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Tomgram: Kramer and Comerford, Shutting Down Americans

7:17 am in Uncategorized by Tom Engelhardt

This article originally appeared at TomDispatch.com. To receive TomDispatch in your inbox three times a week, click here.

Untitled

Shutdown Button

While this country’s creditor nations twitched, the global bankers were worried, too, and in campaign mode. In Washington for the annual meeting of the International Monetary Fund, a number of them were predicting that a congressional unwillingness to raise the debt ceiling could take down what global “recovery” there had been since the Great Recession. In the meantime, here we were, yet again teetering at the edge of “the cliff.” And what a strange spectacle these last weeks have been! Yes, we all know that there are deep-seated problems in this country, that infrastructure is crumbling, school systems starved for resources, the gap between rich and poor growing, poverty on the rise, and manufacturing jobs still leaving town. Nonetheless, there is no evidence that, absent the Republican-controlled House of Representatives, we would have been at the edge of any cliff at all.

The spectacle of these last weeks has been thoroughly ginned up, as fictional as the plot of any Hollywood disaster film. But here’s the thing: when, a few months from now, the debt-ceiling and government shutdown issues return like the walking dead and threaten once again to step off that cliff, what could follow would not be fiction and it would be unpredictable. Real life, unlike Hollywood, is that way. For all any of us know, it could take the global financial system down with it and someday historians would wonder just how such a catastrophe could have been created out of thin air.

But we’re not historians of the future, are we? Nor have we simply been spectators at a congressional disaster flick, even if, as TomDispatch regulars Mattea Kramer and Jo Comerford of the invaluable National Priorities Project point out today, we’ve been acting that way.  Already, as the government “shutdown” unfolded, a startling number of perfectly real Americans found their lives swept up in the House’s fiction, while the economy, too, took a hit. Let’s hope that, before it’s over in 2014 or beyond, we won’t all discover that, willy-nilly, we’ve been swept into that same film as extras in the crowd scenes, and that, peering into the fog on the horizon of our future, we won’t suddenly see the first shadowy, lurching figures staggering toward us. Tom

What Was “Essential” and What Wasn’t
The Government Shutdown in Perspective Read the rest of this entry →

How to Build a National Security Blowback Machine

6:36 am in Uncategorized by Tom Engelhardt

This article originally appeared at TomDispatch.com. To receive TomDispatch in your inbox three times a week, click here.

Letter to an Unknown Whistleblower 
How the Security State’s Mania for Secrecy Will Create You 
By Tom Engelhardt

Dear Whistleblower,

Protest against NSA surveillance

Protest against NSA surveillance

I don’t know who you are or what you do or how old you may be. I just know that you exist somewhere in our future as surely as does tomorrow or next year. You may be young and computer-savvy or a career federal employee well along in years. You might be someone who entered government service filled with idealism or who signed on to “the bureaucracy” just to make a living. You may be a libertarian, a closet left-winger, or as mainstream and down-the-center as it’s possible to be.

I don’t know much, but I know one thing that you may not yet know yourself. I know that you’re there. I know that, just as Edward Snowden and Bradley (now Chelsea) Manning did, you will, for reasons of your own, feel compelled to take radical action, to put yourself in danger.  When the time comes, you will know that this is what you must do, that this is why you find yourself where you are, and then you’re going to tell us plenty that has been kept from us about how our government really operates. You are going to shock us to the core.

And how exactly do I know this? Because despite our striking inability to predict the future, it’s a no-brainer that the national security state is already building you into its labyrinthine systems.  In the urge of its officials to control all of us and every situation, in their mania for all-encompassing secrecy, in their classification not just of the millions of documents they generate, but essentially all their operations as “secret” or “top secret,” in their all-encompassing urge to shut off the most essential workings of the government from the eyes of its citizenry, in their escalating urge to punish anyone who would bring their secret activities to light, in their urge to see or read or listen in on or peer into the lives of you (every “you” on the planet), in their urge to build a global surveillance state and a military that will dominate everything in or out of its path, in their urge to drop bombs on Pakistan and fire missiles at Syria, in their urge to be able to assassinate just about anyone just about anywhere robotically, they are birthing you.

