. . . because much of the content relates both to Washington, D.C., and "outside the beltway" -- the heartland, specifically Iowa -- and because after going from Iowa to Washington via Texas and California I subsequently returned, From DC 2 Iowa.
"Jobs" Focus is Misleading Economics and Politics (bought to you by FromDC2Iowa.blogspot.com*)
Iowa's two candidates for Governor -- a former governor vs. the incumbent -- are engaged in a food fight over "jobs": their own, and those of the thousands of unemployed Iowans.
The economic analysis and rhetoric of both of them is misleading at best. As politics, it has been self-defeating for Governor Chet Culver, and has led to a despicable TV commercial from former Governor Terry Branstad.
Infrastructure
Human societies have come a long way since the day we came down out of the trees and started chasing, and later growing, our food.
Today we live above a veritable house of cards. Each of those cards is a part of our "infrastructure."
They include roads and bridges, oil and natural gas pipelines, railroads and airports, municipal water and sewerage treatment plants, dams and locks, telephone and Internet networks, and the power grid -- among other things. Some are built and operated by governments, some by public utilities, and some by traditional profit-maximizing corporations.
We don't think much about the air we breath until we can't see through it, our eyes water, we start coughing, or we learn it is contributing to our parents' cancer and our children's asthma.
Similarly, it is seldom that the mass media, elected officials (or you and I) spend much time thinking, talking or writing about our nation's infrastructure until one of those cards collapses.
By now, everyone knows about the damage done to the Gulf of Mexico by BP's oil spill. What we may be less aware of are our dependence upon, and the risks associated with, the underground network of natural gas and oil pipelines that criss-cross our nation and are subject to leaks and explosions.
Pipelines, like bridges, need to be regularly inspected, repaired and replaced. They too corrode, weaken, and leak. Like BP, Enbridge Energy Partners, the owner and operator of the pipeline, had been warned of the risk of oil leakage. The investigation isn't yet concluded, but it now looks like those warnings -- like those given BP -- were ignored.
And let's not so quickly forget the 90-year-old Lake Delhi dam that finally gave way last week -- and the others that may soon follow. As the Register later editorialized, "Thirty-one Iowa dams have structural problems or other deficiencies. Nearly all are earthen structures that support small lakes or ponds and, if improvements aren't made, these dams could fail, too, according to state records. The Iowa Department of Natural Resources has classified six of them as 'high hazard,' which means failure may result in loss of life." Editorial, "Public Dollars If There is a Public Benefit,"Des Moines Register, August 9, 2010.
There is virtually no end of examples of the infrastructure that is so central to our day-to-day lives, but can cause so much disaster when it goes terribly, terribly wrong. It's the infrastructure that most politicians and corporate CEOs don't want to even think about, let alone build, repair and replace.
What Governor Culver set out to do last year with his horribly misnamed endeavor was to focus attention on Iowa's share of our nation's infrastructure needs, identify the most critical (62% of which are flood-recovery-and-prevention-related), borrow about $857 million (to be paid back with state revenues from the gambling industry), match it with federal and private sources of some $610 million, and start with the shovel-ready projects -- now scheduled for all, and underway in most, of Iowa's 99 counties.
From almost any conceivable vantage point, this was an effort (approved by the Iowa legislature) deserving of statewide applause and commendation.
What Branstad needs to answer is, "What would you do with those fire stations, water treatment plants, libraries, bridges and flood-protection projects that Culver has funded?"
What are the options? You continue to let them rot -- like the bridge in Minneapolis, or the oil pipeline in Michigan -- or you build new and fix what's there. To pay for the projects you either raise taxes or you borrow the money. Given that Iowa is well up in the top 10 states for high credit ratings, and low obligations-per-citizen, borrowing made sense.
Would Branstad ignore all the needs, or just some? If the latter, which projects would he not fund? Would he have preferred to raise taxes rather than issue bonds? Or if he would find the money by cutting public services even further than they've already been cut, what programs would he eliminate and how much would that generate?
What Culver has done is responsible governing; something we should all be thankful for in this age of two dysfunctional major political parties. It may not be as politically appealing as talk about same-sex marriage, abortion, immigration, taxes, and guns, but it's one hell of a lot more important to the present and future of Iowa than any of those evening news sound bites and commercials.
Jobs
Rather than public projects, we're more used to taxpayers' money being funneled to for-profit corporations in the form of tax breaks, subsidies, bailouts, government contracts, and other nefarious schemes -- all too often in exchange for campaign contributions. It's called "socialism for the rich, and free private enterprise for the poor," or "my profits are mine, my losses are the taxpayers.'" (My reaction: If no one else is willing to put sufficient money into a new project -- not the entrepreneur, his or her family and friends, venture capitalists, banks, pension funds and insurance companies -- it doesn't look to me like a very good investment for the public's money either. What's wrong with "the marketplace" working its will?)
In order to sell such giveaways of public money to the wealthy, they are usually described as "jobs programs."
(As I have often written here, you can't jump-start an economy, 80% driven by consumer spending, by giving money to CEOs. No business person in their right mind is going to hire more employees, to manufacture more products, when they can't sell the inventory they already have to unemployed former consumers. If you really want to pull out of recession you do what FDR did (during his first month in office): You make the government the employer of last resort and put all the unemployed on the federal payroll. They spend their paychecks, demand for consumer goods increases, the private sector starts hiring to make more of those goods, the federal payroll declines, and the recession is over. We are paying an enormous price as a nation for letting our ideological purity regarding "socialism" and thinking that "government is the problem" stand in the way of such an obvious path to prosperity for all.)
Thus, it is understandable why Culver, out of political habit, would call his infrastructure proposal "I-Jobs" -- a jobs program (although even he might have thought to exercise restraint with regard to his early boast that it would create 30,000 jobs).
So now he's in a food fight with Branstad over the numbers -- which range, in various estimates, from 4,000 to his original 30,000. This is a fight Culver cannot possibly win, and which he could have, and should have, avoided.
Here's Branstad's latest commercial.
Forget about the precise numbers. To suggest that you can spend $875 million of public money, plus $600 million in the matching funds it makes possible, on projects in 99 Iowa counties, without creating jobs, in addition to being a dishonorable political assertion is economic lunacy. Of course it has created jobs!
In a nationwide -- indeed a global -- economic recession there will be unemployment. It is, for the most part, unemployment no governor can do anything about. This time around, even the federal government (refusing to create a real federal jobs program) has been unable to do much about it.
To put precise numbers on how many jobs I-Jobs created is mostly smoke and mirrors. You can't get accurate data, and even if you could it's not clear what should be included.
Do you just count the guy running the heavy equipment on the highway construction project? Or do you include the folks manufacturing, transporting, stocking, and selling retail the work clothes he or she buys, or those who work in the supermarket and cafes where the workers get food?
Culver would have been better off never to have even mentioned jobs -- except perhaps as a closing almost after thought: "Oh, yes, and we hope this will all provide a few jobs for those who might otherwise be unemployed."
Editorial, "Value of I-JOBS is flood repair,"Quad-City Times, July 31, 2010 ("Follow the money and Gov. Chet Culver’s touted I-JOBS program clearly should be called I-Flood. The top five counties benefiting from I-JOBS are those hit hardest by the 2008 flooding that, frankly, made even our 1993 record-setter look like a big drip. Those five counties won 62 percent of the $705.3 million allocated and borrowed for immediate infrastructure repair and better flood plain management.");
Rob Daniel, "Officials: I-JOBS program has created jobs,"Iowa City Press-Citizen, August 3, 2010 ("According to the latest program report, the program has translated into more than $154 million in funding in Johnson County, including $5.76 million to Iowa City to build a new fire station and wastewater treatment plant and $27.1 million to Coralville for flood control along First Avenue.").
