Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Could BP Derail Economic Recovery?

| Mon Jun. 7, 2010 7:04 AM PDT

Not only is BP's 49-day-old oil spill in the Gulf of Mexico the worst in US history, its after-effects—especially the moratorium on offshore drilling instituted by President Obama in May—could lead to a crippling economic disaster in the Gulf Coast region, if not the country. In a worst-case scenario, if the spill continues to shut down local industry deep into this fall, experts in the Gulf coast region say the Deepwater Horizon calamity could pave the way for a double-dip recession.

Among the sectors facing shutdown stemming from Obama's moratorium are Louisiana's oil and gas, fishing, and tourism industries. Yet, as NPR's John Ydstie reported today, the woes of those industries will ripple throughout Gulf Coast states' economies, hurting everyone from tug boat captains, boat engine repairmen, hotel operators, to bar owners. As Ydstie reported, the oil and gas industry makes up 16 percent of Louisiana's GDP; tourism and fishing comprise 4 percent and 1 percent, respectively. The state's economic development organization estimates that 20,000 jobs could be lost, and the Tulane University Energy Institute went so far as to say that the spill's economic reverberations could cause a double-dip recession. (Analysts with Moody's Economy.com denied that claim, NPR's Ydstie says.) "Guys that sell maintenance and repairs, guys that sell engines—there's lots of banks out there who only loan money to the oil and gas sector," Shane Guidry, chairman and CEO of Harvey Gulf International Marine, told NPR. "They're going to be affected. I mean, it just goes on and on and on. Carmakers—people won't be buying cars, houses...They won't have jobs to pay for it."

All of this leaves Obama in a nasty pickle. He had practically no choice, in the spill's aftermath, but to place a temporary moratorium on offshore drilling. (Though that hasn't completely stopped the practice.) But in doing so, he risks partly undermining his own efforts to stabilize the economy and add jobs to the workforce each month—not eliminate them. And job creation, at least in the private sector, is something the president's having enough trouble with already. Obama has said he would consider ending the moratorium early based on the findings of a commission studying the spill, but if he does, the move will certainly rile up environmental groups who want an end to offshore drilling altogether. He's stuck between a rock and a hard place, with few good options anywhere he looks.

Why Won't the GOP Criticize BP?

| Fri Jun. 4, 2010 10:23 AM PDT

Elected Democrats haven't been shy about slamming BP for the horrific oil spill in the Gulf of Mexico. Last month, Senate majority leader Harry Reid emotionally declared on the Senate floor that the oil company's "greed led to 11 horrific and unnecessary deaths. It has harmed an enormous tourism industry, threatened business at countless fisheries and disrupted life for many along the Gulf Coast. As the pollution grows worse, those consequences will only compound." This week, House Speaker Nancy Pelosi blasted the petro-giant: "We have been told that the technology is such that we could go all the way down, miles into the sea...and that this was safe. Nobody said, 'But if it doesn't work, we don't have the faintest idea what to do.'" President Barack Obama has decried the "scandalously close relationship" between oil firms (like BP) and federal regulators, noted that he is "furious" that BP "didn't think through the consequences of their action," and raised the prospect of a criminal investigation targeting BP.

As for the top Republicans in Washington, they've hardly said boo about BP. When it comes to the Gulf tragedy, there's been a partisan outrage gap.

Let's look at House minority leader John Boehner. He's an active tweeter, but how many times has he mentioned BP on his Twitter feed? None. Unless you count a May 12 tweet about a USA Today editorial that urged politicians not to use the spill as an excuse to stop drilling. His congressional website blog has had no postings on BP or the spill. Boehner has called for BP to bear the entire financial burden of clean-up. But he has refrained from criticizing the company. Yet he has not hesitated to blame the Obama administration for "not fulfilling their responsibility to the people of the Gulf Coast area or the people of the United States."

Rep. Eric Cantor (R-Va.), the minority whip, has followed his leader's example. He has not tweeted a negative word about BP. And he's blamed Obama for imposing a quasi-moratorium on drilling and for blaming others: "Pointing fingers, placing blame, and reversing previously made policy decisions is not the kind of leadership people want and deserve in times of crisis." Rep. Jim Sensenbrenner, the senior GOPer on the House select committee on energy independence (which is chaired by Democrat Rep. Ed Markey, a fierce critic of BP), has not fired any noticeable shots at BP.

GOP Senate leader Mitch McConnell has also refrained from slapping BP. Last month, he appeared on Meet the Press and emphasized the "administration's involvement in this" more than BP's role. He, too, chastised Obama for spending "a whole lot of time pointing the finger at" BP. McConnell argued vigorously against lifting the cap on BP's liability. Sen. John McCain (R-Ariz.), an active Twitterer, has not tweeted about the spill. His Senate office has issued no press releases regarding the spill.

