Johann Hari:
Thursday, 29 May 2008
This week, a battalion of angry addicts brought London to a standstill. They snarled up the traffic, then marched on 10 Downing Street to demand their fix at prices they can afford. Across the world, in countries as different as the US and Iran, fellow junkies are rising up in rage. Their addiction is to a gloopy black drug called petrol – and we are all about to go cold turkey.
In the past seven years, the price of oil has soared from $30 (£15) a barrel to $140. By the end of next year it could be at $200. No matter how much we plead or howl at our governments, it will never go back: the final act of the Age of Oil has begun.
The era that is ending began at 10.30am on 10 January 1901, on a high hill called Spindletop in south-eastern Texas. A pair of pioneer brothers managed to drill down into the biggest oilfield ever found. Until then, the dribbles of oil that had been discovered were used only for kerosene lamps – but within a decade, this vast gushing supply was driving the entire global economy. It made the 20th century – its glories, and its gutters – possible. Humans were suddenly able to use in one frenetic burst an energy supply that had taken 150 million years to build up. A species that died before the age of 40 after a life of boring, back-breaking labour spurted forward so far and so fast that today billions live into their eighties after a life of leisure and plenty.
Oil now drives everything we do. It shuttles us across the globe, we fight wars for it, and we even eat it: to farm a single cow and deliver it to slaughter burns up six barrels of oil – enough to drive from New York to LA. That's why food becomes expensive when oil becomes expensive.
It is totally understandable that most of us want to live forever in that sweet niche in history when we had seemingly infinite reservoirs of oil, and no awareness that burning it would, in time, burn us too. But, alas, we need to wake up and smell the fumes. There are three reasons why the placebos demanded by the petrol protesters and the politicians cowering from them across the world – lower taxes! find more oil! dig! burn! – are a delusion.
Reality Check One: Petrol is finite. There is a limited amount of oil in the world, and we have already burned more than 900 billion barrels of it. There is a complex scientific debate about when we will reach the point of "peak oil", when we will have used up more than half of all the supplies on earth. Some geologists think this moment has already passed. Others – mostly oil industry flunkies – think we have as long as 30 years to go. But all agree the remaining oil is harder to reach, and much of it can never be accessed.
The facts are stark. All the biggest oilfields on earth were discovered before my parents were born. The discovery of new oilfields peaked in 1965, and has been falling ever since. The last year in which humans found more oil than we burned was the year I was born: 1979.
So we have a diminishing supply – at the very moment when billions more people want access to it. Car ownership in India has trebled in the past decade, and it will treble again by 2020. In China, three-quarters of urban Chinese say they plan to buy a car in the next five years. These factors mean we are unquestionably moving from having a world with growing pools of cheap oil to dwindling supplies of expensive oil.
Reality Check Two: Even if we had infinite supplies of free petrol, we couldn't afford to use it without dramatically destabilising the climate. To use just a few examples: Spain and Australia are currently suffering their worst droughts since records began, and several cities are on the brink of running out of drinking water. The oceans are rapidly turning more acidic, to levels scientists didn't expect to see until 2050. The Arctic is now almost free of sea ice in the summer.
This is all with just one degree of global warming. The world's climatologists agree that if we burn up most of the remaining dribbles of oil on earth, we could be on course for six degrees this century. The last time the world warmed so quickly was 251 million years ago – and 95 per cent of everything on earth died.
Reality Check Three: Our addiction to oil means we can never undermine the Islamic fundamentalists who want to kill us – and often actually help them.
Most of the world's remaining oil is in the Middle East. In order to access it, we have a twin-track policy. To start with, we support the most repressive dictatorship in the region – the torturing, sharia-law enforcing House of Saud – because they keep the supply running nicely. The Saudi state then uses the money we pay at the pump to fund a vast network of extreme madrasahs and mosques across the world – including within the US and Europe – preaching that democracy is "evil", women should be subordinated, Jews are "pigs and apes", and gays should be killed. We do not query this because, as the writer Thomas Friedman put it, "junkies don't tell the truth to their dealers".
Where we cannot find a friendly local tyrant, we invade the country in order to control the oil ourselves. Even John McCain admitted this month that Iraq was about oil, arguing that energy independence would "prevent us from having ever to send our young men and women into conflict again in the Middle East." (He later claimed with a red face he was talking exclusively about the first Iraq war.)
On their own, each of these inconvenient truths would be enough to require us to begin an urgent transition away from petrol. Together, they are unanswerable.
Of course it's tempting to draw the oily covers over our head and cry for tiny little steps like cutting a few pence off petrol taxes, or squeezing out a few more barrels as Gordon Brown begged yesterday. But these measures would be at best a local anaesthetic, putting off the moment when the rapid transition to a global economy run on carbon-free energy sources must start.
The longer we delay, the harder it will be. As Paul Roberts puts in his book The End of Oil: "The real question is not whether change is going to come, but whether the shift will be peaceful and orderly or chaotic and violent because we waited too long to begin planning for it."
Every penny now should be spent not on perpetuating petrol, but on developing and disseminating alternative fuels. The addiction that began a century ago on a hill in Texas is ending – and we have no choice but to check en masse into petro-rehab.
Thursday 29 May 2008
Tuesday 27 May 2008
Oil price mocks fuel realities
By F William Engdahl
As business and consumers consider the implications for them of crude oil selling at US$130-plus per barrel, they should bear in mind that, at a conservative calculation, at least 60% of that price comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York Nymex futures exchanges and uncontrolled inter-bank or over-the-counter trading to avoid scrutiny (see Speculators knock OPEC off oil-price perch, Asia Times Online, May 6, 2008).
US margin rules of the government's Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex by paying only 6% of the value of the contract. At the present price of around $130 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120.
This extreme "leverage" of 16 to one helps drive prices to wildly unrealistic levels and offset bank losses in subprime and other disasters at the expense of the overall population.
The hoax of "peak oil" - namely the argument that oil production has hit the point where more than half all reserves have been used and the world is on the downslope of oil at cheap price and abundant quantity - has enabled this costly fraud to continue since the invasion of Iraq in 2003, with the help of key banks, oil traders and big oil majors.
Washington is trying to shift blame, as always, to Arab oil producers and the Organization of Petroleum Exporting Countries (OPEC). The problem is not a lack of crude oil supply. In fact, the world is in over-supply now. Yet the price climbs relentlessly higher. Why? The answer lies in what are clearly deliberate US government policies that permit the unbridled oil price manipulations.
World oil demand flat, prices boom
The chief market strategist for one of the world's leading oil industry banks, David Kelly, of JP Morgan Funds, recently admitted something telling to the Washington Post: "One of the things I think is very important to realize is that the growth in the world oil consumption is not that strong."
One of the stories used to support the oil futures speculators is the allegation that China's demand for imported oil is exploding out of control, driving shortages in the supply-demand equilibrium. Yet the facts do not support the China demand thesis.