In every action, a reaction. So they say, no?

Give our national security managers credit, though: they may prove to be the master builders of the early twenty-first century. Their ambitions have been breathtaking and their ability to commandeer staggering amounts of our taxpayer dollars to pay for those projects hardly less so.  Their monuments to themselves, their version of pyramids and ziggurats — like the vast data storage center the National Security Agency is building for almost $2 billion in Bluffdale, Utah, to keep a yottabyte of private information about all of us, or the new post-9/11 headquarters the National Geospatial-Intelligence Agency built, again for almost $2 billion, so that its 16,000 employees could monitor our system of satellites monitoring every square inch of the planet — are in their own way unique. In their urge to control everything, to see everything from your Facebook chatter to the emails of the Brazilian president, they are creating a system built to blowback, and not just from the outside or distant lands.

Chalmers Johnson, who took “blowback,” an obscure term of CIA tradecraft, and embedded it in our everyday language, would have instantly recognized what they’re doing: creating a blowback machine whose “unintended consequences” (another term of his) are guaranteed, like the effects of the Snowden revelations, to stun us all in a myriad of ways.

They have built their system so elaborately, so expansively, and their ambitions have been so grandiose that they have had no choice but to embed you in their developing global security state, deep in the entrails of their secret world — tens of thousands of possible you’s, in fact.  You’s galore, all of whom see some part, some corner, of the world that is curtained off from the rest of us.  And because they have built using the power of tomorrow, they have created a situation in which the prospective whistleblower, the leaker of tomorrow, has access not just to a few pieces of paper but to files beyond imagination.  They, not you, have prepared the way for future mass document dumps, for staggering releases, of a sort that once upon time in a far more modest system based largely on paper would have been inconceivable.

They have, that is, paved the way for everything that you are one day guaranteed to do.  They have created the means by which their mania for secrecy will repeatedly come a cropper.  They have created you.

Worse yet (for them), they have created a world populated with tens of thousands of people, often young, often nomadic in job terms, and often with remarkable computer skills who have access to parts of their vast system, to unknown numbers of secret programs and documents, and the many things from phone calls to emails to credit card transactions to social media interactions to biometric data that they so helpfully store away.
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Mattea Kramer: A People’s Budget for Tax Day

6:30 am in Uncategorized by Tom Engelhardt

This article originally appeared at TomDispatch.com. To receive TomDispatch in your inbox three times a week, click here.

Close up of Washington's eye on dollar bill

Upset about how your tax dollars are spent? Even worse, it could be fixed.

Recently, Secretary of Defense Chuck Hagel gave a major speech at the National Defense University on cutting military — aka defense — spending.  Hagel is considered a “realist” and so when it comes to such cuts, this is undoubtedly the best we’re likely to get out of Washington for a long time to come.  Unfortunately, it turns out that the best is pretty poor stuff.

The speech was filled with the sort of complaints we’ve already grown used to hearing from the Pentagon about the “deep cuts… imposed by sequester.”  These, Hagel insisted, will result in “a significant reduction in military capabilities.”  (In fact, President Obama’s just released 2014 budget calls for only a miniscule 1.6% cut in the Pentagon’s bloated budget.)  There was also the usual boilerplate stuff about the U.S. global military stance — “America’s responsibilities are as enormous as they are humbling” — and about the “vacuum” we’d create on planet Earth if we reduced it in any way.  As the Nation’s Robert Dreyfuss wrote, “Nature may abhor a vacuum, but it isn’t the job of the United States to go stumbling into every regional conflict, humanitarian crisis, failed state, and would-be terrorist nest that arises. Whatever those things are, they’re not ‘vacuum’ to be filled.”

Like Leon Panetta before him, Hagel, who took a voluntary sequester pay cut, managed to make it sound as if the U.S. military were teetering at the edge of some financial cliff.  He spoke mournfully, for instance, of the Pentagon having “significantly less resources than the department had in the past.” Well… no, as Mark Thompson of Time magazine pointed out, it just ain’t so.

