Project for Philosophical Evaluations of the Economy |
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Where is the financial market’s outrage about BP?
Dialog with the Alter Ego about the oil spill in the Gulf of Mexico, first drafted on May 31, published on June 1,
2010
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Question by Alter Ego of Noah denkt™ (AE): Noah denkt™ has been eerily quiet about the oil spill in the Gulf of
Mexico. Is there nothing that you have to say about this?
Answer by Noah denkt™ (Nd): You are right: We have been too complacent about this.
AE: Why did you not respond to this disaster earlier?
Nd: Because for the longest time we felt, that accidents happen, that there is no need to go neurotic about this,
given that on balance technology has produced more good than bad things, and that ultimately BP and nature
too will resolve the matter.
AE: That position has changed now?
Nd: Yes, it has. Ever since the top kill approach failed and it became clear that BP is pretty much clueless as to
what to do next to stop the oil spill soon, we actually feel that BP needs to be severely castigated for this.
AE: You do not think that the markets will take care of that?
Nd: Well, it seems to us as if, the market reaction is not punishing enough, this time around. Perhaps there is a
need to contemplate a political solution to this that would even look at breaking up BP as a company.
AE: That however would violate the principles of your own free market thinking, wouldn’t it? And then, it could well
be that breaking up BP would create more costs than benefits to the overall economy. After all, it isn’t just the loss
of trust in the rule of law that, one way or another, would make prices, but it’s also the fact that the BP knowhow
would then have to be written off altogether.
Nd: True. But you must also not forget that negligence and carelessness damage the economy as well. In other
words, it seems very important to us, to make it unmistakably clear to all remaining parties in the business that
this type of accidents is absolutely intolerable whatever the individual causes for this may have been.
AE: Well, the easiest way to avoid this kind of natural disaster is to do what has been done which is to decree a
moratorium on deep sea exploration. You do not need to break up BP for that.
Nd: Deep sea drilling is only one of the fields that are extremely sensitive as far as the protection of the
environment is concerned. There is also the management of nuclear energy, the disposal of its waste or the
safety of air transport which require a comparable degree of diligence and foresight. For all these and other
industries a very clear message needs to be sent.
AE: And the drop in the BP share price, the compensation costs, the legal fees, the clean up charges etc that BP
is facing now, will not send a message to others that is strong enough?
Nd: Perhaps not. This disaster is way too horrific to categorically rule out additional punishment.
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Dialog with the Alter Ego about the oil spill in the Gulf of Mexico, first drafted on May 31, published on June 1,
2010
----------------------------------------------------------------------------------------------------------------------------------------
Question by Alter Ego of Noah denkt™ (AE): Noah denkt™ has been eerily quiet about the oil spill in the Gulf of
Mexico. Is there nothing that you have to say about this?
Answer by Noah denkt™ (Nd): You are right: We have been too complacent about this.
AE: Why did you not respond to this disaster earlier?
Nd: Because for the longest time we felt, that accidents happen, that there is no need to go neurotic about this,
given that on balance technology has produced more good than bad things, and that ultimately BP and nature
too will resolve the matter.
AE: That position has changed now?
Nd: Yes, it has. Ever since the top kill approach failed and it became clear that BP is pretty much clueless as to
what to do next to stop the oil spill soon, we actually feel that BP needs to be severely castigated for this.
AE: You do not think that the markets will take care of that?
Nd: Well, it seems to us as if, the market reaction is not punishing enough, this time around. Perhaps there is a
need to contemplate a political solution to this that would even look at breaking up BP as a company.
AE: That however would violate the principles of your own free market thinking, wouldn’t it? And then, it could well
be that breaking up BP would create more costs than benefits to the overall economy. After all, it isn’t just the loss
of trust in the rule of law that, one way or another, would make prices, but it’s also the fact that the BP knowhow
would then have to be written off altogether.
Nd: True. But you must also not forget that negligence and carelessness damage the economy as well. In other
words, it seems very important to us, to make it unmistakably clear to all remaining parties in the business that
this type of accidents is absolutely intolerable whatever the individual causes for this may have been.
AE: Well, the easiest way to avoid this kind of natural disaster is to do what has been done which is to decree a
moratorium on deep sea exploration. You do not need to break up BP for that.
Nd: Deep sea drilling is only one of the fields that are extremely sensitive as far as the protection of the
environment is concerned. There is also the management of nuclear energy, the disposal of its waste or the
safety of air transport which require a comparable degree of diligence and foresight. For all these and other
industries a very clear message needs to be sent.
AE: And the drop in the BP share price, the compensation costs, the legal fees, the clean up charges etc that BP
is facing now, will not send a message to others that is strong enough?
Nd: Perhaps not. This disaster is way too horrific to categorically rule out additional punishment.
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| © Landei Selbstverlag, owned by Wilhelm ("Wil") Leonards, Gerolstein, Germany. All rights reserved. Reminder: Noah denkt™ is a project of Wilhelm ("Wil") Leonards and his Landei Selbstverlag (WL & his LSV). Consequently, all rights to the texts that have been published under the Noah denkt™brand name are reserved by WL & his LSV. The commentary and the reasoning that was provided on this page is for informational and/or educational purposes only and it is not intended to provide tax, legal or investment advice. It should therefore not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or any issuer by WL & his LSV or its Noah denkt™ Project. In fact, WL & his LSV encourage the user to understand that he alone is responsible for determining whether any investment, security or strategy is appropriate or suitable for him. And to leave no doubt as to what this means we urge our user to also note our extended Legal Notice. |
| Conflict of Interest Statement with respect to BP Q: Does Wil Leonards hold shares in BP? A: No Q: Has Wil Leonards done consulting work for BP? A: No Q: Does he intend to develop a commercial relationship with BP? A: No Q: Do members of Wil Leonards' family hold shares in BP? A: No Q: Have members of Wil Leonards' family done consulting work for BP? A: No Q: Does a member of his family intend to develop a commercial relationship with BP? A: No |
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| Keywords: oil spill in the Gulf of Mexico, breaking up BP, breaking up British Petroleum, punishing BP, costs of cleaning up environmental disasters, reaction of financial markets to natural disasters, break-up of BP, avoiding natural disasters, BP crisis management |
Addition to this dialog made on June 4, 2010: Fortunately enough, the markets did start to punish BP in a more severe manner the day, we published this dialog. In fact, there was even talk of BP becoming a possible takeover target for other oil companies. If markets should continue to contemplate solutions like these, in the weeks to come, this would, in deed take away the need to break-up BP through government intervention. Let's stay put on this issue. |