Obama
By
Greg Palast Read Spanish Version
I
can’t make this up:
In
a hotel room in Brussels, the chief executives of the world’s top
oil companies unrolled a huge map of the Middle East, drew a fat, red
line around Iraq and signed their names to it.
The
map, the red line, the secret signatures. It explains this war. It
explains this week’s rocketing of the price of oil to $134 a
barrel.
It
happened on July 31, 1928, but the bill came due now.
Barack
Obama knows this. Or, just as important, those crafting his policies
seem to know this. Same for Hillary Clinton’s team. There could be
no more vital difference between the Republican and Democratic
candidacies. And you won’t learn a thing about it on the news from
the Fox-holes.
Let
me explain.
In
1928, oil company chieftains (from Anglo-Persian Oil, now British
Petroleum, from Standard Oil, now Exxon, and their Continental
counterparts) were faced with a crisis: falling prices due to rising
supplies of oil; the same crisis faced by their successors during the
Clinton years, when oil traded at $22 a barrel.
The
solution then, as now: stop the flow of oil, squeeze the market,
raise the price. The method: put a red line around Iraq and declare
that virtually all the oil under its sands would remain there,
untapped. Their plan: choke supply, raise prices rise, boost profits.
That was the program for 1928. For 2003. For 2008.
Again
and again, year after year, the world price of oil has been boosted
artificially by keeping a tight limit on Iraq’s oil output. Methods
varied. The 1928 “Redline” agreement held, in various forms, for
over three decades. It was replaced in 1959 by quotas imposed by
President Eisenhower. Then Saudi Arabia and OPEC kept Iraq, capable
of producing over 6 million barrels a day, capped at half that, given
an export quota equal to Iran’s lower output.
In
1991, output was again limited, this time by a new red line: B-52
bombings by Bush Senior’s air force. Then came the Oil Embargo
followed by the “Food for Oil” program. Not much food for them,
not much oil for us.
In
2002, after Bush Junior took power, the top ten oil companies took in
a nice $31 billion in profits. But then, a miracle fell from the sky.
Or, more precisely, the 101st Airborne landed. Bush declared,
“Bring’m on!” and, as the dogs of war chewed up the world’s
second largest source of oil, crude doubled in two years to an
astonishing $40 a barrel and those same oil companies saw their
profits triple to $87 billion.
In
response, Senators Obama and Clinton propose something wrongly called
a “windfall” profits tax on oil. But oil industry profits didn’t
blow in on a breeze. It is war, not wind, that fills their coffers.
The beastly leap in prices is nothing but war profiteering, hiking
prices to take cruel advantage of oil fields shut by bullets and
blood.
I
wish to hell the Democrats would call their plan what it is: A war
profiteering tax. War is profitable business – if you’re an oil
man. But somehow, the public pays the price, at the pump and at the
funerals, and the oil companies reap the benefits.
Indeed,
the recent engorgement in oil prices and profits goes right back to
Bush-McCain “surge.” The Iraq government attack on a Basra
militia was really nothing more than Baghdad’s leaping into a gang
war over control of Iraq’s Southern oil fields and oil-loading
docks. Moqtada al-Sadr’s gangsters and the government-sponsored
greedsters of SCIRI (the Supreme Council For Islamic Revolution In
Iraq) are battling over an estimated $5
billion
a year in oil shipment kickbacks, theft and protection fees.
The
Wall
Street Journal
reported that the surge-backed civil warring has cut Iraq’s exports
by up to a million barrels a day. And that translates to slashing
OPEC excess crude capacity by nearly half.
Result:
ka-BOOM in oil prices and ka-ZOOM in oil profits. For 2007, Exxon
recorded the highest annual profit, $40.6 billion,
of any enterprise since the building of the pyramids. And that was
BEFORE the war surge and price surge to over $100 a barrel.
It’s
been a good war for Exxon and friends. Since George Bush began to
beat the war-drum for an invasion of Iraq, the value of Exxon’s
reserves has risen — are you ready for this? — by $2 trillion.
Obama’s
war profiteering tax, or “oil windfall profits” tax, would equal
just 20% of the industry’s charges in excess of $80 a barrel. It’s
embarrassingly small actually, smaller than every windfall tax
charged by every other nation. (Ecuador, for example, captures up to
99% of the higher earnings).
Nevertheless,
oilman George W. Bush opposes it as does Bush’s man McCain. Senator
McCain admonishes us that the po’ widdle oil companies need more
than 80% of their windfall so they can explore for more oil. When
pigs fly, Senator. Last year, Exxon spent $36 billion of its $40
billion income on dividends and special payouts to stockholders in
tax-free buy-backs. Even the Journal called Exxon’s capital
investment spending “stingy.”
At
today’s prices Obama’s windfall tax, teeny as it is, would bring
in nearly a billion dollars a day for the US Treasury. Clinton’s
plan is similar. Yet the press’ entire discussion of gas prices is
shifted to whether the government should knock some sales tax pennies
off the oil companies’ pillaging at the pump.
More
important than even the Democrats’ declaring that oil company
profits are undeserved, is their implicit understanding that the
profits are the spoils of war.
And
that’s another reason to tax the oil industry’s ill-gotten gain.
Vietnam showed us that foreign wars don’t end when the invader can
no longer fight, but when the invasion is no longer profitable.
Greg
Palast is the author of, “Trillion
Dollar Babies,”
on Iraq and oil, published in his New York Times bestseller, Armed
Madhouse.
Palast is currently working with Robert F. Kennedy Jr. on
investigation the latest attacks on the right to vote in America.
Support this effort and receive a signed copy of Armed
Madhouse from the author at Palast Investigative Fund.
