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Naomi Klein: Disaster Relief — for Profit

LA Times | 29 August 2006

Will government-contracted private firms ever charge us for emergency services?

NAOMI KLEIN’s book on disaster capitalism will be published in spring 2007.

THE RED CROSS has just announced a new disaster response partnership with Wal-Mart. When the next hurricane hits, it will be a coproduction of Big Aid and Big Box.

This, apparently, is the lesson learned from the government’s calamitous response to Hurricane Katrina: Businesses do disaster better.

“It’s all going to be private enterprise before it’s over,” Billy Wagner, emergency management chief for the Florida Keys, currently under hurricane watch for Tropical Storm Ernesto, said in April. “They’ve got the expertise. They’ve got the resources.”

But before this new consensus goes any further, it’s time to take a look at where the privatization of disaster began, and where it will inevitably lead.

The first step was the government’s abdication of its core responsibility to protect the population from disasters. Under the Bush administration, whole sectors of the government, and particularly the Department of Homeland Security, have been turned into glorified temp agencies, with essential functions contracted out to private companies. The idea is that entrepreneurs, driven by the profit motive, are always more efficient than government.
We saw the results in New Orleans: Washington was weak and incompetent in part because its emergency management experts had fled to the private sector and its technology and infrastructure had become positively retro. In a crisis, government looks frighteningly inept (“doing a heckuva job”) while the private sector can seem modern and competent, at least by comparison.

In truth, when it comes to reconstruction, contractors are hardly wizards. “Where has all the money gone?” ask desperate people from the Persian Gulf to the Gulf Coast. One place a great deal of it has gone is into major capital expenditures for the private corporations. Largely under the public radar, billions of taxpayer dollars have been spent on privatized disaster-response infrastructure: the Shaw Group’s new state-of-the-art Baton Rouge headquarters, Bechtel’s battalions of earthmoving equipment, Blackwater USA’s 6,000-acre campus in North Carolina (complete with paramilitary training camp and 6,000-foot runway).

Call it the Disaster Capitalism Complex. Whatever you might need in a serious crunch, these contractors can provide it: generators, water tanks, cots, port-a-potties, mobile homes, communications systems, helicopters, medicine, men with guns.

This state within a state has been built almost exclusively with money from public contracts, yet it is all privately owned. Taxpayers have absolutely no control over it. So far, that reality hasn’t sunk in because when these companies are getting their bills paid by government contracts, the Disaster Capitalism Complex provides its services to the public free of charge.

But here’s the catch: The U.S. government is going broke, in no small part thanks to this kind of loony spending. The national debt is $8 trillion; the federal budget deficit is at least $260 billion. That means that sooner rather than later, the contracts are going to dry up. And no one knows this better than the companies themselves. Ralph Sheridan, chief executive of Good Harbor Partners, one of hundreds of new counter-terrorism companies, explains that “expenditures by governments are episodic and come in bubbles.”

When the bubbles burst, firms such as Bechtel, Fluor and Blackwater will lose their primary revenue stream. They will still have the ability to respond to disasters — while the government will have let that precious skill wither away — but now they will sell back the infrastructure built at public expense at whatever the market will bear.

If current trends continue, here’s a snapshot of what could be in store in the not too distant future: helicopter rides off of rooftops in flooded cities ($5,000 a pop reflects typical fees for such a service, $7,000 for families, pets included), bottled water and “meals ready to eat” ($50 per person — steep, but that’s supply and demand) and a cot in a shelter with a portable shower (show us your biometric ID, developed on a lucrative Homeland Security contract, and we’ll track you down later with the bill).

Before you say “not in America,” ask yourself this: Where else but in America? The model is the U.S. healthcare system, in which the wealthy can access best-in-class treatment in spa-like environments while 46 million Americans lack health insurance. The model also fits the global AIDS emergency, in which private-sector prowess has helped produce lifesaving drugs that the vast majority of the world’s infected cannot afford. If that is the private sector’s track record on slow-motion disasters, why should we expect different values to govern fast-moving disasters, such as hurricanes and even terrorist attacks?

One year ago, New Orleans’ working-class and poor citizens were stranded on their rooftops waiting for help that never came, but those who could afford it escaped to safety. It could prompt us to reverse a fatally wrong direction. Or it could be our first glimpse at “user pays” disasters.

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This entry was posted on 30 August, 2006 by in Corp-watch, Diplomacy, Hegemon-watch, Iraq, Political Economy, Racism, USA.

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-- Aldous Huxley

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