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Nasty Cover-Up Gets Exposed

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Ever since the Deepwater Horizon oil rig disaster occurred on that horrible, twentieth day of April 2010, I have been criticizing the cover-up concerning the true extent of this tragedy.  Sitting here in my tinfoil hat, I felt frustrated that the mainstream media had been facilitating the obfuscation by British Petroleum and the Obama administration in their joint efforts to conceal an ongoing environmental disaster in the Gulf of Corexit.  On July 22 of that year, I wrote a piece entitled, “BP Buys Silence of Expert Witnesses”.  On August 26 of 2010, I expressed my cynicism in a piece entitled “Keeping Americans Dumb”:

As time drags on, it is becoming more apparent that both BP and the federal government are deliberately trying to conceal the extent of the damage caused by the Deepwater Horizon blowout.

I got some good news this week when I learned that the mainstream media are finally beginning to acknowledge the extent of this cover-up.  While reading an essay by Gerri Miller for Forbes, I learned about a new documentary concerning the untold story of the Deepwater Horizon Disaster:  The Big Fix.

Once my enthusiasm was sparked, I began reading all I could find about this new documentary, which was co-produced by Peter Fonda.  The Guardian (at its Environment Blog) provided this useful analysis of the movie:

The Big Fix, by Josh and Rebecca Tickell, re-opens some of the most persistent questions about last year’s oil spill.  How BP was able to exert so much control over the crisis as it unfolded?  What were the long-term health consequences of using a toxic chemical, Corexit, to break up the oil and drive it underwater?

Rebecca Tickell herself had a serious reaction to the chemical after being out on the open water – and as it turned out so did the doctor she consulted in an Alabama beach town.  She still has health problems.

Josh Tickell, who grew up in Louisiana, said the Obama administration’s decision to allow the use of Corexit, which is banned in Britain, was the biggest surprise in the making of the film.

“The most shocking thing to me was the disregard with which the people of the Gulf region were dealt,” Tickell said.

“Specifically I think that there was sort of a turn-a-blind-eye attitude towards the spraying of dispersants to clean up the spill. I don’t think anyone wanted to look too deeply at the consequences.”

Gerri Miller’s article for Forbes provided more insight on what the film revealed about the injuries sustained by people in the local shrimping communities:

Dean Blanchard, whose shrimp processing company was once the largest in the U.S., has seen his supply dwindle to “less than 1 percent of the shrimp we produced before.  We get shrimp with oil in the gills and shrimp with no eyes.  The fish are dead and there are no dolphins swimming around my house.”  He knows five people who worked on cleanup crews who have died, and he suffers from sinus and throat problems.  Former shrimper Margaret Curole‘s healthy 31-year-old son worked two months on the cleanup and became so sick from dispersant exposure that he lost 52 pounds and is now unable to walk without a cane. “Most of the seafood is dead or toxic.  I wouldn’t feed it to my cat,” said her husband Kevin Curole, a fifth-generation shrimper who, like Blanchard, had friends who died from Corexit exposure.  “I used to be a surfer but I won’t go in the water anymore,” he said.  “The last time I did my eyes and lips were burning.”

EcoWatch warned us that the movie can be emotionally upsetting:

When you watch how the the Gulf residents captured in The Big Fix have been affected by Corexit and the spill, beware, it is both heart wrenching and frightening.  When you see Gulf residents driven to tears by this environmental tragedy, you want to cry with them. Rebecca, herself, was seriously sickened by Corexit during their filming in the Gulf.

When you listen to eco-activist, Jean-Michel Cousteau, son of champion of the seas Jacques-Yves Cousteau, state so emotionally in the film, “We’re being lied to,” you realize the truth about the Gulf oil spill is being covered up.

The most informative essay about The Big Fix was written by Jerry Cope for The Huffington Post.  The “official trailer” for the film can be seen here.

Ernest Hardy of LA Weekly emphasized how the film hammered away at the mainstream media complicity in the cover-up:

Josh Tickell, a Louisiana native, had two questions he wanted answered when he set out to make his documentary:  What were we not told by the media in the days and weeks immediately following the April 2010 British Petroleum oil spill in the Gulf of Mexico, and what haven’t we been told since the story faded from the news cycle?  If The Big Fix had simply tackled those questions, the story uncovered would be maddening:  BP’s repeated flaunting of safety codes; their blatant disregard for the lives of individuals and communities devastated by the spill; collusion among the U.S. government (from local to the White House), the media, and BP to hide the damage and avoid holding anyone accountable.  The film’s scope is staggering, including its detailed outlining of BP’s origins and fingerprints across decades of unrest in Iran.  By doing smart, covert reporting that shames our news media, by interviewing uncensored journalists, by speaking with locals whose health has been destroyed, and by interviewing scientists who haven’t been bought by BP (many have, as the film illustrates), Fix stretches into a mandatory-viewing critique of widespread government corruption, with one of the film’s talking heads remarking, “I don’t have any long-term hope for us [as a country] unless we find a way to control campaign financing.”  And yes, the Koch brothers are major players in the fuckery.

