Wall Street Reform

The second of Obama's 3 pillars of domestic reform (healthcare, finance, and energy) has made some major headway in the last few days. The House passed the Wall Street reform bill in the wee hours of this morning, and it is expected to clear the Senate and make it to Obama's desk before too long.

This Wall Street reform was the most popular of the pillars, for fairly obvious reasons...the American people are still upset with Wall Street for the housing bubble burst that spurred the recession that we are finally climbing out of. While it is more popular than healthcare and energy reform (which will actually be easier to pass in the wake of the oil spill), I think it is going to bring the Obama administration equal trouble.

What this reform does is basically place a lot more oversight on the finance industry by means of an expanded bureaucracy and tougher regulations. Frankly, the bill is very tough to explain, and that is a major issue facing the Democrats right now. Just as with the healthcare bill, this one is huge and complicated. Just as Nancy Pelosi admitted that how Obamacare was going to work was somewhat of a mystery, Chris Dodd has said the same thing with this finance reform. The thing is, it's hard to predict with absolute certainty anything that hasn't been done before. Only time will decide if the Democratic Party's diving into uncharted territory will be considered brave or foolhardy. In the short term, this will most likely be disastrous for the party.

People don't fully understand this legislation. Or the healthcare legislation. People fear what they don't understand. People don't understand it because Congress doesn't seem to understand it either. It's tough to explain to people what you yourself don't comprehend. Also, a lot of Congressmen don't bother to read the entire bill before voting on it.

America's biggest concern right now is jobs. Unemployment is still officially at 10% (probably higher), while the number of unemployed people getting zero unemployment benefits is creeping upwards. Job reports show that since Obama took office, we have been losing fewer and fewer jobs, before adding jobs starting in January this year, as evidenced by this chart:

**I realize the partiality of this chart, being from Nancy Pelosi's blog. You can check the actual numbers here. It is also important to note that this includes public sector jobs, meaning 400,000 of the jobs added were part-time census workers.

Anyway (I'm starting to digress), what Americans want to see right now are immediate, tangible results to real problems. They want to see the beaches along the Gulf Coast clean, and they want to have jobs. This finance reform isn't going to create many jobs or clean many beaches. What it will do is minimize the risk for another economic collapse by means of more oversight from a bloated bureaucracy and more restricted access to credit. When people are looking at the immediate, tangible results of the bill, they see the government barging in and saying they can't borrow money like they used to. They aren't going to appreciate the safeguards against economic collapse, because that isn't something that you can directly attribute to this bill. Even if it works to perfection, all that means is that our economic system will function normally. It isn't going to wow anyone. There will be winners and there will be losers, and the losers always cry louder.

Critics don't believe that the government is being tough enough on Wall Street. Banks are still going to be subsidized and "too big to fail," and many banks won't see a difference in the way they do business. But at the same time you can't really punish an industry that our economy relies so heavily on to function by incapacitating them.

The Obama Administration (and the Democratic Party) is bringing sweeping change to this country. It's just not the change that people want to see right now. The Democrats will suffer badly at the polls this November. The country has a lot of problems, and the party in power always pays the price for that. I do like that the Democrats seem so committed to the change they promised. I think that the three pillars will ultimately help the country, and the Democratic Party seems willing to take a huge bullet by seeing them through to the end. I see it as an honest desire to better the country, not the usual political point puppet show. Not many Congresses have the guts to see such legislation through, because the need to face the short-term issues weighs far more heavily on elections.

Expansion

I just read that Nebraska is expected to join the Big 10 as early as Friday of this week, which would trigger a Longhorn-led emigration of Texas, Oklahoma, Oklahoma State, Texas Tech, Texas A&M, and Colorado to the Pac-10, which is looking to score a huge television contract in 2012 (grabbing Texas and Oklahoma = jackpot). This will effectively dissolve the Big 12. Nebraska would likely take Missouri to the Big 10 with them to keep a rival.

