fresh voices from the front lines of change







It probably seems like I'm "a day late and a dollar short," with a post about Ireland's economic disaster days after the New York Times story about the high cost of austerity measures in Ireland echoed all over the progressive blogosphere. But I'm not. It just took me a few days to recover from the intense deja-vu.

See, back in April, the Heritage Foundation ranked Ireland #5 in its "economic freedom" index for 2010. That, of course, warranted some investigation.

I can't claim to have known much about Ireland or it's economy at the time. But a few days of research was enough to paint a disturbingly familiar picture, as the causes and impacts of Ireland's economic crisis and America's are pretty much the same.

"Sharp economic adjustments" must be another way of saying what every estimation of the Irish economy states outright: that after the bubble-burst heard 'round the world happened in 2008 — as housing bubbles popped worldwide — Ireland was among the hardest hit. The "openness and flexibility" that made it one of the high-fliers of the boom period came at a high price, causing it to hit the ground harder than other countries. And the damage from that crash may be permanent.

...On top of the housing bubble, Ireland's economy largely relied on exports, 90% of which were made by foreign-owned multinationals, attracted by the corporate tax rate that was among the lowest in Europe. The tax rate was sweetened by more lucrative concessions designed to attract multinationals. Indeed, when tax-cutting advocate Charlie McCreevy became Labour Finance Minister in 1997, he soon implemented what some deemed were unnecessary property-tax incentives, along with a 20% cut in capital gains tax for property investment. Banking on permanent prosperity, essentially, led to tax cuts that have deprived the country of much-needed reserves, and left it stuck choosing between severe budget cuts in service of the national debt, or investing in programs to keep people working and stimulate the economy.

As in the U.S., warnings about the signs of a coming crash were ignored or dismissed in favor of unfounded confidence in unending growth.

Calls for austerity are — or ought to be — laughably ironic in the context of a crisis caused by conservative economic policies that were incredibly and unjustifiably generous to wealthy and corporate interests whose.

Just as the warnings of an impending crash were ignored, now warnings that "austerity" is likely to make the damage from this economic crisis permanent are being ignored. Instead, deficit hawks and Blue Dog Democats on Capitol Hill are drowning out the voices of Americans who are hurting the most in the crisis, with calls for more pain, blocking yet another vote to extend unemployment benefits.

Given the implications of — not the least of which is the possible creation of a chronically unemployed permanent underclass — and the rejection of every opportunity to make even modest efforts to avoid this outcome, it's reasonable to question the desired ends such inaction is meant to achieve.

That requires some reframing. Not that the president was wrong when he said that today's economic reality is rooted in failed conservative ideology.

But to be fair, the other party's opposition has also been rooted in their sincere beliefs about how the economy works. They believe that our economy will do better if we simply let the banks and oil companies and insurance industry make their own rules. They still believe that—even after Wall street crashed and the BP oil well blew. They think we should keep on doing what they did for most of the last decade, leading up to the recession. Their prescription for every challenge is pretty much the same: cut taxes for the wealthy, cut rules for corporations and cut working folks loose to fend for themselves.

The problem is, we've already tried these ideas. We tried them for a good part of the last decade. And we know where they led us.

They led us — and Ireland, and lots of other countries — here, with catastrophic results for millions of people. But whether that's a failure or a success depends on your point of view.

The current economic crisis may be a result of conservative failure, with catastrophic results that have impacted most Americans in one way or another. But I think there's a better way to describe it, by borrowing phrases from a former president and best-selling author: What's happening in Ireland and here in America is really a "catastrophic success" for something called "Disaster Capitalism."

"Had we had to do it over again, we would look at the consequences of catastrophic success, being so successful so fast that an enemy that should have surrendered or been done in escaped and lived to fight another day."

~ George W. Bush, on the war in Iraq, August 2004


"I, like most Americans, have no idea what that means..."

~ John Edwards, on Bush's "catastrophic success"

George W. Bush, during the 2004 presidential election described the war in Iraq as a "catastrophic success," a phrase which had most Americans scratching their heads, at a time when the was in Iras looked like anything but a success. After all, growing chaos, increasing violence, a fraying coalition, an increased attacks on U.S. personnel had combined to postpone Iraq's elections for seven months.

None of which proved that the war was a failure far as the president and the war's supporters were concerned. As William Saletan put it, "Does this prove Bush is failing? No. It proves he's succeeding." Or, the worse it gets the more "we" must be winning. Likewise, the economic crisis — as it continues to grow, and economic pain continues to spread — can be seen as the success of policies that brought it about and the philosophy that suports them.

The question is, "Succeeding at what, and for what purpose?"

Naomi Klein, author of The Shock Doctrine, describes a "disaster capitalism" that exploits disasters and catastrophic events of all kinds to advance "a vision of a ruthlessly divided" world.


After each new disaster, it’s tempting to imagine that the loss of life and productivity will finally serve as a wake-up call, provoking the political class to launch some kind of "new New Deal." In fact, the opposite is taking place: disasters have become the preferred moments for advancing a vision of a ruthlessly divided world, one in which the very idea of a public sphere has no place at all. Call it disaster capitalism. Every time a new crisis hits—even when the crisis itself is the direct by-product of free-market ideology — the fear and disorientation that follow are harnessed for radical social and economic re-engineering. Each new shock is midwife to a new course of economic shock therapy. The end result is the same kind of unapologetic partition between the included and the excluded, the protected and the damned, that is on display in Baghdad.

What does "catastrophic success mean?" How can anything be both catastrophic and success? I think it's derived from catastrophic failure.

A catastrophic failure is a sudden and total failure of some system from which recovery is impossible. Catastrophic failures often lead to cascading systems failure.

The term is most commonly used for structural failures, but has often been extended to many other disciplines where total and irrecoverable loss occurs. Such failures are investigated using the methods of forensic engineering, which aims to isolate the cause or causes of failure.

Catastrophic success isn't necessarily concerned with executing a planned destruction of a system. It can refer to the successful exploitation of a crisis or catastrophic event — engineered or otherwise — to achieve a particular end. The destruction may be engineered, but it may just as easily be the result other actions or conditions, and even natural disasters.

Catastrophic success is, in a sense, what happens when the total failure of a system in which total and irrecoverable loss occurs, is the desired goal. That pretty clearly defines what's happening in Ireland right now — the total collapse of an economic system, in which many Irish citizens are experiencing total and irrecoverable loss. That pretty clearly defines where we're headed if our political leaders don't act to reverse current trends.

Total destruction of a system, including the people's level of trust in the system, is a success if the destruction is exploited to achieve desired end — in this case, a restructuring of the economy to the disadvantage of the working- and middle-classes, widening economic disparities and further concentrating wealth into the hands of a narrow few. The result is presicely the "ruthlessly divided world" Klein describes, with its "unapologetic partition between the included and the excluded, the protected and the damned."

Whether the crisis is set in motion intentionally, or rises from other conditions, it creates an opportunity that can be successfully exploited if recognized and acted upon — or not acted upon. In Ireland, it means acting to worsen the crisis with policies like "austerity measures" that increase economic pain. In the U.S., it takes the form of inaction, like the Senate's failure to extend unemployment benefits amid chronic, long-term joblessness, thus increasing economic pain and desperation for millions of Americans.

Either way can yield success out of crisis. Depending, of course, how you define success and what you want to achieve.

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