The US government's Energy Information Administration (EIA) concluded in its most recent monthly Short Term Energy Outlook report that US oil demand is expected to decline by 190,000 barrels per day (b/d) this year. That is mainly owing to the deepening economic recession.
Chinese consumption, the EIA says, far from exploding, is expected to increase this year by only 400,000 barrels a day. That is hardly the "surging oil demand" blamed on China in the media. Last year, China imported 3.2 million barrels per day, and its estimated usage was around 7 million b/d total. The US, by contrast, consumes around 20.7 million b/d.
That means the key oil-consuming nation, the US, is experiencing a significant drop in demand. China, which consumes only a third of the oil the US does, will see a minor rise in import demand compared with the total daily world oil output of some 84 million barrels, less than half of one percent of total demand.
OPEC has its 2008 global oil demand growth forecast unchanged at 1.2 million barrels per day (mm bpd), as slowing economic growth in the industrialized world is offset by slightly growing consumption in developing nations. OPEC predicts that global oil demand in 2008 will average 87 million bpd, largely unchanged from its previous estimate. Demand from China, the Middle East, India and Latin America is forecast to be stronger, but the European Union and North American demand will be lower.
So the world's largest oil consumer faces a sharp decline in consumption, a decline that will worsen as the housing and related economic effects of the US securitization crisis in finance de-leverages. The price in normal open or transparent markets should presumably be falling not rising. No supply crisis justifies the way the world's oil is being priced today.
Big new oil fields coming online
Not only is there no supply crisis to justify such a price bubble. There are several giant new oil fields due to begin production over the course of 2008 to further add to supply.
The world's single-largest oil producer, Saudi Arabia, is finalizing plans to boost drilling activity by a third and increase investments by 40%. Saudi Aramco's plan, which runs from 2009 to 2013, is expected to be approved by the company's board and the Oil Ministry this month. The kingdom is in the midst of a $50 billion oil production expansion plan to meet growing demand in Asia and other emerging markets and is expected to boost its pumping capacity to a total of 12.5 mm bpd by next year, about 11% up from the present capacity of 11.3 mm bpd.
In April this year, Saudi Arabia's Khursaniyah oilfield began pumping and will soon add another 500,000 bpd to world oil supply of high grade Arabian light crude. In addition, the country's Khurais oilfield development, the largest of Saudi Aramco's projects, will boost the production capacity of Saudi oilfields from 11.3 million bpd to 12.5 million bpd by 2009. Khurais is planned to add another 1.2 million bpd of high-quality Arabian light crude to Saudi Arabia's export capacity.
Brazil's Petrobras is in the early phase of exploiting newly confirmed oil reserves offshore in its Tupi field that could be as great or greater than the North Sea. Petrobras says the new ultra-deep Tupi field could hold as much as 8 billion barrels of recoverable light crude. When online in a few years it is expected to put Brazil among the world's "top 10" oil producers, between Nigeria and those of Venezuela.
In the US, aside from rumors that the big oil companies have been deliberately sitting on vast new reserves in Alaska for fear that the prices of recent years would plunge on over-supply, the US Geological Survey (USGS)recently issued a report that confirmed major new oil reserves in an area called the Bakken, which stretches across North Dakota, Montana and south-eastern Saskatchewan. The USGS estimates up to 3.65 billion barrels of oil in the Bakken.
These are just several confirmations of large new oil reserves to be exploited. Iraq, where the Anglo-American Big Four oil majors are salivating to get their hands on unexplored fields, is believed to hold oil reserves second only to Saudi Arabia while much of the world has yet to be explored for oil. At prices above $60 a barrel huge new potentials become economic. The major problem faced by Big Oil is not finding replacement oil but keeping the lid on world oil finds in order to maintain present exorbitant prices. Here they have some help from Wall Street banks and the two major oil trade exchanges - Nymex and London-Atlanta's ICE and ICE Futures.
Then why do prices still rise?
There is growing evidence that the recent speculative bubble in oil, which has gone asymptotic since January, is about to pop. Late last month, in Dallas, Texas, the American Association of Petroleum Geologists held its annual conference, with major oil executives and geologists present. According to one participant, knowledgeable oil industry chief executives reached the consensus that "oil prices will likely soon drop dramatically and the long-term price increases will be in natural gas".
Just a few days earlier, Lehman Brothers, a Wall Street investment bank, had said that the current oil price bubble was coming to an end. Michael Waldron, the bank's chief oil strategist, was quoted in Britain's Daily Telegraph on April 24 saying, "Oil supply is outpacing demand growth. Inventories have been building since the beginning of the year."
In the US, stockpiles of oil climbed by almost 12 million barrels in April according to the May 7 EIA monthly report on inventory, up by nearly 33 million barrels since January. At the same time, MasterCard's May 7 US gasoline report showed that gas demand has fallen by 5.8%. And refiners are reducing their refining rates dramatically to adjust to the falling gasoline demand. They are now running at 85% of capacity, down from 89% a year ago, in a season when production is normally 95%. The refiners today are clearly trying to draw down gasoline inventories to bid gasoline prices up. "It's the economy, stupid," to paraphrase Bill Clinton's infamous 1992 election quip to daddy Bush. It's called economic recession.
The May 8 report from Oil Movements, a British company that tracks oil shipments worldwide, shows that oil in transit on the high seas is also quite strong. Almost every category of shipment is running higher than it was a year ago. The report notes that, "In the West, a big share of any oil stock building done this year has happened offshore, out of sight." Some industry insiders say the global oil industry from the activities and stocks of the Big Four to the true state of tanker and storage and liftings, is the most secretive industry in the world with the possible exception of the narcotics trade.
Goldman Sachs again in the middle
The oil price today, unlike 20 years ago, is determined behind closed doors in the trading rooms of giant financial institutions like Goldman Sachs, Morgan Stanley, JP Morgan Chase, Citigroup, Deutsche Bank or UBS. The key exchange in the game is the London ICE Futures Exchange (formerly the International Petroleum Exchange). ICE Futures is a wholly owned subsidiary of the Atlanta Georgia International Commodities Exchange. ICE in Atlanta was founded in part by Goldman Sachs, which also happens to run the world's most widely used commodity price index, the GSCI, which is over-weighted to oil prices.
As I noted in my earlier article, ICE was the focus of a recent congressional investigation. It was named both in the Senate's Permanent Sub-committee on Investigations' June 27, 2006, Staff Report and in the House Committee on Energy and Commerce's hearing in December 2007, which looked into unregulated trading in energy futures.
Both studies concluded that the energy price climb to $128 and beyond is driven by billions of dollars' worth of oil and natural gas futures contracts being placed on the ICE. Through a convenient regulation exception granted by the George W Bush administration in January 2006, the ICE Futures trading of US energy futures is not regulated by the Commodities Futures Trading Commission (CFTC), even though the ICE Futures US oil contracts are traded in ICE affiliates in the US. And at Enron's request, the CFTC exempted the over-the-counter oil futures trades in 2000.