The facts aren’t difficult to sort out, even for those of us who aren’t secretaries of defense.  In a world filled with the most modest of enemies, after those “sequestration” and other planned cuts in the military budget are taken into account, the country would still be spending at levels that weren’t reached in the Cold War years when there were two overarmed superpowers on the planet.  As the Congressional Budget Office concluded last month, “In real terms, after the reduction in 2013, DoD’s base budget is about what it was in 2007, and is still 7% above the average funding since 1980.”

Among Hagel’s more accurate, if disheartening, comments was his praise for the way the U.S. military had, in the post-9/11 era, grown “more expeditionary.”  Back in the nineteenth century, that phrase would instantly have been recognized as code for “imperial” — for, that is, a great power exerting its muscle by policing the far frontiers of the planet.  In ending his speech, Hagel added definitively, “America does not have the luxury of retrenchment.”  So here’s a simple budget-cutting formula for you: if you can’t retrench and become less “expeditionary,” then significant cuts to the military, not to speak of the full-scale national security state, including the homeland-security complex and the intelligence-security complex, simply will not happen.  There’s only one way to cut the national security budget in a meaningful way: downsize the mission.

With tax day looming, we asked TomDispatch regular Mattea Kramer to get the number crunchers at the invaluable National Priorities Project to work on what a people’s budget might look like with genuine military cuts in a less imperial world.  Her answer: don’t underestimate the much-ignored wisdom of the American people on where their tax dollars should (but won’t) go. Tom

A Tax Day Plan for Righting the Republic 
Just Doing What’s Popular Would Make Us Healthier, Wealthier, Wiser, and Less Indebted 
By Mattea Kramer

After heroic feats of arithmetic and a your-guess-is-as-good-as-mine interpretation of opaque rules and guidelines, millions of Americans will file their taxes by this Monday, April 15th.

Then there’s the bad news.

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Hellman and Kramer: How Much Does Washington Spend on “Defense”?

6:30 am in Uncategorized by Tom Engelhardt

This article originally appeared at TomDispatch. To receive TomDispatch in your inbox three days a week, click here .

As the country’s big wars on the Eurasian continent wind down, American war-making and war preparations fly ever more regularly under the radar.  There has, for instance, been much discussion about the Obama administration’s policy “pivot” to Asia — the only warlike act in the region so far has, however, been a little noted drone strike in the Philippines.  At the same time, remarkably little attention has been paid to a massive build-up of U.S. forces in the Persian Gulf, and — though both seem to be underway (and connected) — who talks about the “pivot” to the Western Indian Ocean or the “pivot” to Africa?

For those keeping a careful eye out, U.S. drone (and air) bases in the region have been proliferating — in the Seychelles Islands, in Ethiopia, and at an unidentified site on the Arabian peninsula, among other places.  Recently, however, Wired’s Danger Room website reported that an Italian blogger had put the pieces together and offered impressive evidence of a larger war-making effort in the region, involving not only drones but F-15E fighter jets, possibly being used to bomb Yemen. Meanwhile, there are U.S. drone strikes in Yemen almost daily and at least 20 special forces operatives are reportedly now on the ground there, helping direct some of the fighting and even taking casualties.

The pentagon rendered to look like a toy.

Photo by Michael Baird

Meanwhile, the U.S. Africa Command (Africom), set up in 2007, has been gaining clout.  In 2011, 100 special operations troops, mainly Green Berets, were moved into Central Africa, officially to aid in the hunting down of Joseph Kony, leader of the Lord’s Resistance Army.  Recently, it was reported that a brigade of regular U.S. combat troops will soon be assigned to the command and given training duties throughout the region. Meanwhile, the U.S. has been organizing a proxy war, supported by drone attacks, against al-Shabab rebels in Somalia, using Ugandan, Kenyan, and other African troops as those proxies.  And more’s afoot.  It’s just that, if you weren’t an obsessive news watcher, you would have next to no way of knowing that any of this was taking place.

