Through a Glass Darkly: Catherine Austin Fitts and the Capitalism of Crisis

In The Shock Doctrine, Naomi Klein brought to light the neoliberal tactic of crisis capitalism, unleashed in circumstances (as in Chile, Argentina, Poland, Russia, South Africa) where political powers have exploited (or even created) extreme conditions–such as coups, natural disasters, or economic crises–during which the local population is disoriented and their defenses are down, to instigate corporation- and “investment”-friendly policies like lowered taxes and the  cutting  and privatization of government services.  The justification given for such maneuvers is to bring the target economy in line with the global economy, but, of course, very few people (only a tiny few) in the world actually benefit from these capitalistic incursions. One of the most obscene instances of the Shock Doctrine in action resulted in the rape of the former Soviet Union”s assets by the oligarchs in the name of Boris Yelstin’s economic “reforms.” But that’s only one of the most obvious and well known cases.

Catherine Austin Fitts

Catherine Austin Fitts

During the Clinton years, as former communist apparatchiks were helping themselves to radically discounted oil fields and other rich resources in Russia, Catherine Austin Fitts says she witnessed a similar feeding frenzy much closer to home. A former managing director and board member at the Wall Street firm Dillon Read who served as Assistant Secretary at HUD in the first Bush administration, Fitts started a financial company of her own, The Hamilton Securities Group of Washington, D.C., to help communities make the most of federal monies and improve their standing in what she calls the Popsicle Index,  which measures the confidence families in a community feel to send a six-year-old by herself to the corner store and back. Fitts witnessed firsthand the collusion between Washington and Wall Street insiders (often the same people on opposite sides of a revolving door) to employ crisis capitalism techniques in the US as part of the daily repertoire of government actions (my emphasis):

Our efforts at The Hamilton Securities Group to help HUD achieve maximum return on the sale of its defaulted mortgage assets coincided with a widespread process of “privatization” in which assets were, in fact, being transferred out of governments worldwide at significantly below market value in a manner providing extraordinary windfall profits, capital gains and financial equity to private corporations and investors. In addition, government functions were being outsourced at prices way above what should have been market price or government costs — again stripping governmental and community resources in a manner that subsidized private interests. The financial equity gained by private interests was often the result of financial, human, environmental and living equity stripped and stolen from communities — often without communities being able to understand what had happened or to clearly identify their loss. This is why I now refer to privatization as “piratization.”

One of the consequences was to steadily increase the political power of companies and investors who were increasingly dependent on lucrative back door subsidies — thus lowering overall social and economic productivity. Hence, the doubling of FHA’s mortgage recovery rates from 35% to 70-90% ran counter to global trends and ruffled feathers…. Continue reading

Beginning of a New American Revolution? #OccupyWallStreet

The following is a public service announcement on behalf of Occupy Wall Street. To participate, go here. Of course, if you’d like to discuss it with me in the comments area right here, please do. Continue reading

“Anarcho”-Capitalism: The Boss’s and Landlord’s Paradise

Continuing the discussion I began here and continued here, in this installment, I present for your consideration more of the debate I participated in nearly a decade ago over the inherent contradiction in the term “anarcho”-capitalism.

I should say a little more about why this debate remains relevant. If you listen to the rhetoric of some of the “intellectuals” in the Republican party, you will hear echoes of “anarcho”-capitalism’s sacred principles: private property is a natural right; the state is an impediment to freedom; taxation is theft; freedom to associate with persons of one’s choosing is a natural right. Ron Paul‘s Ten Principles of a Free Society almost reads like a Ten Commandments for anarchos. It’s not surprising given that Paul is a Libertarian and “anarcho”-capitalism is also a product of Libertarian philosophizing, is, in fact, Libertarianism taken over the side of the slippery slope. Paul and his son Rand are far from the only Libertarianism-espousing politicians in power. One other very powerful Libertarian  in the Republican party is Wisconsin Congressman Paul Ryan, whose budget aims to dump social welfare programs from the government’s repertoire of services for the citizenry. These ideas are as close as they’ve ever been to  America’s power center. Are we all comfortable with that? Continue reading

“Anarcho”-Capitalism (Proprietarianism) vs. Real Libertarian Anarchism

An American's sacred right to property being profaned.

Continuing from my last post, here reproduced are excerpts from the Usenet debates I had in the summer and fall of 2002, mostly, with self-described “anarcho”-capitalists. The original argument concerned “rights” and “freedom,” but it quickly led, as most debates with “anarchos” go, to the question of property. As I mentioned yesterday, these issues, I believe, lie at the very heart of the debates going on presently over the debt-ceiling (actually over revenues vs. spending) in Congress and the media. But you won’t hear our pundits or politicians for the most part bring it down to the very ground it all springs from. Continue reading

The “Anarcho”-Capitalist Conundrum

In the wake of September 11, 2001 and continuing through the lead-up to the Iraq War and into 2003, I was involved in an intense debate on several political Usenet groups (my involvement in political Usenet, actually, goes back to the Clinton-Lewinsky scandal of 1997-1998), in which there was a clique of rabidly right wing libertarians holding forth on what they called “anarcho-capitalism.” Many believe that the only logical conclusion to right libertarianism (and to history, actually) is capitalism completely unfettered by government. In a sense, they’re right (except for the history part): If you think government is bad for business and you think business is the best way to distribute resources, then the best government is no government at all.  Of course a lot of Libertarians believe government is necessary to provide for the defense of business interests, but the anarchos would argue that if businesses need to be defended, they should do it themselves. Abolish government, they say, abolish borders, open all the world to capitalism. Let the market determine the value of everything. Continue reading

Did You Know?: South Carolina’s Drinking Water Is Controlled by a Private Interest

This letter is from today’s The State of Columbia, SC:

SC drinking water: Similar to this?


Private water companies a bad deal

We were in Italy on vacation last month when 57 percent of the Italian population came out to vote “si” on three referendums — and “no” to the privatization of water systems. Italians overwhelmingly do not want private companies to take over their drinking water because they’ve heard horror stories from Africa, and from the United States, about cash-conscious private companies bilking their customers.

Nowhere in the United States is this more apparent than in South Carolina, where many communities are squeezed at the throat by a private company with many tentacles into rural areas. Many who don’t have public water have either private wells or Utilities Inc., also known as Carolina Water. Continue reading