Playing Politics with the Spill

The one thing that really made me mad during the response to Hurricane Katrina was the political games that were played so that national rage would be directed at a partisan target rather than at taking care of people hurt by the Hurricane and the resultant flooding when the levees failed.  It’s deja vu all over again now except Louisiana has a Republican Governor and a Democratic President trying to reflect the rage.  I thought perhaps Jindal was actually going to be the grown up in this situation, but I was wrong.  Nothing good will come of this, believe me.  Like I said, I saw this same dynamic after Katrina and it hurt every one.

We’re seeing  the Louisiana National Guard deployment as one of the volleyballs in the Oil Gusher response. The other is a series of funds made available by BP and the federal government. Once again, no one wants responsibility for the huge failed response so, it’s a battle of the memes now. Who is responsible the Feds or the SLGs?

The Baton Rouge Advocate points out this travesty by Jindal who is also being accused by Democratic Partisans of not deploying all the National Guard that he could. For some reason, no Republican Governors in the area has, but they’re not on AC 360 every night.  As I’ve mentioned before, Jindal is an ideological conservative who believes in starving the beast.  The cuts to higher education and health care have been horrible and arbitrary.  This one, however, has to do with money originating in places other than Louisiana tax payers.  Much like Donald Rumsfeld, Jindal would rather pay money the state receives for private contractors rather  than reimburse local governments that provide similar services.  He’s essentially told the parishes and towns to go beg money off of BP.  I don’t think the Governor should be helping BP divide and conquer.

Gov. Bobby Jindal unleashed his veto pen late Friday, nixing lawmakers’ attempt to direct $24.9 million to parishes and small towns affected by the oil leak.

In his veto message, Jindal said BP should pay the municipalities directly for the impact of the April 20 rig explosion in the Gulf of Mexico.

“The effect of this amendment would make Louisiana’s taxpayers, not BP, responsible for paying for state government’s response to the Deepwater Horizon oil spill,” the governor wrote in the line-item vetoes he released at about 8 p.m. Friday.

Left unnoted in Jindal’s veto message was the fact that the money legislators wanted to give to the municipalities comes from a fund fattened by a grant from BP. The Jindal administration wants state agencies to have use of the money.

“If it’s acceptable use for state government, then why isn’t acceptable for local governments?” said state Rep. Sam Jones, D-Franklin, who co-sponsored the amendment that would have diverted much of the BP money in the state’s Oil Spill Contingency Fund to help 11 coastal parishes and the towns of Lafitte and Grand Isle.

Jones said the money was help the local governments, which often have no credit line, needed to help respond to the loss of income by its residents and the damage to its environment.

“This is not the first time we as Cajuns have been told to go fend for yourselves,” Jones said.

“We’re good at giving our taxpayer dollars to privately owned companies from out-of-state, but we can’t help our own people with our money?” said state Rep. Joe Harrison, R-Napoleonville, who also co-sponsored the effort.

“Our people are in dire need of assistance and they’re not getting it,” he said.

Isn’t this similar to what the Feds are telling the states?  If you need money, go beg it off BP. We’re not even going to front you for it.

If you continue to read the list, you’ll see exactly what kinds of things Jindal thinks are expendable.   It’s not only money.  He’s vetoed a clause to allow parents of the developmentally disabled more input in decisions affecting their family members.  Get this for the rationale.

Rejected a request by parents for more input into their children’s transfer from centers for the developmentally disabled into community homes. Jindal said the heightened involvement would “hinder the efficient and effective transition of services.”

During Jindal’s reign of terror at the Health and Human Services department here in Louisiana for then Governor Bubba Foster, Jindal was well known for cutting funding to services for the disabled and elderly.  Many of these folks wound up on the street before the families were even notified.

You can read more about his budget cuts at WWLTV which has reprinted a local political pundit’s take from The Gambit. This op-ed talks about his cuts to education and all things cultural and art-related.

No doubt Jindal will say that he did not single out any of the arts and cultural organizations for elimination. He will maintain steadfastly he is simply trying to cut waste and fat out of state government.

If Jindal truly believes that arts and culture are waste or fat, he should say so. If not, he should not idly stand by and let them become collateral damage in his budget wars.

Otherwise, the next time you see Jindal railing against the feds and BP about the destruction of our culture, remember that he’s one of the biggest destroyers of all.

Jindal has repeatedly ignored the press who have asked him why he keeps asking for more Federal Resources while not activating the Guard levels he requested earlier.  I guess the Federal government is getting tired of Jindal’s endless rants on AC 360 and is now doing it’s on version of blame it on the people who are enduring the Gulf Gusher.  Bostonboomer found this earlier at the NY Times.  It’s Katrina all over again except there’s a bunch of parish presidents instead of one Mayor Nagin.

But a review of Louisiana’s prespill preparation suggests that the state may be open to the same criticisms that Mr. Jindal has leveled at BP and federal authorities.

The state has an oil spill coordinator’s office. Its staff shrank by half over the last decade, and the 17-year-old oil spill research and development program that is associated with the office had its annual $750,000 in financing cut last year. The coordinator is responsible for drawing up and signing off on spill contingency plans with the Coast Guard and a committee of federal, state and local officials.

