Big Oil Propaganda has Manufactured Consent for Increased Consumption of Fossil Fuel

Scott Deshefy


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It may sound Panglossian, but solutions for many of America’s problems are simple, straightforward and easily accomplished, if only both major parties weren’t subservient to billionaires and corporations.

Beginning around 2034, Social Security’s solvency may be at risk not only because “boomers,” such as I, have chosen to retire in high numbers, but because of pay-in inequality. Social security is one of the most cherished and successful programs our government ever created, not only because it helps support retirees but also because it keeps some 27 million U.S. citizens out of poverty. Unless the rich start paying fair shares into the program by early next decade, existing full benefits will have to be cut by 23 percent to make ends meet.

You may recall that Social Security was amended by the Reagan administration in 1983 to fully cover slugs of benefits projected to be paid to Baby Boom retirees. That’s why the age for collecting full benefits was gradually increased from 65 to 67. What did the program’s trustees fail to anticipate in 1983? No one expected capitalism to run amok and for much larger percentages of America’s total income to be concentrated among the super rich. In fact, since 1979, income has grown a whopping 206% for the upper ten percent of wealthiest U.S. citizenry but only 28% for the remainder of the population. Meanwhile, income subject to the Social Security payroll tax is capped, and no dollar amount above $160,200.00 is taxed.

For decades, as the rich have gotten exceedingly richer, higher amounts of the nation’s cumulative income have been exempt from social security payroll tax. Corporate CEOs, for example, making $20 million per year pay Social Security tax on only 0.8% of that income, whereas earners making $160,200.00 or less per year pay social security taxes based on 100% of their income. As more of America’s income has gone to the ultra-rich, more of America’s income has gone untaxed to support Social Security. That widening inequality has cost the Social Security trust fund upwards of $1.4 trillion since 1983.

The solution to this problem is not only logical but intuitively obvious ─ we need to eliminate or significantly increase the cap so the enormously rich pay commensurately into social security. Just increasing the cap to a modest $250,000.00, additionally subjecting investment income to Social Security taxes (a measure already introduced by progressive lawmakers), would extend Social Security’s solvency another 75 years without raising taxes one iota for 93% of U.S. households. “Elementary, my dear Watson.”

Although gas prices have fallen since last year and eggs can be purchased, depending on where you shop, for $1.10 a dozen, many price hikes persist long after shipping costs and bottlenecks diminished. Many suppliers, having used those excuses for price hikes, continued to gouge consumers long after pandemic-related supply and demand fluctuations stabilized.

Other drivers of inflation are systemic, profligate economy mainstays. Low interest rates, for instance, incentivize borrowing and credit purchases. As long as consumers use credit cards and bank loans to “buy” unaffordable merchandise and services, failing to say “no” when prices get too high, sellers will continue to ratchet-up charges. Debt and personal bankruptcies, while banes to society, enable 1-percenters and corporations to thrive. Credit purchases keep demand artificially high even when asking prices skyrocket, and lenders, profiting from interest payments, make fortunes. After all, society’s perpetual indebtedness means banks and other lending institutions legally own big-ticket merchandise, such as cars and homes, until the last loan or mortgage payment is made. Liens, foreclosures and repossessions are part of capitalism’s profit calculus as well as grim reminders that usury was once punishable by death.

Causes of inflation, such as corporate greed and corporate concentration, are equally difficult to control because both major parties aid and abet. However much Republicans hawk false narratives that the current administration is solely responsible for high prices, conveniently neglecting two years of wage growth and record-low unemployment, the guilt is bipartisan.

Except Bernie Sanders and a few other stalwarts in Congress, legislators ignore (and often abet) the obvious structural reasons for high prices: concentrations of America’s economy into spheres of influence of a few corporate giants with collective control over prices.

Absent competition, charges for goods and services keep skyrocketing, whereas in a competitive Adam Smith marketplace, corporations would keep their prices as low as possible, doing everything to prevent passing higher costs onto consumers for fear of losing sales to competitors. But corporations neither play by Adam Smith’s idealistic, equilibrating rules nor submit to his “invisible hand.” Instead, corporations raise their prices with economic impunity even as they amass record, often unconscionable wealth, setting historical highs the last two years. They get away with piracy by using inflation as an excuse and exploiting political narratives that assign responsibility for higher than normal prices to a single major party. In reality, Democrats and Republicans alike turn blind eyes to corporate monopolies in exchange for campaign funding and retention of power.

