It is particularly disappointing that President Obama should have deployed the cheap weapon of hatred in his response to the disaster at the BP Macondo well in the Gulf of Mexico.
Despite an appalling public relations failure at board level, the BP technicians are to be applauded on their handling of the crisis, which has been at the cutting edge of technology. At the time of writing, it seems the well has been plugged. We do not prejudge what went wrong. Were problems with the blow-out preventer ignored?
Was it wise to drill such a deep well without a relief well? At the worst there may have been “gross negligence” but not willful default or malfeasance. Subsequent inquiries and the courts will rule on this.
Through all of this, President Obama has excoriated BP, emphasising its Britishness, although according to a correspondent in America, failing to stimulate any broader anti-British sentiment. Perhaps he needed to deploy the weapon of hatred in order to improve his prospects at the mid-term elections and to demonstrate his superiority over his hapless predecessor in reacting to Hurricane Katrina, although the response to this tragedy was organised at a state not a federal level. Obama is considered to have handled the oil spill poorly and questions need to be answered as to why the standard procedure of burning off surface oil was not adopted earlier.
Playing the hatred card in this situation is in marked contrast to global reaction to the fi nancial crisis which struck in 2007, which continues to cause infi nitely greater damage than the spill in the Gulf of Mexico.
Blame for the crisis has been variously allocated to President Carter’s misguided
“Communities Rehabilitation Act” which was the genesis of sub- prime lending; reckless borrowers; sleepy regulators; feckless central bankers (the BIS thinking that mortgages were risk free) or complicit rating agencies who were paid to give favourable ratings
to packages of debt, some of which were toxic. But the real culprits were the American investment banks, which packaged the sub-prime debt, in some instances as we now learn specifi cally so that it was designed to fail for the benefi t of the packager and a particular client and to the detriment of the purchasing client. Yet there has never been a word of anti-Americanism.
Of the negative emotions contempt, disdain and scorn are occasionally permissible. Among the positive we are told that charity ranks before faith and hope. But to see
the hatred card played is not worthy of the President of the world’s leading nation.
Inflation threats rising?
The present fi nancial crisis is all about excessive indebtedness, which fi rst manifested itself at the personal level (particularly through real estate loans) and then had a knock-on effect among banks as they suffered real estate loan write offs. The response of governments has been to shoulder these debts themselves with a quite unprecedented explosion of public indebtedness. In the US it seems the Fed is primarily concerned by the risk of a double- dip recession and has prolonged its quantitative easing programme by reinvesting the maturity proceeds of purchased bonds; fresh QE is also on the cards. At the moment the infl ationary threat seems negligible, while the consumer is reluctant to spend and the already high jobless totals are understated by part time working and salary cuts. But in the longer term we remain sceptical that the massive monetary easing will not have infl ationary consequences. Equally, it seems improbable that the mountain of federal debt can ever be repaid through fi scal receipts in a growing economy and, as ever before, it will have to be eliminated in real terms through infl ation.
