konane's Blog

All I can say is GW was NOT holding it when it broke. 

___________________

"Feds let BP avoid filing blowout plan for Gulf rig

By MICHAEL KUNZELMAN and RICHARD T. PIENCIAK, Associated Press Writers

Thursday, May 6, 2010

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/05/05/national/a165540D79.DTL

Posted by Karl Denninger in Regulatory at 14:41

What's your excuse now, CONgress?

May 5 (Bloomberg) -- Former Merrill Lynch & Co. Chief Executive Officer David Komansky said he regrets promoting the 1999 repeal of the Glass-Steagall Act that separated commercial and investment banks.

“Unfortunately, I was one of the people who led the charge to try to get Glass-Steagall repealed,” Komansky, 71, said in a Bloomberg Television interview today. “I regret those activities and wish we hadn’t done that.”

....

John S. Reed, former co-chief executive officer of Citigroup Inc., also said in January that U.S. lawmakers were wrong to repeal Glass-Steagall.

That's two.

Now do it Congress.

You were conned.  We won't hold it against you - if you put it back now.  If you pull the curtain down on Greenspan's meddling and your ex-post-facto legalization of his unlawful act of approving a merger he knew was illegal.

This is the solution to the problem and you know it.

It kept the banking system safe for 50 years.

It was 14 pages.

And you can put it back in force with one."

http://market-ticker.org/archives/2280-TWO-Former-IB-CEOs-Want-Glass-Steagall-Back.html

Source Business Insider

"A bill sponsored by Ron Paul and Alan Grayson to thoroughly audit the Fed, passed the House. However in a brazen move that ought to offend the sensibilities of every citizen, the Fed is lobbying Senate members to water down the bill so that it is meaningless.

The Huffington Post tells the story in Fed Privately Lobbying Against Audit.

The Federal Reserve is privately lobbying against a bipartisan Senate amendment that would open the central bank to an audit by the Government Accountability Office, according to documents distributed to Senate offices by a Fed official.

In order to obtain the documents, HuffPost agreed not to reveal the name of the Federal Reserve official who did the specific lobbying in question.

"As I mentioned, we believe that the bipartisan Corker-Merkley provision in the Dodd Bill is quite strong and addresses issues of transparency and disclosure without impinging on the independence of monetary policy," the official goes on.

Merkley teamed with Sen. Bob Corker (R-Tenn.) on an audit provision, but Merkley himself says he'd prefer to go further. "I appreciate Representative [Alan] Grayson's concerns over accountability at the Federal Reserve. I have been a strong proponent of Fed reform and voted against the re-confirmation of Ben Bernanke because the Fed has been so lax in using its regulatory powers," Merkley said in a statement to HuffPost, responding to an analysis from Rep. Alan Grayson (D-Fla.) showing that the Senate bill did not meaningfully expand transparency.

Dodd Bill Would Allow Fed To Hide Its Spending

Inquiring minds are reading Dodd Bill Would Allow Fed To Hide Its Spending.

The Wall Street reform bill headed for a test vote on the Senate floor Monday night will allow the Federal Reserve to continue to pump trillions of dollars into major banks largely in secrecy, the co-author of House language that would open the central bank to an audit charged in a memo to the Senate.

"The Senate has a provision in its reform bill that purports to audit the Fed. But, it really doesn't do anything of the sort. I'm going to run down the details for you, and reprint the legislative language so you can read it yourself," writes Rep. Alan Grayson (D-Fla.).

It would not allow the GAO to look into the Fed's massive purchase of toxic assets, its hundreds of billions in foreign currency swaps with other central banks or its open market operations, among other restrictions.

Grayson and co-author Rep. Ron Paul (R-Texas) passed legislation through the House that would allow the Government Accountability Office (GAO) to audit the Federal Reserve and, after a delay, release the information to Congress. It was a remarkable victory, with a populist coalition beating back the combined lobbying efforts of the Treasury Department, the Fed and Wall Street banks. ....

What You Can Do

All you need to know is that if the Fed is for the Dodd bill or the Corker-Merkley provision, then you do not want either.

