The Shock Doctrine

University of Chicago Faculty Object to the Proposed Milton Friedman Institute

University of Chicago Faculty, Website, August 11, 2008

In June 2008, the University of Chicago announced it was establishing a $200 million economic research institute to honor Milton Friedman.

Faculty members at the University of Chicago are actively objecting to this institute. See the petition signed by more than 100 faculty members expressing concern about the University of Chicago's rationale and funding for this center.

Check out the faculty's website, where you can also read detailed letters from staff explaining their objections, see reactions from economists, and find helpful background materials.

Hillary Clinton on Disaster Capitalism

Contractors, Wall Street Journal, August 6, 2008

"There appears to be no crisis, tragedy or disaster immune from exploitation under the Bush administration. The examples of the waste, fraud and abuse are legion -- from KBR performing shoddy electrical work in Iraq that has resulted in the electrocution of our military personnel according to Pentagon and Congressional investigators, to the firing of an Army official who dared to refuse a $1 billion payout for questionable charges to the same company....

"But the fraud and waste are not limited to the war. In the weeks after Hurricane Katrina, for example, FEMA awarded a contract worth more than $500 million for trailers to serve as temporary housing. The contractor, Gulf Stream, collected all of its money even though they knew at the time that its trailers were contaminated with formaldehyde.

"If we're going to get serious about putting our nation's fiscal house in order, let's talk about putting an end to billions in no-bid contract awards to unaccountable contractors. Let's talk about the number of lucrative contracts and bonuses being paid for duties never performed, promises never fulfilled, and contracts falsely described as complete. And let's talk about reforming the federal contracting system so that we can take on the real waste, fraud and abuse in our federal government."

Oil Crisis Leads to Mass Transit Cuts

Ivan Moreno, Associated Press, August 5, 2008

"About one in five of the nation's transit agencies have cut service over the past year. They include Cleveland; Corpus Christi, Texas; and San Diego, which has seen one of the largest increases in bus ridership in the country.

"The cutbacks come at a time of increasing interest in public buses and trains: The transportation association says people took 2.6 billion trips on public transportation nationwide in the first three months of 2008 — almost 88 million more than last year."

See Also:
Ridership on Mass Transit Breaks Records

Contractors Charge City Staggering Fees for Debris Removal after 2007 Wildfires

Dana Wilkie, Brooke Williams and Danielle Cervantes, San Diego Union-Tribune, August 3, 2008

"The city [of San Diego] hired two companies, which billed by the ton. They removed more debris from 112 homes than the city anticipated and more than many private contractors believe would have been possible.

"Ultimately, A.J. Diani Construction Co. of Santa Maria and Watsonville-based Granite Construction Co. charged an average of nearly $83,400 per home, according to a San Diego Union-Tribune analysis of the companies' contracts and invoices. The total program cost was at least $9.4 million.

"The contractors' bills far exceeded an initial estimate of $28,000 per home. Some were almost nine times what privately retained contractors charged to clear nearly identical lots."

Exxon Profits $1,500 A Second

Steve Hargreaves, CNN Money, July 31, 2008

"Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter. That profit works out to $1,485.55 a second. That barely beat the previous corporate record of $11.66 billion, also set by Exxon in the fourth quarter of 2007....The company returned $10.1 billion to shareholders in the form of dividends and stock buybacks."

See also:

• Royal Dutch Shell's profits are up 33% to more than $11.5 billion
• BP's profits rose 28% to nearly $9.5 billion
• Chevron profits nearly $6 billion

Big Oil Avoids Paying $1.3 Billion in Royalties for Offshore Drilling

Tyson Slocum, Public Citizen, July 30, 2008

"A bureaucratic oversight has allowed 24 oil companies to avoid more than $1.3 billion in royalties for the privilege of extracting oil and natural gas from U.S. territory in the Gulf of Mexico - with foreign companies responsible for 55 percent of that total. But this $1.3 billion in forgone royalties pales in comparison to the $60 billion that Americans stand to lose in royalty revenue over the life of these leases. And if Congress repeals the moratorium on Outer Continental Shelf (OCS) drilling that has existed since 1982, these freeloading oil companies will be eligible to bid on new leases, providing them with more record profits while American families are left holding the bag. These 24 companies have posted a combined $365 billion in profits since 2006.

"The list of the specific companies comes from a February 2008 U.S. Department of Interior memo recently obtained by Public Citizen. Four of the 24 companies (BP, Marathon, Shell and Walter Oil & Gas) signed voluntary agreements to pay royalties going forward, but they will not be required to pay the more than $200 million taxpayers have been denied on production that already has occurred."

Neocon Richard Perle Linked to Iraqi Oil Deal

Susan Schmidt and Glenn R. Simpson, Wall Street Journal, July 29, 2008

"Influential former Pentagon official Richard Perle has been exploring going into the oil business in Iraq and Kazakhstan, according to people with knowledge of the matter and documents outlining possible deals.

Mr. Perle, one of a group of security experts who began pushing the case for toppling Iraqi dictator Saddam Hussein about a decade ago, has been discussing a possible deal with officials of northern Iraq’s Kurdistan regional government, including its Washington envoy, according to these people and the documents....

"Mr. Perle, who was an assistant Defense secretary in the Reagan administration, is known for his strong support of Israel and hawkish views on arms control. In the early days of the Bush administration, he was one of the most influential proponents of U.S. military action to oust Iraq’s President Hussein. Mr. Perle was chairman of the Defense Policy Board, which advises the Pentagon, but resigned in March 2003 amid criticism of his role as an adviser to a telecom company that was seeking U.S. government approval for a sale to Asian investors."

Mexican Voters Reject Increasing the Role of Private Oil Companies

Marla Dickerson, Los Angeles Times, July 29, 2008

"Turnout was light, but voters in a nonbinding referendum gave an overwhelming "no" to President Felipe Calderon's proposal to give private firms a bigger role in Mexico's government-controlled petroleum industry.... Mexico is the world's sixth-largest petroleum producer, and the industry is the nation's largest taxpayer....

"Calderon in April sent legislation to Congress that would loosen some restrictions on Pemex, enabling it to team up with foreign oil companies to extract the nation's undersea oil. His plan also calls for more private investment in areas such as refining and storage. Opponents say Calderon's real objective is to privatize Pemex, a charge the president denies."

Oil Industry Execs Pour Money into McCain's Campaign

Matthew Mosk, Washington Post, July 27, 2008

"Campaign contributions from oil industry executives to Sen. John McCain rose dramatically in the last half of June, after the senator from Arizona made a high-profile split with environmentalists and reversed his opposition to the federal ban on offshore drilling.

"Oil and gas industry executives and employees donated $1.1 million to McCain last month -- three-quarters of which came after his June 16 speech calling for an end to the ban -- compared with $116,000 in March, $283,000 in April and $208,000 in May."

See also: The Los Angeles Times on Hess Corporation executives and family members' large donations to McCain's fundraising committee.

Defense Contractor Lockheed Martin Unhurt by Economic Crisis; Earnings Up 13%

Dana Hedgpeth, Washington Post, July 23, 2008

"Not all sectors of the economy are suffering these days. Lockheed Martin, the world's biggest defense contractor, reported a strong second quarter yesterday, with profit up 13 percent compared with the corresponding period last year. The Bethesda company said its net earnings were $882 million ($2.15 per share) for the period ended June 29, up from $778 million ($1.82) in the second quarter of 2007. Revenue rose 3.6 percent, to $11.04 billion....

"The defense sector has suffered little in the economic downturn, instead benefiting from government spending on the occupations of Iraq and Afghanistan."