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>>David Kotok: BP Oil Spill Will Cause 1 Million Permanent Lost Jobs

Joe Weisenthal | Jun. 20, 2010, 8:24 AM

David Kotok of Cumberland Advisors is out with the latest in his sobering, but must-read OIl Slickonomics series. This time he does some math on the direct economic impact on Gulf States.

We estimate that an extended moratorium, which we now expect to continue because of Obama political calculus, will cost up to 200,000 higher-paying jobs in the oil drilling and oil service business and that the employment multiplier of 4.7 will put the total job loss at nearly 1 million permanent employment shrinkage occurring over the next few years. Five states have a regional recession/depression development underway. Alaska could become the sixth state on the damaged list.

Readers may note that for the Gulf region, they can watch the Beige Books of the Atlanta and Dallas Federal Reserve Banks for economic details over the next several months.

And we must not be deceived by the $20 billion fund. It is not nearly enough to cover the liabilities that may develop for BP and its partners, who are already in dispute with each other over who is going to pay for what and when and how much. Remember at $4300 fine for each leaked barrel of oil, the $20 billion is likely to just cover the fine. We expect that the total cleanup and payment of the liabilities to all injured parties in all five states may approach 5 times that amount.



Read more: http://www.businessinsider.com/david-kotok-bp-oil-spill-will-cause-1-million-permanent-lost-jobs-2010-6#ixzz0rOlXLEY7