Why Obama Should Put BP Under Temporary Receivership
It's time for the federal government to put BP under temporary receivership, which gives the government authority to take over BP's operations in the Gulf of Mexico until the gusher is stopped. This is the only way the public will know what's going on, be confident enough resources are being put to stopping the gusher, ensure BP's strategy is correct, know the government has enough clout to force BP to use a different one if necessary, and be sure the President is ultimately in charge.
If the government can take over giant global insurer AIG and the auto giant General Motors and replace their CEOs, in order to keep them financially solvent, it should be able to put BP's North American operations into temporary receivership in order to stop one of the worst environmental disasters in U.S. history.
The Obama administration keeps saying BP is in charge because BP has the equipment and expertise necessary to do what's necessary. But under temporary receivership, BP would continue to have the equipment and expertise. The only difference: the firm would unambiguously be working in the public's interest. As it is now, BP continues to be responsible primarily to its shareholders, not to the American public. As a result, the public continues to worry that a private for-profit corporation is responsible for stopping a public tragedy.
Five reasons for taking such action:
1. We are not getting the truth from BP. BP has continuously and dramatically understated size of gusher. In the last few days, BP chief Tony Hayward has tried to refute reports from scientists that vast amounts of oil from the spill are spreading underwater. Hayward says BP's sampling shows "no evidence" oil is massing and spreading underwater across the Gulf. Yet scientists from the University of South Florida, University of Georgia, University of Southern Mississippi and other institutions say they've detected vast amounts of underwater oil, including an area roughly 50 miles from the spill site and as deep as 400 feet. Government must be clearly in charge of getting all the facts, not waiting for what BP decides to disclose and when.
2. We have no way to be sure BP is devoting enough resources to stopping the gusher. BP is now saying it has no immediate way to stop up the well until August, when a new "relief" well will reach the gushing well bore, enabling its engineers to install cement plugs. August? If government were in direct control of BP's north American assets, it would be able to devote whatever of those assets are necessary to stopping up the well right away.
3. BP's new strategy for stopping the gusher is highly risky. It wants to sever the leaking pipe cleanly from atop the failed blowout preventer, and then install a new cap so the escaping oil can be pumped up to a ship on the surface. But scientists say that could result in an even bigger volume of oil - as much as 20 percent more -- gushing from the well. At least under government receivership, public officials would be directly accountable for weighing the advantages and disadvantages of such a strategy. As of now, company officials are doing the weighing. Which brings us to the fourth argument for temporary receivership.
4. Right now, the U.S. government has no authority to force BP to adopt a different strategy. Saturday, Energy Secretary Steven Chu and his team of scientists essentially halted BP's attempt to cap the spewing well with a process known as "top kill," which injected drilling mud and other materials to try to counter the upward pressure of the oil. Apparently the Administration team was worried that the technique would worsen the leak. But under what authority did the Administration act? It has none. Asked Sunday whether U.S. officials told BP to stop the top-kill attempt, Carol Browner, the White House environmental advisor, said, "We told them of our very, very grave concerns" about the danger. Expressing grave concerns is not enough. The President needs legal authority to order BP to protect the United States.
5. The President is not legally in charge. As long as BP is not under the direct control of the government he has no direct line of authority, and responsibility is totally confused. For example, listen for the "we" and "they" pronouns that were used by Carol Browner in response to a question on NBC's "Meet the Press" Sunday (emphasis added): "We're now going to move into a situation where they're going to attempt to control the oil that's coming out, move it to a vessel, take it onshore ....We always knew that the relief well was the permanent way to close this .... Now we move to the third option, which is to contain it. If [the new cap on the relief well is] a snug fit, then there could be very, very little oil. If they're not able to get as snug a fit, then there could be more. We're going to hope for the best and prepare for the worst." When you get pronoun confusion like this, you can bet on confusion -- both inside the Administration and among the public. There is no good reason why "they" are in charge of an operation of which "we" are hoping for the best and preparing for the worst.
The President should temporarily take over BP's Gulf operations. We have a national emergency on our hands. No president would allow a nuclear reactor owned by a private for-profit company to melt down in the United States while remaining under the direct control of that company. The meltdown in the Gulf is the environmental equivalent.

