A prime example of corporate concentration is the oil and gas energy sector. Only a few conglomerates control the land, pipelines and cargo ships that control supplies of oil and gas on which the world remains overly and harmfully dependent.

At the height of the pandemic, when most of us stayed home to avoid being COVID casualties, “anthropause” produced some idyllic results. Greenhouse gas emissions dropped significantly, wildlife reemerged, and streets and highways had very little traffic, meaning oil and gas companies took economic hits from lower demands for fuel as oil tankers and storage depots filled to their brims. To compensate for low demand and high supply, Big Oil had to lower gasoline prices to stimulate sales. Prices dropped to $2.00 per gallon or less until travel restrictions relaxed and demand for gasoline at lower prices depleted reserves. Seizing that opportunity to make up for lost profits during anthropause, oil companies immediately limited production and supply and cranked-up gasoline prices, more than doubling their profits in the cases of Exxon-Mobil and Chevron.

Inflation became an expedient excuse for price gouging, and the radical right perpetuated the scam by assigning it false political narratives. At the same time, Proctor & Gamble dramatically increased prices of its disposable diapers citing increased costs of raw materials for production as justification. That excuse didn’t jive with Proctor & Gamble’s 25% jump in profits, however. Concurrently, Kimberly Clark also increased prices for paper products, and both corporations got away with it because, having cornered their respective markets, neither company had a competitor to which dissatisfied customers could turn. In the third quarter of 2021, Coca Cola and Pepsico made $10 billion and $3 billion in profits, respectively, by raising prices. Their excuse was higher costs for ingredients, freight and labor when in reality the two soda makers have no other large-scale competitors to which they would lose customers. With only four major meat processors in America, escalated meat prices produced 300% profit increases responsible for roughly half the jump in grocery costs in the U.S. in the last two years.

Since the 1980s and the Reagan and G. H. Bush administrations, when anti-trust enforcement was largely abandoned, American industries have become more and more concentrated, dominated by handfuls of corporations maximizing profits by coordinating prices. Banks, broadband, Big Pharma, meat packers, airlines, soft drink makers and other corporations also take part in rigging the economy to their benefit and consumers detriment. All could easily absorb higher costs of production and pay workers overdue higher wages without passing those costs onto consumers by highly inflating prices. Instead, the two major parties allow powerful corporations to amass enormous profits for the sole purpose of enriching investors, CEOs and other executives.

To fix this problem of corporate concentration, we need to get corporate money out of politics and aggressively enforce antitrust laws. One such initiative: President Biden asked the Federal Trade Commission (FTC) to investigate energy companies’ roles in surging gas prices while simultaneously appointing experienced antitrust lawyers (Jonathan Kanter and Lina Kahn) to the Dept. of Justice and FTC. At every opportunity we must work to limit corporate power in the United States because concepts of noblesse oblige are lost on all but a few American corporations and billionaires.

It’s no surprise surging gasoline prices coincide with Big Oil raking in tens of billions of dollars of profit each quarter. Even in a nation whose citizenry insists on driving too much, filling its gas tanks using credit cards, and blaming inflation on politics instead of corporate greed and price-gouging, there’s a way to counter Big Oil profiteering. And it doesn’t require buy-in or commitment from weak-willed U.S. citizenry driving gas-guzzlers. Big Oil can be held accountable by imposing a windfalls profit “claw back” on excess profits which petroleum companies are reaping at the expense of American consumers.

The term claw back means the same as restitution and refers to any money or other benefit required to be returned due to special circumstances or conditions under which those benefits were derived. Examples include monies received or damages inflicted during commissions of crimes, or where a claw back provision has been written into an executive compensation package. In the case of Big Oil, the claw back would take the form of quarterly dividends going back into pockets of each and every U.S. citizen, similar to a tax rebate or the dividends people in Alaska and British Columbia get for oil extraction in their state and province, respectively. So, the concept of getting dividends out of oil companies is nothing new. It’s just a matter of going after excess profits through direct payments to working Americans rather than taxing their windfalls to fund government services earmarking public works and general welfare.

