Extent of ecological damage impossible to predict, but effect on unemployment will be big

The ecological catastrophe in the Gulf of Mexico will have far-reaching effects, many of which will not be felt for years. The most brilliant climatologist cannot predict how the destruction of the Gulf ecosystem will affect the flow of the Gulf Stream, which is an important regulator of the global climate. It will have some effect because all those living things that are now dying in the Gulf of Mexico impact things like water temperature. The water temperature impacts currents. Currents impact air flows.

Nobody knows how this will play out. What we do know is that it is enormous in scale, despite what British Petroleum's PR machine is "messaging" through their mass media toadies. It could literally be the end of life as we know it, a fatal wound to the planetary ecosystem. Not to bum anybody out, but get ready for a very weird decade or two, weather-wise.

One effect we can predict with some certainty is the number of jobs lost. The seafood industry in Louisiana is worth about $2.4 billion. If each job pays $50,000, that amounts to 48,000 jobs directly lost. Except it doesn't stop there: Those fisherfolk buy things. They have bills to pay like the rest of us. That money circulates through the economy. Each dollar is worth more than a dollar according to the multiplier effect. (Incidentally, I blame the reverse which I call the "divisor effect" for the current state of economic meltdown. Less dollars circulating through the heart of the economy -- working people -- leads to a state of economic entropy where the thing just keeps melting down.)

BP is doing a great job of PR, though -- fishing boats are being hired to help clean up the spill. Whether this will replace their lost income is up for debate. It is hard to imagine that BP would shell out 2.4 billion a year for this effort.

What about tourism? So far we are being told that the beaches east of the Mississippi are largely unaffected. Even if true (which is doubtful), hotels in Alabama and the Florida panhandle are reporting that Memorial Day weekend reservations are down 50 percent. Occupancy is as low as 15 percent.

On a brighter note, hotel occupancy is up in Louisiana as the news media and scientists descend on the area like vultures. This is temporary, though, unlike the death of the Gulf ecosystem. The reporters and scientists will leave once the carcass is picked clean. Well, a few of the scientists will probably stick around if they can get grants. I'm sure BP is on that one, undoubtedly grooming a few choice scientists for generous grant allotments.

Florida's tourism industry is worth over $20 billion a year. If this oil fouls the beaches of the Sunshine State, it could only be called an economic nightmare. I don't even want to think about those numbers. Sport fishing in the Gulf, a multi-billion-dollar industry, will take a huge hit even if Florida's beaches dodge the bullet.

So how do the numbers shake out? Back of my envelope says this:

Best-case scenario:

• 48,000 (minimum) jobs lost forever in the seafood industry, just in Louisiana
• 100,000 (minimum) jobs lost forever in the tourism industry (The beaches are going to be stinky and toxic for a very long time)
• 10,000 jobs (maximum) gained in the hospitality industry in Louisiana for the next year or two
• 50,000 jobs (absolute maximum) gained in the oil cleanup effort

Net job loss: 88,000

Worst-case scenario:

• 80,000 jobs lost forever in the seafood industry (Louisiana, Alabama, Texas)
• 200,000 jobs lost in the tourism industry (Florida panhandle, Alabama, Louisiana, Texas)
• 5,000 jobs gained temporarily in the Louisiana hospitality industry
• 10,000 jobs gained in the oil cleanup effort

Net job losses: 265,000

Remember that most of these are jobs that are never coming back -- the waters are dead, and the beaches permanently fouled.

These estimates do not account for lost jobs in construction or financial losses to property owners along the Gulf Coast. A lot of beachfront property will be left to fall into ruin, but I'm not building that in to the estimates because a lot of people will regard it as "hysterical" thanks to BP's masterful PR efforts. Just wanted to mention it so that a couple of years from now I can revisit this post and be like, "Yup, I called it -- again."

Sorry I can't be more cheery today. This thing bums me out.