Baylor may get the Pac-10 bid over Colorado, pending political finagling, in which case Colorado would almost certainly join the Mountain West, who held out on inviting Boise State in hopes of picking up Big 12 leftovers.

Where does that leave Kansas, Kansas State, and (most importantly to me) Iowa State? Kansas and K-State have vowed to stick together, and some conference will no doubt pick them up for Kansas' basketball program, if nothing else. Perhaps the Mountain West will pick them up for a 12-team conference, or maybe grab Boise State and another school. Either route should get them the BCS Conference status they are trying to get.

All of this just leaves one school from the Big 12: Iowa State is most likely going to get screwed into getting picked up by a smaller conference.

Best of luck, Cyclone Nation!

By the Way...

Have you guys seen Guatemala's giant sinkhole?

Apparently it's not really a sinkhole. Guatemala city's just on top of a valley filled with volcanic ash. Uh-oh...

A Long Commentary on Oil Spills

I don't know if any of you have heard anything about the oil spill down in the Gulf of Mexico, but I guess it's kind of a big deal. I'm going to think out loud here in this post in an attempt to make some sense of what is happening.

Back in April, the Deepwater Horizon rig had a blowout that killed 11 workers before sinking to the ocean floor. The rig was owned and operated by a company called Transocean, and leased by British Petroleum. Apparently all safety mechanisms that would have stopped the flow of oil out of the well in the event of such an explosion failed shortly before or during the accident. Now oil is spewing out of the ocean floor at a rate of several thousand barrels a day, ultimately culminating in an epic environmental disaster, with oil washing ashore in Louisiana, Mississippi, Alabama, and Florida, affecting some of the world's most delicate ecosystems.

BP leads all oil companies in terms of investment dollars for such deep water drilling. More shallow drilling is much more common, but this rig was tapping a well some 5,000 feet below sea level. Apparently all the kinks haven't been worked out on how to operate machinery in such treacherous conditions. Several attempts to stop the leak have failed, with no one really seeming to have a clue as to what to do. BP first tried to cover the leak with two separate domes, in order to funnel it into a pipe, only to have the funnel plugged by a freak crystallization of methane gas. In another attempt, they tried to attach a tube to the broken pipe, only to have one of their robots collide with it and break it, forcing them to start all over again. Recently, after 7 million barrels had already leaked, a "top-kill" was attempted, in which cement and mud is forced down the well in an attempt to clog it. Four days, three tries, and 30,000 barrels of mud later, they gave up, saying the oil pressure was too great.

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As Colbert points out, no one really has a clue. And that's not just BP--that's everyone. BP is now drilling a relief well, which will stop the flow, but that will not be completed until August at the earliest. In the meantime, BP has announced that it is successfully collecting up to about 15,000 barrels a day on tankers--very nearly the same rate it is being leaked.

While it will likely take years before everything is sorted out, the blame game has begun. BP is accepting full financial responsibility, already spending about $1.25 billion on cleanup, with billions more in governmental fines to come. They also say they will accept any legitimate claim against them, which are sure to be extremely costly. They assure us that no tax money will be necessary, though many groups fear that the costs will bankrupt the company, leaving costs on taxpayers.

So who is to blame?

Most people are putting the blame on BP, as evidenced by a Gallup poll showing 76% disapproval for the company. It is easy to blame them, as the company has a track record of preventable accidents (a Texas refinery explosion and an Alaskan pipe leak), and, as leaseholder of the well, they are ultimately in charge of what happens there.