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* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself. -- Nicholas Johnson
Corporate Risk Assessment and Inevitable Disaster (bought to you by FromDC2Iowa.blogspot.com*)
Sat next to a business consultant on a recent flight. Got to talking about Massey and BP. His contention: It's all just about risk assessment. However conscious and precise we may be about the process (whether we're driving a car or drilling miles beneath the ocean's surface), it goes something like this: What are the potential rewards from our risky behavior? What are those risks? How serious would it be if the worst occurred? What is the likelihood it will occur? (Perception of risk -- or more often mis-perception -- is another matter, as when someone fears flying (despite the relatively slight risk) but continues smoking (despite its almost inevitable risks).) Anyone in business is under enormous pressure to both increase profits and decrease costs; in other words to gradually assume ever increasing risks of harm -- to employees, customers, the environment, or the global economy -- until the inevitable disaster occurs.
Goldman Sachs. "Goldman Sachs has agreed to pay $550 million to settle federal claims that it misled investors in a subprime mortgage product as the housing market began to collapse . . .." Notwithstanding the payment, "Goldman did not formally admit to the S.E.C.’s allegations . . .." Now, how credible is that stance? You don't admit to any wrongdoing, but you pay the $550 million fine anyway? Even if you earned over $13 billion, $550 million is a little more than one normally pays to settle a nuisance suit. Moreover, Goldman Sachs "agreed to a judicial order barring it from committing intentional fraud in the future . . .." What a concession from a Wall Street firm! That really stings, and should substantially cut into their future profits. Wow, agreeing to forgo the ability to engage in "intentional fraud." Sewell Chan and Louise Story, "S.E.C. Settling Its Complaints With Goldman,"New York Times, January 16, 2010, p. A1.
When grief or anger become seemingly unbearable, we sometimes redirect it into humor. So it is with Harry Shearer's catchy, bouncy, "Mr. Goldman and Mr. Sachs" ("spinning gold out of flax, Mr. Goldman and Mr. Sachs"). Give it a listen; available from Amazon and iTunes.
Massey Coal. It's now come to light that Massey Coal (in whose mine 29 miners died last April) has deliberately applied its risk assessment analysis to miners' safety.
An NPR News investigation has documented a dangerous and potentially illegal act at the Upper Big Branch mine in West Virginia two months before a massive April explosion killed 29 mine workers.
On Feb. 13, an electrician deliberately disabled a methane gas monitor on a continuous mining machine because the monitor repeatedly shut down the machine.
Three witnesses say the electrician was ordered by a mine supervisor to "bridge" the automatic shutoff mechanism in the monitor.
Methane monitors are mounted on the massive, 30-foot-long continuous miners because explosive gas can collect in pockets near the roofs of mines. Methane can be released as the machine cuts into rock and coal. The spinning carbide teeth that do the cutting send sparks flying when they cut into rock. The sparks and the gas are an explosive mix, so the methane monitor is designed to signal a warning and automatically shut down the machine when gas approaches dangerous concentrations.
There was a risk. But it would result in greater production -- and profits. A worst case scenario was possible, but not inevitable. Sometimes they got away with it. This time they didn't.
BP. BP didn't get away with its cost-saving risk either. By now, everyone's familiar with BP's risk assessment process. The prior blog entries on that one are linked at the top of this blog entry. That company has so often weighted potential cost savings over risks to worker safety and environmental disaster that it amasses hundreds of safety violations (including the Artic spill and Texas City) when other oil companies have less than a handful.
GlaxoSmithKline's Avandia (rosiglitazone). Public Citizen's Health Research Group reports,
3.1 million prescriptions [for Avandia] were filled in 2008. But Avandia is associated with heart failure, heart attacks, liver toxicity, bone fractures, low red blood cell count and macular (retinal) edema with vision loss.
Public Citizen petitioned the FDA to revise the labeling for Avandia due to multiple safety issues in 2000. In 2007 a study published in the New England Journal of Medicine associated the drug with a 43 percent increase in the risk of heart attacks.
As an indication of the ties between the FDA and the pharmaceutical industry, as well as the complexities of risk assessment, an FDA advisory panel recently voted 20 to 12 to recommend that GlaxoSmithKline should be permitted to continue to profit from the millions of pills. A vote of 20-12 on such a death risk reminds me of my days on the seven-person FCC, when we would vote 4 to 3 to send a colleague a get-well card. Bear in mind, this same FDA committee, by a vote of 21 to 4, agreed not only that Avandia carries a risk of death from heart attack, but that the risk is much higher from Avandia than from alternative medicines that could be used instead. Matthew Perrone, "FDA Panel Votes to Keep Avandia On the Market," AP/MSNBC, July 14, 2010.
Have you seen the latest commercial for Avandia? The list of side effects goes on seemingly forever. I don't think a diabetic should "ask your doctor if Avandia is right for you," I think if a doctor recommends it diabetics should "ask yourself if your doctor is right for you."
Other examples. These are only the most recent examples. There are hundreds of others. A couple that spring immediately to mind are Bhopal (Union Carbide chemical spill; 500,000 exposed, 15,000 killed) and Three Mile Island (partial core meltdown of Babcock & Wilcox nuclear reactor).
That the U.S. electric utilities chose to save money by managing the nation's electric grid through the Internet, rather than a more secure system, is a monumental calamity just waiting to happen. Siobahn Gorman, "Electricity Grid in U.S. Penetrated by Spies,"Wall Street Journal, April 8, 2009, ("Cyberspies have penetrated the U.S. electrical grid and left behind software programs that could be used to disrupt the system, according to current and former national-security officials.").
As for "Leaders Prey on the Fearful & Naive" slug at the bottom of their billboard, I'd suggest the TP folks take a look in the mirror, and a second look at those they follow on radio and TV, and as speakers at their rallies.
I won't write at length about the TP's choice and characterization of Hitler and Lenin. Obviously, they have been chosen as characters to despise, in the Republican/TP's efforts to do everything they can to make Obama fail (as they have openly acknowledged). Never mind that if he fails, America fails.
Frankly, each of the disasters noted above have involved not socialism -- government ownership of means of production -- but a form of fascism, fascist corporatism, or more simply put, political corruption, the domination of political and regulatory institutions by large corporations. "Agency capture," to a lesser or greater degree, was a factor in each of the noted disasters.
Indeed, if only Obama were a socialist we would have long since clawed our way out of the global economic collapse brought on by Goldman Sachs and others. When 80 percent of our economy is driven by consumer spending, unemployment (including that which is not reported) runs closer to 20 than 10 percent, and consumers are, not irrationally, saving rather than spending, you can't create an economic turn-around by giving money to corporate executives and calling it a "jobs program."
Darkening consumer confidence and plunging prices combined with a generally dismal outlook to dampen hopes for a quick economic recovery. . . . "Consumers are facing three major hurdles," Art Hogan, chief market strategist at Jefferies & Co., said in an interview. "They are paying down their debt, their houses are not worth as much as they were two years ago and they're staring down the barrel of 10 percent unemployment." . . . Taken together, the week's economic data suggest that a global recovery will be staggered and sluggish in getting off the ground. Consumers -- the engine of the U.S. economy -- are catching few breaks.
Businesses won't provide additional employment until they see a reason to increse production. There's no reason to increase production unless consumers are going to spend. Consumers aren't going to spend if they're concerned they, too, may soon be unemployed.
