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The extreme cases that I discuss in the book are wars, terrorist attacks, natural disasters, but overwhelmingly, the most common shocks that have created the context for pushing through these very unpopular policies in a way that economists often call "economic shock therapy," the first shock is the economic crisis, the second shock is the economic shock therapy; overwhelmingly the shocks have been economic crises, whether it's the Asian financial crisis in 1987 or the economic crisis in the former Soviet Union that created this sort of panic atmosphere where they could impose economic shock therapy, so we are in one of those moments of shock.
In the book, I quote a Polish human rights activist in 1989 describing what it was like in that country when they were living through a very profound economic crisis. They became the first Eastern Bloc country to be prescribed shock therapy, and as she said, "We're living in 'dog years' (laughs) not human years, which is to say it's this fast forward intense period where you can barely keep up and I think we are living in dog years at the moment.
Kall: You know, one thing that shocked me, and I've got to ask you this: ever since I read Sinclair Lewis's book, It Can't Happen Here-- have you read that?
Klein: Yes.
Kall: It's fascinated me, and I followed how we've been moving in that direction.
Klein: Yes.
Kall: Well, recently, I got a first edition with the dust jacket and it's very similar to the cover of your book. Are you aware of that?
Klein: I had no idea.
Kall: I'm going to send you a picture of it; it'll blow your mind.
covers of Shock Doctrine and Lewis's 1935 IT CAN'T HAPPEN HERE
Klein: Great!
Kall: In many ways, "The Shock Doctrine" recaps what happens—it can easily, it's happened; that's what happens it can't happen here. Right?
Klein: Yeah, and I think that one of the things, just coming back to the beginning of our discussion, thinking about what we've gone through in the last few weeks is that this tactic of using a crisis to push through very unpopular policies really relies on people not knowing about it. It is a tactic that is about harnessing the state of panic, the state of disorientation, even the regression that takes place in a crisis; but there is a kind of law of diminishing returns on this particular tactic, because once we've identified it, then we engage in a kind of a pattern recognition once it gets reused.
But one of the lessons that it's really important to focus on, if we think about the original bailout plan, the Paulson Plan-- that two and a half page extraordinary document that Hank Paulson came up with, giving him absolute power, shielding his plan to buy 700 billion dollars of toxic debt from challenge from any arm of the government, or any court--there was a real popular uprising against that plan and people just didn't buy it, despite the fact that the big corporate media was selling it really hard, like saying, you know, "We're all going to die unless we get this plan and this isn't a bailout for Wall Street, it's a bailout for you and it's the only option."
And there was, you know, bipartisan support for this thing and both candidates signed on to it and Congress voted against it; Congress voted against it, originally; we know they voted for it eventually, because Congress people were being bombarded with calls from their constituents saying that they didn't want to bail out Wall Street, that they didn't believe that this plan would help; they didn't believe it would benefit them. We know that the Congress people who were in the tightest races were more inclined to vote against the plan. So it was an outbreak of real democracy (laughs) in the United States.
After that, people were really scolded, right?--For their "ignorance" for having turned away from this bailout that would've saved them, and eventually the Senate approved it and Congress approved it with some amendments.
