Three More Reasons for the President to Take Control over BP's Gulf Operation -- Robert Reich

[nashville_brook]

Three More Reasons for the President to Take Control over BP's Gulf Operation

Robert Reich 6/9/10 12:04 PM

1 -- Why hasn’t BP moved more of its rigs and tankers to the site? Because BP’s first responsibility is to maximize shareholder value, and moving more rigs and tankers would be too expensive. Coast Guard Admiral Thad Allen, the government’s man on the scene, said BP planned to move another rig to the spill site June 14, which would enable the company to boost its capacity to collect oil from the ruptured well to 28,000 barrels (1.18 million gallons/4.45 million liters) a day.

2 -- Why isn’t BP leveling with the American people about how many barrels of oil is gushing into the Gulf? Because BP’s first responsibility is to its shareholders, and a bigger leak means more liability. Government scientists estimate the leak spews 12,000-19,000 barrels a day, with one estimate as high as 25,000 barrels. BP says it’s not nearly this much.

3 -- Why isn’t BP acknowledging a huge plume of oil developing deep under water? Ditto. On Tuesday, National Oceanic and Atmospheric Administration researchers reported subsurface oil as far as 142 miles from the leaking Gulf well, the first clear confirmation of such a plume. On Wednesday, BP rejected the report, insisting that it has not found any significant concentration of crude under the surface. “We haven’t found any large concentrations of oil under the sea. To my knowledge, no one has,” BP Chief Operating Officer Doug Suttles said on NBC’s TODAY show.

[havocmom]

1. .

[William Z. Foster]

2. pretty straightforward

He makes the case pretty well.

Why are so many Democrats arguing so feverishly against this? It cannot be merely a matter of "loyalty" to the President. How is advocating left wing positions disloyal? Many of the same people claiming that it is often argue and advocate positions to the right of what the administrative is doing, and that is not seen as disloyal nor as "tearing down the President."

[nashville_brook]

3. there's loyalty to party, and loyalty to one's moral code. it's a shame the two aren't

more in line.

[nashville_brook]

4. kickee

[donco6]

5. I'd like to see someone argue this.

No takers? As absurd as it is - thinking Dems would actually defend BP, but we've been seeing it pretty frequently here these days.

[nashville_brook]

9. naw -- they'd rather just unrec anonymously.

[Hugabear]

15. Oh, I got plenty of pro-BP responses when I suggested the feds taking over earlier today

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8520630

Reich probably said it a little better than I did. But my point was that BP's interest is primarily in maximizing its profits, not necessarily in stopping the flow of oil.

[Statistical]

18. "BP's interest is primarily" Correction: BP ONLY interest is in maximizing shareholder value.

That applies to all for-profit corporations.

However the gusher is extremely expensive for BP. The single largest expense the company has ever incurred and it is continually growing.

Thus BP only interest is to maximize shareholder value HOWEVER shareholder value is maximized by stopping the gusher. The two are not mutually exclusive

[William Z. Foster]

23. so have I

Ferocious resistance.

[DirkGently]

6. Should be obvious to everyone, but . . .

Clearly it must be said again: Corporations act, by law, in the interests of their shareholders, to the exclusion of all else. Screw the planet and screw the people on it.

Great post.

[nashville_brook]

7. this "shareholder" thing needs to be said repeatedly -- corps aren't "people" no matter what the USC

says.

they are specialized legal entities that must act in certain PREDICTABLE ways -- to increase shareholder value. i understand that there's not even a provision in the law to exempt money-losing actions from shareholder lawsuits. maybe a lawyer can confirm this.

[DirkGently]

8. Put it this way

. . . There are laws requiring corporations protect share value. The only laws requiring them to protect people or the environment are called " government regulations."

You know, those things we keep hearing we don't need?

[nashville_brook]

10. you mean all that "red tape" that keeps business from being profitable?

are those the regulations that the DLC keeps telling us are "out of step" with winning elections?

[Statistical]

17. Most people don't want to accept and/or realize this.

You often here about "good" companies.

Like Target is a "good" company and "Walmart" is a bad company. BS. Both companies exist for one purpose and one purpose ONLY. To maximize shareholder value. If a CEO doesn't maximize shareholder value and puts interest of others ahead of interest of shareholders he/she can be SUED. Sued for breach of fudiciary responsibility. They exist to serve one master only and that is the persons (or entities) which own the company.

Another example is "American" company vs "foreign" company. Once again when you realize that shareholders OWN the company that notion becomes quaint. One of the largest investors to both citibank and GM is the Dubai sovereign wealth fund.