Why temporary? The entire company should be nationalized, it's the only way we can be sure that the Treasury doesn't take a loss on this.
May 31, 2010 7:55 PM | Reply | Permalink
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January 24, 2011 11:28 PM | Reply | Permalink
Obama Really Should Put BP Under Temporary Receivership.
BP is so important, if GOV holds it, I'll be at ease quite.
led Grow Lights
March 27, 2011 7:20 AM | Reply | Permalink
. . . to devote whatever of those assets are necessary to stopping up the well right away.
Wahoo!
May 31, 2010 8:00 PM | Reply | Permalink
Whooooweee!
June 1, 2010 12:46 AM | Reply | Permalink
The hell with that. Let's liquidate the company and put its executives in jail. BP needs to be made an example of . . . that's the only way this kind of gross corporate negligence will ever end. Force the company out of business, force the shareholders to take the loss, and put the executives and the company's directors in jail. Maybe then executives, directors, and shareholders will start realizing that you can't make profits without also taking full responsibility for your actions while making those profits.
May 31, 2010 8:15 PM | Reply | Permalink
Exactly. Come on... if you broke a plate glass window of somebody's store you'd do more time than BP's execs. They've befoiled an entire coastline. And you know that if we don't nationalize their company we will wind up paying for this.
May 31, 2010 9:07 PM | Reply | Permalink
Don't forget the Board of Directors - those people who hire and can fire the CEO's.
.
June 2, 2010 3:15 PM | Reply | Permalink
How do you do that legally?
May 31, 2010 9:13 PM | Reply | Permalink
You get congress to pass a special authorization and it's done. Nothing in the constitution protects anyone's right to wreck a coast line and besides, even if it did... BP is a foreign company. If we can send foreigners to Gitmo and debate their rights later we can certainly nationalize BP!
May 31, 2010 10:31 PM | Reply | Permalink
The 5th amendment protects private property rights. The President has no authority to 'nationalize' anything, and Congress can't give it to him. This is not a banana republic.
June 1, 2010 7:09 AM | Reply | Permalink
They seize houses and cars of accused drug offenders all the time. Every Day. Day in and day out.
What makes BP's drilling rigs more secure than American's private residences?
I'm not saying I think the seizure BP is a great idea - you can't simply take control and expect to do better. But I am saying that a country where the property rights of a corporation are more sacred than the property rights of individuals might qualify as a Banana Republic.
June 1, 2010 11:00 AM | Reply | Permalink
Exactly...and a point the doggie seems blissfully ignorant of.
June 1, 2010 11:37 AM | Reply | Permalink
Drug seizures are allowed only in cases where the asset was used in the commission of a crime or obtained from proceeds of criminal activity. So by your reasoning that BP committed a 'crime', you can seize the sunken Deepwater rig, as it was the asset used in the commission of the 'crime'.
June 1, 2010 12:18 PM | Reply | Permalink
And what if it is found that BP was criminally negligent in their drilling operations? What if it is found out that in the course of their operations they did not follow federally mandated laws and regulations? Would it then be alright?
A bit OT. The definition of what is or isn't a crime always gives me pause. Sell some weed? Off with their heads. Kill an entire ecosystem? No biggie...
June 1, 2010 12:26 PM | Reply | Permalink
If they are criminally negligent then the 75 million dollar cap in the OPA would not apply, and they would be liable for damages, as determined by a court. That still does not mean Obama can seize them by fiat.
June 1, 2010 1:23 PM | Reply | Permalink
Wasn't Exxon deemed to be criminally negligent in the Prince William Sound spill? And wasn't the 10 figure penalty/fine reduced by the SCOTUS to $75M? Weren't the residents of the area affected only compensated 5 cents on the dollar in terms of the costs of that spill?
Jefferson was correct in how he felt putting too much power in the hands of the judiciary would lead to an oligarchy. And that is what we have. And no matter how much it is decided BP should pay they will appeal it and the SCOTUS will side with their rights as a corporate person...even though they are not even an US based corp.
June 1, 2010 1:37 PM | Reply | Permalink
No, that isn't quite true. What really happens is the police can seize any assets they believe were used in commission of a crime. If they later find out that no crime was committed, they keep the assets. If they seize your house, try you and you are acquitted, they keep the house. It is wildly unconstitutional, but the Supreme Court chose to ignore the Constitution in ruling it to be legal. Their justification was that "property doesn't have rights."
