There are so many obvious reasons the BP oil leak is a disaster, but beyond the humanity of it the situation has presented another opportunity for this Administration to launch its latest assault against capitalism. The endless deflection of accountability to the oil spill from the White House to BP could work, with some voters opening the door for the kind of takeover of the industry that has occurred in healthcare and is being cobbled together right now for the financial industry.
The White House has a playbook with one play. It’s all about bringing big business to its knees. The way to do that is demonization. BP’s CEO Tony Hayward has been such an easy foil that central casting couldn’t have produced a better villain. But that isn’t good enough as every single day the flames of anger and hatred must be fanned by the Administration. We must hate Wall Street, the healthcare industry, and oil companies.
Under this cloud of hate, fear, and distrust is it any wonder our economy has grinded to a halt? Is it any wonder banks have been hoarding money and businesses hoarding money, and while consumers have begun to spend after an unusual long period of savings they went back into a shell in April. Of course, BP is going to pay for the damage, but that isn’t going to be enough. The industry has to brace itself for a series of investigations, hearings, and public floggings. They will have to travel to Washington and try to answer dumb questions obviously designed for further embarrassment rather than solutions (and everyone there will arrive thanks to crude oil). Then again, I’m sure everyone in Washington has seen businesses grow from money raised on Wall Street and have benefited from the amazing medical industry America possesses…the best in the world.
I continue to marvel when the President tells people or industries to take his wrath and shut up. It’s called survival instincts. Of course, Wall Street has hired lobbyists. Of course, BP is going to spend money on trying to get out their message. Did they really want all of this oil to spill into the Gulf? Did Wall Street really want the economy to collapse? If anyone wants to see the economy collapse it would be a follower of an ideology that despises the foundation of this economy.
Last week, President Obama mentioned his ideas on what the pillars of the economy should be and hinted that government is needed to control all four. Over the weekend, he lashed out at BP paying a dividend to shareholders, a shot across the bow of investors just as little old ladies with GM bonds were painted as greedy and cold hearted. They must be salivating at the White House; what a gift, this should put another industry (pillar) under their thumb.
So to answer Spike Lee who wants the President to “go off” it’s tough when in fact things are going your way to be too upset. But things are going our way. America could only lose its position on top of the world through self destruction. I’ve talked about this for half a dozen years. Fear and self-loathing. Now the idea of supplanting capitalism with a better system is underway. You can call it fettered capitalism but that is more akin to socialism. It has never worked, and never will. The very threat of this shift gave us Friday’s jobs result. Trillions of dollars tossed at the housing market from government programs, Fannie Mae, and Freddie Mac bailouts and support (unlimited) and FHA backing all mortgages hasn’t stopped housing prices from continuing their freefall. The steadfast and unwavering determination to fundamentally change our economy is impacting it faster than I thought it would.
Can everyone hide in their bunkers forever? Can we afford it while everyone braces for the moment that it’s their turn to be crushed rhetorically and under the weight of regulations and rules designed to control and punish? Where is the tipping point where even if we tried we couldn’t reverse the impact of this anti-business war on success? I don’t know the answer to that, but I do think there is time to fix this. But the message isn’t resonating. Take this moratorium on deepwater oil drilling. According to Louisiana Mid-Continent Oil and Gas Association, the impact of halting work on 33 exploratory wells will be devastating.
* Rigs: $250,000 to $500,000 a day means losses of up to $16,500,000 per day in costs for idle rigs
* Supply boats: $30,000 day for 33 rigs will cost about $1,000,000 a day
* Employees: up to 140 per shift at $1,804 a week could add to $330,000,000 a month in lost wages
The gears of commerce have been locked, sealed shut the way Constantinople held against siege after siege until succumbing to the Ottoman Empire on May 29, 1453. Later today we’ll get the latest on consumer credit trends, a very important data point that gets scant attention on the Street. Banks want to lend, businesses want to grow, and people want prosperity unless all that stuff is going to be taken from them which at that point they only want to survive.
I still believe in the business cycle and the uniqueness of the American capitalistic system. From time to time it needs nudging, but it recognizes the difference between a takeover and a helping hand, not that it’s hard to tell the origins and intents of government overtures these days.
Jobs haven’t been a priority for our government, but spending has been. I just see more spending, more taxes, and more browbeating of businesses and even those that dare invest in those businesses. We are losers in this battle, which has been lopsided. Around the world citizens are fighting back against misguided governments that for so long bought votes and sank futures. The seeds of destruction are in place right now. But if Japan, Great Britain, Chile, and the Ukraine could elect fiscally conservative leaders then for sure we can do the same in America.
Charles Payne is the CEO and Principal Analyst of Wall Street Strategies . This post was republished, with permission, from his company’s column, WStreet Market Commentary.