No Is Not Enough

by Naomi Klein

  This creates a disastrous cocktail. Take a group of people who directly profit from ongoing war and then put those same people at the heart of government. Who’s going to make the case for peace? Indeed, the idea that a war could ever definitively end seems a quaint relic of what during the Bush years was dismissed as “pre–September 11 thinking.”

  Profiting from Economic Crisis

  Ties between the US government and the business world date back to 1776 (several of the Founding Fathers were from wealthy plantation-owning families). The revolving door has been spinning ever since, regardless of whether a Democrat or a Republican was in the Oval Office. The difference with Trump, as is so often the case, is one of volume, and shamelessness.

  As of this writing, Donald Trump has appointed five current or former Goldman Sachs executives to senior roles in his administration, including Steve Mnuchin as Treasury secretary, James Donovan (formerly a Goldman Sachs managing director) as deputy Treasury secretary, Gary Cohn (formerly Goldman’s chief operating officer) as director of the White House National Economic Council, and Dina Powell (formerly Goldman’s head of impact investing) as the White House senior counselor for economic initiatives. Even Steve Bannon once worked at Goldman. And that’s not counting Trump’s pick to lead the Securities and Exchange Commission, Jay Clayton, who served as Goldman’s lawyer on multibillion-dollar deals, and whose wife is a wealth manager with the company.

  Making all these Goldman appointments is particularly brazen given Trump’s invocation of the bank to attack his opponents. In a typically vicious salvo at his GOP rival Ted Cruz, he claimed the Goldman guys “have total, total control over him. Just like they have total control over Hillary Clinton.”

  It’s also extremely worrying for what it says about the administration’s willingness to exploit the economic shocks that may well reverberate on their watch. Of all the major Wall Street investment banks at the center of the 2008 subprime mortgage crisis, Goldman Sachs was among the most predatory. Not only did Goldman do a huge amount to help inflate the mortgage bubble with complex financial instruments, but it then turned around and, mid crisis, allegedly bet against the mortgage market and earned billions. In 2016, the bank was ordered by the United States Justice Department to pay a settlement of $5 billion—the largest settlement Goldman had ever paid—for these and other malpractices. In 2010, it agreed to a further $550-million fine, the largest ever paid by a Wall Street firm in the then 76-year history of the Securities and Exchange Commission, for its role in the financial crisis.

  Democratic senator Carl Levin, who headed the 2010 Senate subcommittee that investigated Goldman Sachs following the financial crisis, summarized their misdeeds:

  The evidence shows that Goldman repeatedly put its own interests and profits ahead of the interests of its clients and our communities…. Goldman Sachs didn’t just make money. It profited by taking advantage of its clients’ reasonable expectation that it would not sell products that it didn’t want to succeed, and that there was no conflict of economic interest between the firm and the customers it had pledged to serve. Goldman’s actions demonstrate that it often saw its clients not as valuable customers, but as objects for its own profit. This matters because instead of doing well when its clients did well, Goldman Sachs did well when its clients lost money.

  Even among Goldman alumni, Steven Mnuchin has distinguished himself by his willingness to profit off misery. After the 2008 Wall Street collapse, and in the midst of the foreclosure crisis, Mnuchin purchased a California bank. The renamed company, OneWest, earned Mnuchin the nickname “Foreclosure King,” reportedly collecting $1.2 billion from the government to help cover the losses for foreclosed homes and evicting tens of thousands of people between 2009 and 2014. One attempted foreclosure involved a ninety-year-old woman who was behind on her payments by 27 cents.

  These predatory practices drew fire during Mnuchin’s confirmation hearing for Treasury secretary (though not enough for Republicans to vote against him). Oregon Democratic senator Ron Wyden said during the hearing that, “while Mr. Mnuchin was CEO, the bank proved it could put more vulnerable people on the streets faster than just about anybody,” and charged “OneWest churned out foreclosures like Chinese factories churned out Trump suits and ties.”

  Profiting from Natural Disasters

  And then there’s Vice President Mike Pence, seen by many as the grown-up in Trump’s messy room. Yet it is Pence, the former governor of Indiana, who actually has the most disturbing track record when it comes to bloody-minded exploitation of human suffering.

  When Mike Pence was announced as Donald Trump’s running mate, I thought to myself, “I know that name. I’ve seen it somewhere.” And then I remembered. He was at the heart of one of the most shocking stories I’ve ever covered: the disaster capitalism free-for-all that followed Katrina and the drowning of New Orleans. Mike Pence’s doings as a profiteer from human suffering are so appalling that they are worth exploring in a little more depth, since they tell us a great deal about what we can expect from this administration during times of heightened crisis.

  The Katrina Blueprint

  Before we delve into Pence’s role, what’s important to remember about Hurricane Katrina is that, though it is usually described as a “natural disaster,” there was nothing natural about the way it impacted the city of New Orleans. When Katrina hit the coast of Mississippi in August 2005, it had been downgraded from a Category 5 to a still-devastating Category 3 hurricane. But by the time it made its way to New Orleans, it had lost most of its strength and been downgraded again, to a “tropical storm.”