War American-style, already long detached from the lives of most Americans, is growing more so: ever more secret, presidential, and beyond the control of, or accountability to, citizens or Congress.  In only one way is this not true: we taxpayers still fork over the massive sums that make our perpetual state of war and war state possible.  As Chris Hellman and Mattea Kramer of the invaluable National Priorities Project report, the expense of all this is blowing a hole in your wallet and our treasury.  To offer but one small example, if someday soon the Pakistani/Afghan border is reopened to U.S. war supplies, you will be paying the Pakistanis $1,500-$1,800 for every truck that crosses it, at an estimated cost of at least $1 million a day (with other “fees” likely).  And yet, it’s remarkable how little Americans know about what’s coming out of their pockets when the subject is “national security,” or where exactly it’s all going. Which is why we need Hellman and Kramer (and their new book, A People’s Guide to the Federal Budget) to keep us in the loop.  Tom

War Pay
The Nearly $1 Trillion National Security Budget

By Chris Hellman and Mattea Kramer

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Tomgram: Mark Engler, Paying Oil’s True Cost

9:56 am in Uncategorized by Tom Engelhardt

This story originally appeared at TomDispatch.com.

To receive TomDispatch in your inbox three times a week, click here.

I won’t claim it was the first time in all these months, just the first I noticed.  On Monday, my hometown paper had no mention of the Gulf of Mexico, BP, or what we’ve come to call its disastrous “spill,” though that word hardly catches the dimensions of what happened.  On Tuesday, the catastrophe that filled front pages and topped the TV news month after month returned to the paper as a reporter-less seven-paragraph piece, headlined “Relief Well Nears Point of Intercept,” and tucked away at the bottom of page 15 (with a credit line reading only, “by The New York Times”).  This was, of course, just a week after, as the piece put it, “a ‘static kill,’ or ‘top kill’ cemented the runaway well.” 

Runaway no more. Now, only the story is running away.

Last week, the government also announced — and this was front-page news in the Times – that 4.9 million runaway barrels of oil had poured into the Gulf since April, and that, according to a government report, all but 26% of it was now miraculously gone.  The news in the headlines seemed rosy indeed.  Almost a frog-turns-into-prince happy ending.  Of course, given the strange, collusive relationship between the Obama administration and BP in the Gulf, including suppressing or discrediting scientific research on and media coverage of the spill, keeping key assessments of damage from the public, all sorts of lingering unanswered questions, and the low-ball figures both the administration and BP have repeatedly released since the Deepwater Horizon rig exploded, these should hardly be treated as gospel numbers.  That they should not, however, was only a page 16 follow-up story in the Times; and for more startling figures — that, for instance, closer to half of the spewed oil may remain in the Gulf — you needed to look elsewhere.

Meanwhile, the government and BP were reportedly close to an agreement on a “clean up and compensation fund” that would, curiously enough, be pegged to that company’s oil revenues from the Gulf or, as the Wall Street Journal put it, “that would give both sides an incentive to continue production in the Gulf… [and] would represent a new level of interaction between BP and the federal government.”  BP’s new chief operating officer Doug Suttles even briefly suggested that the company might return to the same reservoir of oil and take another shot at drilling there.  But no matter, unless the capped well were to blow again, we’re obviously at one of those 24/7 to 0/7 moments that seem increasingly the essence of media coverage of any subject.

Not so fast, though.  Mark Engler, TomDispatch regular and author of How to Rule the World: The Coming Battle Over the Global Economy, wants us to consider the real damage and real cost to our society from Big Oil’s predations.  (By the way, the image accompanying Engler’s piece, “BP’s Black Gold,” comes from a series of collages on water issues by Phyllis Ewen, an artist whose work I particularly admire.  Click on it to make it bigger.  In addition, for a TomCast audio interview with Engler click here or, to download it to your iPod, here.)  Tom

The Gulf at the Gas Station 
Can We Calculate the True Cost of Our Dependence on Oil? 

By Mark Engler

This might be an opportune time to make a disclosure: I am a BP shareholder. Admittedly, I’ve never attended the company’s annual meeting, and if I did, I would have very little weight to throw around.