June 1, 2010 11:06 PM | Reply | Permalink
It is individuals that own the corporation. It is they who have 14th and 5th amendment rights. They have not been accused of a crime. You cannot seize their property without just compensation, that's the Constitution. Don't like it , too bad.
June 1, 2010 11:58 AM | Reply | Permalink
Sorry, but this is so completely off-base that I'm not even sure where to begin.
First of all, the whole point of the corporate form is that it expressly limits the potential liability of shareholders in the corporation. If we are to accept the notion of corporate personhood (as our legal system certainly does), then whatever rights or responsibilities attach to that entity are the ones that are implicated here. Criminal acts conducted by a corporation or its officers may open the corporation itself (and possibly its executives) to civil and criminal penalties, but not its shareholders. Shareholders "have not been accused of a crime" (and never will be) precisely because they cannot be. To the extent that our system does not contemplate holding shareholders liable, their constitutional rights do not even enter the equation.
Second, your statement belies a gross misunderstanding of our capitalist system, particularly as it exists today. For one, shareholders are not "individuals" in any meaningful sense. The vast, vast majority of equity shares are held by large institutional investors, which themselves are typically managing funds for other institutions. Moreover, shares of stock are transacted on an expressly speculative basis; analysts determine what the future value could be, and the price level shifts quite dramatically in any given time period based on slight variations in the underlying assumptions. Such "value" doesn't remotely resemble property of the sort that would implicate the takings clause (which you quote). A bond is something closer to a claim on tangible value, but such securities are still themselves a form of risk capital subject to loss in extreme circumstances.
June 1, 2010 3:25 PM | Reply | Permalink
I'm sorry but you are completely wrong. If I own 100% of the stock, I own the corporation and all of it's assets. Stock in a company represents fractional ownership of the company, arguing that stock does not constitute property is just plain stupid. Your argument is no different than claiming that money itself is not property. And your thoughts on stock ownership are also off base. Even for a giant corporation like Exxon, more than 50% of it's stock is owned by non-institutional investors. (figures not available for BP) Many of those institutional investors are 401k plan managers, holding the shares of millions of workers retirement funds.
Really, your argument is just plain stupid, period. In effect you are arguing that the government can seize all the assets of any corporation at will and since a company has no 14th or 5th amendment rights, no one has a basis to file an objection.
June 1, 2010 4:08 PM | Reply | Permalink
Let's just declare PB to be a "terrorist" organization and then anything can be done to them under the "Protect America Act".
It is hard to imagine any other "terrorist" attack being more damaging to the USA.
.
June 2, 2010 3:23 PM | Reply | Permalink
Of course Chihuahua would say we can legally invade, kill tens of thousands of people, and appoint a administrator for a foreign country that did nothing to us, and then occupy it for a decade.
Bulldog reminds me of the dumb Sargent in Dr. Strangelove who tries to prevent Peter Sellers from breaking into a Coke machine to get change to call the President on a pay phone, saying, "That's the private property of the Coca-Cola co. of America, sir!"
June 1, 2010 11:25 AM | Reply | Permalink
But they can seize you and detain you indefinitely on suspicion of terrorism related activities...
But can't touch BP....
Do you even see how wacko that sounds, coming from a supposed CONSERVATIVE?
June 1, 2010 4:03 PM | Reply | Permalink
I didn't say BP can't be sued in court. They will be. Of course, Congress foolishly limited their liability to 75 million, so there may be a lot harder time getting them to pay than people think. I'm guessing at some point they will decide to play hardball and try to enforce the OPA limits on liability.
June 1, 2010 4:12 PM | Reply | Permalink
By the time Congress and the Fed Govt would make that a reality, BP will have drilled 2 new wells to stop the leak and we will all have moved on by then.
Focus on pressuring BP to complete the work, compensate affected people and stop with this line of over-the-top bluster by folks like Reich & Carville.
June 1, 2010 10:39 AM | Reply | Permalink
I'm thinking eminent domain. What say you all?
June 1, 2010 3:55 AM | Reply | Permalink
ED requires just compensation, so the government would need to pay BP at least 134 billion (today's market cap), and likely much more.
