Shock Doctrine FTW: It's global

Britain's economy shrank by 0.6% in the final quarter of last year, a sharper fall than previously thought.

The surprise downward revision, from a 0.5% quarterly drop reported last month, was blamed on industry and service sector firms whose performance was worse than originally estimated. Consumer spending also slipped and the economy was kept afloat by higher government spending, which will see sharp cuts in coming months.

The Office for National Statistics stuck to its view that the harsh winter weather in December – the coldest December on record – contributed 0.5 percentage points to the decline, so without the snow GDP would still have shown a slight fall.

Meanwhile the US economy grew more slowly than initially estimated in the fourth quarter as government spending contracted at a sharper rate and consumer spending was less robust than first thought. US GDP rose at an annualised rate of 2.8%, revised down from 3.2%.

Output from the UK service industries fell by 0.7% between October and December from the previous quarter, rather than 0.5% – led by a 1.1% drop in finance and business services – while industrial production was also revised lower to show growth of 0.7% compared with the earlier estimate of 0.9%. Construction slumped by 2.5%.

TUC general secretary Brendan Barber said: "The government's hope of an upwards revision of growth has been dashed. It's time to wake up and smell an economy in big trouble. We need a plan B that doesn't send it over the edge with deep rapid spending cuts."

As many readers may recall, the results were spectacular — in a bad way. Instead of focusing on the urgent problems of a shattered economy and society, which would soon descend into a murderous civil war, those Bush appointees were obsessed with imposing a conservative ideological vision. Indeed, with looters still prowling the streets of Baghdad, L. Paul Bremer, the American viceroy, told a Washington Post reporter that one of his top priorities was to “corporatize and privatize state-owned enterprises” — Mr. Bremer’s words, not the reporter’s — and to “wean people from the idea the state supports everything.”

The story of the privatization-obsessed Coalition Provisional Authority was the centerpiece of Naomi Klein’s best-selling book “The Shock Doctrine,” which argued that it was part of a broader pattern. From Chile in the 1970s onward, she suggested, right-wing ideologues have exploited crises to push through an agenda that has nothing to do with resolving those crises, and everything to do with imposing their vision of a harsher, more unequal, less democratic society.

Which brings us to Wisconsin 2011, where the shock doctrine is on full display.

Walker: ... This is — you know, I told my cabinet, I had a dinner the Sunday, or excuse me, the Monday right after the 6th. Came home from the Super Bowl where the Packers won, and that Monday night I had all of my cabinet over to the residence for dinner. Talked about what we were gonna do, how we were gonna do it. We’d already kinda built plans up, but it was kind of the last hurrah before we dropped the bomb. And I stood up and I pulled out a picture of Ronald Reagan, and I said, you know, this may seem a little melodramatic, but 30 years ago, Ronald Reagan, whose 100th birthday we just celebrated the day before, had one of the most defining moments of his political career, not just his presidency, when he fired the air-traffic controllers. And, uh, I said, to me that moment was more important than just for labor relations or even the federal budget, that was the first crack in the Berlin Wall and the fall of Communism because from that point forward, the Soviets and the Communists knew that Ronald Reagan wasn’t a pushover. And, uh, I said this may not have as broad of world implications, but in Wisconsin’s history — little did I know how big it would be nationally — in Wisconsin’s history, I said this is our moment, this is our time to change the course of history. And this is why it’s so important that they were all there. I had a cabinet meeting this morning and I reminded them of that and I said for those of you who thought I was being melodramatic you now know it was purely putting it in the right context.

There’s a three-prong approach in Governor Walker’s plan that highlights a blueprint for conservative governorship after the 2010 election. The first is breaking public sector unions and public sector workers generally. The second is streamlining benefits away from legislative authority, especially for health care and in fighting the Health Care Reform Act. The third is the selling of public assets to private interests under firesale and crony capitalist situations.

This wasn’t clear to me at first. I thought this was about a narrow disagreement over teacher’s unions. Depending on what you read, you may have only seen a few of these parts, and you may have not seen them put together as a coherent whole. This will be the framework that other conservative governors, and even a few Democratic ones, will use in their state, so it is good to get a working model in place.