Jun 2nd 2010

The Oil Spill and the Republicans

by Robert Creamer

Robert Creamer is a long-time political organizer and strategist and author of the recent book: "Stand Up Straight: How Progressives Can Win," available on amazon.com.
The frustration and anxiety of Americans about the horrific oil spill in the Gulf of Mexico grows by the day. Those whose livelihood is tied to the Gulf -- or who live in the wetlands of Louisiana, and communities along the coast -- are justifiable demanding the deployment of war-time levels of personnel and equipment to stop the dark, deadly oil that is invading from the sea.

In times of national crisis, Americans look to the President to lead - and to deliver. That's why President Obama was absolutely correct to make it crystal clear that he is personally responsible to deal with the oil spill crisis - and has told his Administration to spare no effort to stop the leak, oversee the cleanup, and assure that BP completely compensates the massive number of victims.

Increasingly sharp criticism has been leveled at the President because BP has so far been unable to stop the leak. The problem, of course, is that most of the critics have few suggestions about what the Administration might do that it isn't doing.

And it is down right remarkable that the critics, include Republicans like Louisiana Governor Bobby Jindal, who less that two years ago were joining Republican oil industry "expert" Sarah Palin in the juvenile Republican convention chant "Drill Baby Drill!"

"Drill Baby Drill!" was not just intended to promote more offshore oil drilling. It was intended to mock Democratic concerns for the environmental impact of offshore drilling. It was intended to dismiss their opposition to drilling as stupid, "tree-hugging," anti-growth, "elite" concerns. It was intended to mock those who feared that offshore drilling would despoil our natural resources. It was intended to label them - in the words of the late Republican Vice-President Spiro Agnew - as "effete, nattering nabobs of negativism" - part of the "chablis and brie" set that is completely disconnected from the lives of ordinary Americans who drink beer, work hard and get their hands dirty producing the products and the food we need in our everyday lives.

Of course things haven't turned out that way. The victims of the BP oil disaster are the shrimpers and the oystermen - the people who own the mom and pop restaurants and coffee shops - the folks who drive their pickup trucks to a job in the tourist industry along the Mississippi coast. The real victims are the fathers who want to take their sons hunting in the Louisiana wetlands the way their father took them.

And the real beneficiaries of the Bush-Cheney-Republican energy policy have not been ordinary Americans - they are the giant oil companies that have become economic behemoths by encouraging the world's addiction to oil and preventing the development of energy alternatives that would end our dependence.

The fact is that while Big Oil has been polluting the Gulf with what now appears to be 12,000 to 19,000 barrels of oil - or more -- each day since April, it has been polluting our politics with millions of dollars in campaign contributions for decades.

In the last three and a half years, the oil industry has given over $35 million dollars to the Republicans. Big Oil paid for "drill baby drill" just as surely as United Airlines paid for the naming rights of the United Center in Chicago.

There are two underlying causes for this disaster:
First and foremost is our failure to invest in development of clean, renewable energy sources to replace hydrocarbons that are rapidly running out and are increasingly expensive and dangerous to recover. For decades it has been obvious that this was a critical national - worldwide - necessity. We have failed to do so for one reason: the enormous political power of big oil.
The big oil companies own huge oil reserves that appreciate in value every time the price of oil rises. The scarcer oil gets, the more valuable those reserves become. They have every reason to promote the world's addiction to oil and to ransom the remaining supplies of hydrocarbon-based energy at higher and higher prices.

The interest of the private players in the energy market are simply different than the interest of ordinary Americans. It is up to the government to act to assure that our society develops cheap, clean abundant alternatives to fossil fuels. Left to their own devices, the big energy companies ain't gonna do it.

The Republicans - who are virtually a wholly-owned subsidiary of the big oil companies - are doing everything they can to block clean energy legislation that redirects our national energy policy down a road to renewables -that puts the United States in the forefront of creating a new generation of clean energy jobs - and that ends our political and military dependence on foreign oil.

