Third
world quality at first world prices: Let
them drink lead! The story of America, its
unleaded gasoline and its leaded water.
Water is almost as scarce a resource as land. Access to water, and its molecular structures
free from contamination are required for human survival. Air is perhaps the only resource as important
as water for the survival of the human organism at present. The rate of water contamination will increase in
conjunction with resource scarcity over the coming years as exponential
population growth occurs secondary to industrialization of third world nations. It is certain that environmental contamination
with heavy metals, including lead, will continue long in to the future as
antiquated infrastructural systems fail, before they are replaced (ncbi.nlm.nih.gov).
Let’s face it, infrastructure spending, and planning, is about as sexy as a 97 year old stripper. Apologies
to any of my readers who may be 97 year old strippers.
Over the past decade the four horsemen of economic collapse
have been visited many of the incorporated municipalities in the U.S.
The first horsemen, debt, is viewed as wealth in a Keynesian economic
model. It is believed in the predominant
school of economic thought that gov’t spending stimulates economic growth. However, even Keynes pointed out that
borrowing too much money in a strong economy would cause lending rates to increase,
and production values to fall below profitable levels (investopedia.com). Of course when times are good, as they were
over a decade or two ago, who paid attention to any of that fiscal
responsibility nonsense? They say, you can lead a
horse to water but you can’t make it drink. Your horse not drinking in Michigan might be for the best if it runs on unleaded water.
The
story:
Despite attempts to spend their way out of a staggering
deficit of $348.1 million dollars, Flint Michigan was finally forced to declare
a state of emergency to attain state backed funds in an effort to evade the
second horsemen, default. With these
funds came a state appointed disaster manager, who oversaw the downsizing of
municipal budgets. Water, inarguably the
most important natural resource second only to air, was targeted as an
expense. The city used emergency funding
to change the municipal water resource from Detroit Michigan to Lake Huron. Detroit was an adjacent municipality, which had been
visited by the third horsemen of the economic apocalypse bankruptcy, years
earlier. Detroit had increased their water
price to bolster their still crumbling water works, which to this day has been shutting off water
entirely to entire neighborhoods of homes at a time. Thank
goodness for the land of 1,000 lakes.
With infinite wisdom, despite warnings from water quality experts, the
leadership decided that in order to save $12 million dollars it would use nearby
Lake Huron as its water supply. Shortly after the switch in 2014, citizens began to complain. It was
well known in 2014 by the leadership that the water supply was dangerous. This was evident by its
sulfuric smell, and discoloration, even to the untrained and unprofessional
observer. Citizens who raised complaints
were assured that it was nothing, and that the water was safe. Even when the nearby GM motor works factory switched
water supplies because of engine corrosion issues in factory production lines,
the city and department of health insisted that the water met or exceeded
safety standards (theatlantic.com). In
addition to the switch, Flint would increase water and sewer prices by 25% to
offset the cost of the infrastructural development needed to finance their new
pipeline project. It is worth
mentioning that $285.4 million dollars of the cities debt was due to pension
liabilities. The city managed to cut $1.54 million of this by reducing health benefits of aging
pensioners (cityofflint.com). The pension
liability may have been over estimated, since the average lifespan of someone
with lead poisoning is significantly shorter than the average lifespan of someone
who is healthy. Though, it is almost
certain that, the medical care cost associated with renal and liver failure
would offset the potential cost savings of killing off all of the aging
pensioners early. Senior citizens run best on
unleaded water.
Financial
cost:
If we combine statistical data we can calculate the costs
associated with the $12million dollar savings of this disaster, which was orchestrated
entirely by State, and local officials, who assured citizens everything was
fine, even while the situation developed in to the resultant financial and human catastrophe. The repairs needed for the city’s
water infrastructure alone are now estimated to be at least $1.5 billion dollars. With a state of emergency being declared FEMA *a federal agency* will pick up
75% of that tab (fema.gov). It is hardly
worth calculating the cost savings of $12 million dollars from $1.5
billion.
Biological
cost:
The human costs are significantly higher, just under
$50 billion dollars. The long term
health consequences of lead poisoning are horrific, real, and very well
documented. The highlight reel includes:
Neurologic damage ranging from retardation to ADD, as well as reduction in IQ, brain
atrophy, and severe mood disorders, kidney failure, anemia, high blood
pressure, heart disease *secondary to high BP, impotence, spontaneous abortion,
osteoporosis, and dental disease (cdc.gov).
Most of these conditions decrease the lifespan significantly. Though heavy metal is great for working out
and increasing your lifespan, its best to stick to AC/DC for that. The financial biological impact on society as
a whole can be easily measured using the EPA’s calculation of value per human
life throughout its productive years. Yes,
there’s an app for that!
Data
aggregation:
According to the EPA the value of a human life has
actually declined by $900,000 in the past several years. Being a human being just aint what it used to
be. The average human life is worth $7.15
million dollars (gao.gov & nbcnews.com).
Census.gov indicates that there are just over 99,000 people living in
Flint as of July 2015. Of these people
27.3% are under 18. If this data was
applied to our individual valuations it is evident that the major effects of
leaded water instead of leaded gas near Americas motor city would impact a
minimum of 27,027 individuals adversely.
If we factor in all lifetime medical care costs, and lost productive
value from these individuals at a conservative 25% of their full productive
value the cost comes to around $48,310,762,500! That’s a lot of commas!
Since the city is near bankruptcy it is unlikely that
any civil suit will yield meaningful compensations to the victims of corporate
negligence. Such a suit would result in
the 3rd horseman of bankruptcy knocking on the door of Flint
anyway. Followed shortly by the 4th
horsemen, asset liquidation. A process Detroit
knows all too well.
The
moral:
Don’t be: impotent, and mentally retarded, test your
water. "Because only you can prevent lead poisoning.", or was that forest fires? Test kits can be purchased on line at a fairly low cost, relative to the
cost of a lifetime of horrific health problems.
http://www.ebay.com/itm/WaterSafe-WS-425B-City-Home-Tap-Drinking-Water-Test-Kit-Bacteria-Lead-pH-more-/371089925792?hash=item5666aee6a0:g:p~IAAOSws65Tqt~k
The investment
opportunities:
What is the take home message? Well, aside from the
fact that maleficence goes unpunished in corporate entities, it should be noted
that water resources are scarce. Water,
though it is not as sleek and sexy as other assets should be viewed as an
investment opportunity when possible.
Purification, rights to sources, and even testing are avenues of
possible investment. Fear is a powerful
motivator. Especially in a culture where
safety can motivate a country to pay 7,346,924,000 for a company to protect it
from danger, and only be successful 5% of the time! I’m talking of course
about the lovable goons at the TSA (FY_2016_DHS_Budget & forbes.com). I suspect as lead scares and water contamination spreads, name brand water will become big business.
Companies
to take a look at:
Full
disclosure:
I neither endorse nor recommend any of these stocks or
products, I have no vested interest in any of these companies.
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