The theme of regulatory capture played a role in Anthony Kaufman’s critique of The Big Fix for The Wall Street Journal’s “online magazine” – Speakeasy:

Tickell says that U.S. politicians, both in the Democratic and Republican parties, are too closely tied to the oil and gas industries to regulate them effectively.  “Even if these people come in with good intentions, and what to do good for their community, in order to achieve that level of leadership, they have to seek money from oil and gas,” he says.

While the film promises to take a crack at BP, Tickell says the company is more held up as a “universal example, in the way that resource extraction companies have a certain set of operating paradigms which have lead us to a situation where we have Gulf oil spills and tar sands.”

I felt that my conspiracy theory concerning this tragedy was validated after reading a review of the movie in AZGreen Magazine:

The Big Fix makes clear that the Deepwater Horizon disaster is far from over.  Filmmakers Josh and Rebecca Tickell (makers of groundbreaking films Fuel and Freedom) courageously shine the spotlight on serious aspects of the BP oil spill that were never addressed by mainstream media.  Central to the story is the corporate deception that guided both media coverage and political action on the environmental damage (and ongoing human health consequences) caused by long-term exposure to Corexit, the highly toxic dispersant that was spewed into the Gulf of Mexico by millions of gallons.   The Big Fix drills deeply beyond media reports to demystify the massive corporate cover-up surrounding the Gulf oil spill, and BP’s egregious disregard for human and environmental health.  The film exposes collusion of oil producers, chemical manufacturers, politicians and their campaign funders that resulted in excessive use of Corexit to mask the significance of the oil, and thereby reduce the penalties paid by BP.

Reading all of this makes me wonder what happened to the people, who were discussed in my July 2010 posting, “NOAA Uses Human Canaries to Test Gulf Fish”.

The movie received a standing ovation at the Cannes Film Festival, as it did in its initial screenings in the United States.  Once audiences have a deeper look at the venal nature of the Obama Administration, it will be interesting to watch for any impact on the President’s approval ratings.


 

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Transparency Gives Way To Cover-Ups

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It hasn’t been limited to the Obama administration and it’s really catching on.  Transparency just isn’t working out anymore.  Things run much more smoothly after a good, old-fashioned cover-up.  This attitude is becoming more popular all over the world.

President Obama’s transition from transparency to opacity became obvious last summer, in his discussion about the catastrophe in the Gulf of Corexit.  Here’s how I discussed this situation on August 26, 2010:

Consider what our President said on August 4th:

“A report out today by our scientists shows that the vast majority of the spilled oil has been dispersed or removed from the water,” Obama said.

Beth Daley of the Boston Globe gave us another example of what our government told us about all that oil:

Earlier this month, Jane Lubchenco, National Oceanic and Atmospheric Administration chief, declared that “at least 50 percent of the oil that was released is now completely gone from the system, and most of the remainder is degrading rapidly or is being removed from the beaches.”

On August 20, we learned about the falsity of the government’s claims that the oil had magically disappeared.  The Washington Post put it this way:

Academic scientists are challenging the Obama administration’s assertion that most of BP’s oil in the Gulf of Mexico is either gone or rapidly disappearing — with one group Thursday announcing the discovery of a 22-mile “plume” of oil that shows little sign of vanishing.

After the Fukushima earthquake and nuclear power plant disaster in March, I immediately became suspicious about the lack of transparency concerning that crisis:

A good deal of the frustration experienced by those attempting to ascertain the status of the potential nuclear hazards at Fukushima, was obviously due to the control over information flow exercised by the Japanese government.  I began to suspect that President Obama might have dispatched a team of Truth Suppressors from the Gulf of Corexit to assist the Japanese government with spin control.

More recently, Vivian Norris reported on what she has learned about the extent of radioactive contamination resulting from the Fukushima events in the Huffington Post.  In the middle of the piece, she took a step back and shared a reaction that many of us were experiencing:

Why is this not on the front page of every single newspaper in the world?  Why are official agencies not measuring from many places around the world and reporting on what is going on in terms of contamination every single day since this disaster happened?  Radioactivity has been being released now for almost two full months!  Even small amounts when released continuously, and in fact especially continuous exposure to small amounts of radioactivity, can cause all kinds of increases in cancers.

In the United States, the EPA has apparently become so concerned that the plume of radioactivity may have contaminated fish, which are being caught off the Pacific coast and served-up at our fine restaurants – that the agency has decided to cut back on radiation monitoring.  That’s right.  Thorough radiation testing of water and fish causes too much transparency – and that’s bad for business.  Susanne Rust of California Watch discussed the reaction this news elicited from a group called Public Employees for Environmental Responsibility (Public Employees – uh-oh!):

The EPA and the Food and Drug Administration increased their radiation monitoring efforts after a massive earthquake and tsunami off the coast of Japan set off the world’s worst nuclear disaster since Chernobyl.

But on May 3, the EPA announced [PDF] in a press release that it was falling back to a business-as-usual schedule of radiation monitoring, citing “consistently decreasing radiation levels.”

