Lots of chatter on the right-leaning talk shows along two points:
(1) Obama was slow to respond to the crisis … no better than Bush on Katrina.
(2) There goes off-shore drilling as a source of oil for the U.S.
I can’t take the slow response criticism seriously. I didn’t think Bush deserved it (should he have declared the LA Governor and N.O. Mayor to be grossly inept and Federalized the state ?) … so I can’t criticize Obama on this one.
Interestingly, Obama got boxed by some bad timing. Just a couple of weeks ago he announced expansion of off-shore drilling. While the announcement had no substance to it (actually cut back on authorized areas), it did provide some pro-drilling sound bites. If he hadn’t said it, he would be in the catbird seat now: “See, I told you offshore drilling was bad.” But, now he’s rhetorically in the offshore canoe. We’ll see on that one.
My take: There will be a ‘discontinuity’ in offshore production. This well is gone, and others will be shut or slowed by government inspections and reviews.
So what?
I expect gas prices to be over $4 by the end of the summer … and maybe as high as $5 … due to curtailed supply and the oil companies costs of clean-up and mandatory rig upgrading.
The impact? Uh-oh for the economy. Oil is a major cost component of many products. So, if oil prices spike, a broad range of prices to go up, demand will falter, and the expected recovery will sputter.
That means that unemployment stays high going into the November elections.
That’s a problem for the President.
The Homa Files 
May 4, 2010 at 10:53 am |
Great Analysis and time to buy a Hybrid.
I do disagree with the comparison to Katrina. You are correct that Bush was hobbled by State and Local ineptitude. Unfortunately for Obama, the entire response capability for this type of event rests at the Federal level.
Also, am I the only one who thinks that it would be worthwhile to invest in some sort of “Dome/Well Repair System” prior to the occurence of this type of event? It seems like some sort of specialized ship and response team for this type of accident would be a small price to pay to ensure more drilling and provide a quick response and insurance valve for future disasters.
May 5, 2010 at 8:58 am |
I don’t think blame should be pointed to the president in either Bush’s or Obama’s case. I am ignorant when it comes to the processes and bureaucracy to overcome in order to get action taken … it’s like me being blamed by one of my clients for a delayed shipment due to a mechanical error on FedEx’s plane. Am I ultimately to blame, sure, but if th, but regardless, I have to believe there are people in charge of this who should have and could have acted quicker. If the process is broken, fix the process … but the fat and make reaction time to crisis faster.
May 5, 2010 at 9:15 am |
Laptops and sensitive mouse pads … sorry for the incomplete post:
I don’t think blame should be pointed to the president in either Bush’s or Obama’s case. I am ignorant when it comes to the processes and bureaucracy to overcome in order to get action taken … it’s like me being blamed by one of my clients for a delayed shipment due to a mechanical error on FedEx’s plane. Am I ultimately to blame, sure, and I’ll do my best to put pressure on FedEx to perform, and that is the best I can do. Regardless, I have to believe there are people in charge of this who should have and could have acted quicker. If the process is broken, fix the process … cut the fat and make reaction time to crisis faster. Did it really take two weeks to decide to install a huge oil dome??