Economic coup d'état?
Earnings of the nation's major oil companies climbed by an average of 68.9 percent in the second quarter, and these gains have revived accusations of oil industry profiteering that promise to become a focal point as Congress debates President Carter's “windfall” profits tax.
Some critics point to Texaco's earnings statement as an example of the alleged distortions in the petroleum industry. In the first six months of the year the earnings of Texaco, the third largest domestic oil company, increased 106 percent to $672.4 million. But its production of oil and gas increased by only 7.2 percent. Refinery runs were up a meager 2.7 percent, and the sales volume of petroleum products registered a slight decline.
Increase in Oil Company Profits Revives Criticism of the Industry
- NY Times: July 30, 1979
By Gregg Wall (6-11-2022)
Since the time of John D. Rockefeller, Big Oil & Gas has a long, unsavory history with America, a track record that has only grown increasingly evil & nefarious over time.
When Big Oil & Gas isn’t burning down the planet, with a pending climate catastrophe, it holds undue sway over global governments, democratic leaders, and political parties. In the United States, Big Oil & Gas flat out owns the Republican Party, which can always be counted on to champion the deadly energy source’s lost cause. The MSM and Independent media have documented Cancer Alleys near oil refineries, and it’s been widely reported that one in five deaths is now linked to fossil fuels, production & refining contaminates, and industry related pollution. Let that sink in. Twenty percent of the world’s population dies, prematurely, because our ‘leaders’ – not the American public – but because our leadership are either bought off or afraid to take on an industry that has only grown more brazen and powerful.
And it only gets worse from here, as the Big Oil & Gas catastrophe changes climate patterns, heats up the planet, and causes droughts… farmers’ fields and livestock are also threatened. Which in turn, coupled with food monopolies, sends grocery bills soaring.
Two notable news items this week… clearly drive home the point that, Big Oil & Gas holds a stranglehold over the global economy and governments. This week, it was reported that US inflation hit a high last seen in the early eighties, at 8.6% (nearly all of it driven by fossil fuels energy and food). Also reported this week, today in fact, gas has now hit $5 at the pump, for the world’s largest energy producer, the United States. A figure that is altogether insane, given that the US is a net exporter of gas and oil and is energy independent. Factor in landlocked Canadian production, sent through the U.S… and North America – as a matter of public policy, as a matter of energy policy – is exporting production and gasoline offshore, almost entirely for the exclusive benefit and enrichment of Big Oil & Gas utilities, billionaires, and Wall St.
So, to recap, Big Oil is the existential crisis of our times… it threatens the planet, the food we eat, the air we breathe, sound democratic government, cogent & moral energy and public policies, and buys off & corrupts politicians. Let’s add to the list: finances dictators, despots, terrorism, and war. See the Ukraine, presently, and any number of authoritarians, human rights abusing dictatorships throughout the Middle East (that the US supports as a matter of national security).
But what if we were to take this a step further. What if I told you that the power of Big Oil & Gas is so great, its tentacles reach so far into the economy & government, that the industry effectively has the power to remove a U.S. president from office?
Arguably, that’s exactly what happened to U.S. President Jimmy Carter, who served from 1976 to 1980. Mr. Carter was not your everyday President. Mr. Carter came to power during a time of great inflation. In the seventies, two oil price shocks occurred, one of which happened under Mr. Carter’s watch (after the overthrow of the Shah of Iran, a key US ally and supplier of foreign oil). Granted, unlike today, the U.S. was highly dependent upon foreign oil, but very much like today, Big Oil & Gas made record profits, extraordinary profits, off American consumers with a debilitating impact upon the economy. In the calendar year of 1979, and conveniently enough headed into Mr. Carter’s re-election, the global price of oil doubled. American consumers were furious and turned Mr. Carter out of the White House in the next election, in favor of Ronald Reagan and the Republican party (the political party favored by…. Big Oil & Gas).
President Carter was brilliant. A man way ahead of his times, he knew that America would be at the mercy of the Oil & Gas industry, as long as the country did not build up alternative fuel sources and end its dependence upon foreign oil. Mr. Carter was big on renewables, solar, hydro, geothermal, and alternative fuel blends. He actually declared May 3rd 1978, Sun Day. He had solar panels installed on the White House. Carter’s actions couldn’t possibly have gone unnoticed by the dictators, politicians, and thugs dependent upon, or owned by, the Oil & Gas industry.