There is no such thing as an "American" company. Companies are owned by shareholders. Period.

Three corporation axioms:
1) Corporations are owned solely by shareholders.
2) Corporations exist solely to maximize profits for shareholders.
3) Corporations have loyalty only to shareholders (not to citizens, not to workers, not to community but ONLY to shareholders).

[nashville_brook]

20. if corporations were indeed "persons" they'd be psychopaths.

[Statistical]

21. Or at a minimum narcissistic and likely some anti-peronsality disorder tendencies. n/t

[nashville_brook]

27. malignant narcissists.

[William Z. Foster]

24. correct

To realize and accept this would require people to re-think everything. The more invested in the existing system people are - literally or emotionally - the more resistant they are to that. The more educated and the more successful that people are, generally speaking, the more difficult time they have with this. That is because people are rewarded to the degree they are willing to promote and defend the illusion about this. Questioning the illusion is the one thing that will get you fired from any corporate job, and made into a pariah in most upscale communities. You cannot be a "winner" and realize and accept this obvious truth without a lot of internal dissonance - and we see the convoluted logic and emotional distress in the posts by people defending the existing conditions - and you cannot speak out about it and be allowed to remain in the company and good graces of the "winners."

[nashville_brook]

11. evening kick

[nashville_brook]

12. duper

[havocmom]

13. Well, I came back to see if the chorus had dropped by with any answers...

guess they got nuttin

[nashville_brook]

26. maybe the reality is setting in.

[wordpix]

14. why isn't Obama ordering a 2nd tanker to slurp up the oil since BP won't?

He could contract with another company to get the resources needed to the site, and send BP the bill. If they won't pay, seize their assets.

[neverforget]

16. He's right. BP is looking out for the bottom line.

[nashville_brook]

19. it's madness to think they're doing anything other than that.

[Individualist]

22. K&R

[nashville_brook]

25. ...

[KharmaTrain]

28. The Beltway Is Scared Shitless...

This is a slow motion disaster that has caught the government off balance from the outset as it tries to grasp not just the physical damage going on but the economic and political as well. Thanks to all the badgering and "ref baiting" of the right wing...screaming about how President Obama was "socializing" the country when he helped bail out GM & Chrysler, the administration and especially the Congresscritters are skittish about looking "too strong" in pushing BP. They wished that BP could solve the problem. It's obvious, they aren't prepared and neither is a government that has gone through 30 years of downsizing and deregulating. The shame is this whole tragedy was avoidable but the corruption of the beltway and corporates made it inevitable.

BP will continue to downplay the damage...it's in their financial interest to do so. While they will pretend to show concern and throw money for recovery, they have no real incentive to go beyond the bare minimum...this is a government problem, not theirs. When I hear President Obama and others say they're going to hold BP accountable, I laugh...cause I know that BP will do everything they can to delay any actions and that years will pass before any real penalties are paid...in the meantime the profits roll on as do the political contributions.

Politicians are chickenshit to take on anything controversial...especially as we close in on the elections and they need big oil money to buy TV commercials and get re-elected. Isn't it interesting that the only politicians I'm hearing talking about the oil situation are worried about any moritorium or outright halt on drilling. You don't hear much from those who want to create a "Manhattan Project" to develop alternative energy and escape our oil addiction. As long as that addiction endures, BP can pollute to its corporate's content.

[DirkGently]

29. Another example of the impotence of triangulation

... stand around and wait for the polls to tell you what to do, or try to figure out a way to appease monied interests while appearing to put the public good first, and you lose both the moral high ground, and the opportunity to be truly effective.

. . . to "lead" as it were.

In other words, you can't lead and cover your ass at the same time, Mr. President.

[KharmaTrain]

30. He's Not The One Who Legislates...

Now how would you like the President to lead that he's not doing right now? I mean something that can remedy the two major problems...the oil gushing from underneath the gulf and the oil piling up on the beaches. No blame game, please. There'll be lots of time for that.

A major roadblock is our Legislative that has to approve changes and have the ultimate power to investigate and regulate. Those are the people most compromised as they need the thousands and millions in campaign contributions and political cover over the interests of the country. I'm still hearing some of these critters all in a snit about a moritorium on new drilling while the Gulf continues to blacken. And with elections a few months away, there's precious little these critters will do.

The public good was sold down the oily river 30 years ago...it's the corporate good first and foremost.

[DirkGently]

32. He could start by not handing out deep water drilling leases

while the Gulf of Mexico is drowning in crude, for Christ's sake. This administration has already set a record for giving them out, and it's already talking in terms of not if, but when the moratorium will be lifted "and we can be assured deep-water drilling is safe."