So it is no surprise to see in a May 6 report from Reuters that Goldman Sachs announces oil could in fact be on the verge of another "super spike", possibly taking oil as high as $200 a barrel within the next six to 24 months. That headline, "$200 a barrel!" became the major news story on oil for the next two days. How many gullible lemmings followed behind with their money bets?
Arjun Murti, Goldman Sachs' energy strategist, blamed what he called "blistering" (sic) demand from China and the Middle East, combined with his assertion that the Middle East is nearing its maximum ability to produce more oil. "Peak oil" mythology again helps Wall Street. The degree of unfounded hype reminds one of the self-serving Wall Street hype in 1999-2000 around dot.com stocks or Enron.
In 2001, just before the dot.com crash in the NASDAQ, some Wall Street firms were pushing the sale to the gullible public of stocks that their companies were quietly dumping. Or they were pushing dubious stocks for companies where their affiliated banks had a financial interest. In short, as later came out in Congressional investigations, companies with a vested interest in a certain financial outcome used the media to line their pockets and that of their companies, leaving the public investor holding the bag.
It would be interesting for Congress to subpoena the records of the futures positions of Goldman Sachs and a handful of other major energy futures players to see if they are invested to gain from a further rise in oil to $200, not forgetting that 16 to one leverage with which a hedge fund or bank can buy oil futures.
We are hit with an endless series of plausible arguments for the high price of oil: a "terrorism risk premium", a "blistering" rise in demand of China and India; unrest in the Nigerian oil region; oil pipelines' blown up in Iraq; possible war with Iran ... And above all the hype about peak oil. Oil speculator T Boone Pickens has reportedly raked in a huge profit on oil futures and argues, conveniently, that the world is on the cusp of "peak oil". So does the Houston investment banker and friend of Vice President Dick Cheney, Matt Simmons.
As noted in the June 2006 US Senate report, The Role of Market Speculation in Rising Oil and Gas Prices, "There's a few hedge fund managers out there who are masters at knowing how to exploit the peak oil theories and hot buttons of supply and demand, and by making bold predictions of shocking price advancements to come they only add more fuel to the bullish fire in a sort of self-fulfilling prophecy."
Will a Democratic Congress act to change the carefully crafted opaque oil futures markets in an election year and risk bursting the bubble? On May 12, the House Energy and Commerce Committee stated it will look at this issue in June.
F William Engdahl is author of A Century of War: Anglo-American Oil Politics and the New World Order (PlutoPress), and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (Global Research, available at www.globalresearch.ca). He may be reached at info@engdahl.oilgeopolitics.net.
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As business and consumers consider the implications for them of crude oil selling at US$130-plus per barrel, they should bear in mind that, at a conservative calculation, at least 60% of that price comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York Nymex futures exchanges and uncontrolled inter-bank or over-the-counter trading to avoid scrutiny (see Speculators knock OPEC off oil-price perch, Asia Times Online, May 6, 2008).
US margin rules of the government's Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex by paying only 6% of the value of the contract. At the present price of around $130 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120.
This extreme "leverage" of 16 to one helps drive prices to wildly unrealistic levels and offset bank losses in subprime and other disasters at the expense of the overall population.
The hoax of "peak oil" - namely the argument that oil production has hit the point where more than half all reserves have been used and the world is on the downslope of oil at cheap price and abundant quantity - has enabled this costly fraud to continue since the invasion of Iraq in 2003, with the help of key banks, oil traders and big oil majors.
Washington is trying to shift blame, as always, to Arab oil producers and the Organization of Petroleum Exporting Countries (OPEC). The problem is not a lack of crude oil supply. In fact, the world is in over-supply now. Yet the price climbs relentlessly higher. Why? The answer lies in what are clearly deliberate US government policies that permit the unbridled oil price manipulations.
World oil demand flat, prices boom
The chief market strategist for one of the world's leading oil industry banks, David Kelly, of JP Morgan Funds, recently admitted something telling to the Washington Post: "One of the things I think is very important to realize is that the growth in the world oil consumption is not that strong."
One of the stories used to support the oil futures speculators is the allegation that China's demand for imported oil is exploding out of control, driving shortages in the supply-demand equilibrium. Yet the facts do not support the China demand thesis.
The US government's Energy Information Administration (EIA) concluded in its most recent monthly Short Term Energy Outlook report that US oil demand is expected to decline by 190,000 barrels per day (b/d) this year. That is mainly owing to the deepening economic recession.
Chinese consumption, the EIA says, far from exploding, is expected to increase this year by only 400,000 barrels a day. That is hardly the "surging oil demand" blamed on China in the media. Last year, China imported 3.2 million barrels per day, and its estimated usage was around 7 million b/d total. The US, by contrast, consumes around 20.7 million b/d.
That means the key oil-consuming nation, the US, is experiencing a significant drop in demand. China, which consumes only a third of the oil the US does, will see a minor rise in import demand compared with the total daily world oil output of some 84 million barrels, less than half of one percent of total demand.
OPEC has its 2008 global oil demand growth forecast unchanged at 1.2 million barrels per day (mm bpd), as slowing economic growth in the industrialized world is offset by slightly growing consumption in developing nations. OPEC predicts that global oil demand in 2008 will average 87 million bpd, largely unchanged from its previous estimate. Demand from China, the Middle East, India and Latin America is forecast to be stronger, but the European Union and North American demand will be lower.
So the world's largest oil consumer faces a sharp decline in consumption, a decline that will worsen as the housing and related economic effects of the US securitization crisis in finance de-leverages. The price in normal open or transparent markets should presumably be falling not rising. No supply crisis justifies the way the world's oil is being priced today.
Big new oil fields coming online
Not only is there no supply crisis to justify such a price bubble. There are several giant new oil fields due to begin production over the course of 2008 to further add to supply.
The world's single-largest oil producer, Saudi Arabia, is finalizing plans to boost drilling activity by a third and increase investments by 40%. Saudi Aramco's plan, which runs from 2009 to 2013, is expected to be approved by the company's board and the Oil Ministry this month. The kingdom is in the midst of a $50 billion oil production expansion plan to meet growing demand in Asia and other emerging markets and is expected to boost its pumping capacity to a total of 12.5 mm bpd by next year, about 11% up from the present capacity of 11.3 mm bpd.
In April this year, Saudi Arabia's Khursaniyah oilfield began pumping and will soon add another 500,000 bpd to world oil supply of high grade Arabian light crude. In addition, the country's Khurais oilfield development, the largest of Saudi Aramco's projects, will boost the production capacity of Saudi oilfields from 11.3 million bpd to 12.5 million bpd by 2009. Khurais is planned to add another 1.2 million bpd of high-quality Arabian light crude to Saudi Arabia's export capacity.
