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Capitalism oozes in Gulf

By Barbara Whelehan ·
Friday, May 21, 2010
Posted: 12 pm ET

Those of us who live in a coastal city near the Gulf of Mexico share a feeling of dread as we wait for the Deepwater Horizon oil spill to reach us. Florida thrives on its tourism industry, and it's also a popular retirement destination. I've lived here most of my adult life, drawn to its subtropical climate and beautiful fauna and flora. We Floridians proudly don the motto "Salt Life" on our vehicles and attire. Whether we fish, surf, snorkel, swim or just walk along the shore, we celebrate our aquatic lifestyle.

Elmers Island, La., oil spill

Thick oil pools up on Elmers Island, La. (Photo courtesy AFP/Stephanie Jourdain)

Our salt life is now at risk. We look at this impending mess with the same sense of fear and trepidation that we feel when a hurricane approaches. The only difference is that a hurricane lasts maybe a week from its formation on the West Coast of Africa to its destructive landfall, and then it wreaks havoc for a day or two before it finally peters out. Cleanup and repair usually takes anywhere from a few days to a few months, depending on the damage. But this spill that began about a month ago has already made landfall in Louisiana and threatens to impact our region for many years to come.

Moody's Investors Service analyst Edith Behr said earlier this week that the oil spill's effect on Florida "could likely have long-term implications even greater than the recent global recession or Hurricane Ivan in 2004," according to the St. Petersburg Times. The credit ratings of Florida, Mississippi, Louisiana and Alabama may be cut if tourism drops dramatically and property values fall. That means municipal bondholders may demand higher interest rates because they'd be taking on more risk investing in our flailing economies.

Blame spreads like oil

Who's to blame for this environmental atrocity? Can culpability be placed on crony capitalism, the cozy relationship between government regulators and the oil industry? Or can we blame the greed of the oil industry -- in this instance, British Petroleum -- for taking safety shortcuts in blind pursuit of profits? Can we blame ourselves for being so heavily dependent on oil for our own energy needs? Or is it the fault of our unfettered capitalistic system, in which company managements are pressured to produce big profits so that investors -- big pension funds as well as mutual fund shareholders like you and me -- can get good returns and one day retire?

Ironically, BP shareholders are suing the company for breaches of fiduciary duty and safety violations. BP has promised to pay all "legitimate claims" and has awarded tourism grants to the states around the Gulf so that marketing departments can somehow use words and images to convince visitors to come anyway.

Gushing at a rate much higher than the original estimate of 5,000 barrels a day, the toxic oil spill threatens our wildlife and elicits a sense of foreboding about our capitalistic values. According to the Wall Street Journal, as of Tuesday government officials documented the deaths of 156 sea turtles, 12 bottlenose dolphins and 23 oiled birds. We mourn their loss and the deaths of countless other sea and air creatures that will be victimized by this devastating environmental disaster. Sadly, our "Salt Life" motto might as well change to "Desecrated salt life."

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Paul Flores
June 21, 2010 at 2:49 pm

Thanks for sharing. It shows even though there is a financial thread (the writer)and its subsequent impacts that the need for questioning and inquiry in search of product and profit needs to be balanced with prudent investment, risk analysis, gov't oversight/regulation. As an investor..I want to know that my investment dollars are being used wisely on these rigs. I want a reasonable return on my investments (ROI) for the large capital & risk invested in deep water drilling and I expect both the drilling fees and gov't taxes paid ensure that the private sector is doing its job with a margin of safety comfortable for both the public and private sectors both within the industry and other stakeholders who may be affected. Like banking, there are two sides to the coin..not one.

June 12, 2010 at 10:04 am

. . . all I know is B P is headed for extinction . . .
watch and see . . .
they'll be made an example of . . .

Barbara Whelehan
May 23, 2010 at 11:36 am

Normally in this space I share something I've learned about retirement planning. This time I indulged in an expression of grief about an event that especially affects those of us who live in proximity to this oil spill. As for who's to blame, BP is likely to bear the brunt of it, but my point was that to varying degrees investors and consumers have a hand in the mess. Nevertheless, thanks for writing.

May 23, 2010 at 9:24 am

I didn't learn anything new from this article.

As for your yearning to place blame, I'll wait for an official investigation to report their findings.