May 27, 2010
WWRPA at the Hearings of SUAC?
Or, "What would Rand Paul Ask at the Hearings of the Senate Un-American Activities Committee?". From AP:
"What I don't like from the president's administration is this sort of, 'I'll put my boot heel on the throat of BP,'" Paul said in an interview with ABC's "Good Morning America." "I think that sounds really un-American in his criticism of business."
Here's some visual context.
From NYT, "Public beaches were closed Friday in Grand Isle, La., as oil, dead fish and birds washed ashore. "Just under 70 miles of our coast have been hit by oil," said Gov. Bobby Jindal. "Let's make no mistake that what is at threat here is our way of life." "
The Flow Rate Technical Group has just released its estimates of the spill rate. Their estimates range between 2.4 and 3.8 times the original NOAA estimate of 5000 barrels per day. The cumulative estimated spill is depicted in the graph below.
Figure 1: Estimated cumulative oil spill, according to original NOAA estimate (blue line), and the Flow Rate Technical Group high/low estimates (gray lines), and Exxon Valdez spill (black line). Source: Reuters and author's calculations.
This range of estimates is substantially below the Wereley estimates reported in this post.
Posted by Menzie Chinn at May 27, 2010 11:00 AMdigg this | reddit
I do wonder what Professor Chinn's position on Salazar's rhetoric would be if he were a member of the Tea Party rather than a member of the Obama administration.
Posted by: Sniper at May 27, 2010 11:29 AM
Ah yes, the dead seabird photos. Below that one we can put a photo of an SUV parked in front of a 5000 sq ft home.
Then there is only one solution to all this, Congress should pass a law prohibiting drilling in the US and only obtain oil from third world countries. The Nigerians seem to have no problem with self induced blowups and spills.
Posted by: MikeH at May 27, 2010 11:31 AM
Wow, Menzie. What well-reasoned appeal to intellect!
Posted by: bryce at May 27, 2010 11:36 AM
Another tack in the same line is, "Why are we helping Louisiana?" Bobby Jindal talks about state sovereignty and yet the well is within the state territory that requires state permitting as well as federal. Why didn't Louisiana bond the risk? Why am I responsible for their mistakes? They took on the risk apparently on behalf of the rest of the United States so why don't they pay? Why don't the oil & gas producing states take responsibility for the pollution they create instead of expecting me to pick up the bill for them? They could have banded together and formed a fund? Since the risk was considered low, why didn't LA or the whole o&g group insure the risk for cheap? A $10 or $20B insurance policy would look good now but instead they chose to push all those risk on to the rest of the nation.
The same logic - or inconsistency - should be applied to New Orleans. Why didn't Louisiana take responsibility for having its major city below water level in a hurricane zone? Isn't that their responsibility?
My point is that if you take the arguments advanced by these people literally, then they are completely inconsistent in practice and that shows they really only object to government programs they don't like and want the ones they like.
Posted by: jonathan at May 27, 2010 12:08 PM
Nice centrist comment as always. You know, after years of reading Econbrowser, I couldn't venture a guess as to James Hamilton's political sympathies. It's a little easier to tell with Menzie.
Posted by: fair & balanced at May 27, 2010 12:45 PM
bryce: It beats this well-reasoned comment of yours (which happened to be factually incorrect):
The Federal deficit is reported as $1.4 trillion, when in fact the gov't borrowed an additional $.5 for the "off budget" Iraq/Afghan thing. Thus the Fed gov't borrowed 1.9 trillion, in spite of what they report as the deficit. Do the above grafts account for this misdirection/deception?
MikeH: I don't have the requested picture posted, but this post has one similar to that requested.
There is an alternative to getting more oil from overseas; it's called demand management. In any case, see Jeffrey Frankel's post on the desirability of your desired "drain America first" policy.
Posted by: Menzie Chinn at May 27, 2010 12:58 PM
I also look forward to reading Professor Chinn's posts mocking the House Democratic leadership for calling opponents of the PPCA "un-American."
It's been eight months since it happened, but I'm sure that post is just awaiting some minor revisions. I'm waiting patiently.
Posted by: Sniper at May 27, 2010 01:23 PM
Yes, Menzies's political leanings are very clear.
I suspect, like many, he is having second thoughts about his vote.
What I'm waiting for is his article explaining how adding more, new personal taxes is stimulative.
