The terror lurking below

BP claims to have sealed the well, but it's likely that the wellhead has been damaged to the point it can't contain potential leaks. The pressure at the new well cap may fall within tolerable thresholds because it's coming out somewhere else. The absence of information about what's happening on or around the wellhead on the sea floor makes the extent of secondary leaks unknown by anyone outside the BP/Fedgov response team.

I'm guessing that this story is far from over. In part I do this based on the apparent ease with which this gusher has been stopped. I wish I could say I was wrong, but the evidence of a far worse and perhaps worsening problem is compelling.
BP wants to mask the worst case scenarios out of self-interest. It could be removed from the crisis response team and lose control over the PR effort that is attempting to minimize the political costs and fines associated with the spill.

Wait a second! We've got BP still in control of the clean-up despite the fact that they're facing a fine per barrel of oil leaked. This means the company has every incentive to disguise the scale of the disaster. And that motive has likely guided the choice of dispersants.

An EPA study deemed that Corexit 9500 is safe based on a 96-hour testing timeframe using shrimp larvae and river fish. The tests are also conducted at temperatures far below the Gulf's. With all that oil in the Gulf, it's possible Corexit could have far more toxic effects. A petition to stop the use of solvents (Corexit 9500 can be classified as this) is circulating on the Web here: Stop Using Solvents In Our Oceans Petition.

As I've said before, the Corexit reduces the size of the oil molecules to that which can be airborne, meaning oil can be carried in the rain. See YouTube - Breaking: BP Gulf Oil Spill Toxic Rain Falls on Cars, Ground, Central Texas; I also saw some disturbing videos from the Miami area, where evidence of chemical burns appears on vegetation. It could be the oil, or the dispersant, or some chemicals emitted by ruptures on the sea floor.

Another nasty potentiality is a hurricane strengthened by the higher water temperatures created by the abundance of oil in the water. We don't know how much warmer the Gulf is but we can be certain a hurricane would be strengthened.

There are rumors that the Coast Guard is actually spraying bleach on beaches to cover up the oil there. We do know that extensive efforts to cut off public access to beaches have been made. Reporters and media people appear to be singled out for special treatment and arrest. Just what is it that has BP and the authorities so concerned? Possibly it's the images of stricken wildlife like these that could sufficiently enrage the population. Perhaps if enough people get angry enough, the current response would appear inadequate and new more drastic actions taken.

Now BP and the powers-that-be do have a reason to keep beach-goers away due to the toxicity of the oil. Amazing it is to me that anyone would go near the oil. This isn't refined crude! The oil is toxic and corrosive. Additionally volatile and caustic effects on boat hulls and skin have been recorded. If the oil can eat through a boat's hull, your accidental tourists should hardly let the kids play in it.

Then there are the toxic gases emerging alongside the oil. Industry expert Matt Simmons has been interviewed in a number of media outlets (a six-part interview on Christian radio is here; Simmons was on Dylan Ratigan show briefly yesterday (link here.) [Ratigan has a great rant against the financial industry--I'll link to it in a future post perhaps.]

Benzene is one of the major threats, alongside methane. The possibility that a giant methane gas bubble is building has many people scared. Should the methane deep under the ocean floor melt (it's currently locked into solid form), the sea floor could rise, bulge and erupt. Methane, when brought to the surface, would make all surface ships sink due to a loss of buoyancy. It's suspected in Bermuda Triangle disappearances.

A leak large enough could doom the whole world to a Permian-type event, at least according to one article in The Guardian. Methane is a greenhouse gas that heats the atmosphere; I read that the Gulf spill has put more methane gas in the atmosphere than any other documented event in the modern era.

Then there's the possible tsunami created by a massive undersea displacement of seawater as the methane bursts forth. I'd consider this possibility narrow, but utterly catastrophic due to the size of the tsunami, which could be large enough to cross Florida.

A hurricane could accomplish the same type of damage, albeit on a more limited area of effect. All the toxins associated with the leaking oil could be blasted deep into the interior where they could pollute inland lakes and waterways. Not an appealing prospect.

Finally, I wanted to link to a comment I made at OpEdNews concerning the Gulf oil spill. I come down a little hard on the article author, who's genuinely concerned about the pattern of ecological abuse inflicted on people in the Gulf region. As much as I want to be sympathetic, at this point I believe that:

the effectiveness of their message can be diluted by worthy but irrelevant social justice and green energy issues. The Gulf tragedy is best messaged as an economic event, because that's what our capitalism-based political system recognizes and will respond to, not the plight of the "small people." Call it realpolitick, or whatever, but the top priority needs to be getting the spill stopped.

In no way do I want to distract the public from the gravity of the threat, and as important as the longer-term trends are, the blogosphere has a much more urgent priority in watchdogging this tragedy and its response.

7-18 Addendum
Keith Olbermann continues to assert threats posed to First Responder safety. See this video episode from MSNBC.

He brings up the toxicity of the dispersants and offers the link, www.BPmakesmesick.com

Olbermann's guest, Marylee Orr of the Lousisiana Environmental Action Network, says that over 7 million gallons of dispersants have been used, a jump over the "hundreds of thousands" of gallons claimed in the intro part of the video segment.

The fact we don't know how much has been used exposes the ulterior motive of BP to disguise the toxicity of its response. BP's unwillingness to let clean up workers wear masks show they're hypersensitive to bad PR which could emerge once facts about the scale of the disaster and the health dangers caused by BP's response are exposed.

The severity and frequency of First Responder sickness should be a source of concern for regulators and government but isn't. Halfway down this page is an older Olbermann video from June on this major health threat called T.I.L.T. Toxicant-Induced Lost Tolerance.

Can we trust BP? And Fedgov delegates oversight to the company, can we trust FedGov? If you're a clean-up worker, I'd hire a good lawyer for the class actions that will come. I guess we could see a replay of the 9/11 First Responder tragedy, where no one is willing to help with the medical costs. Meanwhile responders must choose between wearing masks or feeding their families. Like the 9/11 First Responders, many will die--their sacrifice on our behalf remembered only by their families.

Like Nixon and Watergate, it's the coverup and lying that provides evidence of an underlying crime.

I'm going to take a contrarian viewpoint here and predict that the well is still leaking (although perhaps not at the top). Would BP tell us that the capping process can't seal the multiple subsurface leakS, if they've expanded across the sea floor? I suspect that BP will use the capping procedure as a legal defense to claim the other leaks aren't its fault. The story about all those other capped, abandoned wells strewn about the Gulf could support that lie.


