About That “Catastrophic” Gusher in the Gulf… Meh.

There’s a BP station on the route between my home and my work, and that’s where I always get my gas.  I’m not a fan of boycotts, especially ones that primarily victimize local business owners with no say in corporate affairs.  Besides, the station charges the same price for cash or credit.

It’s hard to believe that it’s been only five months since BP’s gushing oil well in the Gulf of Mexico was capped. It’s just six months since the sad spectacle of President Obama declaring he wanted to know “whose ass to kick,” while his press secretary asserted “I’ve seen rage” from the President.  The so-called “worst oil spill in history” has disappeared.

In “Oil Spill Hysteria,” Professor Robert Nelson explains in the Weekly Standard why the Gulf incident, despite spewing more than 20 times the volume of oil as the Exxon Valdez, caused so much less damage.

Start with the fact that the Gulf spill occurred in 5,000 feet of water, while most spills come from tankers at the surface. It took time for the oil to get to the surface, giving the oil-eating “bugs” of the Gulf opportunity to do their work.A second important factor was that the spill occurred 50 miles from the coast. This left more time for responders to apply chemical dispersants and for wave action and other natural forces to decompose large amounts of oil. What oil did reach the beaches often took the form of tar balls that were less environmentally harmful than actual slicks. Cleanup workers could simply pick them up.

By contrast, the Exxon Valdez spill immediately spread over the surface of the ocean, where many birds and other creatures came into contact with it. Prince William Sound, where the spill began, is an enclosed body of water, and the spilled oil—some of it in the most toxic forms—quickly reached the shore. In addition, the sound has no significant natural oil seepage and so lacks the associated oil-eating organisms. The water is much colder and less conducive to such natural activity. The mammal populations in Prince William Sound and the other affected areas were larger, too.

And yet, the hysteria continues to drive policy.  The Obama Administration this month announced a seven-year moratorium on new drilling in the Gulf, thereby making it likely that the response to the oil spill will cause more economic damage to the region than the oil spill itself.  Between the Gulf overreaction and Climategate, it’s been a tough year for environmental alarmism.

Victor Davis Hanson Offers a Useful Cliff Notes Guide to the Obama Presidency

Victor Davis Hanson is one of my favorite authors — so much so that I was surprised just now to discover that I never made a VDH “tag” for my blog posts.  (I just made one now… maybe someday I’ll go through the annoyingly tedious process of assigning the tag to past blog posts.  It involves paging through nearly 400 blog posts, 20 at a time.  #$&*@ WordPress.)

Where was I?  VDH.  I started following him at NRO in the wake of 9/11, and now he writes at Pajamas Media as well.  His writing from late 2001 still holds up quite well for the most part.  38 of his essays are collected in An Autumn of War: What America Learned from September 11 and the War on Terrorism — and you can buy it via my Amazon widget at the right!  (Theoretically I would get a tiny commission on the sale, but you can’t prove it by me.)

Hanson soured more quickly and more thoroughly on Obama than I did, and I started to notice something.  Whenever he wrote at length about Obama, he almost invariably tied aspects of his immediate topic back to earlier episodes, missteps or gaffes from the Obama campaign and presidency.  All polemicists do this, of course, but VDH is a master at teasing out links that are not immediately obvious.

I found myself thinking, “he must be keeping a cheat sheet — nobody can remember so much detail.”  Turns out he was keeping a cheat sheet, and yesterday he published it, at Pajamas Media:

So why are people angry? I’ll end with a brief list of twenty-one months of examples in no particular order. Each incident in itself was perhaps explicable by Obama supporters given the exigencies of the time or perhaps could be contextualized by the liberal media and political establishment. But in the aggregate they confirm an overwhelmingly damning pattern of ideological extremism, polarization, and basic incompetence – to such a degree that dozens of politicians are not running on the very Obama agenda that they once voted for.

Here We Go…

A vast new health care monstrosity that will send private insurance rates through the ceiling. The Machiavellian way in which it was slammed through. Failed stimulus. Wasteful pork-barrel spending of hundreds of billions in borrowed money. Persistent near 10% unemployment. Three trillion dollars in new debt in just two years. Record levels of federal spending. The vast increase in the size of government and its share of GDP. Eight years of projected $1 trillion annual budget deficits. Record high foreclosures. Record high usage of food stamps. The Keynesian zeal of Romer/Summers/Orzag followed by their sudden resignations in the wake of failure. Constant talk of higher taxes on “them”— the promised new health care surcharge taxes, the promised return to the Clinton income tax rates, talk of a VAT, talk of lifting the caps on income subject to FICA taxes, new capital gains taxes, new inheritance taxes on the horizon.

