Cutting Corners

Many writers are suggesting that Obama may have overstepped his authority while attempting to punish BP. Among these are long-time critics, such as Rush Limbaugh and Glenn Beck - but theirs are far from the only voices. Indeed, The Economist, which endorsed Obama during the election, is now calling him "Vladimir Obama."  The magazine says the following:

His reaction is cementing business leaders' impression that he is indifferent to their concerns. If he sees any impropriety in politicians ordering executives about, upstaging the courts and threatening confiscation, he has not said so. The collapse in BP's share price suggests that he has convinced the markets that he is an American version of Vladimir Putin, willing to harry firms into doing his bidding.

Furthermore, says The Economist, Obama has informed BP that it must "put adequate funds to meet all compensation claims into an escrow account beyond its control, although he has no authority to do so."

The Economist has often praised Obama in the past and even in this article, the writer goes out of his way to state that Obama isn't the socialist the right thinks he is. It would be hard, therefore, to construe this as a partisan attack. It is serious and legitimate criticism. But none of it matters to WendyNYC at The Daily Kos, who says the following:

BP loves this trust fund, and loves Kenneth Feinberg. The ultimate claims paid out will be about the $ame as they eventually would have been anyway, but without having to pay 50 hours of legal fees per claim. Without dozens of their senior executives having to be deposed for a week at a time, 30 or 40 times. And without entire clerical departments being tied up with document production. As for BP's shareholders -- investors appreciate predictability. That's why BP's stock price went up $7 when this deal was announced.

So to Joe Barton, Michelle Bachman, Rush Limbaugh, and every other wingnut bloviator who claims Obama overstepped his authority, to every supposedly pro-business conservative who says it should have gone through the courts, to every Fox personality who accuses the President of shaking down BP -- please be advised that there's not a single Fortune 500 company that would want any one of you to ever make any decisions on their behalf.

What Wendy appears to be saying is that it's alright to overstep one's authority and to cut corners, as long as doing so is profitable. Going through the court system is just too expensive and too much of a hassle. But if Wendy is right, then the administration has no cause to punish BP, as the company was doing precisely the same thing as the administration is now, that is, cutting corners to increase profits. Furthermore, if cutting corners with oil can lead to such a disaster, we may not want to experiment in the same way with a right as precious as due process.

Comments

[William]

For the Left, the ends always justify the means... The Constitution, the rule of law, trifles to be ignored if it produces the desired outcome...

[Donald Pay]

It's pretty easy to see where you're coming from. In your world BP comes first and the people of the United States last. Obama's priorities are different than yours---he's putting America first, not the multi-national corporations. That's the real reason conservatives are upset. Their little money pot got diverted to pay people who have been harmed, and it won't be going to them.

Obama used his constitutional powers to balance the scale of justice so the "little people" are going to get some justice for a change. What conservative fool thought up the liability limits? Where does that authority come in the Constitution? The model you suggest is the one Exxon used to string out the court cases so long that many of the people died before they got any money, and Exxon's attorneys got much more than the people harmed.

[jana]

Did you seriously use a comment on a website as a source? Seriously? No really are you serious? You built a major part of your post around a comment on a blog? Sorry...never mind.

[Miranda]

William: Not always! They didn't, for instance in Iraq.

Donald Pay: I'm not quite sure how you got that out of me disagreeing with someone who praised Obama for benefiting BP. I have said nothing in defense of BP. My focus is on abuse of presidential power and the importance of due process. You may, of course, read into it any motivation you like - but I don't think you'll find much evidence for your accusations.

Jana: Thank you for your response. WendyNYC is a blogger with her own WendyNYC.dailykos.com web address. I think it's fair for a blogger to respond to another blogger's post.

[William]

Miranda,

I'm not sure what you mean by your reference to Iraq? Will the Left adhere to the Constitution and rule of law when it suits them, sure they will. Will they abandon them to achieve their goals, well they'll do that too.

I cannot fathom that Donald is serious about the things he posts here. It's more than opposing viewpoints, I can't even begin to relate to the worldview he represents.

[A.I.]

A: How does anyone know Obama's motive was to "punish BP" rather than to expedite getting compensation to victims?

B: If I were to damage my neighbor's property, a third party might very well convince me to compensate him without his going to court or even contacting a lawyer. Why then is the BP deal--something tantamount to an out-of-court settlement--unconstitutional?

C: Obama had little or no leverage to "shake down" BP so it's quite likely there was a mutual recognition of the advantages both the company and those harmed would enjoy were an escrow fund established--as offered by Wendy.
So what Wendy really seems to be saying is it's OK for the President to play "arbiter-in-chief which has resulted in BP's becoming more financially viable and thus more able to survive, more likely to be able to compensate for additional liability and yes, more likely to enjoy a profitable future.

[Donald Pay]

I'm all for the court system, by the way, but oil companies have a lot of power to game the system, while individual "small people" do not. Exxon used delay tactic after delay tactic, like your garden variety mafiosi, to not pay out claims. Is that what you advocate?

Here's the thing: there's nothing stopping the conservative illuminati here and elsewhere who stand against "cutting corners" (are you in that category?) to sue to stop this fund, and the quicker redress of the immediate harms this spill caused the "small people." Good luck to you as you file your suit. I would add, unless you're going to file suit, your rather lamely drawn out scruples above sound more like the whining of a someone focus testing a political soundbyte to sully this victory for the people of the Gulf Coast against the oil industry.

This new fund in no way takes away the right of people to sue BP, nor does it take away the government's authority to put BP executives in the slammer, after a fair trial, of course. But it's clear that's not your concern. Not only that, but BP can sue TransOcean and Halliburtan, to recover funds from them for their part, if any, in this spill. Don't worry, Miranda, due process of law related to this spill will stretch out endlessly.

