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Shirley Sherrod should have been a household name long before this week’s media frenzy – but for reasons most of the country knows little about.

For decades, Ms. Sherrod has been fighting for economic justice and access to property for those who have been left out of the system. Starting back in the 1960s, she and her family were at the center of an effort that assembled nearly 6000 acres of land in the south for farmers who had lost control of their land. Inspired by the Jewish National Fund and other groups which held land in trust, New Communities, Inc., fused the civil rights movement with ideas about economic justice into an ambitious plan to provide ownership stability for large numbers of small farmers.

But the land was ultimately lost again, as government officials withheld access to credit that was necessary to save their effort. Such discriminatory practices were ultimately successfully challenged in a class action lawsuit documenting decades of USDA wrongdoing.

In the full video that was manipulated to portray her as a racist, Ms. Sherrod instead advocates for economic justice for all. She puts the economic tidal wave that has affected so many of those in the lower middle end of the economic spectrum into a framework that moves past race. Her approach is timely, given current debates over where to target efforts to boost the economy.

Credit is the lifeblood of any economy. Those who get access to credit on fair and reasonable terms tends to prosper. Those who get credit on predatory terms fall further behind.
The legacy of treatment of African American farmers in the south is one of denial of credit, leading to dependence on predatory credit, and finally the loss of lands on a huge scale. Though well documented, though admitted by the United States, these farmers still cannot get their compensation appropriated.

In Chicago of the 1950s and 1960s, as in many parts of the country, the United States Federal Housing Administration determined that minority neighborhoods were inherently bad risks. Middle class homebuyers who had saved substantial down payments, and whose income was sufficient to make monthly mortgage payments, nevertheless still could not get a mortgage where the FHA had redlined a neighborhood. With normal credit options constrained, many buyers paid more for a house than it was worth, turning to contract sale arrangements where a single missed payment meant the loss of years of savings.

And in the subprime flood of bad loans into hundreds of communities that surged between 2000 and 2006, those who had trouble accessing normal credit channels again became prey to the peddlers of dangerous loans. Certainly some borrowers were on the make for a fast deal with cheap money. But many subprime borrowers were fully qualified for safer, fixed rate prime loans, yet were not being served by our regular banking system.

Time and again, middle income and lower income Americans have been unable to get credit on consumer-oriented, fair terms. Home loans, farm loans, credit cards and access to property ownership are far easier to obtain for those who do not have to overcome the misperceptions of those who often control access to credit. And when average families then need to turn to bad credit products, whole segments of the population are setback and lose gains toward building wealth.

As Elizabeth Warren wrote so cogently when calling 3 years ago for a Consumer Financial Products Safety Commission: “Indeed, the pain imposed by a dangerous credit product is even more insidious than that inflicted by a malfunctioning kitchen appliance. If toasters are dangerous, they may burn down the homes of rich people or poor people, college graduates or high-school dropouts. But credit products are not nearly so egalitarian. Wealthy families can ignore the tricks and traps associated with credit card debt, secure in the knowledge that they won’t need to turn to credit to get through a rough patch. Their savings will protect them from medical expenses that exceed their insurance coverage or the effects of an unexpected car repair; credit cards are little more than a matter of convenience. Working- and middle-class families are far less insulated. For the family who lives closer to the economic margin, a credit card with an interest rate that unexpectedly escalates to 29.99 percent or misplaced trust in a broker who recommends a high-priced mortgage can push a family into a downward economic spiral from which it may never recover.”

Many will take away from the Shirley Sherrod media incident merely that fact checking is vital when information is so easy to manipulate.

But there are more important lessons to be learned. The productive economic energies of average Americans are too often smothered in a morass of bad credit products, traps for the unwary, and terms that make it hard to build wealth. Passing a Financial Reform bill, promulgating a new set of credit card regulations, or revamping the housing financing market, are not enough.

We need teeth in their enforcement, and a concerted effort to level the playing field between consumers and their sources of credit. If we fail to do so, no one should be surprised to see more and more of the middle class fall economically behind, unable to recover alongside the financial sector’s recovery.

