"BP Will Pay"

The New York Times reports on President Obama's speech last night with the type of puffery we would expect from the mainstream media. Apparently, the American people--especially the people on the Gulf Coast most directly affected by the spill--are supposed to take solace that the President has appointed a commission.

Until now he has employed most of the tools of his office, imposing a deepwater drilling moratorium, traveling repeatedly to the region, firing an agency director and appointing a commission. He used a few more Tuesday night, summoning the cameras to the Oval Office, appointing a long-term recovery coordinator and demanding that the company responsible, BP, set up a multibillion-dollar escrow account to compensate the victims.

Meanwhile, oil continues to leak from the seafloor despite BP's efforts to bring the well under control. While Obama is busy appointing new oil spill czars, the Associated Press reports that government scientists have increased their estimates of the oil being leaked by a factor of 10, up to as much as 2.5 million gallons per day. Even if BP succeeds in shutting off the flow, there will still be 50-100 million gallons of oil loose out in the Gulf of Mexico, waiting to be washed ashore by the first hurricane that comes through, or worse, to be spread along the entire eastern seaboard by the Gulf Stream current.

In the White House transcript of Obama's speech, one line jumps out as an indicator of how the President is still underestimating the vastness of the spill. While outlining his plan for recovery, Obama took pains to assure the American people that, "BP will pay for the impact this spill has had on the region," but Obama's $20 billion escrow fund is nothing compared to the mind boggling scale of this disaster.

Even if BP is deemed by the new oil spill czar to be liable for unlimited damage claims, Obama's plan has one major problem: what happens when BP runs out of money? The Washington Post reports that as members of Congress scathe BP's leaders with a withering crossfire of recriminations, they are also selling all stocks related to BP. At the same time, BP's shares have declined by almost 50% since the explosion of the Deepwater Horizon on April 20.

Obama is talking tough and is even taking tough actions, but the real measure of his leadership skills is whether his actions actually bring the spill under control and repair the damage. In both cases, he continues to push all responsibility to BP. This may be a good political tactic, but it also comes with a big risk. If BP ultimately fails, the responsibility he now evades will come back to him--with interest.

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