Please phone and fax your senators and tell them you want the Fed audited fully, and you do NOT want the watered down Dodd bill or the or the Corker-Merkley provision.

Tell them you do support the Grayson/Ron Paul bill exactly as passed by the house.

Here is a directory sorted by state of all the Senators of the 111th Congress.

You can also look up the phone numbers in the Online Directory For The 111th Congress but the first link may be easier to use for just senators. 

Send A Message

Call, Email, and Fax Now!"

http://www.businessinsider.com/fed-privately-lobbies-senate-to-kill-audit-2010-5#ixzz0n1cisTpV

Tuesday, May 4. 2010
Posted by Karl Denninger in Macro Economics at 12:45

"Does Anyone Remember 1931?
http://market-ticker.org/archives/2271-Does-Anyone-Remember-1931.html

http://www.wqad.com/news/whnt-explosion-redstone-arsenal-050410,0,4550942.story

We knew the bus was cranked headed in the taxpayers' direction for the ultimate cost of cleanup and higher energy costs.

______________

"Federal Law Could Limit BP's Liability Over Oil Spill

CHRIS KAHN | 05/ 3/10 06:28 PM |

Source The Huffington Post

NEW YORK — The oil spill spreading across the Gulf of Mexico has drained $32 billion from BP's stock market value. Lawsuits, fines, cleanup and reputation-repair are certain to cost the company billions more and could tie up BP for many years to come.

Yet the still-unfolding environmental disaster isn't likely to put one of the world's largest oil companies out of business.

BP PLC earned close to $40 billion in 2008 and 2009 combined, and more than $6 billion in the first three months of 2010.

Exxon Mobil – which shelled out more than $4 billion in cleanup costs and legal payouts after the Exxon Valdez spill in Alaska 21 years ago – managed to pull through the disaster just fine. Today it is the world's largest publicly traded oil company.

In the long run, BP will be fine too, said Mark Gilman, an analyst at The Benchmark Co.

"Let's not get hysterical here," he said. "They're going to survive this."

Still, London-based BP will face a litany of challenges as a result of last month's accident, not the least of which will be scrutiny from politicians and regulators in Washington. BP could find itself at a competitive disadvantage when vying for offshore drilling permits if the Obama administration moves ahead with plans to open vast swaths of the U.S. coast to oil exploration.

How much the disaster costs depends on how much worse the spill becomes, and how much fault is ultimately assigned to BP for the oil-rig explosion and fire that caused the spill. The oil company leased the offshore platform from Transocean Ltd. and hired subcontractors, including Halliburton Co., to help drill the well that is now spewing an estimated 200,000 gallons a day.

On Monday, BP gave assurances to shrimpers, oil workers and scores of others that they will be compensated for any "legitimate and objectively verifiable" claims.

BP is spending $6 million a day to contain the oil spill; the federal Oil Pollution Act requires BP to pay the cost of any cleanup work done by government agencies such as the Coast Guard and Homeland Security. But the real costs will come later, when BP starts paying for damage to wildlife, coastal businesses and tourism.

"The worst-case scenario is enormous," said Keith Hall, a New Orleans lawyer who represents oil and gas companies. "There are already a number of wrongful-death and personal injury cases out there. There will be no doubt more."

Fadel Gheit, a market analyst with Oppenheimer & Co., estimated that every day that oil seeps into the gulf, BP loses hundreds of millions of dollars in liability claims. Overall, Gheit estimated BP could pay anywhere between $5 billion and $15 billion for the cleanup, damage claims and lawsuits.

Federal law sets a $75 million limit how much an oil company has to pay for damages such as lost wages and economic suffering. But lawyers said the cap can be lifted if BP is found to have failed to meet federal safeguards or was otherwise grossly negligent.

People can also pursue claims in state court and file for damages through the Oil Spill Liability Trust Fund, which was established after the Exxon Valdez. The fund, which collects 8 cents from the industry for every barrel of oil produced or imported to the U.S., has about $1.6 billion available to cover damages.

BP, the largest oil and gas producer in the U.S., has been blamed for a number of big accidents in the past decade.