Sources (more recent first):
1) Dispersant facts
2) ah, mephistophelis.: More Dispersant Used Than Oil Spilled In Any Previous Accident
3) Oil Spill - BP Trying To Hide Toxic Oil with Corexit Chemical Dispersant Agent?
4)BP Looks to Profit from Oil Salvaged from Gushing Well | CommonDreams.org
5) Underwater Oil Plumes In Gulf EXPOSED By ABC News (VIDEO)
6) Gulf oil spill: BP has a long record of legal, ethical violations - More News - MiamiHerald.com

Resources:
Gulf Oil Spill Tracker

///

Obama spins BP spill, and we get to pay

Below is a crosspost from my health and environmental blog, where I post infrequently.

I did see Obama's speech last night, and found it wholly inadequate. He failed to mention that BP was denying responders the use of respirators. Apparently people along the coast are experience dizziness, headaches, and other issues from the leak and, quite possibly, the toxic dispersants as well.

Last night, Obama said nothing of BP's chronic understatement of the size of the leak. The number I've been able to translate from gallons (yes, the size of the leak is being obfuscated by the use of barrels instead of gallons) is about 50,000 barrels a day (calculated from 42 gallons/barrel and an estimated 2 million gallons/day.) A far cry from the 5,000 we were told were leaking by BP for months. The discrepancy speaks legions about BP's credibility, and Obama's as well.

As I say in the article below, I guess it was the size of BP's surface tankers collecting the oil that gave away the true size of the spill. Nothing was volunteered. And now we can only guess at the size of undersea plumes, whose existence BP has denied.

Now today, after negotiating with BP for four hours, Obama said a $20 billion fund will be set up. He neglected to mention when. It was only by digging through the details later that I saw this in an AP article:

"Svanberg announced the company would not pay dividends to shareholders for the rest of the year, including one scheduled for June 21 totaling about $2.6 billion. The company will make initial payments into the escrow fund of $3 billion this summer and $2 billion in the fall, followed by $1.25 billion per quarter until the $20 billion figure is reached."

Excuse me? Where's the beef? The first installment hasn't yet arrived. And what are the poor people on the Gulf going to do should BP go bankrupt? With government serving the corporate interest (above even its own?) we really are on our own.

Begin post:

I'm writing this before President Obama goes before a nationwide audience this evening. I'm not sure if he'll characterize the response to the Deepwater spill as "his own." No one, it would seem, wants to take ownership of the response. The spill is an economic, environmental, and political liability. It may now be such a huge political problem, now that it hasn't been dealt with in a forthright manner.

BP has been actively trying to cover up the disaster. Obviously, they have the most to lose by admitting that the spill is out of control. For weeks, they refused to consider that the leak was anything more than 5,000 barrels. Fedgov has--and is, depending on what Obama will actually do differently--demurred control over the clean-up to BP, a questionable act considering how BP's failure to follow safety rules and regulations led to the crisis.

We've only recently been able to guess at the size of the leak. BP's damage control efforts have been more about controlling public relations and the release of negative information than stopping the leak. The FAA has obliged by preventing overflights of the spill area by media personnel. Just as perception management overshadows the political leadership, so too does BP try and obfuscate damaging press and deflect criticism to prop up its sagging public image (limiting lawsuits is another goal.)

As hard as Obama might try to sound tonight, it's a safe bet what he does won't be anywhere as aggressive. It's a recurring theme: talk tough and do little to nothing. How much more bad leadership can America take? As a defender of the environment, I guess I might take some consolidation in the carbon taxes he'll likely try to sell. In my opinion, trying to take advantage of the spill is grossly immoral, even if it points the country in a different direction.

Fact is, the buck stops at the President's desk. If for whatever reason he can't get BP to stop the leak(s ?), he needs to do it himself. Yet he's said he lacks the resources to stop it. Can we honestly believe that? With all those trillions spent on our war machine, I can't believe we can't put anything out there on the water. During an oil spill off Saudi Arabia, huge tankers vacuumed up the oily water. Why can't we at least try to do something like that? Deepwater will likely do more damage to the US--economically--than any terror strike could have. Yet we haven't anticipated it, and now must depend on the polluter's capability to respond, which so far now eight weeks later, has been...surprise...inadequate.

We could talk forever about how the spill could have been better dealt with. We could also talk in volumes about how the spill could have been avoided. I'm sure the mainstream media will cover these valuable issues, judging from the scale of the disaster. So in this respect, don't expect me to repeat what's regurgitated but rather spotlight the less published secrets and schemes meant to mislead the public and cover up the extensive relationship between policymakers and Washington and BP.

Now Obama might say anything tonight. And some people will believe him, no matter what he says. It's often easier to believe that something will be done than see it done. Obama's time in office can be characterized as lip service to the ideal, and doing the complete opposite.

I could list many examples of what Obama said on the campaign trail he didn't do in office. The glowing one, of course, is the failure to draw down U.S. forces in Iraq according to the promised timeframe. Escalating the Afghan war is something Obama never said he would not do, however.

As a side note, I found it amusing that a report just came out indicating Afghanistan had $1 trillion in minerals and natural resources. Of course, this bounty is the reason our occupation has lasted so long--a point I made on my blog years ago. If we won, we'd get to go home. A trillion dollars is a pretty good motive to find terrorists behind every bush, and press an unworkable plan into an unwinnable occupation. And meanwhile the Military Security Complex fattens itself on the blood of innocents and young Americans caste into the fray.

* * *

According to the Los Angeles Times, Rahm Emmanuel, Obama's chief of staff, was staying for five years in a Washington, D.C. townhouse owned by a BP adviser. Emmanuel has been known to say that no disaster should go to waste. This fits exactly with Naomi's Klein's concept of disaster capitalism, where corporation profit from inadequate enforcement except, of course, instead of greedy corporations it's crass political opportunism.

Money rules the Washington establishment, and the consensus in Washington is that corporations pay better than serving the public interest, at least as long as illusion that the public is being represented can be preserved. This is why the art form of perception management has latched onto the Washington establishment--feeding the myth that politicians are still serving their constituencies.

Maybe the unholy alliance between the corporate and political worlds has been at work for longer than we've realized. Wherever we now stand in the historical cycle--whether at some new low point or somewhere along a slippery, downward slope--it's obvious deft management of the media is seen as more than valuable than actual leadership. Preserving the impression that something is being done ameliorates the public's rightful skepticism. Meanwhile, deals in the back rooms and corridors of power allow the wealthy and corporations to avoid accountability.

Regulations are much criticized despite the fact they were greatly eviscerated prior to the financial crisis (see the testimony of Texas professor James Galbraith here.) Rather than presenting an obstacle to growth, regulations--if enforced--protect the markets. The trillions of equity (I've heard $10 trillion real estate and another $10 trillion in equity values) that disappeared didn't have to vanish. Yet the companies who kept pushing risky bets in the Wall Street casino gained the most from short-sighted speculation, exactly the thing Glass-Steagal tried to prevent prior to its dismantling by Congress.