Posted by: CoRev at May 27, 2010 02:03 PM
Obviously Menzie figures that if unhinged partisanship works for Krugman, it should work for him. Unfortunately, he needs to work on his satire chops.
Posted by: Walter Sobchak at May 27, 2010 02:37 PM
Sniper: What's PPCA?
Posted by: Menzie Chinn at May 27, 2010 03:32 PM
Menzie, now that's funny. Patient Protection and Affordable Healthcare Act (“PPCA”)
Posted by: CoRev at May 27, 2010 04:38 PM
Gee Wiz, I guess it continues to amaze me Management's "I don't give a SH*T about Negative Externalities" attitude.
How much did BP save over the years by nickel and dime'ing safety? I'm guessing BP had some kind of incentive structure in place to save money on cost and safety control on this platform.
Now, you can say BP was badly managed for "short term profit", how much real safety would they have lost on their 14 Billion Dollar Profit this year?
But, I'm leaning toward "Sociopath" Management as the real problem. A Culture of Sociopathology in the upper ranks of BP and the Oil Industry in General.
Posted by: MikeRINO at May 27, 2010 05:54 PM
Why are you all so mean? Professor Chinn works in the public sector. He has the political views appropriate to his economic class and his social position. Marx was a good sociologist.
Posted by: C Thomson at May 27, 2010 06:33 PM
I think MikeH has it.
Those who blame BP, I suspect, would be enraged to find out that, by and large, they will be the ones to pay for the spill in higher pump prices. In very rough outline, our market economy has the oil companies doing our bidding, as it does all other private companies, trying to satisfy our wants in the cheapest way possible. The boys at BP made a mistake this time, but ultimately "The fault, dear Brutus, is not in our stars, But in ourselves"
Posted by: don at May 27, 2010 06:57 PM
CoRev: Usually known as "Patient Protection and Affordable Care Act", which would typically be abbreviated as PPACA.
Posted by: Menzie Chinn at May 27, 2010 08:11 PM
Menzie, seen it both ways. PPCA is more often seen on blogs. Some folks just got no ed.... :)
Posted by: CoRev at May 27, 2010 08:46 PM
The rhetoric of putting a boot on anybodies neck in this process of resolving this tragedy is very troubling, but coming from government officials it is particularly disturbing in a purported free society under the rule of law. It leads me to wonder about the values, means and commitment to the rule of law of those same public officials who have sworn an oath to uphold our Constitution. Obamaï¿½s failure to speak out for the rule of law in this matter is consistent with his rhetoric about those who disagreed with him about health care and financial regulation; it is particularly authoritarian and reminiscent of the 1930ï¿½s.
Posted by: William Leitold at May 27, 2010 09:07 PM
Regardless of the acronym used, Professor Chinn, I am still waiting for your post dealing with nearly identical rhetoric coming from the Democratic leadership.
After all, one good McCarthyist insinuation deserves another. Even more so when those making the troublesome statements already hold elected office.
Posted by: Sniper at May 27, 2010 10:23 PM
In abstract, this means :
Our governance is a bad show, put on by Wall St. for our distraction while they steal everything they can from the middle class.
Posted by: Johannes at May 28, 2010 07:28 AM
And important to know is :
BP waited until after Obama’s news conference to announce that the so called "top kill" operation had been halted the previous night — before the new conference, BP even said top kill “operations continued over the night and are ongoing,” a total fabrication.
BP will not announce that a “top kill” is impossible until after Obama’s photo-op “I feel your pain” tour of the Gulf coast tomorrow. That’s why the last word from BP was it will be Friday night at the earliest before they “know” if the operation is successful. They already know it won’t work. They are just timing their revelations to curry favor with Obama.
Posted by: Johannes at May 28, 2010 08:22 AM
To speak of keeping "the boot on BP's throat" is clearly inappropriate.
Here's a link to a Coast Guard photo of some of the assets on site working on the Macondo well. http://cgvi.uscg.mil/media/main.php?g2_itemId=879651
BP has a veritable armada deployed, including three (and possibly four) drilling rigs/ships, at least four ROV systems (and reportedly 16), and countless support vessels. There can be no question that BP is working hard to stem the flow, and to suggest that somehow BP is detached or lax in its efforts is misguided.
