Common Theme of Gulf Oil Spill, Wall Street Collapse: Unrestrained Corporate Recklessness
The BP oil spill disaster in the Gulf of Mexico and the 2008 collapse of Wall Street may not be identical twins, but they are siblings. Both are the children of unrestrained corporate recklessness - recklessness that was made possible by a fifty-year corporate conservative campaign to prevent government from holding corporations accountable to the public interest.
The recklessness of Wall Street banks cost eight million Americans their jobs, and millions more their pensions. All of those unemployed Americans and under-utilized plants, stores and warehouses cost us trillions of dollars in lost economic output that we will never recover. It cost governments tax dollars that could have been used to educate children, build new roads, find cures for disease. It cost us hundreds of millions in interest to borrow the money we needed to jump-start the economy and provide basic services.
The Goldman Sachs emails published by Senator Levin's Committee on Investigations brought Wall Street recklessness into clear focus. There was nothing there about the consequences of their actions for the society or economy at large - only how the trader who referred to himself as "Fabulous Fab" could make millions for himself at the expense of anyone who happened to be gullible enough to buy his worthless investments.
The oil company BP - and the entire global oil industry - have been no less reckless in their unquenchable thirst for profits. It doesn't take a genius to predict that when you start drilling thousands of wells in mile-deep water in the middle of the economically and ecologically critical Gulf Coast, something might go terribly wrong.
Of course we've seen what might go wrong up close and personal before. The Exxon Valdez disaster resulted in incalculable loss to the environment, billions in loss to fishermen and the Alaska economy, and billions more for a cleanup that lasted over three years.The Santa Barbara oil spill despoiled miles of beaches, and for a time put the brakes on some forms of reckless oil exploration.
We don't yet know the full consequences of the BP Gulf of Mexico oil disaster for the economy or environment - nor do we know the full range of preparations that BP made in the event of a catastrophe. But the proof of the pudding is in the eating. Whatever preparations they made were obviously far from adequate to stop what may become a cataclysmic event.
One thing we do know for sure: left to themselves, giant international corporations will always be reckless in their pursuit of more and more profit.
These international corporations have no loyalty whatsoever to our country or its welfare. They are huge, free-floating international organizations dedicated to only one goal: making as much money as possible for themselves. Remember that BP is British Petroleum. When it comes to Wall Street, its own advertisements remind us that "Citi Corp never sleeps" - it does business in every corner of the globe. The trading group that sank AIG was based in London. And Goldman Sachs makes its billions from deals and trades in every corner of the world. These companies have no loyalty to the people or interests of the United States.
The cultures of these organizations reward short-term profit. They do nothing to punish employees or leaders for global economic or environmental catastrophe.There is only one brake on this recklessness. That would be us - in the form of our government.
For the last four decades the Conservative Movement and its corporate backers have promoted the notion that the private sector can and should be left alone to do whatever it wants, since only the private sector (meaning international banks and corporations) can create innovation and economic growth. To facilitate this, conservative leader Grover Norquist says that government should be shrunk so much that it could be "drowned in a bathtub."
After the Great Depression, we created the Security and Exchange Commission to oversee the stock market, the FDIC to guarantee ordinary depositors against bank failures, and passed the Glass-Steagall Act that prevented banks from engaging in reckless speculative activities that would endanger the economy. As a result there was no "credit crisis" in America for over half a century - and also the greatest period of long-term economic growth on record - the period that led to the birth of the American Middle Class. The first major American credit crisis following the Great Depression happened when the Reagan Administration deregulated the Savings and Loan industry.
And then the Big Wall Street Banks, and their conservative and Republican enablers --- convinced Congress to "deregulate" Wall Street and repeal the Glass-Steagall Act in the 1990's and the results are there for everyone to see. Now they are fighting tooth and nail to kill or weaken legislation that would begin, once again to hold Wall Street Banks accountable.
The big oil companies and Republicans have done exactly the same thing when it comes to weakening regulations, allowing oil companies to drill in riskier and riskier environments. Just as importantly, so far they have blocked passage of legislation to develop clean energy that would threaten the profits of Big Oil but would make it unnecessary for our society to risk the Gulf Coast to get our energy from dirty fuels like oil in the first place.
