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The Gulf and Our Oily Campaign-Finance System
As the BP oil spill continues to flood the Gulf of Mexico, I find myself asking if such an environmental catastrophe might constitute the sort of “creative destruction” that right-wing market fundamentalists love to cite when they defend “free markets” and capitalism.
Creative destruction is the term coined in 1942 by the brilliant Austrian economist Joseph Schumpeter to describe certain not-so-benign effects of the market system, and the right wing has clung to the concept ever since. In the right’s oversimplified version of Schumpeter’s idea, capitalists function as something akin to artists who must not be restrained by governments lest they lose their creative verve and nerve. Of course, such unregulated enthusiasm will from time to time lead to the destruction of old-fashioned, cherished ways of life and work. But these trades and practices were headed for the ash heap anyway, and from this “industrial mutation,” as Schumpeter put it, will arise, well . . . something wonderful.
So far, however, I can’t seem to find the good, creative or otherwise, in the tide of petroleum now well on its way to suffocating the Gulf and its surrounding coastline. While waiting for the good news, I have to content myself with trying to understand the bad.
For one thing, none of what has happened over the past month — the absurd obfuscations by BP and the federal government, the lack of a plan to address the disaster, the so-far toothless denunciations of “big oil” — should surprise anyone. The corruption of the bureaucrats assigned to “regulate” oil drilling on public lands is an old story dating back to the Teapot Dome scandal, in the early 1920s, when Albert Fall, Warren Harding’s secretary of the interior, took bribes from oilmen in exchange for granting them leases without competitive bidding. As Brian Urstadt explained last year in Harper’s Magazine, the descendants of Fall at the Interior Department’s Minerals Management Service were, as Annie Oakley sang in “Annie Get Your Gun,” just “doing what comes naturally.”
Indeed, given the suspiciously lax method by which the MMS (and the American people it is supposed to serve) are compensated by oil companies for the privilege of drilling on public land, it’s amazing that we haven’t had more Deepwater Horizon disasters. Under an arrangement conceived in the Clinton administration and greatly expanded during the G.W. Bush administration, MMS has been collecting large quantities of oil — called “royalty-in-kind” — instead of cash royalties from the private drillers. In turn, the MMS is supposed to sell the oil for real money that would benefit citizens. The trouble is, as Urstadt reported, there’s no credible evidence that royalty-in-kind produces as much revenue as the old-fashioned cash-payment system.
Meanwhile, there’s much evidence that MMS officials like Lucy Denett, who resigned in 2008 after two subordinates were convicted of conflict-of-interest charges, are up to no good. Dennett’s deputy, Gregory Smith, “also resigned,” wrote Urstadt, “after the inspector general alleged that Smith had taken bribes from oil companies, slept with his subordinates, and had cocaine delivered to his office.”
Is this what the market-minded right-wingers have in mind when they dream of creative destruction? Perhaps not, but creative uses of time on the public dime were rampant at the MMS. Evidently civil servants can be even more “creative” than a businessman in a beret. According to Urstadt, “MMS employees were not just figuratively in bed with the oil industry, having ‘partied’ with their private-sector counterparts, earning some the nickname ‘the MMS chicks.’ ”
The Bush family, given its long history in the oil business, would understandably not want to interfere with the creativity of the likes of BP and ExxonMobil. What’s possibly more troubling is that nothing seemed to change at Interior or the MMS, besides a few names in top-level positions, after Obama and his supposedly more environmentalist crew took command. But in Washington, “green” still mainly means money in the form of lobbyist fees and campaign contributions. So why mess with a good formula?
Interior Secretary Ken Salazar, a former senator from Colorado, can make a scapegoat out of former MMS chief Elizabeth Birnbaum, but nothing short of his resignation would indicate a change in the administration’s fundraising priorities. As Obama’s chief of staff, Rahm Emanuel, has no doubt reminded the president, Colorado is rich in both fossil fuels and political donations from energy companies, so why would Obama want someone running Interior who comes from a state with little or no interest in coal, oil, or natural gas? Over the latest election cycle, from January 2009 to May 2010, the total contribution of oil and gas companies to the Democratic Party was $3.7 million.
Nevertheless, Obama says he’s determined to punish BP, plug the leak, and make sure that it never happens again. Two weeks ago, his spokesman, Robert Gibbs, described a president “enraged at the time that it’s taken” to halt the underwater oil gusher. How did Gibbs know this? Because he’s seen Obama’s “clenched jaw” in various meetings.
Yet Obama seemed utterly at ease — practically slack-jawed — on March 31, when he announced the expansion of offshore oil drilling, this to the dismay of his faithful environmentalist supporters.
