Populist Daily

Politics, Culture and American Life

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It Can Happen Here. It’s Happening Now.

May 16th, 2010 · No Comments · Corporations and Industry, International affairs, Lobbying, Politics, Wall Street

First they came after our land. Then they came after our trees. Then they came after our money. Now they want to take our water. The Gulf of Mexico is now polluted and large parts are becoming unusable for life-sustaining fishing as we speak. The people of Mississippi and Louisiana, parts of Florida and Texas should be in all-out revolt against the oil companies and any Senator or Congressperson who helps them.

Make no mistake about it, huge corporations were once the country’s jaded benefactors of jobs and some taxes. Because homes and shops followed industry, they also became our country’s inadvertent municipal developers. But the by-products of industrial development were less understood and therefore simply accepted as an aspect of growth. The big corporations understand it. They understand that the more they can drill or mine or cut or manufacture without the costs of being responsible to the public, the more they earn. And they are all about earnings…profit.

At this point in our country’s history, we are 100 years after the breakup of the huge trusts by Teddy Roosevelt. Through years of painful litigation and some farsighted individuals, like Rachel Carson, we have come to understand the damage to human life that can be caused by pollution, by the loss of natural resources and by the occasional irreparable damage to others and to the ecology.

But we have not acted responsibly. In 1980, in our impatience with an economic system suddenly slowed, we followed a false prophet. Worse than that, we allowed into our temple of Democracy those money changers who would spend the next 30 years devastating our economy, looting it and consolidating the power of the gigantic corporations.

Enough Americans responded to the illogical arguments of “voodoo” economists who said that we could resurrect our “greatness” by cutting our taxes and expanding our military and relying on “private interests” to run the country. They would be more “efficient” and run the country like a business.

Some of the arguments as presented made, to be honest, eminent good sense. Ronald Reagan somehow had altered his positions to fit exactly into the temper of the times, from a man formerly considered, both “fringe” and politically naive.

Years of work on his image on GE-sponsored television and the relentless work of Michael Deaver’s public relations firm, changed his image from Right Wing radical to serious politician. Like George W. Bush, his record as Governor of California was presented in the best possible light. But his sponsor GE was the most conservative corporation in the world at that time.

Ronald Reagan was elected and immediately cut taxes on those executives from 74% down to 28% and increased the size of their military contracts fourfold. Government continued to grow and revenues continued to shrink. But now the Conservatives had control of government. GE and Halliburton and EXXON and Bechtel and BP and all the major corporations from autos to pharmaceuticals joined in. On the other side were the rest of us, the People.

The People have taken a hard hit in these thirty years. Eight years of Reagan. Four years of Bush the Smarter. And eight years of Bush the Dumber. We have been left with $12 trillion in debt and a contracting job market.

Here’s the problem. If you pay only something like 20-24%…at most…in taxes, which the upper income groups do…you need something to do with all those millions. So you go to a broker and the broker says that he can get…let’s say…12% on that money, instead of an investment in a corporation that might bring multiples of 100% per year, or 5% in totally secure investment.

You might say that one should go for the risky 100% investment. But you…the average person…are not risking that $5,000,000 or more. Why risk it? Just collect a higher rate from a broker. So what does that lead to? That leads to brokers trying to find more and better ways to increase returns. And without regulation that leads to the temptation to fake it.

In the period following the downturn of 2001-2003, was led by money going into real estate because we had less manufacturing here by then, thanks to numerous attempts to “globalize” our economy. (By the way, the Second Bush recession is George W.’s recession. The First refers to the 1991 Bush, Sr. recession. Oh yes, the Republicans all have their own recessions. And who suffers? The Bushes or their friends? Not bloody likely.)

Because there were no tax incentives for people to invest in this country, something deliberately done by the Right Wing Conservatives, Wall Street began to create investments out of home mortgages. When they began to run out, George W. Bush suddenly declared America to be the “ownership” economy–everyone would own their own home. Some Populist! He was merely giving cover to the selling of homes to people who could not afford them, using worthless (sub-prime) mortgages.

