by Jerome a Paris
Tue Sep 6th, 2005 at 09:42:14 AM EST
I'd like to provide a review of the commentary provided by the main business papers in English on Katrina and the reaction of the Bush administration. I include articles from the Financial Times, the Economist and the WSJ
- the FT (London), after publishing a shameful defense of Bush's competence last week (critiqued here), has since provided some scathing criticism over the week-end (reviewed here) and has more today (reviewed below);
- the Economist (also from London, but more than half their readers are in the US) has been mysteriously kind to Bush over the past 5 years, and they continue to be so now. Despite calling to vote for Kerry, they have provided excuses for Bush throughout, and keep at it now. There coverage of the economic and financial impact, and even of the political fallout, is nevertheless interesting;
- the Wall Street Journal, or at least its opinion pages, has been consistent in its support of Bush and his policies, and continues on that line. Today's message to help in the aftermath of Katrina: cut taxes! Deregulate oil drilling!
Let's start with the WSJ, from their main editorial: Bush and Katrina
They are realistic enough to acknowledge that Bush fucked up last week:
the aftermath of Katrina poses a threat to his entire second term.
(...)
Mr. Bush is going to have to recognize the obvious initial failure of the Department of Homeland Security in its first big post-9/11 test.
(...)
If FEMA can't now handle the diaspora out of New Orleans to Houston, Baton Rouge and other cities, the political retribution will be fierce.
But their conclusions are not what you might think...
- first, promote Rumsfeld, as the Pentagon was the only branch of government that showed some competence in recent days;
- second, don't spend any money on a city located in a dangerous place, but offer tax-breaks to those that do want to rebuild ("There's a danger here of tax breaks for floating casinos, but the greater risk is spending $20 billion or more solely on the priorities of local politicians.")
- third, to respond to the higher oil prices and the risks for the US economy, relax restrictions on drilling, and lower taxes again. ("Republicans have been far too defensive on tax cuts, and Katrina is an opening to explain their necessity and to push for making them permanent."
In a word - Bush is on the defensive, he should go back on the offensive.Maybe it's heartless and odious to us, but it is not irrational, and it shows what needs to be done on the Democrats' side: keep Bush on the defensive, and he loses.
The Economist, in addition to the spectacular picture above, provides some insightful commentary on the economic and energy impact of the crisis. They flag the loss of oil and gas production, the damage to the refineries and some pipelines, and note the positive reaction of the markets to the opening up of the SPR and to the help provided by Europeans on the gasoline front. They also note that damage to production could be more extensive than thought:
Less visible to the naked eye, but more important for energy supplies, is a latticework of underwater pipelines that brings these hydrocarbons to shore (see map). In 2004, Hurricane Ivan precipitated underwater mudslides that damaged several of these pipelines, disrupting supplies. At the worst point, one-third of the oil and a fifth of the gas produced in the Gulf was knocked out.
But in their article on the political aftermath (The blame game, they peddle a line very close to that of the Bush administration: "it's the locals' fault". After mentioning that some are criticising the administration (but without giving any details), they write this:
Many of the immediate difficulties are understandable. As Michael Chertoff, the secretary of homeland security, pointed out, the disaster has in fact been a double one.
(...)
Even if some failures can be attributed to the Bush administration, the most important reasons for Katrina's deadliness may lie in decisions that predate the current president, from Jean Baptiste le Moyne de Bienville's decision to found the city in its precarious location, in 1718, to the more recent "improvements" in the area's maritime navigability that have damaged south-eastern Louisiana's wetlands.
(...)
It is an uncomfortable fact that millions of Americans have made the decision to live in areas prone to this kind of disaster. Though Congress has authorised an immediate $10.5 billion relief package, Denny Hastert, the speaker of the House of Representatives, has expressed doubt that large dollops of money should be spent on reconstruction in a location as exposed as New Orleans (though he later backpedalled). But there remain important questions to be asked at both the local and national level about the failures that led to Katrina's destruction and chaos
As the Economist is pretty influntial, expect this to be the "official line" for the global business world.
Thankfully, the Financial Times (apart from the one article mentioned above) has been much more critical. In addition to several LTEs criticising harshly that article, it publishes the following column by Michael Lind (a well-known Washington commentator):
Tragic costs of Bush's Iraq obsession
In early 2001, shortly after President George W. Bush was inaugurated and before 9/11, the Federal Emergency Management Agency warned of the three most devastating disasters that could strike the US: a terrorist attack on New York City, a hurricane flooding New Orleans and a San Francisco earthquake. The Bush administration was focused on its priority: Iraq.
(...) [New York is struck. Bush focuses on Iraq]
Day after day, the levees of Lake Pontchartrain in New Orleans and the wetlands that protected the city were eroding. Mr Bush and his allies in the Republican-majority Congress have slashed federal spending for flood control in south-east Louisiana by half and funds for work at Lake Pontchartrain by almost two-thirds. (...) When Katrina struck, tens of thousands of National Guard soldiers were in Iraq, along with much of the equipment needed for disaster relief.
(...)[He also focuses on the "porous" US-Mexico border and the security risk it represents]
If, early in 2001, the Bush administration had focused on al-Qaeda instead of Iraq, it might have responded to FEMA's call to prepare New York for a big terrorist incident. If it had not divided US forces to fight two wars at once, Afghanistan might have been pacified while Saddam remained in power but contained. If Bush had not sacrificed border security to pay for the war in Iraq, the Mexican border might be under control. If Bush had not diverted so many National Guard units to Iraq, disaster relief following Hurricane Katrina would have been swifter and more effective. And if the war in Iraq had not caused the Bush administration to raid money for the New Orleans levees, this big port city might not be a corpse-filled cesspool.
Supporters of the war in Iraq predicted that the dominos would fall in the Middle East. Instead, the dominos are falling across America.
That last line may be prophetic, especially in view of the slow-fuse time bomb nature of the energy crisis (which the Financial Times has also covered in much more detail than the other two publications above).
This admittedly only covers the English language business press, but we all know that it sets the language for all to follow. It seems that the European business class will have a less biased coverage than the American one, with a more varied vision of what has happened. We'll see how it unfolds.