I own two shares of BP stock. I received my stake in the company as a Christmas gift in 1989, when I was 14 years old. The previous June, I had taken a "summer enrichment" course in the Des Moines public schools, designed as an introduction to the world of business. The teacher gave each of us in the class a modest hypothetical budget to invest in the stock market.

Earnest young capitalists, we made our picks and then followed the quotes in the morning paper. I invested heavily in Amoco and finished the summer feeling that my portfolio had done quite well. As a result, my younger brother decided that I should receive a real piece of the enterprise that was once John D. Rockefeller’s Standard Oil. He conspired with my mom to get me an Amoco share for the holidays.

I’ve watched the oil industry as an interested party ever since. In 1998, my Amoco stock split, turning my one share into two. Then, a few months later, the company was acquired by BP. This "oil mega-merger," as the BBC called it, gave me a stake in yet another energy titan. It also allowed the combined corporation to shed 6,000 jobs, prompting its new chief executive, Sir John Browne of BP, to confidently assure the press that "he hoped the merger will increase pre-tax profits of the two partners by ‘at least’ two billion dollars by the end of 2000."

The merger proved profitable indeed. Over time, the price of my stock nearly doubled. I received dividends every three months, usually of around 60 cents per share. And by the mid-2000s, BP was making some $20 billion per year in profits. The numbers looked good.

Of course, these are not the only numbers to consider. In fact, in the wake of BP’s disaster in the Gulf of Mexico, they don’t seem like the right numbers at all. It’s time for a different accounting: What has that catastrophic spill cost our society? What price do we pay for our dependence on oil? How do we measure these things?

Costs of Business

When I first began receiving Amoco’s annual reports, they featured photos that celebrated robust industrial capabilities, like multicolored sunsets behind fields of horsehead oil pumps in Texas. These days, there’s still some of that, but the reports tend to have more shots of solar panels, white windmills, and smiling school children (our future). Someone looking at the annual review the company sent me in 2001, for instance, might have been fooled by the photos of lush, palm-heavy landscapes in Indonesia, California, and Trinidad into thinking that it was a mailing from Conservation International.

Such changes in public relations were born of tragedy. Back in 1989, not three months before my summer business class, the Exxon Valdez collided with the Bligh reef in Alaska’s Prince William Sound, breaching its hull. Even according to conservative estimates, it spilled more than 10 million gallons of oil and contaminated more than 1,200 miles of ecologically sensitive coastline. For years afterwards, we saw Exxon deal with the fallout of the catastrophe.

However many thousands of boats and booms the company deployed, it only managed to recover about 8% of the oil released. The rest evaporated, coated beaches, or sank to the bottom of the sea. The Exxon Valdez Oil Spill Trustee Council estimates that 250,000 seabirds, 2,800 sea otters, 300 harbor seals, 250 bald eagles, up to 22 killer whales, and billions of salmon and herring eggs were killed by the spill. Two decades later, some 16,000 gallons of leftover oil still poison wildlife in the Prince William Sound.

The cost to the planet was steep. The cost to Exxon could have been severe as well. While the company claims that it spent $2.1 billion on its clean-up efforts, it might have had to pay many times that in fines and lawsuit settlements. The government initially threatened $5 billion in criminal penalties, and in 1994 a federal jury ordered the company to pay $5.2 billion in punitive damages to Alaskans who had filed a class-action lawsuit. For a time, things at Exxon looked grim.

Although these were the worries of a rival corporation, Amoco investors did get a taste of what Exxon was experiencing. In 1990, after a dozen years of litigation, a federal judge in Chicago ordered my company to pay $132 million in damages to the French government and other parties.  They had all been harmed 12 years earlier when the Amoco Cadiz ran aground off the coast of Brittany, releasing 68 million gallons of oil. At the time, it was the largest tanker spill ever. It killed millions of sea urchins and mollusks, thousands of tons of oysters, and almost 20,000 birds.

In terms of the overall business, however, the judgment was only a blip on Amoco’s radar screen. In the end, Exxon never made any $10 billion payout for its disaster either. The first Bush administration allowed the company to plead guilty to a small number of charges and settled for penalties and fines of around $1 billion. The judge who ultimately approved the settlement had earlier worried that the amount was too low: "I’m afraid these fines send the wrong message," he said, "and suggest that spills are a cost of business that can be absorbed."

