Is the GOP purposely sabotaging economic recovery for political gain?

What do you think?

A Suffolk University poll was released today that polled registered voters in Florida and asked a key question:

Do you think the Republicans are intentionally stalling efforts to jumpstart the economy to insure that Barack Obama is not reelected?

Now, I have been telling many of my friends and relatives (much to their collective chagrin, I’m sure) that the political and economic situation in the country – continued high unemployment, political stalemate in Congress, a disillusioned citizenry – means that, politically, the Republicans would have the most to gain electorally if the economy remains stagnant.  As Bill Clinton’s pollster James Carville famously quipped in 1992, “it’s the economy, stupid.”  Conventional political wisdom (and a fair amount of political science research) points to the notion that, electorally, the president generally bears the most responsibility for the state of the economy in voters’ eyes, rightfully deserved or not. 

The corollary to this situation we face today is that, in a cynical political calculus, the Republicans can increase their chances of taking the White House in 2012 if they actively work against economic recovery.  It sounds sinister to even suggest such a thing, doesn’t it?  Well, what do you think the popular view of the situation is among Florida voters?

Do you think the Republicans are intentionally stalling efforts to jumpstart the economy to insure that Barack Obama is not reelected?

Yes 49

No 39

Undecided 12

49%…that’s something, ain’t it?  Meanwhile, the partisan split on the polling is quite fascinating as well:

As expected, most registered Democrats (70 percent) agreed that Republicans are intentionally hindering the economy and hurting Obama, but independents (52 percent) and even some Republicans (24 percent) also agreed. (emphasis added)

Independents are often regarded as the lily-white souls who just can’t bear partisan conflict in politics, so the fact that 52% are siding with Obama on this question might reflect a majority view among that crucial demographic that the obstruction is coming from only one party.  The 24% of Republicans who agree with the question could reflect a small group of Republican voters who are willing to acknowledge such scorched-earth tactics from the GOP, and they may even approve of such tactics in order to defeat President Obama.  There is at least one big caveat to drawing too much out of these poll numbers; it’s not a national poll, it’s only Florida voters, so the applicability to other voter groups is negligible.

All that being said, however, this poll represents something new for this election cycle: acknowledgment that the political calculus for Republicans favors maintaining and/or increasing the economic misery for the American populace.  Left-leaning writers and bloggers have been discussing this issue for months, but the fact that such a notion has penetrated into the rarefied air of a respected polling organization’s survey questions is something entirely new. 

As Steve Benen notes, this single poll cries out for verification and/or contradiction, but that can only be done by further polling – polling that will have its results reported by the media, which will be forced to actually acknowledge the nature of the “sabotage” question asked, thus potentially raising the question in the minds of the viewing American public.  Such a situation does not bode well for the GOP, as their strategy of getting away with massive legislative obstruction (as seen in Sen. Mitch McConnell’s blocking of a vote on the President’s infrastructure bill in the Senate today) relies upon the median voter not grasping the nuances of parliamentary procedure in Congress to directly link such obstruction to the GOP’s actions.  Hiding in plain sight, as it were, with plausible deniability built-in.

For a long while, such actions appear to have worked, in a Pyrrhic sense, what with President Obama’s approval rating steadily dropping since mid-June. And yet, Congress has not been immune from blowback. Congress’ collective approval rating is now averaging 12.7%, according to RealClearPolitics.  Congressional approval ratings are historically virtually always lower than those of the President, but with a CBS News/NY Times poll recently showing Congress to only have a 9% approval rating (the lowest ever recorded since the poll was first launched) Americans are increasingly angry at their elected representatives these days.  The flipside of President Obama’s dropping poll numbers from the summer, as seen in the link above, are that his positives are now increasing again as he has honed his message on jobs and the economy.  All the GOP has had to offer are a bunch of blockades of legislative procedure and empty “jobs proposals” full of the same sorts of ideas they’ve been promulgating since Reagan’s presidency. 