Wall Street needed them because these were the only investments that they could pretend to secure and thereby make the securities salable. It was of course a huge lie. Wall Street knew that they had become a group of Max Bialystocks, selling piece that didn’t exist to little old ladies, like the hero of Mel Brooks’ movie and musical, “The Producers.”

These mortgage packages were worthless and they knew it. They sold tens of trillions of dollars of worthless pieces of paper. But they made billions. Huge numbers of Wall Street brokers made hundreds of billions of dollars. It was a scam and they knew it.

But eventually everyone knew it and everything came crashing down. Like musical chairs, no one wanted to be left standing with the worthless stock when the bell rang. The market that had dropped over the previous year from 14,000 down to 11,000, dropped again. This time from 11,000 down to 6,500. Millions of innocent American bystanders, many trusting banks and brokerages to have been ethical, were wiped out, impoverished.

When the market and these worthless piece of paper crashed, some companies went broke. They bought worthless pieces of paper. The brokers didn’t give the money back to either the banks or the retirement funds or the people. So the crooks won and we paid hundreds of billions of dollars to Wall Street firms because because Bush’s Secretary of the Treasury said that if we didn’t, we would have something worse than the Great Depression.

And now, we get another disaster. And this one looks bad. If Katrina was bad, this is like 20 Katrinas. The oil is literally flowing, unstoppable into the richest fishing area in the country, where we get 40% of our seafood and some of our best seafood. It may foul the beaches of Mississippi, Louisiana and Florida.

And there is no telling what will happen when storms blow the Gulf of Mexico up onto the shores of Galveston or Biloxi. This is a disaster, already, of epic proportions that was caused by arrogance and inattention to detail in a situation that was as clearly and inescapably risky to an entire country as one could be.

Fifty thousand gallons a day pouring into the Gulf of Mexico. And the Republican Senate Minority Leader, Senator McConnell makes light of it. He does not say that we must get going with alternative energy…thousands of wind turbines or solar panels or even natural gas to power the country until we can learn how to contain these oil spills. His only comment is that these off-shore platforms give us 30% of our energy and we must drill. He does not mention that the energy, the oil that is produced is literally often sold abroad!

If you loved your country and the wonderful people of Louisiana in particular…and they are as hospitable as people can be…why would the Minority Leader of the Senate call for more drilling in the Gulf of Mexico. Because, here is the essential point:

That is not our oil being pumped by those wells in the Gulf. It is oil that is sold on the world market…some to us…some to others…just oil being drilled and extracted. There is no guarantee it will even come to the United States. Oil is now a fungible commodity. That is, it goes to the highest bidder. That oil leaking into the Gulf of Mexico could have been, might have been, for example, sold to Saudi Arabia as easily as to us.

American companies have drilled wells in the Gulf only to sell the oil fields or large parts of the production, not to American firms but to corporations from Brazil, China, and Nippon Oil of Japan. So much for all our sacrifice. We want to help our world partners, but Senator McConnell doesn’t want voters to know the truth. Because that would indicate the truth–he really cares only about the oil companies and their profits, from which he draws very large campaign contributions.

One can make a pretty good case that these large corporations either hate America, or hate American workers, or have less respect for their own country than they have for the almighty dollar. This country gives these huge oil drilling countries, these multi-billion-dollar enterprises, enormous opportunities and enormous tax breaks and they sell our oil to others while telling Americans that our sacrifices are to provide “30%” of our energy.

We must take the kind of action that Teddy Roosevelt took 100 years ago. We need to break up these big oil corporations. We need to tightly regulate what they can do where they can sell their oil, and to whom they can sell their businesses. If as the turtle-faced Senator from Kentucky says, oil is a significant commodity, essential to our survival, then we must take steps to see that it is controlled.

We cannot allow our oil to be sold to China or Russia or Saudi Arabia or anywhere in the world that does not hold our interests as highly as we do. And those not holding our interests above others may be our own Republican Party.

And at the very least, we cannot allow these valuable national assets to leak out into the sea where they do no good for anyone and do immense harm to everyone.

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