"Trickle down" never works, but especially not at this time. What we need is trickle up.
If Obama were a socialist he would have created a federal, employer-of-last-resort, jobs program that would have immediately (FDR's programs were in place in a month) put everyone on a payroll. Give the unemployed a job, the confidence they won't be fired, and the money that goes with it, and they'll use the money to buy stuff they need, not increase their savings accounts. Their purchases will require increased production; increased production will increase private sector employment. Gradually those on the federal payroll will be picked up by private employers.
Now that's a real jobs program. Recession reversed; global economic collapse averted. Corporations profiting from their business sense, not their political dollars -- and our taxpayer bailouts of the wealthy. See generally, "Unemployment Answer is Jobs Not Bailouts," February 6, 2010.
What the TPers ought to get angry about (and, in fairness, to some extent do) is a "capitalism" in which successful businesses keep all of their profits, and unsuccessful businesses pass their losses on to the taxpayer. "Heads I win, tails you lose."
"Socialism" is the Interstate highway system, public schools, libraries, museums, local police and fire protection, the military, and a national, state and local system of parks. I kind of like that socialism, and feel that it often provides me a greater return on my investment of taxes than what I sometimes end up with from the capitalists.
How ironic that the TPers would choose "socialist" as one of their favorite pejoratives for Obama, when he is, apparently, one of the few Americans who appears to be even more frightened of the word than they are. _______________
* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself. -- Nicholas Johnson
Why Are We Blind to What Artists See So Clearly? (bought to you by FromDC2Iowa.blogspot.com*)
In 1979, on March 16, "The China Syndrome" was released to America's theaters. It was a fictional account of a near-nuclear power plant meltdown and corporate efforts at a cover up (and see "The China Syndrome," wikipedia.org).
Twelve days later, at 4:00 a.m. on March 28, 1979, there was a partial core meltdown in a Babcock & Wilcox pressurized water nuclear reactor at Three Mile Island, near Harrisburg, Pennsylvania. "It was the most significant accident in the history of the American commercial nuclear power generating industry, resulting in the release of up to 481 PBq (13 million curies) of radioactive gases . . .." "Three Mile Island Accident", wikipedia.org.
Life does have a way of imitating art. Indeed, I believe it was in one of Abraham Maslow's books that I first encountered the theory that just as the canary responds to poisonous gas before humans, so do some artists have the capacity to detect -- and project in one art form or another -- the tiny ripples of change in society years before the waves sweep over the rest of us.
And so it is that an outfit called Democracy for Sale appears to be looking back through old movies to see what might be coming our way. They cleverly package 9:59 worth of excerpts, and put them up on YouTube.
They have at least two for us already -- which together pretty well explain both the values of BP and the corruption in Washington, D.C., that makes it possible for such corporations to prosper (while taking human life and despoiling the environment in the process).
The 1994 movie "On Deadly Ground" involves an oil company that has an explosion on an offshore drilling rig, tries to cover up the facts, blames the environmentalists for the problem, and then produces a slick commercial. (See yesterday's "BP's Commercial: Shame on Media," June 9.)
Watch:
As Democracy For Sale explains: "June 10, 2010 — In this purely fictional video, an oil spill causes major damage to the environment. When it's discovered that the oil company cut corners and disregarded safety measures, the oil company responds with an advertising campaign of soothing and reassuring words, then blames the spill on sabotage by environmentalists. Ultimately, the citizens realize that their government and the agencies established to protect them and the environment are really controlled by special interests and the oil executives. Any similarity to real people or events is purely coincidental. This video is for educational use only."
So just how does the corrupting process work? Democracy For Sale attempts to answer that question for us as well, with these excerpts from the 1992 movie, "The Distinguished Gentleman," starring Eddie Murphy as Congressman Thomas Jefferson Johnson.
Democracy For Sale explains: "What's Wrong with Washington. February 01, 2010. In a government where democratic representation is sold to the highest bidder, big corporations, not citizens, have a disproportionate share of democratic control. This short compilation illustrates the problem in under 10 minutes. The need for campaign finance reform is very clear. This video is for educational academic use only. Any similarity to real people or events is purely coincidental."
Can you think of other examples of feature films that dealt with societal problems that subsequently came to pass? If so, post them here as comments.
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* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself. -- Nicholas Johnson
Media's Profit is Public's Loss: BP vs. Mobil Oil (bought to you by FromDC2Iowa.blogspot.com*)
It has been said that we are no more conscious of the media through which we swim each day than fish must be of the waters through which they swim -- unless, perhaps, those waters are are part of the BP-polluted waters of the Gulf, and the fish notice that their family and friends are covered with oil and floating to the surface of the water.
Thus, no one, so far as I have seen, has picked up on what BP has been doing to pollute the media -- and how the media has sacrificed its values and capitulated to the company's public relations efforts (to the media's financial profit).
I'm talking about BP's $50 million public relations campaign, and specifically the commercial starring BP CEO Tony Hayward. And I'm responding to the media's willingness to not only plop that commercial right in the middle of news and public affairs programming -- but to do so without providing a critique of the commercial, or a public service announcement answer to it of any kind from those holding a contrary view.
If you watch television at all I can't believe you haven't seen it. But anyway, here it is:
I trust you picked up on the soothing tones, the seemingly sincere apology, the representation that "we will make this right," the assurance that it "never happens again," and the pictures of clean, white sand beaches and birds with not a drop of oil on a one of them.
Now don't get me wrong. I think BP has a right to make an effort to put its best foot forward in this public relations disaster. I don't buy the Supreme Court's assertion that corporations have all the constitutional rights of persons, that political contributions (money) are the constitutional equivalent of First Amendment-protected speech, and that Congress has no right to try to bring some balance back to the wildly disproportionate power of corporate treasuries thrown into the political arena. But I do think BP has a right to produce this commercial.
My problem is with the almost total absence of any critique of the commercial, the absence of public service announcements from environmental organizations with equivalent production (and psychologically manipulative) techniques, and television's placement of the BP commercial inside news and public affairs programs.
And to help make my point, I want to relate a story from another time, involving another oil company.
I can't warrant that I have recalled all the facts precisely. But neither will I use Mason Williams' line, "This is not a true tale, but who needs truth if it's dull." Mason Williams, "Tomato Vendetta", lyrics with brief musical excerpt ("This song’s about the Tomato Vendetta/and the tale of a man who let a/Hate for tomatoes cause him strife/He lost his job, wife, home, car, kids, and life . . .."). I just acknowledge that my best memory of truth may not correspond exactly with the facts -- including the date, which I'm assuming must have been the early 1970s.
This is a story about NBC and a Mobil Oil executive who was a former lawyer and active Kennedy family friend and political supporter named Herb Schmertz. [Photo credit: Current.]
The feisty Schmertz was Mobil's Vice President for Public Affairs. [For more background, see, e.g., the New York Times' review of his book, Herb Schmertz with William Novak, Good-by To the Low Profile (Little, Brown, 1986), Bryce Nelson, "Playing Hardball With the Press,"New York Times, June 1, 1986.]
Mobil, like BP, had a need to convince the American public and their elected representatives that fish and other creatures of the deep really liked offshore drilling rigs. So Mobil, like BP, produced a slick commercial making the point.
When Herb took it to NBC, however, the network refused to air it. Why? It was controversial. (Moreover, the network may have been concerned that the "Fairness Doctrine" then in effect might have required it to air opposing views -- possibly at NBC's expense, both for production and the absence of paid time).