  That’s relevant, because a tropical storm should never have broken through New Orleans’s flood defense. Katrina did break through, however, because the levees that protect the city did not hold. Why? We now know that despite repeated warnings about the risk, the Army Corps of Engineers had allowed the levees to fall into a state of disrepair. That failure was the result of two main factors.

  One was a specific disregard for the lives of poor Black people, whose homes in the Lower Ninth Ward were left most vulnerable by the failure to fix the levees. This was part of a wider neglect of public infrastructure across the United States, which is the direct result of decades of neoliberal policy. Because when you systematically wage war on the very idea of the public sphere and the public good, of course the publicly owned bones of society—roads, bridges, levees, water systems—are going to slip into a state of such disrepair that it takes little to push them beyond the breaking point. When you massively cut taxes so that you don’t have money to spend on much of anything besides the police and the military, this is what happens.

  It wasn’t just the physical infrastructure that failed the city, and particularly its poorest residents, who are, as in so many US cities, overwhelmingly African American. The human systems of disaster response also failed, the second great fracturing. The arm of the federal government that is tasked with responding to moments of national crisis like this is the Federal Emergency Management Agency, with state and municipal governments also playing key roles in evacuation planning and response. All levels of government failed.

  It took FEMA five days to get water and food to people in New Orleans who had sought emergency shelter in the Superdome. The most harrowing images from that time were of people stranded on rooftops—of homes and hospitals—holding up signs that said HELP, watching the helicopters pass them by. People helped each other as best they could. They rescued each other in canoes and rowboats. They fed each other. They displayed that beautiful human capacity for solidarity that moments of crisis so often intensify. But at the official level, it was the complete opposite. I’ll always remember the words of Curtis Muhammad, a longtime New Orleans civil rights organizer, who said this experience “convinced us that we had no caretakers.”

  The way this abandonment played out was deeply unequal, and the divisions cleaved along lines of race and class. Many people were able to leave the city on their own—th
ey got into their cars, drove to a dry hotel, called their insurance brokers. Some people stayed because they believed the storm defenses would hold. But a great many others stayed because they had no choice—they didn’t have a car, or were too infirm to drive, or simply didn’t know what to do. Those are the people who needed a functioning system of evacuation and relief—and they were out of luck. It felt like Baghdad all over again, with some people taking shelter in their own private Green Zones while many more were left stranded in the Red Zone—where the worst was yet to come.

  Abandoned in the city without food or water, those in need did what anyone would do in those circumstances: they took provisions from local stores. Fox News and other media outlets seized on this to paint New Orleans’s Black residents as dangerous “looters” who would soon be coming to invade the dry, white parts of the city and surrounding suburbs and towns. Buildings were spray-painted with messages: “Looters will be shot.” Checkpoints were set up to trap people in the flooded parts of town. On Danziger Bridge, police officers shot Black residents on sight (five of the officers involved ultimately pled guilty, and the city came to a $13.3-million settlement with the families in that case and two other similar post-Katrina cases). Meanwhile, gangs of armed white vigilantes prowled the streets looking, as one resident later put it in an exposé by investigative journalist A.C. Thompson, for “the opportunity to hunt Black people.” In the Red Zone, apparently, anything goes.

  I was in New Orleans and I saw for myself how amped up the police and military were—not to mention private security guards from companies like Blackwater who were showing up fresh from Iraq. It felt very much like a war zone, with poor and Black people in the crosshairs—people whose only crime was trying to survive. By the time the National Guard arrived to organize a full evacuation of the city, it was done with a level of aggression and ruthlessness that was hard to fathom. Soldiers pointed machine guns at residents as they boarded buses, providing no information about where they were being taken. Children were often separated from their parents.

  What I saw during the flooding shocked me. But what I saw in the aftermath of Katrina shocked me even more. With the city reeling, and with its residents dispersed across the country and unable to protect their own interests, a plan emerged to ram through a pro-corporate wish list with maximum velocity. Milton Friedman, then ninety-three years old, wrote an article for the Wall Street Journal stating, “Most New Orleans schools are in ruins, as are the homes of the children who have attended them. The children are now scattered all over the country. This is a tragedy. It is also an opportunity to radically reform the educational system.”

  In a similar vein, Richard Baker, at that time a Republican congressman from Louisiana, declared, “We finally cleaned up public housing in New Orleans. We couldn’t do it, but God did.” I was in an evacuation shelter near Baton Rouge when Baker made that statement. The people I spoke with were just floored by it. Imagine being forced to leave your home, having to sleep in a cot in some cavernous convention center, and then finding out that the people who are supposed to represent you are claiming this was some sort of divine intervention—God apparently really likes condo developments.

  Baker got his “cleanup” of public housing. In the months after the storm, with New Orleans’s residents—and all their inconvenient opinions, rich culture, and deep attachments—out of the way, thousands of public housing units, many of which had sustained minimal storm damage because they were on high ground, were demolished. They were replaced with condos and town-homes priced far out of reach for most who had lived there.

