It has been a life-changing month for me and my family. For those of you who do not know, on May 15th I was hospitalized for treatment of a pulmonary embolism. I had multiple blood clots in both lungs, which the pulmonologist estimated were blocking 90% of the blood flow from my heart to my lungs. Every time a doctor sees my CT scans for the first time, they give me a look that tells me they are amazed that I am still here.
I am fine now and on the road to recovery, so why do I share this news? I share it because I think everyone should be as lucky as I am. When one realizes – really realizes – how truly fragile life is and that they could just as easily be gone from this world, it adds perspective to everything. In my opinion there is nothing we need more today than perspective.
My first winter in Atlanta (1992-93), we suffered through “The Storm of the Century.” The snow storm blanketed the entire east coast from New England to Georgia. My parents in Boca Raton, FL, did not get snow but did get powerful thunderstorms. It was a huge storm.
Of course news ratings spiked during the storm as everyone wanted to know what was happening. However, only the real weather enthusiasts knew that Gloria – a 1985 hurricane – had already been crowned “The Storm of the Century.” There was another winter storm in 1996 that tried to vie for the title but was not as successful.
I suppose it is human nature makes us want to believe that everything that happens to us, or on our watch, has to be bigger and more important than things that happened in the past. In sports, the greats of our time must be “the greatest of all time.” This is seemingly true with recessions as well; we can’t have just a severe recession, we must have the “Great Recession.” We can’t have just a devastating oil leak in the Gulf of Mexico; we must have “the worst environmental catastrophe in the history of humankind.”
I am no expert on environmental catastrophes and I certainly recognize the environmental and economic severity of the situation, but I do know that this is not “the worst oil spill in the history of humankind.” In fact it is not the worst oil spill in the Gulf of Mexico in the last 31 years. In 1979 there was a similar leak that went on for nine months before it was stopped. In 1991, approximately six times more oil was spilled into the Persian Gulf. Keeping this disaster in context and realizing that the world has seen even bigger catastrophes and survived, even to thrive again, would bring hope to the people on the Gulf coast. The blame game and “woe is me” syndrome doesn’t fix anything. However, calling this “the third worst water-based oil leak in the last 31 years” just doesn’t have the same ring to it.
While I am poking a little fun at the media and its hype machine, don’t think such dramatization of the situation doesn’t have consequences. Last week Reuters reported that Florida beaches were feeling the hit from a lack of tourism because of the leak. The headline was “Most beaches are clean, but misperception continues.” On Monday, mayors of two cities on Florida’s west coast were talking about the deep local economic impact even though there is no oil in sight.
The oil spill is not killing the Gulf Coast’s tourism industry, but our national lack of perspective and the media hyping the spill is. The media is no longer concerned with educating people about the events of the day; instead it is about ratings, and ratings come from good stories, not cold hard facts. Good stories have villains, so BP in this case becomes not a group of people that made a horrible mistake that cost the lives of eleven co-workers, caused horrible environmental damage, and damaged the future reputation and potentially the survival of the company, but a faceless inanimate villain that is deliberately trying to destroy the environment.
This makes for a great movie plot, but unfortunately this is not a movie. It is real, and in the real world corporations are not faceless inanimate objects, but organizations made up of real human beings – human beings who are flesh and blood, who have spouses and children, who volunteer to coach little league. BP is nothing more or less than the thousands of people that go to work there every day. A large number of those people, if not a majority, live in the Gulf Coast region. Does anyone really believe that they wanted this to happen or don’t care about the damage being done?
Yet, this is the story we get, and not just from irresponsible media outlets but from Facebook posts and other social media rants of college-educated friends. Worst of all, this is what we get from our elected officials. The Obama administration has promised to “keep a foot on the neck of BP” and have been looking for someone’s “ass to kick.” I think Jack Welch summed it up best in his CNBC interview Wednesday morning when he called the administration’s response “horrible” and added, “Here’s the difference between a businessman and a politician: Businessmen focus on solutions. Politicians focus on ‘who can we blame.’”
We have rewarded a sensationalistic media with our attention, and we have created a class of professional politicians rewarded by reelection – people who have no experience doing anything other than campaigning. They campaign to get elected, they campaign to pass their initiatives, and then they campaign to get re-elected. In a campaign it is you against your opponent, and you try to make yourself look good largely by tearing down your opponent. This is the only experience Obama has. From that perspective, what other response could we reasonably expect from him?
Unfortunately, in the real world, BP is not an opponent to be beaten. Yes, BP is responsible for this accident, but more importantly they are an essential partner in its solution. Destroying BP does not save the Gulf; in fact it makes it less likely that the Gulf will be cleaned up.
Instead of looking for an “ass to kick,” true leaders might be encouraging fellow Americans not to cancel their plans to visit the Gulf Coast this summer. True leaders might try to bring the oil industry together to help with the cleanup and to find ways to ensure this doesn’t happen again.
We should be so lucky. In the interim we will continue to focus on what our job is, managing investment portfolios. The good news about the sensationalistic media and irresponsible politicians is that they do create investment opportunities for those of us who still value reason. Perspective can change your way of thinking and help you see things in a different light. And a little perspective can be a very profitable thing.
Chuck Osborne, CFA