Just last Friday, America crossed the one trillion dollar mark in spending for the wars in Iraq and Afghanistan that happened primarily because our dependence on oil from the Middle East. Even the attack by Al Qaeda. that spawned our involvement in Afghanistan had its roots in our involvement in Saudi Arabia that resulted entirely from U.S. dependence on foreign oil. And of course, every dollar we spend on oil and gasoline goes to support many of the world's regimes that are most committed to doing America harm.

Second, the BP oil spill resulted from the outrageously cozy "non-regulatory" attitude of the Interior Department's Minerals Management Service (MMS). That's the outfit that was the subject of the Inspector General's report that found MMS employees literally sleeping and doing drugs with the oil company executives they were suppose to regulate.

There is no doubt that MMS should have been overhauled more rapidly when the Democratic Administration took office. But the "non-regulatory" culture that allowed many oil companies to write their own inspection reports was enshrined by the Bush Adminstration's culture of "private industry knows best." And it was easy for the so-called regulators to justify giving environmental waivers to BP for the Deepwater Horizon well since Congress had mandated that applications for drilling permits must be acted on within thirty days - never enough time for a serious environmental review.

Right now it appears that at least some oil will leak from the Deepwater Horizon well until August, when a relief well is completed and can permanently close off the blowout. But the Canadian Government requires that when oil companies drill in the environmentally sensitive Canadian Artic, a relief well must be drilled at the same time as the original well. If that were required in the Gulf, the spill would have ended shortly after the original blowout over a month ago.

The oil industry would argue that that would impose an enormous cost burden for deep water drilling. But all you need is one disaster to generate massively more cost than that of the relief well. BP's liability could rise to be hundreds of billions of dollars and it should be forced to pay every penny even if it were ultimately to mean bankruptcy.

Of course oil flacks like Republican Senator James Inhofe of Oklahoma would argue that imposing additional costs and exposing oil companies to uncapped liability would "discourage" this kind of drilling. Precisely. We need to require polluters to base their economic decisions on the actual costs of their activities to everyone - including the ones they normally try to externalize to the rest of us.

The oil companies - like Wall Street - want to privatize the profits and socialize the risks. And those risks turned out to be massive. As the New York Times reported on Monday, "The failure of the most recent effort - known as a top kill….. has underlined the gaps in knowledge and science about the spill and its potential remedies." No matter, the upsides were so great that absent rigorous regulation, BP was perfectly willing to ignore them. After all Big Oil and Wall Street both planned to take all of the upsides for themselves and lay the downsides off to the taxpayers.

And that is exactly what they will do every time if they are not subject both to tough, continuous regulatory oversight and to uncapped economic liability if their risky bets go south. Their Republican enablers have done everything in their power to prevent both tough regulation and uncapped economic liability for Big Oil.

It turns out that - in practice - the Republican convention chant, "drill baby drill" really meant "spill baby spill." Many rank and file Republicans may not have intended it that way, but that's exactly the way it turned out.

Robert Creamer's recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.

