Monday, June 07, 2010

The BP oil apocalypse

The Jackson Clarion-Ledger's longtime cartoonist Marshall Ramsey has been coming up with some inspired images for the BP oil catastrophe in the Gulf. Like this one of June 3:

I hesitate to use the word "apocalypse" to describe events. But the root meaning of the word is appropriate for the BP oil gusher disaster. Because of its association with John's Apocalypse in the Book of Revelation, it has come to mean something like world-ending-disaster. Actually "revelation" is the translation of the Greek word αποκάλυψις/apokálypsis from which the English "apocalypse" is derived.

And the oil disaster in the Gulf is a revelation, and the world should take it that way. More specifically, the United States should take it that way, the Democratic Party included. (So should Republicans, but I'm trying to stay within the realm of the remotely feasible.)

Bill McKibben prods Obama in If There Was Ever a Moment to Seize Firedoglake 06/06/2010 to use this opportunity to dramatize the urgency of alternative energy development and climate change legislation. Our major pundits for the last couple of weeks have been wringing their hands about whether Obama in showing enough anger, which lets them indulge in theater criticism of Obama's appearances on the BP oil disaster. David "Bobo" Brooks is hoping that it will become Obama's Iranian hostage crisis. But Bobo had theater criticism too. On the PBS Newshour of 06/04/2010, he said:

I thought today was a good step [for Obama], just in theatrical terms, not the best step.

I still want to see him surrounded by fisherman, by regular folks down there. And he still hasn't done that. ...

But -- but people want to know that the communication with the government is two-way. And that doesn't mean you just sit with a series of government officials in your shirtsleeves around a table. It means you are in a non-governmental setting, where most people are, at a restaurant, maybe out on a boat with people.
Bobo doesn't find Obama's atmospherics entertaining enough. Yes, our star pundits really are this shallow.

Paul Barrett's article Obama and BP at Risk Over Oil Spill Bloomberg Business Week 06/03/2010 surprised me. Because he gives a very good explanation of not only how Obama has an opportunity to seize here, but also states some of the obvious problems with the "neoliberal" ideology of deregulation, social service cuts, and balanced-budget obsession that has done US and European economies so much damage:

This is a moment to think big and creatively. As distant as risky drilling rigs off Louisiana may seem from the New York financial laboratories where wizard bankers synthesized subprime credit derivatives, Obama could explain the important connections: how, after decades of antiregulatory fundamentalism in Washington, the feckless Minerals Management Service [MMS] became the Securities & Exchange Commission [SEC] of the oil business.

It is no coincidence that staff members at both agencies watched pornography on government computers when they should have been monitoring their respective beats. Although corruption and incompetence seem to have run deeper at the soon-to-be-dismantled MMS, the zeitgeist of the two places was similar, according to investigations and congressional hearings: Industry was to be trusted, even when government overseers had no more idea what transpired on the trading floor at Lehman Brothers or Bear Stearns than they did on the ocean floor beneath the Gulf of Mexico.

The question is: What will Obama do about it?

One route to political rehabilitation would be to redefine how government interacts with business. The goal he should articulate is protecting capitalism—and the society it's intended to serve—from the tendency of the profit-minded to go to extremes. ...

As investigators reconstruct events leading up to Apr. 20, Sarah S. Elkind, an historian of politics and the environment at San Diego State University, warns against focusing on minutiae to the exclusion of the big picture. Within the MMS, she says, "The employees followed cues from political appointees during the Bush Administration and earlier Administrations, going back to 1980, and including Democrats as well as Republicans. The message was that government doesn't work, and industry always knows what it's doing. What did we expect the employees to do?" ...

Obama has spoken expansively about restoring respect for government service. His occasionally populist rhetoric aside, he has been solicitous of corporate interests, too. Recall the astonishing bailout of General Motors. Just three weeks before the Deepwater Horizon exploded, the President had proposed expanding offshore oil exploration, in part as a bid for Republican votes for stalled energy and climate legislation. At the time, Obama praised advances in drilling technology.

"Where I was wrong," he said on May 27, "was in my belief that the oil companies had their act together when it came to worst-case scenarios." By his own admission, this product of Harvard Law School and liberal South Side Chicago politics was mesmerized, along with everyone else, by the myth of industry omnipotence. ...

Until someone figures out how to fix BP's leak, the idea the President should stress is how to reframe the debate about oil, investment banking, and other technologically sophisticated industries. Obama should argue that we need better government oversight of business, not to harm it, but to nurture it. He could invoke the memory of the New Deal regulatory revolution, which shielded industry and finance from calls for socialism after the Great Depression.