It was a prescient concern, especially given the resolution of the class-action suit. In that arena, Exxon’s lawyers proved patient and skilled. They held up the case in court for years until, in 2008, nearly two decades after the spill, the Supreme Court ruled that damages paid by the company would be limited to an exceptionally absorbable $507.5 million.

Emerging Unscathed

In the months during which the well under BP’s Deepwater Horizon freely spewed crude into the Gulf of Mexico, it released 4.9 million barrels of oil, or 205.8 million gallons, according to a government panel tasked with measuring the spill. Depending on what estimates you use for the earlier disaster, this amounts to roughly 20 times as much oil as the Exxon Valdez released. In negotiations with the Obama administration, BP agreed to put $20 billion into a fund for cleanup. It has also indicated that it will pay "all legitimate claims" related to the disaster.

Despite such vows, how much of the final cost BP will actually end up paying is unclear. Spill-related damages and lost economic activity could amount to tens of billions of dollars more than what BP is currently setting aside. An Oxford Economics study predicts that costs to the tourism industry alone could exceed $22 billion. Damage to the natural environment, much of it potentially unseen, is almost impossible to quantify.

In the case of the Valdez spill, according to the Associated Press, "the state priced each seagull at $167, eagles at $22,000, harbor seals at $700, and killer whales at $300,000." Such an effort could be replicated for the Gulf. Yet a price tag of $167 per seagull seems tragically inadequate as a means of accounting for a destroyed population of birds, and it doesn’t begin to account for species that may seem less significant to us, but could be crucial to the ecosystem.

Now-deposed BP executive Tony Hayward repeatedly vowed to Gulf residents that the company would "make this right." Likewise, in 1989, after the Valdez ran aground, Don Cornett, Exxon’s top official in Alaska, told locals dependent on the ruined fishing industry, "We will do whatever it takes to keep you whole. We do business straight." Of course, that was before Exxon went on to pursue years of dogged litigation to limit its liability.

Once the public furor dies down, as already seems to be happening, BP will have financial incentive to do the same. Though the price of my stock took a hit, plummeting from around $60 per share in early April — before anyone had heard of the Deepwater Horizon — to a low of $27 per share in late June, it has already rallied to above $40 as of this writing. Some analysts are betting that BP, like Exxon, will contain the cost of its spill, and then continue about its business in much the same manner it did before. As analyst Antonia Juhasz argues with regard to the Valdez disaster, "Exxon emerged virtually unscathed from the incident and is, today, the most profitable corporation the world has ever known."

What We Do Not Pay at the Pump

Aspects of this situation are reminiscent of the aftermath of another recent “spill.” They recall the way in which bailout banks like Goldman Sachs and JPMorgan Chase relied on billions of dollars in public funding to stay afloat after causing a global economic near-collapse, then turned around the next year to report massive profits and once again award exorbitant bonuses to their well-heeled employees. In each case, there is something deeply unsatisfying about how the market handles the destructive behavior of powerful economic actors.

It is not a new idea to suggest that the true costs inherent in many economic pursuits have been unfairly socialized. Nor does this notion apply only in moments of crisis. Economists give the name "externalities" to costs associated with a business that are not reflected on the balance sheet of that enterprise or in the prices of its products, but rather are borne by society at large. For example, if a factory can dump its waste in a local river and is never fined, it has successfully externalized the cost of waste disposal, which the public pays for in the form of polluted water and its consequences.

Oil has many externalities, and the BP disaster has been only the most recent trigger — "the reminder we didn’t need," as Carter Dougherty at BNet put it — for refreshed awareness that the gas we buy is far more expensive to our country than what any of us pay at the pump.

In August 1987, the New York Times published an editorial with the bold title, "The Real Cost of Gas: $5 a Gallon." Given that, at the time, you could commonly fill up for 99 cents per gallon, and that even the energy crises of the 1970s did not push gas prices above $1.50 per gallon, $5-a-gallon gas was pretty much unimaginable. Yet the Times editorial stated that, "in light of the administration’s willingness to risk lives and dollars in the defense of oil from the Persian Gulf… the real cost of oil should include the cost of the military forces protecting supplies." It argued for an energy policy that accounted for Pentagon expenditures.