Brazil's Petrobras is in the early phase of exploiting newly confirmed oil reserves offshore in its Tupi field that could be as great or greater than the North Sea. Petrobras says the new ultra-deep Tupi field could hold as much as 8 billion barrels of recoverable light crude. When online in a few years it is expected to put Brazil among the world's "top 10" oil producers, between Nigeria and those of Venezuela.
In the US, aside from rumors that the big oil companies have been deliberately sitting on vast new reserves in Alaska for fear that the prices of recent years would plunge on over-supply, the US Geological Survey (USGS)recently issued a report that confirmed major new oil reserves in an area called the Bakken, which stretches across North Dakota, Montana and south-eastern Saskatchewan. The USGS estimates up to 3.65 billion barrels of oil in the Bakken.
These are just several confirmations of large new oil reserves to be exploited. Iraq, where the Anglo-American Big Four oil majors are salivating to get their hands on unexplored fields, is believed to hold oil reserves second only to Saudi Arabia while much of the world has yet to be explored for oil. At prices above $60 a barrel huge new potentials become economic. The major problem faced by Big Oil is not finding replacement oil but keeping the lid on world oil finds in order to maintain present exorbitant prices. Here they have some help from Wall Street banks and the two major oil trade exchanges - Nymex and London-Atlanta's ICE and ICE Futures.
Then why do prices still rise?
There is growing evidence that the recent speculative bubble in oil, which has gone asymptotic since January, is about to pop. Late last month, in Dallas, Texas, the American Association of Petroleum Geologists held its annual conference, with major oil executives and geologists present. According to one participant, knowledgeable oil industry chief executives reached the consensus that "oil prices will likely soon drop dramatically and the long-term price increases will be in natural gas".
Just a few days earlier, Lehman Brothers, a Wall Street investment bank, had said that the current oil price bubble was coming to an end. Michael Waldron, the bank's chief oil strategist, was quoted in Britain's Daily Telegraph on April 24 saying, "Oil supply is outpacing demand growth. Inventories have been building since the beginning of the year."
In the US, stockpiles of oil climbed by almost 12 million barrels in April according to the May 7 EIA monthly report on inventory, up by nearly 33 million barrels since January. At the same time, MasterCard's May 7 US gasoline report showed that gas demand has fallen by 5.8%. And refiners are reducing their refining rates dramatically to adjust to the falling gasoline demand. They are now running at 85% of capacity, down from 89% a year ago, in a season when production is normally 95%. The refiners today are clearly trying to draw down gasoline inventories to bid gasoline prices up. "It's the economy, stupid," to paraphrase Bill Clinton's infamous 1992 election quip to daddy Bush. It's called economic recession.
The May 8 report from Oil Movements, a British company that tracks oil shipments worldwide, shows that oil in transit on the high seas is also quite strong. Almost every category of shipment is running higher than it was a year ago. The report notes that, "In the West, a big share of any oil stock building done this year has happened offshore, out of sight." Some industry insiders say the global oil industry from the activities and stocks of the Big Four to the true state of tanker and storage and liftings, is the most secretive industry in the world with the possible exception of the narcotics trade.
Goldman Sachs again in the middle
The oil price today, unlike 20 years ago, is determined behind closed doors in the trading rooms of giant financial institutions like Goldman Sachs, Morgan Stanley, JP Morgan Chase, Citigroup, Deutsche Bank or UBS. The key exchange in the game is the London ICE Futures Exchange (formerly the International Petroleum Exchange). ICE Futures is a wholly owned subsidiary of the Atlanta Georgia International Commodities Exchange. ICE in Atlanta was founded in part by Goldman Sachs, which also happens to run the world's most widely used commodity price index, the GSCI, which is over-weighted to oil prices.
As I noted in my earlier article, ICE was the focus of a recent congressional investigation. It was named both in the Senate's Permanent Sub-committee on Investigations' June 27, 2006, Staff Report and in the House Committee on Energy and Commerce's hearing in December 2007, which looked into unregulated trading in energy futures.
Both studies concluded that the energy price climb to $128 and beyond is driven by billions of dollars' worth of oil and natural gas futures contracts being placed on the ICE. Through a convenient regulation exception granted by the George W Bush administration in January 2006, the ICE Futures trading of US energy futures is not regulated by the Commodities Futures Trading Commission (CFTC), even though the ICE Futures US oil contracts are traded in ICE affiliates in the US. And at Enron's request, the CFTC exempted the over-the-counter oil futures trades in 2000.
So it is no surprise to see in a May 6 report from Reuters that Goldman Sachs announces oil could in fact be on the verge of another "super spike", possibly taking oil as high as $200 a barrel within the next six to 24 months. That headline, "$200 a barrel!" became the major news story on oil for the next two days. How many gullible lemmings followed behind with their money bets?
Arjun Murti, Goldman Sachs' energy strategist, blamed what he called "blistering" (sic) demand from China and the Middle East, combined with his assertion that the Middle East is nearing its maximum ability to produce more oil. "Peak oil" mythology again helps Wall Street. The degree of unfounded hype reminds one of the self-serving Wall Street hype in 1999-2000 around dot.com stocks or Enron.
In 2001, just before the dot.com crash in the NASDAQ, some Wall Street firms were pushing the sale to the gullible public of stocks that their companies were quietly dumping. Or they were pushing dubious stocks for companies where their affiliated banks had a financial interest. In short, as later came out in Congressional investigations, companies with a vested interest in a certain financial outcome used the media to line their pockets and that of their companies, leaving the public investor holding the bag.
It would be interesting for Congress to subpoena the records of the futures positions of Goldman Sachs and a handful of other major energy futures players to see if they are invested to gain from a further rise in oil to $200, not forgetting that 16 to one leverage with which a hedge fund or bank can buy oil futures.
We are hit with an endless series of plausible arguments for the high price of oil: a "terrorism risk premium", a "blistering" rise in demand of China and India; unrest in the Nigerian oil region; oil pipelines' blown up in Iraq; possible war with Iran ... And above all the hype about peak oil. Oil speculator T Boone Pickens has reportedly raked in a huge profit on oil futures and argues, conveniently, that the world is on the cusp of "peak oil". So does the Houston investment banker and friend of Vice President Dick Cheney, Matt Simmons.
As noted in the June 2006 US Senate report, The Role of Market Speculation in Rising Oil and Gas Prices, "There's a few hedge fund managers out there who are masters at knowing how to exploit the peak oil theories and hot buttons of supply and demand, and by making bold predictions of shocking price advancements to come they only add more fuel to the bullish fire in a sort of self-fulfilling prophecy."
Will a Democratic Congress act to change the carefully crafted opaque oil futures markets in an election year and risk bursting the bubble? On May 12, the House Energy and Commerce Committee stated it will look at this issue in June.
F William Engdahl is author of A Century of War: Anglo-American Oil Politics and the New World Order (PlutoPress), and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (Global Research, available at www.globalresearch.ca). He may be reached at info@engdahl.oilgeopolitics.net.
