Griffin, J. M. 2009. A Smart Energy Policy: An Economist’s Rx for Balancing Cheap, Clean, and Secure Energy. Yale University Press.
Energy and environmental policy is just one area among many in which the stranglehold of lobbyists and wealthy elites over the political system is obvious, and this has done much to fuel the populist backlash in recent years. In 2000-08, the energy and natural resource sector spent $304 million on federal elections, 72% of which went to Republican candidates. Of this $141 million came from the oil and gas industry, and overall these industries were the fifth largest contributors to elections, with finance, insurance and real estate (FIRE) always in first place. More importantly, energy and natural resource companies spent $2 billion on lobbying during the same period, and had allies in control of the Energy Task Force chaired by former Halliburton CEO Dick Cheney, as well as the key House and Senate Committees. In George W, Bush, they also had a Texas president whose family had been closely connected to the oil and gas industry for decades, and had himself been head of an independent oil company. Senator John McCain called the Energy Policy Act of 2005 the No Lobbyist Left Behind Law and Senator Hillary Clinton made an issue of it in the 2008 Democratic primaries since Barack Obama voted for it. It passed both Houses of Congress with bipartisan support, and offered $1.6 billion in grants and $12.3 billion in subsidies, mostly for the oil, coal and nuclear industries. Among its significant provisions was the Halliburton Loophole, which allowed hydraulic fracturing in methane gas extraction to be exempt from the Safe Drinking Water Act, which also benefitted other major energy companies such as ConocoPhillips, Chevon-Texaco and Devon Energy, which spent $15 million of the 2004 elections and $70 million on lobbying Congress. It also exempted oil and gas companies from the Federal Water Pollution Act and restricted the ability of states to regulate offshore drilling, including in the Gulf of Mexico—which is where the Deepwater Horizon explosion led to the worst oil spill in history a few years later. Texas companies gained disproportionately from the Energy Policy Act, not coincidentally because House Majority Leader Tom DeLay and Joe Barton, chair of the House Energy and Commerce Committee, were from that state. DeLay of course was later imprisoned for corruption and Barton apologized to British Petroleum after the Gulf of Mexico oil spill. Other provisions of the bill included $4.3 billion in tax breaks for the nuclear industry, $2.8 billion for fossil fuels and $1.6 billion for ‘clean coal’, although renewable energy also obtained $2.7 billion due to lobbying by environmental groups. It also had grants for wind, solar, biofuel, hydrogen fuel cells and tax breaks for energy conservation, as well as direct grants to unnamed companies favored by certain Senators, including the Larry Craig of Idaho, who later resigned because of a bizarre sex scandal. There were also $3 billion in grants for new coal-fired power plants. In short, the Energy Policy Act of 2005 was a classic pork barrel project which once again demonstrated “special interest influence in policymaking”, which is the only type of energy policy that ever passes Congress.
The collapse of Enron in 2001 reflected not only the corruption of government and the political system that has generated so much populist rage, but was also typical of the epidemic of white-collar crime in the U.S. that seemed to explode out of control a few years later in the Wall Street crash and bailout. Enron collapsed very quickly in November 2001 due to massive fraud, and its failure should have been a warning to serious dysfunctions in the entire corporate and financial system, but this did not happen. Its executives admitted that they had falsified its records going back for at least five years, although in reality they had been doing so since the 1980s. When the company filed Chapter 11 bankruptcy it laid off over 20,000 workers and at least $24 billion in pension assets, stocks and mutual funds also vanished. In addition, the Arthur Anderson accounting firm that had been complicit in covering up the fraud and embezzlement at Enron for many years, also went out of business. This catastrophe also demonstrated that Wall Street banks, stock analysts and ratings agencies had either been deceived or allowed themselves to be deceived by Enron when they continually painted a positive picture of the company and its future prospects. All these actions were illegal at the time and the laws and regulations against them have been strengthened since then, but it would be naïve to imagine that enforcement has ever caught up with the actual levels of malfeasance. This became clear later in the decade, when the exact same problem would occur with the banks and investment firms that were marking ‘assets’ of dubious values like subprime mortgages. They also collapsed and ended up receiving trillions in dollars in bailouts from the Congress and the Federal Reserve, which was also yet another indication that Wall Street and corporate America had basically bought the government and both political parties. Enron had certainly done so with donations to politicians of both parties, and was especially close to both George Bush’s, who helped the company obtain the deregulation it desired and billions in government subsidies. In the Internet age, white-collar crimes like those of Enron are becoming far more common since the companies find it easier to conceal bogus transactions, clients and traders using the new technologies. This was the type of white-collar crime that the Sarbanes-Oxley Act (SOX) of 2002 was designed to eliminate, while the Dodd-Frank Act was intended to prevent similar financial meltdowns from occurring again. Advancements in copying technology, instantaneous financial transactions and rampant corruption in the U.S. all facilitated the white-collar crime epidemic.
Ohmae, K. 2005. The Next Global Stage: Challenges and Opportunities in our Borderless World. Pearson-Prentice Hall.