So now, with all that oil bursting from the busted, under-maintained well in the Gulf, it's clear that a lack of enforcement is to blame. Self-regulation, a term that came into existence during the get-rich 1980s, simply doesn't work. The forces of greed are simply too strong in the corporate enterprise. Profit-taking is simply too short-term an approach to consider longer term consequences, even if they include self-destruction. British Petroleum stands now on that precipice. And if it'd go under, many investors and stakeholders would pay the price.

Those that profit the most in the short-term aren't likely to hang around once their mistakes impact the companies they once led. The executives who should have monitored the company's compliance will jet away and land in exclusive retirement retreats on golden parachutes.

We could blame greed for this--or the structure of corporate governance. All too often corporate boards rubber stamp the decisions of upper management. Shareholders rarely question the ethics or morality of board decisions, especially in regard to compensation committees. All too easy it is for board members to consent to huge stock options packages for executives, based on quarterly performance, rather than measure performance against longer term objectives.

The environment is a stakeholder in all corporations. Rather than look at the earth as a passive backdrop, a source of raw materials, to be plundered 'til exhaustion, all corporations must look at sustainability. Implementing sustainable practices requires full commitment by shareholders and corporate Board members who perform the invaluable function of holding executive management to account.

Like auditors, independent outsiders need to observe corporate practices and report on them. Most importantly, regulatory lapses must be corrected. If government regulators have recurring issues with a company, or its methods, the shareholders and directors need to take action. The BP case clearly shows the consequences of non-monitoring. And preventable are the effects if the causes are obvious for all to see (except perhaps the executives who are trying to squeeze maximum profit out of their operations by undercutting safety.)

Well, if BP should go under, I think the environment will have its say. Again, BP's misconduct wasn't isolated or random but rather sustained and serious. The company had been put on probation--which I said in my last post is an utterly meaningless proposition that obviously did nothing to push the company in to compliance.

Another huge lesson is for government. When regulators fail their job--as Galbraith's testimony linked above explains--everyone loses. Not only the offending company--the Enron, the Worldcomm, the BP--but so many people who had done nothing wrong. The lesson lies in government doing its job, and walls being put between the regulators and regulated.

Enough said. At this time we don't need lessons, we need to prevent the tragedy from worsening. Now isn't the time for opportunism, or even recriminations. It's time to stop the spill. If Obama can't do that, he'll almost certainly be tossed aside in 2012.

Obama appears to be having a hard time getting BP to pay all its claims. This shouldn't be a surprise. If you read my post on blogspot last month, you'd have been reminded of how long it took Exxon to pay the fisherman in Prince William Sound, and how inadequate their compensatory damages had been as awarded by a corporate-friendly Supreme Court some twenty years later.

Now if Obama can only spend our money--or our children's children's to be more accurate, as it's all borrowed--to clean up the spill, I'd say fedgov has become utterly toothless or so wholly beholden to BP that it socializes the costs of the companies pollution. Either alternative is unacceptable. We do know the taxes on oil drilling will go up, presumably to pay for future spills. Guess who gets to pay for the taxes? You. So because fedgov (especially the notorious M.M.S.) failed to regulate, and BP didn't self-regulate, you pay.

Unless of course you live on the Gulf, the largest impact will be higher energy costs. If Obama chooses to exploit the disaster by urging a carbon tax scheme, it'll provide a dark motive for not handling the response, or letting BP bungle it. Another impact: shipping into and out of the Port of New Orleans will be more expensive, and delayed, resulting in higher prices for some kinds of imports throughout the country, and lower prices for exports like grains from the Midwest which go through New Orleans, typically via barge down the Mississippi.

Under-regulated, BP pollutes. The corporate state capitalizes on the failure. And we get to pay, higher prices for gas and energy, as well as some imports. The scheme encourages wrong-doing and punishes the innocent unless of course BP really does go under, or the Supreme Court reverses its corporate-friendly bias and uncaps damage limits. Neither scenario--really the same issue, liability--is likely to occur. BP will be allowed to go on, and the costs in some way limited in order to protect the corporation.

~End post

Gulf spill shows scope of corporate control

BP manages its own leak with minimal interference from Washington. In a strained news conference--his first in 10 months--Obama did assert control but it just made the disaster seem to be less under control. The lack of an assertive federal response has really exposed just how much control corporations have over our government. Conspiracy theories will abound, as they have since 9/11.

The money connection is at the root of our government's subservience to industry. The corruption floats to the top. As we saw in the mortgage crisis, the worst culprit in the Deepwater fiasco is the company with the most influence in the White House. BP gave more money to Barry Soetoro--now known as Mr. President--than any other oil concern. Goldman Sachs was the biggest donor among financial entities--look at the preferential treatment they received.

And now with the Gulf spill, we see the payback, just like the response to the mortgage crisis.

As I've been saying for years, campaign contributions yield reciprocal benefits, a quid pro quo in which corporations influence and even set policy. This special treatment is most evident in times of crisis, which seem these days to regularly emerge from a lack of enforcement.

We're starting to see inconsistencies in the way the Deepwater spill is being managed. In Washington, the head of a government agency a thousand miles from the disaster recently claimed, alongside BP executives, that there were no plumes of oil beneath the surface. Evidence of a cover-up? Perhaps. See this ABC News video on a visit to a federal research boat that exposed the oil plumes here.

There's more to plume denial than trying to massage public perception about the scale of the disaster. There's the very strong motive of minimizing the scale of the disaster in an effort to protect the President's inadequate response. The agenda--make the response seem less bungled if the unfixed problems are...well...disappeared.

Then there's use of the toxic dispersants. Apparently huge quantities of less toxic dispersants were waiting dockside, ready to be used weeks ago. One possible motive for the dispersants is to mask the size of the spill by keeping it beneath the surface. Apparently the dispersants do keep the oil from rising to the top. In a technical process I can't fully explain, dispersants reduce the size of oil globs to tiny proportions, almost atomizing them. Unable to combine with gases, they tend to float suspended below the surface until, slowly, very slowly they eventually come up.

The whole bungling of the choice of dispersants sends echoes of Katrina, in which the government's response was too late and mismanaged. Rather than facilitate the best possible deployment of relief and rescue resources, FEMA charged in and assumed control. Boats and rescue teams like that sent from the State of Florida were forced to wait hours before getting the go-ahead. Salvation Army trucks were stopped. The list of mistakes seems so vast and incompetent that conspiracy theories about FEMA's real intentions can't help but arise. If we really in an age of conspiracies, the Deepwater leak will undoubtedly spawn endless theories about why our government did--or didn't do--what it should have.

