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STSTANDARD OIL AND ITS DESCENDANTS THEN AND NOW – THE NEW GILDED AGE

September 30, 2012

STANDARD OIL AND ITS DESCENDANTS THEN AND NOW – THE NEW GILDED AGE

Steve Coll in his new book “Private Empire: ExxonMobil and American Power,” gives us an interesting look at the empire built by John D. Rockefeller and his Standard Oil Company, which was broken up in an anti-trust action by the Supreme Court in 1911 just over a century ago. Exxon was one of Standard Oil’s corporate descendants. So was Mobil. Exxon and Mobil merged in 1999 in a move back toward pre-1911 Standard Oil’s “trust” status. Without the trust-busting progressive republican Teddy Roosevelt around these days, both the Sherman Anti-Trust Act and “little” state anti-trust acts are rarely enforced by either Democratic or republican administrations. We are steadily regressing to a second “Gilded Age.”

ExxonMobil is the biggest oil corporation on the planet. Is it “fixing prices in restraint of trade?” Bribing politicians in such poverty-stricken and politically violent venues where they have refineries, such as Equatorial Guinea, Chad, and Indonesia? Or where they have now started drilling in Kurdistan province with the consent of the Kurds but without the consent of Iraq? Will our troops be called upon to protect their Kurd operations if a civil war breaks out between the Kurds and Iraqis – a real possibility – and, if so, who do we shoot, the Kurds or the Iraqis? Both? Whoever Exxon tells us to shoot?

At least old John D. didn’t have a monopoly on our foreign policy – he was not into the eternal search for oil around the globe, as now. His anti-trust practices were domestic. With a global exposure, we the people are worse off in many important ways. If you think the price at the gas station is what you are paying, think again. How much are you paying when you factor the costs of fleets of ships in the Persian Gulf, troops all over the area, CIA operatives, “special forces,” planes, tanks, bad diplomatic decisions to support dictators for access to oil, personnel costs in salary, retirement, health costs etc.? The list is endless, and the stated cost for a gallon a gas at the pump is just for starters. You are paying much more: it’s just from a different pocket. We could well be paying six or seven dollars a gallon for all I know – Big Oil research departments have not come up with any numbers in this connection. I wonder why.

Indeed, when Bush the younger was asked by the Indian Prime Minister to intervene in a controversy involving ExxonMobil and was asked “Why don’t you just tell them what to do?” Bush’s response was that “Nobody tells those guys what to do.” That response was and is indicative of the bias of an oilman (as both Bushes were) and is also indicative that ExxonMobil has our presidents of both parties cowed in the enforcement of anti-trust and other laws (tax and environmental laws, for instance).

Presidents are charged with enforcement of law, whether they agree with the law or not. Both our Democratic and republican presidents have failed to do their duty of enforcement, and while the prospect of a hostile congress (saturated in campaign contributions from Big Oil) may perhaps be a political rampart too high to climb, I here note that that is immaterial. The law in this connection to be enforced has long since been passed by an earlier congress. The current bought and paid for congress is not involved. It’s a matter of enforcement. Here and in other areas, there is a startling lack of backbone on the banks of the Potomac, and as usual, you and I are paying the price, and in more ways than one.

We pay for Big Oil’s gasoline AND their mistakes. The costs of disasters must in one way or another be folded into the price of their products, and since they have a monopoly and we must buy their products, we are paying for their negligence, not to mention bribes etc. (Parenthetically, oil corporations are not the only ones involved in bribery – see the recent disclosure that Wal-Mart bribed local Mexican officials for help in picking select sites for their stores there.) To the extent that such oil and other corporations deduct the costs of fines, we even help out on those, since what they don’t pay in taxes we have to pay. We are effectively involved in bailouts of Big Oil’s negligence and other such practices with every gallon of gas we buy due to Big Oil’s monopoly status and failure of our politicians to do anything about it.

Big Oil has lots of money, and we the victims of their monopolistic practices have very little. They can buy politicians, especially in oil- and gas-rich states. They can write legislation and/or stymie legislation and rules and regulations which (as we have seen) have resulted in the Exxon Valdez disaster in Alaska, the BP catastrophe in the Gulf of Mexico, Chevron’s environmental degradations in Nigeria and Ecuador et al. Breaks in pipelines within this country have been mini-disasters as well as the deadly explosion of a BP refinery in Texas several years ago. Big Oil’s pollution potential is matched only by its profit potential.

Standard Oil rose to empire status at the end of the 19th century under John D. Rockefeller, a Baptist church-going product of the gilded age who was, with all his billions, known as a cheapskate. He had an acquisitive nature from childhood, and if that is a measure of success, he was fabulously successful. He ran afoul of the 1890 Sherman Anti-Trust Act and was forced to break up his empire into several different companies, one of which is the present day ExxonMobil oil corporation following the recent merger of the two. The breakup came as a result of his “ruthless internal financial discipline and by brutally undercutting his competitors. Like the other robber barons, he had little interest in public opinion. . . Like social Darwinists then and now, he was confident in the ethics of wealth accumulation.” He publicly stated as follows: “I believe the power to make money is a gift of God. . . Having been endowed with the gift I possess, I believe it is my duty to make money and still more money, and to use the money I make for the good of my fellow man according to the dictates of my conscience.”

Let’s see, now; an individual who is gifted by God to make lots of money must do so for the good of his or her fellow man according NOT to the dictates of God but to the DICTATES of his/her conscience (“DICTATES” which were helped mightily by the fact that we had no income taxes until 1913, making accumulation of fortunes much easier for John D. and his fellow robber barons).  By their standard, God must be playing favorites, because most of us are not billionaires. Anyone who can swallow old John D’s story, especially when the one who is spinning it had no regard for public opinion or law, well, I have this bridge. . . God did not pass the Sherman Anti Trust Act; the congress did (and for good reason).

This pious billionaire was a social Darwinist who brutalized his competition in defiance of the Sherman Anti-Trust Act. The DICTATES of his conscience and God’s choices are, of course, unknown to us, but his defiance of law that caused the breakup of Standard Oil is known, and it is not a pretty picture. We have many with his sense of conscience (or lack thereof) today, but no one is enforcing the anti-trust laws, so we are settling into a second gilded age, complete with social Darwinism, greed driven robber barons and all the usual rich and marginally criminal parasites on Wall Street and environs. Back to the future!

John D. would be ecstatic with the under-regulated and under-prosecuted investment milieu we live in were he alive today, and though we have income taxes now, that would be no problem since robber barons of this day pay little (Romney) or nothing (GE) anyway. Wonderful! But not for us. . . .  GERALD  E

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