Two Gulf wars later, an array of reports from both liberal and conservative sources suggest that $5 per gallon is anything but an outlandish estimate for the true cost of gas. It could, in fact, be far too low.

Taking military spending into account would only be a start toward reckoning with what we really pay for oil. But since the military takes up a massive part of our national budget, it would be a good start.

Anita Dancs, an economist with the Center for Popular Economics, notes that "energy security, according to national security documents, is a vital national interest and has been incorporated into military objectives and strategies for more than half a century." After breaking down the overall military budget and evaluating specific missions, she concludes that "we will pay $90 billion this year to secure oil. If spending on the Iraq War is included, the total rises to $166 billion." That would already add 56 cents to every gallon of gas we buy.

The late Milton Copulos was a veteran of the Heritage Foundation, an advisor to both President Ronald Reagan’s White House and the CIA, as well as the head of the right-wing National Defense Council Foundation. He was particularly concerned with dependence on foreign oil, and he highlighted how oil imports were both an economic boon to unsavory governments abroad and a missed opportunity for domestic investment. In 2006, Copulos argued that, if you add to oil-related defense spending such factors as the economic impact of periodic oil supply disruptions and the opportunity costs of money spent on oil imports that might have been used elsewhere in the economy, the "hidden" costs of the U.S. dependence on petroleum would total up to $825 billion per year.

"To put the figure in further perspective," he wrote, "it is equivalent to adding $8.35 to the price of a gallon of gasoline refined from Persian Gulf oil." At today’s rates, that would hike the price at the pump to approximately $11 per gallon, or more than $250 to fill the tank of a typical SUV.

Gushing Subsidies

Military spending is just one type of public subsidy that benefits the oil industry and keeps the price at gas stations artificially low. When I made my adolescent wager on Amoco, I was not aware that the company also profited from massive tax breaks and other non-military forms of support. Yet these go a long way toward making the enterprise a safe bet for investors. Copulos factored some of them into his $11 per gallon calculation; others would drive the price still higher.

In early July, The New York Times reported: "With federal officials now considering a new tax on petroleum production to pay for [the BP oil spill] cleanup, the industry is fighting the measure… But an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process."  Senator Robert Menendez (D-NJ) added, “The flow of revenues to oil companies is like the gusher at the bottom of the Gulf of Mexico: heavy and constant. There is no reason for these corporations to shortchange the American taxpayer.”

The Times story notes that BP was, for instance, able to write off 70% of what it was paying in rent for the Deepwater Horizon rig that caught fire, "a deduction of more than $225,000 a day since the lease began." Amazingly, BP is also claiming a $9.9 billion tax credit for its response to its oil spill in the Gulf of Mexico.

Not only does our government allow energy companies to avoid taxes in myriad ways, the variety of public supports for the oil industry outside the tax code are almost too numerous to list. A 1995 report by the Union of Concerned Scientists mentioned several, including these: the government invests in substantial energy research that directly benefits the oil industry; it spends millions to maintain a Strategic Petroleum Reserve, designed to help stabilize the oil supply; and it maintains a massive highway system that facilitates gas-intensive auto travel, only part of which is paid for by taxes on motorists.

Then, of course, there is the environmental price we pay, most notably in the form of global warming. As Ezra Klein wrote recently in Newsweek,some experts argue that carbon emissions from cars could be offset at the cost of about 65 cents per gallon (money that would presumably be invested in activities like reforestation). Others believe the cost would be much steeper — perhaps steep enough to turn oil industry profits into losses.

Andrew Simms of the British New Economics Foundation calculated that, if you were to combine BP’s exploration, extraction, and production activities with those involved in the sale of its products, you would end up with 1,458 million tons of CO2-equivalent entering the atmosphere per year. Pricing the cost of carbon emissions at $35 per ton, he puts the bill for climate-change damages at $51 billion. Since BP reported a mere $19 billion in profits in 2006, the year Simms was reviewing, he argues that it would have been "$31 billion in the red," or effectively bankrupt, if it had to cover the climate-change bill.