June 1, 2010 7:02 AM | Reply | Permalink
Of course, we can bill them for the full clean-up costs and for our troubles. BP's market cap might cover that nicely.
June 1, 2010 9:20 AM | Reply | Permalink
Even the largest estimates on ultimate cost, including economic losses, is 40 billion, about 1/4 the market cap.
June 1, 2010 10:17 AM | Reply | Permalink
Estimates are made to be broken. Remember "1000-5000 barrels a day...."
You GOP'ers really are like lambs to the slaughter in the face of authority figures.
June 1, 2010 4:05 PM | Reply | Permalink
Mr. Reich stands taller than the president in this matter, a president who doesn't seem to stand for anything.
May 31, 2010 9:14 PM | Reply | Permalink
No, Reich is an ignorant fool, completely unaware of the limits the US Constitution places on government. That he could so cavalierly suggest ignoring the 5th amendment and illegally seizing private property is frightening, considering this idiot once worked in the White House.
June 1, 2010 7:11 AM | Reply | Permalink
No, no, Mr. Reich is too smart for that. He knows what the realities are today.
He's just trying to pressure Obama to do more.
The problem is that this blog post by Reich comes across as sounding too much like GW Bush bluster.
June 1, 2010 10:40 AM | Reply | Permalink
WOW!! Mr Reich I stand in awe of your stupidity! I mean, you've said some stupid things before, but this takes the cake! I will point out to you that AIG and GM were taken over because they ASKED to be taken over, the government infused tens of billions of dollars into them. BP is a publicly traded INTERNATIONAL corporation. Obama has no authority to seize their assets in any way. Who do you think he is, a third world tin pot dictator like Hugo Chavez? It is frightening to think that you were actually advising the president, and that anyone takes you seriously on anything.
May 31, 2010 9:34 PM | Reply | Permalink
Of course Obama has the authority to seize BP's assets, at least in the US and probably in our hemisphere. Fact is, BP applied for licenses to do business in the US. Our government can and should do everything to make sure that our taxpayers don't clean up BP's mess.
We entirely have the authority to nationalize BP right now and we have good cause. But if the royal crown disagrees, I suppose Britain is within its rights to oppose us.
May 31, 2010 10:44 PM | Reply | Permalink
So, why isn't the prez doing this, Destor?
I mean, other than being a weenie, in bed with big oil, those kinds or explanations. It seems to me that they are very much trying to keep the chain of custody on BPs end. Which should help when it comes time to go to court...the fewer decisions the govt makes, the more liable BP is in the end. Which makes me think that somebody out there has made a decision that what we do between now and the relief wells is not going to have much impact on the ultimate environmental outcome. (A depressing thought.) So it's going to be all about liability and payment in the end....
June 1, 2010 3:25 AM | Reply | Permalink
Except Browner already stuck her nose into it and told BP to stop the top kill/junk shot operation because the administration feared it would make things worse. They have now clouded the liability picture.
June 1, 2010 6:52 AM | Reply | Permalink
No, the US government is not responsible for the death and destruction of the spill, no matter how it's spun.
June 1, 2010 9:42 AM | Reply | Permalink
I suspect it was a joint decision, but this is exactly why I think the admin is leaving BP in charge.
June 1, 2010 12:37 PM | Reply | Permalink
BTW Destor, sorry if that sounded cranky. I'm just trying to get at underlying strategies if there are any.
June 1, 2010 12:29 PM | Reply | Permalink
Please cite that authority, and tell me how it trumps the 5th and 14th amendments? Due process and the takings clause block any such action.
June 1, 2010 7:22 AM | Reply | Permalink
BP is a foreign company. Consitutional rights apply to individuals, not corporations. And... it isn't even an American company. Let's just call them an enemy combatant and be done with it.
June 1, 2010 9:21 AM | Reply | Permalink
hilarious!
June 1, 2010 9:58 AM | Reply | Permalink
Individuals own the shares. You are proposing to take assets from millions of people (many of them Americans) with no due process, and no compensation. The supreme court will take a dim view of that proposal.