_ An explosion at a BP refinery in Texas City, Texas, in 2005 killed 15 people and injured 170. Regulators in October hit BP with a record $87 million fine for failing to correct safety hazards at the plant. BP is contesting the fine.

_ More than 200,000 gallons of oil spilled from a BP pipeline in Alaska in March 2006, the largest-ever spill on Alaska's North Slope. BP paid about $20 million in fines.

Now, a class-action lawsuit filed in federal court in New Orleans blames BP, Transocean, Halliburton and Cameron International Corp. – a maker of rig equipment – for faulty behavior before and after the April 20 accident.

BP has pointed the finger at its partners. CEO Tony Hayward – who took over BP after the Texas City blast – said Monday on ABC's "Good Morning America" that a failure of Transocean's equipment led to the spill.

David Kotok, chief investment officer of the Sarasota, Fla., money-management firm Cumberland Advisors, said early predictions are likely to understate the fallout from the disaster. Neither the 1969 Santa Barbara, Calif., offshore oil spill nor the Exxon Valdez is a useful comparison because the current slick could be much bigger and harder to contain.

"We're looking at maybe two to three months" of oil flowing into the gulf, he said. "The devastation is huge. This is like Three Mile Island."

Experts say the green image the company cultivated in its advertisements is vulnerable. Market researcher Eileen Campbell valued BP's brand at $17.3 billion, mostly because of its interest in the environment. BP invests in biofuels, wind and solar energy, and it supports capping carbon emissions.

The spill will probably make it tougher for BP to expand in U.S. waters, analysts say.

"BP is under watch now," Gheit said. "They may not be welcome in the area. So if I'm going to issue a permit for BP to drill a well, I'm going to take a much closer look at them."

___

AP Business Writer David Koenig in Dallas contributed to this report."

http://www.huffingtonpost.com/2010/05/04/bp-could-face-billions-in_0_n_562271.html

http://www.foxnews.com/world/2010/05/03/usama-bin-laden-living-comfortably-iran-documentary-asserts/

"The Gulf oil spill is much worse than originally believed.

As the Christian Science Monitor writes:

It's now likely that the actual amount of the oil spill dwarfs the Coast Guard's figure of 5,000 barrels, or 210,000 gallons, a day.

Independent scientists estimate that the renegade wellhead at the bottom of the Gulf could be spewing up to 25,000 barrels a day. If chokeholds on the riser pipe break down further, up to 50,000 barrels a day could be released, according to a National Oceanic and Atmospheric Administration memo obtained by the Mobile, Ala., Press-Register.

CNN quotes the lead government official responding to the spill - the commandant of the Coast Guard, Admiral Thad Allen - as stating:

If we lost a total well head, it could be 100,000 barrels or more a day.

Indeed, an environmental document filed by the company running the oil drilling rig - BP - estimates the maximum as 162,000 barrels a day:

In an exploration plan and environmental impact analysis filed with the federal government in February 2009, BP said it had the capability to handle a “worst-case scenario” at the Deepwater Horizon site, which the document described as a leak of 162,000 barrels per day from an uncontrolled blowout — 6.8 million gallons each day.

Best-Case Scenario

BP is trying to perform a difficult task of capping the leak by using robotic submarines to trigger a "blowout preventer" 5,000 feet below the surface of the ocean. Here's a photo of the robot trying to activate the switch on April 22nd:

(courtesy of the US Coast Guard)

If successful, the leak could be stopped any day. Everyone is rooting for the engineers, so that they may successfully cap the leak.

Already, however, the spill is worse than the Exxon Valdez, and will cause enormous and very costly destruction to the shrimping, fishing and tourism industries along the Gulf Coast of Louisiana and Florida. It will be years before good estimates on the number of dead fish, turtles, birds and other animals can be made.

The Backup Plan

If the blowout preventer can't be triggered, the backup plan is to drill another well to relieve pressure from the leaking well.