I guess if the oil doesn't come up as quickly, the American people will be less concerned about the failure to more aggressively interdict the spill. If on the other hand, all the oil were to gush into the gulf current, then go up the Keys and east coast of Florida, we'll then there'd be a panicked call for stopping all drilling. Instead we saw approval for a new well head coming this week, despite Obama's hollow moratorium on new drilling. It's like a Bush-era redux: say one thing in public and do the exact opposite in private.

Another serious complication in the effort to stop the gusher is BP's likely intent to continue to extract oil from the well. This is a goal that the mainstream media hasn't advanced; re-starting the well, or at least drawing as much oil from the leak is likely seen as a small win for the company's bottom line, especially if there are millions of barrels still down there. Sure, BP would just as well have the leak stop, if for no other reason than the clean-up costs (delayed and minimized by the legal process as they likely will be.) Then again, a company that's participated in criminal behaviors will likely see the environmental cost as part of doing business.

At this time, BP was actually on probation for its failure to maintain a Texas refinery where numerous safety violations were reported prior to an explosion in 2005 that killed fifteen. It's also responsible for numerous violations and leaks at its Prudhoe Bay operations in Alaska. [Sorry Supreme Court, I guess the concept of putting a corporate person on probation doesn't quite work out here, unless of course the probation will land the poor corporate person in bigger trouble for Deepwater than they would have otherwise faced, an unlikely event.]

Now as for the Obama regime, the goal is to Cover-Its-Ass. I think passing the buck like it did is only a signal of weakness, and subservience to the corporate interest. The inadequate response speaks legions to the millions of people who trusted Obama to run government more efficiently. In addition to being a disappointment, I'm thinking the regime will be gone in 2012. Republicans might win big, but in our duopoly, this means that rather than bring change, the Republicans will screw things up, albeit in a different way.

Fertile ground for conspiracy theories

In my conspiratorial mindset, who benefits (qui bono) is a powerful means of connecting the motive with the end result. Like the Exxon Valdez, it's likely that BP will delay and fiddle on paying claims (of course they say that all claims will be honored etc. but nothing is in writing.) Good luck getting those years of wages back like the fisherman in Prince William Sound. So BP wants to reduce the perception that the disaster is as big as it really is, a point echoed in the somewhat dismissive comments about the leak by BP CEO Tony Hayward early on.

Obama's administration has responded poorly to the crisis. Not one to pass up the chance at a conspiracy behind the ineptitude, I'll venture that the inadequate response is somehow designed to achieve some policy goal for the administration. With cap and trade legislation before Congress, one can't help but wonder if the globs of oil which will be washing up are simply the product of error. Just like 9-11, we're caught guessing at motives behind the inadequate response.

The animated series South Park explained the conspiratorial inclinations of Americans quite well in an episode several years back. The idea that 9-11 occurred as an intentional plan makes the shock and horror of the incident easier to understand, the story line went. So stunned we're we the American public, that we had to believe that our government must have known. So self-confident are we that our government can prevent an attack of that magnitude, that we collectively assume our government must have known, as it surely could have stopped it.

As much as I like the reasoning, and as reasonable as the logic behind dismissing 9-11 conspiracy theories might sound, I'm simply not convinced. Maybe I'm too confident in our government's ability to sniff out the terror plot. Or maybe there are facts which I can't dismiss, and that lingering doubts about the Official Explanation make me prone to conspiracy theories.

Role of a corporate media

Without the oil spill, or mortgage crisis, the public is less aware of how tightly government and corporate interests are intertwined, due largely to a corporatized media. It takes a Deepwater, or a coal mine disaster, to prove just how total this corruption is, and how absolute.

The masses are also conditioned by the feeble corporate media establishment. BP advertises on many of these networks. We know media consolation brought down many investigatory responsibilities traditionally assigned to media companies. As Rupert Murdoch bought network after network, independent journalism declined and has been replaced by a heavily commercialized, bland, celebrity-centric version with dumbed-down content.

Newspapers and magazines are more about selling books and promoting movies than challenging prevailing assumptions. Without a diligent media devoted to unbiased coverage, we've actually lost the ability to monitor the actions of corporations. No where was the message elevated over content more than during Barack Obama's presidential campaign. The people were sold on hope and possibility. The reality was different. The night after his election, before even assuming office, Barack Obama instructed then-Secretary of the Treasury Hank Paulson to give Citigroup a $308 billion loan, according to Matt Taibbi.

Gullible people are prone to be surprised when the truth gets out--if it gets out. Most of the time, Americans are too distracted and consumed by the rigors of everyday life to devout much time to news, and the invariably dull but precious process of guarding our democracy. Our corporate media spares them the inconvenience. Easy it is for most people to assume there's nothing they can do, that they must accept what their government tells them to accept. As we saw in Hitler's Germany, even reasonable and generally good-natured peoples can be easily manipulated.

In the Nazi regime, there was this important tool devised to manage the masses. Hitler said that if people were inclined to disbelieve that their government would do something so obviously against the people, they'd disbelieve anything, so the more outlandish the conduct, the better the disguise. In proud nations, no one wants to think that their sense of nationalism is misplaced. So in some form of mass hypnosis we simply deprogram our minds to the possibility that our government could be behind something truly evil.

I've commented that the US is lucky no Hitler has risen to exploit the ignorance of the masses. Hitler used blind faith in nationalism and militarism to convince Germans of the dangers posed by internal and external enemies. With our military overcommitted in two open-ended wars, and our budget bursting with tax receipts dropping, the low road to stirring nationalist ideals is a bust, a weed-covered, muddy morass.

So the next trigger that the government will turn to will likely be the need to protect our shores, not from corporation who pose great danger, but from dissidents and anti-government types--whoever poses a threat not to Amerika but the Establishment.

Public fatigue in the terror war has already set in. Perhaps the fear button won't be enough to induce the public into a frenzy. Just like the boy who called wolf, our anti-terror policies have devolved to the point we call any of our enemies al Qaeda. Our drones rain down missiles on Pakistanis.

I've been hammering on the government's propaganda in Iraq and Afghanistan and I won't stop now. As long as the corporate news is content to regurgitate official news releases as original reporting, the quality of the content will be abysmal. I guess we can't blame the American public, as so few have the time or energy to do research on the war, or see if the government's previous goals were reached.

Can our current military achieve the goals set by the politicians? One of the biggest blame-getters for the Vietnam failure were the politicians. Nixon shouldn't have been selecting bombing targets. One important lesson Vietnam gave, and has been forgotten, is that war's are ultimately political exercises. The North Vietnamese may have lost virtually all its engagements against American firepower, but the impact of the perpetual stream of casualties on the domestic population kept growing. After a certain point, no one wanted it to be their child sacrificed in a war without end.