As for demand management, history suggests it is accomplished through recessions. US oil consumption is down 2 mbpd, or about 10%, compared to July 2006. This reduction was accomplished through a major recession and the eviction of millions of people from their jobs, just as it was after 1979. So you can breathe easier--we're already successfully managing demand!
Posted by: Steven Kopits at May 28, 2010 11:44 AM
It is kind of sad when the only argument the right has left is calling people or organizations "un-American". And when somebody point this out, they throw little hissy fits.
Posted by: Martin at May 28, 2010 11:55 AM
Sniper: Please be specific and provide links to specific statements. If individuals in the leadership of the Democratic party were criticizing as "un-American" mendacious statements and deliberate disinformation in the form of allegations of "death panels" in PPACA, that might be useful to know.
In my view, deliberate lying is not an American virtue. You may disagree. However, I will not presume to speak for you.
Posted by: Menzie Chinn at May 28, 2010 02:32 PM
Speaker Pelosi and Majority Leader Hoyer were not decrying deliberate lying, they were decrying the spectacle of elected officials facing loud, angry constituents when they used the "un-American" label: http://blogs.usatoday.com/oped/2009/08/unamerican-attacks-cant-derail-health-care-debate-.html
Now, it is a defensible position to take that, as Pelosi and Hoyer wrote, "Drowning out opposing views is simply un-American."
However, in my view, it is also a perfectly defensible position that the use of rhetoric deliberately reminiscent of gangster threats and intimidation tactics by government officials towards private companies is not an American virtue.
While I believe in both cases the "un-American" label is over-the-top, I certainly don't think that one case is perfectly acceptable, while the other deserves to be associated with the evils of McCarthyism.
Posted by: Sniper at May 28, 2010 06:09 PM
It is not I the amateur who is incorrect but you the professional who has no excuse. The Federal gov't borrowed a tidge under $1.9 trillion in the completed year. When I have more leisure, I'll supply documentation. You could verify it quicker than I.
Posted by: Bryce at May 28, 2010 08:32 PM
Bryce: The point is not the total figure; the issue at hand is the "off-budget" aspect of Iraq/Afghanistan spending. Requests for those funds were not under the usual budget procedure. However, they are not "off-budget" in the technical sense. See this post for previous use of "supplementals".
Posted by: Menzie Chinn at May 29, 2010 07:32 AM
Here is the documentation:
You'll see that if you subtract the outstanding debt going from Oct.'08 to Oct.'09 [official fiscal yr.], you get a difference of $1.885 trillion, 30% more than the gov't dishonestly touted as the deficit!
Posted by: Bryce at May 29, 2010 07:51 AM
Bryce: You should check back in the time series; you'll observe that the change in outstanding debt and the deficit do not match typically. The difference has been exacerbated in the past couple of years by extraordinary measures to stabilize the financial sector.
Posted by: Menzie Chinn at May 29, 2010 08:11 AM
Menzie, I appreciate your answering, but I don't understand why change in outstanding debt [money that the government must borrow]--especially on the order of ~30% difference from reported "deficit"--is not relevant to focus upon.
Posted by: Bryce at May 29, 2010 10:41 AM
Posted by: Johannes at May 28, 2010 08:22 AM
I said : "Top kill" will not work,
and I was right. PR-work for Obama verified ...
Posted by: Johannes at May 30, 2010 12:10 AM
Menzie, your bias is showing. "Off Budget" does not mean a supplemental spending bill" is "off budget". It means that the spending was not accounted for in the Executive budget submittal, but is accounted for under and even brighter light as a separate bill. Most supplemental spending is for unforeseen occurrences, Katrina for example, and short term war expenses, but with Menzie's definition all pork spending should also be considered "off budget".
Off budget is usually a program that has dedicated revenue streams, Social Security and the US Postal Office, etc.
Mixing the two terms is an attempt to confuse the population/voter.
Posted by: CoRev at May 30, 2010 05:02 AM
CoRev: Your point is exactly what I was trying clarify for Bryce. For instance, Social Security is "off budget"; most Iraq/Afghanistan expenditures under the Bush Administration were in supplementals, but "on budget" -- just not through the ordinary budget process. So I think we are in agreement.
Posted by: Menzie Chinn at May 30, 2010 11:17 AM
Menzie, gotcha. We're in agreement.
Posted by: CoRev at May 30, 2010 01:35 PM