California Recall All About National Politics, Natural Gas -- And Empire

by Franz Schurmann

Since the previous presidential election of 2000, the USA has morphed into an empire. As a result, the political stakes are even higher than before. Now, for the American empire to function optimally, the winning party has to win it all -- the presidency, both houses of Congress and governorship of most of the states, especially the big ones. California leads the pack.

Empires are political entities that rule over many diverse peoples and occupy large stretches of land, de facto or de jure. Their imperial concerns outweigh their domestic ones. And their new politics are unrecognizable to the old politicians. In a way, one can say that the USA of 50 states has given way to an America whose interests extend all over the world and even encompass parts of outer space.

Over the last 25 centuries, there have only been a few significant empires -- Roman, Persian, British, Chinese and Spanish. At their zenith, they became prosperous through trade, and their varied peoples enjoyed widespread security due to the empire's vast power to impose it through military power. America now looks like the sixth great empire that can come close to dominating the entire world.

One can get a sense of America's new imperial behavior by the changed handling of earlier problems, such as an indifference to its gargantuan trade deficit. When recently Treasury Secretary John Snow was asked about the huge deficit he simply said, "It's manageable" and moved on to the next question. The White House shows similar indifference toward erstwhile economic demons like inflation and deflation, a weak dollar and enormous public and private debt. Following the hallmarks of empire, instead of tackling deficits America is grappling with global security through the "War on Terror." The protectorates give us their goods and we give them our protection against their enemies from inside as well as from outside.

The biggest goods they give us are oil and natural gas, and the latter is at the core of California's recall. In May 2001, Californians, who gave the Democrats a smashing victory in the 2000 elections, found themselves facing enormous energy bills. Gov. Gray Davis spent huge amounts of money to buy natural gas futures, the idea being that, high as people's energy bills were then, they would be much less than the fixed prices on the specified date for cashing in on the futures. But instead, natural gas prices tumbled worldwide, leaving Californians with bloated contracts, forcing them to pay for gas and electricity well above the market price.

The reason the gas prices plummeted was that Saudi Arabia had just made a deal with the "big seven" Anglo-American oil companies, plus Enron, which specialized in liquid natural gas (LNG) and would quickly introduce large quantities of LNG all over the world. The way it happened was that pipelines, serving both oil and gas, were already available, going to the Saudi port of Yanbu on the Red Sea. The Iraqis had built and owned the pipelines because of a threat to Persian Gulf oil during the 1980-88 war with Iran, but they never used them. However, they were just ready to be used by Enron, and Gray Davis didn't know about it.

If Davis had been a Republican, Energy Secretary Spencer Abraham might have warned him about LNG futures. But after Bush did so badly in California during the 2000 election, thanks to Davis and the AFL-CIO, the Republicans were in no mood to help.

Davis and his fellow Democrats refuse to acknowledge that the USA has morphed into an empire. One big reason for this refusal is that the big unions, a major supporter of the Democrats, would become irrelevant. Davis, a functionary operating with other functionaries, thrives in a heavily bureaucratized USA. Bush, however, knows from his father and from long acquaintance with the oil companies that a greater American empire is swallowing the USA. His familiarity with cowboy capitalism and its swashbuckling CEOs helps him thrive in this new America.

Now Arnold the Terminator has swept into California politics. With his Hollywood connections he is the polar opposite of Gray Davis and his graying AFL-CIO friends. The latter are counting on lower middle class and older Californians to keep the country's biggest welfare state going. Arnie offers little beyond Hollywood. But as a poor Mexican woman once told a reporter who asked about the difference between starving in her village or in an urban dump, "I can dream in the city dump but not in the village." Hollywood is all about selling dreams.

If Davis wins in the recall, it will be a big and likely fatal blow to Bush the empire builder. But if another Republican actor should win the governorship of California, chances are good that on Nov. 2, 2004, Bush will prevail. And the American Empire will march on.