No matter. Bipartisan Obama, the consummate corporate Democrat, could bask in the reluctant praise of Senate Minority Leader Mitch McConnell, who called the plan for increased drilling a “step in the right direction.”
What has to change? To be sure, Americans must end their addiction to SUVs and other monster vehicles. The U.S., with one-twentieth of the world’s population, gobbles up one-fifth of world oil production. But Americans also need to stop electing regular Republicans and Democrats like Bush and Obama who will never ask them for any sacrifices, apart from money at election time.
So far, the only sacrifices I’ve seen are the ones made by the oil-rig workers who died in the Deepwater Horizon explosion. They were sacrificed to a two-party oligarchy and a campaign-finance system that are leading us toward a very creative self-destruction.
John R. MacArthur is publisher of Harper's Magazine. Among other books, he is the author of Second Front: Censorship and Propaganda in the Gulf War.
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15 Comments so far
Show AllCreatve destruction might be the label to attach to what up to now is called "dead zone". What with the latest about the air pollution in the gulf, we are starting to feel the full wrath of God! Sort of a "wet Sodom".
Bravo! The only thing I don't like about Harper's is Lapham's libertarian derangement over smoking (he seems to think he has the right to blow his carcinogens in my face whenever he damn pleases.
Other than that, Harper's is one of the few jewels left in the American media dungheap.
"corporate democrats"
you really mean "fascist bastards" right?
THAT is the correct definition.....
they call us socialists all the time - but it's not ok to use the truly correct word for these corporate whores?
as I said FASCIST BASTARDS!
and someone here was kind enough to provide us a link to the way the world used to handle these criminals after ww2.....
maybe we need to send these corporate fascists the links!
Internal documents reveal criminal negligence
Obama administration’s “escrow” account will shelter BP
By Tom Eley
16 June 2010
As more evidence comes to light showing that BP disregarded basic safety considerations at its Deepwater Horizon drill site, it has become clear that the Obama administration’s move to create an escrow account to compensate victims is a maneuver to shield the corporation and its top shareholders.
According to law, there is potentially no cap to liability for damages if criminal negligence can be proven. A mountain of evidence proves this is in fact the case. This includes internal BP documents and memos released by the House Energy and Commerce Committee this week. Written in the days before the explosion, the documents reveal that the company knowingly disregarded concerns over safety in the rig’s drill capping operations. The rig exploded on April 20, killing 11 workers and creating one of the worst environmental catastrophes in history.
“We found a pattern,” concluded committee chair Rep. Henry Waxman (Democrat, California) in an accompanying letter. “Every time [BP] had a decision to make they decided to cut corners; to do things faster than they otherwise should have been done; to do it less expensively and the consequence of this, as one independent expert told us, was horribly negligent. They violated what their own employees were recommending they do, they violated their own industry practices and they ignored the recommendation of contractors who told them to do certain tests to avoid safety concerns.”
BP made at least five dangerous cost-cutting decisions in the days and hours before the explosion, the committee found. “Time after time, it appears that BP made decisions that increased the risk of a blowout to save the company time or expense,” the letter to Hayward stated. “If this is what happened, BP’s carelessness and complacency have inflicted a heavy toll on the Gulf, its inhabitants, and the workers on the rig.”
Among other negligent acts, BP chose to use a well tubing design that left few barriers against the eruption of gas. This was despite an internal review prepared in mid-April which warned that such a design would leave the seal assembly on the wellhead as the “only barrier” in the event of cement failure—and even though an internal BP study had predicted cement failure. “Cement simulations indicate it is unlikely to be a successful cement job due to formation breakdown,” BP wrote days before the blast.
“Despite this warning...BP did not run a 9- to 12-hour procedure called a cement bond log to assess the integrity of the cement seal” or bond log, the House Committee commented. “BP had a crew from [contractor] Schlumberger on the rig on the morning of April 20 for the purpose of running a cement bond log, but they departed after BP told them their services were not needed. An independent expert consulted by the Committee called this decision ‘horribly negligent.’”
More damning revelations emerged related to the process of placing centralizers, which insure that tubing is centered in the well bore. If the tubing is placed incorrectly, experts say it is difficult or impossible to properly replace mud at the time of well capping, increasing the chances of blowout. The industry standard is to use 21 centralizers—also the number suggested by contractor Halliburton for the Deepwater Horizon—but BP chose to use only six. Four days before the explosion, Halliburton warned BP that if it proceeded as planned the well would have a “SEVERE gas flow problem.”