So what did Schmertz do? My memory is that he went to some of the environmental groups and offered to use Mobil's money to pay for the air time for them to put commercials on NBC that would respond to Mobil's assertions, including attacks on the company. Otherwise put, Mobil would be both paying twice the going commercial rates for the time it would use, and relieving NBC of any obligation or expense to put on opposing views.
NBC still refused to put on the Mobil ads.
Note that (a) NBC refused to air the oil company's ad, and (b) even the oil company recognized the need -- for both the colloquial "fairness," and the legal "Fairness Doctrine" -- to offer the public opposing views.
So move forward in time thirty or more years and what do we have? BP mounts a $50 million public relations campaign involving offshore drilling, the networks take the money and plop the commercials down in the middle of news and public affairs programming, and neither BP nor the networks make any effort to let environmental and other groups respond with equally hard hitting public service announcements. (Of course, there has been some effort, however inadequate, to provide a little balance in reporting BP's pollution, including some selected and edited comments from environmentalists. However, there is an enormous difference between that and giving them the opportunity to present their views in an unedited, highly produced commercial equivalent to what BP is permitted to do.)
Moreover, the reason why responsible television news programs used to keep such commercials out of their programs is because advocacy commercials create the appearance (and all too often the reality) that (a) they are news, (b) that they represent the editorial position of the news program, thereby raising questions about the impartial nature of the news reports generally, and (c) that they, and the network income they represent, have influenced the content (or even existence) of adverse reports about the program's advertisers.
And now you know "the rest of the [BP media manipulation] story" (with apologies to Paul Harvey). _______________
* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself. -- Nicholas Johnson
Whatever Happened to "The Buck Stops Here"? (bought to you by FromDC2Iowa.blogspot.com*)
Normally when a large and embarrassing institutional error is revealed by the media, the head of that institution, whether called chair, CEO, executive director -- or "President of the United States" -- steps forward to take responsibility.
President Harry Truman was associated with the constant reminder of that obligation he kept on his desk, the sign that read, "The Buck Stops Here" -- "buck" as in "passing the buck." [Photo credit: Harry S. Truman Library and Museum.]
It was not inappropriate for President Obama to chastise the BP, Transocean and Halliburton CEOs' performance before Congress -- seemingly passing responsibility for the Gulf disaster between themselves faster than the basketball at a college team's ball handling practice.
Fortunately for Obama, he went on to acknowledge, almost as an afterthought, "there is enough responsibility to go around. And all parties should be willing to accept it. That includes, by the way, the federal government."
Unfortunately for Obama, the national finger-pointer-in-chief stopped there, unable to move his arm and hand into a position where he could point at himself.
You had executives of BP and Transocean and Halliburton falling over each other to point the finger of blame at somebody else. The American people could not have been impressed with that display, and I certainly wasn’t.
I understand that there are legal and financial issues involved, and a full investigation will tell us exactly what happened. But it is pretty clear that the system failed, and it failed badly. And for that, there is enough responsibility to go around. And all parties should be willing to accept it.
That includes, by the way, the federal government. For too long, for a decade or more, there has been a cozy relationship between the oil companies and the federal agency that permits them to drill. It seems as if permits were too often issued based on little more than assurances of safety from the oil companies.
Top executives often take responsibility for their institution's failures in an almost formal, ritualistic, theoretical sense -- failures for which they played no direct role, failures of which they could not even have been expected to have had advance knowledge.
Alas, President Obama's responsibility for the BP oil pollution was not such a failure.
After all, it was not the CEO of the historically disaster-ridden BP, or the head of the ineffective and corrupt Minerals Management Service, who said that offshore drilling could be done in a way to "protect communities and protect coastlines," "protect America's natural resources -- tourism, the environment," and in ways that are today "technologically advanced" and "guided by scientific evidence," "environmentally sound and not risky" with a "low risk environmentally." It was neither of them who asserted that "oil rigs today don't cause spills."
Those cheerleading assertions sound as if they were written by a BP publicist. Hopefully, they were not -- but the result is just the same -- in fact, far more powerful and influential when delivered and carried worldwide from the "bully pulpit" of the President of the United States.
For they were all the words of President Obama, in his personal effort to boost the oil industry's profitable offshore drilling, days before the BP disaster.
So today we’re announcing the expansion of offshore oil and gas exploration, but in ways that balance the need to harness domestic energy resources and the need to protect America’s natural resources. Under the leadership of Secretary Salazar, we’ll employ new technologies that reduce the impact of oil exploration. We’ll protect areas that are vital to tourism, the environment, and our national security. And we’ll be guided not by political ideology, but by scientific evidence.
[Photo credit: White House] [W]e’ve got to look at our traditional energy sources and figure out how can we use those most effectively and in the most environmentally sound way. . . .
The decision around drilling -- same approach. What we did was we said we’re not going to have drilling a mile off the North Carolina coast or two miles off. But 50 miles off, 100 miles off, where it is appropriate and environmentally sound and not risky, we should allow exploration to begin taking place to see if there’s certain reserves. . . .
But what we did was we tried to look at the scientific evidence and figure out where are areas where low risk environmentally and a high potential upside. . . .
I don’t agree with the notion that we shouldn’t do anything. It turns out, by the way, that oil rigs today generally don’t cause spills. They are technologically very advanced. Even during Katrina, the spills didn’t come from the oil rigs, they came from the refineries onshore.
It was President Obama who encouraged the reversal of policy to permit offshore drilling. It was President Obama who nominated Ken Salazar as his Secretary of Interior. It was President Obama who, presumably aware of big oil's political influence, seemingly cared not at all about the "cozy relationship" between the industry and the Minerals Management Service -- until the oil hit the fan.
The finger pointing should not stop, the buck does not stop, at the MMS; it stops at President Obama's desk, just as it stopped at President Truman's.
President Obama is a bright, sophisticated, well-informed, student of government. Surely he is knowledgeable regarding the phenomenon called "agency capture," or "regulatory capture." That's when an agency created to regulate an industry "in the public interest" ultimately ends up becoming that industry's advocate, its cheerleader, and a partner in its public-be-damned, employee-safety-be-damned, race to ever-increasing profitability and stock prices.
How could it be that he only discovered what he called this "cozy relationship between the oil companies and the federal agency that permits them to drill" after the BP Gulf disaster?
Had he not connected the dots between the results of agency capture (the failure of the Mine Safety and Health Administration to close the mine) and the deaths of 29 coal miners in the Massey Upper Big Branch disaster on April 5, one month before his "cozy relationship" speech? Ian Urbina, "No Survivors Found After West Virginia Mine Disaster,"New York Times, April 10, 2010, p. A1 ("The blast at Upper Big Branch comes four years after a pair of other West Virginia mine disasters — an explosion that killed 12 miners at the Sago mine and a fire that killed two at the Aracoma Alma coal mine. . . . In 2008, the Aracoma Coal Company, a subsidiary of Massey, agreed to pay $4.2 million in criminal fines [for] several safety violations related to that fire. . . . This week’s blast comes after a year in which the Upper Big Branch mine had repeated problems with methane buildups [and had been] cited . . . eight times for 'substantial' violations . . ..")
Had he not heard, specifically with regard to BP, of "the 2005 explosion at a refinery in Texas City" for which BP was fined "a record $87 million for neglecting to correct safety violations;" or that "only a year later, a leaky BP oil pipeline in Alaska" resulted in "$20 million in criminal penalties;" or that "last year, when the federal Minerals Management Service proposed a rule that would have required companies to have their safety and environmental management programs audited once every three years, BP and other companies objected"? Clifford Krauss, "Oil Spill’s Blow to BP’s Image May Eclipse Costs,"New York Times, April 30, 2010; and see additional details and comparisons with other companies in Jad Mouawad, "BP Has a Record of Blasts and Oil Spills,"New York Times, May 9, 2010, p. A22 ("BP, the nation’s biggest oil and gas producer, has a worse health, environment and safety record than many other major oil companies, according to Yulia Reuter, the head of the energy research team at RiskMetrics . . ..").