*   *   *

“With the Japanese nuclear situation still out of control and expected to continue that way for months and with elevated radioactivity continuing to show up in the U.S., it is inexplicable that EPA would shut down its Fukushima radiation monitoring effort,” said Jeff Ruch, executive director of the watchdog group, in a statement.

*   *   *

According to Public Employees for Environmental Responsibility, the EPA has proposed raising their guideline radiation limits, or Protection Action Guides.  These values are used to guide decision makers about when a clean up is needed after a nuclear incident.

According to Ruch, the new clean up standards are “thousands of times more lax than anything the EPA has ever before accepted.”

Documents obtained by the watchdog group [PDF] via the Freedom of Information Act indicate the EPA made a decision to approve the revised guidelines months ago, but has yet to make a formal announcement.

Meanwhile, aversion to transparency is now being discussed in Geneva.  John Heilprin is reporting for the Associated Press that the Global Fund to Fight AIDS, Tuberculosis and Malaria is considering a reversal of its policy of transparency regarding how it spends the billions of dollars contributed to it.  Mr. Heilprin’s report discusses the hostile reaction to this suggestion – which resulted from revelations (by the organization’s internal transparency program) that the fund lost millions of dollars as a result of fraud and mismanagement.  The proposed solution:  to hell with transparency!  Be sure to read Heilprin’s entire report.  It presents a fine example of the latest trend in coping with the “transparency problem”.


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Bad Report Card Haunts Democrats At Mid-Terms

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It doesn’t take much time or effort to find out how or why the Democrats have alienated so many independent voters (and so much of their own base) during the 2010 election cycle.  You don’t need to look to the Fox News or Andrew Breitbart for an explanation.   Reading through the opinion pages of The New York Times should provide you with a good understanding of what the Democrats have been doing wrong.

One common theme voiced by many critics of the Obama administration has been its lack of interest in prosecuting those responsible for causing the financial crisis.  Don’t hold your breath waiting for Attorney General Eric Hold-harmless to initiate any criminal proceedings against such noteworthy individuals as Countrywide’s Angelo Mozilo or Dick Fuld of Lehman Brothers.  On October 23, Frank Rich of The New York Times mentioned both of those individuals while lamenting the administration’s failure to prosecute the “financial crimes that devastated the nation”:

The Obama administration seems not to have a prosecutorial gene.   It’s shy about calling a fraud a fraud when it occurs in high finance.
*   *   *
Since Obama has neither aggressively pursued the crash’s con men nor compellingly explained how they gamed the system, he sometimes looks as if he’s fronting for the industry even if he’s not.

The special treatment afforded to the perpetrators of the frauds that helped create the financial crisis wasn’t the only gift to Wall Street from the Democratically-controlled White House, Senate and Congress.  The financial “reform” bill was so badly compromised (by the Administration and Senate Democrats, themselves) as it worked its way through the legislative process, that it is now commonly regarded as nothing more than a hoax.  Frank Rich finds it ironic that the voters are about to return power to “those who greased the skids” to facilitate the financial catastrophe:

We can blame much of this turn of events on the deep pockets of oil billionaires like the Koch brothers and on the Supreme Court’s Citizens United decision, which freed corporations to try to buy any election they choose.  But the Obama White House is hardly innocent.  Its failure to hold the bust’s malefactors accountable has helped turn what should have been a clear-cut choice on Nov. 2 into a blurry contest between the party of big corporations and the party of business as usual.

David Weidner of MarketWatch recently discussed the idea of appointing a special prosecutor to bring the Wall Street culprits to justice.  After acknowledging the often-used pushback argument made by those opposed to such a prosecutorial effort — that those cases are impossibly difficult to advance through the legal system — Weidner made this observation:

These cases may be difficult, but they’re not impossible.  And given the creation of a lawless marketplace where one economy-destroying decision can be made on top of another for short-term personal gains, something has to be done.

But nothing’s happening.  Maybe it’s because of the money Wall Street lavishes on Congress.  Perhaps it’s the close ties between the industry and the administration.   It could be, as Nouriel Roubini said in the new documentary “Inside Job,” investigators are “afraid” of what they will find.

A special prosecutor, in a bid to make a name for himself or herself, might be immune to such pressure.   It’s our best hope for outing the scoundrels and creating an industry where greed finally takes a backseat to the law.

Back at The New York Times, Charles Blow brought our attention to the recent rant by Attorney General Eric Hold-harmless, who – despite his uselessness in the aftermath of the financial Ponzi-crisis – stands at the ready to prosecute marijuana smokers in the event that Proposition 19 becomes law in The Golden State.  One would think that the Obama administration might prefer that a large bloc of voters should remain stoned for as long as possible, so as to prevent those citizens from realizing what a lousy job their President is doing for them.  Worse yet, Charles Blow explained how the Democrats have been advancing the Clinton-era Byrne Formula Grant Program, as a vehicle for financing a war on pot smokers, over the objections of former President George W. Bush and conservative groups, who emphasized that the program “has proved to be an ineffective and inefficient use of resources.”  Nevertheless, the Democrats were able to direct two billion dollars from the financial stimulus program to the so-called Byrne Grants.  Remember: that’s two billion dollars from the American Recovery and Reinvestment Act of 2009 – which was supposed to put people back to work and save the economy – misappropriated to the effort of putting pot smokers in jail.  I guess that the Obama Justice Department has to look like it’s doing something.