The globalization of capitalism in recent decades, combined with the loss of manufacturing jobs and the rise of massive economic inequality is another issue that has fueled the populist backlash against corporate and political elites. Kenichi Ohmae trumpeted the new system of global capitalism, the Internet, high technology and open borders although in light of recent developments it appears that some of his conclusions were slightly premature. This is a polite way of putting it, of course, since the recent crash of the world economy was the worst since the 1930s, and only massive pump-priming, deficit spending and money-printing by central banks preserved this system from total collapse, at least up to now. Like many other writers of the time, Ohmae proclaimed that the nation state was dead, along with Keynesian economics, redistribution of wealth and Fordist mass production industries. Instead, the new centers of economic growth and development would be regional and local economies that found new niches within the global system, like the call centers and financial services of Ireland and India. At the moment, of course, with Ireland suffering from bankruptcy, high unemployment and IMF-style austerity programs, his celebration of its great success would also seem to have been somewhat ill-advised. Even in 2005, though, Ohmae’s analysis and forecasting were the conventional wisdom of the day, and he did not see the disaster looming ahead, no matter that there were many warning signs like the Asian meltdown of 1997-98 and the dot.com crash a few years later. In the new global economy, physical location, size, population and domestic markets are no longer important for success, and stock exchanges no longer require a location at all. Platforms are far more important, including telecommunications, satellites, the Internet, ATM machines, and ability to communicate in English. Old-style governments of nation-states are obsolete, and the main role of the new type of governments will be to facilitate the development of specialized local and regional economies, or at least avoid actively hindering and inhibiting that development. This new world system has no borders and is often invisible, connected through cyber-technology and no longer measured in money but by multiples and derivatives. Capital flows control the world today, not central governments, and these move trillions of dollars around instantaneously.
Sandal, M. J. 2009. Justice: What’s the Right Thing to Do? NY: Farrar, Straus and Giroux.
Michael J. Sandal argues that politics and society require a common moral purpose beyond the assertion of natural rights like life liberty and property or the utilitarian calculus of increasing pleasure and minimizing pain for the greatest number of people. This has been sorely lacking in government and politics for many years, and is another reason for widespread popular distrusts of the elites. Justice and morality involve making judgments on a wide variety of issues, including inequality of wealth and incomes, discrimination against women and minorities, CEO pay, government bailouts of banks and public education. Robert Kennedy and Martin Luther King added this moral dimension to U.S. politics in the 1960s when they criticized the Vietnam War, poverty and racial inequality. So did Barack Obama in his 2008 campaign, although in practice achieving a politics of the common good in American society has been difficult, given the Lockean, natural rights basis of its 18th Century Constitution. Private contractors like Blackwater have taken over many of the duties of the military, while public schools and colleges have also been turned into privatized, for-profit organizations. In the Wall Street crash of 2008-09, large financial institutions received trillions of dollars from Congress and the Federal Reserve, to save them from a collapse that their own fraud and corruption had caused. This leads another important point in Sandal’s thesis in that not only do capitalist interests control the political system for their own benefit rather than the common good, but also that they have caused a huge increase in poverty and inequality in the U.S. over the last thirty years. Indeed, the tremendous gap between rich and poor has now undermined democratic citizenship. America has developed an aristocratic, privileged caste that lives in gated communities, relies on privatized heath care and services while allowing the public sector to deteriorate, and this can only be corrected by more investment in the public schools, public health care, museums, libraries, the environment and national infrastructure.
West, C. 1993, 2001. Race Matters. Boston: Beacon Press.
Cornel West’s main thesis in Race Matters (1993, 2001) is that in spite of major gains since the civil rights movement of the 1960s, including the creation of a large black middle class for the first time in American history, the U.S. is hardly a post-racial society. Segregation, the slave trade and lynching taught blacks to hate themselves, and the violence directed against them was not only physical and economic but also psychic. Nor did government successfully curb this violence in the years 1776 to 1965, except for a very brief period of Reconstruction after the Civil War. Over the last forty years, racial discrimination has been driven underground and become less overt, but it still exists, although white America has long since given up even trying to deal with these problems, except through increased reliance on prisons and police since the 1970s. Racism has always been related to other social and economic problems, especially poverty, police brutality, social class and lack of economic and educational opportunities. From the early-1970s, poverty and inequality in wealth and incomes have also increased, and this affected blacks more than any other group. By 2000, 1% of the population had almost half of the wealth in the United States. Nearly 10% of young black men were in prison and 40% of black children lived in poverty, but this was hardly part of the national political agenda. Blacks consumed about 12% of the drugs in the U.S. but were 70% of those convicted on drug charges. They were also imprisoned all out of proportion to their actual numbers in the population. Even educated and middle class blacks frequently experienced discrimination and racial profiling in everyday life, from taxis that refused to pick them to being frequently stopped and searched on the highways (Driving While Black) and commonly suspected of theft and shoplifting (Shopping While Black). White America only noticed this occasionally, such as the riots that occurred in Los Angeles in 1992 after the acquittal of the white police officers who beat Rodney King.