What Obama Won't Tell You Tonight

MarketWatch

Will he do so tonight? Reports say the President is planning to use his speech to press climate initiatives. Let's hope so. But it's a little late. The 'narrative' is already about competence: BP's and the government's.

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They say one picture is worth a thousand words. But the most depressing image out of the Gulf crisis may not be one of those pitiful cormorants. Maybe it's the chart of the PowerShares Global Clean Energy exchange-traded fund (NYSEArca: PBD - News), which tracks the stocks of companies engaged in clean energy. It has actually fallen 16% since the April 20 blowout of Deepwater Horizon.

Yes, there's been a slump on the stock market over that time, and clean energy has also been hit by the looming expiration of tax credits in Europe. But nonetheless they have actually underperformed small caps, and the Nasdaq (^IXIC - News), since April 20.

Just think about that. We've just seen perhaps the greatest disaster ever caused by dirty energy. In any rational universe, shares in wind power, solar power, geothermal, and energy efficiency companies should be skyrocketing. This crisis should be waking this country out of a 30-year bout of laziness and torpor, and making us get serious about conserving energy and developing sources that don't foul the Earth. Instead they have fallen by about a sixth.

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Investors aren't stupid. If they thought we were about to mend our ways they'd be piling into these stocks. Instead they've looked the national reaction to the Gulf disaster, from Washington to Main Street. And so far they are drawing their own conclusions

4. Define 'British'

For obvious reasons, the President has pointedly referred to BP as "British Petroleum" — a name it abandoned years ago. He may try that again tonight.

Like most major oil companies, it's really just a multinational.

We hear time and again about "British" pensioners and shareholders in the company. Yet the reality is BP is traded on Wall Street as well as in London, and plenty of Americans own stock in this company through mutual funds as well.

Major U.S. mutual funds that had big stakes in BP at the end of the last quarter, according to FactSet, included Vanguard Windsor II (NASDAQ: VWNDX - News), Vanguard Wellington (NASDAQ: VWELX - News), Fidelity Diversified International (NASDAQ: FDIVX - News), Vanguard Wellesley Income (NASDAQ: VWINX - News), T. Rowe Price Equity Income (NASDAQ: PRFDX - News), American Beacon Large Cap Value, T. Rowe Price New Era (NASDAQ: PRNEX -News), Putnam Equity Income (NASDAQ: PEYAX - News), T. Rowe Price International Growth & Income (NASDAQ: PRGIX - News), Vanguard Equity Income (NASDAQ: VEIPX - News), Hartford Dividend & Growth (NASDAQ: IHGIX - News). Unless they sold all their shares on the weeks before April 20, investors in those funds got hit by the slump in the stock following the explosion at Deepwater Horizon.

5. Let's get some perspective here

Obviously, this is an ecological disaster. The people of the Gulf coast are going to need help getting back on their feet. And the wetlands need saving and restoring. No one's going to dispute any of that.

But amid some of this hysteria, let's get a little context.

Big oil was not some evil outside monster feeding on Louisiana's plain folk. On the contrary, it was very good business for the local economy and remains so. According to the U.S. Commerce Department, Louisianans earn $13 from mining and related activities for every dollar they get from fishing.

No kidding. In 2007, the last year for which we have data, the total compensation paid to people in Louisiana working in forestry, fishing and related activities came to just $310 million. The figure for mining and support activities was $4.1 billion, with nearly all of it related to oil and gas.

Furthermore, this isn't the first bailout on the Bayou. It isn't even (after Katrina) the second.

Louisiana, Mississippi and Alabama were getting billions of dollars a year in subsidy from the rest of us even when times were good.

That's because they get vastly more back in federal spending than they pay in taxes.

The Tax Foundation, a non-partisan think-tank in Washington, D.C., has done the most authoritative analysis. It looked at federal tax and spending data through 2005, the last year for which numbers are available.

In the preceding quarter century, it found, these three states got an extra $430 billion from the rest of us. That's the difference between how much they paid into the pot and how much they took out. (In today's money — after accounting for inflation — by my math it comes to around $609 billion.)

And this is a lowball figure, because the Tax Foundation adjusted the numbers to balance the federal budget. In reality, thanks to the huge deficits racked up nationwide most years, the true cash subsidies were even greater than that.

In 2004, the year before Katrina distorted things, Louisiana got back $1.57 in federal spending for every dollar it paid in taxes. That's a net profit of $3,100 per resident.

In Mississippi the figure was $1.82 in spending per dollar paid in taxes, or $3,800 per person.

In Alabama, $1.67, or nearly $4,000 per person.

And never forget that the majority of voters in these states have spent years railing against "big government" and "federal waste" even while pocketing the same. Alabama is proud to call itself a heartland of the Tea Party. Louisiana elected as governor — with a 54% majority — Bobby Jindal, who was, up until around April 20, busy trying to build a career denouncing federal spending.

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