Our politics is beyond broken these days, it is now actively heartless too.  Our representatives seem not to have much of an inkling of what “representing” Americans means, given the widespread and massive suffering amongst and all around us.  Witness Rep. Buck McKeon (R-CA), Chair of the Armed Services Committee, writing to the New York Times to argue contra Paul Krugman that he is anything but a closet defense Keynesian:

Congress is charged by the Constitution with providing for the common defense by raising and supporting our armed forces. We don’t spend tax dollars to protect American jobs, but to protect American lives. As such, it is accurate to point out that cuts in defense spending will cripple a critical industry, result in huge job losses and erode our ability to provide for the common defense. (h/t Kevin Drum)

I don’t know, is it just me, or does it not seem that “protecting American jobs” seems like exactly what we ought to be spending our precious and vanishing tax dollars on in the interest of “common defense”?  Have you seen our defense budget lately?  Methinks the Pentagon is doing just fine, thank you.  Why not use some Congressional intervention on behalf of the American people, rather than defense contractors, who have had bonanzas yearly since the “War on Terror” began?

Would that we had representatives working on our behalf…perhaps Congress ought to be the next venue for some Occupy-flavored civil disobedience?

Don’t think it’s not bipartisan, it is

A Washington Post headline today that speaks volumes: Obama still flush with cash from financial sector despite frosty relations:

…Obama has brought in more money from employees of banks, hedge funds and other financial service companies than all the other GOP candidates combined, according to a Washington Post analysis of contribution data.

…Obama’s ties to Wall Street donors could complicate Democratic plans to paint Republicans as puppets of the financial industry, particularly in light of the Occupy Wall Street protests that have gone global over the past week. In response to the protests, the Obama campaign and other Democrats have stepped up their attacks on Romney and other Republicans for their opposition to Wall Street regulations.

One top banking executive who raises money for Obama and who requested anonymity to discuss fundraising efforts said reports of disaffection with the president “are exaggerated and overblown.” He said a strong contingent of financiers in New York, Chicago and California remain supportive of Obama and his economic policies, even as some have turned on him.

Now, all is not as it seems, as the Democratic National Committee has the ability to raise $30,800 per donor per year, whereas direct contributions to candidates’ campaign funds are capped at $5,000 per donor for the entire campaign cycle.  Because Obama is the Democratic nominee for president in 2012, he is able to coordinate fundraising with the DNC, whereas because the Republican primary is still underway, the RNC is not yet coordinating with a specific candidate.

That all being said, we’re still talking about vast sums of money here, with the election over a year away.  Is there not something troubling about that?

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So yesterday I gave a bit of grief to Mitt Romney for being cold and calculating (or at least giving every impression that he is when it comes to the plight of homeowners) and I feel the need to point out that President Obama himself is certainly no stranger to financial industry largesse.  Wall Street gave more money to President Obama in 2008 than they did John McCain, and finance has remained a key part of the President’s fundraising arsenal since. 

Obama’s done an intricate dance with Big Finance since his inauguration, calling them “fat-cat bankers” and warning that his administration was “the only thing between you and the pitchforks” while appointing a very Wall Street-friendly Treasury Secretary in Tim Geithner, as well as a former VP of JP Morgan Chase as his latest Chief of Staff, Bill Daley, among other key players. 

It is true, on the other hand, that President Obama helped shepherd the Dodd-Frank financial regulations through to passage in Congress.  But the implementation process of such a complex bill has been met with delays in regulation writing and an apparent lack of gumption on the Administration’s part to support nominees to key oversight positions.  Why is Elizabeth Warren running for the US Senate in Massachusetts and not running the Consumer Financial Protection Bureau, which she effectively created whole cloth?  It’s due in major part to the Obama Administration’s not weighing in with more support for Warren against predictable Senate Republican intransigence in blocking her nomination.  The fight over securing Warren’s nomination would have been a titanic one, as the financial industry was as opposed to the creation of the CFPB as anything else in Dodd-Frank, and 44 Senate Republicans promised to block any nominee to the CFPB’s Directorship, not just Warren.  And yet, President Obama, despite what could have been a prime opportunity to highlight Republican tactics that negatively affect consumers, didn’t seem to have the fight in him on this one, for reasons still unknown.

A further area of concern has been the ongoing “50-state” Attorneys General housing settlement negotiations, which have sought to release the big banks from any liabilities for their criminal ways during the housing boom of the 00s in exchange for a paltry $20 billion or so in fines.  See the video below with Delaware Attorney General Beau Biden (son of Joe) giving a great overview of the major issues:

Visit msnbc.com for breaking news, world news, and news about the economy

Despite the appearance of massive fraud by every major bank, the Obama Administration has been pushing rather hard to have all 50 AGs sign on to the agreement, which is ostensibly narrowly related to the robosigning fraud unearthed last year, however the negotiated terms of the agreement attempt to release the banks from all sorts of liabilities unrelated to robosigning.  That a number of upright state AGs have stood up against such attempts to sweep illegal activities under the rug may not be terribly surprising, but that the Obama Administration would be aligning itself with the criminals in this case so blatantly certainly gives one pause.  Does Obama think promoting a less bank-friendly investigation might hurt his fundraising opportunities with Wall Street?  Such a consideration can’t be far from the top of his mind…When Obama’s reelection is going to be fought against a GOP that still considers wholesale deregulation to be a viable job creation strategy despite all evidence to the contrary, he has to give Big Finance some carrots to keep their contributions flowing to his coffers, no?

