If Obama really wants to get tough with B.P. and make the consequences of giant oil spills clear to oil companies, he should put the company’s U.S. operations into receivership, where they can be administered by the U.S. rather than executives of the foreign corporation. B.P. will still pay for everything, and their employees and subcontractors will still do the work, but our representatives will give the orders directly, rather than indirectly as at present, and have unfiltered access to information, including all of the company’s documents. When the well is capped, the Gulf cleaned, and all damages have been paid, the business, whatever is left after it has settled its debts, can be returned to London.
Many people have suggested this step: here on BMG; Robert Reich and environmental groups; and most recently Tennessee Democratic representative Steve Cohen, according to Bloomberg.
This kind of blunt demonstration that the people are more powerful than business interests is one way to help convince corporate leaders that they should make sufficient investments to prevent future disasters of this kind, rather than let them happen and pay damages later as a cost of doing business. Corporations, after all, are creatures of the state, which gives them life by creating the laws that permit them to exist.
The degree to which the president approaches this position — there are many intermediate steps, from taking management control of some of B.P.’s employees and subcontractors, such as for example flow rate measurement technicians, to setting up an escrow fund as Harry Reid and others have suggested — is the degree to which he is acting for the people rather than for B.P.
By contrast, if Obama does not do this, I think he opens up a position of terrible political risk for himself. He has already declared emphatically that the bucks stops with him: this is his responsibility. But he is acting through an intermediary, B.P., whose interests are not in general the same as the voters of the U.S. This is not a time for half-measures: the longer this disaster continues — months more, under even the best estimates — the clearer that will be. If a hurricane throws millions of gallons of oil over hundreds of miles of shoreline, the catastrophe may become orders of magnitude worse.
What do you think Obama should say in his big speech tonight?
hoyapaul says
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p>To what extent will this be possible given that BP America is only a subsidiary of the larger foreign company (which cannot be put into receivership)? The US would still have to deal with that British private ownership, whether or not the US seizes BP America. I’m not sure how that would mesh.
mr-lynne says
… we should do everything we can to ameliorate the profound heaviness we have in our hearts as a nation because of this tragedy. And while it certainly can’t make up for everything, our nation would do well to celebrate a resounding Celtics victory tonight.
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p>Now back to the reality of the spill (depressing).
christopher says
…that the Celtics did absolutely nothing to lift our spirits tonight:(
mr-lynne says
…. take out a starting center and rebounding suffers. Whodathunk. It seems that the keys to their successful games were stay competitive with rebounding and do something to keep Gasol from having a good night. Neither happened. and OMG the missed layups.
howland-lew-natick says
Doesn’t the Oil Pollution Act of 1990 set a $75Million limit on BP’s liability? The Act was Aye’d by our own Congressman Barney Frank and Senator John Kerry. Won’t anything past ex post facto just be window dressing to show the politicians are “doing sumtin’.”
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p>“Money and Corruption Are ruining the land Crooked politicians Betray the working man, Pocketing the profits And treating us like sheep, And we’re tired of hearing promises That we know they’ll never keep” –Ray Davies
bob-neer says
The 1990 act limits damages to $75 million but does not limit in any way liability for “removal costs.” The latter, I’d say, is a loophole big enough to drive a tanker through in the present case. How much would it cost to filter the Gulf? If the government wants to play tough, they can bankrupt BP through a strong definition of removal costs, among many other ways they can severely damage or even destroy the business.
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p>Personally, and separately, I think any limit at all on liability for oil companies is short-sighted. Let the free market function and make them compete without government-enforced special treatment of this kind.
howland-lew-natick says
Will it be cheaper to pay the politicians than clean the damage?
stomv says
the other half is to require them to carry insurance (or self insure) for the full cost of a major disaster, like Ixtoc or Valdez or Deepwater. If that means that each company ponies up $x.xx per barrel into a trust fund, cool. If that means that some insurance company (or group of ’em) is willing to insure directly, cool.
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p>My hunch is that the price of cleaning the disaster is so high that if we required the companies to be prepared to clean it up they’d stop drilling in deep water.
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p>If that’s the case, well, my friends, welcome to economics. If the cost of disaster is so high that it’s not worth doing, then… it’s not worth doing.
bob-neer says
We do subsidize some things we think worth doing. The question is whether that should be oil companies …
jconway says
I completely agree with you, Secretary Reich, and Rep. Cohen that this is probably the most efficient and easiest way to move forward regarding this crisis. That said, you and I both know that Obama is far too scared of right wing opposition to do this. We know the Faux news channel, the rush’s, becks, and hannitys will all be foaming at the mouth with the words ‘nationalization’ and ‘socialism’. Furthermore the Tea Party will get more riled up about this.
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p>Now what that would show is a great moment of going on the offensive and saying ‘these guys are wrong’ and that the GOP and the right supports oil companies over people. Obama could really make a great populist argument that could win the Democrats seat this fall, he could go on a tour of the gulf states and in a Truman-esque fashion say these are the bad guys we are the good guys.
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p>The question is when will he realize that the right is not out to negotiate, compromise, or work with him? When will he realize a good chunk of that group does not even view him as a legitimately elected President believing conspiracies about birth certificates and ACORN? When will he realize that even though he is President a black man still can’t get a break in this country?
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p>I want to see the angry Obama fighting for us. The time for nuance, bipartisanship, and humble rhetoric is over, the time for action is now. I am just as disappointed as he is that even centrist proposals will be steamrolled by the right, but they have proved themselves to be beneath smart governing, and its time to move on.