The Oil Crisis is Real

Recently there has been a lot of discussion on the role of the government in everyday life and the question of what size government-and its corollary-how much taxation should we have. If I believe the Tea Partyers we should get rid of all government, and certainly Mr Obama.

I find it then interesting to hear in the news reports and political analysts blaming this disaster understandably on BP-and now on Obama. BP is a paragon of the private sector which fights government regulation continually. In this instance even BP's CEO Tony Hayward has admitted that at least 7 cardinal rules were broken in the lead-up to this disaster. But now it's Obama's problem?

There were any number of problems with this well before the explosion occurred as evidenced by BP internal and external correspondence. Regulations were either broken or the cosy relationship between the regulators and the industry resulted in exceptions being accepted, with the result that we now have a full-blown crisis in the Gulf of Mexico, which may even spread beyond.

All the comparisons between Katrina and Deepwater Horizon are merely trying to make political capital out of a disaster. For the record, Katrina was a hurricane. Deepwater Horizon was man-made.

But I don't want to get caught up in the politics either. Deepwater Horizon is like a massive trade error. Only the ignorant and the gormless get caught up in the blame game before the error is closed. Anyone with an ounce of understanding recognises that the first requirement is to close the error. There will be plenty of time to determine who was at fault afterwards.

Despite this I am disappointed by Mr Obama whose first instinct was to worry about the cost of the problem and to focus people's attention on the fact that BP will bear the cost of this disaster. What he should have done, and still has time to do is to recognise that BP is overwhelmed by this nightmare and has its hands full trying to stop the leak while engaging in a PR exercise.

For BP this is damage limitation-reputational and financial. For the Gulf of Mexico it is also damage limitation, but solely environmental. Ordering BP to triple its cleanup efforts of the shoreline and tidal marsh is the wrong approach. Order Homeland Security to organise the cleanup, and present BP with the bill. If the military has equipment/expertise in fixing the leak, send them in, and present BP with the bill.

Waiting for BP to gets its act together-you might as well wait for Godot.