Finally, progress on the BP Oil Spill

Today, in almost a stunning turn of events, the Gulf oil spill saga has generated some good news. Foremost, BP has agreed to set up a $20 billion escrow account to pay off potential claims arising from the spill. That agreement brought immediate and much-needed relief for Gulf Coast residents and businesses. Although $20 billion is not that much for BP - its annual dividends are just half of that - Obama has obtained good terms for the escrow account: administration by an independent third party, collateral of BP's American assets and the remaining understanding that no minimum exists for BP's liability. Furthermore, BP has suspended dividends to its shareholders for the year, and has also set aside a $100 million fund for displaced and waylaid oil workers impacted by the President's oil drilling moratorium. That latter claim was likely difficult to bargain and win, as BP had little influence in that effect.

I think that today's turn of events constitutes a big success for Obama. After last night's Oval Office speech, which I thought was only mediocre and not forceful enough, today's negotiations delivered substantial results. The American people are disappointed with Obama and the federal government's handling of the BP crisis not because regulators overlooked the problems or could not stop the spill, but because the government appeared incapable of doing anything about it or extracting some tangible promises from BP. Ordinary people in general do not, and cannot, concern themselves with far away dealings of an overseas oil company or the technical details of an oil spill. Instead, they look at their bottom line and how their lives are impacted. Obama appeared aloof and incapable of helping them with their lost livelihoods. Today may be the beginning of a new perception.