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And that’s the crux of the problem.  That’s what Occupy Wall Street is about – the failure of institutions to offer any alternative to the rampant corruption that is right before all of our eyes.  There is no alternative to the current system, and no viable way to use “democracy” to achieve the real change that people appear to seek, as the votes are rigged in favor of the winners.  Justice itself is being undercut systematically so that those who have won historically can keep right on winning, consequences be damned.  It’s no way to run a country.

For his part, Obama has presided over a time that has been marked by major investigations and public exposures of unbelievably bad behavior and rampant greed among the elites who run the economy; a time where an average citizen can find any number of things to be unspeakably outraged about.  Obama’s time in office has coincided with a loss of trust in institutions that would have happened with or without his being President.  And yet, it behooves me to ask how much he himself has contributed to the loss of trust Americans feel in their government?  Sure he inherited a bad situation from his predecessor, but where has he exacerbated the structural problems in our society with his choices?  I’ve been attempting to map out some of the terrain where I feel there has been a governmental failure on this blog for some time now; not because I am opposed to our President, far from it.  It is because so much of the government’s response to issues of structural criminality have been to mask those issues, to sweep them under the rug, to choose not to act in the face of injustice in the hopes that the average low-information voter will not pick up on that act of collusion.  Obama or no, I won’t stand for that.

I believe in a better, stronger, more just and more free America – I have to believe in it; I’m a member of the generation that will be picking up the pieces when those in power today have long departed from the scorched earth they are rapidly creating in their wake.  I believe that we can have a government that works on behalf of the people, and I intend to do my part to make that happen.  But when the government is itself an impediment to the realization of those goals, when it uses its might and state secrets privileges and its power to regulate (or not) in the service of those who would bend government to their own nefarious ends, I feel the need to call attention to those acts as a lowly scribe/blogger. 

I have a proposal in the works that will present a more positive vision for the future, that will present some concrete actions individuals can take to change their own lives as well as their communities for the better, and I sincerely hope to present it on this blog soon.  This blog, in the attempt at chronicling so much wrongdoing, has taken on a terribly negative tone, and I hope to change that in the very near future.

Thanks for reading, as always, and stay tuned.

P.S. – Here’s a great read from Charles P. Pierce of Esquire, taking on Romney’s callous discussion of foreclosures and the curveball that the Supreme Judicial Court of Massachusetts threw his way today.  Great fun, or not.

The foreclosure fraud mess – a day of reckoning at last?

The foreclosure fraud case is one of the BIG stories I’ve been trying my best to follow lately.  We learned today that all 50 state Attorneys General have opened an investigation into mortgage industry practices:

The state attorneys general are looking at allegations some banks did not properly review files or submitted false statements to evict delinquent borrowers from their homes during a foreclosure crisis that is one of the most visible wounds of the 2007-2009 recession.

"We are in the fourth year of a housing and economic crisis that was brought on by lax practices of the mortgage lending industry," Minnesota Attorney General Lori Swanson said in a statement.

"The latest allegations of corner-cutting and slipshod paperwork are troubling, but perhaps not surprising."

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The states are investigating the use of "robo-signers" -- people who sign hundreds of affidavits a day -- by banks and companies that collect monthly mortgage payments. It is alleged they did not properly review the documents they were signing.

"What we have seen are not mere technicalities, as some suggest," Ohio Attorney General Richard Cordray said.

So if there was systematic fraud perpetrated throughout the mortgage lending industry, one would hope we’d finally see some of these scoundrels locked up for awhile. 