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We have gone mad, Your Majesty, and only you can cure our affliction.
An open letter to the leader of Opec's biggest oil producer, the one man who can force Britain to cut its carbon emissions
-
- The Guardian,
- Tuesday May 27 2008
- Article history
King Abdaullah of Saudi Arabia
Your Majesty,
In common with the leaders of most western nations, our prime minister is urging you to increase your production of oil. I am writing to ask you to ignore him. Like the other leaders he is delusional, and is no longer competent to make his own decisions.
You and I know that there are several reasons for the high price of oil. Low prices at the beginning of this decade discouraged oil companies from investing in future capacity. There is a global shortage of skilled labour, steel and equipment. The weak dollar means that the price of oil is higher than it would have been if denominated in another currency. While your government says that financial speculation is an important factor, the Bank of England says it is not, so I don't know what to believe. The major oil producers have also become major consumers; in some cases their exports are falling even as their production has risen, because they are consuming more of their own output.
But what you know and I do not is the extent to which the price of oil might reflect an absolute shortage of global reserves. You and your advisers are perhaps the only people who know the answer to this question. Your published reserves are, of course, a political artefact unconnected to geological reality. The production quotas assigned to its members by Opec, the oil exporters' cartel, reflect the size of their stated reserves, which means that you have an incentive to exaggerate them. How else could we explain the fact that, despite two decades of furious pumping, your kingdom posts the same reserves as it did in 1988?
You say that you are saving your oil for the benefit of future generations. If this is true, it is a rational economic decision: oil in the ground looks like a better investment than money in the bank. But, reluctant as I am to question your Majesty's word, I must remind you that some oil analysts are now wondering whether this prudence is a convenient fiction. Are you restricting supply because you want to conserve stocks and keep the price high, or are you unable to raise production because your fabled spare capacity does not in fact exist?
I do not expect an answer to this question. I know that the true state of your reserves is a secret so closely guarded that oil analysts now resort to using spy satellites to try to estimate the speed of subsidence of the ground above your oil fields, as they have no other means of guessing how fast your reserves are running down.
What I know, and you may not, is that the high price of oil is currently the only factor implementing British government policy. The government claims that it is seeking to reduce carbon dioxide emissions, by encouraging people to use less fossil fuel. Now, for the first time in years, its wish has come true: people are driving and flying less. The AA reports that about a fifth of drivers are buying less fuel. A new study by the Worldwide Fund for Nature shows that businesses are encouraging their executives to use video conferences instead of flying. One of the most fuel-intensive industries of all, business-only air travel, has collapsed altogether.
In other words, your restrictions on supply - voluntary or otherwise - are helping the government to meet its carbon targets. So how does it respond? By angrily demanding that you remove them so that we can keep driving and flying as much as we did before. Last week, Gordon Brown averred that it's "a scandal that 40% of the oil is controlled by Opec, that their decisions can restrict the supply of oil to the rest of the world, and that at a time when oil is desperately needed, and supply needs to expand, that Opec can withhold supply from the market". In the United States, legislators have gone further: the House of Representatives has voted to bring a lawsuit against Opec's member states, and Democratic senators are trying to block arms sales to your kingdom unless you raise production.
This illustrates one of our leaders' delusions. They claim to wish to restrict the demand for fossil fuels, in order to address both climate change and energy security. At the same time, to quote Britain's Department for Business, they seek to "maximise economic recovery" from their remaining oil, gas and coal reserves. They persist in believing that both policies can be pursued at once, apparently unaware that if fossil fuels are extracted they will be burnt, however much they claim to wish to reduce consumption. The only states that appear to be imposing restrictions on the supply of fuel are the members of Opec, about which Brown so bitterly complains. Your Majesty, we have gone mad, and you alone can cure our affliction, by keeping your taps shut.
Our leaders, though they do not possess the least idea of whether the oil supplies required to support it will be sustained, are also overseeing a rapid expansion of our transport infrastructure. In the UK, we are building or upgrading thousands of miles of roads and doubling the capacity of our airports, in the expectation that there will be no restriction in the supply of fuel. The government's central forecast for the long-term price is just $70 a barrel.
Over the past few months, I have been trying to discover how the government derives this optimistic view. In response to a parliamentary question, it reveals that its projection is based on "the assessment made by the International Energy Agency in its 2007 World Energy Outlook". Well, last week the Wall Street Journal revealed that the IEA "is preparing a sharp downward revision of its oil-supply forecast". Its final report won't be released until November, but it has already concluded that "future crude supplies could be far tighter than previously thought". Its previous estimates of global production were wrong for one simple and shocking reason: it had based them on anticipated demand, rather than anticipated supply. It resolved the question of supply by assuming that it would automatically rise to meet demand, as if it were subject to no inherent restraints.
Our government must have known this, but it has refused to conduct its own analysis of global oil reserves. Uniquely among possible threats to the economy and national security, it has commissioned no research of any kind into this question. So earlier this year, I asked the Department for Business what contingency plans it possesses to meet the eventuality that the IEA's estimates could be wrong, and that global supplies of petroleum might peak in the near future. "The government," it replied, "does not feel the need to hold contingency plans." I am sure I do not need to explain the implications if its forecasts turn out to be wildly wrong.
Your Majesty, I recognise that this is not among your usual duties as the ruler of Saudi Arabia. But I respectfully beg you to save us from ourselves.
Yours Sincerely,
George Monbiot
Your Majesty,
In common with the leaders of most western nations, our prime minister is urging you to increase your production of oil. I am writing to ask you to ignore him. Like the other leaders he is delusional, and is no longer competent to make his own decisions.
You and I know that there are several reasons for the high price of oil. Low prices at the beginning of this decade discouraged oil companies from investing in future capacity. There is a global shortage of skilled labour, steel and equipment. The weak dollar means that the price of oil is higher than it would have been if denominated in another currency. While your government says that financial speculation is an important factor, the Bank of England says it is not, so I don't know what to believe. The major oil producers have also become major consumers; in some cases their exports are falling even as their production has risen, because they are consuming more of their own output.
But what you know and I do not is the extent to which the price of oil might reflect an absolute shortage of global reserves. You and your advisers are perhaps the only people who know the answer to this question. Your published reserves are, of course, a political artefact unconnected to geological reality. The production quotas assigned to its members by Opec, the oil exporters' cartel, reflect the size of their stated reserves, which means that you have an incentive to exaggerate them. How else could we explain the fact that, despite two decades of furious pumping, your kingdom posts the same reserves as it did in 1988?
You say that you are saving your oil for the benefit of future generations. If this is true, it is a rational economic decision: oil in the ground looks like a better investment than money in the bank. But, reluctant as I am to question your Majesty's word, I must remind you that some oil analysts are now wondering whether this prudence is a convenient fiction. Are you restricting supply because you want to conserve stocks and keep the price high, or are you unable to raise production because your fabled spare capacity does not in fact exist?