The use of extra-cabinet czars to avoid confirmation and audit. The neglect of the law, from reversing the order of Chrysler creditors to announcing a BP $20 billion shakedown and punishments for health insurers who don’t toe the line. The ascendance of ACORN and SEIU. The months-long shutdown of Gulf drilling. The failure to encourage coal, nuclear, and oil and gas new production. The Black Panther voting intimidation mess. The bowing abroad. The apologies. The outreach to enemies, and the snubbing of allies. The unnecessary humiliation of Great Britain and Israel. The Iran serial “deadline” charade. The unnecessary announcement of Afghan troop withdrawal deadlines. “Overseas contingency operations” and “man-made disasters.” The proposed civilian trial of KSM. The Ground Zero mosque mess. The beer summit mess. NASA’s new main mission of Muslim outreach. Stopping the border fence. Suing Arizona and demonizing the state. The apologies to the Chinese over the Arizona law, which was trashed from the White House lawn by the president of Mexico, and sued by foreign governments to the apparent approval of the administration.

The constant “Bush did it” refrain. The gratuitous slurs against limb-lopping doctors. The thrashing of the “rich” going to the Super Bowl and Las Vegas. The artificial divide of them/us based on $250,000 of annual income. The racial divisiveness from a sad cast of characters that gave us “cowards,” “stupidly,” “wise Latina,” and whites polluting the ghetto. Unhinged appointees like Van Jones and Anita Dunn. The occasional unguarded admissions like “never waste a crisis” and “at some point I do think you’ve made enough money.” The wacky behavior from the whining of “like a dog” to the sudden junketing to Copenhagen to lobby for the Chicago Olympics. The Orwellian cheap damning of the Bush anti-terrorism protocols only to accept or expand tribunals, renditions, Guantanamo, Predators, Iraq, and intercepts and wiretaps. The golf obsession and Costa del Sol while trashing the indulgent rich.

I’ll stop there since we have another 27 months to go.

Again, to invoke any one or two of these can be written off as partisan nit-picking; in toto they paint a picture of ideological zealotry determined to remake the U.S. abroad into a UN neutral and at home into something like Belgium or Sweden.

I would urge everyone to vote next week…

Some of the emphasis is in the original, some I added. (If you care which is which, check the original.) I just want to point out one subtlety.  Obama caught a lot of grief over the BP oil disaster, although I and others consistently argued that he was getting a bum rap.  VDH could easily have tossed in a line above about Obama being too slow to respond — but he didn’t.  He limits his Gulf-related criticism to the drilling moratorium and the BP shakedown, both points based on clear conservative principles.

Financial Services “Reform” to Complete Obama’s Tragic Trifecta

USA Today, an early pioneer of soundbite journalism in written form, is admirably concise in setting the stage for elections soon to come:

Obama will likely trumpet a new financial regulation bill — the biggest overhaul of the system since the Great Depression — as one of his major first-term accomplishments, along with health care and the stimulus plan.

Republicans will likely argue that all three bills threaten prospects for economic recovery.

Ya think?

ObamaCare is such a train wreck that Americans support repealing it by a 2-1 margin.  Don’t even get me started on the wasteful and dishonest Porkulus fiasco, which will continue to increase deficits for years after the “need” for financial stimulus has passed.

And now comes yet another 2,000-plus page bill, a financial services “reform” measure that does a lot of things — but fails to address the actual causes of the financial meltdown that began nearly two years ago and has us staggering still. Here’s blogger (and Nobel-prize-winning economist) Gary Becker on the bill’s shortcomings (H/T: Freakanomics):

One of the most serious omissions is that the bill essentially says nothing about Freddie Mac or Fannie Mae. [KP Note: !?!?!?!?] In 2008 these organizations were placed into conservatorship of the Federal Housing Finance Agency. During the run up to the crisis, Barney Frank and others in Congress encouraged Freddie and Fannie to absorb most of the subprime mortgages. In 2008 they held over half of all mortgages, and almost all the subprimes. They have absorbed even a larger fraction of the relatively few mortgages written after 2008. Freddie and Fannie deserve a considerable share of the blame for the crisis, but they continue to have strong political support. I would like to see both of them eventually dissolved, but that is unlikely to happen. Instead we are promised that they will be dealt with in future legislation, but I am skeptical that anything will be done to terminate either organization, or even improve their functioning.