To prevent future economic and environmental disasters, Progressives have to stand up straight and demand strong, forceful action by government to hold big international corporations accountable. Government is not the problem - in this case it is the solution.
And we have to assert once again that government is not some far off entity that orders us around and intrudes into our lives. As President Obama said last weekend in Ann Arbor - in a democratic society, the government is us. Or as Congressman Barney Frank puts it: "Government is the name of the things we choose to do together."
We know how to use government to rein in the natural recklessness of huge corporations. Take commercial aviation. In spite of some periodic lapses in government oversight, the generally tough regulation of aviation by the FAA has turned commercial aviation into the safest mode of transportation in human history. It is safer to fly somewhere on an airplane than to take a train, drive, horseback ride, bike or even walk there.
In 2009, there were only three commercial aviation accidents classified as serious by the National Transportation Safety Board over the course of 18 million hours flow. The probability of a passenger being killed on a single flight is approximately eight million-to-one. In other words, if a passenger boarded a flight at random once a day, everyday, statistically it would take over 21,000 years before he or she would be killed.
That record of safety is not because people who go into the airline business are any less interested in making money than people who go into the oil business or Wall Street trading. It is because the public demanded strong government regulation of the safety of commercial aviation. That in turn has created a culture inside aviation companies that makes safety a primary value and actually ostracizes reckless behavior.
Left to its own devices the "invisible hand of the market" will not create that kind of culture. It never has, it never will. That is particularly true where the activities of companies are hidden from view of average citizens and consumers. Even the most sophisticated customers on Wall Street didn't have a clue how to evaluate the risks associated with the collateralized debt obligations being sold by Goldman Sachs. The electricity consumers whose power is made with coal haven't got an inkling about the working conditions of the miners that dig out that coal. And the everyday consumers of gasoline sure don't know what kind of risks BP is taking 5000 feet below the surface of the Gulf of Mexico as it drills for oil.
We can't just sit by and allow these huge private actors to threaten the well-being and future of our society just because they want to be free to make as much money as they can.
On last Sunday's "This Week" former Bush adviser Matthew Dowd kept repeating the new Republican mantra: "Washington doesn't work." Now there is the ultimate in Republican chutzpa. The modern Republican Party has done everything it can to prevent "Washington" from working. It diverted hundreds of billions of government revenue into tax breaks for the wealthiest Americans. It gutted regulations that held Wall Street and the oil companies accountable. It is blocking clean energy legislation that would free us from the stranglehold of Big Oil. It tried, unsuccessfully, to prevent passage of desperately-needed health care reform that would for the first time hold the private insurance companies accountable - companies that have driven American health care costs to the point where they are 50% higher than any other nation.
Ignoring the fact that Republicans have fought on behalf of big mine owners for years to weaken mine safety oversight, Dowd actually had the gall to say that the mine disaster in West Virginia was an example of how "Washington doesn't work."
He correctly pointed out that the draconian Arizona anti-immigrant "papers please" law was a response to the failure of Washington to take action to fix the broken immigration system. But he conveniently forgot that it is the Republicans who refuse to allow action to go forward to pass comprehensive immigration reform.
And, of course, he actually argued that the Gulf oil spill was yet another indication that "Washington doesn't work." This, from the party of the now-silent cries of "drill, baby, drill."
The Republicans and their corporate patrons will do everything in their power to get America to forget the iconic symbols of their failures. They will try to convince us that Barack Obama and the Democrats are somehow responsible for the collapse of Wall Street and the Great Recession - even though it all happened on the Republican watch and because of the failure of their policies and the bankruptcy of their economic philosophy.
But Dowd's audacity needs to remind progressive Democrats that people across America want action. They want Washington to work. And to make Washington work, we need to demand that Congress reassert the power of government to hold mine owners, Wall Street banks, Big Oil - and all of the most powerful international corporations - accountable to the interests of everyday Americans.
Robert Creamer's recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.