Obama averted a government shutdown on April 8 by brokering a flimsy budget compromise between two increasingly hostile camps of U.S. capitalists.
One is composed of imperialists who need ever-expanding and more costly U.S. wars. This faction’s power and wealth depend on forcibly reasserting its once almighty control of the world’s energy trade. Until 1975, Exxon, Mobil and Chevron — descendants of John D. Rockefeller’s Standard Oil colossus — (along with ally Texaco) legally owned all of Saudi Arabia’s unsurpassed oil reserves. But today, rival oil and gas barons in China, Russia and Iran, unrest in the Arab world, and al Qaeda threaten the empire headed by U.S. flagship Exxon Mobil.
So, from Libya to Afghanistan, the U.S. war machine seeks to rescue the Rockefeller-Exxon wing of U.S. capitalists, at a cost of trillions of workers’ tax dollars; 27% of everyone’s federal taxes go to pay for these wars, which consume more than half of the Federal Budget.
On the other side of the split stand smaller, domestically-oriented bosses like oil billionaires Charles and David Koch, who consider war taxes an unnecessary burden. They rally popular support by bankrolling the anti-tax Tea Party. Koch Industries’ big new project, a proposed 900,000 barrel-per-day pipeline from Alberta, Canada, to Texas won’t require paying one dime for a single aircraft carrier, bomber or soldier. By contrast, Exxon’s newfound gushers in Iraq [see box] help explain why U.S. “Defense” chief Gates “suggested that American troops could remain [t]here for years.” (San Francisco Chronicle, 4/10)
Each side in this ruling-class divide, highlighted by the budget battle, employs think-tanks to organize opinion among fellow capitalists and mislead the working class. The Cato Institute, founded and funded by the Kochs, decries the U.S. invasion of Libya; calls for halving the Pentagon’s financing; and supported the government shutdown Obama sidestepped. The U.S. war machine does relatively little for the Kochs and allied minor-league bosses.
Thus, Cato fellow Doug Bandow complains, “Most American military forces are busy doing tasks which have no recognizable connection to U.S. security.” (Forbes, 4/4) But the far more influential Rockefeller-led Council on Foreign Relations (CFR) has the opposite take. CFR big shot Larry Diamond called U.S. military intervention in rebellious Arab lands a matter of life and death for U.S. imperialism: “It’s an existential challenge for the United States, because our interests in the region are so profound.” (CFR website, 4/8) The CFR cloaks Obama’s Mideast-North Africa oil grab with the liberal fig leaf of “humanitarian protection.”
Saudi Oil Treasure Is Imperialists’ Grand Prize
Holding onto Exxon’s reshaped but still sweetheart Saudi deal forms the core of U.S. strategy relative to the “Arab Awakening.” Exxon now enjoys first dibs on crude oil from the nationalized Saudi Aramco outfit at undisclosed contract prices far below the current going rate of well over $100 per barrel.
When the Saudi royal rulers “seized” the Rockefeller companies’ holdings in 1975 — with oil selling for $13 a barrel — they were assured “access to seven million barrels per day…at the rate of 47 cents per barrel.” (“Oil, God, and Gold: the Story of Aramco and the Saudi Kings,” Anthony Cave Brown, 1998). With figures adjusted for price rises and Chinese encroachment on the U.S. share, this racket still endures.
That’s why Obama, while backing pro-U.S. “rebels” in Libya, Egypt and Tunisia, endorses Saudi-backed “shoot-the-protestors” actions in Yemen and Bahrain. They both border Saudi Arabia. Obama’s recent $60-billion arms sale to the kingdom cements both Washington’s status as Saudi Aramco’s military overlord — dependent on U.S. weaponry — and Exxon’s status as its especially favored partner. However, when market conditions force Koch to buy Saudi oil, he pays prevailing prices.
The liberal war-making Rockefeller wing needs an all-out purge of imperialism-thwarting businesses like Koch as well as a mass, liberal, pro-government, ideological civil war against the Tea Party. But they can’t pull off either yet.
Ex-New York governor Eliot Spitzer tried to force the imperialists’ war agenda throughout Wall Street. But some bankers — more focused on their bottom line than on “sharing sacrifice” to counter China and other imperialists — torpedoed him.
Meanwhile, the rulers face a contradiction: On the one hand, capitalists cut workers’ services to make the working class pay for the current economic crisis. But this severely reduces their ability to win these same workers’ loyalty to Washington’s war agenda.
Headed for World War III, U.S. Rulers Need ‘Roosevelt 2’; But Obama’s Not Achieving It
In The Great Depression, President Roosevelt carefully constructed a host of federal job programs such as his Works Progress and Civilian Conservation schemes which — along with his concessions to mass (communist-led) working-class struggle for Unemployment Insurance, Social Security and the 40-hour week — won a great deal of worker support that U.S. rulers needed to eventually wage World War II.
Presidents Kennedy and Johnson tried similar policies — a militaristic “high-tech jobs” space program in response to the Soviet ‘Sputnik’ (the first shot into space); Medicare and voting rights for black people in response to the Civil Rights struggle. However, they had far less success for the cold war against the phony “communist,” but anti-U.S, Soviet empire. And their efforts eventually failed to win backing for their war of aggression in Vietnam.
Obama, faring even worse, has yet to come up with anything to mobilize the working class for the wars the rulers’ dominant imperialist faction must prepare to wage against Iran, China and Russia. Al Gore’s liberal environmentalism didn’t quite succeed in winning masses to government service. So Obama, or his successor, must find another smokescreen for imperialism.
There exists, nevertheless, a viable but demanding course for workers against worsening ruling-class-enforced war-making and cutbacks. It lies in relying neither on liberal/imperialist nor Tea Party politicians but on our class alone. Exposing the profit motive of both capitalist factions’ attacks on us — on the job, in schools, neighborhoods, universities, among rank-and-file GIs and in every mass organization we work in — can help build a mass base for our revolutionary, communist Progressive Labor Party. We have the long-term outlook of forcibly replacing the bosses’ unceasing wars and repression with rule by the working class in our own class interest.J
Two Million Iraqi Lives, 5,000 Dead GIs Reap Profit Bonanza for Exxon
When Exxon invests in Iraq’s oil, its government pays Exxon $1.90 for every barrel Exxon pumps out of the ground. But it costs Exxon far less to pump that oil. Nominally the oil Exxon gets from Iraqi soil belongs to the Iraqi government. But the 2010 “Entitlement” program forces Iraq to sell the lion’s share of that oil to Exxon and to British firms Shell and BP.
This would be at a price far lower than the current potential $120-a-barrel, as well as less than Iraq sells to other imperialists. This enables Exxon to make fabulous profits. And Exxon’s Iraqi oil fields have enormous potential. The West Qurna field’s yield alone could soon out-produce that of entire oil powerhouses like Venezuela, Kuwait and Nigeria.
So the invasion of Iraq enabled Exxon to gain these enormous profits over the dead bodies of two million Iraqis and 5,000 dead GIs.