and all of these commentators, from Larry Kudlow to Sean Hannity, repeating these talking points, and not to mention Dick Cheney, who just propagated a complete lie, saying that China was drilling off the coast of Cuba, and the Vice President’s office actually had to retract that. It turns out his source was George Will, who also had to issue a correction. China is not drilling off of Cuba. And so, there’s a very aggressive campaign going on.
The reality is, it would take between five to ten years to see any of that oil. Everybody admits this. Everyone knows this. You have to do the exploration, then you have to build the rig, which takes a huge amount of time. So it takes—we’re talking about as long as a decade to see any of this oil.
So when you press people who are selling this drill in ANWR, more offshore oil drilling, also drilling into the shale in places like Montana, what they actually say is that the reason why it will lower prices at the pump, you know, soon, this summer, is because it will send a message to the stock market, it will send a message to the oil speculators that more supply is on the way. So, essentially, what they’re saying is, let’s play the market, let’s collectively play the market.
And that’s why it’s significant that yesterday, in the face of Bush’s announcement—and it was a significant announcement, because it was a real indication of the seriousness of this administration to really make this their, you know, final push in office, and they could well win, because this media campaign is really bringing public opinion on side, and we know that the Democrats are pretty weak in the face of that public opinion, and the only thing that they could fight this with is with real commitment to green policies. And, you know, don’t hold your breath.
AMY GOODMAN: What does this offshore drilling, lifting the ban—how would you relate this to what’s happening in Iraq right now and what’s happening at the Oil Ministry and the pushing through the permanent occupation that the Bush administration is pushing hard for?
NAOMI KLEIN: Well, I think we’re seeing the Bush administration in its final months just handing out a series of gifts to the oil and gas industry, both at home, pushing for opening up the Arctic National Wildlife Refuge, and then in Iraq, the prize, the biggest prize of all, which is allowing foreign multinationals to gain control of Iraq’s oil fields. And we’re seeing a two-stage process now, and it isn’t over yet, where first there was the service—the short-term service agreements, no-bid contracts, that were announced. They haven’t been signed yet, but they’re going to the big oil companies that were kicked out of Iraq in the ’70s. They’re coming back. AMY GOODMAN: Explain how that works, these no-bid contracts, how it is—who’s signing these contracts? NAOMI KLEIN: OK. Well, at the moment, Iraq does not have an oil law, so Iraq can’t sign long-term exploration agreements, although they are doing it in Iraqi Kurdistan, and we’ve heard about this with Hunt Oil. But that’s—those are illegal contracts. They’re very precarious. There could be future expropriations. It’s really risky to go that route, because there isn’t a law. And we know it’s been a major push of this administration to get the Iraqi parliament to accept a US-backed oil law. This has been sold as a symbol of Iraqi unity. That’s not the way it’s seen in Iraq.
In Iraq, the reason why it has been years in resisting this oil law is because nationalizing the oil in Iraq was the centerpiece of the anti-colonial struggle, as it was in neighboring nations throughout the Arab world. And it is not just a pro-Saddam idea. It is not just a Baathist idea. It’s the core of Arab nationalism. And that victory is being protected by many political forces in Iraq, and most notably by the oil workers’ unions in Iraq, who said, “We don’t need these foreign multinationals to get the oil out of the ground. We can do it ourselves. We can bring in technical support without giving away management control, without giving away ownership control.”
And, I mean, but let’s stress here that unlike the oil offshore, unlike the shale, this is very difficult oil to extract. It’s extremely—it requires a huge amount of technology. It requires a huge amount of investment. And that’s part of the problem with what the Bush administration is selling. These—actually, they—the oil companies need the price of oil to stay high in order for it to be economically viable to do these—to get oil out of solid rock, for instance, which is very hard, very expensive. Offshore oil drilling, also very, very expensive—you have to build the rigs and so on. Iraq, no. Iraq, stick a straw in the ground and suck. I mean, this is incredibly accessible oil. And Iraqis actually know how to extract this oil themselves. So this idea that they need these foreign multinationals to come in is yet another myth.
And not only have companies like BP and Texaco been offered these no-bid contracts, but what’s strange about it is that they’re service contracts, and these are not oil service companies. So what’s significant about these contracts is that they appear to be giving these oil companies the right of first refusal on future, more significant contracts. So, one week after these smaller service agreements were announced, the Iraqi Oil Ministry announced that they also will be handing out longer-term management agreements, which will give oil companies the ability to manage existing fields in Iraq and hold onto 75 percent of the worth of those contracts and leave only 25 percent for Iraqis, which is absolutely unheard of in the region, where 51 percent for the country is the baseline for new exploration, for new fields. These are existing fields. They’re already working. The technology is already there. And these foreign companies are going to be taking 75 percent of the worth of those existing fields in Iraq. So it’s daylight robbery. It’s armed robbery, actually, Amy.
AMY GOODMAN: We’re talking to Naomi Klein. Her book is just out in paperback, The Shock Doctrine: The Rise of Disaster Capitalism. We’ll keep talking about oil. She’s a Canadian journalist, and we’re going to find out about, well, the largest supplier of oil to the United States. No, it’s not Saudi Arabia; it is Canada. And, well, Naomi is just back from China, so we also want to find out what she’s been investigating there, what she says is the building of a police state with the help of US military contractors. And we’ll find out why she’s suing the US government. Stay with us.
Full interview in video format can be found at Democracy Now.
Chris Webb is an activist and journalist living in Winnipeg. He is currently publishing assistant at Canadian Dimension. Read more by Chris Webb.
