Current affairs 2010-05-10

Where’s the $100 million a day fine?
BP makes about $250 billion in sales per year, of which $25-$35 billion is profit before tax. Currently it spends $10 million a day trying to contain the oil spill in the Gulf of Mexico. For some reason it’s not achieving very quick results. Obama said that they would “pay the price” but so far the price is at least an order of magnitude too low! If BP were fined $100 million a day, minus whatever they actually spend on containment of course, then you might see some action. That amount would wipe out the year’s profits if they did nothing at all to fix the spill for about a year, so it’s a very conservative number. Fines should be high enough to make BP consider options that seal the well permanently, forfeiting its value.

Merkel needs to go!
The German leader ought to be defeated in the next elections for blowing the handling of the Greek debt crisis. She’s been incredibly naive to treat the matter as a solvency issue for one country. Greece, for all it’s failures, just happened to be the weakest of the small indebted Euro economies. Financial markets speculated against it, and Europe failed to see the problem as what it was and stop it in time. Sarkozy and even Obama urged Merkel to bring solidarity in the Euro but she thought voters wouldn’t like it. Then the Greek crisis became a Euro credibility crisis, with markets devaluing the Euro and influential economists such as Krugman and Mankiw writing that the Euro may be “over”. To be sure, German voters won’t be happy, but they’ll be unhappy about Merkel’s colossal failure of leadership over the Euro zone. Update: EU leaders got their act together on Monday.

And did Brown really need to go?
Every few years the British media go off a politician. The previous one was Ken Livingstone, the somewhat socialist but very pragmatic and effective mayor of London. After praising him for several years the media suddenly decided he was a joke. They didn’t have any specific issue with his policies, they just declared he was finished. Same with Gordon Brown this last election. Everyone agreed that he handled the financial crisis pretty well and that his main shortcoming was an almost complete lack of charisma (probably a relief after Blair who had too much). Yet the media decided he had to go. No reason given, just go… Is that a democratic press?

Yay for incompetent bombers
By all indications the guy who planted a car bomb in New York was a random person who became unhappy with the way things are, started adopting more extreme views, and eventually decided that blowing people up would improve matters. He was kind of useless at making bombs, and you wonder if he really intended, with 100% of his mind, to kill people. Americans should be thankful that events turned out as they are. They should listen to his story, give him a prison term, and be done with it. The point for thought is what could society do differently so that these “outliers” don’t show up every few years. The wrong message is to drum up fear and go on a hunt for villains in the mountains, as even progressive media appear to be doing.