Here's a drawing prepared by BP showing the plan (the drilling rig on the left will take months to drill down and relieve pressure from the leaking rig):


Here's a graphic from the Times-Picayune showing the same thing (and accurately showing that there are currently 3 leaking oil plumes):

BP will also attempt to drop concrete and metal "cages" over the leak sites, to try to buy time by collecting oil in the cages, and then draining oil away in a safer manner.    In addition, BP is using chemical disperents to try to break up the oil plumes as they arise.

Worst-Case Scenario

As the Associated Press notes:

Experts warned that an uncontrolled gusher could create a nightmare scenario if the Gulf Stream carries it toward the Atlantic.

This would, in fact, be very bad, as it would carry oil far up the Eastern seaboard.

Specifically, as the red arrows at the left of the following drawing show, the Gulf Stream runs from Florida up the Eastern Coast of the United States:


[Click here for full image.]


But how could the oil get all the way from Louisiana to Florida, where the Gulf Stream flows?

As Discovery explains:

Many ocean scientists are now raising concerns that a powerful current could spread the still-bubbling slick from the Florida Keys all the way to Cape Hatteras off North Carolina.

These oceanographers are carefully watching the Gulf Loop Current, a clockwise swirl of warm water that sets up in the Gulf of Mexico each spring and summer. If the spill meets the loop -- the disaster becomes a runaway.

"It could make it from Louisiana all the way to Miami in a week, maybe less." said Eric Chassignet, director of the Center for Ocean Atmospheric Prediction Studies at Florida State University. "It is pretty fast."

Right now, some computer models show the spill 30 to 50 miles north of the loop current. If the onshore winds turn around and push the oil further south: "That would be a nightmare," said Yonggang Liu, research associate at the University of South Florida who models the current. "Hopefully we are lucky, but who knows. The winds are changing and difficult to predict."

Imagine the loop current as an ocean-going highway, transporting tiny plankton, fish and other marine life along a watery conveyor belt. Sometimes it even picks up a slug of freshwater from the Mississippi River -- sending it on a wandering journey up to North Carolina.

The Gulf Loop Current acts like a jet of warm water that squirts in from the Caribbean basin and sloshes around the Gulf of Mexico before being squeezed out the Florida Strait, where it joins the larger and more powerful Gulf Stream current.

***

Oceanographer George Maul worries that the current could push the oil slick right through the Florida Keys and its 6,000 coral reefs.

 

"I looked at some recent satellite imagery and it looks like some of the oil may be shifted to the south," said Maul, a professor at Florida Institute of Technology in Melbourne, Fla. "If it gets entrained in the loop, it could spread throughout much of the Atlantic."

In fact, new animation from a consortium of Florida institutions and the National Oceanic and Atmospheric Administration, predicts a slight southward shift in the oil over the next few days.

A graphic from the Discovery article shows what the Gulf loop current looks like:

The Gulf Loop Current enters from the Caribbean basin,
moves around the Gulf of Mexico and
exits out the Florida Strait, where it joins
the more powerful Gulf Stream current.
Naval Oceanographic Office

According to ROFFS, the oil spill is getting close to the loop current:

In a worst-case scenario - if the oil leak continued for a very long period of time - the oil could conceivably be carried from the Gulf Stream into world-wide ocean currents (see drawing above).

I do not believe this will happen. Even with the staggering quantity of oil being released, I don't think it's enough to make its way into other ocean currents. I think that either engineers will figure out how to cap the leak, or the oil deposits will simply run out. It might get into the Gulf loop current, and some might get into the Gulf Stream. But I don't believe the apocalyptic scenarios where oil is carried world-wide by teh Gulf Stream or other ocean currents.

Changing the Climate

There is an even more dramatic - but even less likely - scenario.

Specifically, global warming activists have warned for years that warming could cause the "great conveyor belt" of warm ocean water to shut down. They say that such a shut down could - in turn - cause the climate to abruptly change, and a new ice age to begin. (This essay neither tries to endorse or refute global warming or global cooling in general: I am focusing solely on the oil spill.)

The drawing above shows the worldwide "great conveyer belt" of ocean currents, which are largely driven by the interaction of normal ocean water with colder and saltier ocean currents.