Incidentally, one of the last times that all 50 state Attorneys General agreed to pursue a coordinated investigation, guess what the alleged crime was?  Predatory lending.  And guess who took the lead in making the public case for the investigation – then-Governor of New York Eliot Spitzer.  Spitzer came out swinging against the mortgage lending industry and the banks at large in a February 14, 2008 Washington Post piece that is worth excerpting from at length (but well worth a read in its entirety):

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

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Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules. (emphasis mine)

The Bush Administration intervened to stop the states from investigating and enforcing their own predatory lending laws, which I think just might qualify as an egregious breach of the sacredness of “states’ rights” in GOP doctrine, eh?

But as we all now know, hubris brought Spitzer’s gubernatorial reign down (but he’s not out, have you seen him on CNN recently?) with the high-priced call girl scandal he was ensnared in just a few weeks after he wrote his Valentine’s Day article.  Let me make a quick aside at this point and say in no uncertain terms that I am not arguing that what Spitzer did was by any means acceptable.  Now, that being said, could there be any coincidence between his article broadcasting the Bush Administration’s outrageous actions on behalf of predatory lenders and his being outed as a john?  Let’s look a bit further:

Spitzer's fall was all the more stunning because he had been elected in November 2006 with 69 percent of the vote, the most ever in a New York gubernatorial race, and some Democrats even said he could possibly become the country's first Jewish president.

But his life and career began unraveling last week, when federal agents, acting on wiretaps, busted a high-class New Jersey-based prostitution ring, called Emperors Club VIP, and arrested four people. The criminal complaint listed an anonymous "Client 9," who was heard calling the escort service to arrange for a call girl named "Kristen" to meet him for a Feb. 13 tryst at Washington's Mayflower Hotel.

The client allegedly paid for the woman's train fare from New York to Washington and $4,300 for a two-hour session. Law enforcement sources confirmed this week that Client 9 was Spitzer.

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There are also questions about the identities of the other wealthy clients of the Emperors Club VIP. The criminal complaint unsealed last week made reference to 10 clients without naming them; only Spitzer has been identified as Client 9. (all emphases mine)

Interesting that Spitzer was the only client whose name was leaked identified to the press, especially because he was later cleared of all charges:

The details of Mr. Spitzer’s financial transactions — how he took money from his personal accounts and sent it to the prostitution ring’s front company, QAT International — were always the crucial questions in the case. Prosecutors, from the start, were trying to determine whether there was ample evidence to charge Mr. Spitzer with a crime called structuring, which makes it illegal to conduct financial transactions in a way intended to conceal their source and purpose.

Michael Horowitz, another former chief of the public corruption unit in Manhattan, said that it was rare for prosecutors to pursue a structuring charge without a substantive underlying crime like money laundering or drug trafficking. He suggested that a prostitution case, which the government was unlikely to prosecute anyway, was not enough to undergird a structuring charge. (emphasis mine)

So the government knew that Spitzer’s crimes were not going to lead him to prison, and yet it is uncommon for sitting politicians involved in sex scandals to be forced out of office, look at South Carolina Governor Mark Sanford, US Senator from Nevada John Ensign, and US Senator from Louisiana David Vitter (who was also caught in a prostitution scandal – the DC Madam case).  None of them were forced out of their jobs; do the rules bend when Republicans are involved, or was Spitzer more the exception to the rule in being forced out?  And why does it appear that some people in high places decided to drop the axe on Spitzer to muzzle him just after he publicly charged that the Bush Administration aided and abetted predatory lenders?

That line of questioning leads us back to the now-unfolding foreclosure fraud situation, explained in great detail here by Mike Konczal of the Roosevelt Institute.  The banks, as we all are well aware, benefited from a massive infusion of taxpayer largess in the form of the bailout (TARP) of October 2008 (remember it was Bush’s bailout folks, no matter what the Tea Party may wrongly claim) and that the bailouts served to rehabilitate a good chunk of the banks’ balance sheets.  But the banks still were forced to contend with the problem of widespread despair in the housing markets, and with the fact that many of the houses that they owned were, in fact, overvalued assets due to the nationwide plunge in home values. 