June 1, 2010 10:20 AM | Reply | Permalink
we keep coming back to the 5th amendment, and now you invoke the supreme court. But the supreme court hasn't stepped in to prevent the seizure of property from accused drug offenders - when the property may have been used in the commission of a crime - and I believe dumping oil in the ocean is a crime.
Again, I think seizure is a lousy idea because there would be little positive effect and plenty of negative affect - but there is plenty of precedent for it. All sorts of ways to argue that BP deserves more property protection than individuals, but the precedent is there.
June 1, 2010 11:06 AM | Reply | Permalink
There are specific laws (RICCO) that were written to enable confiscation of drug dealer assets. They were always on shaky constitutional grounds. These statutes do not apply against everyone or every organization, even if accused of a crime. Trying to seize BP's assets under RICCO would require proving that the assets were the results of criminal proceeds, which would certainly be shot down in court.
June 1, 2010 12:15 PM | Reply | Permalink
So you're saying congress would need to pass a law to allow it? Dumping oil on the beach absolutely is a crime in these united states - and the apparatus of BP is about nothing else if not the removal of oils from under the ground and depositing it someplace else.
I agree that it runs afoul the 5th amendment, but the supreme court seems to have a different opinion than me in other pre-conviction seizures.
Anyway, there is an easy way around all of that. We're at war. And the war powers of the president are whatever the president decides they must be in order to protect the nation from all threats.
Of course this executive is not going to do that because they seem to have a little more respect for law than that; never mind the common sense to know that BP has orginization and expertise that would be disrupted by Reich's plan (and are required to put a stop to the leak).
But to put it bluntly, if BP was owned by the French, and Cheney was still in power - Scalia would have already found a creative way to insult those who protested the seizure.
June 1, 2010 12:32 PM | Reply | Permalink
Haven't you heard? There is a war on.
June 1, 2010 9:40 AM | Reply | Permalink
The cover story could be that temporary receivership is necessary to protect BP's investors and stockholders from the huge losses they might expect, thus requiring a court order to put BP in T.R.
May 31, 2010 10:56 PM | Reply | Permalink
So you are offering to indemnify the shareholders against loss?
June 1, 2010 7:25 AM | Reply | Permalink
Why should the shareholders be protecting from any loss based on their company's action or negligience? They brought this on and are responsible; they can deal with it. Only invest in responsible industries if you're so worried.
June 1, 2010 9:40 AM | Reply | Permalink
That was the basis of his argument for temporary receivership, I didn't say I supported it.
June 1, 2010 10:22 AM | Reply | Permalink
The investors decided to support a company that is committing an act of environmental war against a sovereign nation. Too bad for them. They should have invested smarter.
June 1, 2010 1:40 PM | Reply | Permalink
Ding ding ding!
June 1, 2010 4:07 PM | Reply | Permalink
Really a pathetic argument. There was an accident in the Gulf, period. Courts can determine if there was negligence involved, and assess damages. That is how the system works. Don't like it? Too Damn Bad! Obama has no authority to seize anything.
June 1, 2010 4:18 PM | Reply | Permalink
I keep wondering about such recommendations. I always considered Democrats to be respectful of laws and bound to follow them. I know Repubs are willing to ignore any law that is inconvenient to their current objectives, but not Democrats. And, I know of no legal way to nationalize BP, seize their assets, plunder them for our own purposes, and walk away when we finish.
Congress can certainly pass a law making this legal, but the Constitution prohibits laws of this type, and don't we respect the Constitution? Also, guess what the Roberts Court would do a week later, if Obama did order BP to be nationalized.
Maybe we should, instead, require all automobiles and trucks to meet some efficient fuel consumption regulations, related to real world driving. That, at least, has some precedent, and would cut the demand for oil enough to justify not drilling off shore.
For now, we broke it, so we pay for it. We are the ones who ignored the off shore drilling, refusing to demand that Congress make it illegal. We are the ones who paid so little attention we didn't know the oil industry had no outside regulators.
May 31, 2010 10:53 PM | Reply | Permalink
Hoppy are you serious? We have a legal system that allows the government to detain foreigners without access to full rights under our constitution and we consider that, at worst, debatable. BP is a foreign company that did fat worse than any accused post 9/11 terrorist ever dreamed. So surely we could nationalize it and, should its shareholders or the British crown complain they could... I dunno... try to take it back?
