Huffpost Homepage
The Blog

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Jon Raymond Headshot

McCain's Bailout Bomb Is Yet To Be Dropped

Posted: Updated:

The smoking gun in Treasury Secretary Henry Paulson's $700 billion Cash for Trash, bailout plan, is a kind of (a now typical neocon) disaster capitalism effect (a.k.a. corporate socialism), as Naomi Klein describes in her book, The Shock Doctrine: The Rise of Disaster Capitalism.

Klein said in her weekend appearance on Bill Maher's HBO show Real Time:

The disaster is far from over. They have actually just relocated the disaster. The disaster was on Wall Street, and they moved the disaster to Main Street...

Klein went on to say that the bomb will drop when and if John McCain is President and is faced with another economic disaster and then has to privatize social security, cut health care, cut food stamps, and will call for more deregulation and privatization due to a real disaster that has yet to come. As Klein describes it,

You need a disaster to rationalize pushing through these very unpopular policies. So the real disaster has yet to come. The real disaster is the debt that's going to explode on the American taxpayers.  And then they do economic shock therapy.

In a recent ad Obama echoes the concept calling McCain's health care plan a prescription for disaster:

"We've seen what Bush-McCain policies have done to our economy. Now John McCain wants to do the same to our health care. McCain just published an article praising Wall Street deregulation... Said he'd reduce oversight of the health insurance industry too... Just 'as we have done over the last decade in banking'... Increasing costs and threatening coverage. A prescription for disaster."

As Jason Linkins notes, the following wording in the bailout bill raises quite an alarm:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Paulson will therefore have "carte blanche to spend up to $700 billion over the next 24 months to buy toxic securities from financial firms" according to Robert Kuttner analysis. The next president will be stuck with Paulson as Treasury Secretary, keeping their hands tied over this crisis, as Thomas Edsall reports. Edsall says this turn of events also puts both McCain and Obama in a tough spot, both aligned with Wall Street in some way.

With this current economic disaster Paulson is setup for a lovely infusion reaching into the trillions of dollars, counting that money already appropriated to bailouts, to reward Wall Street for gambling with the peoples' credit and money. But what about the cost to taxpayers, as Klein warns? A borrowed trillion plus annual interest to taxpayers comes out to what? As if people don't have enough problems paying down their debt.

No matter the outcome of these troubling events, I fear the neocons stand to come out on top, if you look at the odds. The division between neocons and McCain is obviously manufactured by McCain's media spin and doesn't exist, not for thinking people at least. But this could be the thing that puts neocons on top. Well maybe in their minds anyway. If you consider that the two candidates are both perceived at odds with Bush and Paulson, you end up with three factions vying for control in 2012, Obama, McCain, and the neocons. Yet the latter two are one in the same, giving them a two out of three chance of winning people over, if you consider that one actual faction (McCain and Bush) can control both sides of the argument by playing McCain against Bush as well as Obama. Better odds than one out of two.

Klein's book is analyzed by Adrianna Huffington in her article, New Books By Alan Greenspan and Naomi Klein: One is Prophetic, One is Pathetic, and by John Cusack in his HuffPost Exclusive: My Interview with Naomi Klein; while doing research for his recent film War Inc. Read more of Naomi Klein's reaction in her HuffPost blog.