Because the banks have gotten “too-big-to-fail” (which is what necessitated the bailouts in the first place) as I’ve discussed in a previous posting at length, the government has continued to help prop the banks up, lest the entire financial apparatus collapse entirely.  Programs such as the Home Affordable Modification Program (HAMP) that are ostensibly designed to incentivize banks to help homeowners renegotiate their mortgages on more favorable terms, have been shown to serve the banks’ interests entirely.  From a report by Steve Waldman on a meeting Geithner and other top Treasury officials had with financial bloggers over the summer:

The conversation next turned to housing and HAMP. On HAMP, officials were surprisingly candid. The program has gotten a lot of bad press in terms of its Kafka-esque qualification process and its limited success in generating mortgage modifications under which families become able and willing to pay their debt. Officials pointed out that what may have been an agonizing process for individuals was a useful palliative for the system as a whole. Even if most HAMP applicants ultimately default, the program prevented an outbreak of foreclosures exactly when the system could have handled it least. There were murmurs among the bloggers of “extend and pretend”, but I don’t think that’s quite right. This was extend-and-don’t-even-bother-to-pretend. The program was successful in the sense that it kept the patient alive until it had begun to heal. And the patient of this metaphor was not a struggling homeowner, but the financial system, a.k.a. the banks. Policymakers openly judged HAMP to be a qualified success because it helped banks muddle through what might have been a fatal shock. I believe these policymakers conflate, in full sincerity, incumbent financial institutions with “the system”, “the economy”, and “ordinary Americans”. Treasury officials are not cruel people. I’m sure they would have preferred if the program had worked out better for homeowners as well. But they have larger concerns, and from their perspective, HAMP has helped to address those. (all emphases mine)

There you go, policymakers playing kabuki with taxpayers in order to help keep the banks who got us into this mess alive…what a grotesque situation!

And yet, after all of this has happened, some are saying, like former financial executive RJ Eskow, that the foreclosure fraud scandal may just show that the emperor (the banks in this case) has no clothes:

The foreclosure fraud scandal is a big deal (or a big "effin'" deal, as Joe Biden might say). But its real significance is an even bigger deal. Foreclosure fraud is one domino, and if it falls others will follow. The result could be an end to the "invisible bailout" -- the one you never hear about, the one that forces millions of people to subsidize bad lending practices in order to prop up Wall Street.

The invisible bailout is the reason why the government isn't pushing to freeze foreclosures. If the foreclosure process is halted and lending practices are thoroughly investigated, it might eventually force bankers to own up to their own lawlessness -- and write down billions of dollars in artificially inflated assets. How are they going to pay themselves record bonuses if that happens?

This is where it gets really ugly – our somewhat/perhaps/maybe/kinda recovering economy could well be plunged into another, perhaps deeper financial downturn if widespread fraud is in fact found among the banks’ mortgages.  If nobody knows who rightfully holds the title to a home, how could they possibly know its market value?  The entire financial system has been rebuilt (if one could even call it that) after the 2008 financial crisis on a foundation of nearly worthless and potentially fraudulent mortgages, and “irresponsible homeowners” have been to blame for not only their own troubles, but those of the entire financial system.  Eskow continues:

Nobel prizewinner Joseph Stiglitz, who also bears the distinction of having been correct about the housing bubble, thinks it's time for the banks to write down the excess value of these loans. As Stiglitz observes, that will be painful for the banks in the short term, although it would be "nothing in comparison to the suffering they have inflicted on people throughout the rest of the global economy."

But the administration's reluctant to do that. That's why we heard such tepid remarks from the White House about the foreclosure fraud scandal over the weekend. If the foreclosure fraud issue is pursued too aggressively, it throws 41% of all expected housing sales into question. It raises even more questions about the ownership of millions of loans in good standing, potentially giving homeowners leverage to renegotiate based on the actual market value of their homes. And it reopens the issue of "writedowns."

Illegal submission of foreclosure documents was part of a larger cover-up. People need to be arrested for it -- but that, of course, would open up a larger can of worms. The legal process could very well reveal the extent of the title problem, as well as other potentially widespread criminal practices.

So there you have it folks, the states are now going after the big Wall Street fish again, perhaps following up on the forestalled investigations they were set to launch back in 2003 when all of this mortgage madness could have been nipped in the bud.  In case you are in any doubt about just what was produced by the collusion between government and Wall Street, Ezra Klein interviewed financial analyst Janet Tavakoli last week, and here’s her response when being asked what this all means for the banks (after calling this crisis “the biggest fraud in the history of the capital markets”):

When we had the financial crisis, the first thing the banks did was run to Congress and ask for accounting relief. They asked to be able to avoid pricing this stuff at the price where people would buy them. So no one can tell you the size of the hole in these balance sheets. We’ve thrown a lot of money at it. TARP was just the tip of the iceberg. We’ve given them guarantees on debts, low-cost funding from the Fed. But a lot of these mortgages just cannot be saved. Had we acknowledged this problem in 2005, we could’ve cleaned it up for a few hundred billion dollars. But we didn’t. Banks were lying and committing fraud, and our regulators were covering them and so a bad problem has become a hellacious one. (emphases mine)

