With a seventy four percent decline in stock value over the past ten years, one would think the Times would be thinking about how to get their edge back. One would be wrong. In answer to the question "What lead to the BP oil leak in the gulf?", Mr. Egan offers the following insight:
"The reason was, BP was too big, too advanced, to fail. Plus, voluntary regulation, the oil companies claimed, was working fine. If that sounds familiar, it was the same argument heard just before the financial crisis. The derivatives and collateralized debt obligations that Wall Street used to make unprecedented profits and then nearly bring down the economy were too big, too advanced for anyone to understand."
BP is drilling in water 5,000 feet deep because the government will not allow them to drill closer. Plenty of oil is available, and the shallows are far easier to work in. They are not there because of government regulations. The other half of the analogy is equally off base. The sub prime mortgage disaster which ruined the world's economy was set off by the government forcing banks to make high risk loans to people that they knew were unlikely to be able to pay them back. That these loans were all guaranteed by Fannie Mae and Freddie Mac created the opportunity for aggressive lending practices.
How does one prevent such a disaster? Easy. No threats from Janet Reno, no government subsidized risk, no economic collapse.
"But, in both cases, the stage was set for catastrophic failure, and, in both cases, you can pinpoint two likely causes.
First, size. In the search for end-stage oil, companies have had to go deeper and further in ever-riskier gambits to pull this gooey fossil fuel from its ancient slumber. The easy oil era is long over."
That is sheer baloney. End stage oil? If we are in end stage oil, how is it that this one leak is billowing out 25,000 barrels a day? Companies have to go deeper and ever riskier because the government forces them to. They are drilling...where? ... where we allow them to. Alright?
How can anyone get this much wrong and still be a serious journalist? These are major omissions, major miscues. Oh well, I can't continue with Mr. Egan's drivel. Suffice it to say that he claims the Supreme Court under John Roberts is to blame, and the best way to deal with this problem is to drive BP into bankruptcy.
Sorry Tim. The economy needs oil, preferably affordable oil produced by either ourselves or nations that are friendly to us. Bankruptcy for BP is not going to help anyone here.
But bankruptcy for the New York Times...now that's another story.