When I received my first presidential appointment (U.S. Maritime Administrator), I sat in the oval office with the president, one-on-one, while he provided me instructions in no uncertain terms as to what he wanted done with regard to the "agency capture" in the agency I was about to head. Indeed, I have always assumed that one of the reasons for my unlikely selection, for this job -- a job for which I had not applied, and for which I expressed disinterest to the President when it was offered -- was that I did not have any association with the shipping or ship building industries.
That's a part of what concerns me about the number of former Goldman Sachs employees brought into the Obama Administration, including Secretary of Treasury Timothy Geithner, and the wisdom of appointing Ken Salazar Secretary of Interior given his ties to the energy industries.
(Goldman Sachs alums have infiltrated the government, from the Fed to the Treasury to the White House itself, and also influence Congress. See, e.g., the summary in Alex Floum, "Goldman Sachs alumni hold many of the top government positions,"Economic Policy Examiner, May 6, 2010; Albert R. Hunt, "Scarlet Letter for the Greed Generation,"New York Times, April 25, 2010 ("Goldman’s political action committee gave $290,500 to congressional candidates last month as Congress weighed the financial-regulation overhaul. Mr. Obama shook the Goldman Sachs money tree for almost $1 million in his presidential campaign.").)
Surely he has appointed someone, to head an agency somewhere in Washington, who is a true consumer advocate, someone who is challenging corporate abuses. But offhand, I must confess, no name immediately comes to mind.
Does President Obama provide explicit directions to his appointees regarding agency capture, like those President Johnson provided me? Or, from his behavior, and the absence of any instructions to the contrary, do agency heads' sensitive antennae pick up the sense that corporate interests should be accommodated rather than challenged?
Public relations firms' libraries are full of playbooks for handling an institution's screw ups after they reach the media. The top guy should issue a statement saying his thoughts and prayers are with the families of those killed (killed needlessly as a result of the institution's negligence and lack of management oversight). (E.g., "President Obama earlier on Friday [April 9] expressed his condolences to the families of those [29 coal miners] killed or injured in the [inadequately regulated Massey Upper Big Branch coal] mine explosion." Ian Urbina, "No Survivors Found After West Virginia Mine Disaster,"New York Times, April 10, 2010, p. A1.)
A statement is issued reaffirming the institution's commitment to the highest standards of ethics and quality control. A commission is appointed to investigate the totally unpredictable disaster that occurred, "so that this will never happen again." We're all familiar with that process.
Indeed, many institutions leave one with the impression it is only the failures that make their way into the mainstream media that are of any concern at all. Employees' expressions of concern are at best ignored, and at worst lead to the complaining employee's dismissal. This seems to have been the case at the Minerals Management Service. Ian Urbina, "U.S. Said to Allow Drilling Without Needed Permits," May 14, 2010, p. A1 ("The . . . M.M.S. . . . routinely overruled its staff biologists and engineers who raised concerns about the safety and the environmental impact of certain drilling proposals in the gulf and in Alaska, according to a half-dozen current and former agency scientists.").
We need to judge the heads of major institutions -- including our presidents -- not on the basis of how they respond to the institutional public relations disasters after they reach the media and public, but how they hopefully prevent and respond to those that fall well below the media's radar.
When you choose foxes to protect the public's chickens you cannot fairly express surprise when the size of the flock begins to dwindle. Nor can you expect much from the report of a commission of foxes that does little to prevent future losses, and concludes that those losses are not the fault of the foxes. Nor does it solve the foxes' inherent conflicts of interest to ask the head fox to separate the single group of foxes into two groups of foxes -- or even to replace the head fox with a different fox. Juliet Eilperin, "Obama to create commission to investigate gulf oil spill,"Washington Post, May 18, 2010; Juliet Eilperin, "Salazar to split MMS into two agencies,"Washington Post, May 11, 2010 ("Interior Secretary Ken Salazar announced Tuesday he had commissioned an independent review of the BP oil spill and will split the Minerals Management Service into two parts"); Juliet Eilperin, "Interior Dept. official at MMS resigns,"Washington Post, ("Chris Oynes, the top Interior Department official who oversees offshore oil and gas drilling for the Minerals Management Service, announced Monday that he will retire on May 31 . . ..").
I'm not suggesting that the Administration of President George Bush was better in terms of agency capture. If anything, it was probably worse. But the BP Gulf disaster can't be blamed on George Bush. Obama has been president for well over a year, and was planning his presidency at least since the election in November 2008.
We know he voted as a senator to grant immunity to the phone companies that had turned the private records of their customers over to the government in violation of law. We saw his early direction of millions of dollars of taxpayers' money to banks and other businesses -- rather than genuine jobs creation programs like the CCC and WPA that worked for President Roosevelt and would have been the quickest and cheapest way to actually create jobs. We watched as he refused to even consider universal single-payer health care, and then took a public option off the table. We know he held secret closed door meetings at the White House with representatives of Big Pharma that undercut patients' rights to more pharmaceutical options at lower prices. We recently witnessed the consequences of his failure to reform federal oversight of coal mine safety.
And now we're looking at what has been characterized as the most devastating environmental disaster in the history of America as a result of the "cozy relationship" between his MMS and the oil industry.
Barack Obama was my candidate. He is my only U.S. President. There is still a great deal about him that I like and admire. I want him to succeed.
But I don't think it helps him to succeed for his supporters to turn a blind eye to his turning a blind eye to corporations turning a blind eye to the public interest. _______________
* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself. -- Nicholas Johnson
Connecting Those Slippery, Oily Dots (brought to you by FromDC2Iowa.blogspot.com*)
Update: May 14: A couple of the most shocking stories yet (corporate-government silencing scientists, suppressing data): Justin Gillis, "Size of Oil Spill Underestimated, Scientists Say,"New York Times, May 14, 2010, p. A1; Ian Urbina, "U.S. Said to Allow Drilling Without Needed Permits,"New York Times, May 14, 2010, p. A1 ("The [MMS] gave permission to BP and dozens of other oil companies to drill in the Gulf of Mexico without first getting required permits . . . despite strong warnings . . . about the impact the drilling was likely to have . . . [and] routinely overruled its staff biologists and engineers who raised concerns . . ..").
Update, May 11:"MMS Approved 27 Gulf Drilling Operations After BP Disaster; 26 Were Exempted From Environmental Review, Including Two to BP; Salazar's "Moratorium" on New Drilling Permits Allows Continuation of the Same Flawed Environmental Exemption Process that Allowed the BP Catastrophe," Center for Biological Diversity, May 7, 2010 ("Even as the BP drilling explosion which killed eleven people continues to gush hundreds of thousands of gallons of oil per day into the Gulf of Mexico, the U.S. Department of Interior’s Minerals Management Service (MMS) has continued to exempt dangerous new drilling operations from environmental review. Twenty-seven new offshore drilling projects have been approved since April 20, 2010; twenty-six under the same environmental review exemption used to approve the disastrous BP drilling that is fouling the Gulf and its wildlife. “The MMS has learned absolutely nothing from this national catastrophe,” said Kierán Suckling, executive director of the Center for Biological Diversity, “It is still illegally exempting dangerous offshore drilling projects in the Gulf of Mexico from all environmental review. It is outrageous and unacceptable.”).
