Mosaic Closing Exposes Flaw in the System

Published Sunday, September 5, 2010 3:00 am
Previously published on

by Dennis Maley

There are many drawbacks to a weak economy rife with unemployment. For those struggling to find work, they are of course obvious. We live in a market-based economy that relies on ever increasing consumption, so whenever unemployment rises and spending decreases, the economy tends to contract, often leading to further cutbacks in employment and reduced consumer confidence because of anxiety over whether any of our jobs are safe. It is indeed a vicious cycle.

One ancillary drawback that is rarely considered is our increased openness to short-sided and even dangerous sources of employment during the worst economic times. Our current economy has created multiple examples of conflict that has arisen as a result of people being much more sensitive to any policy, no matter how sound, that may lead to a loss of employment.

When fertilizer giant Mosaic lost a recent judgment denying its expansion in South Fort Meade, they announced the closing of the mine and told 140 people in an already hard-hit area not to come to work the next day. Obviously, there were many hard feelings among people who lost their livelihood for the greater good of the community.

Phosphate mining is nasty business. It has become a necessary component to modern industrial agriculture and our current food supply could not be maintained without it, but over-mining poses serious risks to any nearby community. Mosaic mines 30% of its phosphate from the Fort Meade operation, yet said it was not “cost effective” to continue operations there if they couldn’t expand in South Fort Meade.

The corporation posted $400 million in profits during the final quarter of last year, noting that phosphate margins were up significantly. In all likelihood, they could have continued to operate while making a tidy profit, but that is not what capitalism is about. There is more profit to be found somewhere else and that is their obligation to their stockholders, so they will move.

This is a difficult reality that is intrinsic to capitalism. In theory, that money is invested somewhere else in our economy where that greater profit can be made. Jobs are created to replace those lost, the increased wealth flows through the channels, trickles down via increased consumption, and our economy grows stronger as a result. But for those who are out of a paycheck now, that is of little comfort.

The backlash is almost always directed toward the government bodies that enforce important environmental and safety regulations, rather than the companies who seek to skirt them or move off to someplace less concerned about the welfare of their citizens. So then, what is the solution? Perhaps we should create laws that prevent companies from abandoning such operations when they are still profitable, just to move them someplace else for the sake of a better share price.

The areas surrounding Fort Meade have paid an ecological price to have their natural resources exploited in exchange for jobs. Is it fair be left with what may turn out to be decades of associated problems without even those jobs to show for it? Of course such laws would never work because more desperate states would undercut more prosperous ones and someone would do whatever the corporation wanted to get jobs for their voters.

It probably would require stiffer  federal regulations to ensure a fair playing field. If no state could lure a corporation away with relaxed state regulation or subsidies, a company would have less financial incentive to pull out. But of course such laws would be viewed as federal intrusion on states’ rights and the most depressed states would complain that such high-mindedness was easy for places with less significant employment problems – and they’d be right. It is easy for a state like California with a strong base of high-paying, clean jobs to be more willing to comply with strict environmental standards than say Mississippi or Kentucky.

I feel deeply for the families who have lost an income through this closing. As much as I try to be a good steward of the planet and act in the interest of my community, I have no shame in telling you that I would happily club a baby seal were it necessary to feed my children. I doubt there are many among us who wouldn’t, which is why we rely on government to protect us from self-interest, no matter how well intended.

Again, this is of little comfort as corporations such as Mosaic continue to reap billions, while displaced employees sign up for unemployment checks. However, the other choice seems to be allowing private corporations to rape, pillage and plunder our resources no matter the consequence, while hoping they’ll demonstrate a moral compass along the way to squeezing every last drop of milk and honey from our nation’s land.

Natural gas employees is Pennsylvania, coal miners in West Virginia, oil riggers in Southern Louisiana and Phosphate miners in Florida have a right to be angry. They want to feed their families and they want work in the field in which they are skilled. Some of these out of work employees might lose their homes. Trying to scrape by with an unemployment check while everyone else up the ladder seems to get a bailout when things go sideways, undoubtedly adds insult to injury. Welcome to capitalism 2.0.