In May, Sen. James Inhofe (R-Okla.), the senior Republican on the environment and public works committee, attended two hearings that the committee held on the spill. In each of his opening statements, Inhofe, long a supporter of the oil industry and a global warming denialist, did not say anything about BP. He griped that the Exxon Valdez spill of 1989 "was politicized, and continues to be politicized, by certain activist groups bent on blocking access to America's domestic resources." Inhofe did note that that if there was "gross negligence or other violations of federal law on the part of oil companies or their subcontractors, then we will hold them accountable." He just didn't mention BP or the others by name.

For leading Republicans, it seems BP practically stands for Beyond Pronouncing.

Jobs Report: Good, Bad, and Ugly

| Fri Jun. 4, 2010 7:36 AM PDT

The Labor Department put out its latest employment report today, for the month of May, and the news is decidedly mixed.

Good: The unemployment rate dropped to 9.7 percent, from 9.9 percent. (Caveat on this after the big graph below.) The US economy created 431,000 jobs last month, the most in two years and since the start of the recession in December 2007, continuing a growing trend of job creation under the Obama administration and its stimulus package. (The graph in this New York Times article illustrates this trend.) The number of part-time workers decreased last month, which lowered what many consider the real unemployment—not just the actively searching unemployed but those not searching (i.e., “discouraged workers"), the underemployed, and a few other categories—to 16.6 percent, from 17.1 percent.

Bad: 411,000 of those jobs were temporary positions for the 2010 US Census, jobs that will disappear once the summer’s over. In May, net job gain—the difference between jobs added and lost—was 390,000 for government jobs, but a meager 41,000 in the private sector. That means companies are stretching the resources and manpower they already have to meet demand instead of adding new workers to their payrolls.

Ugly: The ranks of the unemployed (but still searching) for six months or more yet again set a record, at 6.763 million Americans. That's the highest since 1948, when the statistic was first recorded, and it accounts for almost 4.5 percent of the entire US workforce. Here's a nifty graph showing the spike in the long-term unemployed, courtesy of the invaluable economics blog, Calculated Risk:

* As Bill McBride at Calculated Risk points out, the drop in unemployment may not be reason to cheer: "The reason the unemployment rate declined was because people left the workforce—and that is not good news." He cites the Labor Force Participation Rate, the ratio of employed workers to the working-age population, which edged downward last month—not a good sign. "As the employment picture improves," he writes, "people will return to the labor force, and that will put upward pressure on the unemployment rate."

So what does today's report mean for Obama? On the one hand, the administration can update its much-publicized, color-coded job-creation chart to show more growth in May, even though the majority of those jobs are temporary and will soon go away. Obama can also point to the 0.2 percent drop in the headline unemployment rate. But if you scratch just beneath the surface, the news isn't all that great for the White House, and I wouldn't expect to see the administration openly touting today's report. "As always, it is important not to read too much into any one monthly report, positive or negative," wrote White House economic guru Christina Romer today.

More updates to come as we dig into today's report. Questions? Leave them in the comments, and I'll try to answer (or call up someone who can and report that here).

Is BP Hanging Florida Out to Dry?

| Fri Jun. 4, 2010 3:00 AM PDT

Florida is the new front in the ever-widening disaster stemming from BP's oil spill in the Gulf of Mexico, a now 44-day-old calamity sending tar balls and slicks onto beaches and into marshes. Yesterday, oil was identified in regions off Florida’s coast still open for fishing, and oil from BP's Deepwater Horizon rig is expected to wash onto Florida's white-sand shores as early as Friday. Are BP and government agencies prepared?

Local officials contacted by Mother Jones don't think so. The Pensacola area, in the westernmost tip of the Florida Panhandle, is among the first locales in the state expected to be hit by oil. Escambia County, which includes Pensacola, boasts 36 miles of beaches, according to county commissioner Grover Robertson. County officials said on Thursday that some oil was as close as seven miles off the county's shoreline, and that the majority of the oil was about 35 miles away.

But Robertson says he's "concerned" that BP and the multiple government agencies that make up the Unified Command organization (the Coast Guard, the Army Corps of Engineers, the Environmental Protection Agency, and the National Oceanic and Atmospheric Administration) aren't ready for the oil's onslaught. Robertson said Escambia County had secured the help of about 300 volunteers, via the Unified Command, some of whom will divide into teams of 10 to act as spotters for when the oil hits. After that happens, those spotters will dig up the sand absorbing the oil washed ashore. The county also plans to use tractors and sifters to extract oil from sand. Still, Robertson says, "We are very concerned that [Unified Command] will not get this done in a timely manner."

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