The details of one of the most devastating environmental disasters in American history on fish, wildlife and beaches is not the most important story.
The details of the technology that permits drilling for oil a mile beneath the ocean's surface -- and that fails us when that drilling goes awry -- is not the most important story.
The tragic sacrifice of workers' lives -- 11 on the Deepwater Horizon (plus 29 in the Massey Coal mine) -- to the profits of their corporate employers with "cost savings" on inadequate and malfunctioning safety technology is not the most important story.
The response of suddenly get-tough-on-oil senators and members of Congress, and what the investigations may ultimately reveal (or conceal), is not the most important story.
The newspaper and television coverage of the oil disaster is not the most important story.
All of the above are mere diversions from the most important story.
The most important story? The extent to which America's officials -- and the public, let it be noted -- have permitted major corporations' campaign contributions, lobbying, public relations, advertising, and other influence to corrupt our nation's ability to formulate, and enforce, policies that would best serve "the national interest."
We're generally aware of the extent to which Goldman Sachs alums have infiltrated the government, from the Fed to the Treasury to the White House itself, and how they influence Congress. See, e.g., the summary in Alex Floum, "Goldman Sachs alumni hold many of the top government positions,"Economic Policy Examiner, May 6, 2010; Albert R. Hunt, "Scarlet Letter for the Greed Generation,"New York Times, April 25, 2010 ("Goldman’s political action committee gave $290,500 to congressional candidates last month as Congress weighed the financial-regulation overhaul. Mr. Obama shook the Goldman Sachs money tree for almost $1 million in his presidential campaign.").
We are perhaps less well informed and aware of the extent to which many industries exert similar influence over governmental decision making as well.
So let us consider the case study of BP.
From the West Coast to the Gulf Coast
This picture is so revealing. [Photo credit: UC Berkeley Media Relations] The caption reads, "Backstage before the announcement, UC President Robert Dynes (right) flashes 'thumbs up' to BP America chairman Robert Malone . . .."
"The announcement." "What announcement?" I hear you ask. The announcement that BP is going to give UC Berkeley (my first post-clerkship employer) $500 million.
Global energy firm BP announced today (Thursday, Feb. 1 [2007]) that it has selected the University of California, Berkeley, in partnership with Lawrence Berkeley National Laboratory (LBNL) . . . to lead an unprecedented $500 million research effort to develop new sources of energy and reduce the impact of energy consumption on the environment. . . .
"This partnership with BP will develop new, sustainable energy technologies that can transform the landscape," said Nobel Laureate Steven Chu, director of LBNL — a U.S. Department of Energy-funded lab — and UC Berkeley professor of physics and of molecular and cell biology.
Why is this story relevant? Well, for starters it is an illustration of the fact that the tentacles of a multi-billion-dollar corporation like BP extend into far more major American institutions than just the federal government -- especially the large, prestigious, research universities.
It also makes the point that when you're in a position to hand out money in $500 million bundles you tend to get a thumbs up from everyone you meet -- including presidents and members of Congress.
How can a company afford to make $500 million contributions? BP's first quarter profits were $5.6 billion; that's profits, not revenue, which is of course much greater; and not annual profits, but three months' worth of profits.
But there's more. Just as occasionally when you drill you strike oil, so occasionally when you pay $500 million for favorable public relations (BP was trying to sell the public on the idea that BP no longer stands for "British Petroleum," it now stands for "Beyond Petroleum") you strike another kind of oil.
And so it was with their beneficence spread upon Professor Chu. Do you know where he is now? That's right, President Obama decided he would make a great Secretary of Energy -- the guy who's supposed to be helping us overcome our oil addiction.
And what did he have to say recently about the BP oil spill disaster?
"U.S. Energy Secretary Steven Chu said Wednesday it was not a mistake for the administration to support more offshore drilling as part of comprehensive energy reform, despite the oil rig spill in the Gulf of Mexico that continues to threaten coastal areas." John Wihbey, "Energy Sec. Steven Chu: More Drilling Proposal 'Not a Mistake,'” "On Point with Tom Ashbrook"/WBUR/NPR, May 5, 2010.
Spreading Money Like Oil
But it's BP's generosity with members of Congress that may have even more to do with its disaster in the Gulf than its generosity with Energy Secretary Chu. After all, the pollution of the Gulf is primarily the responsibility of the Secretary of the Interior, not the Secretary of Energy.
Oil behemoth BP poured millions of dollars into lobbying and campaign contributions over the past two decades, courting allies in Congress and the White House. . . . BP paid $6.2 million in campaign contributions since 1990, landing on the list of 107 "heavy hitters" compiled by the Center for Responsive Politics.
The company's political action committee has helped the re-election efforts of many . . ..
And that's just part of BP's political spending.
Just in the past year, BP doled out nearly $16 million for influence efforts, using both its own lobbyists and those with eight other firms . . ..
OK, but what does that have to do with Interior Secretary Ken Salazar? Well, before he was a cabinet secretary it happens that he was a U.S. Senator -- a senator who served just shy of one term.
Having not yet been a senator for a full term, Ken Salazar (D-Colo.) [who] hasn't had much time to collect money from the industries that will take a special interest in him as Secretary of the Interior . . . . has collected a total of $321,800 from the energy and natural resources sector during his short time in the Senate . . ..
And what was his record as a Senator? His Wikipedia entry reports that,
In 2005, Salazar voted against increasing fuel-efficiency standards (CAFE) for cars and trucks . . . [and] against an amendment to repeal tax breaks for ExxonMobil and other major petroleum companies. . . .
In 2006, Salazar voted to end protections that limit offshore oil drilling in Florida's Gulf Coast.
In 2007, Salazar was one of only a handful of Democrats to vote against a bill that would require the United States Army Corps of Engineers to consider global warming when planning water projects.
So we shouldn't be surprised with Paul Krugman's reminder this morning that "environmentalists were bitterly disappointed when Mr. Obama chose Ken Salazar as secretary of the interior. They feared that he would be too friendly to mineral and agricultural interests, that his appointment meant that there wouldn’t be a sharp break with Bush-era policies — and in this one instance at least, they seem to have been right." Paul Krugman, "Sex and Drugs and the Spill,"New York Times, May 10, 2010, p. A23.
Regulators Make Strange Bedfellows
And so what role did President Obama's Secretary of the Interior play in bringing on this Gulf disaster?
The Interior Department exempted BP's calamitous Gulf of Mexico drilling operation from a detailed environmental impact analysis last year, according to government documents . . . [as a result of] [t]he decision by the department's Minerals Management Service (MMS) to give BP's lease at Deepwater Horizon a "categorical exclusion" from the National Environmental Policy Act (NEPA) on April 6, 2009 -- and BP's lobbying efforts just 11 days before the explosion to expand those exemptions . . ..
"I'm of the opinion that boosterism breeds complacency and complacency breeds disaster," said Rep. Edward J. Markey (D-Mass.) on Tuesday. "That, in my opinion, is what happened." . . .
While the MMS assessed the environmental impact of drilling in the central and western Gulf of Mexico on three occasions in 2007 -- including a specific evaluation of BP's Lease 206 at Deepwater Horizon -- in each case it played down the prospect of a major blowout.
In one assessment, the agency estimated that "a large oil spill" from a platform would not exceed a total of 1,500 barrels and that a "deepwater spill," occurring "offshore of the inner Continental shelf," would not reach the coast. In another assessment, it defined the most likely large spill as totaling 4,600 barrels and forecast that it would largely dissipate within 10 days and would be unlikely to make landfall.