Another issue that has not escaped the public’s radar – despite the efforts of the Obama administration – is the never-ending catastrophe in the Gulf of Corexit, caused by the Deepwater Horizon oil rig blowout.  Washington’s Blog recently featured an important posting, with links to several articles about this environmental disaster, which the administration wants you to forget about (at least until after the election).  The BP-sponsored, mainstream media seem more than happy with the claim of  “mission accomplished” voiced by Coast Guard Rear Admiral Paul Zukunft (the man in charge of the federal response) and his top science adviser, Steve Lehmann.   A review of any one of the articles linked at the Washington’s Blog posting will scare the hell out of you — just in time for Halloween (and Election Day).  Nevertheless the people who will get the worst haunting of Halloween 2010 will be the Democrats.  Unfortunately for us, most of them deserve it.


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BP Buys Silence Of Expert Witnesses

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July 22, 2010

You might be familiar with the manner in which British Petroleum has been silencing potential witnesses to the extent of damage caused by the Deepwater Horizon disaster.  A typical example was recently discussed by Anne Macquarie of the Nevada Appeal:

I have a friend who has been working for the last month for a private contractor, doing wildlife inventories in areas affected by the oil spill.  I asked her if I could talk to her about what she saw down there and share it with Nevada Appeal readers.

She told me she’d been required to sign a confidentiality agreement.  She couldn’t talk to anyone about anything she did there.  I didn’t push her — times are tough and I sure didn’t want her to lose her job.

Anticipating criminal prosecution and a nearly infinite number of civil lawsuits, BP has begun a campaign of signing-up as many potential expert witnesses as can be found, not only to testify on BP’s behalf in the numerous proceedings – but, more importantly – to buy their silence.  Litigation attorneys often refer to this tactic as, “buying experts off the street”.   Precious little attention has been focused on this activity.  Dylan Ratigan has exposed it and CBS News briefly touched the subject.  Other than those instances, the mainstream media have not discussed this ploy – at least as of this writing.   Here’s some of what CBS had to say:

BP has been trying to hire marine scientists from universities around the Gulf Coast in an apparent move to bolster the company’s legal defense against anticipated lawsuits related to the Gulf oil spill, according to a report from The Press-Register in Mobile, Ala.

Scientists from Louisiana State University, Mississippi State University and Texas A&M have reportedly accepted BP’s offer, according to the paper.

The federal government is expected to file a massive Natural Resources Damage Assessment lawsuit against BP, and it’ll have to draw on large amounts of scientific research to build its case.

*   *   *

Robert Wiygul, an Ocean Springs lawyer who specializes in environmental law, said BP is in effect denying the government access to valuable information by hiring the scientists and adding them to its legal team.  “It also buys silence,” Wiygul told the Press-Register, “thanks to confidentiality clauses in the contracts.”

Scientists who sign the contract to work for BP will be subject to a strict confidentiality agreement.  They will be barred from publishing, sharing or even speaking about data they collected for at least three years.

George Crozier, director of the Dauphin Island Sea Lab, who was approached by BP, told the paper:  “It makes me feel like they were more interested in making sure we couldn’t testify against them than in having us testify for them.”

The original story for the Alabama Press Register was written by Ben Raines.  His article included this interesting aspect of his investigative work on the piece:

BP officials declined to answer the newspaper’s questions about the matter.  Among the questions:  how many scientists and universities have been approached, how many are under contract, how much will they be paid, and why the company imposed confidentiality restrictions on scientific data gathered on its behalf.

Coincidentally, CBS also provided us with the perspective of musician/performance artist Laurie Anderson on this subject.  She appeared on David Letterman’s Late Show on July 14 to perform a song entitled, “Only An Expert”.

On July 21, Bloomberg News televised an interview with Matthew Simmons, founder of the Ocean Energy Institute.  Among the subjects included in the conversation was the topic of BP’s confidentiality agreements.  If what Mr. Simmons said is correct, BP’s legal defense efforts will become futile once the public realizes “we have now killed the Gulf of Mexico”.  At least on that one point, the cretins at BP are probably not the only individuals who are hoping that Mr. Simmons is wrong.



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NOAA Uses Human Canaries To Test Gulf Fish

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July 5, 2010

I recently checked in on the website for the National Oceanic and Atmospheric Administration  (NOAA) for the latest update on the Deepwater Horizon oil plume.  The site features a map depicting the “fishery closure area” – a rather huge section of the Gulf of Mexico consisting of over 81,000 square miles — where fishing is prohibited.  I immediately began to wonder whether some of the toxic fish from the fishery closure area might swim outside of their boundary and find their way onto someone’s plate.  Apparently, the folks at NOAA thought of that themselves, so they developed a testing protocol to ascertain whether Gulf fish intended for human consumption might have been contaminated with petrochemicals and/or Corexit – the creepy dispersant that has been banned in Britain, although it has been used extensively in response to the Deepwater Horizon catastrophe.  Corexit 9500, when ingested, has been known to rupture red blood cells and cause internal bleeding.  Here is the Material Safety Data Sheet for Corexit 9500, where you can find this useful tidbit:

HUMAN HAZARD CHARACTERIZATION :  Based on our hazard characterization, the potential human hazard is:  Moderate

What do you think NOAA’s Gulf fish testing protocol involves?  Gas chromatography?  Scanning electron microscopy?  Guess again.  They’re having people sniff the fish to determine whether it has been tainted.  No kidding.  Check it out:

NOAA’s expert seafood assessors are training state personnel to use their sense of smell and taste to detect any unusual odors and flavors in Gulf Coast fish — aromas that could indicate contamination by oil or dispersants from the Deepwater Horizon/BP oil spill.