I do not expect an answer to this question. I know that the true state of your reserves is a secret so closely guarded that oil analysts now resort to using spy satellites to try to estimate the speed of subsidence of the ground above your oil fields, as they have no other means of guessing how fast your reserves are running down.
What I know, and you may not, is that the high price of oil is currently the only factor implementing British government policy. The government claims that it is seeking to reduce carbon dioxide emissions, by encouraging people to use less fossil fuel. Now, for the first time in years, its wish has come true: people are driving and flying less. The AA reports that about a fifth of drivers are buying less fuel. A new study by the Worldwide Fund for Nature shows that businesses are encouraging their executives to use video conferences instead of flying. One of the most fuel-intensive industries of all, business-only air travel, has collapsed altogether.
In other words, your restrictions on supply - voluntary or otherwise - are helping the government to meet its carbon targets. So how does it respond? By angrily demanding that you remove them so that we can keep driving and flying as much as we did before. Last week, Gordon Brown averred that it's "a scandal that 40% of the oil is controlled by Opec, that their decisions can restrict the supply of oil to the rest of the world, and that at a time when oil is desperately needed, and supply needs to expand, that Opec can withhold supply from the market". In the United States, legislators have gone further: the House of Representatives has voted to bring a lawsuit against Opec's member states, and Democratic senators are trying to block arms sales to your kingdom unless you raise production.
This illustrates one of our leaders' delusions. They claim to wish to restrict the demand for fossil fuels, in order to address both climate change and energy security. At the same time, to quote Britain's Department for Business, they seek to "maximise economic recovery" from their remaining oil, gas and coal reserves. They persist in believing that both policies can be pursued at once, apparently unaware that if fossil fuels are extracted they will be burnt, however much they claim to wish to reduce consumption. The only states that appear to be imposing restrictions on the supply of fuel are the members of Opec, about which Brown so bitterly complains. Your Majesty, we have gone mad, and you alone can cure our affliction, by keeping your taps shut.
Our leaders, though they do not possess the least idea of whether the oil supplies required to support it will be sustained, are also overseeing a rapid expansion of our transport infrastructure. In the UK, we are building or upgrading thousands of miles of roads and doubling the capacity of our airports, in the expectation that there will be no restriction in the supply of fuel. The government's central forecast for the long-term price is just $70 a barrel.
Over the past few months, I have been trying to discover how the government derives this optimistic view. In response to a parliamentary question, it reveals that its projection is based on "the assessment made by the International Energy Agency in its 2007 World Energy Outlook". Well, last week the Wall Street Journal revealed that the IEA "is preparing a sharp downward revision of its oil-supply forecast". Its final report won't be released until November, but it has already concluded that "future crude supplies could be far tighter than previously thought". Its previous estimates of global production were wrong for one simple and shocking reason: it had based them on anticipated demand, rather than anticipated supply. It resolved the question of supply by assuming that it would automatically rise to meet demand, as if it were subject to no inherent restraints.
Our government must have known this, but it has refused to conduct its own analysis of global oil reserves. Uniquely among possible threats to the economy and national security, it has commissioned no research of any kind into this question. So earlier this year, I asked the Department for Business what contingency plans it possesses to meet the eventuality that the IEA's estimates could be wrong, and that global supplies of petroleum might peak in the near future. "The government," it replied, "does not feel the need to hold contingency plans." I am sure I do not need to explain the implications if its forecasts turn out to be wildly wrong.
Your Majesty, I recognise that this is not among your usual duties as the ruler of Saudi Arabia. But I respectfully beg you to save us from ourselves.
Yours Sincerely,
George Monbiot
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Thursday 22 May 2008
They're wrong about oil!
Rip up your textbooks, the doubling of oil prices has little to do with China's appetite
Get Started!
Why bananas are a parable for our times
Johann Hari
Thursday, 22 May 2008
Below the headlines about rocketing food prices and rocking governments, there lays a largely unnoticed fact: bananas are dying. The foodstuff, more heavily consumed even than rice or potatoes, has its own form of cancer. It is a fungus called Panama Disease, and it turns bananas brick-red and inedible.
There is no cure. They all die as it spreads, and it spreads quickly. Soon – in five, 10 or 30 years – the yellow creamy fruit as we know it will not exist. The story of how the banana rose and fell can be seen a strange parable about the corporations that increasingly dominate the world – and where they are leading us.
Bananas seem at first like a lush product of nature, but this is a sweet illusion. In their current form, bananas were quite consciously created. Until 150 ago, a vast array of bananas grew in the world's jungles and they were invariably consumed nearby. Some were sweet; some were sour. They were green or purple or yellow.
A corporation called United Fruit took one particular type – the Gros Michael – out of the jungle and decided to mass produce it on vast plantations, shipping it on refrigerated boats across the globe. The banana was standardised into one friendly model: yellow and creamy and handy for your lunchbox.
There was an entrepreneurial spark of genius there – but United Fruit developed a cruel business model to deliver it. As the writer Dan Koeppel explains in his brilliant history Banana: The Fate of the Fruit That Changed the World, it worked like this. Find a poor, weak country. Make sure the government will serve your interests. If it won't, topple it and replace it with one that will.
Burn down its rainforests and build banana plantations. Make the locals dependent on you. Crush any flicker of trade unionism. Then, alas, you may have to watch as the banana fields die from the strange disease that stalks bananas across the globe. If this happens, dump tonnes of chemicals on them to see if it makes a difference. If that doesn't work, move on to the next country. Begin again.
This sounds like hyperbole until you study what actually happened. In 1911, the banana magnate Samuel Zemurray decided to seize the country of Honduras as a private plantation. He gathered together some international gangsters like Guy "Machine Gun" Maloney, drummed up a private army, and invaded, installing an amigo as president.
The term "banana republic" was invented to describe the servile dictatorships that were created to please the banana companies. In the early 1950s, the Guatemalan people elected a science teacher named Jacobo Arbenz, because he promised to redistribute some of the banana companies' land among the millions of landless peasants.
President Eisenhower and the CIA (headed by a former United Fruit employee) issued instructions that these "communists" should be killed, and noted that good methods were "a hammer, axe, wrench, screw driver, fire poker or kitchen knife". The tyranny they replaced it with went on to kill more than 200,000 people.
But how does this relate to the disease now scything through the world's bananas? The evidence suggests even when they peddle something as innocuous as bananas, corporations are structured to do one thing only: maximise their shareholders' profits. As part of a highly regulated mixed economy, that's a good thing, because it helps to generate wealth or churn out ideas. But if the corporations aren't subject to tight regulations, they will do anything to maximise short-term profit. This will lead them to seemingly unhinged behaviour – like destroying the environment on which they depend.
