Friday, June 18, 2010

What Joe Barton should have said

Instead of his awkward apology to BP, it would have been nice if he or some other congressman had made the point about the BP escrow account that the WSJ makes today.
BP no doubt concluded that it had no choice but to accept the new escrow account—to be administered by national trustee laureate Ken Feinberg—lest it court even greater political wrath. It also wanted to pacify the capital markets and stop its share-price slide by suggesting there is some limit on its liability. Yet Mr. Obama pointedly failed to agree to any outer liability bound, even beyond the $20 billion.

Meanwhile, BP's agreement sets a terrible precedent for the economy and the rule of law, particularly for future industrial accidents or other corporate controversies that capture national outrage. The default position from now on in such cases will be for politicians to demand a similar "trust fund" that politicians or their designees will control.

There was in particular no reason for BP to compound its error and agree to spend another $100 million to compensate the oil workers sidelined by the Administration's policy choice to impose a drilling moratorium. BP had no liability for these costs, and its concession further separated its compensation from proper legal order.

BP deserves to pay full restitution for the damage it has caused, but it ought to do so via legal means, not under what Texas Republican Joe Barton rightly called the pressure of "a shakedown" yesterday. On the other hand, BP does not deserve the apology that Mr. Barton also offered, though he quickly backtracked when the White House pounced on his comments.

The American people seem to have concluded that they dislike both BP for causing this disaster and the White House for appearing to exploit it without stopping the leak, and maybe that's the right response. BP at first sounded arrogant and now is so obsequious it won't even stand up for its legal rights. But it's hard to know who is more unlovable, BP or its Washington expropriators.
It's the precedent that this establishes that is so disturbing, not the idea that BP must pay for the damage caused by the spill. As Ross Kaminsky writes,
BP is not a victim here. They're not in the least bit sympathetic. But this is the nation that presumes innocence before guilt, that is founded on the rule of law rather than of men. How strange it is that we elected a president who wants to give terrorist murderers the benefit of the doubt, give them access to legal protections they're not even entitled to, but treats a major international corporation -- which had already said it would pay all legitimate claims -- the way Al Capone treated a rival moonshine distributor.
Barton had a point, he just expressed it terribly. We are a nation of laws and those should be followed. This escrow fund is too reminiscent of how the stimulus money and TARP money were handled instead of using the legal processes we have established. Otherwise, we run the risk of having this whole thing being politicized.

11 comments:

tfhr said...

"This escrow fund is too reminiscent of how the stimulus money and TARP money were handled instead of using the legal processes we have established."

Exactly. There will be one line for businessmen, people thrown out of work, families, etc., all filing for their claims, and there will be another line for political patronage. We'll call that the ACORN line.

In the end, much of the money put into escrow will go to people or organizations that do not deserve compensation.

Rick Caird said...

tfhr, that is exactly my point, too. This is a shakedown. It was designed to get money to operate
"The Chicago Way".

Obama was willing to stop the BP direct reimbursements that were already underway in favor of his control even though it means creating a whole new bureaucracy and a whole new set of operating rules and creating delay.

But, with the responsibility for the fund comes ownership. We all know how Obama detests ownership.

Tacitus Voltaire said...

what Texas Republican Joe Barton rightly called the pressure of "a shakedown" yesterday

the fact that the wsj can quote this approvingly merely demonstrates not only how out of the mainstream they are with american society and american values, but even with the values of the majority of republican voters



In the end, much of the money put into escrow will go to people or organizations that do not deserve compensation

you have expressed this opinion in the form of a factual statement

Locomotive Breath said...

TV presumes to speak as the voice of the majority of Republican voters.

By way of prior example, part of the tobacco settlement in NC went to tobacco farmers. But they were well connected so they got the money. I was working at NCSU at the time and still remember the tractor parade down Hillsborough St.

http://www.tobaccofreekids.org/reports/settlements/state.php?StateID=NC

Tacitus Voltaire said...

TV presumes to speak as the voice of the majority of Republican voters

you got me there, but on the other hand mitch mconnell promptly made barton go on teevee and take it back

equitus said...

Traditionally, the Democrats' primary virtue has been the good intentions behind their policies - never mind the real world consequences.

What Obama is doing now is heaping upon those good intentions extra-legal punishment and Chicago-style extortion. And still, never mind the consequences.

BP is only slightly more evil that your average major oil company (and that is for cynically playing the green political game), which are in turn negligibly more evil that your average big company in any industry. It could have easily been Exxon or Chevron or any of the others.

Obama simply needs an ass to kick to make himself look good. And it's working, to some extent. His tough-guy demonizing distracts while he pushes for economic policies most informed Americans realize will be devastating.

tfhr said...

TV,

So?

Go see who bellied up to the TARP trough and then tell us how every recipient or every program was deserving. When you're done with that, remind us again about how that scam kept unemployment below 8%, as Obama promised.

Tacitus Voltaire said...

tfhr said...
TV, So?

Go see who bellied up to the TARP trough and then tell us how every recipient or every program was deserving


you were the one who made the statement as if it were already fact. i didn't make any statements about it one way or the other. you are the one with the burden of proof here

tfhr said...

TV,

If you don't think the disbursal of this money from the BP escrow account won't be subject to the whims of politicians, then your credulousness knows no bounds.

Tacitus Voltaire said...

tfhr said...
TV, If you don't think the disbursal of this money from the BP escrow account won't be subject to the whims of politicians, then your credulousness knows no bounds.


you expressed an opinion in the form of a factual statement:

In the end, much of the money put into escrow will go to people or organizations that do not deserve compensation

prove it

tfhr said...

TV,

When the government actually starts disbursing money from that account, we will see.

My statement is a prediction but like we saw with the fraud, waste and abuse that was uncovered with Katrina and 9-11 compensation and assistance, there will be individuals and organizations that take money that they should not have been offered. There will be opportunists and con artists that will arrive on the scene to submit fraudulent claims.

And like we saw with TARP, there will be money that goes to dubious projects, people and organizations, even though Joe Biden was put in charge of preventing such a thing. I hope Kenneth Feinberg is more effective with the BP escrow fund than Biden was with TARP funds. Perhaps he should keep Jamie Gorelick as disengaged as possible, if it is true that she'll have part in managing the fund.

Fraud, waste and abuse - just wait for it.