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April 16, 2004
The Case for Consumer Activism
The Case for Consumer Activism
Last week, Stephen Farrell, a British journalist, was taken hostage for eight hair-raising hours by anti-American fighters outside of Fallujah. Farrell recounts the words of one of his mujhadeen captors:"I need for you to ask Bush. Amreeka, what do you need here from Iraq? I need to know why the American Army is killing the people of Iraq," the man said, and then answered his own question: "The petrol.”
Farrell’s captor is not alone in his conviction. Sooner or later in virtually all conversations about U.S. policy in Iraq, someone will propose the one-word explanation for the whole affair: oil. But there are also those who dismiss the oil explanation as overly simplified. They argue that the U.S. has long since diversified its portfolio of both energy sources and oil providers, and that the real issue at play in Fallujah is not simply the threat to oil supplies but rather the growth of extremist Islamic groups bent on the violent overthrow of the Western capitalist order, quite possibly with “weapons of mass destruction.” In fact, the two positions are hardly mutually exclusive, and the critical question may be to ask how the global demand for oil actually gave rise to Fallujah.
As of 2000, the United States consumed an average of almost 20 million barrels of oil per day, a number which represents 26% of the world’s total oil consumption and somewhat more than the next six biggest oil-consumer nations combined. Still, that year oil represented only 39% of the U.S. energy supply, with domestically-produced sources from coal to nuclear power accounting for the rest. And, while in 2000 the U.S. imported well over half of its oil, the Persian Gulf region as a whole accounted for only one fifth of that imported supply. In recent years, therefore, the U.S. has depended upon the Persian Gulf region for something less than 5% of its total energy.
This low number might suggest that, acts of terrorism aside, we could safely ignore the nasty politics of the Middle East and be none the worse off economically. But, of course, the situation is not that simple. While oil represents only 39% of the American energy supply overall, it represents nearly 100% of the supply related to transportation. Without petroleum products, U.S. cars, trains, plains, and ships would grind to the proverbial halt, and, with them, the flow of goods, including food, necessary to sustain not just “the economy,” but also human life. Transportation uses are only the most obvious way in which the modern economy has an “inelastic” dependence on oil --- there are myriad other industrial and commercial areas that are similarly incompatible with non-oil energy supplies, and they will be for the foreseeable future.
Thus, changes in the price of oil have an immediate and profound economic impact. Simply put, when oil prices go up, everything gets more expensive (a.k.a. higher inflation,) which, in turn, tends to reduce overall production (i.e. lower Gross Domestic Product.) Lower production implies fewer jobs and leads quickly to the vicious recessionary cycle of reduced demand driving still lower production and higher unemployment. In short, it’s an ugly mess that can’t easily be solved, even if everyone does refinance their home mortgage.
America’s per capita energy use tops the list of industrialized nations and is an outlier on the energy consumption curve, doubling, in fact, the Western European average. This naturally gives rise to the image of gluttonous Americans living in over-heated homes and driving gas-guzzling SUVs, but the figures are somewhat misleading. America consumes more energy overall than other countries partly because it has the largest population among developed countries, and also because it has the biggest industrial economy. Industrial use accounts for nearly 40% of total U.S. energy consumption, and while the products of U.S. industry are consumed all over the world, the energy cost of their creation inflates only the U.S. per capita figure. The point is not so much that the American energy-hog lifestyle is anomalous as compared to that of, say, France or Japan, but rather that the developed world as a whole is a voracious energy consumer, and oil represents a critical component of the energy mix. Thus, the rise of rabidly anti-American, anti-capitalist regimes in the Middle East – a region which accounts for 67% of known global oil reserves -- could very easily lead to economic mayhem everywhere else. The mujhadeen in Fallujah have got it right: oil is indeed the main reason why we went in and are still there. It is also the reason why the most dangerous terrorists come from the region.
Whether the United States was right or wrong to link Saddam Hussein to al Qaida, it is not particularly controversial to point out that oil-rich Middles Eastern countries are home to the extremist Islamic movements which have given rise to the current terrorist jihad against the West. The critical question to ask then is how did this happen. Speaking at an oil industry gathering, Dick Cheney once said, "The problem is that the good Lord didn't see fit to put oil and gas reserves where there are democratic governments." The problem with Cheney’s point is one of misplaced causality. Leaving God out of it, The Guardian’s Brian Whitaker makes the point that abundant supplies of oil tend to be anti-democratic.
“Possession of vast mineral wealth produces governments that have little or no need to raise money by taxing their citizens,” writes Whitaker. “As much as we may dislike taxation, it is a central part of democracy - people who are forced to pay taxes will, sooner or later, demand a say in how that money is spent.” Instead, Whitaker explains that oil-rich regimes – at their most benevolent -- render their populations politically complacent by keeping them on the dole. They “buy off or co-opt potential opponents,” and generally aim for a static, self-enriching equilibrium. But the rise of Wahhabism and the more virulent strain of Bin Ladenism suggest that a strong cash flow alone does not buy social health.