*   *   *

Using your sense of smell is one of the best methods for determining the safety and acceptability of seafood  — sensory analysis is a commonly used tool in seafood safety and quality inspections.  An essential element of the job of a NOAA seafood inspector is to determine what qualifies as Grade A fish, which means that seafood must have good flavor and odor.

*   *   *

People are trained by exposing them to various kinds and concentrations of odors and flavors.  This process takes time.  Some people, unfortunately, are not trainable — some just don’t have an adequate sense of smell to do this work.  However, most people have a sense that can be trained to detect specific odors and refined for enhanced sensitivity.

*   *   *

The Deepwater Horizon/BP oil spill is on a scale we’ve never seen before, and we can use all the extra hands — and nostrils — we can get.  We are expecting to process tens of thousands of samples in the coming months.

What are sensory testers “sniffing” for?

Sensory testers smell for the distinct scent of oil or chemicals that might differ from the normal odor of fish and shellfish ready for market.  When we get a whiff of oil in a seafood sample, we know that the product is unfit for both human consumption and for commercial sale.

In “harmonization” class, we spike fish samples with set concentrations  of oil specific to the Deepwater Horizon/BP spill, as well as dispersants, to determine how sensitive our testers and trainees are.

Learning to discern an odor or flavor and properly describing it is something that comes from experience.  Some odors or flavors are easily masked by a competing odor or flavor so the training and evaluations need to take place in a controlled setting such as a laboratory.  We train people to not only fine-tune their sense of smell to the oil and dispersants from this particular spill, but also to be able to repeat their sensory abilities and standardize how they describe what they are smelling.

*   *  *

For fish like snapper and grouper, we collect a minimum of six, one-pound samples.  First, the fish are filleted.  Then, a panel of 10 expert assessors will smell each of the raw samples and record the odor.  The samples are then cooked, and the process is repeated so that the experts may smell and taste the fish in its cooked state.

Cooking the product is important for two reasons:  First, it releases aromas that may be less detectable in a raw state.  Second, some of the testers may be more sensitive to the smell of cooked fish versus raw fish.  Either way, smelling both raw and cooked samples assures that our testers can detect the full aromatic possibilities of the fish.

This “sniff testing” struck me as a really stupid idea.  It doesn’t sound reliable at all.  It is based on the presumption that hazardous levels of numerous chemicals — often in combination —  can be detected by the human olfactory sense.  Has NOAA considered that these fish sniffers might be getting exposed to hazardous chemicals at levels in excess of the Threshold Limit Values (TLVs) for these substances?   How many parts per million of the various petrochemicals are the testers ingesting when they sniff this fish on a continuous basis?  Worse yet:  How much do they ingest when they eat the fish?   I would love to hear the opinion from an independent, objective panel of occupational hygienists about this testing protocol.

NOAA’s fish-sniffing project appears to be just another example of how a stupid mistake  (allowing the  Deepwater Horizon to operate in the first place) sets off a chain reaction of even more stupid mistakes.  Let’s hope the people involved with this testing don’t suffer any unhealthful consequences from this activity.  Aside from the risk of adverse physical effects, there is also a good chance that these people signed a release —  exculpating “the usual suspects” from any and all liability arising from injuries sustained while conducting these tests.  No good deed shall go unpunished.



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Ignoring The Root Cause

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June 17, 2010

The predominant criticism of the so-called “financial reform” bill is its failure to address the problems caused by the existence of financial institutions considered “too big to fail”.  In an essay entitled, “Creating the Next Crisis” economist Simon Johnson discussed the consequences of this legislative let-down:

On the critical dimension of excessive bank size and what it implies for systemic risk, there was a concerted effort by Senators Ted Kaufman and Sherrod Brown to impose a size cap on the largest banks – very much in accordance with the spirit of the original “Volcker Rule” proposed in January 2010 by Obama himself.  In an almost unbelievable volte face, for reasons that remain somewhat mysterious, Obama’s administration itself shot down this approach.  “If enacted, Brown-Kaufman would have broken up the six biggest banks in America,” a senior Treasury official said.  “If we’d been for it, it probably would have happened.  But we weren’t, so it didn’t.”

*   *   *

The US financial sector received an unconditional bailout – and is not now facing any kind of meaningful re-regulation.  We are setting ourselves up, without question, for another boom based on excessive and reckless risk-taking at the heart of the world’s financial system.  This can end only one way:  badly.