Conceivably -  if the oil spill continued for years - the greater thickness or "viscosity" of the oil in comparison to ocean water, or the different ability of oil and seawater to hold warmth (called "specific heat"), could interfere with the normal temperature and salinity processes which drive the ocean currents, and thus shut down the ocean currents and change the world's climate.

However, while this is an interesting theory (and could make for a good novel or movie), it simply will not happen.

Why not?

Because there simply is not enough oil in the leaking oil pocket to interfere with global ocean currents. And even if this turns out to be a much bigger oil pocket than geologists  predict, some smart engineer will figure out how to cap the leak well before any doomsday scenario could possibly happen."

http://www.zerohedge.com/article/oil-spill-how-bad

http://blog.al.com/live/2010/05/fire_boom_oil_spill_raines.html

Just watched this report on tv ...... absolutely outstanding reporting, excellent video.  Just maybe this report will shake Washington enough to seal the border.

_________

http://www.wsbtv.com/2investigates/23434381/detail.html

http://www.cato-at-liberty.org/2010/04/26/costly-irs-mandate-slipped-into-health-bill/

Created 05/02/2010 - 04:08

Source Zero Hedge

"Today is D-Day for Europe, and soon, the world. Shortly, the IMF will take its historic place as the cash cop of last resort, a post traditionally reserved for the Federal Reserve, which incidentally was rumored to have activated its FX currency swaps with European banks last week (whether or not that is true will be disclosed by next week's H.4.1). This action will open a floodgate of consequences, as every semi-bankrupt country forces itself into a spending frenzy to guarantee that it is truly bankruptcy, no ifs about it, and qualifies for IMF (and thus 20% US) aid. And at that point the politics of a US-funded world bailout really will come to the fore. Because while the Fed bailing out America is one thing due to the Fed's untouchable and unsupervisable status, the IMF, as a corporation, does not share the same "above the law" privileges. And in an election year, with Americans slowly realizing that the fate of the world is truly in their hands, and their tax money is being involuntarily taken away from them as we speak yet again, ahead of midterm elections, all bets are off. For those interested in the actual mechanics of the IMF rescue mechanisms available, as well as some of the political implications likely to follow, here is an overview via Bank Of Countrywide Lynch.

IMF Lending Capacity (Jeffrey Rosenberg )

The IMF has nearly $250 bn in lending capacity currently available. To lend beyond that, the IMF needs consent of participants representing 80 percent of total credit arrangements in their backstop lending facility – the New Arrangements to Borrow (NAB). While legislative approval is not required in some countries, it is required in others. In either case, it would be a politically sensitive issue in any non-European country to support the peripheral European countries, especially if this comes on heels of Germany rejecting the aid proposals for Greece next week.

The IMF primarily funds itself through payments of quotas from member countries based on their relative sizes in the world economy. Currently, these quotas total SDR 217 billion (SDR or special drawing rights, is an international reserve asset created by the IMF and is based on a basket of four currencies), or $328 billion. Additionally, the IMF supplements  quota subscriptions through two credit arrangements between the IMF and a group of member countries – New Arrangements to Borrow (NAB) and General Arrangements to Borrow (GAB). The GAB enables the IMF to borrow  from participant countries, or their central banks, under certain circumstances at marketrelated interest rates.The NAB is used as a credit facility intended to backstop quota resources, and was recently approved to be expanded to nearly $550 billion from 38 participants, up from $50 billion and 26 participants earlier. Until the expansion goes into effect, the additional lending amounts are available as bilateral agreements, which would eventually be folded into the multilateral (According to a recent IMF conference call, since the NAB is a multilateral loan framework, the IMF usually draws upon it on a proportionate basis to member commitments) expanded NAB.

In reality, the amount the IMF has readily available for new lending is primarily determined by the one-year forward commitment capacity (though this figure is not a rigid maximum). The amount equals usable resources, including unused amounts under loan and note purchase agreements, plus projected loan repayments over the subsequent twelve months, less the resources that have already been committed under existing lending arrangements, less a prudential balance (The prudential balance is an amount set aside to safeguard members’ quotas and claims, also taking into consideration potential erosion of the IMF’s resource base. The prudential balance is set at 20% of member’s quotas used and any amounts activated under NAB and GAB). Currently, the one-year forward capacity stands at SDR 165 billion, or $248 billion.