June 1, 2010 12:14 AM | Reply | Permalink
Perspective: I will remind you that this is a corporation which has caused major, unprecedented, tremendous environmental damage to the United States. In my area, there's a thousand dollar fine for littering -- throwing a piece of paper on the ground. Extrapolate that.
May 31, 2010 11:30 PM | Reply | Permalink
A compelling and clearly articulated argument made by Mr. Reich. However I would love to hear comments from Mr. Reich and the community regarding the practicability of putting a foreign based corporation's North American operations under receivership. GM and AIG are both registered in the US. BP is a UK based company, although listed on the NYSE.
May 31, 2010 11:42 PM | Reply | Permalink
It's just like torture. You tell the lawyers that this is what we want to do, now justify it with legal mumbo jumbo.
May 31, 2010 11:48 PM | Reply | Permalink
What would the legal basis be? Is there anything that would serve as legal precedent? Or would this just turn into a long drawn out fight in court?
Would there be other ways of getting some of the same results. A suit for injunctive relief that has the courts order BP to put all of their resources towards control of the spill?
Without some more details and some sense of the options it is hard to evaluate the idea.
June 1, 2010 12:12 AM | Reply | Permalink
A compelling and clearly articulated argument made by Mr. Reich. However I would love to hear comments from Mr. Reich and the community regarding the practicability of putting a foreign based corporation's North American operations under receivership. GM and AIG are both registered in the US. BP is a UK based company, although listed on the NYSE.
June 1, 2010 12:34 AM | Reply | Permalink
A compelling and clearly articulated argument made by Mr. Reich. However I would love to hear comments from Mr. Reich and the community regarding the practicability of putting a foreign based corporation's North American operations under receivership. GM and AIG are both registered in the US. BP is a UK based company.
June 1, 2010 12:35 AM | Reply | Permalink
There is a larger issue here about multinational corporate hegemony VS National sovereignty/security. If BP cannot be put under PR to be held accountable for this, where does that leave the public interest?
June 1, 2010 12:47 AM | Reply | Permalink
(meant TR not PR)
June 1, 2010 12:53 AM | Reply | Permalink
While nearly 40% of BP the multinational is held by US shareholders, and the subsidiary BP America domiciled in Texas could be readily seized the Feds, this does not answer the next question as to what you are supposed to do with it once you take it over. Our wonderful Navy, from Mullens and Raybus on down, continues to sit on the sidelines saying this is an oil industry problem. Indeed, no official has proposed a viable technical solution to end the leak.
Yet the law still exists. Nothing is stopping Eric Holder from marching into federal court and asking for a mandatory injunction creating an escrow account, titled say, "BP Oil Spill" account or "Biggest Fucking Mess in American History" account, into which BP would have to deposit $200 million a day, i.e. BP's current daily profit of $66 million, ballpark running economic losses in the northern Gulf of $100 million, and the costs of governmental and private response, of $30/40 million. The deposits would be retroactive five weeks, and all of the money in excess of BP's liability would be returned.
June 1, 2010 1:09 AM | Reply | Permalink
He can march into court and say anything he wants to. And any competent judge will march him right back out. The case will eventually go to court, and it will follow legal procedures. There is nothing to be gained from illegal acts like Reich is proposing except to cause the ultimate case to be dismissed.
June 1, 2010 7:21 AM | Reply | Permalink
I'm not quite sure what you mean. Holder has numerous statutes concerning water pollution and environmental protection, federal lands, as well as simple trespass, that concern an immediate and ongoing threat to our country. Moreover, the ultimate money damages, which some stock analysts are now putting north of $50 billion, are quite uncertain. This equitable remedies such as an escrow account are appropriate.
June 1, 2010 8:34 AM | Reply | Permalink
Trespass? Come on. And how do you justify taking all of their profits? Based on what? The company has more than enough assets to pay damages, even up to 50 billion. They have 7 billion in cash right now. No court is going to order an escrow account of this magnitude when there is no justification for it.
June 1, 2010 9:24 AM | Reply | Permalink
Dude, you're obviously not a lawyer. Stop pretending you know what you;re talking about.
June 1, 2010 1:43 PM | Reply | Permalink
I damn sure know a hell of a lot more than you, and more apparently than Mr. Reich based on his blog.