As Eskow said above, the bankers just want to make it seem that they’ve actually produced some semblance of profits for their shareholders so they can continue to collect their exorbitant bonuses.  That greed leads the bankers to convince regulators to help them avoid realizing the losses they should rightfully incur for such terrible investments.  That dynamic then leads to continued uncertainty in the market, which causes the banks not to lend to businesses, individuals, or even to each other. Greed has never run so rampant in the streets, and it is now manifestly clear that it is the greed of the privileged few that is genuinely handcuffing any sort of economic recovery for the rest of us.  Government regulators have bought into this system for years – when Eliot Spitzer began to make a stink, he was publicly disgraced and muzzled quickly, lest his accusations about the rotting core of the financial system lead people to look too closely so that the house of cards fell. 

Government has been complicit in this scheme since day one, which is the real reason none of the fraudsters have been put in prison yet – the circle would likely extend too widely and might ensnare some of those who are supposed to be on the “good” team.  We can’t have change in this country until we have an honest accounting of the mistakes of the past, and I surely hope that the state Attorneys General are allowed to run their investigations as they see fit, with no White House interference.  The President’s actions in confronting this crisis, including the actions of his deputies, will show just how committed to change he really is. 

To drill or not to drill, that is the question, baby

President Obama announced a new energy policy proposal yesterday, which appears to have surprised both environmentalists and fossil fuel interests in that the proposal seeks to open vast new areas of US coastline for offshore oil drilling.  The new drilling is combined with new regulations and policies to invest significantly in green energy resources, including new auto regulations mandating higher fuel economy standards of 35.5 miles per gallon across a company's entire fleet of cars and trucks by 2016.

But ultimately, nobody's really paying attention to the higher fuel economy standards, despite the very positive climate benefits those standards will have, when the topic du jour is offshore drilling.  Did the President really just give in to the "drill baby drill" crowd?

Well, I would argue that the answer is yes and no.  The President has just deftly given the Republican party, and its oil and gas interest supporters, enough rope with which to hang themselves, policy-wise.  Take a look at the chart below, helpfully supplied by the NY Times:

Copyright 2009 New York Times

All of the state coastlines that are now opened to new offshore drilling have Republican governors, except for Maryland, Delaware, and North Carolina.  Meanwhile, the areas north of Delaware on the Atlantic side, and all of the Pacific coast will remain off-limits to drilling, with the environmentally sensitive Bristol Bay in Alaska that was opened for exploration by President Bush now closed off for at least seven years.

The way I read it is, if Republicans want to drill so badly then let them, for as others have noted, allowing them to do what they have claimed offshore drilling would do - completely solve America's oil needs indefinitely - will be shown to be false.  Offshore drilling, because it has been anathema to environmentalists, has been built up to mythical status among Republicans, when any responsible politician would admit that there likely won't be enough oil to supply the US for long, and even then, the new oil will not affect gas prices at the pump.  The government lease and exploration process will take years, and then the companies that purchase the leases will need to actually extract and refine the oil, so don't expect any new "homegrown" oil for at least 10 years.

But that scenario only plays out if everything goes smoothly on the political end of things, and when does that ever happen?

Access to oil and gas in South Atlantic waters also would probably meet stiff resistance from the coastal states unless Congress first enacts a plan to share the billions of dollars in potential revenue from lease sales and oil and gas development. And that's not easy.

Lawmakers from coastal states that would benefit have been pushing for that, but some other senators argue that proceeds from oil and gas resources in federal waters should go to the U.S. Treasury.

Here's the thing, the governors will likely take a lot of flak from environmental and concerned citizens' groups from within their states if they agree to allow the offshore drilling, no matter where on the political spectrum they are.  What would help the governors neutralize that criticism is the prospect of increased state revenues from oil and gas development to help their states, but Congress would have to approve those deals.  Politicians never like to give up "free" money coming to their states at the expense of other states, so it would be quite a battle between the interior-state politicians and the coastal-state ones over who receives the proceeds from oil and gas development.  Hmm, divide and conquer, Mr. President?