David Abromowitz is a Senior Fellow at the Center for American Progress, www.Americanprogress.org.

Future life forms might ask: Who were they, what happened to them? To which the reply would be: They were primitive humans belonging to a less advanced civilisation and they were forced to break their addiction to oil after the Gulf of Mexico catastrophe which started in 2010. Easy oil is over for international energy firms without access to sovereign reserves in the Middle East, Russia and Latin America, driving an ever more desperate search for more costly supplies deep under the sea or trapped in shale and sand. Whilst the deep water oil gusher has caused an unparalleled environmental and economic disaster along the US Gulf Coast, Canadian tar sands are also in the investor spotlight over substantial pollution and influence on longer term climate chaos. The stage is now being set for an extreme makeover in investment flows from large pension funds, mutual funds and some sovereign wealth funds away from the oil industry, which is in the process of losing its “safe haven” status. This tidal movement in investment flows will have massive, and as yet unknown, consequences for the end of the oil dependency era.

We Are All Involved

Not just the US, the Gulf oil spill is a disaster for all of us worldwide as supercomputer modelling demonstrates the rapid drift of the oil into Atlantic waters and beyond in the coming weeks and months. Whilst it is easy to lay blame on a single global oil company, as some are wont to do, this complex issue is much broader and deeper than that. It is a world-wide civilisation challenge. The whole global economic system is oil dependent. Even the financial world is an inverted pyramid resting on the fossil fuel energy that powers world growth. None of us are excluded. We would be truly surprised if we knew where the oil and gas burnt in our cars, boats and aeroplanes actually comes from and how it is transported, refined and delivered to find its way into our forever hungry fuel tanks! The complicit nature of our relationship with the oil industry is ill understood.

Man-made Disaster

The Gulf of Mexico gusher is a reminder that the oil industry is now a high-risk sector where the risk profile has grown exponentially. “Black gold” is running out and oil exploration companies are entering more and more risky areas of operation to keep production levels up. The Deepwater Horizon disaster has all the familiar ingredients of deregulation, deception, and knee jerk damage-limitation that typically characterise the relations between government regulators and multinational corporations in crisis after crisis. Enron, Worldcom, Lehman Brothers, AIG etc. The list goes on. It is a man-made disaster, like Three Mile Island in 1979, Chernobyl in 1986 and Exxon Valdez in 1989.

Toxic Rain?

Not only are several million gallons of crude oil sitting within the Gulf of Mexico, with more pouring in by the day, but the region is relatively prone to hurricanes early in the season, which begin in less than a few weeks. In parallel, millions of gallons of toxic dispersants like Corexit 9500, are being dumped into the Gulf of Mexico to add to the pollution from the oil spill. Dispersants have never been applied on this scale. The oceans are part of a larger precipitation cycle, and scientists are concerned that soon the consequences of using dispersants could be falling from the sky. The hurricanes could take some of the lighter oil and toxic dispersant components with them and promptly drop the lot as toxic rain along the east coast of the US and beyond. This toxic rain could be fatal for all species — from the microbial level all the way to humans — no matter where it falls, essentially collapsing the environment from the bottom up.

Oil Consumption and Investment Exit

There is a fundamental change happening. The moratorium on offshore drilling is to be expected given the rising public concern. This is a direct result of the metamorphosis in psychological perception and attitudes amongst mass consumers and return-hungry investors in regard to the risk of oil. The Gulf oil gusher is ushering in an end to the era of oil investment and consumption without questions asked. Generally there has been a perception in the global financial community that the oil and gas majors are reliable, blue chip investments delivering a steady stream of above-average growth in profits and generous dividends. As fund managers see billions of dollars wiped off the value of BP and some US lawmakers want the company to suspend shareholder dividends, large investors will undoubtedly be keen to ensure they understand all the issues surrounding deep-water drilling thoroughly and begin to diversify away from their massive oil industry exposure. It is a big change in direction since oil has played such a large role in global investment strategy for so long. This will mean asking oil companies probing questions about risk management, contingency planning, crisis management and approaches to regulatory compliance etc. Investors’ scrutiny is likely to spread beyond offshore drilling to tar sands and then shale gas. For example, the half a trillion dollar Norwegian sovereign wealth fund, has demanded that major oil companies account for the environmental impacts of their tar sand operations. An extreme response to the spill may be for funds to exit oil companies altogether, for example into low-carbon clean energy alternatives. This could trigger the end of the oil era.