In some sense, fundamentalist Islamic clerics are right to rail against the bankrupt values of their governments. As any business leader knows, high morale is born of challenging goals tied to fair rewards, the freedom to innovate, and some sense of progress. Like bloated American car manufacturers circa 1975, the oil-rich Persian Gulf states have fallen into the uninspiring, reactionary role of macro-economic cash cows.
In some very real way, then, Americans are losing their lives in Iraq today because, for many years, America – and the world in general -- was content to look the other way while buying prodigious amounts of oil from undemocratic regimes.
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Posted by oliver at 04:46 PM | Comments (0)
April 10, 2004
CSJ Blogs Surfing other people's
CSJ Blogs
Surfing other people's weblogs has the same addictive quality as thrift shopping. You never know what you'll find, and you should probably be doing something else. But then there is that find that makes you smile, that brings back memories, that would be such a funny gift. The sun comes out, and time feels less oppressive. Blogging has taken root at the Columbia School of Journalism. Voices are beginning to emerge, friends linking to each other. I wonder if this is the break-through class at the j-school with regard to blogging? Sure, there were blogs and sites before, but was there a blogger community? Alex Huddleston sent me a link to her beautiful, photo-rich site and from there I made my way to Sam Knight's account of Alla Nostra which leaves one sheepishly determined to get back into the business of having friends and giving dinner parties. And I read many others as well to whom I will link as soon as I migrate this tired orange site from blogger to MoveableType and figure out how to do side bars.....--------
Posted by oliver at 01:10 PM | Comments (0)
April 01, 2004
Tragic Bush The infuriating thing
Tragic Bush
The infuriating thing about President Bush is how so often flawless reasoning seems to lead him to flawed decisions. It is the essence of tragedy: the hero thinks he is doing the right thing, but the more committed to his path, the greater the resulting catastrophe.Take, for example, the Bush administration decision back in December to bar France, Germany, and other nations from the lucrative Iraqi reconstruction contracts.
“It’s very simple,” said Bush. “Our people risk their lives. Coalition, friendly coalition folks risk their lives, and, therefore, the contracting is going to reflect that.”
Hard to argue with the logic, but, like so many clear and tough-minded Bush policies, it left you with a sick feeling in the pit of your stomach. Right or wrong, we knew we had expended a great deal of our international goodwill when we invaded Iraq. By December, it was also quite clear that we would need plenty of financial and political help to put Iraq back on its feet. But we stood proudly and dumbly on a principal of righteous self interest. Off went faithful James Baker to Europe with the awkward task of asking anti-war Europeans to forgive Iraqi debt while also informing them that their companies would be barred from the enormous reconstruction contracts.
Then came the devastating subway bombs in Madrid, and what had once appeared merely awkward became demonstrably shortsighted. Exploding subway cars tend to focus the public mind, and the fall of long serving Prime Ministers has a similarly unambiguous effect on nearby politicians. Paris, Bonn, and Rome are now looking hard for good reasons not to further distance themselves from the infidel occupier, and smart commentators on both side of the American political spectrum urge the administration to proactive diplomacy.
“It’s time for the American government to get serious about dealing with the political crisis in Euorpe,” writes William Kristol in the latest Weekly Standard. “There’s a big difference between an isolated Al Qaeda victory,…and a chain reaction of political capitulations that invite more terror.”
It’s hard not to think of chickens coming home to roost. Certainly, the administration’s case for western unity in the face of angry jihadists would be somewhat stronger if German companies like Siemens and French companies like Elf Aquitaine were just now unpacking their bags in Baghdad. Instead, Halliburton is alone in Baghdad and Washington’s neo-conservatives write with helpless disgust of Eurpoean “appeasement.”
The Iraqi contract business is, unfortunately, but one example of Bush’s lack of Solomonesque touch. Even more recently comes his support for a Constitutional amendment outlawing gay marriage. A famously instinctive decision maker, one imagines him taking all of five minutes to conclude that marriage should be “between a man and a woman.” Consulting his pollsters, he finds that his position has a solid majority behind it. “If I don’t stand for the sanctity of straight marriage, what do I stand for,” one imagines the President thinking. Add in a bit of political calculus about “shoring up the conservative base,” and it’s hardly a stretch for him to support the amendment. Thus, in his own unreflective, and perhaps even uncalculating, fashion he blithely leads the country into a vicious, unproductive, and largely avoidable political brawl.
America is at “war" with fundamentalists, angry people with a tragically simplistic understanding of the world. People who do not listen and who reject compromise. In the President’s approach to combating this deadly global problem, one wishes he would admit some degree of complexity in his own thinking and steer clear of the same sort of righteous intransigence.
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Posted by oliver at 02:00 AM | Comments (0)