  And this is where Mike Pence enters the story. At the time Katrina hit New Orleans, Pence was chairman of the powerful and highly ideological Republican Study Committee (RSC), a caucus of conservative lawmakers. On September 13, 2005—just fourteen days after the levees were breached and with parts of New Orleans still under water—the RSC convened a fateful meeting at the offices of the Heritage Foundation in Washington, DC. Under Pence’s leadership, the group came up with a list of “Pro-Free-Market Ideas for Responding to Hurricane Katrina and High Gas Prices”—thirty-two pseudo relief policies in all, each one straight out of the disaster capitalism playbook.

  What stands out is the commitment to wage all-out war on labor standards and the public sphere—which is bitterly ironic, because the failure of public infrastructure is what turned Katrina into a human catastrophe in the first place. Also notable is the determination to use any opportunity to strengthen the hand of the oil and gas industry. The list includes recommendations to “automatically suspend Davis–Bacon prevailing wage laws in disaster areas” (a reference to the law that requires federal contractors to pay a living wage); “make the entire affected area a flat-tax free-enterprise zone”; and “repeal or waive restrictive environmental regulations…that hamper rebuilding.”

  President Bush adopted many of the recommendations within the week, although, under pressure, he was eventually forced to reinstate the labor standards. Another recommendation called for giving parents vouchers to use at private and charter schools (for-profit schools subsidized with tax dollars), a move perfectly in line with the vision held by Trump’s pick for education secretary, Betsy DeVos. Within the year, New Orleans became the most privatized school system in the United States.

  And there was more. Though climate scientists have directly linked the increased intensity of hurricanes to warming ocean temperatures, that didn’t stop Pence and his committee from calling on Congress to repeal environmental regulations on the Gulf Coast, give permission for new oil refineries in the United States, and green-light “drilling in the Arctic National Wildlife Refuge.” It’s a kind of madness. After all, these very measures are a surefire way to drive up greenhouse gas emissions, the major human contributor to climate change, which leads to fiercer storms. Yet they were immediately championed by Pence, and later adopted by Bush, under the guise of responding to a devastating hurricane.

  It’s worth pausing to tease out the implications of all of this. Hurricane Katrina turned into a catastrophe in New Orleans because of a combination of extremely heavy weather, possibly linked to climate change, and weak and neglected public infrastructure. The so-called solutions proposed by the group Pence headed at the time were the very things that would inevitably exacerbate climate change and weaken public infrastructure even further. He and his fellow “free-market” travelers were determined, it seems, to do the very things that are guaranteed to lead to more Katrinas in the future.

  And now Mike Pence is in a position to bring this vision to the entire United States.

  Kleptocracy Free-for-All

  The oil industry wasn’t the only one to profit from Hurricane Katrina. Immediately after the storm, the whole Baghdad gang of contractors—Bechtel, Fluor, Halliburton, Blackwater, CH2M Hill, and Parsons, infamous for its sloppy Iraq work—descended on New Orleans. They had a singular vision: to prove that the kinds of privatized services they had been providing in Iraq and Afghanistan also had an ongoing domestic market—and to collect no-bid contracts totaling $3.4 billion in the process.

  The controversies were legion, too many to delve into here. Relevant experience often appeared to have nothing to do with how contracts were allocated. Take, for example, the company that FEMA paid $5.2 million to perform the crucial role of building a base camp for emergency workers in St. Bernard Parish, a suburb of New Orleans. The camp construction fell behind schedule and was never completed. Under investigation, it emerged that the contractor, Lighthouse Disaster Relief, was in fact a religious group. “About the closest thing I have done to this is just organize a youth camp with my church,” confessed Lighthouse’s director, Pastor Gary Heldreth.

  After all the layers of subcontractors had taken their cut, there was next to nothing left for the people doing the work. Author Mike Davis tracked the way FEMA paid Shaw $175 per square foot to install blue tarps on damaged roofs, even though the tarps themselves were provided by the government. Once
all the subcontractors took their share, the workers who actually hammered in the tarps were paid as little as two dollars per square foot. “Every level of the contracting food chain, in other words, is grotesquely overfed except the bottom rung,” Davis wrote, “where the actual work is carried out.” These supposed “contractors” were really—like the Trump Organization—hollow brands, sucking out profit and then slapping their name on cheap or nonexistent services.

  In order to offset the tens of billions going to private companies in contracts and tax breaks, in November 2005 the Republican-controlled Congress announced that it needed to cut $40 billion from the federal budget. Among the programs that were slashed: student loans, Medicaid, and food stamps. So, the poorest people in the United States subsidized the contractor bonanza twice: first, when Katrina relief morphed into unregulated corporate handouts, providing neither decent jobs nor functional public services; and second, when the few programs that directly assist the unemployed and working poor nationwide were gutted to pay those bloated bills.

  —

  New Orleans is the disaster capitalism blueprint—designed by the current vice president and by the Heritage Foundation, the hard-right think tank to which Trump has outsourced much of his administration’s budgeting. Ultimately, the response to Katrina sparked an approval ratings free fall for George W. Bush, a plunge that eventually lost the Republicans the presidency in 2008. Nine years later, with Republicans now in control of Congress and the White House, it’s not hard to imagine this test case for privatized disaster response being adopted on a national scale.