"They never did an analysis that took into account what turns out to be the very real possibility of a serious spill," said Holly Doremus, a law professor at the University of California at Berkeley who has reviewed the documents.
The MMS mandates that companies drilling in some areas identify under NEPA what could reduce a project's environmental impact. But Interior Department spokesman Matt Lee-Ashley said the service grants between 250 and 400 waivers a year for Gulf of Mexico projects. He added that Interior has now established the "first ever" board to examine safety procedures for offshore drilling. It will report back within 30 days on BP's oil spill and will conduct "a broader review of safety issues," Lee-Ashley said.
BP's exploration plan for Lease 206 [Deepwater Horizon], which calls the prospect of an oil spill "unlikely," stated that "no mitigation measures other than those required by regulation and BP policy will be employed to avoid, diminish or eliminate potential impacts on environmental resources."
[T]he plan . . . minimized the prospect of any serious damage associated with a spill, saying there would be only "sub-lethal" effects on fish and marine mammals, and "birds could become oiled. However it is unlikely that an accidental oil spill would occur from the proposed activities."
Kierán Suckling, executive director of the environmental group Center for Biological Diversity, said the federal waiver "put BP entirely in control" of the way it conducted its drilling.
Agency a 'rubber stamp'
"The agency's oversight role has devolved to little more than rubber-stamping British Petroleum's self-serving drilling plans," Suckling said.
BP has lobbied the White House Council on Environmental Quality -- which provides NEPA guidance for all federal agencies -- to provide categorical exemptions more often. In an April 9 letter, BP America's senior federal affairs director, Margaret D. Laney, wrote to the council that such exemptions should be used in situations where environmental damage is likely to be "minimal or non-existent." An expansion in these waivers would help "avoid unnecessary paperwork and time delays," she added.
The disaster was predictable. Why predictable? Consider the record:
The 2005 explosion at a refinery in Texas City, Tex., killed 15 workers and injured hundreds more. The Occupational Safety and Health Administration fined BP a record $87 million for neglecting to correct safety violations.
Only a year later, a leaky BP oil pipeline in Alaska forced the shutdown of one of the nation’s biggest oil fields. BP was fined $20 million in criminal penalties after prosecutors said the company had neglected corroding pipelines. . . .
Last year, when the federal Minerals Management Service proposed a rule that would have required companies to have their safety and environmental management programs audited once every three years, BP and other companies objected. The agency is also investigating charges by a whistle-blower that the company discarded important records from its Atlantis Gulf platform.
So what? So, "The [Department of the Interior] inspector general said that these relationships have cost taxpayers $4.4 million in lapsed collection fees, but due to the sloppy administration at MMS, the real cost may go undiscovered. In a separate report, the Government Accountability Office (GAO) found that MMS is plagued by inefficiency in collecting royalties, and that there is no way to backtrack and figure out how much has actually been lost. Currently, oil companies submit their own data and MMS simply takes them at their word, rather than independently confirming that the numbers are correct — what the inspector general has referred to in a letter to Secretary Dirk Kempthorne as a “Band-Aid approach to holding together one of the federal government's largest revenue producing operations.” A separate GAO report found that the United States is not collecting fair market price for royalties on public resources — which may be seriously limiting the amount of money taken in by MMS, and hence, the taxpayers." "Broken Government," Center for Public Integrity.
These consequences are reinforced as a result of what has come to be called the "revolving door."
In trying to understand why M.M.S. fails in its fiduciary and regulatory responsibilities to taxpayers, it’s impossible to ignore the revolving door between the agency and the industry that it oversees. Since leaving government service, Gale Norton, secretary of Interior under President Bush, became Shell’s general counsel, and J. Steven Griles, a deputy secretary of Interior, lobbied for numerous oil and gas industries — including BP — before he went to jail for obstructing a Senate investigation. Randall Luthi, the most recent director of M.M.S., is now president of the National Oceans Industries Association, whose mission is to secure a “favorable regulatory and economic environment for the companies that develop the nation’s valuable offshore energy resources.” . . .
Longstanding cozy ties with industry may help explain why M.M.S. failed to bolster safety requirements for equipment and processes used on the Deepwater Horizon rig — despite internal reports giving clear warnings about the risks of these devices and techniques.
At the end of the day, this spill should show Congress that there are real harms when government regulators consider the industry they oversee to be a partner or client (or future employer) rather than an entity that they should hold accountable.
In fairness to the Obama Administration, it should be noted that this "self-regulation" of offshore drilling actually began during the Clinton Administration.
"We are not supportive of the extensive, prescriptive regulations as proposed in this rule," wrote Richard Morrison, BP's vice president for Gulf of Mexico production. "We believe industry's current safety and environmental statistics demonstrate that the voluntary programs implemented since the adoption of [voluntary standards] have been and continue to be very successful." . . . The voluntary approach was adopted in 1994 during the Clinton administration.
Because ultimately this rot from within government, like an under-ocean oil spill, makes its way up to the White House and the President himself. President Obama is, from all indications, a bright guy, well informed, a quick study, not easily bamboozled. So when he starts mouthing oil industry propaganda it's hard to make excuses for him -- much as I'd like to believe he was simply relying too heavily on staff members, or industry spokespersons, he thought he could trust.
And yet, there he was on March 31, announcing from Andrews Air Force Base,
[A]s we transition to cleaner energy sources, we’ve still got to make some tough decisions about opening new offshore areas for oil and gas development in ways that protect communities and protect coastlines. . . .
[T]he bottom line is this: Given our energy needs, in order to sustain economic growth and produce jobs, and keep our businesses competitive, we are going to need to harness traditional sources of fuel even as we ramp up production of new sources of renewable, homegrown energy.
So today we’re announcing the expansion of offshore oil and gas exploration, but in ways that balance the need to harness domestic energy resources and the need to protect America’s natural resources. Under the leadership of Secretary Salazar, we’ll employ new technologies that reduce the impact of oil exploration. We’ll protect areas that are vital to tourism, the environment, and our national security. And we’ll be guided not by political ideology, but by scientific evidence.
On April 2, 2010 -- 18 days before the BP disaster -- here is what the President had to say in Charlotte, North Carolina:
[Photo credit: White House] [W]e’ve got to look at our traditional energy sources and figure out how can we use those most effectively and in the most environmentally sound way. . . .
The decision around drilling -- same approach. What we did was we said we’re not going to have drilling a mile off the North Carolina coast or two miles off. But 50 miles off, 100 miles off, where it is appropriate and environmentally sound and not risky, we should allow exploration to begin taking place to see if there’s certain reserves. . . .
But what we did was we tried to look at the scientific evidence and figure out where are areas where low risk environmentally and a high potential upside. . . .
I don’t agree with the notion that we shouldn’t do anything. It turns out, by the way, that oil rigs today generally don’t cause spills. They are technologically very advanced. Even during Katrina, the spills didn’t come from the oil rigs, they came from the refineries onshore.
"Protect communities and protect coastlines"; "protect America's natural resources -- tourism, the environment -- guided by scientific evidence"; "environmentally sound and not risky"; "low risk environmentally"; "technologically advanced -- oil rigs today don't cause spills." It sounds as if it was written by a BP publicist. Hopefully, it was not -- but the result is just the same.
Wrapping Up With Democracy Now: How is the Environmental Impact of Offshore Drilling Like a Forest Trail?
To wrap it up, here is the "Democracy Now" interview of Kieran Suckling, executive director of the Center for Biological Diversity:
SECRETARY KEN SALAZAR: Minerals Management Service will not be issuing any permits for the construction of new offshore wells [after] May the 28th. . . . But today is not really the day to deal with those issues. . . .