[1]

Spreading the Political Risk Beyond Europe

The lack of a ready liquidity support mechanism for sovereigns in Europe highlights the importance of the IMF in the Greek bailout. Absent the ability or willingness of member states to extend bilateral loans to Greece, the IMF would
be the only support available, in our view. While its current facilities are of sufficient size, the much larger NAB facilities both are not yet operational and in our view require significant political support to execute. Given that the US represents nearly 20% of the total IMF lending capacity (both current and NAB), the failure of Europe to agree to support Greece would shift that political debate to the US and elsewhere.

Until an actual EU/IMF/Greece agreement has been reached and approved in all relevant countries – including by the parliament in some - uncertainty remains elevated in financial markets. Bear Stearns, Lehman Brothers, and AIG all faced shorter time lines at the end of their crises. The abbreviated time line in financial crises stems from the instability of funding. In the case of Greece, that instability may come from what is otherwise regarded as a source of funding stability – deposits. Under normal circumstances, government guarantee schemes generally support stable deposit bases but these are clearly not ordinary circumstances. This week the risk of restructuring – a Greek sovereign default – roiled financial markets.

Whether this concern spreads to depositors in domestic Greek banks will determine whether time will have finally run out on an EU brokered liquidity bailout. Absent that, the IMF stands as the only viable source of funds to avoid further spillover to systemic risk, in our view. And while they currently have enough capacity to fulfill this role, they would likely need to tap the NAB to enable them to support the broader periphery of Europe’s financing needs in a worst case scenario. Such an outcome would test the NAB and the political willingness of a much broader group of countries to support the fiscal deficit challenges of Europe.

The Bank Run

Much has been said over the ongoing Greek bank run by depositors. Some (RBS) did not believe us. They are now stuck holding bonds about 20% lower from where they could have sold them had they listened to us instead of mocking us. But that seems to be a recurring theme. We harbor no ill will toward the nationalized and failed banking institution. Yet, once again we are reminded that once a cascade of events is in motion, depositors, no matter what the level of assurances, simply refuse to keep their money in a banking system in troble. And while Greece is now done, and reliant on the ECB to collateralize its junk-rated sovereign debt, the spotlight now shifts to Spain, Portugal and Italy: are deposit redemptions in those 3 countries approaching the level seen in Greece? Stay tuned and find out. In the meantime, as the TimesOnline [2]reports, Europe has, too late, discovered that by the time the liquidity cascade begins, it is far too late.

Central bankers are also working on a separate scheme to stop Greek banks from succumbing to a run on their funds.

The European Central Bank plans to introduce a new emergency liquidity scheme as part of the wider bailout of the country, said sources close to the talks.

Greek banks have suffered a huge outflow of corporate deposits in recent weeks, reducing their financial strength, according to senior bankers.

The scheme would allow the banks to post junk-rated Greek government bonds as collateral in exchange for emergency loans. It will require a change in the European Central Bank's rules: at present it allows only government bonds with a high credit rating to be used in its emergency lending facilities."

Source URL: http://www.zerohedge.com/article/quantifying-imfs-ability-bail-out-world

Links:
[1] http://www.zerohedge.com/sites/default/files/images/user5/imageroot/Bofa IMF.jpg
[2] http://business.timesonline.co.uk/tol/business/article7114070.ece

"Tonight I was listening to Hugh Hewitt as I drove to the grocery store, and got so engrossed that I missed my exit. What was so interesting? Hugh was arguing that the Obama administration failed to respond promptly to the oil spill in the Gulf, and that its belated response was inadequate.

Is that a fair charge? Normally, I would be slow to blame government at any level for a natural (or, as here, man-made) disaster. But the basic facts are curious: the Deepwater Horizon rig exploded on April 21, nine days ago. This was no minor event; at least 11 workers were killed. The resulting oil slick has been evident, covering many miles, for some days now. Yet the federal response lagged.