Not long after Panama Disease first began to kill bananas in the early 20th century, United Fruit's scientists warned the corporation was making two errors. They were building a gigantic monoculture. If every banana is from one homogenous species, a disease entering the chain anywhere on earth will soon spread. The solution? Diversify into a broad range of banana types.
The company's quarantine standards were also dire. Even the people who were supposed to prevent infection were trudging into healthy fields with disease-carrying soil on their boots. But both of these solutions cost money – and United Front didn't want to pay. They decided to maximise their profit today, reckoning they would get out of the banana business if it all went wrong.
So by the 1960s, the Gros Michel that United Fruit had packaged as The One True Banana was dead. They scrambled to find a replacement that was immune to the fungus, and eventually stumbled upon the Cavendish. It was smaller and less creamy and bruised easily, but it would have to do.
But like in a horror movie sequel, the killer came back. In the 1980s, the Cavendish too became sick. Now it too is dying, its immunity a myth. In many parts of Africa, the crop is down 60 percent. There is a consensus among scientists that the fungus will eventually infect all Cavendish bananas everywhere. There are bananas we could adopt as Banana 3.0 – but they are so different to the bananas that we know now that they feel like a totally different and far less appetising fruit. The most likely contender is the Goldfinger, which is crunchier and tangier: it is know as "the acid banana".
Thanks to bad corporate behaviour and physical limits, we seem to be at a dead end. The only possible glimmer of hope is a genetically modified banana that can resist Panama Disease. But that is a distant prospect, and it is resisted by many people: would you like a banana split made from a banana split with fish genes?
When we hit up against a natural limit like Panama disease, we are bemused, and then affronted. It seems instinctively bizarre to me that lush yellow bananas could vanish from the global food supply, because I have grown up in a culture without any idea of physical limits to what we can buy and eat.
Is there a parable for our times in this odd milkshake of banana, blood and fungus? For a hundred years, a handful of corporations were given a gorgeous fruit, set free from regulation, and allowed to do what they wanted with it. What happened? They had one good entrepreneurial idea – and to squeeze every tiny drop of profit from it, they destroyed democracies, burned down rainforests, and ended up killing the fruit itself.
But have we learned? Across the world, politicians like George Bush and David Cameron are telling us the regulation of corporations is "a menace" to be "rolled back"; they even say we should leave the planet's climate in their hands. Now that's bananas.
To purchase 'Banana: The Fate of the Fruit That Changed the World', click here
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Wednesday 21 May 2008
Gresham’s Law in Present day India
May, 20 2008
By Girish Mishra
If one looks at India's post-Independence scenario in political, social, cultural, academic, literary, journalistic, religious or any other sphere, one comes across the phenomenon of the inferior elements pushing out, by and large, the superior competent ones.
To understand the change, let us take, for example, the politics of the Nehruvian days and cite a few representative instances. A member of parliament was thrown out by unanimous vote because he had, knowingly, given a false statement. Acharya Narendra Dev, a leading socialist leader voluntarily resigned his membership of the U.P. state assembly as he had left the Congress on whose ticket he was elected. The Acharya fought on the Socialist Party ticket and he was defeated by the Congress candidate. He had no regrets because his was a principled stand. One must remember that, during those days, it was not legally binding on the Acharya to resign his seat in the assembly as there was no law, making it obligatory for a defector to quit. Take another instance, Harihar Nath Shastri, president of the Indian National Trade Union Congress and an M.P. was killed in an air crash soon after the first general election. Nehru and the Congress offered to make his wife Shakuntala Devi, their candidate in the by-election, but she refused because she was a member of the Socialist Party and not willing to desert it for a sure win. She contested as a Socialist candidate and lost, but had no regrets for turning down the offer from Nehru.
Look at the present scenario. Members of central and state legislature frequently defect from one party to another but do not resign their seats. They try to cling to them by exploring some loophole or the other in the anti-defection law. The instances of mass defection by members of Bihar legislature, led by B.P. Mandal in 1967-68 and by Haryana legislators under the leadership of Bhajan Lal are widely known. In both the cases, the defectors formed the government and ruled over their respective states. Only recently, when K. Natwar Singh, a former foreign minister of India, was thrown out by the Congress as his and his son's names figured in the "food for oil" scandal, concerning Iraq, he did not resign his seat in the upper house of the Parliament and lobbied for a seat from the BJP, after his term expired, notwithstanding his self-proclaimed loyalty to secularism and the Nehruvian thinking. H. D. Devegoda, a former prime minister, who heads a party, called Janata Dal (Secular), entered into an alliance with the BJP that has never taken kindly to secularism, just to make his son chief minister of Karnataka, but when the turn of the BJP for heading the government came, he, all of a sudden, woke up to the fact that his party was secular while the BJP was not! Only the other day, a Congress M.P., after being dropped from ministership, crossed over to Mayawati's party, as if ideology was just a shirt to be put on according to one's convenience. The same can be said of a number of politicians who don secular or Hindutva caps, according to expediency.
During Nehru's days, K. D. Malviya, then minister for oil and natural gas, had to resign from the cabinet because he had openly recommended the name of a Muslim freedom fighter for some assistance to a nationalist businessman. No quid pro quo was involved. Around the same time Lal Bahadur Shastri, the railway minister resigned, owning moral responsibility for railway accidents.
Those days are long past. Today, ministers cling to their positions even though there are corruption cases against them going on in courts of law. There are members of parliament and assemblies, convicted in the cases involving heinous crimes like murders, thefts, robberies, human smuggling and so on, yet none of them have quit their posts. The list is too long.
Very few parliamentarians and legislators have any interest in reading and writing. The latest report from U.P. points out that legislators rarely visit the rich library of the legislature. If one goes through the records of parliament library showing the books borrowed by honourable members, one will not reach any different conclusion. The declining standard of debates is another indicator.
If one turns one's attention to academic and literary world, one reaches the same conclusion. By and large, inferior elements, pushing aside the qualified and meritorious ones, have come to occupy dominant positions. If one prepares the lists of all those persons who have been occupying positions of importance in academic institutions or have been nominated to the upper house of parliament or state legislature as "distinguished persons" or awarded literary prizes or Padma decorations, the point will be obvious. The proximity to the people in power, sycophancy, corruption, etc. have been playing no mean role. To give a concrete example, the list of "literary" people, sponsored by various government and semi-government organizations to attend the World Hindi Conference last year, contained quite a sizable number of inferior and fake writers. Pulls and pressures had played a significant role in the preparation of this list.
Lately, by floating two fashionable nonsensical concepts, namely, bazaarwad (marketism) and global realism, some inferior writers have been trying to climb up the ladder of eminence. In fact, bazaarwad has been brought in to replace capitalism so that its exploitative character is covered up. Bazaarwad cannot have any place for exploitation because unrestrained market forces assign every commodity whether material or capacity to labour its true value and no one is cheated. Obviously, the champions of this concept serve the interests of capitalism.
If one observes carefully the quality of programmes on electronic media and the character of comments, articles and dispatches in print media over time, the deterioration becomes crystal clear.
