Thursday, June 10, 2010

Obama Takes a Dangerous Left Turn

In an earlier blog, I defended Obama's initial reaction to the BP Oil Spill, but criticism from the political talking heads -- right and left -- have caused an abrupt shift in Obama policy toward the spill.

What should the government's response be? The government should declare that this is a two-part national disaster: Part I -- fix the leak; Part II -- prepare defenses for the environment to protect beaches, fisheries, wetlands, whatever is threatened by the spill. These are two separate activities. On Part I. BP had (but no longer, see below) enormous economic incentives to fix the leak and were working feverishly to do so. If BP plugs the leak, they can potentially save enormous amounts of money in liability and clean up costs. That is, until yesterday.

Yesterday, Ken Salazar, Secretary of the Interior, announced that BP should be responsible for all the layoffs that result from Obama's six month suspension of off shore drilling. That changed the incentives. If BP is responsible for bad policies enacted by the US after the spill, then they probably face bankruptcy. Whether they fix the leak or not may not matter to BP's future. BP may be toast no matter what. That dramatically alters their incentives to fix this leak. Big mistake by Salazar and, of course, by Obama. John McCain, not to be outdone in bi-partisan stupidity, quickly chimed in on the Larry Kudlow CNBC show last night that he supports making BP responsible for anyone laid off by the Obama drilling suspension directive. Thanks John. Good thing we didn't elect you president.

As for the clean up, here, the administration could show some real leadership. They could bring together environmentalists, including those of the far left, and fisherman, and oil cleanup experts from the industry and fashion a play to save our beaches and our shoreline. Instead, Obama is playing golf and laying plans to increase taxes big oil (and further alienate the oil industry, just at a time when he needs their help). By exerting real leadership Obama could bring the country into a unified effort to save our environment. Instead it's politics as usual, divide one from another, and villify any easy targets you can find.

The net effect of Obama policies will be to beggar pensioners in the UK and in the US (BP is a big pension dividend payer to lower and middle income Brits and Americans), to terrify the oil industry and move offshore drilling to other countries (with much more lax regulation, which means much more of a threat to the environment). Companies will be spending more time trying to figure out how to ward off the Obama threat to their existence and less concern on how to contain the oil spill and prepare to defend our coasts.

The Obama policy is now set on this disastrous course and the US (and the Brits) will suffer greatly. Obama has not even spoken once to Tony Hayward, the CEO of BP! That is an amazing fact. When quizzed about this, Obama says, and I paraphrase, I don't want to hear his lies. That should ensure Hayward's cooperation.

Obama only understands confrontation. He has no experience in dealing with conflicting and complicated problems and little understanding about how to unify people around a common theme. In short, Obama is a disaster. The result will be much, much higher energy prices for Americans, more job losses and more political division. As for the environment, the absence of a unifying program to defend our environment will prove to be disastrous in the end and destroy the hopes and the livelihoods of the Americans dependent for lifestyle and sustenance on our southern coasts. (I guess if it reaches NYC, Obama might begin to show some serious interest). It probably means the effective end of the Obama Administration. Growing number of Americans, including many prominent Democrats, are now openly questioning Obama's competence. He will not recover from this.

It could have been so different.