Portfolio.com - Some Advice for Obama: Urge Entrepreneurial Spirit
June 15, 2010
Capital
by Kent Bernhard, Jr.
Jun 15 2010 12:18pm EDT
Some Advice for Obama: Urge Entrepreneurial Spirit
Image: U.S. Coast Guard photo by Petty Officer 3rd Class Ann Marie Gorden
Members of Coast Guard shore safety teams get their protective boot covers removed after an environmental demonstration on the beach in Grand Isle, La., June 14, 2010. Decontamination stations are set up to prevent oily waste from spreading to clean areas of the beach.
Restaurants in the Southeast were already suffering so badly they had cut 13 percent of their payrolls and now BP's Gulf oil gusher could be a double whammy to those establishments.
That’s what Drew White, CFO of Sageworks, Inc., which tracks private businesses, said. And that’s one reason why he wants President Barack Obama to tell the public it’s safe to eat seafood at restaurants tonight during his 8 p.m. address.
Obama is expected to speak about the BP disaster from the Oval Office this evening after a tour of the Gulf Coast. He has also appointed the rest of a commission to investigate the Deepwater Horizon spill headed by former Florida Governor and U.S. Senator Bob Graham and former Environmental Protection Agency administrator William Reilly. Members of the panel include: Donald Boesch, president of the University of Maryland Center for Environmental Science; Cherry A. Murray, dean of the Harvard School of Engineering and Applied Sciences; Frances Beinecke, president of the Natural Resources Defense Council; Terry D. Garcia, vice president for mission programs at the National Geographic Society; and, Frances Ulmer, chancellor of the University of Alaska, Anchorage.
The restaurant statement is just one thing White would advise the president to say to help ease the economic disaster that the oil spill has become. He has a specific list. So does oilman T. Boone Pickens, who is warning that the spill in the Gulf could make the U.S. even more dependent upon oil and is using the event to push politicians toward using natural gas in the nation's energy mix, a cause he has worked on for a year.
But restaurants first. Sageworks has found that revenue at restaurants in the Southeast, which includes the Gulf Coast, dropped 2.1 percent in 2009. That may not seem like much, but with many costs fixed, and thin profit margins, it translates to bad news for employees of those restaurants.
“It’s a huge leveraged effect when sales go down in a restaurant,” White says. “They really hack payroll…which is bad for the recovery.”
That was 2009, but this year could have been marginally better, when along came oil spilling into the Gulf, leaving one of the nation’s richest fishing grounds off-limits and soiling the tourism season along the coast.
“This translates into tough times,” White said. “And it could affect more than just Louisiana because people look at seafood differently.”
Hence White’s advice to the president about restaurants. But he goes further than that.
Of course, he wants Obama to hold BP accountable for paying restitution to businesses and individuals—especially fishermen left idle by the closure of huge stretches of the Gulf—for the spill.
“That’s where BP needs to come up with the money to sustain the businesses,” he said.
But White goes further than that. He wants the president to advocate an all-out entrepreneurial effort to save the Gulf.
“Give the people some ability to help solve their own problem and the resources to do it,” he said
The president, he said, should:
Call on people from all over to spend time on the Gulf Coast, and call on BP to help them do that. “What would be innovative is have BP give vouchers for people to travel down there.” The folks who came down wouldn’t have to do traditional tourist things. They could volunteer to help clean up, just as long as they came to the coast and spent some money.
Call on businesses in other parts of the country to source work from companies on the Gulf Coast, bringing much-needed cash into an economy hammered by the closing down of its fisheries, tourists staying away, and, ironically, the idling of many oil platforms deep in the Gulf that provide good jobs to residents.
Tap into the entrepreneurial spirit of those who live along the Gulf Coast, encouraging BP to expand its use of the fishing fleet to help skim oil, and hiring companies like Paul Vickers’ U.S. Flood Control. His special tubes used to control floodwaters have been deployed around barrier islands to block oil-laden water from the coast, and oil can then be skimmed before hitting the coast. “People don’t want to sit around and just collect money,” White said.
Pickens, meanwhile, warns that the nation could grow even more dependent upon foreign oil, as this disaster leaves the country less likely to tap offshore oil resources. And, he adds, there is the solution he has been pushing for a year.
Pickens said there is currently bipartisan legislation in the House and Senate that would replace the foreign oil, diesel, and gasoline used by heavy transportation fleets with natural gas.
“We have a resource in this country, natural gas, that we can use immediately to replace oil for transportation. On an energy-equivalency basis, we have twice as much domestic natural gas as Saudi Arabia has oil,” Pickens said. “It’s clean, domestic, and it’s an ideal transportation fuel. We need to put it to work…and now, with a particular focus on heavy-duty fleet vehicles.”
As for the immediate problem of oil spilling into the Gulf, along with holding BP accountable, the president should urge the company to act more like a small business instead of a giant with a massive environmental, economic, and public relations problem, White said.
“BP ought to be just innovative and entrepreneurial like the people in that region,” White said.
Kent Bernhard Jr. is News Editor of Portfolio.com