[Democracy Now reporter] JUAN GONZALEZ: Secretary Salazar added that the existing offshore oil and natural gas drilling will continue, . . ..
KIERAN SUCKLING: Well, when a federal government is going to approve a project, it has to go through an environmental review. But for projects that have very, very little impact like building an outhouse or a hiking trail, they can use something called a categorical exclusion and say there’s no impact here at all so we don’t need to spend energy or time doing a review. Well, we looked at the oil drilling permits being issued by the Minerals Management Service in the Gulf, and we were shocked to find out that they were approving hundreds of massive oil drilling permits using this categorical exclusion instead of doing a full environmental impact study. And then, we found out that BP’s drilling permit—the very one that exploded—was done under this loophole and so it was never reviewed by the federal government at all. It was just rubber-stamped.
JUAN GONZALEZ: Well, according to the Washington Post article, in one of its assessments of the agency “estimated that a large oil spill from a deep platform like the Deepwater Horizon would not exceed a total of 1,500 barrels and that a deepwater spill occurring off the Intercontinental shelf would not reach the coast.” Obviously, both of those—both of those assessments have proven dramatically off the mark. As many as 250-400 waivers a year for drilling in the Gulf?
KIERAN SUCKLING: Yeah, yeah, absolutely. It’s also important to note that when the government says it’s very unlikely this spill will occur, it’s unlikely the spill will reach shore, those aren’t even the government’s own assessments. They’re just repeating what BP, Exxon, and other oil companies put in their drilling applications. And since there’s no environmental impact study, the government never actually does an independent review. So everyone is just repeating the industry’s statements as they rubber-stamp the approvals.
AMY GOODMAN: Reporters questioned White House press secretary Robert Gibbs on Wednesday about why BP’s Gulf of Mexico drilling operation was exempted from the detailed environmental impact analysis last year. . . .
KIERAN SUCKLING: The White House and the Department of Interior are really sort of ducking their heads on this issue right now because it’s an enormous problem. Especially since just a few months ago the Government Accountability Office came out with the report on MMS’s operations in Alaska, where they also have offshore drilling, and specifically said the agency is not doing these environmental studies properly. They’re avoiding doing them at all. And then they went ahead knowing that the GAO had just done this study and continued to put them out. So, this is not something new. MMS knew they had a problem. In fact, when Interior Secretary Salazar first came into office, he announced ‘There’s a new Sheriff in town, I’m going to clean up this corrupt agency,’ and instead of doing that, he’s pushed them to put out more offshore oil drilling permits while not cleaning up what is clearly a broken process of doing any environmental review at all.
JUAN GONZALEZ: I want to play a clip of President Obama where he says that oil spills don’t come from rigs, but from refineries. He was speaking on April 2nd, just over two weeks before the explosion of the Deepwater Horizon rig.
PRESIDENT BARACK OBAMA: I want to point out, by the way, that oil rigs today generally don’t cause spills. They are technologically very advanced. Even during Katrina, the spills didn’t come from the oil rigs, they came from the refineries onshore. . . .
KIERAN SUCKLING: Yeah, I mean, I think what the President has said here is actually just very, very critical, because he is repeating, and I suspect without even knowing it, the big lie of offshore oil drilling. For decades, the oil companies and the Minerals Management Service have told us, ‘Oil drilling is safe, it’s fine, that’s not where oil spills come from.’ In fact, that’s the basis of not doing any environmental review is, you simply assert it will never be a problem, therefore, you don’t even have to study it. While it’s true that they don’t leak often, but when they do leak, it’s absolutely catastrophic. It’s very similar to nuclear power plants. They don’t often fail, but when they fail it’s catastrophic. And, therefore, you have to plan for catastrophe. You have to do very intensive environmental analysis, not simply say, ’It’s rare, so we can ignore it.’
AMY GOODMAN: Kieran Suckling, what do think has to happen right now?
KIERAN SUCKLING: Well, first off, I think that the President should announce a complete moratorium on all new offshore oil drilling. This three-week time-out is really too little, too late. And it’s very important to do that now because the president, under the urging of Secretary of Interior Ken Salazar, has planned to open up new offshore oil drilling in Alaska, in the eastern Gulf of Mexico, and on the Atlantic coast. And that just needs to end. It’s not safe anywhere, anytime.
Secondly, the president should immediately revoke existing oil permits and especially in Alaska. Shell Oil, this July, . . . is going to start doing offshore oil drilling in the Chukchi Sea of Alaska. And if you think it’s difficult to clean up oil in the relatively warm, calm Gulf of Mexico, imagine trying to do this with icebergs and sea ice, twenty hours of darkness, in the Arctic oceans. It just cannot be done. If this spill had happened in Alaska, its magnitude would have been ten times worse than has happened in the Gulf.
Then, thirdly, the President should start an initiation of an investigation of Ken Salazar and his role in allowing this to happen.
Salazar has been a major proponent of the offshore oil drilling industry. He passed legislation as a senator in 2006 to open up the Gulf of Mexico in the first place to offshore oil drilling. He gets campaign contributions by British Petroleum. And then he walks into this agency he is supposed to reform, and instead of reforming it, pushes it to do even more offshore oil drilling. So Ken Salazar is part of the problem here, not the solution. He should not be doing the investigation of MMS. He should be under investigation for helping to cause this crisis.
Most institutions only respond to internal problems when they become serious or dramatic enough to create significant adverse media coverage. The response may be helpful, or may be counterproductive -- even to the institution's self-interest.
But even after the public relations disaster there's no assurance meaningful reform will ensue. Consider our financial collapse. As I pointed out in a recent blog entry, the first thing to do if the problem is "too big to fail" is to make the institutions smaller. And yet, when the Senate tried it was the Senate that was "too" something; it failed. The Goldman Sachs alums won again.
A move to break up major Wall Street banks failed Thursday night by a vote of 61 to 33.
Three Republicans, Richard Shelby of Alabama, Tom Coburn of Oklahoma and John Ensign of Nevada, voted with 30 Democrats, including Senate Majority Leader Harry Reid of Nevada, in support of the provision. The author of the pending overall financial reform bill in the Senate, Banking Committee Chairman Christopher Dodd, voted against it.
The amendment . . . would have required megabanks to be broken down in size and capped so that their individual failure would not bring down the entire system. . . .
In practice, the amendment required the six biggest banks -- Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley -- to significantly scale down their size. It was touted as a way to end Too Big To Fail.
Though top Obama administration officials have not publicly opposed the amendment, its leading economists have opposed ending Too Big To Fail simply by breaking up the nation's financial behemoths. Austan Goolsbee and Larry Summers have both fought back against this idea, as has Treasury Secretary Timothy Geithner.
It remains to be seen whether even America's worst environmental disaster, getting worse by the day, will be enough to change the culture of Washington anymore than our financial collapse was able to do.
But now at least we can see how to connect those slippery, oily dots; now we understand "the rest of the story."
Will we do anything about it -- you and me? That also remains to be seen. _______________
* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself. -- Nicholas Johnson
Remember when the I-35W bridge over the Mississippi River in Minneapolis collapsed? That was one of those cards. It got our attention -- briefly. [Photo credit: Minnesota Department of Transportation]
Only last week this happened near Battle Creek, Michigan. Eric D. Lawrence and Brent Snavely, "Fumes from oil leak creep over Battle Creek," Detroit Free Press, July 27, 2010 ("An estimated 840,000 gallons of oil leaked into a creek Monday that feeds into the [Kalamazoo] river").
