1LessonOneSpillonomics:UnderestimatingRisk2CatalogueBackgroundInformationWarm-upQuestionsMainIdeaLanguagePointsDifficultSentencesKeystotheExercises3DavidLeonhardtisaneconomicsjournalistwithTheNewYorkTimes.HejoinedTheTimesin1999andwritesboththe“EconomicsScene”columnandfortheTimesSundayMagazine.BeforecomingtoTheTimes,hewroteforBusinessWeekandTheWashingtonPost.InAprilBackgroundInformation42011hewasawardedaPulitzerPrizeinthe“Commentary”categoryfor“hisgracefulpenetrationofAmerica’scomplicatedeconomicquestions,fromthefederalbudgetdeficittohealthcarereform”.BackgroundInformation5DeepwaterHorizonisthenamegiventoanultra-deepocean-drillingoperationthatwaslocatedabout250milessouthwestofHouston,Texas,inGulfofMexico.Thedrillingextendedfromaplatformontheoceansurface,downabout4,000feet(about1.2Km)totheoceanfloor,andthenanother31,000feetBackgroundInformation6(about9.3Km)belowtheoceanfloorintothecrudeoildeposit.Itwasthedeepestwellofitstypeeverdrilled.In2010,worldwide,DeepwaterHorizonwasthelargestofabout200suchplatformscapableofdrillinginwatersamiledeep(1.6Km)ormore.BackgroundInformation7BPOilSpillintheGulfofMexicoTuesday,April20.Newsbrokethatanexplosionoccurredat11p.m.ESTonBP’sDeepwaterHorizonoilrigintheGulfofMexico,52milessoutheastoftheLouisianaportofVenice.BackgroundInformation8ExplosionBackgroundInformationAccordingtotheCoastGuard,11to15crewmemberswerereportedmissing,ofthetotal126workersaboardtherigatthetimeoftheblast.Therigwasdrilling,butnotinproduction.DeepwaterHorizonoilrig9BackgroundInformationPresstheiconontherightandwatchObama:BPagreestopay10TheOilPollutionAct(石油污染法)waspassedbythe101stUnitedStatesCongress,andsignedbyPresidentGeorgeH.W.Bush,tomitigateandpreventcivilliabilityfromthefutureoilspillsoffthecoastoftheUnitedStates.BackgroundInformation11Thelawstatedthatcompaniesmusthavea“plantopreventspillsthatmayoccur”andhavea“detailedcontainmentandcleanupplan”foroilspills.BackgroundInformation12WallStreet–acollectivenameforthemajorU.S.financialinterests(banks,insurancecompanies,investmentcompanies,etc.),mostlybasedinNewYorkCity.Background:Intheearly1600sManhattanIsland,themainportionoftoday’sNewYorkCity,hadaBackgroundInformation13BackgroundInformationsmallpopulation.Forprotection,alargewallwasbuiltneartheshore;aroadwayranalongsidethewall.AstheareadevelopedintoatowntheroadwaywasnamedWallStreet.Todayitisaneight-blockareawithsky-crapers,verytallbuildings,containingtheheadquatersandofficesofmanyofthemajorbankingandinvest-mentcompaniesofAmericaandtheworld.14Warm-upQuestions1.DoyouthinkBritishPetroleumisthevictimofanunfortunateaccident,ordidthecompanyfailinthemanagementofpotentialrisks?2.Atthetimeofmaximizingprofits,whatshouldaresponsiblecompanydo?3.Whatarethechallengesindevelopingeconomywithoutharmingtheenvironment?15MainIdeaHumansoftenparticipateinveryriskybehavior,particularlyifeventsareextremelyrare,therewardsarelargeandtheconsequencesseemtobesmall.Theauthorbeginswithtwoexamplesofriskybehaviorsthatresultedinseriousunexpectedconsequences:1)Amajorunderseaoilspillin2010.2)ThecollapseoftheU.S.financialmarketsin2009.Inthefirst16MainIdeaexampleasmallgroupofcorporateexecutivestookunduerisks.InthesecondexamplealargesegmentoftheAmericanpublic,andmany,manyfinancialde-cisionmakersweresurprised.Thearticlegoesontodiscusstwotypesofrisks:1)Whereabadeventisdifficulttoimagineandriski...