There’s more, too. Consider that car exhaust and oil industry pollution mean an increase in smog and asthma, burdening our health-care system. Then count in the damage caused by massive oil spills we seldom hear about in places like Nigeria, Ecuador, or China, as well as the economic cost of traffic congestion and excess auto accidents made possible by subsidized car travel (costs which the willfully contrarian Freakonomics blog contends may be even more expensive than global warming). The final tally is staggering. High-end estimates of the true costs of the gas we use come to over $15 per gallon. Taxpayers subsidize significant parts of this sum without even knowing it.

That Which Makes Life Worthwhile

To the extent that energy corporations are made to spend more to do business in the future — forced, for example, to pay for mandatory safety measures, pricier insurance policies, or taxes from which they were previously exempt — some of the costs of oil could be "internalized." If enough costs were accounted for, some companies, no longer confident that their efforts would be profitable, might begin to reconsider exploiting harder-to-extract reserves of fossil fuels. A recent article in the British Guardian offered this scenario: "If the billions of dollars of annual subsidies and the many tax breaks the industry gets were withdrawn, and the cost of protecting oil companies in developing countries were added, then most of the world’s oil would almost certainly be left in the ground."

Unfortunately, this is surely an overstatement. If the exploits of oil companies were made more costly, these companies would simply raise their prices and pass along the costs to consumers. And we would pay them because we are unwilling to give up the speed and convenience of driving, or the luxury of airline travel. We would pay them because we are unwilling to reduce our consumption of foods shipped to our grocery stores from far away, or diminish our energy consumption in many other ways. We would pay them in order to maintain at least a facsimile of our previous lives.

Or would we?

While it is too much to say that "most of the world’s oil" would be abandoned, some might be. In 2008, when gas prices soared above $4 per gallon, Americans did behave differently. As the New York Times reported, we drove 10 billion fewer miles per month than the year before; surprising numbers of SUV owners traded in their vehicles for smaller, more efficient cars; and daily oil consumption was lowered by 900,000 barrels. Investors began to reconsider how "realistic" the costs of developing alternative energies might be and to fund them more seriously. In other words, Americans responded to the market.

This was a hopeful sign. At the same time, reacting to the market’s cues will not be enough to sort out our relationship to oil and the oil business. We must also reckon with the market’s limits. Appreciating the full magnitude of the Deepwater Horizon crisis requires us to recognize that the market is inherently unable to account for many of the things we hold most precious. Robert F. Kennedy pointed to this problem in one of his most powerful speeches, explaining that the gross national product measures everything “except that which makes life worthwhile."

Some things cannot be — or should not be — left to business spreadsheets. Calculating the cost of a destroyed ecosystem in the Gulf of Mexico or along the coast of Alaska means putting a price tag on things that are not meant to be priced. If you accept that a harbor seal’s life is indeed worth $700, and a killer whale’s $300,000, pretty soon you must accept that your own life has a price tag on it as well.

Yet taking the limits of economic calculus seriously has implications. It means that we cannot trust the market to solve its own problems — to self-regulate and self-correct. It means that we need democratic action to place controls on corporate behavior. It means that some things must be considered not merely expensive but sacred, and defended against forces blind to their true value.

Those who believe that the price of my BP stock will recover in the next year might be wrong. Even if the stock bottoms out, however, that won’t restore a shattered Gulf, nor will it change a system that prizes easy consumption and deferred responsibility. We can only correct for the catastrophe oil has wrought by living according to a different measure.

Mark Engler is a senior analyst with Foreign Policy In Focus, a TomDispatch regular, and the author of How to Rule the World: The Coming Battle Over the Global Economy (Nation Books). He can be reached via the website Democracy Uprising. Research assistance provided by Tim LaRocco and Arthur Phillips. To listen to a TomCast audio interview with Engler click here or, to download it to your iPod, here.

Copyright 2010 Mark Engler