One would assume that an important lesson learned from the 2008 financial crisis was the idea that a corporation shouldn’t be permitted to blackmail the country with threats that its own financial collapse would have such a dire impact on society-at-large that the corporation should be bailed out by the taxpayers.  The resulting problem is called “moral hazard” because such businesses are encouraged to act irresponsibly by virtue of the certainty that they will be bailed out if their activities prove self-destructive.

Gonzalo Lira wrote a piece for the Naked Capitalism blog, explaining how the moral hazard resulting from the “too big to fail” doctrine is facilitating a state of corporate anarchy:

In a nutshell, in this era of corporate anarchy, corporations do not have to abide by any rules — none at all.  Legal, moral, ethical, even financial rules are irrelevant.  They have all been rescinded in the pursuit of profit — literally nothing else matters.

As a result, corporations currently exist in a state of almost pure anarchy — but an anarchy directly related to their size:  The larger the corporation, the greater its absolute freedom to do and act as it pleases.  That’s why so many medium-sized corporations are hell-bent on growth over profits:  The biggest of them all, like BP and Goldman Sachs, live in a positively Hobbesian State of Nature, free to do as they please, with nary a consequence.

Good-old British Petroleum – the latest beneficiary of the “too big to fail doctrine”  — can rely on its size to avoid any sanctions it considers unacceptable because too many “small people” might lose their jobs if BP can’t stay fat and happy.  Gonzalo Lira’s analysis went a step further:

Worst of all, BP realizes that, if it finally cannot get a handle on the oil spill disaster, they can simply fob it off on the U.S. Government — in other words, the people of the United States will wind up cleaning BP’s mess.  BP knows that no one will hold it accountable — BP knows that it will get away with it.

*   *   *

This era of corporate anarchy is reaching a crisis point — we can all sense it.  Yet the leadership in the United States and Europe is making no effort to solve the root problem.  Perhaps they don’t see the problem.  Perhaps they are beholden to corporate masters.  Whatever the case, in his speech, President Obama made ridiculous references to “clean energy” while ignoring the cause of the BP oil spill disaster, the cause of the financial crisis, the cause of the spiralling health-care costs — the corporate anarchy that underlines them all.

This era of corporate anarchy is wrecking the world — literally, if you’ve been tuning in to images of the oil billowing out a mile down in the Gulf of Mexico.

Mr. Lira discussed how a leadership void has been helping corporate anarchy overtake democratic capitalism:

Obama is a corporatist — he’s one of Them.  So there’ll be more bullshit talk about “clean energy” and “energy independence”, while the root cause — corporate anarchy — is left undisturbed.

The failure of President Obama to take advantage of the opportunity to address this “root cause” in his Oval Office address concerning the Deepwater Horizon disaster, inspired Robert Reich to make this comment:

Whether it’s Wall Street or health insurers or oil companies, we are approaching a turning point.  The top executives of powerful corporations are pursuing profits in ways that menace the nation.  We have not seen the likes not since the late nineteenth century when the “robber barons” of finance, oil, and the giant trusts ran roughshod over America.  Now, as then, they are using their wealth and influence to buy off legislators and intimidate the regions that depend on them for jobs.  Now, as then, they are threatening the safety and security of our people.

One of my favorite commentators, Paul Farrell of MarketWatch, recently warned us about the consequences of allowing corporate anarchy to destroy democratic capitalism:

The rise of uncontrolled corporate greed killed the “Invisible Hand,” the “soul” of capitalism that Adam Smith saw in 1776 as a divine force serving “the common good.”  Today the system has no moral compass.  Wall Street’s insatiable greed has destroyed capitalism from within, turning America’s economy into a soulless zombie.

The “Invisible Hand” Adam Smith saw as essential to capitalism in “The Theory of Moral Sentiments” died in endless battles fought by 261,000 lobbyists each wanting a bigger piece of the $1.7 trillion federal budget pie plus favorable laws protecting, vesting and increasing the power and wealth of their special interest clients.  Future historians will call this ideological battle replacing democracy the new “American Capitalists Anarchy.”

*   *   *

As a New York Times reviewer put it:  Nations like “China and Russia are using what he calls ‘state capitalism’ to advance the interests of their companies at the expense of their American rivals.”  Global pandemic?

Unfortunately while America wastes trillions to bail out inefficient too-stupid-to-fail banks, our competition is bankrolling healthy state-controlled corporations to destroy us  . . .

If we ever reach the point when the watered-down “financial reform” bill finally becomes law, the taxpayers should insist that their government move on to address the “root cause” of corporate anarchy by taking up campaign finance reform.  That should be one hell of a fight!



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ObamaWatch

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June 14, 2010

Last week, I highlighted some criticism of Barack Obama’s presidency, which came from such unlikely sources as Maureen Dowd and Frank Rich of The New York Times, as well as Tony Norman of the Pittsburgh Post-Gazette.  The man whom I described as the “Disappointer-in-Chief” during his third month in office, has continued to draw harsh criticism from unlikely sources.  At this point, the subject pondered by many commentators concerns whether any of this dissatisfaction will stick long enough to have an impact on the mid-term elections and beyond.

