Shock Doctrine California, Part I

I was speaking with an energetic healer this week and mentioned that the shock doctrine is about to roll out in the United States, starting with California.  She said, “looks like we need Grizzly Bear magic,” referring to the grizzly bear in the California state flag.

On this week’s Solari Report, I will be reviewing what is happening in California and how citizens can take action to prepare themselves. The banks are now flush with cash and some of them are out from under government restrictions. A great deal of money has been amassed. Will they finance real estate developers on a shopping spree for state parks and facilities? Will a wider understanding of California’s situation put additional pressure on the Treasury bond market and the dollar globally?

In the meantime, best to be prepared for what several budget cycles of severe state and local budget cuts could mean – whether to local services, the economy, or the municipal bond markets. This month, Californians are most at risk. However, the U.S. state and local government budget crunch is a financial wave coming to your door. This wave will have a dramatic impact on most North Americans and could fundamentally alter the relationship of American states with the federal government. This wave will reach beyond North America, impacting the global economy in significant ways.

This week’s Solari Report will come to you from Tucson, Arizona where I will be speaking at the Institute of Noetic Sciences conference. I will cover other developments in our extended segment of Money and Markets, answer questions in Ask Catherine, and then address the California situation.

In our Let’s Go To the Movies segment, I will review Welcome to Mooseport, a comedy in which Gene Hackman, the retiring President of the United States, runs for Mayor in Mooseport, Maine and gets an education in the intimate issues of local governance and budgets.

If you are a subscriber to The Solari Report, you can post your questions at your private panel or feel free to also post them at this blog post. If you would like to learn more about The Solari Report and subscribe, click here.


View Shock Doctrine California, Parts II & III



    1. The Ugly Agenda Behind California?s Budget Crisis (Michael)
    2. Fwd: [realbankreform] Americans for Financial Reform Launch
    Campaign to Clean Up Wall Street, Protect Your Pocketbook
    (tiffiniy cheng`)

    Subject: [Discussion] The Ugly Agenda Behind California?s Budget
    This article was posted to LeagueDiscuss. It takes the analysis from
    Naomi Kleins book Shock Doctrine and applies it to the budget crises
    in California and the general crises of capitalism we are living thru.

    Steven Miller
    June 15, 2009

    The Ugly Agenda Behind California?s Budget Crisis

    Once economic crisis gets snarled up and aggravated it often can no
    longer be resolved by economic means. Then a political crisis emerges
    as economic classes seek to determine a political resolution to the
    crisis. By definition, politics is about the struggle for power ? to
    control what happens ? and no force is larger in that struggle than

    The French Revolution was the classic example. It was precipitated by
    a long drawn-out budget and tax crisis. Every class, including the
    king, was in favor of taxation, but nobody could figure how to raise
    taxes without trampling on the hallowed privileges of each estate. The
    months of stasis lead to increasing suffering, until women
    demonstrating at Versailles just decided to kidnap the king. Then
    things jumped off. Suddenly the budget crisis was subsumed by politics
    as the newly wealthy bourgeoisie took over and changed everything.

    The economics of California?s budget crisis are fundamentally
    different, but the nexus of events is pushing political resolution
    onto the stage. At one level, the state?s crisis is a classic ?Shock?
    straight out of the pages of Naomi Klein?s important book The Shock
    Doctrine. As we will see below, the so-called $24.3 budget crisis is
    completely manufactured, a direct and deliberate result of policies
    embraced by both Democrats and Republicans.

    California?s crisis is deliberately engineered by corporations. We all
    remember the last manufactured crisis – the state?s 1999 ?Electrical
    Crisis? – that was engineered by ENRON and various hedge funds in
    order to make a hostile takeover of the state?s electrical grid. That
    little crisis cost the state some $40 billion, money that is still
    being paid off.

    Klein describes how the neo-liberal economic system (ie the global
    capitalist financial system) created economic crises across the world
    in order to take advantage of them and privatize public services. She
    shows in detail how the Bush Administration outsourced the public
    services of the US government and essentially privatized their delivery.

    Governor Schwarzenegger has already illegally seized some $5 billion
    from the state?s public schools. Now he is demanding $4 billion more.
    This plays right into the hands of privatizers like Eli Broad and
    Steve Barr of Green Dot Charters.

    On a more profound level, the crisis is being driven by the same
    objective forces that have created the world financial meltdown. This
    crisis is a classic overproduction crisis. In this case, so many
    houses were created that people could no longer buy them, so predatory
    loans were offered to sucker poor people into thinking that they could
    get into a home with no money down. Then mortgages were
    ?securitized? (ie – turned into investment opportunities) that feed a
    speculative bubble. These scams happened more in California than any
    other state.

    The whole economy is increasingly formatted so that the vastly
    powerful organizations of speculative capital can ?securitize?
    everything, from health care to water to public education, making the
    necessities of life into the fodder for billion-dollar bets on the
    stock market.

    This process drives the government to serve the speculators, as has so
    conveniently been done with the federal bailouts that now total $12.6
    trillion and climbing ? all in the last 18 months. At every level ?
    federal, state and local ? governments are proclaiming the need to get
    out of the business of helping people. Social services are privatized
    and farmed out to corporations, who take their profit off the top.
    First New Orleans, then Detroit. Now California.

