The Gulf oil spill is now larger than the Exxon Vadez disaster, becoming the worst spill in U.S. history. No doubt to keep its lawyers happy, BP has been consistently under-reporting the extent of the leak.
The calamity bears striking parallels with the financial collapse: the spawn of an era of “free market” ideology that weakened regulation and encouraged self-policing by industry; “innovations,” in this case very deep-water drilling technologies whose risks most people only now realize; cozy relationships and conflicts of interest between regulators and regulated; members of Congress owned by the industry; the Bush administration’s dominant oil men vs. the Clinton administration’s dominant investment bankers, and a highly consolidated industry. Oh, and the playerz will likely get off easy, just as has happened from the financial collapse.
There’s one more parallel: Our appetites. For all its blunders, greed and abysmal safety and environment record, BP isn’t solely to blame. That’s akin blaming illegal aliens for being in Arizona. They are there and elsewhere because of our insatiable appetite for cheap labor. The financial mess: the “American dream and endless, debt-based consumption. And how many of those angry with BP will be willing to give up their long, single-occupancy auto commute.
This is what peak oil looks like: Not merely higher costs to find and refine the largely inferior petroleum remaining, nor the national security implications of the worldwide chase for remaining oil supplies. It means riskier and riskier means of production. Welcome to the future. What author James Howard Kunstler calls the “era of happy motoring” is over.
The Back Story: I hope the crew over in Redmond doesn’t get too weirded out by Apple passing Microsoft in market capitalization. The stock market is a fickle beast that in recent years is better at destroying productive activity than raising the capital to fund it. Go to the graveyard of dot-coms and ask those late 1990s stars what market cap is worth.
Microsoft is huge, profitable, full of smart people. The worst thing it could do is focus more on pleasing Wall Street, or give visitor badges to investment bankers peddling deals and mergers. Of course many dominant companies have been in similar situations, only to slip into slow, painful eclipse. Ballmer and Gates have long known the question is whether any large corporation can ride successfully into new eras of their industry. Whether Microsoft can do it is still unanswered.
Today’s Econ Haiku:
Quicker laments from workers
“Wish I had a job”