The phenomenon or tendency, illustrated by the above examples, is not a novel one. It was first mentioned two and a half centuries ago in Greek literature. Aristophanes (456 BC - 386 BC) in his well-known comedy the Frogs underlined it. The play tells the story of the god Dionysus who despairs the plight of Athens as a result of the disastrous Battle of Argiusae. Athens was defeated because the inferior, dishonest, and unqualified people had become dominant after pushing aside superior ones.
To quote the relevant lines:
"The course our city runs is the same towards men and money.
She has fine new gold and ancient silver,
Coins untouched with alloys, gold or silver,
Each well minted, tested each and ringing clear
Yet we never use them!
Others pass from hand to hand,
Sorry brass just stuck last week and branded with a wretched brand.
So with men we know for upright, blameless lives and noble names.
These we spurn for men of brass."
Centuries later, in 1858, British economist Henry Dunning Macleod termed this phenomenon "Gresham's Law". Since then this has been in common parlance. In his book Elements of Political Economy. Macleod claimed to have brought to light "a great and fundamental law of currency" that showed the disappearance of good money from circulation with increasing preponderance of bad one. He christened it as Gresham Law on the basis of a letter by Sir Thomas Gresham to Queen Elizabeth I. Sir Thomas, an English merchant, was working as the Crown's financial representative in Antwerp. He informed the Queen that gold coins were disappearing from the circulation as a result of the entry of debased coins, introduced by Henry VIII. The latter had reduced the gold content of coins from six ounces fine to three ounces fine of gold.
History shows that the phenomenon that bad money drives good money from circulation was widely known during the earlier periods too. For example, it occurs in the writings of astronomer Copernicus (1473-1543).
In the course of time, it has been found that Gresham's Law may be applied to other fields too. People accept inferior goods in place of genuine ones for lack of correct information or the deception created by high voltage advertisement. In the market for second hand cars, lemon automobiles that are analogous to bad money drive out the good cars. Similarly, it is quite dominant in management science. While honest and devoted managers and business leaders take a long time to bring in tangible results while sly ones show good results by employing all kinds of tricks and manipulations. Thus, in the short run, investors and clients are lured by them. It is a different matter that they, ultimately, come to grief when such companies collapse. In India, non-banking financial institutions, only a few years ago, duped large number of gullible investors and then vanished in thin air.
In India, even in civil and police administration, a number of incompetent and dishonest people have risen by manipulation and nexus with corrupt politicians. One may look at the startling facts that have emerged after some of them have been caught indulging in corrupt practices and brought before courts of law. One senior officer of civil administration has been found to have a huge real estate besides tens of bank accounts all over the country. In political parties, too, manipulators have risen pushing out the loyal and competent workers and leaders. The Samajwadi Party, led by Mulayam Singh Yadav is a typical example where racketeers with no ideological and political commitments have pushed aside the old ideologically committed workers and leaders.
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Tuesday 20 May 2008
This week, I've been ashamed to be a woman
Yasmin Alibhai-Brown
Cherie still defends the war in Iraq. Hillary would go nuke Iran
Monday, 19 May 2008
In 1988 I was on BBC TV debating politics with an all-female audience. For most guests, the 1979 election of Margaret Thatcher had marked an optimistic turn of history. I disagreed vehemently. Our leaderine made me biliously ashamed to be a woman.
Today that old shame heaves again, and stomach acids fill my throat as two more grasping women betray themselves and rob us of our ideals. Hillary Clinton and Cherie Blair would refute the charges. Heed not their denials, not after this week. The two mates are covetous of clout and wealth, rapt in cringing marital dotage, above all, morally questionable and beholden to none. God is always on their blessed side to exonerate any (tiny) trespasses. From those who share their chromosomes, they expect, nay demand, infinite sympathy and fulsome appreciation.
Is this where it leads to, our long road towards gender parity? It might have been better for us not to have started the journey. I don't mean that really. Blame the gloom which is set to deepen as we get a whole week of chirpy Cherie on Radio 4 reading from her (allegedly) million-pound memoir, a well spun tale – Scouse lass from a broken family gets to marry a British PM, just like that assistant in Love Actually... In reality, Mrs Blair's example is less than inspirational. As soon as she stepped over that famous threshold, she turned, like fresh milk left out overnight in the summer. She blames her embarrassing photos after election night, when, bleary and dishevelled, she opened the door to receive flowers. What tosh. All those years building up a reputation as a respected human rights lawyer and champion of equality, her passion and purpose, the luminous intelligence and warmth were jacked in as she fell into the perfidious embrace of power. It was glitzy and wildly exciting, never mind the political corruption that came with the privilege.
Meanwhile, Hillary carries on a noxious, malignant campaign covered in pustules of lies, expediency and congealing ambition. Though she tries hard to wash herself clean, to deodorize the air around her, the stench of forgery lingers on. Five years ago, Hillary wrote her own self-aggrandizing memoir and was paid eight million for the sentimental drivel. Both ex First Ladies have studied law and should know the inviolability of facts and evidence. Hillary misspeaks involuntarily, as if she suffers from a strange brain disease that twists out falsehoods and forces them to be uttered. She pretended to be shot at in Bosnia and insists her name comes from Edmund Hillary, who at her christening had not yet climbed Everest. Observers say both Clintons will tell a big lie when a small one will do and a small lie when the truth would suffice.
But hey, men who rule over us or want to are natural born fibbers so why this level of ire? Are women commentators always bitchy to other women? Because both Cherie and Hillary have used womanhood to get on, but only when it suits.
Over the nomination campaigns, Hillary has come across as a man in bad frocks, a "ventriloquist" says Jane Fonda. Arguably, you have to be a manly woman to get elected – but then she and Cherie climbed up through marriage to stand on the shoulders of husbands with lethal defects and judgements. Though unelected, the wives sought illegitimate influence over national politics and policies. Cherie wanted not only more money, more things, more foreign trips, more kudos, but a vastly more important role. So did Hillary and the claims to "experience" come from exactly that pushy presence she exerted in the White House.
Cherie still defends the war in Iraq. Then she believed New Labour women "should be supporting our men in these difficult decisions, not making it worse by nagging them". So being a sweet little wifie was more important than the law, deaths of innocents, human rights. WHAT? Today those Iraqi wives and mothers who are not grieving are being suppressed, veiled, killed for the freedoms they once had.
After tortuous obfuscations, Hillary now wants to distance herself from her old war-mongering self, but still would go nuke Iran. Both have defended laws curtailing fundamental civil rights and yet both are drawn to back frightfully worthy charities to help womankind.
Finally, the two women lack political conscience. Cherie is no better than John Prescott and, like him, has damaged the Labour party this difficult week. By not stepping aside, Hillary will destroy the Democrats and possibly let the Republicans back in. As women, they ought to know and act better. We should have higher standards otherwise what is the point?
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