In summary, out of control oil prices in the late 70s served to enrich Big Oil & Gas beyond all measure; but also removed a President in power, in favor of a right-wing conservative, that would cater to the Oil & Gas industry’s every whim.
Need another example? Examine current President Joe Biden… a Democrat, who also had bold Green Energy plans, to be funded under his Build Back Better initiative. Mr. Biden’s plan was a direct threat to the fossil fuels industry, and so once again, gas prices are soaring at the pump. And I predict, they are just getting started. The goal of sending gas prices ever higher, by all appearances, like the 70s, is two-fold: unseemly profits for an industry of crooks, despots, and oligarchy; but also, to remove Biden and any possibility of Green legislation … to be replaced, after one term, by, you guessed it, another Republican president.
Do I know definitively, that the president’s defeat and removal is on the Exxon board’s and CEO’s minds? No, nor am I aware of any PowerPoint presentations or any news stories that spell out what I’m pointing out today… the net effect of higher gas prices is to reap huge profits, but also overthrow a sitting president (for even suggesting America remove itself from the vice like grip Big Oil & Gas holds on the American economy’s throat).
Coincidence? We saw it the 70s, under Mr. Carter, and we are seeing it again, now, in real time, under POTUS Biden. Larry Summers and Republicans have been crowing about inflation for months, and when inflation didn’t materialize, or arrived in a muted form, the price gouging commenced.
I have a tremendous amount of respect for Mr. Carter… historians have not been kind to him, but I believe a reassessment is in order. And that over time, historians will have even greater respect for President Carter, a forward-thinking and very intelligent leader. Dem leaders, like Clinton and Obama, who have fared well initially upon leaving office with historians… I predict time will not smile on these two presidents. The two Presidents – Clinton & Obama - authored and preserved neoliberalism, that is the very libertarian policies that led to America’s failed monopoly/Wall St economy. Moreover, both presidents, Clinton & Obama, failed to take the opportunity to pivot the nation to alternative energy sources (leaving the US at the mercy of Big Oil & Gas, today). The verdict is still out on Biden. While his initial goal of passing Build Back Better, with a substantial renewable energy component, was a long overdue and positive development. Biden has done very little to fight for his program and appears to have pivoted to austerity & policies that crush aggregate demand, with a punishing impact upon Americans and the US economy, as a means to combat inflation.
Biden’s failed neoliberal advisors and economists believe the way to handle inflation is to punish American consumers & workers, by shutting down the economy with higher interest rates and via fiscal austerity. These so-called liberals have done little, if anything, to raise the minimum wage or increase workers’ rights to organize. In fact, by sending the economy into a recession, these neolib economists virtually guarantee that disenfranchised workers will have less bargaining power with employers and face even greater wage stagnation. Biden – like many of today’s Dems and GOP - has shown little courage and initiative, beyond words, in taking on the primary sources of inflation: price gouging cartels, monopolies, utilities, and Wall St.
The bottom line: Dems will, very likely, lose control over Congress in November. The fiscal and monetary prescriptions adopted by Dems and the Federal Reserve may mitigate inflation to some degree, by driving the economy into recession. The policy prescriptions, however, will harm American consumers and labor, while leaving the drivers of inflation – cartels, monopoly, oligarchy, and Wall St – unscathed, unregulated. Hence, infuriating consumers, labor, voters.
Industries with inelastic demand, and with monopolistic control over their sector -- by accident or design -- can and will likely continue to wage war on the Biden administration & the US economy, effectively waging an economic coup d'état against the president.
Unfortunately, for America, and very much like the televised hearings on the January 6th Coup… the Democrats, and a handful of Republicans, know what the problem is; but few, if any, lack the courage to act against America’s colossal fossil fuels problem or the fascist GOP that support the fossil fuels industry. The blame for this failure ultimately falls on Democratic party leadership and their ultra-wealthy donors (many of whom, are cashing in on higher fuel prices at the pump).
Copyright JM Hamilton Publishing 2022