BP responded by stating that putting in place additional centralizers would take too long. “It will take 10 hours to install them,” a BP representative wrote. “I do not like this.” Another BP official acknowledged the risks related to using few centralizers, but concluded, “who cares, it’s done, end of story, will probably be fine.”
The House Energy Committee also found that BP skipped over recommended testing of heavy mud circulation in the well, which requires at most 12 hours, and that it bypassed placing an extra seal known as a “lockdown sleeve” that might have prevented a blowout. It found further evidence that company officials were aware of the dangers. One engineer even referred to the operation as “a nightmare well.”
Dozens of similarly negligent decisions were made dating back to the planning and environmental risk assessment of the drilling site, as numerous government documents, investigative reports, and worker testimony have revealed. Most of these decisions—including several in the lead-up to the blast—were approved by Obama administration regulators, especially the Minerals Management Service (MMS) of the Department of the Interior. Any serious investigation of the BP Gulf spill would turn up further evidence of government culpability in the disaster—and would expose the dire safety conditions under which scores of oil rigs continue to operate.
The ongoing revelations of BP’s negligence expose the content of Obama’s plan for an escrow account, of an as yet unstated funding level, that would be administered by a supposedly independent third party. BP will likely go along with the plan—“provided that it has certain assurances,” the Washington Post notes. At a Wednesday meeting in the White House, BP CEO Tony Hayward and Chairman Carl-Henric Svanberg will ask Obama to impose “a limit to its liability” and see to it that the “escrow account [is] administered by someone the company can trust.”
.....
The Deepwater Horizon disaster is no more an accident than the implosion of financial markets two years ago that has led to the worst economic and social crisis since the Great Depression. In both cases, the decades-long promotion of the “free market,” the subordination of the productive forces to the profit demands of the corporate and financial elite, and the gutting of regulations created conditions that, sooner or later, would inevitably lead to disaster.
http://www.wsws.org/articles/2010/jun2010/gulf-j16.shtml
The authors failed to note that Johns Manville ducked all the asbestos suits the same way 35 years ago after it came out at trial that they had knowingly withheld medical information from affected employees, letting them continue to sicken until they died.
Manville's corporate counsel said on the stand, apparently without any sense of irony let alone shame, "we save a lot of money that way".
Government let them put money into an escrow fund, and then let them completely let them off the hook for all future suits. Once the escrow fund was tapped dry, claimants whose condition wasn't recognised in time were just out of luck.
It looks like some fresh psychopaths at BP or in ObamaCo did their homework.
Look how the government treated victims of the 9/11 terrorist attacks.
The same type fund was set up in Manhattan and the families of those who were killed were arm twisted into quickly taking a settlement and they were forced to swear they would never join any lawsuits against the federal government and that they would never come back and ask for more compensation.
Google that one and read about it if you want to see some major political/legal hijinks in action.
What's with the musical headlines? Before I can respond to yet another Addiction headline with my own:
"Americans Need To End Their Addiction To Stupid Memes" (addiction to oil being the one addressed here), they up and change the title on the article itself.
Also, enough with the SUV-bashing already. It's (usually) just another example of conspicuous consumption, embarrassing to behold but probably done to impress somebody. So let's not be impressed. Certainly, we are not "addicted" to them, good grief.
As to actual petroleum usage, I'd research where we are using it before writing articles. How much goes to the military/DoD, how much to manufacturing; if nearly half is used in transportation, how much is commercial vs public vs personal vehicles?
MacArthur got this part right: "...Americans also need to stop electing regular Republicans and Democrats..." Not sure what's new or compelling about the rest of the piece.
WOW! What a brilliant guy to be writing in a local Providence newspaper. He must reside in RI, and should author more here at CD.
I was a bit concerned about CD's headline on this story, "Americans Must End Their Addiction to Oil (and Corporate Democrats)" --- since it should really, more broadly, focus on ending 'Corporate democracy', which is no democracy at all --- but rather corporatist EMPIRE.
Anyway, Obama also spoke last night about about "Americans ending their oil addiction" --- but he most certainly did NOT speak, NOR level with the American people about ending their "addiction" to "Corporate Democracy" which is really EMPIRE.
In fact, William Rivers Pitt has a fabulous article today in "Truth-Out" which correctly identifies Obama as actually serving the role FOR Empire of actually being the "addiction" (or 'opium for the masses') in hiding this already well disguised global ruling-elite corporate/financial/militarist EMPIRE --- which has 'captured' our whole country and government as surely as BP, Exxon and the rest of the corporatist EMPIRE has 'captured' the MMS (Mineral Management Service), and as surely as Bank of America, Citi, Morgan, and Goldman Sachs have 'captured' Treasury and the FED.
http://www.truth-out.org/enough-crap60452#comment-200853
[CD editors, any chance of getting Pitt on board at CD?]