Afghanistan is heating up. We're facing a determined foe in the "graveyard of empires." Fighting an insurgency is a time-consuming and expensive endeavor. As long as we can avoid a draft, and casualties come from volunteers alone, the domestic political impact might be minimized. Still, in time, we'll see stiffening antiwar resistance.

It's just that the impact--especially the fiscal one--is severely delayed. It wasn't until 1971 or so that Nixon abandoned the gold standard. Any student of economic history knows what happened in the Seventies.

Tough sailing ahead

We'll people, that's where we're headed: back to the 70's and stagflation. Slow growth (once inflation is factored out) is a certainty. We're seeing declining tax receipts, which means government spending will become increasingly monetized--printed out of thin air. The Federal Reserve banks are destined to profit as the interest on the national debt--which the Treasury must market through the Fed--grows. Interest rates will rise into the double digits.

Our nation's economy is in a state of decline. The only way we can recuperate appears to be by our government's borrowing money, then spending it on census workers. As people like Peter Schiff have been saying, the government's spending has supplanted private sector growth, and is in fact delaying and weakening a potential recovery.

Our problems are also demographic. Baby Boomers dominate the agenda. Aging, they're inclined to amass as much personal wealth as possible in the time they have left. This doesn't bode well for future government outlays on medical care and social security.

As much respect I have for Baby Boomer's devotion to work, I believe the time has come to replace them yet they are obviously irreplaceable. Still, to build an economy beyond the Boomer years, we'll need to invest massively into younger people, something that really isn't happening as education spending falls. With there vast skills, Baby Boomers mentoring younger people in the workforce is not only crucial, but increasingly urgent.

Down on dollar

As you can suspect, all this doesn't bode well for the value of the dollar. I've been watching the increasingly propagandized, Larry Kudlow-dominated CNBC rant on about "troubles in Europe." What a crock! Greece compromises a tiny portion of the European economy. The Euro is down somewhat but this is hardly a contagion. And of course American traders love to introduce the idea that the US dollar is the safer bet.

I'm not predicting that Europe will be a haven of fiscal discipline, or that their currency will maintain its value-after all it's a fiat currency like the dollar. the whole point of the whole dollar vs. Euro exercise is to obfuscate the face that our spending is completely out of control. And the biggest reason for overspending--and the easiest way to rectify the fiscal deficit--is to stop spending on senseless wars. Yet we can't and won't. And I think the Afghans, like the Vietnamese, have something to do with that. Better that we leave now than blow our wad. If we are in fact competing with Europe...and Asia for that matter...we need to realize that those governments don't have such a unnecessary burden of military spending to deal with. So if any currency is destined to collapse, it'll be the dollar first.

I'm not an investment adviser. I have nothing invested in dollars at the present. I like the Norwegian krone, and Singapore dollar. Swiss francs interest me as well--I know there's an ETF called FXF tracking that currency and it's down.

I wouldn't expect these foreign markets to do especially well if our economy tanks. Nor would Europe's. However, it's my opinion that the relative strengths of those currencies, and their sounder fiscal practices, will make them attractive compared to the over-militarized policies which will invariably drain the value of the dollar.

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Deepwater disaster could have been prevented

As I write a river of oil blows towards the Gulf coast. Details of the precipitating event have emerged. Blame is squarely on BP, British Petroleum.

Victims of the tragedy include fisherman--recreational and commercial. I'm sure the economic impact of the Deepwater Horizon oil rig-turned gusher will be far worse than predicted.

The worst part of this tragedy is that the well continues to leak. Huge amounts of oil remain unseen, under the surface. Considering the well's depth, at some 5,000 feet, an emergency operation remains challenging and an easy fix elusive. The wellhead is on the ocean's floor and spewing out an indeterminate amount of oil.

Part of the crisis response effort has been to bring as many parties as possible on board. BP's chief of operations said any help from anyone would be accepted. This methodology leaves me wondering if the response has been as dynamic and robust as needed--shouldn't BP be more specific than accepting all help? I mean, I would hope BP has a planned response more detailed than just throwing more resources at it, like the miles of boon that have been laid in a feeble attempt to stem the tide.

Looking back at Katrina, the Deepwater disaster sends echoes of government inaction. All the parties involved in the response undoubtedly don't want to appear to be doing nothing. So official news briefings and perception management try to appear responsive and robust, whether or not they actually are. The result is that the parties responsible for the response try to offer counter-directional spin in the mainstream media--that they're doing something, which is evidence of an agenda other than to tell the public the unbiased, whole truth, no matter how ugly.

Oddly, many news networks devoted constant air time to a serious but failed car bomb attack at Time Square. Conspiracists will no doubt be quickly guessing that the one had something to do with the other. In this sense the Internet hosts in hyper-time huge numbers of doubters of the Official Explanation: a growing crowd of wired non-conformists eager to confront media myths, spin, and blackouts.

Coordination between the Coast Guard, Department of Homeland Security, and Department of the Interior involves massive layers of government bureaucracy. All three organs have their own heads, and while interagency communication protocols may make coordination easier, there are simply too many decision-makers to react quickly enough to a tragedy of this size.

We don't know if a single head of the operation would be better or not. Right now a Coast Guard admiral is at the head of a multi-pronged response that also includes BP and Transocean, the rig operator.

Issues of whether or not the response is adequate or expeditious can certainly wait. In the meantime we have a New Orleans Katrina-type environment evolving. The poor, mostly black people stuck in the Superdome and New Orleans Convention Center have been caught on television, demanding rescue. Expect this time instead of people, there are birds who stand to be coated in oil--an event which will certainly remind Americans of the Exxon Valdez tragedy in 1989.

In that episode, thousands of Alaskan salmon fisherman were made unemployed for years. The case reached the Supreme Court only a few years ago. Over the years, the Court had turned largely sympathetic to the interests of Big Oil and ruled against any punitive damages. The legal case did foretell a sequence of what might be called "pro-business" rulings, the latest of which has been to give corporations legal standing as corporations--a completely ridiculous notion that I attack on the second page of my last article at OpEdNews.com.

However unsatisfying the final ruling on the Exxon Valdez judgement, the Courts also took too long to resolve the case. The delay came as a direct result of Exxon's massive legal effort to delay a settlement, based on the premise that the interest on the settlement was more valuable to the company than a final adjudication. So the case went on, with no side but rather the lawyers winning.

I pity the poor fisherman and their families in the Gulf who rely on clean waters for their livelihood. The tragedy will expand geometrically if the oil flow isn't curtailed, which appears to be a difficult and time-consuming task. Estimates for the size of the oil deposit vary. If something isn't done to stop the flow, we could be facing one of the worst environmental tragedies to hit our country.