Browse articles by author

More Current Affairs

Mar 18th 2024
EXTRACT: "....the UK’s current economic woes – falling exports, slowing growth, low productivity, high taxes, and strained public finances – underscore the urgency of confronting Brexit’s catastrophic consequences."
Mar 18th 2024
EXTRACTS: Most significant of all, Russia’s Black Sea fleet has suffered significant losses over the past two years. As a result of these Ukrainian successes, the Kremlin decided to relocate the Black Sea fleet from Sevastopol to Novorossiysk on the Russian mainland. Compare that with the situation prior to the annexation of Crimea in 2014 when Russia had a secure lease on the naval base of Sevastopol until 2042." --- "Ukrainian efforts have clearly demonstrated, however, that the Kremlin’s, and Putin’s personal, commitment may not be enough to secure Russia’s hold forever. Kyiv’s western partners would do well to remember that among the spreading gloom over the trajectory of the war."
Mar 8th 2024
EXTRACT: "As the saying goes, 'It’s the economy, stupid.' Trump’s proposed economic-policy agenda is now the greatest threat to economies and markets around the world."
Mar 8th 2024
EXTRACT: "Russia, of course, brought all these problems on itself. It most certainly is not winning the war, either militarily or on the economic front. Ukraine is recovering from the initial shock, and if robust foreign assistance continues, it will have an upper hand in the war of attrition."
Mar 8th 2024
EXTRACT: "...... with good timing and good luck, enabled Trump to defeat [in 2016] political icon Hillary Clinton in a race that appeared tailor-made for her. But contrary to what Trump might claim, his victory was extremely narrow. In fact, he lost the popular vote by 2.8 million votes – a larger margin than any other US president in history. Since then, Trump has proved toxic at the ballot box. " -----"The old wisdom that 'demographics is destiny' – coined by the French philosopher Auguste Comte – may well be more relevant to the outcome than it has been to any previous presidential election. "----- "Between the 2016 and 2024 elections, some 20 million older voters will have died, and about 32 million younger Americans will have reached voting age. Many young voters disdain both parties, and Republicans are actively recruiting (mostly white men) on college campuses. But the issues that are dearest to Gen Z’s heart – such as reproductive rights, democracy, and the environment – will keep most of them voting Democratic."
Mar 8th 2024
EXTRACTS: "How can America’s fundamentalist Christians be so enthusiastic about so thoroughly un-Christian a politician?" ---- "If you see and think outside the hermeneutic code of Christian fundamentalism, you might be forgiven for viewing Trump as a ruthless, wholly self-interested man intent on maximizing power, wealth, and carnal pleasure. What your spiritual blindness prevents you from seeing is how the Holy Spirit uses him – channeling the 'secret power of lawlessness,' as the Book of 2 Thessalonians describes it – to restrain the advent of ultimate evil, or to produce something immeasurably greater: the eschaton (end of history), when the messiah comes again."
Mar 1st 2024
EXTRACT: "The lesson is that laws and regulatory structures are critical to state activities that produce local-level benefits. If citizens are to push for reforms and interventions that increase efficiency, promote inclusion, and enable entrepreneurship, innovation, and long-term growth, they need to recognize this. The kind of effective civil society Nilekani envisions thus requires civic engagement, empowerment, and education, including an understanding of the rights and responsibilities implied by citizenship."
Feb 9th 2024
EXTRACT: "Despite the widespread belief that the global economy is headed for a soft landing, recent trends offer little cause for optimism."
Feb 9th 2024
EXTRACT: " Consider, for example, the ongoing revolution in robotics and automation, which will soon lead to the development of robots with human-like features that can learn and multitask the way we do. Or consider what AI will do for biotech, medicine, and ultimately human health and lifespans. No less intriguing are the developments in quantum computing, which will eventually merge with AI to produce advanced cryptography and cybersecurity applications."
Feb 9th 2024
EXTRACTS: "The implication is clear. If Hamas is toppled, and there is no legitimate Palestinian political authority capable of filling the vacuum it leaves behind, Israel will probably find itself in a new kind of hell." ----- "As long as the PLO fails to co-opt Hamas into the political process, it will be impossible to establish a legitimate Palestinian government in post-conflict Gaza, let alone achieve the dream of Palestinian statehood. This is bad news for both Israelis and Palestinians. But it serves Netanyahu and his coalition of extremists just fine."
Jan 28th 2024
EXTRACTS: "According to estimates by the United Nations, China’s working-age population peaked in 2015 and will decline by nearly 220 million by 2049. Basic economics tells us that maintaining steady GDP growth with fewer workers requires extracting more value-added from each one, meaning that productivity growth is vital. But with China now drawing more support from low-productivity state-owned enterprises, and with the higher-productivity private sector remaining under intense regulatory pressure, the prospects for an acceleration of productivity growth appear dim."