Anyway, this is the comment I made to today's (6/16) NY Times front-page supposed 'news analysis' story, "Obama Seeks to Shift Arc of Oil Crisis":
"Obama hasn't "Shift(ed) Arc of Oil Crisis", but rather kept the 'Ark of History on Course' ---- to EMPIRE.
The US is today, like the 'Titanic', on a course controlled by an arrogant and mindless ruling-elite Empire.
'Our' former country, 'our' former democratic Republic, is now fully under the control of a ruling-elite corporate/financial/militarist EMPIRE at the helm --- which has already hit several existential icebergs; imperialist wars abroad, financial manipulation / looting, environmental self-destruction, and democracy euthanasia --- and continues to steer an insane course and "arc of history" toward ultimate self-destruction; reflective of the fictional Captain Ahab in "Moby Dick" and the very real Captain of the 'Titanic'.
This is the holed and sinking Arc/Ark of American history that Captain Obama so publicly promised to "bend" and correct.
"But Captain, our Captain, Why are you holding the course to Empire and extinction --- and why are you not saying anything, nor even whispering, about the Empire that has your icy hands lashed to the wheel?"
Alan MacDonald
Sanford, Maine
You write, "The US is today, like the 'Titanic', on a course controlled by an arrogant and mindless ruling-elite Empire", elaborating in the next paragraph the situation we are in.
What this situation demands is a total repudiation and delegitimation of this idea that the world should be run by a corporate plutocracy. They have been shown to be completely insane and they need to be stopped. Now.
We could lessen our dependence on oil by turning off the gas pump that supplies our military-industrial-congressional complex. At least two wars and hundreds of overseas and domestic military installations probably consume more gas than do in America.
Hoa binh
"...capitalists function as something akin to artists who must not be restrained by governments lest they lose their creative verve and nerve."
Well, from the air, the oil spill looks quite like a Picasso.
And it seems to be some kind of justice that the USA will drown in its own filthy oil...
Documents from the Clinton whitehouse place Supreme Court nominee Elena Kagan squarely in the DLC camp. Obama has shown, time after time, that he's bought into the triangulation/corporatist DLC crap.
Let's make sure he's a one term DLC loser---even if we're saddled with a joke like Palin. NO progressive support for sellout corporate democrats.
"But Americans also need to stop electing regular Republicans and Democrats like Bush and Obama who will never ask them for any sacrifices, apart from money at election time." - John R. MacArthur
Gee. I was hoping he was going to call for the launching of a new political party to take a stake to the heart of the Democratic Party. But no. I guess he just expects us to run out and vote for "irregular" Democrats as opposed to the "regular" ones.
What a waste of time.
I just keep watching and waiting for some American somewhere to send out the clarion call:
"A NEW PARTY IS BEING FORMED TO FIGHT THE CORPORATELY CONTROLLED DEMOCRATS AND REPUBLICANS! WE NEED YOU!!!"
I just keep watching and waiting for some American somewhere to send out the clarion call:
"A NEW PARTY IS BEING FORMED TO FIGHT THE CORPORATELY CONTROLLED DEMOCRATS AND REPUBLICANS! WE NEED YOU!!!"
----------------------------------------
If it happens, it almost certainly won't succeed. And it probably won't happen. Read the book recently written by Nader's campaign manager. The lock the Duopoly has on the very elections process is utterly sickening and *should* be illegal.
The only real way to put a, let's say, People's Party into office is for its members to put on Donkey and Elephant costumes.
Figure out which Duopoly faction has a lock on which seat and see that a PP candidate becomes that faction's nominee for that seat. Then, once elected, the stealth PP members join hands across the aisle and steamroller the real Donkey and Elephant scunners.
In the meantime, it's my hope for a more pragmatic, no-nonsense citizenry response from the majority of citizens: Demand solutions from politicians and keep demanding them. Keep calling repeatedly for solutions to this catastrophic, life-threatening problem. Taking responsibility for our individual appetites and habits has always been necessary and important. This isn't news; there have always been consequences to choice and making better choices is, indeed, a solution. Still, to suggest waiting around until the next election won't solve today's ongoing horror in the Gulf which is screaming for strategic, intelligent, comprehensive solutions. We can demand political solutions from those in positions to legislate them. We could be marshaling resources, soliciting help from the worldwide community, the military, scores of scientists, engineers, industries, volunteers. Excuses are unacceptable. Political decisions affect our lives.