Some of these plans are rife with omissions, including pages of blank charts that are supposed to detail available supplies of equipment like oil-skimming vessels. A draft action plan for a worst case is among many requirements in the southeast Louisiana proposal listed as “to be developed.”

State officials said that many of those gaps had been addressed but that the information had not yet been formally incorporated into the plan by the Coast Guard.

This seems to me another riff on the Obama leadership theme of it’s all Dubya’s fault.  Even Fox News has done a pretty good job of showing how the Gulf States are not employing the National Guard.  This information came from the networks interview with Secretary of Defense Robert Gates.

A Defense official told Fox News that governors are afraid that activating more troops would be politically harmful, charging taxpayers a high cost for duties that won’t keep troops busy. The skill sets these troops have don’t match the needs, the official said, and the governors aren’t about to pay soldiers to stand on the beaches waiting for oil to wash up.

Gates told “Fox News Sunday” that there isn’t more the Pentagon could be doing to help stop the spill or to prevent millions of gallons of oil from washing up on the Gulf Coast.

“We have offered whatever capabilities we have,” Gates said. “We don’t have the kinds of equipment or particular expertise.”

Gates said there is a standing offer for the authorization of up to 17,500 National Guard troops in Louisiana, Mississippi, Alabama and Florida, the four states that are most affected by the BP spill.

Gates authorized the troops under Title 32 status, which means all costs would be reimbursed by the federal government, which in turn is charging BP.

Of the 6,000 troops it is authorized to deploy, Louisiana has activated about 1,100 for aviation support, sandbagging and hazmat training for those who might come in contact with the oil.

Alabama has activated 450 of the 3,000 troops authorized. Troops in that state are helping local business owners and others file claims against BP.

Mississippi has activated 50 of its 6,000 authorized troops, and Florida has activated 30 of its 2,500 to conduct aviation support.

Spokesmen for the four states’ governors rejected the notion that politics is a factor in how many troops they activate.

Last week, Jindal released details of the state’s spending on the Oil Gusher. The money came from a $25 million dollar grant from BP as well as Federal money from the Oil Spill Liability Trust Fund. The majority of the money has gone to the Louisiana Department of Wildlife and Fisheries and the Attorney General. A smaller amount has gone to first responders and others.  It’s definitely stayed at the state level as far as I can tell.

I’m just concerned that since every one impacted by the Gusher and every one watching those of us impacted by the Gusher are pretty mad, that these shenanigans are going to continue.  So far, the face of the local government has been Plaquemines Parish President Billy Nungesser whos being saying almost as many bombastic things as Mayor Ray Nagin did after Katrina.

The last thing we need down here is a pissing contest between varying levels of government. We’ve got enough nasty stuff in our water as it is.  If I start seeing more hints that this is turning into a Jindal/Obama 2012 presidential fight, you’ll hear my screams from down here to what ever corner of the world that you inhabit.   I can’t take another repeat of the same crap that just about did us in after Katrina.

Ben Nelson and Republican Party own the double dip

In an act that defies, history, logic, economics, and humanity, the Senate Dems once again were blocked by the Party of the Grinch. What a stand! After all, all who would want to increase the National Debt by 0.00043 percent ? Why do they take what they consider a ‘reasoned’ stand against the deficit only when it applies to the folks that will be forced to soup kitchens?

No Republicans voted yes, while Sen. Ben Nelson (D-Neb.), who had also rejected earlier versions of the legislation, voted no. Sen. Joe Lieberman (I-Conn.) voted yes after voting on previous procedural motions. Sens. Robert Byrd (D-W.Va.) and Lisa Murkowski (R-Alaska) were absent.

After the vote, Senate Majority Leader Harry Reid (D-Nev.) repeated comments he made earlier Thursday that the Senate will now move to a small-business bill. Reid said the unemployment benefits would not be added to that bill, but others have speculated that the provisions could still be attached to the small-business measure.

The failure to move the tax extenders package, which also would have renewed scores of individual and business tax breaks, illustrates the extent to which fears about the deficit are dominating the legislative process five months before a midterm election in which Democratic control of Congress will be on the line.

If only the Salvation Army went public, then I’d recommend you go long on them and maybe we’d be in the money for a change.

More Absentee Policymaking

There are so many policies running amok these days that it’s hard to keep track of them all. I’m switching my focus back to the

I'll gladly pay you Tuesday for a Hamburger today

financial markets for a bit where Politico’s Ben White is chasing down the bites and pieces that will be part of the Financial Market Sausage. There’s a lot to read over there, but this stood out to me because it seems that there are a many policies going through Congress right now to take care of various crises and there’s a vacuum of executive leadership. (If you’d like to read where they stand, it’s on the White House Blog. That beats hearing it read off of a teleprompter as far as I’m concerned.)

Wall Street executives are complaining that the Obama administration has been largely absent from the financial reform conference process, failing to step up and push back on big issues such as the exact language on derivatives reform and the amendment from Sen. Susan Collins (R-Maine) on capital requirements.

