The Twilight of Capitalism by Michael Harrington (Part II: The Future of Karl Marx or The Secret History of the Contemporary Crisis, Chapter 10)

Chapter 10 delves into how attempts at social welfare expansion through surrendering to the capitalists evolved into the energy crisis. Starting with World War II, American foreign policy was designed to find cheap foreign oil, which had the related effect of suppressing exploration at home. 

Of particular note were the events that evolved into the development of Aramco – the Saudi-U.S. oil venture. Of course, this led to the creation of OPEC as the Third World pushed back, largely over America’s support for Israel during the 1973 War and the resulting oil crisis, which repeated after the book was published when OPEC tightened the screws for profit and in response to U.S. efforts to prop up the Shah of Iran (who was a U.S. puppet). I will spare you the gory details describing who did what, but they do show the thoroughness of Harrington’s research and his clear findings on the role of the capitalist welfare state in the energy crisis.

The other result of WWII was Ike’s love of German highways and his desire to replicate them here. This bit of capitalist social welfare made goods and services mobile, as well as white citizens who moved and move to the suburbs for largely racial reasons (especially when their daughters start dating).

Highway projects are the go to solution to recessions, proposed by both parties when power, with Republicans blocking any increase in gasoline taxes to pay for them, leading to attempts at creative solutions and the inevitable decay of highways in conservative states while others pass gas tax increases when the roads and bridges start collapsing. 

There is nothing wrong with public works to stop a recession from deepening. Indeed, we have regularized such public works into the permanent bureaucracy so well that calls to bring back FDR style programs show the ignorance of the speaker, or his or her pandering.

Since Harrington wrote the book, much energy deregulation has occurred, which stabilized prices until the Bush, Jr. years.  Then tax cuts and the failure to enforce and repeal anti-trust laws in the oil sector and to regulate hedge funds led to rampant speculation in Oil Futures in NYMEX.  Projections of how oil resources were declining  and active hurricane season were the justification for these spikes, but the reality was that these markets had too much money due to the Bush tax cuts. The development of domestic and Canadian oil shale and to frack for natural gas were made possible by the futures market boom. Congressional action to make these markets honest crashed the price of oil and put attention on mortgage backed securities.

The houses of finance tried to use to cover their bets, showed that they were worthless because of abusive practices, not from attempts to raise up minority home buyers but instead to take them for any red cent they had, especially people whose homes were paid off. The TARP covered the crash in securities prices and the collapse of the global economy, also aided by the Federal Reserve, but the promised aid to home borrowers never came, even under Obama.

The refusal of Obama (largely at the promptings of Larry Summers) to help borrowers led me to put my hat into the ring in 2012 in Americans Elect to draw attention to this, but the group folded when it realized that an unknown like me might win their nomination (funded by capitalists) if they relaxed the rules on how many supporters one had to have.

Oil prices went down to 2001 levels as Obama took the oath of office and went up again, largely because the government now held the bad oil futures. TARP was commanded in the law not to lose money and Administration officials let prices go up to placate environmentalists in the administration, who could not get a carbon tax passed by the Republican Congress. Finally, the regulations subsequent to the Dodd-Frank bill led to price declines in oil and American started driving again. 

When Trump promises to eliminate regulations, this is what he means.  Not too coincidentally, Trump appointed Rex Tillerson, President of Exxon Mobil and friend of Russian President Putin, to the post of Secretary of State due to his experience in international oil company capitalism, which pays the leaders and oppresses the poor. Rumor has it that this appointment was suggested by Putin. Only the Special Counsel knows for sure. Tillerson left the Administration without propping the Russian oil market back up (and with it, Putin) largely because he could not deal with the madness of King Donald, at one point calling him a moron.

Surely the Congress will stop such abuses from occurring. Oklahoma is tired of its daily earthquakes due to natural gas fracking, and may elect a Democratic Governor. At this writing, the Republican Congress shows no desire to do oversight over the Administration, let alone impeach him for his Russia dealings. Of course, even the former Speaker, Democrat Nancy Pelosi, is soft pedaling impeachment (as she did with Bush over torture in the latest Middle Eastern wars). Lucky for us, the voters will not (especially in Oklahoma).  PAC money and dark funding by oil companies can only get you so far, but they do prove Harrington’s point about Marxian analysis of the many recurring energy crises (the plural of crisis).

In the end, we need social democracy and collaboratives to force development of electric, computer controlled car on buried and wired roadways. Cooperative membership will own all the pieces rather than the capitalists, from car production, to road building, to electrical generation (which is possible with fusion once big oil quits trying to sink it) and interlocking social ownership to help retirees travel without cost from their shares in these projects. It will also largely end auto fatalities, which the car companies don’t hurry to do so unless forced by consumer death being noticed. Imagine that.