Obama seeks “inflection point” on Gulf o il disaster

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Obama seeks “inflection point” on Gulf oil disaster
19 June 2010

The past week saw the Obama administration, BP, and the US media seek out an
“inflection point” in the Gulf oil blowout crisis, as chief White House adviser
David Axlerod put it.

Their aim was to somehow defuse growing popular anger over the disaster, while
refurbishing the credibility of the government and stock value of BP. However,
the exercise has underscored the subservience of the entire political
establishment to the corporate and financial elite.

Over the weekend Obama toured the Gulf Coast, his third trip to the region since
the April 20 explosion that killed eleven workers and initiated the biggest oil
spill in US history. The previous trips, which had each lasted just a few hours,
had failed in their objective of portraying Obama as “in command” and “angry and
frustrated.”

This time Obama visited several Gulf Coast states over three days, media in tow,
advising Americans “to come down here and enjoy the outstanding hospitality”—and
eat seafood, which the president declared to be “delicious” after a lunch in
Alabama. In a near repetition of the now-infamous comments made by George W.
Bush after Hurricane Katrina in 2005, Obama promised Gulf residents “we’re going
to be able to leave the Gulf Coast in better shape than it was before.” New
Orleans, it should be noted, has never recovered from Katrina.

On Tuesday, Obama held his prime-time Oval Office speech on the blowout. A
spectacle of cowardice and evasion, capped off by sanctimonious invocations of
religion, the speech made no condemnation of BP, its actions in the events
leading up to the disaster, or its cover-up of the size of the blowout afterwards.

On Wednesday came the administration’s White House meeting with top BP
executives Tony Hayward and Carl-Henric Svanberg. Afterwards Obama unveiled his
plan for a BP escrow account of up to $20 billion that the oil giant will come
up with over four years. The sum, even in the unlikely event it is ever paid in
full, does not even begin to approach what would be required to deal with the
crisis.

Though Obama said the escrow, the Independent Claims Facility (ICF), did not
represent a cap on BP liability, most analysts expect that it will serve
precisely that purpose. In words carefully tuned to financial markets on Wall
Street and the City of London, Obama declared, “BP is a strong and viable
company and it is in all of our interests that it remain so.”

Markets took measure of the ICF, bouncing BP share values upwards after a sharp
decline over the previous weeks. With an estimated $30 billion in operating cash
flow next year and enough oil reserves to supply the US market by itself for two
years, BP will have little trouble meeting the $20 billion—even should it be
required to do so.

“Add cash lying around in bank accounts and in short-term investments and BP
could raise $25 billion without breaking much of a sweat,” the AP notes. “The US
government will become insolvent before BP does,” Bruce Lanni, a stock analyst
with Nollenberg Capital Partners, told AP. One UK investor cited by the
Financial Times remarked that BP was now a buying opportunity. “If the escrow
fund is adequate, $20bn against the value of BP’s assets is minimal.”

On Thursday came Hayward’s appearance before a US House Energy Committee meeting
focused on internal documents that clearly illustrate BP’s criminal negligence
in the lead-up to the disaster. This event was aimed to give vent to popular
anger, as politicians—themselves intimately tied to the oil industry and
implicated in the deregulation of the economy that led to the disaster—would
take turns grilling Hayward, by now a despised symbol of corporate power.
Instead, secure in the knowledge that BP will face no real consequences, Hayward
blithely dismissed virtually every question, informing the congressmen that the
company’s own, internal investigation took precedent.

One Republican congressman, Joe Barton of Texas, went so far as to twice
apologize to Hayward for BP’s supposed suffering at the hands of the Obama
administration and its ICF escrow, which he called a “shakedown.”

The US media seized on Barton’s comment on Thursday and Friday to ponder whether
or not Obama had, in fact, “gone too far” in his alleged rough handling of BP,
bringing the week’s propaganda campaign to a miserably dishonest end.

The New York Times led the charge. Writer David Sanger presented the escrow
account as a “display of raw arm-twisting” that might raise questions over “the
power of government overreach.” The Times worried that Obama could appear
“viscerally antibusiness” or to be “at war with American-style capitalism.” This
of a president who has overseen the largest handover of public money to
financial concerns in history!

In fact the operating principle of Obama’s response to the disaster from the
outset has been to defend BP and the oil industry as a whole. Just as there were
no consequences for Goldman Sachs, JP Morgan, and the other finance houses who
wrecked the world economy for their own enrichment—they are doing better than
ever—there will be no consequences for BP. Indeed, two months since the
beginning of the greatest environmental disaster in US history, not a single
person has even been fired—let alone charged with a crime.

Whatever the attempts by the administration and the media to turn the page on
public opinion, however, facts are stubborn things. Hours before Obama’s Tuesday
speech, government scientists revealed that oil is gushing into the Gulf at a
pace of 60,000 barrels per day—12 times the rate BP and White House had clung to
for weeks. Heavy crude is lapping up on the coasts of four states. Entire
industries have been shut down, wiping out tens of thousands of jobs. Species
face annihilation.

What the events of the past week make clear is that opposition to the crimes of
BP and of the corporate elite as a whole can find no expression through their
bought-and-paid-for representatives in the two big business parties.

The working class must intervene as an independent force. There is no
possibility of confronting the catastrophe in the Gulf outside of this.

As a first step, the assets of BP must be immediately seized and used to mount
an emergency response. Even these resources, however, will be inadequate to deal
with the economic and ecological catastrophe. The crisis in the Gulf requires
the mobilization of social resources on a vast scale, including the hiring of
hundreds of thousands of workers, scientists and engineers.

Trillions can be made available to the banks overnight when it is a matter of
bailing out the accounts of the super-rich. However, when it comes to problems
affecting millions of people—education, health care, and now ecological
devastation—the claim is that there is simply “no money” to be found. In fact,
the freeing up of resources for these urgent necessities requires the
nationalization of the giant banks and corporations and their subordination to
the democratic control of the working class.

A rational solution to the crisis is impossible so long as society remains under
the stranglehold of the corporate and financial elite. The Gulf oil disaster is
a demonstration of the bankruptcy of the capitalist system and the urgent
necessity for socialism.

Tom Eley

http://wsws.org/articles/2010/jun2010/pers-j19.shtml

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