There is a basic difference between this incident and Hurricane Katrina, to which it is being compared. In the case of Katrina, the primary responsibility for disaster response lay with the local and state governments. The local response was very poor; among other things, the governor of Louisiana was slow to call out the National Guard. Here, responsibility lay with the Obama administration from the beginning. State and local governments have no jurisdiction and no ability to deal with an oil spill miles out to sea. Only the federal government can act. It didn't, until, perhaps, it was too late.

Should more have been done, sooner? It is way too early to tell. The facts will emerge over the next several years. But the Obama administration's response does seem to have been oddly slow. Today, efforts to contain the spill have been hampered by high winds and choppy seas.

High winds and choppy seas frustrated efforts to hold back the oil spill seeping into Louisiana's rich fishing grounds and nesting areas Friday, and the government desperately cast about for new ideas for dealing with the nation's biggest environmental crisis in decades. ...

The seas were too rough and the winds too strong Friday to burn off the oil, suck it up effectively with skimmer vessels, or hold it in check with the miles of orange and yellow inflatable booms strung along the coast.

The floating barriers broke loose in the choppy water, and waves sent oily water lapping over them.

But what if these efforts had been made three or four days ago, when the oil slick was smaller and farther out to sea? It may turn out that the Obama administration's mysterious slowness in swinging into action was a critical failure that resulted in far greater environmental and economic damage.

So far, the Obama administration seems to have focused more on passing the buck than on containing the oil spill. The administration has told us, over and over, that British Petroleum is responsible for the accident and ultimately will pay the bills. Perhaps so. But those of us who have worked in the civil justice system for many years are well aware of the uncertainty of such predictions. More fundamentally, it is absurd for Barack Obama and Eric Holder to claim that the damage caused by this oil spill is of little concern because someday, British Petroleum may write a number of checks. Animals will be killed, livelihoods of fishermen and others will be destroyed, beaches will be fouled, untold damage will be done. The federal government has the unique responsibility to prevent that damage, if it can. Hoping to collect damages years later is hardly an adequate substitute.

It is too early to tell how extensive the damage will be, or to what extent the Obama administration failed to carry out its most basic duties. All we can say for the moment is that serious questions have been raised.

UPDATE: Oddly, the New York Times is documenting the Obama administration's failures:

BP officials said they did everything possible, and a review of the response suggests it may be too simplistic to place all the blame on the oil company. The federal government also had opportunities to move more quickly, but did not do so while it waited for a resolution to the spreading spill from BP, which was leasing the drilling rig that exploded in flames on April 20 and sank two days later. ...

The Department of Homeland Security waited until Thursday to declare that the incident was "a spill of national significance," and then set up a second command center in Mobile. The actions came only after the estimate of the size of the spill was increased fivefold to 5,000 barrels a day.

The delay meant that the Homeland Security Department waited until late this week to formally request a more robust response from the Department of Defense, with Ms. Napolitano acknowledging even as late as Thursday afternoon that she did not know if the Defense Department even had equipment that might be helpful.

Officials initially seemed to underestimate the threat of a leak, just as BP did last year when it told the government such an event was highly unlikely."

http://www.powerlineblog.com/archives/2010/04/026199.php

"Earlier today, Janet Napolitano appointed Coast Guard Commandant Admiral Thad Allen to coordinate the federal response to the oil spill in the Gulf of Mexico. That's great, but the oil rig blew up eleven days ago, on April 20. In the meantime, the oil slick has tripled in size over the last two days and is approaching the Gulf coast. Now there is speculation that the oil could make its way all the way to the Atlantic. President Obama, reversing an earlier announcement, made hasty plans to visit the Gulf tomorrow.

The Obama administration's slow-footed response to the disaster threatens to become a major political problem, as the spill itself threatens to turn into one of the worst environmental disasters ever. You're doing a heck of a job, Napolitanie!  "

http://www.powerlineblog.com/archives/2010/05/026203.php

http://www.naturalnews.com/z028687_Henry_Waxman_health_freedom.html