I, personally, am reluctant to place all the blame on the London-based oil giant. Let's try to put this in a separate context. Suppose your name is BP, and you are renting an apartment, called the Deepwater Horizon Rig. The landlord's name is Transocean Ltd., and Transocean will do basically whatever you say, because you are one of the richest people on earth, and Transocean stands to make some good money off of your patronage. You decide that you want a new furnace in your apartment, but you want to save a few bucks, so you settle on a cheap, kinda crappy furnace. You stay within the law, of course, and get the project approved by a governmental inspection group. Let's call them the US Minerals Management Service. Now, the MMS is kind of a corrupt joke, and okays the project without even checking it out first. Furnace installation is kind of tricky business, so your landlord hires an expert to do it for you. His name is Halliburton Corporation. Halliburton installs this cheap furnace just as you requested, but for some reason, the furnace just blew right up and pissed off all your neighbors. Why did the furnace blow up? Was it installed wrong? Was the furnace itself bad? Was it a freak accident of everything going wrong? Unfortunately, that will take years of investigation to figure out, and in the mean time, you agree to pay for absolutely everything, including all your neighbors' numerous lawsuits.

Should BP be to blame for ultimately being in charge and possibly skimping? In any case, they share some responsibility. Should Transocean be to blame? They are responsible for the operation of and maintenance of equipment on the well. If there was an equipment malfunction, that will be on them. Did Halliburton do something wrong in the construction process? They claim they were simply following BP's specs. Should the Minerals Management Service be to blame? They are notoriously corrupt and poor at their job, so much to the extent that President Obama has already announced plans to dissolve the whole thing. Should the Obama Administration answer? Many say they have responded poorly. Should the Bush Administration take some blame? Many left-wing politicians have been criticizing their lack of discretion in appointing the MMS. Should Congress be to blame? Many are pointing to lax drilling laws and breaks for oil companies as a major problem.

I think it's a mixture of everything. Like a perfect storm where everything went perfectly wrong. BP is certainly partially to blame, but I think we are misguided in our disgust towards them. What more can we ask than what they are doing? They promise to cover every cost; they are living up to their responsibility to keep us informed with regular announcements and video feeds of underwater operations. What incentive does that leave for them to not do everything they can to fix this? Not only are they losing a ton of money with every barrel leaked (both through cleanup costs and lost potential sales), they are wilfully accepting terrible PR with this whole thing. I honestly can't figure out what more people want from them. Accidents happen.

I think one of the worst responses is the current BP boycott. BP's revenue is generated primarily through drilling and refining oil for sale to other companies. Any loss of sales at the pump is hardly going to affect their bottom line. Here in Iowa, we have a lot of Casey's gas stations. Do you think that Casey's drills and refines their own oil? No. They buy it from companies like BP, Shell, and Exxon Mobil. BP sells a lot more oil through other companies like that than through stations under their own banner. All boycotting BP stations will hurt is the local owners who bought into the franchise. That's not the right response. To hurt BP's revenue, you would basically have to stop buying all gasoline, plastic...anything that comes from oil. But how would bankrupting BP help the situation? If they go under, who's left to foot the cleanup bill that they are wilfully accepting now? Taxpayers. And that will only bring about a whole new wave of complaining. At least let them live long enough to clean up their mess.

I don't mean to sound insensitive. This is a major environmental crisis. Not buying gasoline certainly won't hurt the environment. But it also won't help with the oil spill.

Fiesta

"It's impossible to be unhappy in a poncho. I'm going to get a sombrero too. Imagine that...a poncho-sombrero combo. I'm gonna be off my tits on happiness."

-The Mighty Boosh

Seriously...watch it. Because I'm never going to stop talking about it on here.

Reboot

I've been gone for far too long, mostly because my life has been exceptionally uninteresting in the last few weeks. It's been filled with working, mowing, cleaning, building a garage, falling asleep way too early, and watching young children. By that I mean babysitting my half siblings...not being a pedophile.

Notable things: Tulip Time, 20th birthday, wisdom teeth pulled, moustache shaved and hair cut off.

I've been (re)watching the Mighty Boosh Season 1. Best show ever.

I've been listening to Portugal. The Man's newest album (out since March), American Ghetto. Good stuff.

I read The Sirens of Titan by Kurt Vonnegut yesterday. It says, among other things, "a purpose of human life, no matter who is controlling it, is to love whoever is around to be loved."

Uff da!

(Untitled)

Finals week. Being great. Back soon.









I hope everyone out there is thoroughly enjoying life.



-Bryan