The only thing that brings me a sigh of relief–coupled with a wtf–on this statement is that the complaints about the lackadaisical one are coming from “Wall Street” Executives. I would hope the pushback would come from people wanting the President to be more active in pushing a strategic agenda for Wall Street translucence and safety. As an example, Blanche Lincoln has been trying to ride derivatives reform to re-election. You think she’d like Presidential backing.

Several other things stood out. The discussion on Fannie and Freddie may lead to a liquidation authority. This is a huge deal. These behemoths were obviously mismanaged and misregulated. However, the concern now is with the ratings of the agencies’ debt which is a staple in nearly every ‘safe’ investment portfolio including banks. I’d hate to be any one stuck with one of their bonds should this language become law. I should mention that I’m still betting that parts of my pension plan and yours contain a number of them. This could tank the implicit guarantee from the FEDs on any of those quasi-agency bonds moving them all up a risk level or six.

Bank executives were panicking last night over a proposed fix to Title II of financial reform literally penciled in at the last minute. The fear is that that the proposed change to the orderly liquidation authority could leave banks on the hook for a possible wind-down of Fannie Mae and Freddie Mac that could cost as much as $400 billion. In the House counter-offer below, Fannie and Freddie are penciled in as falling under the definition of ‘financial company,’ meaning they could be resolved by the orderly liquidation process. This process is paid for by the sale of the failing company’s assets and/or through assessments on other financial companies, possibly putting the Street in line to pay for the liquidation of the troubled housing giants.

There are also some interesting tales concerning Dodd and MA Senator Scott Brown who seems to be seeking an exception to every rule. The NYT editorial page stepped in for stronger regulation. It also seemed to take a direct smack at Brown. As long as these things get traded on an exchange, they must be fairly standard, audited and watched by the Exchange, and meet Exchanges standards. This is essential as far as I’m concerned.

Exceptions to the rules in the Senate bill are narrowly drawn. Painstakingly negotiated and uniquely customized contracts would not need to be publicly traded, nor would derivatives deals that commercial businesses use to hedge legitimate risks. Any attempt by negotiators to expand the exceptions would be moving in a dangerously wrong direction.

Lawmakers also have to keep the definition of an “exchange” narrow. A transparent exchange is a trading facility in which many participants make bids and offers and everyone can see what prices were offered and paid. Proposed language from the House for the final bill would allow telephone deals to qualify as a proper trade, which is seriously wrongheaded.

Meanwhile, the housing market is showing signs of weakening. Since this is the major wealth item for most American Families, this will surely depress consumer confidence and buying plans. This also means continued problems for Fannie and Freddie assets and any one holding anything remotely related to mortgages.

“Housing is contributing absolutely zilch to economic growth,” said William Wheaton, an economics professor at the Massachusetts Institute of Technology in Cambridge, Massachusetts. “It’s not that people want houses to be expensive. They want the housing sector to start pulling up the economy as it has done after past recessions, and that’s not going to happen until prices rise.”

When that price gain happens, it will have to be substantial to make up for losses in home values, said Columbia’s Stiglitz.

“Even a 3 to 4 percent increase in value won’t help people who have seen their homes decline 20, or 30 or 50 percent,” Stiglitz said.

Bloomberg has a fairly good summary of what’s left standing in the Financial Overhaul Bill. (You would think the President would take some interest in this at this late stage of the game, but he appears to be off having hamburgers with Russian President Medvedev.) The House and the Senate are hammering out what will stand of the Volcker Rule, how to deal with swaps, and other extremely important measures. So far, the ban on proprietary trading by banks is holding.

On the Volcker measure, lawmakers were awaiting proposed changes to the Senate language that would ban U.S. banks from proprietary trading and bar them from investing in or sponsoring hedge funds and private-equity funds.

Dodd may propose incorporating aspects of a proposal from Democratic Senators Jeff Merkley of Oregon and Carl Levin of Michigan. The two senators want to strengthen the language to eliminate what they consider wiggle room that could allow regulators to change or eliminate the ban later.

In addition, Dodd may offer to add Merkley-Levin language to curb conflicts of interest by preventing companies that underwrite asset-backed securities from placing bets against them. The proposal aims to address the fraudulent activity alleged in the Securities and Exchange Commission’s lawsuit against Goldman Sachs Group Inc. The SEC claims the bank created and sold collateralized debt obligations linked to subprime mortgages without disclosing that hedge fund Paulson & Co. helped pick the underlying securities and bet against them.

Now’s the time to push as much through as possible.

Oh, and more importantly, here’s Business Week’s report on the BIG Hamburger Summit.

Obama had a cheddar cheese burger with onions, lettuce, tomato and pickles, washed down with an iced tea. Medvedev selected a cheddar cheese burger with onions, jalapeno peppers and mushrooms. He ordered a Coca-Cola.

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The President and Vice President’s Golf Game Weekend

and BP CEO’s outing at a Yacht Race sponsored by JP Morgan  to see his 52 foot yacht “Bob”

And a friendly reminder from Reuters:

Obama says will not rest until Gulf oil spill plugged

Brought to you by one really pissed off Gulf Coast resident ….