[Miranda]

William: I meant that the end doesn't always justify the means for the left. For instance, when Bush was in office, neither human rights nor freedom justified the war in Iraq in the eyes of the left. The rules seem to change a bit, however, when the Democrats come to power.

I believe Donald means what he says.

A.I: Nice to see you again. You raise some good questions. In regard to the first, I think once the president announces he's going to find out whose ass to kick, his intentions become rather clear.

Regarding the second: Yes, you could decide to settle out of court. But BP hasn't decided to do so on its own. The situation becomes a little different when the third party forces you to do things its way, rather than merely providing a service. If you are not given the option to go through the courts, you are being deprived of your right to due process. The situation would also
be a little suspect if the third-party forced you to put a large sum of money in an account which is largely under its control - which is what seems to be happening with BP.

I like your version of the story better then Wendy's. But you've really gutted her post and turned it into something different. What bothered me about Wendy's post, is that she objected to right-wingers saying that Obama had overstepped authority, but offered no evidence or argument to show that he hadn't. She merely pointed to financial benefits. A post that explained why he had the authority to act in the capacity he did would have been more appealing.

[Miranda]

Donald: So if I convict you of theft without a trial and force you to pay restitution, then it's alright, as long as your alleged victim can bring suit against you later as well?

I don't think so. Then, not only have I deprived you of your right to a fair trial, I am also subjecting you double-jeopardy. I haven't studied corporate law, so I'm not sure whether or not corporations are protected against such things. But I do know corporations are not supposed to be able to be deprived of property without due process.

Regarding your first statements, yes! You've got me! I'm part of the Illuminati!

I don't think one needs to file a lawsuit in order to have a valid complaint. I sincerely doubt that you have filed suit against every Republican you have publicly disagreed with, but you seem willing enough to voice your objections. I am glad you do, but it would be nice if you could recognize that those of us on the other side also have that right.

[Donald Pay]

No one has to be convicted of anything in this matter. BP had already admitted it is the responsible party in this incident. It was already admitted it needed to pay all legitimate claims, and it was, in fact, paying a few such claims. Some reports said BP rushed to pay claims at the same time they required people to sign away their right to sue. Now let's hear you defend that corporate trick to deprive the "small people" of their property without due process. You are very quick to defend BP, but where is your defense of the "small people." Oh, wait, the "small people" have a big, bad President defending them who is trampling on the rights of BP. I got it. I got it.

[KB]

It seems pretty clear that the President has no authority to order BP to create the escrow account. He can't simply seize the property of the company as he sees fit. Miranda is right to emphasize that point. It doesn't matter how bad BP is or how pitiful are the victims. Even the most perfidious criminal has rights which government is required to respect.

But is not clear to me that any abuse of power has occurred here. The President brought pressure on BP to do what he wanted the company to do. BP, feeling itself to be in a perilous position, went along. That looks like politics.

It is important to remember that BP's wealth doesn't belong to a few miserly plutocrats. It belongs also to a lot of pensioners in Britain and also in the U.S. For that reason, I am guessing, BP is too big to fail. But if it does fail, it will threaten a lot of folks who are just as innocent as your average gulf fisherman. If the Administration is really appropriating the property of BP, or if it should do so in the future, it is those folks he would be shaking down.

[A.I.]

Exactly right KB, it is not clear that any abuse of power took place here. And in fact, Obama had no authority to force creation of the escrow account so he had no power to abuse beyond that of persuasion. Thus it's unlikely he was "kicking ass"--that may come later when all evidence is in as to which party did what.

As Donald notes, this great wringing of hands over Obama the commie autocrat plays well with the conservative base and is little more than partisan hackery. None of us knows exactly what transpired in the meeting where BP agreed to this arrangement. What we do know is thanks to that agreement, people who are suffering great loss because of the spill will be compensated sooner than they would have been through the courts.

[Donald Pay]

KB,

My view as a stockholder in several companies is that I am responsible for seeing that management performs its duties. I view those duties as including more than short term gains. I have participated in several stockholder resolutions to hold management more accountable to stockholders on these . Unfortunately, there is a stacked deck against people who want responsible management and those who only care about short-term gains. For example, management incentives seem tilted toward rewarding management that "cuts corners" in some areas in order to puff up short term gains.

I am not a stockholder in BP (though I some mutual funds I own have some BP stock), but a number of shareholders have sued BP because of their failure to follow proper drilling/safety procedures. BP management's multiple and continuing failures are the cause of this debacle, and the loss of stock value.

[Miranda]

AI: As I stated in my original post, I don't think the concern here can be dismissed as simply partisan rhetoric. The Economist is a British publication. It has endorsed candidates from both of America's major parties and it tends to be rather balanced on American affairs. That was the source of the Putin comment.

You and Dr. Blanchard may be right. Perhaps there isn't an abuse of power. You are right in saying that none of us can see what has actually gone on. Therefore, we can only judge things by what we do see and hear. When Obama himself claims that he's going to find out whose ass to kick, and when the Interior Secretary says he is going to keep "a boot on the neck of British Petroleum," claims like that of The Economist seem much more likely to be true. Now, maybe the administration is just making such statements to make itself look tougher than it really is. And in that case, the situation is more amusing than it is wrong. But if the administration is telling the truth or if it intends to make good on its claims, then Obama may be the bully the writer at The Economist seems to indicate that he is.

Either way, though, I thought that the argument that it was alright to abuse power if doing so ended up being profitable was a bad one, and I still do.