17 Jun

President Obama gave a less than satisfying speech last night about the oil spill. It follows 50 odd days of less than satisfying response by all of the players involved. As of today, fingers are still pointing, people are still complaining, and most importantly, oil is still spilling. We have argued before about whether it makes sense to try to clean up the oil before you plug the hole. Obama said during the campaign a president must chew gum and walk at the same time. Not in this case.

Chris Smith did a great column on the impotent rage the average American feels, and the sense of loss and lack of control. Imagine if you were the President. You can arm twist BP into creating a $20B fund for damages. But you can’t stop the damages in the first place. For the first time in your life, you have encountered a problem you can’t solve.

Obama ran on a message of Hope. But has Hope failed? No, I don’t mean in a Palin-esque How’s-That-Hopey-Changing-Thing Going. My argument is only slightly more nuanced. //sarcasm// I have said before that Americans, in general, do not want a smaller government or larger government; they want a competent government. Bush began his downfall in the eyes of the general public during the mess of Katrina. He has been excoriated since for leading an incompetent government: FEMA can’t help the Gulf, the intel community was wrong about WMDs, the military can’t win in Iraq or Afghanistan, and the credit markets are unregulated and allowed to fail.

Obama implicitly promised competence when he simultaneously promoted Hope, Change, and an activist government that could fix people’s problems: healthcare, the economy, etc. But has this idealist philosophy met the solid wall of pragmatism so early? Most Presidents become pragmatists eventually, but it normally is an intractable Congress that defeats them. Here, it appears our modern unsustainable world has run afoul of Mr. Obama’s Hope.

Our modern house-of-cards economy and lifestyle is based upon corporations and systems taking risks beyond the ability of any organization, including the government, to insure against failure. BP did not create the system of world dependence on oil any more than Lehman Brothers created the housing bubble. But both got rich in that under-regulated, risk promoting system, and neither had the ability to remedy the situation when disaster struck. Our laissez-faire economic system is based upon the fundamental principle that if an individual takes risks, they bear the burden of losses or gains. That the individual is allowed to take risks beyond their ability to make their debtors whole in case of failure has been true for some time. Society in general has born risks in promotion of the overall good: when a factory has a major accident or fire, the government absorbs the risk the factory can not (i.e. fighting the fire, rescuing the wounded, etc). The individual took risks, they defaulted and were overwhelmed, but government, through policy or direct action, could always act as a safety valve.

This is no longer true. Our credit markets and BP wrote checks our government can’t cash. The financial markets traded hundreds of trillions worth of CDOs in a fantasy land that ultimately nearly caused another Great Depression. BP drilled for oil in a place where an accident would cause an unsolvable problem. Government is no longer the actor of last resort. The government acts, but the markets still crash, and the oil still spills.

What if our government can not solve our problems because the systems have grown beyond them? There are now forces larger and more powerful than The Greatest Country in the World. Where does that leave a Hopeful president? Where does that leave the message of Hopeful government?

One Response to “Humbled”

  1. STEEL at 5:50 pm #

    Still not seeing where this president has failed. Still not seeing where we can no longer hope. Oh, you mean because he did not invent a way to secure a leak a mile down on the ocean floor in his first year? I guess you are right – he is a failure in league with Bush. And we have not even gotten to a fight to Mars and cold fusion. Are we supposed to wait for his second term for these things to happen? That would be outrageous.

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