If the President read Tim Dickenson’s recent essay for Rolling Stone, “The Spill, The Scandal and the President”, it must have been painful.  Mr. Dickenson didn’t pull any punches while explaining Mr. Obama’s role in the Deepwater Horizon disaster:

Like the attacks by Al Qaeda, the disaster in the Gulf was preceded by ample warnings – yet the administration had ignored them.  Instead of cracking down on MMS, as he had vowed to do even before taking office, Obama left in place many of the top officials who oversaw the agency’s culture of corruption.  He permitted it to rubber-stamp dangerous drilling operations by BP – a firm with the worst safety record of any oil company – with virtually no environmental safeguards, using industry-friendly regulations drafted during the Bush years.  He calibrated his response to the Gulf spill based on flawed and misleading estimates from BP – and then deployed his top aides to lowball the flow rate at a laughable 5,000 barrels a day, long after the best science made clear this catastrophe would eclipse the Exxon Valdez.

At the Naked Capitalism website, Yves Smith summed up a good number of the Obama Administration’s shortcomings in the first paragraph of her June 11 piece about the BP mess:

As readers may know, I’ve been consistently disappointed by the Obama Administration:  its faux progressive packaging versus its corporatist posture, its half-hearted, halting reforms which are noisily trumpeted as the real thing, its deep seated belief that public antipathy to its initiatives means it needs to work harder on selling its message, when it really needs a new strategy.

But the escalating disaster of the Gulf oil spill, and the unique constellation it presents, namely, a big, rich, isolated, foreign perp, which is largely if not solely responsible for the mess, in close proximity to contested mid-term elections, might actually rouse Obama to do something uncharacteristic, namely get tough.

This is by no means a likely outcome, but we are seeing some novel behaviors.  First is that Obama finally may have succeeded in getting someone important afraid of him.  This is a critically important lesson; Machiavelli told his prince it was much more important to be feared than loved.  Mere anger is often negotiation posturing or a manifestation of CEO Derangement Syndrome; fear is much harder to fake.  And BP is finally starting to get rattled.

In case you are wondering whether the President is still popular in Hollywood, The Hill recently turned to a couple of southern California bloggers to provide some insight as to whether Mr. Obama has begun to lose his sparkle in Tinsel Town.  John Nolte of Andrew Breitbart’s Big Hollywood blog expressed the belief that the President’s supporters in Hollywood have been keeping the faith:

If anything, Hollywood is worried about and for Obama.  Worried about the upcoming mid-terms, his re-election chances, his sliding poll numbers, and his gilded ship sailing off course and landing in Carter-ita-ville instead of Mt. Rushmore.

From the more left-leaning perspective, Deborah White of The Liberal OC blog gave us the impression that the President’s Hollywood supporters are becoming increasingly disappointed, although not yet disgruntled:

As of now, President Obama has not lost the support of most Hollywood liberals.  But Democrats in Hollywood are also no longer lavishing praise on Obama as they did in hopeful droves before his triumphant election.

Hollywood liberals no longer view Barack Obama as someone they blindly “want to follow… somewhere, anywhere” as pal George Clooney famously told Charlie Rose in early 2008.

Meanwhile, Maureen Dowd has continued with her unrestrained criticism of the President.  Her June 11 column must have irritated more than a few people on Pennsylvania Avenue:

The press traveling with Obama on the campaign never had a lovey-dovey relationship with him.  He treated us with aloof correctness, and occasional spurts of irritation.  Like many Democrats, he thinks the press is supposed to be on his side.

The patrician George Bush senior was always gracious with reporters while conveying the sense that what we do for a living was rude.

The former constitutional lawyer now in the White House understands that the press has a role in the democracy.  But he is an elitist, too, as well as thin-skinned and controlling.  So he ends up regarding scribes as intrusive, conveying a distaste for what he sees as the fundamental unseriousness of a press driven by blog-around-the-clock deadlines.

During the Presidential election campaign, Mr. Obama was often described as a “Rorschach test” — people saw in him whatever they imagined.  Now that the President has been able to disappoint his supporters, the criticism is gradually becoming increasingly harsh.  As frustration over the BP crisis, unemployment and the economy continues to build — the criticism voiced by those who voted for him is likely to become more caustic.




Living Up To A Title

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June 7, 2010

It was back on April 9, 2009 – before President Obama had completed his third month in office – when I first referred to him as the “Disappointer-in-Chief”.  I concluded that piece with this gloomy prediction:

If President Obama does not change course and deviate from the Geithner-Summers plan before it’s too late, his legacy will be a ten-year recession rather than a two-year recession without the PPIP.  Worse yet, the toughest criticism and the most pressure against his administration are coming from people he has considered his supporters.  At least he has the people at Fox News to provide some laughable “decoy” reports to keep his hard-core adversaries otherwise occupied.

Just two weeks earlier —  on March 23, 2009 – I had been discussing the widespread apprehension over Obama’s planned bailout of the largest banks (the so-called “Financial Stability Plan” which later morphed into the PPIP).  At that point, Frank Rich of The New York Times made a premature use of the term “Obama’s Katrina moment”.

