Health Care and Oil Industries Attacked by Zombies

A letter to the editor of The Financial Times:

I am a pensioner and a shareholder in BP.

I understand that the board of BP is handing over to the US government $20 billion with no conditions, though the company has no legal obligations to do so. I also understand [that the] representative of the US government who has [the] responsibility for disbursing has said he will “err on the side of the claimant,” an invitation to every conman in the southern USA to get his spoon into the pot at my expense.

This action by the board of BP is so financially irresponsible that I think not only chief executive Tony Hayward but every other member of the BP board needs to consider his position.

Now we will deconstruct this letter following our new Zombie Theory of History. BP is a producer. It is alive. Its flesh is solid. The blood of profits runs through its veins. The zombies are after it.

The company was doing fine. But it tripped up in the Gulf of Mexico. The zombies saw an opportunity. In order to buy time…and perhaps save itself…the company paid an enormous ransom…bribe…or tribute to the federal government.

Now, ‘political risk’ – more properly known as ‘zombie risk’ – is higher in the US than it is in emerging markets.

And now the zombies are gathering outside our window. No kidding. Busloads of them.

There’s a rally by a group called “The Heart of Baltimore.” Someone is spending a lot of money on it. Danny Glover is supposed to be out there. Poor man. It’s about 100 degrees in the shade.

What’s going on?

“Free & Fair Union Elections” is the order of the day. Ah ha…zombies! One of five Baltimore workers is allegedly working in the health care business. According to the pamphlet, they are struggling to “survive on poverty wages,” because they are “without a union.”

Dear readers may wonder how having a union makes what they do more valuable. We wondered too, for about 2 seconds. Of course, it doesn’t. The only way the health care providers could pay higher wages would be if a) the workers were more productive or b) they raised the cost of health care. Health care is already through-the-roof expensive in the US – far more than it is in other countries. Why? Because the zombies have control of it. The US claims to have a free market in health care. It’s not true. The whole system is rigged by unions, pharmacy companies, insurance companies, tort lawyers – and regulations, regulations, regulations.

We will ask you a simple question. Suppose a group of doctors set up a “McDonald’s of Health Care – lowest prices in town.” They said: ‘We’ll treat you. But only if you sign this paper saying you won’t sue us.’ Without the tort lawyers breathing down their necks they could eliminate their malpractice insurance and cut out all the unnecessary tests.

And then…suppose a drug company decided to launch a brand of Free Market Drugs. They offered customers ‘unapproved drugs…neither tested nor reviewed by the FDA or anyone else…take them at your own risk!’

How long would these companies last? About 24 hours. Too many zombies.


Bill Bonner
for The Daily Reckoning

The Daily Reckoning