Sep 12, 2005
On Wednesday, August 31, when it became clear that the toll from Hurricane Katrina amounted to one of the biggest disasters in this country's history, wiping out the homes and livelihoods of millions of people, the U.S. stock market moved up, led by the big energy and construction companies, whose stocks rose as fast and as high as the flood waters that drowned New Orleans.
All the stories about how hard hit the oil industry had been by the storm were just an excuse for these companies to jack their prices up to record levels – immediately. And while President Bush was talking about "shared sacrifice," the oil companies raised gasoline prices highest – up to $6 per gallon – where the storm hit hardest, thus compounding the suffering and misery of the population. Of course, capitalists from far and wide tried to get in on the expected increase in profits, by buying up oil stocks like hot cakes.
The stocks of big construction and engineering companies did even better. In just one day, the stock of the Shaw Group based in Louisiana rose by 17%, Fluor rose by 6% and Coachman, which builds manufactured houses, went up by 12%.
FEMA may have been a complete no-show in New Orleans, Mississippi and Alabama, but immediately after the storm hit, Joseph Allbaugh, the former head of FEMA under Bush and an old Bush crony, flew into New Orleans on a private jet. Allbaugh was there as a business "consultant," representing the Shaw Group and Halliburton's Brown, Root and Kellogg division. Within days, Shaw announced that it had gotten two contracts of up to 100 million dollars each, one with FEMA, the other from the Army Corps of Engineers. Halliburton, with its infamous ties to Vice President Cheney and scamming of billions of dollars from the U.S. government as one of the prime contractors in Iraq, landed a fat contract with the Navy worth 500 million dollars to provide emergency repairs to military facilities damaged by the hurricane.
Of course, Allbaugh was not the only former FEMA director in Louisiana. James Lee Witt, who ran FEMA under the Clinton administration, was "advising" Louisiana's Democratic Party governor, Kathleen Babineaux Blanco, while helping his clients, Nextel Communications, Whelen Engineering, a manufacturer of warning systems, and the Harris Corporation, a telecommunications equipment company, to win fat contracts of their own.
The Bush administration has been doling out contracts at a rate of more than 500 million dollars per day. Perhaps most striking is the government agreement with the engineering and construction giant, Bechtel. Bechtel's zone of operation is the entire state of Mississippi! Bechtel won't have to deal with "pesky" government oversight or control, because, as the New York Times says, Bechtel has "an informal agreement with no set payment terms, scope of work or designated total value." In other words, the Bush administration is granting Bechtel a license to steal on a scale as big as the state of Mississippi.
And, as icing on the cake, the government is already starting to shower these companies with emergency tax credits, as well as changes in regulations on federal contracts that will allow them to pay their work force much, much lower wages and benefits, and ignore environmental protections.
All this amounts to major looting by the biggest companies in the country.