Many proposals in the bill will have highly uncertain impacts on the economy. These include, among many other provisions, the requirement that originators of mortgages and other assets retain at least 5% of the assets they originate, that many derivatives go on organized exchanges (may be an improvement but far from certain), that hedge funds become more closely regulated, and that consumer be “protected” from their financial decisions.

Most of these and other changes in the bill are not based on a serious analysis of what contributed to the financial crisis, but rather are the result of political and emotional reactions to the crisis. Usually, such reactions do more harm than good. That is likely to be the fate of the great majority of the provisions of the Dodd-Frank bill.

In simple terms, the primary enabler of the financial meltdown was the fact that financial institutions had incentives to take huge risks, knowing that any catastrophe would be socialized by a government that would have no choice.  WSJ columnist Holman Jenkins today cites new academic research in arguing that the bill doesn’t change that:

What was obvious to common sense, the naked eye and the open ear is now systematically upheld in the research of finance professors. To wit, shareholders of large, publicly traded banks have a higher appetite for risk than is compatible with our regulatory system.

Down this path lies the beginning of wisdom on how we can live with banks, which alone among businesses have the potential to bring down entire economies. Too bad such wisdom is absent from the financial regulation bill now before Congress. …

Let us be realistic about one thing, since most of us aren’t running for office: “Bailout” has become a curse word in populist diction, but “too big to fail” isn’t going away just because regulators pretend next time they would fold their arms and let the system blow up.

The government will and should continue to come to the rescue in a panic. We need better incentives to avoid creating such situations in the first place. But that discipline won’t come from shareholders, who will happily create the next 100-to-1 leveraged financial institution if the potential rewards are great enough. Bank depositors and other leverage suppliers are the ones who must be mobilized to make the system safer.

“… banks, which alone among businesses have the potential to bring down entire economies.” There in a nutshell is why I favored the “bank bailout” (on which the taxpayers are making a profit, btw) while staunchly opposing the auto industry bailout.

Becker and Jenkins both describe an opportunity lost that actually would have led to a better alignment of risk and reward.  Jenkins is the better writer, let him tell it:

Perhaps the best idea, though, is to require financial firms to fund themselves partly with a special kind of debt that would automatically be converted to equity when a bank’s capital or liquidity are imperiled. These debtholders then would have an incentive to monitor not just the amount of leverage, but the quality of the risks a bank is pursuing.

Bingo.  But instead we get another mammoth bill, chock full of unintended consequences, that increases the size of government to no good end, while failing to fulfill its primary purpose.  Add to this the public anger over the gulf oil blowout — although I think on that count, criticism of Obama is unfair — and you can see why Peter Wehner says “it’s getting ugly for the Democrats.”

Zakaria Lays the Right Oily Blame at the Foot of the Wrong Target

Fareed Zakaria of Newsweek International and CNN is a bright man and an insightful commentator.  In this 2:26 video, he does as good a job as I’ve seen of describing the ridiculous spectacle that the gulf oil disaster has become — from President Obama’s demeaning efforts to appear sufficiently angry, to the temporary neglect  of other pressing issues where the president’s personal involvement might actually be helpful.  (Hat tip: Glen Gill)

But Zakaria blames this on the news media, and I think that gets it backwards.  Yes, the media has been milking the drama for everything it’s worth (Day 60!) — but that’s what the media does.  It’s up to Obama to keep the media tail from wagging the presidential dog.  I would much rather see Obama leave the oil crisis in the hands of the experts and stick to his scheduled visit with Asian allies — instead of blowing them off for the second time.

Sometimes a president has to rise above public opinion and do what’s right.  George Bush showed how to do that by insisting on the surge in Iraq in the face of intense public pressure — and it worked so well that his successor, who campaigned on a platform of surrender at all costs, had little choice but to stay the course.

I guess you could argue that Obama showed similar fortitude by sticking with the immensely unpopular health care “reform” legislation.  But I’d call that rising above public opinion to do what’s wrong.

Reaction to Obama’s Speech Reflects the Limits of Government Power

The President and the Left wing of his party believe that government is the answer to every problem.  Obama now is being savaged from the Left over an environmental disaster that government is powerless to stop.  I didn’t know what the issue would be, but I’m on record from before the inauguration predicting eventual disillusionment.

On January 15, 2009, I wrote the following:

There’s already plenty of opposition to Obama in the right-wing fever swamps of the Internets, of course….  But eventually, even mainstream media outlets will turn their guns on the man who, in the eternal formulation of insider Washington, will become known as “this President.” No matter how much the media was in the tank for Obama during the campaign, no matter how enthusiastic they were in celebrating the coming of BAM-A-LOT, eventually Obama and his Administration will make missteps that even the most liberal papers cannot ignore.