What we have seen demonstrated here is that deep-water oil drilling cannot be done with a reasonable level of safety. This is not a subject of reasonable dispute at this point. Perhaps there will be a way, some day, but it's obvious that a) this type of massive, potentially ocean-killing disaster will happen on a regular basis, and b) the industry has no real interest in either preventing it or stopping it -- recall the copy-and-pasted cleanup "plan" on file that references all the "walruses" to be protected in the Gulf.

How much intestinal fortitude does it take to, for instance, at least state that we will not even CONSIDER additional deep-water oil leases until comprehensive regulatory reform, including the cessation of the practice of having the regulatory agency responsible for collecting as much lease money as possible? How hard is that? Instead, plans in place for more and more and more of these platforms.

That's not only not leadership, it's a truly bone-chilling illustration of the administration's committed unwillingness to give anything but lip service to the notion of changing the carefully constructed Bush-era dynamics that effectively gutted the federal regulatory process. Talking about "kicking ass" is nice, but the real message increasingly seems to be that tough talk will substitute for tough stances or tough action when it comes to powerful industries.

[KharmaTrain]

33. Intestinal Fortitude...In Rare Supply These Days

I am seeing a moritorium being put in place but its being fought. There was a hearing shown on CSPAN the other day where several Gulf state congresscritters (including Democrats) argued about what a moritorium was...anxious to get back to drilling or watch thousands of workers go on the dole. It's these people who should be pushing through reregulation and doing more than holding public bitch sessions that do little.

I'm in total agreement...I strongly support not only a moritorium (no end date until oil companies can prove they are equiped to clean up what they spill) but the shutting down of all wells off the Continental shelf...if you can't send bodies down to fix the problem, you can't drill. But that's me and who cares...

Sadly the future debate will revolve around our ongoing addiction to oil...instead of using this tragedy to push for a major investment into alternative energy. That's what really bothers me at this point. There's little discussion about breaking this addiction...and it's killing not only the Gulf but all of us.

[TheMadMonk]

35. As a matter of fact this blowout says nothing whatsoever,...

about whether or not deep drilling can be done with acceptable levels of safety. BP followed industry worst practice from beginning to end with this project.

Following industry best practice in any one of a dozen places would almost certainly have prevented this disaster.

Industry best practice across the board and the odds I believe would be acceptable to all but the most fervent greenie. The problem of course would be ensuring that industry actually followed best practice procedures.

[marions ghost]

31. Robert Reich

:thumbsup:

[mhatrw]

34. Another reason is that because they are required to do so by law!

http://www.rollingstone.com/politics/news/17390/111965?RS_show_page=5

Instead of seizing the reins, the Obama administration cast itself in a supporting role, insisting that BP was responsible for cleaning up the mess. "When you say the company is responsible and the government has oversight," a reporter asked Gibbs on May 3rd, "does that mean that the government is ultimately in charge of the cleanup?" Gibbs was blunt: "No," he insisted, "the responsible party is BP." In fact, the National Oil and Hazardous Substances Pollution Contingency Plan – the federal regulations that lay out the command-and-control responsibilities for cleaning up an oil spill – makes clear that an oil company like BP cannot be left in charge of such a serious disaster. The plan plainly states that the government must "direct all federal, state or private actions" to clean up a spill "where a discharge or threat of discharge poses a substantial threat to the public health or welfare of the United States."

"The government is in a situation where it's required to be in charge," says William Funk, a professor of environmental and administrative law at Lewis and Clark College who previously worked as a staff attorney in the Justice Department. ...

The effect of leaving BP in charge of capping the well, says a scientist involved in the government side of the effort, has been "like a drunk driver getting into a car wreck and then helping the police with the accident investigation."

[calimary]

36. There's a reason why they're called BUSINESSmen. And not ALTRUISMmen or

GENEROSITYmen or RESPONSIBILITYmen.

They're all about BUSINESS. Nothing but BUSINESS. What will GROW the business, what will PRESERVE and PROTECT the business, and what will also protect the interests of all those involved in a supportive and agreeable way. The fishermen, boaters, tourists and tourism outlets, restaurants, sightseers, the wildlife, the habitats, the way of life, the general, broader, overriding ecosystem, all that is little more than collateral damage that the corporation MAY get around to being concerned about sometime later on, AFTER they've handled all the really critical priorities: their profit margins, their shareholders' dividends, their stock prices, how many corners they can keep cutting, how many lobbyists they can keep employing and how many lawmakers they can keep buying, and how much they can limit liability.