Friday, June 11, 2010

He Can't Walk on Water or Oil

Obama Critics Should Have Voted for Red Adair

June 11 (Bloomberg) -- The blame game is replacing baseball as the U.S. national pastime.

First it was the greedy Wall Street bankers who got us into this mess, were rewarded with a government bailout and then went back to the business of making money.

Next came the insurance companies, whose collective scalp was shaved and sacrificed for the greater good: garnering support for ObamaCare.

Now it’s the oil companies, which have joined the list of personae non grata following the BP Plc oil spill in the Gulf of Mexico.

And who’s getting the blame for the response to the BP spill? Why, President Barack Obama.

This makes as much sense as blaming the weatherman for global warming. Obama can’t plug a hole 5,000 feet below the ocean’s surface, as first daughter Malia asked him to do.

Nor can his energy secretary, Steven Chu, winner of the Nobel Prize in physics, find a quick fix to halt the flow of tens of millions of gallons of oil into the Gulf, threatening the coastline’s delicate ecosystem and the livelihood of its residents. (Chu, who won the Nobel for “the development of methods to cool and trap atoms with laser light,” knows more about black holes than well holes.)

Screeds accusing the president of being detached or disengaged since the April 20 explosion and subsequent collapse of the Deepwater Horizon oil rig are about style, not substance. Frustration has given way to blame from both sides of the aisle. If the public wanted an ace fighter of oil-well fires and blowouts, they should have voted for Red Adair.

Misplaced Anger

“It is better to be angry at Obama for his health-care and labor policies, not this,” writes Richard Epstein, professor of law at the University of Chicago, in a June 7 column for

Epstein’s on to something. Blaming the president for failing to halt the oil spill is unwarranted. Let’s look at some areas where blame is more appropriate.

1. Labor Policies

I doubt Epstein was echoing the view that the president isn’t doing enough to create jobs. The Oval Office isn’t an employment office. Government’s role should be to foster an environment that encourages the private sector to create jobs. Raising the cost of hiring isn’t a winning strategy.

The civilian unemployment rate topped out at 10.1 percent last year, below the 10.8 percent peak during the 1981-1982 recession. Teen unemployment set a record, however, rising to 27.6 percent in October, the highest in the 62-year history of the series. Raising the minimum wage to $7.25 last year, the third step in a three-year $2.10 increase, didn’t help.

Minimum Wage, Maximum Pain

I’m always reminded of my late friend, economist Bob Laurent, when discussions about the minimum wage come up. Bob would ask, “Why raise the minimum wage to $5.00? Why not raise it to $100 and make everyone rich?”

Answer: Because there’s a cost. Putting a floor under the price of labor -- setting it above the equilibrium price -- results in increased supply (more people willing to work for an above-market wage) and reduced demand as employers consolidate the functions of low-wage workers. Unemployment goes up.

Obama didn’t sign the minimum wage increase into law as president; he did vote for it as a senator from Illinois. During the campaign, he promised to increase it to $9.50 by 2011.

Maybe the president will be too preoccupied crafting Son of Stimulus to keep his promise and deny more young Americans a start in the work world.

2. Health Care

Just what the U.S. needed: another entitlement program that promises more than it can deliver. The U.S. was already facing an unfunded liability for Medicare and Social Security -- the difference between benefits promised to current and future retirees and the taxes and premiums collected -- of more than $100 trillion in today’s dollars, according to the 2009 Social Security and Medicare Trustees reports. That was before universal health care became the law of the land.

Few would object to the goal of providing universal access to health care. Everyone should object to the failure of the health-care plan enacted earlier this year to do the one thing that would lower costs: Make the price of health care transparent to consumers.

While individuals and small businesses will be able to choose a plan on health-insurance exchanges, they will still be divorced from the cost of health-care services. Who among us really knows what a colonoscopy costs?

3. Foreign Policy

Obama seems to have difficulty differentiating between our strategic allies and enemies. The “special relationship” between the U.S. and the U.K., a phrase coined by Winston Churchill in his 1946 “Iron Curtain” speech, has gotten less special in the 16 months since Obama took office. Obama’s tactless gesture of shipping a bust of Churchill back to the U.K. was symbolic of the deteriorating ties.

The president claims that brokering a Mideast peace deal is a “vital national security interest” for the U.S. In other words, our security depends on the creation of a Palestinian state.

That’s pretty much what Arab leaders have been telling their populations for decades to deflect attention from their lousy leadership. It’s easier to convince the masses that the problem is an external oppressor and two small pieces of land, one on the West Bank and the other on the Mediterranean Sea, than let them face an uncomfortable reality: The Arab world had no interest in building a real state in Gaza, as opposed to a terrorist outpost, after Israel withdrew completely in 2005.

Criticism of Obama’s handling of long-time allies is justified. Those who blame him for not commandeering BP’s underwater robots should take a deep breath and find some serenity. They should accept what the president can’t change, challenge him for what he can and have the wisdom to know the difference.

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Blogger SNAKE HUNTERS said...

In the 18 months since Barry Obama
assumed the presidency, and enjoying a high-sixties approval-rating in the national polls, there has been significant slippage.

The predictable failure of those Sub-prime Loans with FannieMae & FreddieMac led to the big bank bail-outs, and signalled the beginning of the end of the general public's slobbering love-affair, and also the razzle-dazzle 2008 fatuous clammer for 'Hope & Change'.

The executive power used to force GM CEO Rick Wagoner to resign at General Motors, and the bull-dozer tactics used to shove ObamaCare down the throats of our seniors was a major factor in convincing voters that Mr. O cannot walk on water...nor on Oil.

Public Awareness was painfully slow; now, our citizens will have a final chance to change course on November 2nd.


12:00 PM  
Blogger moonlitetwine said...

Like the post.

S/H lead me to it. Nice guy, isn't he?

5:18 PM  

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