Ironically, Obama has lost the Left over an issue where I think he’s been getting a bad rap.  But make no mistake — he’s lost the Left, based on reactions to yesterday’s Oval Office speech.  Daniel Foster has a good roundup in The Corner, including:

Olberman: “It was a great speech if you were on another planet for the last 57 days.”

Kevin Drum at Mother Jones: “This gives pablum a bad name.”

Jonathan Chait said the part of Obama’s speech concerning Obama’s energy and climate bill “revealed just how much Obama is operating from a position of weakness.”

In a savage report taped before the President’s speech, Jon Stewart relentlessly matches the pious promises of Candidate Obama with the news reports about the breaking of those promises by President Obama.  The clip is well worth watching, but the screen grab below telegraphs the final punch line.

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Respect My Authoritah
Daily Show Full Episodes Political Humor Tea Party

Back to my pre-Inaugural post for a moment:

The honeymoon isn’t over yet, and it certainly won’t end before the Inaugural. But starting next Tuesday (ok maybe Wednesday), when President Obama doesn’t bring the troops home, doesn’t close Guantanamo, doesn’t end the recession, doesn’t deliver national health insurance, doesn’t roll back global warming and make the oceans recede — or at least doesn’t do any of these things as fast as the Left would like — then things like the peccadillos of Tim Geithner will start to get more coverage.

I guess he did “deliver national health insurance,” sort of, but it’s appallingly bad legislation that will only grow more unpopular as the costs become more clear.  On the other issues he’s either run up against the limits of government power or discovered the pragmatic imperatives of leadership.

The biggest mistake of the Oval Office speech was the decision to deliver it at all.  I don’t understand what the Administration thought the speech could possibly accomplish.

(Photo from an Alabama beach at top by Dave Martin/AP, published by the Guardian of London)

Some Contrarian Thoughts on the Gulf Oil Disaster

I think my credentials as a critic of President Obama are fairly well established, but it’s absurd to blame him for the oil spill, or for the failure (so far) to stop it.  And calls for Obama to show more anger have led only to the demeaning spectacles of Obama saying he wants to know “whose ass to kick,” and his press secretary saying “I’ve seen rage” from the President.

Usually I come down on the Bush side of Bush-Obama comparisons, but in this case, blaming Obama for the oil spill is even more absurd than blaming Bush for Hurricane Katrina.  The primary blame for the Katrina debacle goes to inept and corrupt state and local first responders (remember the cops looting stores and the scores of flooded buses that the city was supposed to have used for evacuations?)  But Bush has to answer for having appointed an executive of a show-horse association to head the Federal Emergency Management Agency.  A FEMA director with actual emergency-management experience might have realized earlier on that it was amateur hour in Louisiana.

The disaster in the Gulf of Mexico makes it more appropriate, not less, to open up limited areas of the Alaska National Wildlife Refuge to oil production.  If the oil rig explosion had occurred on land, rather than over a mile of deep water, the oil gusher would have been stopped weeks ago.

Tanker spills are a more serious problem than oil-rig accidents. As Steven F. Hayward writes in The Weekly Standard:

Despite post-Exxon Valdez safety measures, tanker oil spills occur more frequently and release more oil than offshore drilling accidents, by a wide margin. Over the last 50 years, offshore drilling spills, including the Deepwater Horizon, have unleashed a little more than 1 million tons of oil; tanker accidents have spilled 4 million. For every offshore drilling spill, there have been seven tanker spills, many much larger than the Exxon Valdez, only the 40th largest tanker spill on record.

Even if the Deepwater Horizon spill lasts into the fall, it will still not even be the largest offshore spill in the Gulf of Mexico. That dubious achievement belongs to the Ixtoc 1, a Mexican platform near Yucatán that blew out in 1979 in circumstances similar to the Deepwater Horizon (the blowout preventer failed after a gas surge from the well). It took Mexico’s famously inept Pemex almost 10 months to stop the leak, by which time 460,000 tons of oil had leaked—still the largest accidental spill in world history (Saddam Hussein deliberately fouled the Persian Gulf at the end of the first Gulf War with 1.2 million tons).

Finally, I can understand anger and frustration at BP, but certain expressions of that anger are ridiculous.  There’s no point in vandalizing BP stations — all that does is damage a local franchisee who has no say whatsoever in anything the corporation does.  And please spare me any further histrionics about keeping “a boot on BP’s neck” or pressuring the company to try harder.  The company’s stock price dropped more than 50% from the day of the accident to last week, wiping out $90 billion in market value.  Nobody on the planet wants the damage to end more than BP.