Contrasting U.S. and U.K. Reactions to the Gulf Spill

One thing we’ve learned about the Gulf oil spill is how opinions tend to differ depending on which side of the Atlantic you reside on. Compare these screenshots of the respective homepages of the New York Times and London’s Sunday Times.

NYT’s homepage highlights BP CEO Tony Heyward’s yachting trip (taken 6/20/2010 3:50pm EST, crude MS paint additions in red are mine):

London’s Sunday Times fires back with “Obama’s Golf Days Fuel BP Row” (requires login) on their homepage (SS taken on 6/20/2010 around 4:00pm. Once again, the crude MS paint additions are mine.)

Both are bone-headed moves. Everyone should be focused on this disaster, especially considering what we’ve learned over the past few weeks. 100,000 barrels per day and possible well casing failures dictate that.

Watching this situation play out will be both fascinating and nauseating. One of the biggest questions going forward may prove to be:  Is BP too dangerous to exist? I’m starting to think so. Their safety record is horrific.

BP continued to cut corners even after recent disasters, as the NYT points out here. In contrast, after the Valdez incident, Exxon transformed their culture into one where OCD-level safety concern is encouraged. I’m starting to think BP shouldn’t even be entrusted with the relief wells and a head-role in the cleanup efforts.

Disclosure: I am short BP and own long-dated, out of the money puts).

Employment Surveys Diverge

Guest post by Stefan Karlsson, economist of the Austrian School.

Some people think that employment statistics reflect direct government knowledge of all labor related transactions, and of the absence of labor related transactions, in a similar way that the government directly know how much revenue and expenditure it has had. But at least not yet, “Big Brother” isn’t that big.

So, employment statistics is instead based on surveys (polls). In the case of employment statistics this means in most countries surveys based on household respondents.

Unlike in most other countries, the United States government tries to compile two different employment surveys. One is based on the standard international method of household surveys, and the other is based on a survey of employers (the payroll survey).

Usually the message from the household survey is pretty much the same, though the exact details almost always differ somewhat. The latest employment report however had two different messages. The household survey indicated a very weak economy, as despite massive Census-related hirings, total employment actually fell.

By contrast, the payroll survey had a bullish undertone. While private (non-Census) payrolls increased only marginally, total payrolls increased significantly and both the average work week and average hourly earnings increased, suggesting a relatively solid recovery.

Since the survey results differ, and since there is only one reality, it follows that at least (maybe both) one of them is wrong. I don’t know which one of them is more accurate, but based on other reports it seems likely that the truth lies somewhere in between, which would imply a continuing U.S. recovery, but only at a moderate pace.

Read more of Stefan’s excellent economic analysis at his blog or view some rather prescient articles he wroter for Mises.org.

Page 1 of 11