Over the Fourth of July weekend, we traveled to Gulfport to see my family. Barbecued chicken, desserts galore and an evening spent watching fireworks on the beach completed the tradition.
Just two weeks before, we had been on the Alabama Coast. We walked on the beach looking for tar balls, finding only a few. We were impressed with the clean-up efforts there. The place was a buzz of activity from crews scouring the beach to helicopters flying overhead to boats spreading boom. For all the efforts, tourists were in short supply, though. We wondered about the effects on Mississippi.
While in Mississippi, we made a special trip to the beach during the day to check out what was happening on the oil front. We went to the pier at the end of Courthouse Road to begin our investigation. As we looked out over the beach, we could see no oil, not even those occasional tar balls. There were quite a few people enjoying the beach that day, some even splashing in the water.
If you hadn’t told me there was an oil crisis, I wouldn’t have suspected a thing based on what we saw. Then we decided to walk out on the pier. At the end of the pier stood a young woman, posed for her friend wielding a camera. She held up green rubber-gloved hands covered with a thick, gooey, orange substance. There was the oil.
We were shocked to see it. Yuk! “Is that the oil?” I asked. She replied, “Yes, and it’s all over the rocks by the pier. And there are people swimming in this mess!” Clearly, she was outraged. After the picture was snapped, she peeled off the gloves, tossed them in the garbage, and left the beach.
Of course, we headed onto the pier looking for that oil, but we couldn’t see it. My husband even climbed onto the rocks. Nothing. He spotted several shiny spots, thinking it was oil. When he touched the rocks, he declared, “They’re just wet.”
We became suspicious. After all, who shows up at the beach with rubber gloves? Our bet was that the picture got posted on the Internet within seconds of capturing the moment. We felt certain it was a set-up. Now, it was my turn to be outraged.
I know there is oil in the Gulf. I know it’s a problem for the fishermen and for our beaches. But what I’m hearing from the people on the ground is that PERCEPTION about the oil is worse than the oil itself. They have been besieged with news crews scouring every nook and cranny for evidence of the largest man-made disaster. Reports are hitting the national news each night causing people around the world to say, “Oh, isn’t it terrible.”
Long before the first tar ball landed on the beach, tourists were changing their plans. Reservations were canceled. Beach communities were abandoned and local businesses were left high and dry. The environmental damage from the oil is real, but it pales in comparison to the damage done by overzealous reporting.
With the summer winding down, there is no fix for this year’s season. Just write it off. The only good news is that, unlike Hurricane Katrina, this disaster has a benefactor. BP has already paid $65 million to the State of Mississippi. Mississippi Development Authority received $15 million to help combat that perception. Personally, I think that was money down the drain. When viewers are bombarded each night with news of the oil spill, $15 million looks like a drop in the bucket. Now we hear that Vogue is running a spread entitled “Water and Oil.” The models will wear designer outfits covered in sludge.
Also, the Marine Resources Fund received $50 million to combat oil on the ground. Hopefully, local people got a piece of that action. The claims process is ramping up, with many set to receive up to six months worth of funds. My own little claim on our beach property in Alabama is set for payout in another week. Some are complaining about having to pay tax on a claim, but wouldn’t you have to pay tax on business income anyway?
In fact, State Treasurer Tate Reeves says that if state income tax is paid on all those claims and if local people spend the money they receive, the State of Mississippi may not experience a revenue shortfall as a result of the spill. The $65 million in upfront money represents almost 20 percent of our state’s annual budget, so this could end up being a nice gift.
Of course, you want to be careful about looking a gift horse in the mouth. So far, BP is paying the bill. They’ve already written some big checks. More is to come. As long as they are being compliant, I see no reason to threaten legal action. That may come later, but we don’t want to interrupt their check signing in mid-signature. For now, let’s just mind our Southern manners and say, “Thank you.” We’ve suffered real losses because of perception. Let’s use that to get BP to pay the damages.
As for that young woman with the gloves … If I see her again, I plan to rip off those gloves myself and rub her nose in that gooey mess. How dare she use our disaster to bolster her cause? Perception is a powerful thing. In the hands of the wrong people, it can do serious damage.
Nancy Lottridge Anderson, Ph.D., CFA, is president of New Perspectives Inc. in Ridgeland, (601) 991-3158. She is also an assistant professor of finance at Mississippi College. Her e-mail address is email@example.com, and her website is www.newper.com.