Manufactured Goods Fallout
‘Uncertainty’ Leads to Next Wave of Economic Fallout
By Veronica Del Bianco
As Gulf fishermen head back to work, one professor warns that a second wave of economic fallout from the BP disaster may be on its way.
“People talk about the Gulf Coast economy like it’s a homogenous thing,” says Dr. William Barnett II, a professor of economics at Loyola University’s College of Business in New Orleans. “It’s not,” he adds.
With their miles of beaches, the coasts of Mississippi, Alabama and Florida rely heavily on tourism, Barnett explains.
Conversely, Louisiana’s coast is a delta without beaches that depends heavily on natural resources like seafood, natural gas and oil — the industries most severely impacted by the BP oil spill and off-shore drilling moratoriums.
“The BP disaster increases the level of uncertainty for everyone,” he says. “And uncertainty decreases investments. Who wants to put their money at risk?”
According to Barnett, the BP oil spill has impeded capital formation — saved-up wealth or a manufactured means of production, such boats, nets, oyster reefs, oil rigs, pipelines, and new technology or research. Commercial fishermen and oil and natural gas companies won’t invest in new equipment or technology if they can’t be sure they’ll be able to fish or drill in the next few years.
But the decisions and actions of the present have the ability to shape the future of the Louisiana economy, he adds. When the demand for Gulf seafood picks up and the shrimper again decides to invest in a new troll net, there is new hope for the economic future of Louisiana.