The emerging economic impact will be two-fold. First, there will be the loss of jobs in fisheries, and other professions dependent on the seas. And the loss of income will reverberate through the communities that live the Gulf. We might see a wave of environmental refugees forced northward, unemployed and miserable, bearing little money and down on their luck. This would be like the days after Katrina, where an exodus out of the city left natives of New Orleans marooned far from their city.

Then there will be a drop in tourism due to the fouled beaches. The tourist impact will be the largest fiscal cost. I heard on CNN that Walton County, Florida is projecting to experience as much as a $1 billion loss in economic activity. If one county faces that kind of loss, the entire region--which compromises some of the nicest beaches in America, could face economic devastation.

The impact of this tragedy will last for years. For as long as oil plagues the water, the ecosystem will suffer and the business that depend on it, too. Despite modern technology, and frequent urging to "drill, baby, drill", the economic benefits of domestic drilling will be overshadowed by the consequences of potential spills.

If domestic drilling were a solution to our energy dependency--a notion with which I disagree--then the Deepwater incident should be cause for real alarm. Incidentally, it's not the blow to oil production that a moratorium on drilling presents, but rather the potential impact of spills on affected businesses and consumers. Calculated into the drill-at-all cost "solution" must be the direct costs of pollution and spills, which will easily eclipse the value of the oil itself.

For BP, the cleanup appears to be at this point simply be the "cost of doing business." This sounds a lot like Massey's energy recent mine explosion, which came as the result of numerous safety violations.

If BP, like Massey, was simply ignoring the infractions to save money on correcting the underlying problems, then this tragedy could have been prevented. If regulations were not enforced, then our government bears much responsibility.

No matter what the eventual court settlement, or how long it takes, BP will likely avoid many of the damages due to sympathetic judges on the Supreme Court. As long as rulings like that which granted corporate personage continue to emanate forth from On High, it's unlikely that polluters will face the full fiscal ramifications of their regulatory non-compliance.

You can see a clear pattern developing where the government fails to enforce regulations, which may in the short term benefit corporate constituents. The Massey and BP incidents show--alongside the far-bigger financial bailout--just how close government and the corporate interest have conjoined. Ironically, the Deepwater incident will reveal the real economic cost of not complying with safety standards and regulatory compliance.

Without a viable third estate--an unbiased and unafraid media--it's unlikely corporations will be held accountable. Worse, the lack of investigative journalism--for fear of alienating advertisers--will cultivate an attitude of defiance among the regulated. The lack of negative consequences will encourage potential polluters and companies intent on exploiting their influence and the lack of regulatory enforcement. Maybe the hot to BP's stock price will be sufficient incentive to avoid safety errors of this magnitude. Or perhaps not, particularly if BP has the benefit of sympathetic courts.

In its Texas refinery fire a few months back, BP showed itself to be the kind of company that shirks its regulatory responsibilities. In the Deepwater incident, it's joined by Transocean, a company about which I know little, and the infamous Halliburton, a company formerly led by Dick Cheney, who held approximately two million shares of company stock while serving as Vice President. Halliburton, by the way, had its stock price climb over 200% as a result of the decision to invade and occupy Iraq. It's been accused of shoddy construction, illicit deals, and a myriad of other ethical violations in Iraq.

So should we be surprised that a corruption of the public interest precedes a environmental catastrophe? Of course not. As much as the Republicans bang away against regulation, a major cause for the worst economic events of the recent past can be directly traced to inadequate enforcement by federal agencies.

The Minerals Mining Services is a branch of the Department of the Interior that was caught accepting hookers and drugs in exchange for favorable treatment of businesses signing leases with the federal government. M.M.S. has offered bargain-basement leasing terms in sweetheart deals to extractive industries. So bad were some of these contracts that they were actually renegotiated after the scandal broke. See this article at propublica.org for more.

All this collusion between big business and the federal government really does show how badly corrupt both have become. The businesses spend to wine and dine in Washington through trade associations and industry groups. Meanwhile, politicians eagerly dispense reciprocal favors, resulting in a perversion of the enforcement scheme, not too unlike the Madoff case. Madoff's daughter actually married a SEC auditor!

One common hallmark of manmade disasters is that the corruption and regulatory breakdown lead to even bigger disasters. Without enforcing the rules on the books--a task which can only fall to government--scandals and disasters will be both worse and more frequent, as were seeing in our society today.

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Drilling for profit in all the wrong places

John McCain and Bush are calling for a grand solution to our energy woes: tapping the billions of gallons of crude that lie off our coasts and in our wilderness areas. Less obvious is just how easily the oil can be extracted, refined, and brought to market--here. Some of the reserves on the Continental Shelf lie within eyesight of some of Florida's internationally renowned beaches. Other areas out farther in the Gulf are now accessible to drillers but lie up to five miles underwater, which will test the limits of engineering. Even if the oil can be brought up, it will take billions of dollars and years of time.

Drilling concessions to Big Oil need to be tempered by environmental standards and limits on oil company profiteering. Unfortunately, the spiralling cost of oil encourages producers not to produce, but to rather sit back and wait to sell into higher prices in the future, a practice which tends to run prices up even further. Democrats claimed that oil companies already "have under lease 68 millions acres on federal lands and waters--outside the ban area--that are not being developed." (link).

Allowing those who control the drilling and manage our supplies to lease more lands allows them to sit on the reserves. They could sublease the fields and make huge sums simply acting as intermediaries between the government--every successive regime sees itself as uncontested "owner" of all public lands--and the actual drillers and refiners.

As margins shrink, distributors have been squeezed out of the industry as the costs of petroleum go up almost daily. Gas retailing is extremely low margin, less than 4%, to the point some outfits have gone to cash only to avoid credit card surcharges (link). One oil producer, Exxon Mobil, just sold all its distributorships. More profitable it is to ride out the higher prices than to compete on the distribution end, where higher fuel costs mean constantly shrinking profit margins. Like inflation, it can takes several days for higher prices to result in higher prices at the pump --distributors eat the difference.

Fruit falls near the tree

One would think that the public would grow suspicious of the motives of long-time incumbents with ties to the oil and natural gas industries. Bush, who hailed from Big Oil, has presided over a regime that has seen the price of crude oil go up almost ten-fold.

I'd cited a few posts back a CNBC poll that placed blame for the higher cost of oil on a number of different players. Bush finished well back in the poll, behind Congress even, for his role in bringing higher oil prices. Many CNBC viewers are "free-market capitalist" Republicans, so they might have a hard time believing that the actions of our government could account for such a huge swing on prices set in what is a supposedly open market. For years this group has blamed government regulation, a Chicago School of Economic hobgoblin for some time now, as the chief source of problems in what are otherwise perfectly functioning markets.