Months ago, Sen. Sheldon Whitehouse of Rhode Island proposed this idea with support from Sen. Bernie Sanders and other progressives. In 2010, I floated the idea running for Congress as a Green by referencing dividends paid Canadians in BC. The cost to produce gasoline and other petroleum products at wellheads in Texas and elsewhere hasn’t increased significantly, if at all. What’s changed considerably has been the global oil price, ratcheted up by international cartels, including Saudi Arabia, Iran, Venezuela and Russia, and speculators, who moved markets around when Ukraine was attacked by Vladimir Putin. Prices soared, not because supply exceeded demand, but through manipulative “shock doctrine” price-gouging.

To cover their racketeering, oil companies slowed production, withheld petroleum stores and pushed the false narrative that newer wells and pipelines were needed at home. None of that was true, of course, because increased gasoline and oil prices were completely disconnected from costs of production, but it provided political fodder for a Biden-detracting Far Right. Moreover, it enabled Big Oil to finagle $200 billion in fossil fuel profits, which (by definition of “profit”) were used to buy back their own shares of stock rather than reinvesting in carbon capture or other pollution reduction technologies. Big Oil also could have provided better pay and benefits for workers, improved their production or, more importantly, transitioned into clean, renewable energy. Instead, extra money taken from consumers is mainlined into bank accounts of very wealthy shareholders and into CEO compensation packages.

Claw back dividends paid to us citizens are a popular and logical solution to Big Oil’s profiteering, compensating (albeit minimally) for Big Oil’s “externalities,” add-ons to already staggering, profit-driven price hikes. In addition to failures to transition to renewable energy and devastating impacts on the environment are paybacks for damages from climate-intensified droughts, floods, wildfires and storms, and medical costs for air pollution-related illnesses, costs not reflected at the pump. Any legislator not on the corporate dole would be expected to support such restitution. Ah, but there’s the rub. In Congress, the entirety of the GOP and two decisive voters in the Democratic Party have become the political wing of the fossil fuel industry, acting as shills to its profit-making, global-warming agenda. Despite their disservice to us and, more importantly, the biosphere, Big Oil’s false narrative machine and strategically-targeted donations continue to get members of Congress reelected if lockstep. I

n turn, the fossil fuel industry yearly receives tens of billions of dollars of U.S. tax and other subsidies (about $5 trillion globally, or 6% worldwide GDP, according to the International Monetary Fund) for pollutant products that are primary causes of climate change. That environmental damage additionally contributes to 6 million or so respiratory disease deaths around the globe each year. To counter these facts, Big Oil manages to brainwash less-sophisticated voters into believing drilling more oil and gas is the solution, not the problem.

For the last 50 years Big Oil propaganda has manufactured consent for increased consumption of fossil fuels, greenhouse gas emissions, atmospheric carbon absorption in the seas and resulting global warming and oceanic acidification. And to ours and the planet’s detriment that narrative of falsehoods has succeeded, expunging all references to climate change in the telling. The deception is so damaging in terms of wildfires, droughts and intensified hurricanes and rain events California has filed a lawsuit seeking creation of a fund ─ financed by Exxon-Mobil, Chevron, Shell, ConocoPhillips and BP ─ holding them accountable for recovery efforts and costs of remediation following devastating storms and wildfires. Filed in state Superior Court in San Francisco, the litigation signals an awakening. Despite the Constitution having zero roles for corporations in American politics and government, Big Oil’s joint control of markets and Congress has enabled its turpitude to grow at unprecedented scale. Similar parallels can be drawn to Big Pharma, the meat industry, land developers and private medical insurers. Yet, rightwing culture war misdirection, enabled by social media and candidates unfit for office, diverts America’s attention away from real crises. As Edward R. Murrow once said, “The obscure we see eventually. The completely obvious, it seems, takes longer.” Scott Deshefy is a biologist, ecologist and two-time Green Party congressional candidate.