The Wall Street Journal reports that the Obama administration is going to make BP “pay salaries of oil-services workers who lose their jobs as a result of the spill.” This follows on the heels of Obama’s interview with NBC’s Matt Laurer this morning in which the Butt Kicker-in-Chief got all businesslike and stern, and used the A-word on national TV to show how serious he is in, well, being serious about this whole oil leak thing. If he figured that using that language would make him look more leader-like and even presidential, I’m afraid he’s in for a surprise. And it really didn’t do anything to get the well plugged faster.
Anyway, let’s get back to this thing about oil-services workers losing their jobs and BP having to pay their salaries. If I understand things correctly, the administration is going to put a six-month (at least) moratorium on a bunch of offshore drilling, which should directly correlate to a loss of jobs for people who actually depend on that drilling for their livelihoods. So, in effect, the feds want to tax BP to fund their program, a program which, by the way, was not supported by the majority of the engineering experts assigned to review the situation. I’m no Constitutional lawyer, but I suspect there are some issues ripe for arguing in that scenario. If nothing else, it’s an example of just how weird things are getting.
Am I the only one who senses that the administration is seeking nothing short of the bankruptcy of BP? Thus far, according to the WSJ article, BP has not denied a single claim and has paid out nearly $49 million to fishermen and small business owners. To my knowledge, the company hasn’t waffled a bit in owning up to its responsibility for making things right, however long and however much money it takes. And yet the level of hostility in Washington, D.C. towards BP seems to grow exponentially. Some financial experts are directly attributing today’s 16% drop in BP’s stock price to Obama’s remarks on The Today Show.
I fail to see how putting BP out of business is going to help anyone or any part of the situation.
At some point, there may well be a need for punishment to be doled out, but I don’t think anyone knows enough now to even talk about kicking a**.
Just as I didn’t think Arthur Andersen deserved to go down for the mistakes of a few, I don’t think BP deserves that either (unless facts were to show the company is corrupt). And economically, that would be the worst fate for the victims of this tragedy. BP needs to survive in order to pay…that’s pretty simple.
BusinessWeek has a very interesting article about this topic, discussing the implications of BP’s cutting or discontinuing its dividend (which I didn’t even address). The conclusion is that BP still has the wherewithal to pay the dividend AND do the clean-up, but that won’t last if Obama, et al keep hammering at the company for no good reason.
We know so many people who are innocent victims by virtue of having much of their retirement portfolio tied up in BP stock. I hope we don’t see another Enron-style collapse. A couple of weeks ago I couldn’t conceive of it being possible, but I’m no longer sure.