American greed and creative accounting are on full display in the gulf region. Commercial clam fishermen have been hit hard with lost fields. The toe bone's connected to the foot bone, with hotels and restaurants claiming lost bookings and meals served.
The foot bone's connected to the ankle bone as counties claim lost tax revenue because of lower tax receipts. The ankle bone's connected to the shin bone, the Alabama State Superintendent of Schools was on TV today, they are preparing a bill for BP claiming lost tax revenue to run the state school system, it will be a monthly bill. Let’s move to Louisiana and set up a surf shop, then claim lost business!
I talked to a friend Friday that runs a construction company in the Midwest. One of his company’s crews hit a two inch natural gas line causing a release along a commercial street. Area businesses were evacuated for two hours. It took this long to safely stop the leak and make repairs. Afterwards, safety personnel allowed the public back into the area.
One business with less than 100 employees, submitted a bill for $147,000 dollars in lost production and wages. That is one super profitable business! Sometimes a billable catastrophe can be the best stimulus you can find.
BP executives are meeting with President Obama Wednesday. The President wants BP to put money in a special fund for the government to begin paying claims. BP should agree to this if congress will pass a law barring individual lawsuits for economic damages resulting from the oil spill in the gulf. This could be fashioned like the 911 Victim Compensation Fund. Pay all claims out of this fund, and absolve BP of any additional liability.
If BP could negotiate a one time payment to the government to cover all outstanding liability concerning the gulf oil spill, their stock could quickly recover. The cost would not be small, but would stop the bleeding. A known cost, even a high one, is preferable to the years of litigation they face. If they do not or cannot reach this type of settlement, the leecherous bleeding will continue until there is little left of the company.
Disclosure: No Position