Profiteering on Disaster
By DAVE LINDORFF
In a crisis, there are always those who will obscenely take advantage of the situation for personal gain.
I'm not talking here about the looters in New Orleans, as ugly and mean as some of their actions have been.
I am talking about the oil industry.
The evidence is clear:
Ten percent of American oil production is off line because of Hurricane Katrina. That has led to a nominal increase in the per-barrel world price of oil, since 10 percent of U.S. production represents only a single-digit portion of world demand. Yet gasoline prices in the US have soared, from about $2..40 per gallon before the hurricane hit to over $3.00 a gallon now nationwide-a jump of 25 percent.
Local gas station owners say that they have to raise their prices immediately because they only keep a few days' supply on hand and need to have the cash to pay for the next delivery, which will be priced at the new higher wholesale rate. I am inclined to believe that, if their new price is only around 20-25 percent higher than before.
But clearly, somewhere between the oil coming out of the ground or into a port terminal, and those retail pumps, some businesses are cleaning up at the expense of the public.
Read that: the oil companies are gouging and profiteering on disaster.
All you need to do is look at the stock pages. Haliburton, the oil services company, is up from 28.69 to 62 over the year. Exxon/Mobil is up from 45.09 to 64.37 over the year. Sunoco is up from 30.26 a year ago to 73.22. The list goes on and on.
Back in World War II, there was an agency--led by a man named Harry Truman--which aggressively prosecuted companies that tried to profiteer on the war. Now profiteering on war, and on national tragedy it seems, is simply seen in Washington as good business, to be rewarded by investors.
Americans are now paying the price for handing all branches of the government over to one party. Even with the Democratic Party little more than an opposition in name only, if it had been in charge of even one of the two houses of Congress, you can bet that the dynamics of competitive politics would have led to hearings into price gouging and disaster profiteering, but with Republicans in charge in both chambers, the odds of that happening are zero. Likewise, with free-market zealots being appointed by President Bush in droves to the federal bench, don't expect any relief in the courts.
The impact of the oil companies' incredible greed will be profound. It's not just that they are picking our pockets at a time of national crisis; their short-term profiteering is likely to send the national economy into a tailspin as higher oil prices stunt consumer spending and push up all energy costs.
So far, the media coverage has focused on the actions of individual looters in the destroyed city of New Orleans. To the extent that gas prices have received attention, the focus has been at the retail end.
Nobody's talking about the middlemen, and especially about the giant corporations that are really raking it in.
When you think about it though, you have to say that the cold, calculating effort by some corporate executives to take advantage of a national tragedy is far more vile and reprehensible than the actions of desperate or even criminally opportunistic individuals in a city that was essentially abandoned for days by federal authorities.
The inaction of the Bush Administration and of the Republican Congress to challenge, or at least investigate, this outrage is equally disgusting.
By DAVE LINDORFF
In a crisis, there are always those who will obscenely take advantage of the situation for personal gain.
I'm not talking here about the looters in New Orleans, as ugly and mean as some of their actions have been.
I am talking about the oil industry.
The evidence is clear:
Ten percent of American oil production is off line because of Hurricane Katrina. That has led to a nominal increase in the per-barrel world price of oil, since 10 percent of U.S. production represents only a single-digit portion of world demand. Yet gasoline prices in the US have soared, from about $2..40 per gallon before the hurricane hit to over $3.00 a gallon now nationwide-a jump of 25 percent.
Local gas station owners say that they have to raise their prices immediately because they only keep a few days' supply on hand and need to have the cash to pay for the next delivery, which will be priced at the new higher wholesale rate. I am inclined to believe that, if their new price is only around 20-25 percent higher than before.
But clearly, somewhere between the oil coming out of the ground or into a port terminal, and those retail pumps, some businesses are cleaning up at the expense of the public.
Read that: the oil companies are gouging and profiteering on disaster.
All you need to do is look at the stock pages. Haliburton, the oil services company, is up from 28.69 to 62 over the year. Exxon/Mobil is up from 45.09 to 64.37 over the year. Sunoco is up from 30.26 a year ago to 73.22. The list goes on and on.
Back in World War II, there was an agency--led by a man named Harry Truman--which aggressively prosecuted companies that tried to profiteer on the war. Now profiteering on war, and on national tragedy it seems, is simply seen in Washington as good business, to be rewarded by investors.
Americans are now paying the price for handing all branches of the government over to one party. Even with the Democratic Party little more than an opposition in name only, if it had been in charge of even one of the two houses of Congress, you can bet that the dynamics of competitive politics would have led to hearings into price gouging and disaster profiteering, but with Republicans in charge in both chambers, the odds of that happening are zero. Likewise, with free-market zealots being appointed by President Bush in droves to the federal bench, don't expect any relief in the courts.
The impact of the oil companies' incredible greed will be profound. It's not just that they are picking our pockets at a time of national crisis; their short-term profiteering is likely to send the national economy into a tailspin as higher oil prices stunt consumer spending and push up all energy costs.
So far, the media coverage has focused on the actions of individual looters in the destroyed city of New Orleans. To the extent that gas prices have received attention, the focus has been at the retail end.
Nobody's talking about the middlemen, and especially about the giant corporations that are really raking it in.
When you think about it though, you have to say that the cold, calculating effort by some corporate executives to take advantage of a national tragedy is far more vile and reprehensible than the actions of desperate or even criminally opportunistic individuals in a city that was essentially abandoned for days by federal authorities.
The inaction of the Bush Administration and of the Republican Congress to challenge, or at least investigate, this outrage is equally disgusting.