With the arrival of Obama’s real “Katrina moment” — by way of the Deepwater Horizon blowout –  we are again hearing a chorus of criticism directed against the Obama administration, not unlike what we heard during those first few months.  Now that our new President has established a track record of bad decisions, let’s take a look at some reactions from people the Fox News will insist are loyal Obama supporters.  First we had Maureen Dowd of The New York Times, who delivered a one-two punch to the man she has called “Barry” (when mad at him) on May 29 and June 1:

In the campaign, Obama’s fight flagged to the point that his donors openly upbraided him.  In the Oval, he waited too long to express outrage and offer leadership on A.I.G., the banks, the bonuses, the job loss and mortgage fears, the Christmas underwear bomber, the death panel scare tactics, the ugly name-calling of Tea Party protesters.

Too often it feels as though Barry is watching from a balcony, reluctant to enter the fray until the clamor of the crowd forces him to come down.  The pattern is perverse.  The man whose presidency is rooted in his ability to inspire withholds that inspiration when it is most needed.

Ouch!  If that weren’t enough, Ms. Dowd’s June 1 punch had to hurt:

This president has made it clear that he’s not comfortable outside whatever domain he’s defined.  But unless he wants his story to be marred by a pattern of passivity, detachment, acquiescence and compromise, he’d better seize control of the story line of his White House years.  Woe-is-me is not an attractive narrative.

Also at The New York Times, Frank Rich expressed his impatience with the President – now that the real “Katrina moment” has arrived:

We still want to believe that Obama is on our side, willing to fight those bad corporate actors who cut corners and gambled recklessly while regulators slept, Congress raked in contributions, and we got stuck with the wreckage and the bills.  But his leadership style keeps sowing confusion about his loyalties, puncturing holes in the powerful tale he could tell.

*   *   *

No high-powered White House meetings or risk analyses were needed to discern how treacherous it was to trust BP this time.  An intern could have figured it out.  But the credulous attitude toward BP is no anomaly for the administration.  Lloyd Blankfein of Goldman Sachs was praised by the president as a “savvy” businessman two months before the Securities and Exchange Commission sued Goldman.  Well before then, there had been a flood of journalistic indicators that Goldman under Blankfein may have gamed the crash and the bailout.

It’s this misplaced trust in elites both outside the White House and within it that seems to prevent Obama from realizing the moment that history has handed to him.  Americans are still seething at the bonus-grabbing titans of the bubble and at the public and private institutions that failed to police them.  But rather than embrace a unifying vision that could ignite his presidency, Obama shies away from connecting the dots as forcefully and relentlessly as the facts and Americans’ anger demand.

Back on December 14, I pointed out how the so-called “race card” has not been a free pass for the Disappointer-in-Chief:

As we approach the conclusion of Obama’s first year in the White House, it has become apparent that the Disappointer-in-Chief has not only alienated the Democratic Party’s liberal base, but he has also let down a demographic he thought he could take for granted:  the African-American voters.  At this point, Obama has “transcended race” with his ability to dishearten loyal black voters just as deftly as he has chagrined loyal supporters from all ethnic groups.

The most recent example of this phenomenon appeared in the form of an opinion piece by Tony Norman of the Pittsburgh Post-Gazette.  Here is some of what Mr. Norman had to say:

At a Memorial Day dinner I attended, there wasn’t just disappointment with Mr. Obama’s inability to find his inner Huey Long — there was an undercurrent of genuine anger.

It went far beyond the handling of the BP crisis.  As far as anyone can tell, there isn’t much to distinguish Mr. Obama’s policies in Afghanistan and Iraq from his predecessor’s.

Beyond the Deepwater Horizon, Mr. Obama has been a disappointment on civil liberties, banking reform, military spending, the drug war, Middle East policy, immigration and the environment.  Political gamesmanship and calculation of the rankest kind continue.  Even his latest Supreme Court nominee shows every indication of being as colorless as the president has proven to be in recent months.  It’s too much to expect this president to champion a progressive Supreme Court candidate.

Meanwhile, the corrupt culture of Wall Street continues to set the agenda, thanks to cowardly Democrats and nihilistic Republicans.  Accountability is as much a dirty word for Mr. Obama as it was for President George W. Bush.

*   *   *

Honestly, other than the particularities of the historical record, it no longer makes sense to blame Mr. Bush for much when Mr. Obama has done little — other than improvise a less belligerent foreign policy — to distinguish himself from the 43rd president.

I won’t spoil the rest of Mr. Norman’s article.  Just be sure to read it.  (Hint:  It includes some nice speculation about how the new President was likely pulled aside by some members of the plutocracy, who gave him “The Talk”.)

Meanwhile, the Presidential disappointments continue.  It appears as though we are going to wait for God to stop the oil from gushing into the Gulf of Mexico.  Since we have left it to God to do the wetlands protection and the clean-up, this shouldn’t be too surprising.   I’m beginning to suspect that President Obama’s religious ideas are even more far-out than those of President Bush. –  It’s just that President Obama doesn’t talk about them.





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