Given the predilection to demand government get off our backs, it should come as no surprise then that Republicans would tend to blame a domestic drilling moratorium for the higher prices. Much harder to confront would be the reality that continuing military intervention in the world's largest oil-producing region could be to blame. Yet as has become the norm under the Bush years, disconnnecting causes with their effect has become a way of coping with a world that simply won't cooperate, and a world that won't give us what we want, no matter how much we deserve it, or how righteous our cause in the War on Terror.

If one looks closely at the price of oil and its trailing indicator, oil company profits, the run-up in oil prices came well into Bush's term, after 9/11, so terror wasn't the cause--the reaction, the wild lashing out, was. The spike upward began almost precisely as US tanks rolled across the Iraqi border from Kuwait. Coincidence? Impossible. Bush and two million share Halliburton sharehold Dick Cheney are intimately tied to Big Oil. How can we separate their commitment to increase profits for their cronies from their actions? Can we really believe that the President was invading Iraq to spread democracy and secure the world from the spread of terror as he claimed? Or can those of us who dare to think for ourselves consider the connection between the rising oil prices and the actions of our President? Cause and effect are quite pronounced in regard to the price of oil--one need only consult the charts showing oil's steady march up.

Of course other factors have pushed the price of oil up. For one thing, China's economy has grown and generated much more demand for petroleum. India and a host of nations have a growing middle class which emulates an American standard of living built around cars and suburbs. Demand in the US has increased, due mostly to the inability of Washington to redirect national priorities. We consume 25% of the world's energy though we make up but 5% of its population.

Congress can be blamed to some extent for caving in to the influence of the now-not-so-Big Three automakers (Chrysler's stock is now valued at under $1billion, making it a mid-cap.) Detroit was content to push massive SUVs and stave off new CAFE standards as long as possible. That plan is proving unsustainable with higher gass prices--it'll be a miracle if US automakers can catch up with the Japanese and Koreans, who've made fuel efficiency key to automobile design for years.

Time for real change

It is the job of a real leader to push for changes where momentum to keep doing as before is so strong, as it is in America's gluttonous use of oil. A President is elected to lead and to force change even where it's not welcome, like in the corporate boardrooms of Big Oil and the automakers. Now if the President is no more than a corporate shrill beholden to these industries, he'd be less likely to exercise his leadership. Leadership failures are therefore not failures at all, but rather grand deceptions meant to benefit the few at the expense of the many.

Large entities do tend to drift into complacency--leaders who can bring change represent a threat to the status quo rather than the means to create a better future. In a style favored by the Washington establishment, rhetoric is fashioned to appeal to the populace, whether or not the candidate really believes in the things they say. The difference between leading and pretending to lead is a willingness to confront the need for change and the constituencies which oppose it. The benefits to our society have to matter more than the corporate sponsorship offered to politicians in exchange for serving the interest of the few. Washington becomes particularly monolithic at the end of a numbing eight-years under a single President, the capital seems more averse to change the more it needs to change.

Nothing Bush has done would indicate any commitment to change. Yes, there have been rhetorical pronouncements, but little of substance has been achieved in regard to energy policy. Most glaring is the complete absence of any conservation program whatsoever.

I'm old enough to remember the Carter years, during which we Americans experienced what I believe was the second major oil shock of the 1970's. Starting at federal offices--which were supposed to start a trend--thermostats were turned down. The speed limit on the entire interstate highway system was brought down to 55 miles per hour. Executive orders were used to force government departments to save on energy. Acting on the President's example, private corporations and individuals all across the nation joined in by reducing costs, commuting, doing whatever it took. Where is that conservation effort now?

Surely turning down the thermostat a few degrees is not such a great sacrifice, nor is signing an Executive order forcing better fuel economy standards on federally owned vehicles that big of an effort. Therefore it's something other than the effort to change that is missing--it is the lack of a desire to change. In short, the White House doesn't want to change, despite the fact it could through no great hardship bring conservation to the forefront, where it most deservedly belongs in this time of crisis.

One could suspect that the lack of leadership on this issue is not the product of happenstance, but rather the absence of leadership is perhaps the willful desire of a regime wedded to its cronies in the oil and energy businesses.

Now we are told that the windfall profits of these companies shouldn't be taxed. To go a step farther in their prostrations at the feet of Big Oil, McCain and Bush vow to make every orifice available for drilling and exploration, to solve America's energy crisis, a crisis that would likely never have been so severe if energy conservation had begun, or if US forces weren't still threatening the stability of the world's most important oil-producing region.

Could the higher oil prices and the actions of the Executive be related? How could they not be? Looking now at the consequences of inaction on energy, and the giant hole that higher energy prices have created in our economy, it's hard to believe that the damage could have been intentional. Then again, if there's anything that Bush's time in office has shown us, it's that we are truly on our own. If it's a YOYO (your on your own world), the first objective is to get your own piece, then build a bunker, or escape, and let the weak and vulnerable reap the consequences of whatever may come after.

"Apres moi, le deluge," the French King Louis the 15th said. This in English means "after me, the flood." The King knew what would come, the French Revolution, largely because he had done so much to bring it on, by overspending and constant war-making with other European nations. Perhaps Louis got off on his grand legacy, knowing that whatever would befall France, would be as the result of his excesses. In this regard, the King would be the last of his dynasty, part of an unsustainable system of government by a French nobility that had little concern for the lower classes or the consequences of their leadership (or absence of it.)

Just how much flooding is there to come in the wake of Bush/Cheney's eight year reign? As the Mississippi river floods town after town along its banks, we're left to wonder just how big of an impact higher gas prices will have. There will most certainly be a ripple effect, despite the best effort of government statisticians who separate food and energy from the core rate of inflation, as if food and energy didn't matter.

Try as they might to minimize the impact, le deluge will likely flood virtually everyone's home, with a force and fury mightier even than the Mississippi's. We've built a suburban lifestyle here in America that requires huge amounts of energy. Our homes are too big, as are our cars. And worst of all, Americans are woefully ignorant of how much energy we use. TVs are left running; car motors are revved even where a stoplight ahead is clearly red. It's as if not knowing how much we use allows us to keep on wasting energy--as if so many wasteful choices won't add up or hurt us if we simply don't acknowledge the problem. Denial it's called--sooner or later the pain of higher energy prices will cause the addict's inevitable bottoming out that brings to the mind's fore the scale of the problem and desperate need for change.

Much talk of a second depression is rooted in Peak Oil. There is however plenty of oil, except that it's not as easily extracted. Much of the oil off our coast is likewise hard to obtain. Available, yes, cheap, no.

Yes, we can produce billions of gallons, but at what cost to our tourist economy? Bush has authorized coastal exploration at the federal level, which means that it will be up to the states to drill or not. Some states might go ahead, despite the risk of beach contamination.

