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Monday, June 14, 2010

Presidential Leadership and the Oil Spill

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I've avoided blogging on the oil spill since I don't see what good it does to blame either Pres Obama and/or BP for the blowout itself.  I'm not discounting the environmental disaster and economic consequences for the Gulf Coast, but unless further investigations prove otherwise, the spill was rare accident. While many are eager to blame BP, it should be noted they lost 11 workers in the rig explosion.  Obama initially deferred to BP on capping the oil leak.  At the time, that was probably the correct move since BP has much more expertise than the government on these matters, and it's in the best interest of BP's bottom line to stop the leak quickly. 

As this crisis has dragged on though, the federal government's response to the clean up has been a big clusterfark.  Conservatives aren't too surprised by this; we expect that a government that tries to do everything does nothing well.  But what's striking about the federal government's response is not that the bureaucracies made poor decisions--that's to be expected.  The reason why vast majorities are disapproving of Obama's performance in the oil spill is because he has not displayed effective leadership in the clean up effort.  Can anyone imagine Rudy Giuliani leading the clean up in a similar manner?

During a crisis, bureaucracies often need authoritative guidance from the top in order to get one or two big things done quickly.  What's particularly troublesome and has become a trend for this President is that he regularly engages into the politics of demonization and deflection; when has the buck ever stopped with him on any negative political outcome?  He seems more preoccupied in political warfare with BP than in trying to figure out how to clean up the oil.  Last week the Justice Department  hinted it might seek an injunction to stop BP from paying dividends to his shareholders, and open up a criminal investigation.

Malcom Rifkind over at the Times Online points out the problem with this:

The American interference on dividend policy has very serious consequences — and not just for BP. The dividends that it pays are a significant component in the income of pension funds in both Britain and the United States. BP says that £1 in every £7 that pension funds receive from dividends from FTSE 100 companies comes from BP. Pension funds would find a severe gap in their income if no dividend were paid. No less than 18 million people in the United Kingdom either own BP shares or are beneficiaries from pension funds that hold BP shares.

Current White House rhetoric is not just a dangerous worry for British pensioners. No less than 40 per cent of BP shares are held in the United States. A suspension of dividends would deprive US savers of $4 billion per annum.

In addition there are 22,800 people employed by BP who live in the United States. There are, therefore, many American voters who will not thank President Obama if he jeopardises their income or their pensions by careless talk on BP.

So Obama's demonization has done nothing to help clean up the oil, and has harmed trans-Atlantic relations instead, not to mention the impact on BP pensioners and workers.  The Brits are so concerned with the ramifications of the administration's policy on BP that President had to tell the new British PM David Cameron this:

BARACK OBAMA yesterday told David Cameron that his aggressive stance towards BP over the Gulf of Mexico oil disaster was not motivated by anti-British prejudice [emphasis added.] The US president, whose grandfather was allegedly tortured by the British in colonial Kenya, has pointedly referred to the oil giant as “British Petroleum”, although it changed its name nine years ago. British politicians claimed he was exploiting BP’s origins to deflect attention from his failure to manage the crisis.

After yesterday’s 30-minute telephone conversation, No 10 issued a carefully worded statement to defuse the growing transatlantic tensions. It stated: “President Obama said to the prime minister that BP was a multinational global company and that frustrations about the oil spill had nothing to do with national identity. The prime minister stressed the economic importance of BP to the UK, US and other countries. The president made it clear that he had no interest in undermining BP’s value.”

That last line should continue with, "unless it'll stop my own political hemorrhage in the polls."  It seems the administration is realizing the damage from their statements as they back pedal a bit. The Justice Dept has now said they are not currently seeking an injunction at this time.

One would think more than 60 days into this crisis, the President would have given some direction to the bureaucracy to give the Gulf Coast governors what they need to clean up the spill. That's what the federal government normally does in national emergencies; the bureaucrats are told to give the governors what they need to enable them to take action.  The federal government writes blank checks and figures out later how to better the process; getting mired in procedure confuses process with purpose, and often results in a great deal of inflexibility and inaction.  Yet as the spill drags on, the bureaucracy is still engaged in counterproductive behavior to new levels of absurdity.  ABCNEWS reports the Coast Guard stopped Louisiana Gov. Bobby Jindal's crude sucking barges and prevented them from taking in more oil due to questions on how many fire extinguishers and life boats are on board.  Alabama Governor Riley also reported having problems with the Coast Guard:

The governor said the problem is there's still no single person giving a "yes" or "no." While the Gulf Coast governors have developed plans with the Coast Guard's command center in the Gulf, things begin to shift when other agencies start weighing in, like the Environmental Protection Agency and the U.S. Fish and Wildlife Service.
 "It's like this huge committee down there," Riley said, "and every decision that we try to implement, any one person on that committee has absolute veto power."

Bureaucracies and committees dominate when there's a lack of leadership. That's why Obama's polls numbers are sinking as oil washes up on the Gulf shores; he's focused on the wrong tasks and avoiding responsibility for the clean up by trying to assign it to BP.  Thus, it's no surprise the result is a bunch of hapless bureaucrats are hindering the clean up. That's what this oil spill has revealed about Obama: he's got a long way to go to learn some core leadership principles.  Whether he learns to see the forest through the trees, only time will tell.

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