December 11, 2002
BUZZFLASH READER COMMENTARY
Although millions of Americans and others think that Bush's push against Iraq concerns oil, acknowledgments of that view in the Washington Post so far have been reluctant, fleeting and indirect.
This Sunday's Outlook section (December 8, 2002) contained an unusually direct effort at rebuttal. In "A Crude View of the Crisis in Iraq," author Daniel Yergin takes on a version of the oil-agenda argument:
people say the Iraq crisis has been manufactured to cloak an 'oil grab'
by the United States and the American oil industry. Others believe that
a liberated Iraq will flood the world market with cheap oil and provide
a quick fix for concerns about our energy security."
Yergin responds to both these straw-man arguments partly by pointing out that Iraq, though "a major oil country, with the world’s second-largest known reserves," could not supply the world alone: "But in terms of production capacity, Iraq represents just 3 percent of the world's total. Its oil exports are on the same level as Nigeria's." (Can’t get much lower than that, now could you?) Even a postwar Iraq that welcomed foreign investment and doubled oil production could not supply the entire world.
Yergin concedes that Iraq has something to do with the world's oil markets, arguing that Saddam poses a threat to neighboring nations. (He does not mention that Iraq has been bombed by US and British planes patrolling its 'no-fly zones’ for several years, nor that Iraq's soil and airspace have been imaged by the CIA, the NSA, and NOAA since the Gulf War.)
However, he continues, "it requires several leaps of logic . . . to conclude that the current Iraq crisis is all about oil. No U.S. administration would launch so momentous a campaign just to facilitate a handful of oil development contracts and a moderate increase in supply -- half a decade from now."
What judgment you make about what the Bush administration would, or would not, do is up to the individual citizen, of course. But some of the non-judgment-call statements need reconsideration.
Let's start with the obvious: there's a rhetorical slide, typical in straw-man arguments, between saying that Bush's get-Saddam campaign is about oil, and saying that it's all about oil. Indisputably, oil is a powerful agenda. If Bush benefits US oil companies, he benefits some of his corporate donors, other GOP politicians who draw on the same donors, and his own former business associates; he benefits members of his own administration -- including Vice President Cheney, formerly with Halliburton, and Condoleezza Rice, formerly with Chevron. (Halliburton rebuilt Iraq's oil fields after the Gulf War, and Chevron has been one of Saddam's biggest customers.) He even benefits his own family members. Energy fluctuations affect the Riggs Fund, where his uncle Jonathan Bush is a principal; Fresh del Monte, where his brother Marvin P. Bush sits on the Board of Directors; and campaign donors for Florida Governor Jeb Bush, among other connections.
It's not just the oil business in the US that profits from imported oil, it's transportation, finance, and even pharmaceuticals, tobacco, and some sectors of the legal industry (mergers & acquisition lawyers, environmental defense lawyers, bankruptcy lawyers). And as we all know by now, when these gargantuan corporations profit -- with all their shell-game entourages of Limited Liability Companies, Limited Liability Partnerships, subsidiaries, and one-deal-only "Groups," "Associates," and "Holdings," all protected by federal law, and making full use of American courts, currency, and custom -- their top management profits even more. Money to keep position; position to take money.
However, no informed person would think that oil is the "only" agenda. A more powerful incentive, with regard to Bush's position, is war as a distraction from economic and other problems at home. A related incentive is war as political control -- yet another means to drain all possible resources out of this country's public sector, into a tumorous establishment of military-police powers, just when working people's pension plans, health insurance, and educational institutions including universities are being siphoned off. And perhaps the biggest incentive of all is to distract from the coming investigation, so far successfully stonewalled by the administration, into what lay behind the attacks of 9-11. Any genuine investigation will have to illuminate the Bush family's extensive ties to the Saud family.
Beyond the logical slide, there is also a factual slide in Yergin's article. He downplays Iraq's position in world oil supply, but he omits its position in US oil supply. According to statistics from the Department of Energy and the American Petroleum Institute -- which has never been mistaken for Greenpeace -- Iraq was America's sixth-biggest oil supplier in 2001. In the first half of 2002, Iraq moved UP -- not down -- and became America's fifth-biggest oil supplier.
From the first moments of the Bush administration until well into this year, US oil companies have been Saddam’s biggest customers. US corporations bought 90% of Iraqi oil exports last year. They were still buying -- through middlemen of various nationalities -- well into summer of 2002.
There are reasons for this, of course. Iraqi oil contains less sulfur than most oil on the world markets. Thus it is cheaper to refine; the cost of environmental compliance is less than for other oil. Furthermore, its government is a one-man dictatorship, and its commerce is controlled by the UN: ironically, dealing with Iraq is streamlined, compared to dealing with other countries.
Not only are US companies Saddam's biggest customers, but the Bush administration has consistently supported the commerce. The White House, the oil industry, and congressional Republicans steadfastly resisted any effort to curtail imports of Iraqi oil, until a couple of months ago.
This information is all readily available, through public records and industry publications. The administration could share it at any time, and many people in the Middle East and elsewhere are cognizant of it. It is kept mainly from the American public.
The Post identifies Yergin only as "chairman of Cambridge Energy Research Associates," a Pulitzer-winning author of a 1992 book on oil, and co-author of another book. This impression of untouchable scholarly independence might be alloyed if the Cambridge Energy Research Associates (CERA) were fully identified.
CERA is a corporation and a subsidiary of another corporation, engaged in global business-finance research, with corporate clients. It merged with McCarthy Crisanti & Maffei to form Global Decisions Group LLC, with market capitalization of approximately $100 million. (http://www.mcmwatch.com/press/mn_press_080498.html)
The company's directors, including its chairman, sit on the boards of directors of other investment companies; its managerial comings and goings are duly noted in the business press including the Pipeline and Gas Industry newsletter. (http://www.pipe-line.com/archive/archive_99-06/99-06_people.html)
CERA's parent company is also the parent company of MCM Group, Inc, "a leading provider of high value analysis of financial markets to the world's major financial institutions." Its over 2,000 clients "spanning over 60 countries" [what was that about security?] "include securities firms, commercial banks, asset management firms, insurance companies, central banks, government agencies and other major financial institutions." (http://www.mcmwatch.com/)
Part of CERA itself, held by stockholders, was sold to Goldman Sachs a few years ago. (http://www.wmswordco.com/examples.shtml) Its SEC filings are the typical Wall Street saloon-and-dance-hall story, thronged with mergers, stock exchanges, loans, credits, parents and subsidiaries bellying up to the bar on the sawdust floor of public resources.
"CERA has historically distributed substantially all of its net earnings each year to its directors, employees and consultants in the form of bonuses. In Fiscal 1996, these bonuses, which are included in operating expenses (in cost of revenues, and selling, general and administrative expenses) were $4.7 million, compared to $4.0 million in Fiscal 1995."
H. Yergin, President and Director of CERA, also became a director of the
parent corporation in the merger.
Nothing in this context suggests that the author's independence of the corporatist view is a given.
Readers of the business press may already know all this, of course.
But perhaps even they do not know that a bill to re-introduce the draft, HR 3598, is now in Congress. And this time college is not an exemption.
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