–Punish BP or . . . ?

An alternative to popular faith

Those rotten scoundrels have ruined our oceans and our shores. They should pay not only for the cleanup, not only for the jobs lost because of the pollution, not only for the damage, but they even should pay for jobs lost because of President Obama’s decision to stop deep-water drilling. BP should pay, pay, pay until they bleed, then pay some more. These people must be held accountable.

Phew! Now I feel better.

But, wait. What is BP? It’s a legal description, nothing more than words on a piece of paper. It has no physical existence. You can’t punish BP any more than you can punish a law or a page of sheet music. BP, as a legal entity, neither caused, nor can cure, the oil spill. That disaster was caused by people, and it is people, not a piece of paper, who must be held accountable.

So the question becomes, which people should be punished? BP has a huge number of employees, the vast majority of whom had nothing to do with the oil spill. It has a huge number of innocent shareholders, a huge number of innocent suppliers, a huge number of innocent oil users. In some ways, you and I are part of BP, because as users of oil and oil-related products (i.e. all products) we are affected by what its employees do.

Which of those people should be “held accountable”? What if holding all of BP “accountable” means thousands of innocent people will be fired, or innocent suppliers will be put out of business, or all of us will have to pay more for our oil and gas, or all of us who hold BP stock, either directly or as part of a fund, will lose? What if punishing BP has an adverse effect on the whole economy. Is that wise?

Somewhere between vengeance and economic reality lies the answer. Punishing BP, as a company, punishes all of us who already are suffering from the gusher. And though widespread vengeance may feel good, there is a “cut-nose-spite-face” aspect to be considered. So, what can be done to help prevent a repeat?

First, let’s identify the people specifically responsible. Certain BP employees. Certain employees of BP suppliers. The guys who mixed and poured the rotten cement that didn’t hold.

And, with all the focus on BP, let’s not forget those government employees who failed equally. I’m talking about the people who, after having been bribed with nice gifts, so readily approved all of BP’s actions.

Yes, we should fine, fire, even jail all the responsible individuals. That would help prevent future problems. Of course, that doesn’t pay for all the efforts to cure the situation nor for all the losses. Who should pay the billions for that?

If you really care about the economy, and are not just flailing out in retribution, you would agree the economically wise approach would be for the federal government to pay. That way, the guilty would be punished, the innocent spared and the economy stimulated.

Government pays = people benefit. BP pays = people pay.

So what’s your choice: Vengeance or money in your pocket?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

4 thoughts on “–Punish BP or . . . ?

  1. Today, President Obama said he plans to “legally force BP executives to create an escrow account reserving billions of dollars to compensate businesses and individuals if the company does not do so on its own,” a senior administration official said on Sunday.

    Meanwhile, we already know that federal employees were at least partly at fault. But what is the federal government doing other than pointing fingers and tap dancing away from blame?

    We have 10% unemployment in this country. Why doesn’t the federal government hire a million people, similar to what it did for the census, to clean the beaches? This would help the beaches and unemployment at one stroke.

    Or is it better just to point fingers and tap dance?

    Rodger Malcolm Mitchell

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  2. Well stated!

    And we do know we all are responsible.

    Our government regulators failed us much the same way they failed us in the financial crisis.

    We have failed to create the alternative transportation (including user friendly public transportation, alternative fuels, incentives to reduce our travel needs, etc.) that could cut our use of crude oil by 50% or more, removing the need and incentives for what we know is dangerous offshore drilling.

    We should know that the strategy of rushing to use up our domestic oil as soon as we discover it, rather than saving it for later when the rest of the world has used up theirs, is not in the best long term interest of our children and grand children.

    We have elected representatives at all levels based on most everything but the wisdom of proposed agendas, often due to incentives we allow to remain in place regarding campaign finance, the power of special interests, and the incentives in place for our two party system to deliver candidates on criteria unrelated to their capabilities to provide the leadership on these critical issues.

    Don’t get me started!

    thanks!

    warren mosler

    http://www.moslerforsenate.com
    http://www.moslereconomics.com

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  3. 6/16/10:
    “The chairman announced that the BP board decided today that it will not pay any further dividends this year. He also confirmed, as Mr. Obama said earlier in the day, that BP is creating a $20 billion fund run by an independent party to pay claims.

    For those of you who believe BP will pay the damages, WRONG! BP will pay nothing. The damages will be paid by people, in this case, BP shareholders, including individuals, fund holders and pensioners. Perhaps you will be one of those paying.

    If later, BP is forced to fire people or to cut salaries, the damages will be paid by those people. Thus is the myth of BP “paying.” Corporations never pay for anything; only people pay (unless the government does).

    Rodger Malcolm Mitchell

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