Eleventh Hour and Extinction

We have reached a collective turning point in history as we arrive at the eleventh hour. It’s time to shape up, to get our act together, and to find an equitable place in the interwoven fabric of nature, or else we face the possibility of extinction of a number of species with unintended consequences for ourselves. If everything is interlinked, how long before we pay a formidable price as a species? Whilst these questions may not be at the top of the mind of investment houses, their extreme risk aversion to oil stocks in coming months and years may prove to provide the answers that enlightened humanity has been seeking for decades. Common sense should now tell investors and consumers that the current industrial-scale exploitation of hard to reach oil fields in vulnerable natural spots is an insult to intelligence. The alternatives may be slightly more expensive but the risk profile is significantly lower. No sensible analyst can deny that we are bringing disaster on ourselves and the global ecosystems, when we engage in ruthless practices, such as deep sea drilling at 5,000 feet below the surface, with wanton disregard for safety and environmental security. The exorbitant cost of the Gulf oil spill cleanup is likely to deter future adventure licensing and high-risk investment in the oil sector. This is what will begin to mark the end of the oil era, step by step, just like the Three Mile Island nuclear accident in 1979. That accident crystallised anti-nuclear safety concerns among activists and the general public, resulting in new regulations for the nuclear industry, and has been cited as a contributor to the accelerated decline of new reactor construction that was already underway in the 1970s.

Unintended Consequences

The business fallout from the Gulf oil gusher is likely to be widespread. The Deepwater Horizon oil spill could end up causing massive damage to companies that were in no way involved with the tragedy. Risks of different types of operation will be reassessed, new rules will be enacted, and the energy business will change radically.

Conclusion

What is the real moral in the Gulf oil gusher narrative? As the marginal cost of extracting oil has risen ever higher, it has been a red rag to the investment bulls seeking a return. However, given that the risk profile of extracting that extra barrel of oil has now grown exponentially. This is likely to act as a new deterrent. The risks are rising much faster than previously anticipated as we approach peak oil. Recalibrating the value we put on hydrocarbon extraction is now the new mantra amongst oil investors and analysts. This is no different from the changed perception in regard to bank stocks, which were considered to be solid cash cows until The Great Unwind (2007-?) and The Great Reset (2008-?) began. Beyond subprime and sovereign risk, as the revelations about high frequency trading and flash crashes manifest, coupled with trillion dollar bailouts, many financial institutions are also seen as high risk casino players. Similar changes are likely to occur in the perception of oil companies as safe cash cows, which they have ceased to be.

The inertia which has set in amongst governments, businesses and the investment community in regard to preserving the status quo is going to be knocked sideways by the Gulf oil spill and as the costs of the cleanup mount, it will become imperative to invest in cleaner and safer forms of energy. The change in direction will ultimately be driven by a forced change in our collective value system. The end of oil-dependency is likely to mark the end of an era for the globalised western civilisation’s model of oil-centric capitalism. If we survive, the age of oil will be followed by an age of recovery, restoration and a return to local generation of power through alternative means. What does the future look like without oil-dependency? Cleaner forms of energy are likely to proliferate. The possibility of a world in balance with natural resources, clean air, clean water, and with the natural environment, is like a shining light at the end of a dark tunnel. To reach a new agreement, to explore our way into a friendlier way of life could be fun, more interesting, more gratifying, healthier and happier! Generations to come will also thank us for this welcome change of direction precipitated by the global financial community’s new found risk aversion to the age of oil.