He won't win over Tea Partiers who see the New Deal (and the income tax and civil rights laws) as constitutional infringements. But a majority in America may well be receptive to an appeal that Democratic pollster Douglas E. Schoen described this way in a roundtable on the politics of the spill on "We are all in this together—not as corporations or populists, not as Democrats or Republicans, but as Americans working to solve the problem collectively." In a speech in Pittsburgh on the afternoon of June 2, Obama started in this direction, then swerved toward partisanship. The Republican agenda, he said, "basically offers two answers to every problem we face: more tax breaks for the wealthy and fewer rules for corporations." [my emphasis]
Except for the goody-goody rhetoric at the end about how we're all in the same boat and we just sit down and reason together - while the financial markets bankrupt the rest of the passengers and BP sprays us with oil - this is a very good description of what is wrong the neoliberal outlook.

The responsibility of democratic government is protect the public from corporate bandits. The profit motive drives people to do things that are damaging to society. Those things might not be illegal or unethical. If it's legal to create securities that are pure gambles on the prices of a country's bonds going down, investment bankers who pursue them are doing their jobs. But it's simply not the case that corporations and the public always have common interests. Corporations and cartels will always be able to afford PR firms and lobbyists to make their voices heard loud and clear to advocate their own narrow positions. The elected governments in a democracy should be equally as aggressive in defending the public interest against corporate recklessness.

Bill McKinbben is right. If there was ever a moment where a serious leader in Obama's position could use to jump-start a new narrative on the environment, one that challenges the destructive neoliberal consensus possessing the Democratic Party, the BP oil cataclysm is it. Obama hasn't stepped up the challenge and the opportunity yet.

While I'm on the topic, I'll mention a couple of other things about the popular pundit scripts. The Republicans are cheerfully trashing Obama for the disaster. But the point he made quoted above is plainly right: the GOP's approach "basically offers two answers to every problem we face: more tax breaks for the wealthy and fewer rules for corporations." And that's true. That's the Republicans' Predator State approach to government.

Barrett's article pointed out something that hadn't occurred to me. I'm skeptical whether the Obama administration, who believes in Look Forward Not Backward when it comes to prosecuting corporate criminals and torture perpetrators, will actually be aggressive in seeking legal charges against BP and its officials. But, when BP's stock was already dropping for fairly obvious reasons, the announcement of the criminal investigation was another whack to their stock value (although it would be near-impossible to say how much of the stock's decline is due to that particular factor):

Ivor Pether, who helps manage $9.2 billion at Royal London Asset Management, including BP stock, told Bloomberg News: "We're getting into share price territory where analysts speculate about takeover possibilities, because the loss of market value is much greater than the estimated 'worst case' costs." Buyers haven't surfaced yet, he added, "because the near-term uncertainty is so high." BP spokeswoman Sheila Williams declined to comment.

The company's woes grew worse when the Obama Administration announced June 1 that it will investigate potential criminal and civil violations related to the spill. "We will prosecute to the fullest extent of the law," U.S. Attorney General Eric Holder said. While Holder didn't get into particulars, troubling facts have already surfaced. The House Energy & Commerce Committee released internal BP e-mail showing that company employees had worried six weeks before the rig explosion that workers were struggling to control the well below. A criminal indictment of BP and other companies involved in the accident—perhaps for infractions of the Clean Water Act or other environmental laws—"is very likely," David M. Uhlmann, a former chief of the Justice Dept.'s environmental crimes section, told Bloomberg. Uhlmann, who now teaches at the University of Michigan Law School, pointed out that after the Exxon Valdez oil spill in Alaska in 1989, ExxonMobil (XOM) pleaded guilty to charges of that variety.

Another potential line of prosecutorial inquiry, and one that could have more severe effects on BP, would focus on whether executives lied in formal statements to the government. Depending on how high up the chain of command the probe went, a cover-up investigation could seal the fate of Chief Executive Tony Hayward and underscore questions about BP remaining independent. The company has said it will cooperate with investigators. [my emphasis]
Whacking BP's stock price is something that can be accomplished even within the straightjacket of neoliberal economic dogma.

And for all the pundit horse-race chatter about whether this is damaging Obama politically, opinion polls as of last week weren't showing any notable hit to Obama's general polling status. As Steve Lombardo reports for in The Gulf Oil Spill Is Not Katrina and Obama Is Not Bush 06/02/2010(emphasis in original):

At this point in time, there is little evidence that Obama's job rating has suffered substantial erosion because of the spill. While it may emerge over time, so far there is little sign of a negative effect on Obama's overall job approval: over the past month he has been consistently around the 47%-48% mark among registered voters. As we have said before, the economy is still far and away the number one issue for voters, and perceptions of it has far more impact on Obama's approval rating than the Gulf spill - at this point in time.
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