We can't drill our way out of this--an approach that the Republicans are tossing around as if it were possible to reverse the reliance on imported oil--which now provides something like 60% of our petroleum needs. I've heard that the Alaska National Wildlife Reserve (ANWR) holds about 2% of the US' annual needs, and will only pump out for 20 years. What then? We'll still face the same predicament, and by then our government will likely be even more indebted.

A pipeline is very vulnerable to sabotage; a single rifle shot in late 2001 shut down the main Alaskan pipeline. There is also the highly ironic quandary posed by melting permafrost, which makes the construction of pipelines very expensive as they must be built above ground on elevated platforms. BP was fined for massively polluting an Alaskan oil area as their inadequately maintained, corroded pipes burst. As with Exxon Valdez--whose damages to the victims have yet to be paid by Exxon--shows, the oil and natural gas industries are neither efficient nor especially careful. And should they make a mistake, they will most assuredly use whatever political influence they have and the best lawyers available to avoid legal and fiscal accountability.

Polls have put a narrow majority of Americans in favor of drilling in wilderness areas; these results are brought forward by pro-drilling groups and their media allies. The connection between new drilling and lower gas prices is hardly convincing, yet our commitment to protect and preserve our national heritage, the raison d'etre for creating these places, is under constant pressure by those who would exploit these resources for their profit. Signing drill rights away depreciates past efforts to protect these lands-they were set aside for a purpose that is neither economic nor the selfish domain of this generation to deny to others. Permanent disfiguring of these places marginalizes their value as wilderness areas in which future Americans can recreate, in effect denying their use and the purpose for which they were created.

Now if Bush and his cohorts could simply auction off every national park, reserve, forest, and wildlife management area to their cronies in Big Energy, they would. And no thought would be given to the environmental devastation, which could well assume massive financial consequences to affected regions, if the Valdez is an example. An oil leak off the coast of Florida, to give just one example, could decimate that state's economy for years. Besides, the benefit of oil leases to the general public is a small fraction of the benefit to the developer. Oil and natural gas developers do have to contend with massive start-up costs. We are of course routinely reminded by their lobbyists in Congress that lower government regulation would make things less expensive and therefore cheaper for the consumer. This despite recent testimony before the Senate Commerce Committee that attributed approximately 1/3 of a barrel of oil's cost to speculation.

During the June 3rd meeting, Michael Greenberger, a former Director at the Commodities Futures Trading Commission, linked the activities of speculators with the higher price of oil. This idea in itself is controversial to many of the corporate interests which want to seize on the "oil crisis" by expanding drilling, typically through absurdly low lease rates on federal lands. I'm trying to dig out the video from that hearing, as I'd been surprised by its candor and Greenberger's highly persuasive commentary. I wonder if the challenge I'm having getting a link might be precisely because the hearings were so direct, which flies in the face of Washington's obstructionist and byzantine functionings which seem to avoid scrutiny and transparency, in an effort to limit accountability.

In a Senate Democratic Policy Commitee Hearing in May, 2006, Greenberger traced many of the problems we face to speculation. In that testimony (.pdf), Greenberger separates the distinct objectives of one group of companies--those that pay for the higher price--from the "oil industry, the banks and the hedge funds, and free market-oriented financial regulators who contend that market manipulation plays no role in this price run up" {Footnotes omitted.}

Greenberger goes on to link Enron's price manipulation schemes with higher energy prices in California in 2001-2. It should be noted that those higher prices were brought on by de-regulation. Enron--it should be remembered--was the #1 donor to George W. Bush. In return for this financial support, federal regulators were held at bay in a quid pro quo that might be repeating itself for the benefit of oil speculation. Of course California had some serious energy issues at the time, but it was the combination of a weakened regulatory environment, coupled with predatory practices by greedy corporations, that led to a worsening energy crisis. In this sense, California's energy woes then acted as precedent for what's happening on a natural level now. Led by mostly GOP partisans, our elected representatives might view the oil and gas companies as the solution to the problem and simply give them what they want, as we see happening with unconditional funding for Iraq. This despite the clear mandate the Democrats received during the 2006 election to end the war. In both cases, the popular will is subverted.

The same people who advocated abandoning so many of the regulatory and environmental standards are the same people speculating on the higher prices. According to Greenberger, limits on speculative activities that stood in place for over 70 years in the commodities market were recently removed. Investors in energy companies, meanwhile, have the most to gain in the short-term from de-regulation, which allows them to raise prices in exchange for opening up their markets to competition (which unless you have a few billion lying around most likely won't mean you.) Even today, we can hear the constant bleat of market mavens who advocate drilling more of less everywhere, as if these speculators had the best interest of the American public at heart. While lower gas prices may have a stimulative effect, lower prices may be quite some time in coming, as the reserves located off our coasts will take years and billions to develop. Many of the speculators will help invest, but they won't do so for free, or for a rate of return which is lower than that they can get abroad.

This article in smirkingchimp notes how Morgan Stanley now owns more oil than any oil company. Through the derivatives market, huge quantities of futures are bought and sold, often without any link to the underlying commodity. Securitization--the use of sophisticated financial contracts--overshadows the buying and selling of actual oil. Like bundles of mortgage-backed securities, Wall Street pounced on commodity contracts as the natural consequence of easy credit and too much capital available for speculative purposes from hedge funds and banks. With excess capital to invest, real assets like oil become more attractive. As more and more money flows into those assets they appreciate, further increasing their demand and price.

In reality, the rising asset bubble we saw in real estate has found a new bubble: commodities. Money likes to follow money; once the consensus that oil is headed up gathers momentum (CNBC's oil price ticker refers "America's oil crisis"), then further price gains become almost certain.

Government regulation is here for a reason, and where markets de-regulate, we are made painfully aware of the reason for the existence of regulations--to protect consumers from the inevitable greed of the capitalist system, whose mantra is "greed is good." In the constant effort to attain higher profits, sacrifices are willingly made to the environment, and short-cuts taken, even in some cases to the detriment of the companies themselves. Sustainability is not a virtue; more attractive to these investors are the corporate raider-style tactics of a Carl Icahn, who come in and plunder a company's name and desert its stakeholders. Looking at the companies where Icahn and others like him have had their say, very little or nothing is left over. TWA and Enron are great examples.

We can't afford to let Big Oil control our energy future. The public lands belong to us, not our government, and therefore we retain exclusive control over their use. Leases must be fair, and the lessees held accountable for the efficiency of their operations, as well as the environmental impacts. Above all we need to reduce energy consumption, which will reduce our demand on imported energy, much of which comes from nations who are either hostile to us, or are our strategic competitors, like Russia and Venezuela. Yes, we need domestic energy production, and we can do it more effectively through renewable, low emission resources than through oil, which through the combustion engine guarantees increasing levels of CO2 and greenhouse gases which will further radicalize our climate.

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