    The coming privatization of public infrastructure and municipal
    services is described by ecologist Jo-Sing Yang in November 2008 (



    Agricultural Subsidies


    California Budget 101: Making sense of the state’s financial meltdown

    California Nears Financial “Meltdown” as Revs Tumble; Reuters (10 June 09)

    California’s bond ratings don’t reflect reality (LA Times, 3/26/09),0,7033993.column

    California Recovery Act spending

    Official state website

    State agency contracts database search tool

    State parks

    Regional maps

    School data finder tool

    Department of Health Care Services (includes links to # Department of Health Care Services Budget Balancing Reductions – Local Assistance; Department of Health Care Services Budget Balancing Reductions – State Operations; 2009-10 Governor’s Budget Highlights DHCS and ARRA summary)

    MediCal website

    State Treasurer’s website

    Bonds and public financing

    Bond sale database

    Buy California bonds (current offerings)

    On-line campaign finance and lobbying disclosure reports

    Fair Political Practices Commission


    CalPERS Investment Reports

    California State Teachers Retirement System

    California Retired Teachers Association



    City of Berkeley CAFR
    The CAFR includes the City’s financial position and results of operations. It also contains demographic and statistical information to help the reader understand the financial condition of the City for each fiscal year. The current CAFR is for the City’s 2008 fiscal year, which ended June 30, 2008.


    Budget woes have Oakland mulling bankruptcy

    City of Oakland official website (includes proposed city budgets, Opportunities for Public Input to FY 2009-11 Budget and information on City of Oakland Special Municipal Vote by Mail Election – July 21)

    Online Portal to City Council and Council Committees Legislative Activity.

    City of Oakland Bonds (includes links to summary of debt outstanding and official statements)

    City and Agency Resolutions Authorizing the City Administrator to Execute a
    Two (2) Year Professional Services Contract Between the City of Oakland and
    Macias, Gini & O’Connell, LLP to Provide Audit Services for the Fiscal Year
    Ending June 30, 2008 in the Amount Not To Exceed $694,275, and Fiscal Year
    Ending June 30, 2009 in the Amount Not To Exceed $728,989.

    Alameda County official website

    Alameda County Board of Supervisors

    Alameda County Ordinances and Administrative Code

    Alameda County Departments and Agencies

    Alameda County Comprehensive Annual Report

    Alameda County contracting opportunities database

    Alameda County public works (includes development stage projects and various annual reports)

    Alameda County Small Business Development Center

    East Bay Metropolitan Utility District

    Alameda County Employee Retirement System

    * * * *

    Oakland Consolidated Plan submitted to HUD

    Included are:

    Official Plans

    * Consolidated Plans
    o Current Plans
    o Citizen Participation Plan
    o Fair Housing Plans
    o Older Consolidated Plans (2000-2005)
    * Housing Element
    * AIDS Housing Plan
    Policies & Strategies
    Municipal Codes & Ordinances
    Housing and Community Development Consolidated Plans

    The City of Oakland is required to submit a 5-Year Consolidated Plan, as well as annual Action Plans and Performance Reports to the U.S. Department of Housing and Urban Development (HUD) in order to receive funds from the Community Development Block Grant, HOME Investment Partnership, Emergency Shelter Grant, and Housing Opportunities for Persons with AIDS grants.

    The 5-year plan includes information on housing needs, resources, and strategies.

    The annual action plans include information on specific activities funded with CDBG and other federal funds, as well as housing activities carried out with other funds.

    * * * *

  3. well, we have all the facts. but what action can citizens take? we need to be protesting in a big way. demonstrate numbers and discontent with this process of public rip-off.

  4. This from a letter to the editor today in the Marin newspaper; worth typing
    out here.

    Writer is saying that closing the parks makes no sense financially:

    “The general fund budget for our state parks, already cut to the bone,
    accounts for less than one-tenth of 1 percent of the state budget.

    “Yet for every dollar that funds the parks, $2.35 is returned to the
    state’s general fund through economic activities in all the surrounding

    “With more than 80 million visitors to our state parks last year alone,
    eliminating funding for the parks could result in the state losing over $359
    million in related revenue.

    “Economic downturn” is not an acceptable reason Before we squander our
    state’s priceless resources — already paid for by our tax dollars — we should
    look at less destructive was to economize.

    “Two easy examples: The extra per diem and car allowances of our
    legislators, and the flagrant waste and overbilling in our state’s prison system.”

  5. California is much bigger than Guernsey Island, yet cannot use Guernsey’s simple example as a way out of crisis.

    Oakland has to submit a 5-year plan to get “Federal” money -which COULD be simply created for the purpose, had central bankers not long ago won that long fight for monopoly on money creation.

    That monopoly is the cause of crises such as the current ones. Most people don’t understand it but it’s deceptively simple: Human endeavor & interaction is mostly governed by money, and money is a magical device whose power has been usurped to serve a power elite. Crisis can easily be engineered to further consolidate power, and it is happening all around us.

    Instead of going further in the hole by issuing IOUs, California could be issuing its own money, debt free, and creating out of this crisis a new prosperity, as was done on Guernsey and numerous other examples in history. But of course this possibility has been pre-empted. Money itself now rules. Corporations are soul-less instruments of the artificial system of values money has become. Corporations are immortal and powerful with privileges and rights beyond those of humans. Humans can only serve this crass and destructive agenda or dry up for lack of funding.

    The task is not to find humans to blame, but to understand the problem as an artificial one, created by humans YES, but now no longer beholden to human values. Humans could yet kill the beast, but that would require agreement as to what the beast actually IS. The beast is our beastly debt-money system, pure & simple. The governator may not even realize he is a pawn of that system, owing his privilege to his willingness to do its bidding.

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