Daily Archives: May 27, 2010

Obama defended his handling of the oil spill at his first full press conference for months. Polls are showing that the public is losing its patience with the administration’s response to the disaster. Gallup finds that more than half of those asked say that Obama’s performance has been poor or very poor. Karl Rove — who would have guessed? — says Yes, the spill is Obama’s Katrina. In fact, he reckons, it could be even worse.

The federal response to Katrina was governed by the 1988 Stafford Act, which says that in natural disasters on-shore states are in charge, not Washington. The federal obligation is to “support . . . State and local assistance efforts” by providing whatever resources a governor requests and then writing big checks for the cleanup. Mr. Bush had to deal with a Louisiana governor and a New Orleans mayor who were, by federal law, in charge.

But BP’s well was drilled in federal waters. Washington, not Louisiana, is in charge. This is Mr. Obama’s responsibility. He says his administration has been prepared for the worst from the start. Mr. Obama’s failure to lead in cleaning up the spill could lead voters to echo his complaint in Katrina’s aftermath: “I wish that the federal government had been up to the task.”

It is hard to say how the politics will develop. If the environmental damage proves as terrible as many fear, and the government’s best efforts seem puny in comparison, then sentiment may turn more harshly against Obama whether or not that is justified. My feeling, though, is that John Kerry is right to call much of the criticism ridiculous.

The notion that the government should be directing, as opposed to merely supervising, the effort to stop the leak — BP should be pushed aside; bring in the military — is absurd. So far as that side of the operations goes, all that matters is who has more technical expertise: the company or the administration? (If your house was burning down, would you want the White House directing the fire crews, or maybe calling in air strikes, as a sign of how seriously Obama takes your problem?)

There are complaints about the scale of federal resources committed to coastline defences and clean-up, but I don’t see evidence, yet, that the White House has chosen to do less than the feasible maximum. As for Rove’s legalisms, they are preposterous and count for nothing. The country blamed Bush for the appalling mismanagement of the Katrina aftermath, and was right to. I see no signs of a remotely similar shambles in the way the leak has been dealt with. Worse, in the crucial first few days after the hurricane, Bush seemed blithely unconcerned, and those images were juxtaposed against the awful and immediately apparent human consequences. Obama has not made that error. If he is unlucky, or if he slips up in an uncharacteristic way, this may not protect him. Still, I would be surprised if the political harm could be even half as bad as Bush’s self-inflicted injuries.

What Obama said today was correct. He admitted he was wrong to suppose that oil companies were ready to deal with accidents of this type. He was hardly alone in making that assumption. Ensuring that they are ready next time is the challenge for regulatory reform. But fixing those rules won’t help in managing the present emergency. The spill has happened, and there is only so much the government can do. I’d expect the public to understand that.

Is Apple (or some other tech company) about to repeat Apple’s great mistake? This is a question that keeps coming up. See Henry Blodget in January, for example. Just yesterday the idea had another outing in Apple’s Second Date with History in the WSJ.

Apple almost went out of business 14 years ago, and many would have blamed what seemed one of the seminal business blunders in history.

Bill Gates was chatting with students at Stanford at the time and recalled letters he’d written to Steve Jobs begging him to allow cloning of Apple hardware. Had Mr. Jobs complied, Apple’s operating system might have become the de facto universal standard, the one everybody wrote software for—a role that fell to Windows instead… If you think missing out on the riches that Microsoft created for its shareholders was an error, Mr. Jobs erred.

Did he, though? In the spirit of Zhou Enlai, it might be too early to say. The WSJ published its piece yesterday, just as Apple’s market value surpassed Microsoft’s.

Microsoft is a hugely powerful and profitable company in the tech world. Its Windows software runs 9 out of every 10 computers, while more than 500 million people use its Office software to perform their daily tasks, like writing letters or sending e-mail messages. These two franchises account for the bulk of Microsoft’s annual revenue.

But Apple has the momentum. “Steve saw way early on, and way before Microsoft, that hardware and software needed to be married into something that did not require effort from the user,” said Scott G. McNealy, the co-founder and longtime chief executive of Sun Microsystems.

Apple looks expensive at its current price, and Microsoft cheap…but still.

A couple of months ago I speculated that Apple had got the iPad wrong and said it wasn’t for me. It arrived about a week ago and I’ll share my impressions shortly.

Bryan Caplan calls me out for a misleading comment on healthcare in my note about Arthur Brooks’s new book (see previous post). I wrote:

Public spending is lower in the US, but not vastly lower once you remember to add state and local spending to federal outlays; the US healthcare anomaly accounts for a lot of the remaining difference.

Bryan points out:

According to 2007 OECD data, U.S. government [healthcare] spending as a percentage of GDP is actually slightly above the average of (Austria, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Norway, Spain, Sweden, Switzerland, and the UK).  As a percentage of GDP, the U.S. government outspends Canada, too!  And since U.S. GDP per capita is higher, the U.S. government actually spends a lot more dollars per person than the average country in Europe.  Lack of U.S. government spending on health care is not the reason why our government’s share of the economy is smaller than Europe’s.

He’s quite right. In fact it’s a point I’ve mentioned myself (here, for instance), and it’s important to be clear about it because people find it very surprising. The point in my head was not that low US public spending on healthcare explains low overall US public spending, but that the government’s small share of total health spending keeps overall public spending lower than it otherwise would be. The “US healthcare anomaly” is  not low government spending on health, which would be the natural interpretation of what I said; the anomaly is the government’s relatively small share of a very large total. I muddled the point at best, and stand corrected.

Clive Crook’s blog

This blog is no longer updated but it remains open as an archive.

I have been the FT's Washington columnist since April 2007. I moved from Britain to the US in 2005 to write for the Atlantic Monthly and the National Journal after 20 years working at the Economist, most recently as deputy editor. I write mainly about the intersection of politics and economics.

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