Then there's the idea that Americans appear to have that any oil that is drilled from US territory by a multinational corporation like Exxon Mobil will automatically be sold in the US.  This is just wrong.  Oil drilled in the US will be shipped to wherever the demand is greatest in the world, just as oil is now.  While the US is currently a major consumer of oil in the world, who is to say that the oil drilled here won't be shipped to China instead?  In a few years the Chinese economy will only have grown further, so it isn't beyond the realm of possibility.

So all in all, what should we take away from these developments?  I believe this report from Kate Sheppard at Mother Jones provides a clue:

Environmentalists are not just angry that Obama is giving away the store on oil and gas drilling, they also feel that he's basing his decision on a dubious premise—that more drilling will enhance the nation's energy security. The US currently imports 57 percent of its oil, according to the Energy Information Administration. The nation accounts for 23 percent of total world oil consumption, but has only 3 percent the world’s oil reserves within its borders. Drilling off every coast in the US won’t resolve that issue. Even the most productive portion of the area opened to drilling, the eastern Gulf, is expected to yield only 3.5 billion barrels of oil. The US consumes 19.5 million barrels of oil per day, which means that these wells would only produce about 180 days worth of oil. And at current global oil prices, recoverable American-produced petroleum isn't likely to be cost-competive. (emphasis added)

Did you catch that?  For any offshore drilling to occur in this country, the oil companies have to actually believe that there is enough oil for them to recover before they make any capital investments.  It's dubious whether a sufficient amount of oil exists in these newly-opened areas to make it worth the oil companies' while to drill.  And therein lies the rub - President Obama just gave the Republicans and oil companies the access to offshore oil wells that they've been clamoring for for years, and now they're going to have to work to roll back Americans' expectations of just how much oil there is within our borders.  Republicans will have to explain to Americans that just because oil companies now can drill offshore, gas prices will not drop back to $1.50/gallon, indeed:

"Where are the Republicans out there talking about how crude is going to go down" when drilling is allowed, "because oil certainly isn't reacting to it today," said Michael Masters, a hedge fund manager who's testified repeatedly before Congress that big inflows of investment dollars are driving up oil prices, not supply shortages. "It's not a supply and demand issue. ... Crude is detached from the fundamentals."

Masters is referring to oil futures markets, where speculators have notoriously been driving up the price of oil for years now, apart from any increase or decrease in production.

So Obama has managed (it appears thus far, anyways) to divide Republicans on oil drilling, while simultaneously putting them on the defensive regarding their previous claims of the amount of oil the US truly has within its borders.  With the Trojan Horse of offshore drilling, Obama managed to slip by the first increase in vehicle mileage standards in nearly 30 years, a move that on any other day would have provoked howls of protest from the Republican side of the aisle.  On balance, it appears that the positive environmental effects of the new vehicle mileage standards regulations may well outweigh the negatives of offshore oil drilling, but Obama was able to distract the other side (and much of the media) from noticing with the shiny, glossy offshore drilling announcement.

And as for the environmentalists, well I noticed a curious coincidence regarding two of the largest environmental organizations, the Sierra Club and Greenpeace, see if you notice a certain similarity:

"Is this President Obama's clean energy plan or Palin's drill baby drill campaign?" quipped Greenpeace Executive Director Phil Radford in a statement on Wednesday.

“Drilling our coasts will do nothing to lower gas prices or create energy independence,” Michael Brune, executive director of the Sierra Club, said in a statement. It will only jeopardize beaches, marine life, and coastal tourist economies, all so the oil industry can make a short-term profit.” (emphases added)

So both Greenpeace and the Sierra Club released statements, indicating that they were notified ahead of time about the drilling plans, and taking a look at their websites (Greenpeace, Sierra Club) there was either no mention of Obama's announcement on the Sierra Club website, or just a rather rote statement from Greenpeace's Executive Director.  If this plan were so terrible, wouldn't the greens be shouting into any TV camera they could find about how terrible it is?  Could it be that they're in cahoots with the President on a strategy to mollify the "drill baby drillers" while the actually environmentally progressive legislation gets passed in the background?  I think that the President and the enviros are betting that in the time it takes for any sort of viable oil drilling operations to get set up offshore, the US would have already begun the transition towards alternative fuels, obviating the need for major drilling operations at massive costs.  Also, the Bristol Bay area that has now reverted back to protected status in the Obama plan was a key sticking point with environmentalists, so it's not as though they lost out entirely.  But then again, I could be totally wrong.  I just find the curiosities of this particular announcement and the context surrounding it too intriguing not to try to suss it out.  Time will tell.