Jan 28th 2024
EXTRACT: "When Chamberlain negotiated the notorious Munich agreement with Hitler in September 1938, The Times did not oppose the transfer of the Sudetenland to Germany without Czech consent. Instead, Britain’s most prestigious establishment broadsheet declared that: “The volume of applause for Mr Chamberlain, which continues to grow throughout the globe, registers a popular judgement that neither politicians nor historians are likely to reverse.” "
Jan 4th 2024
EXTRACTS: "Another Trump presidency, however, represents the greatest threat to global stability, because the fate of liberal democracy would be entrusted to a leader who attacks its fundamental principles." ------"While European countries have relied too heavily on US security guarantees, America has been the greatest beneficiary of the post-war political and economic order. By persuading much of the world to embrace the principles of liberal democracy (at least rhetorically), the US expanded its global influence and established itself as the world’s “shining city on a hill.” Given China and Russia’s growing assertiveness, it is not an exaggeration to say that the rules-based international order might not survive a second Trump term."
Dec 28th 2023
EXTRACT: "For the most vulnerable countries, we must create conditions that enable them to finance their climate-change mitigation" ........ "The results are already there: in two years, following the initiative we took in Paris in the spring of 2021, we have released over $100 billion in special drawing rights (SDRs, the International Monetary Fund’s reserve asset) for vulnerable countries.By activating this “dormant asset,” we are extending 20-year loans at near-zero interest rates to finance climate action and pandemic preparedness in the poorest countries. We have begun to change debt rules to suspend payments for such countries, should a climate shock occur. And we have changed the mandate of multilateral development banks, such as the World Bank, so that they take more risks and mobilize more private money."
Dec 27th 2023
EXTRACT: "....if AI causes truly catastrophic increases in inequality – say, if the top 1% were to receive all pretax income – there might be limits to what tax reforms could accomplish. Consider a country where the top 1% earns 20% of pretax income – roughly the current world average. If, owing to AI, this group eventually received all pretax income, it would need to be taxed at a rate of 80%, with the revenue redistributed as tax credits to the 99%, just to achieve today’s pretax income distribution; funding the government and achieving today’s post-tax income distribution would require an even higher rate. Given that such high rates could discourage work, we would likely have to settle for partial inequality insurance, analogous to having a deductible on a conventional insurance policy to reduce moral hazard."
Dec 21st 2023
EXTRACT: "Shocks are here to stay, and our task is not to predict the next one – although someone always does – but to sharpen our focus on resilience. Staying the course of politically mandated policies while minimizing the inevitable dislocations is easier said than done. But that is no excuse to fall for the myth of being victimized by the unprecedented."
Dec 21st 2023
EXTRACTS: "A new world is indeed emerging. It will be characterized not only by more interdependencies, but also by more insecurity, danger, and war. Stability in international relations will become a foreign concept from a bygone age – one that we did not fully appreciate until it was gone."
Dec 14th 2023
EXTRACT: "Yet one must never forget that Putin is first and foremost an intelligence officer whose dominant trait is suspicion."
Dec 2nd 2023
EXTRACTS: "In a recent commentary for the Financial Times, Martin Wolf trots out the specter of a 'public-debt disaster,' that recurrent staple of bond-market chatter. The essence of his argument is that since debt-to-GDP ratios are high, and eminent authorities are alarmed, 'fiscal crises' in the form of debt defaults or inflation “loom. And that means something must be done.' ----- "If, as Wolf fears, 'real interest rates might be permanently higher than they used to be,' the culprit is monetary policy, and the real risk is not rich-country public-debt defaults or inflation. It is recession, bankruptcies, and unemployment, along with inflation." ---- "Wolf surely knows that the proper remedy is for rich-country central banks to bring interest rates back down. Yet he doesn’t want to say it. He seems to be caught up, possibly against his better judgment, in bond vigilantes’ evergreen campaign against the remnants of the welfare state."
Nov 27th 2023
EXTRACT: "The first Russia, comprising those living in Russia’s two biggest cities, Moscow and Saint Petersburg, can pretend there is no war at all." ---- "Then there is the other Russia, the one you find in small towns and villages scattered across the country’s massive territory. Here, the Ukraine war is a source of patriotic pride,"