June 1, 2010 4:19 PM | Reply | Permalink
No, no, all wrong. BP should place the Obama administration under permanent receivership.
Or have they already done it?
June 1, 2010 1:38 AM | Reply | Permalink
What idiocy is this? Why is Reich's solution to everything is to nationalize it? We don't have the know-how. We don't have the technology.
This is NOTHING like AIG. How do smart people keep throwing that analogy out there? AIG was a government investment over years of funding going their way, to the point where we have 80% control.
BP is a fully independent company. We have zero money flowing to them. Further, isn't the problem with AIG now, we CAN'T take them over? That's why we're getting the new receivership powers in FinReg.
If the well is taken over, BP will take us to the Supreme Court and they WILL WIN. Remember the steel industry case in the 50s? That's still precedent. Not to mention the fact that Obama will be bloodied in the battle and Republicans will use that Obama taking over industry on the way to victory in november.
Legally, Practically and Politically this decision makes ABSOLUTELY ZERO SENSE. Reich needs to get of his ivory tower and figure this out on his own.
June 1, 2010 2:04 AM | Reply | Permalink
Thus far BP has taken the position that it will meet all proper claims regardless of any cap on its legal liability.
That has at least been a rather more constructive approach than Exxon took in relation to its last major spill or the approach of other US multinationals to disasters such as the 1984 incident at the Union Carbide Bhopal plant in India which has thus far resulted in upwards of 3,700 deaths.
June 1, 2010 2:17 AM | Reply | Permalink
Of course, that cap goes away anyway if it's determined BP was negligent...since Robert Kaluzna (Kalunza?) pled the 5th I've suspected BP sees the cap as not happening....
June 1, 2010 2:32 AM | Reply | Permalink
No need to worry, our jello Congress can produce any bill necessary, then turn it into an anorexic skeleton that will delight BP. Pratice makes perfect!
If necessary Rahm Emanuel will come back from Israel and verbally punch faces.
June 1, 2010 5:31 AM | Reply | Permalink
I assume this is tongue-in-cheek, right? Nationalization would probably hand control to the Republicans in '10 and '12 and serve as grounds for Obama's impeachment. Why advocate a course of action that would be political suicide without doing much to remediate this spill?
June 1, 2010 7:19 AM | Reply | Permalink
Actually Reich is just that stupid. You are correct, it would DEFINITELY lead to his impeachment.
June 1, 2010 7:29 AM | Reply | Permalink
From Cornell Law School:
http://topics.law.cornell.edu/wex/temporary_receivership
"A remedy in which the court appoints a person to temporarily manage a piece of property that is in the defendant's possession. This remedy is available only when the plaintiff is asserting an equity claim in which the piece of property is the subject matter of the equity claim. Also, for the court to grant this remedy there also must be a danger that the defendant will damage or severely diminish the value of the property during the time that the cause of action is pending."
Please explain Mr Reich how this applies to this case, or stop using terms of which you are ignorant of their meaning. You wanted to say nationalize, but not wanting to appear too much of a commie, hedged with TR because it sounded more 'legal' and less banana republic like.
June 1, 2010 8:12 AM | Reply | Permalink
CleverBulldog, your original response to destor23 was accurate. However, you have allowed your apparent political antagonism towards Reich to cause you to conflate the policy advocated by destor23 with that of Reich.
I practice condemnation law. You are entirely correct that the 5th amendment would prevent nationalization of BP without just compensation and destor23 is ill-informed of the law to advocate otherwise. However, NOTHING in Reich's article can be construed as advocating nationalization, except perhaps to the paranoid and biased.
Personally, I deem temporary receivership as risky simply because it raises the possibility of the government incurring liability and blame that does not predominantly belong to it. However, temporary receivership makes some sense as a means of forcing BP to act in the publics best interest for the duration of the crisis. That is NOT illegal or unconstitutional. It would be nearly identical in function to a bankruptcy trustee being appointed to oversee the reorganization of a company in bankruptcy to insure that the lienholders are paid in as fair a fashion as possible. The purpose would be a little different, but there is no doubt that SCOTUS would back the government if it temporarily took charge of BP's US operations to insure the disaster is stopped and cleaned up as quickly as possible.
June 1, 2010 10:15 AM | Reply | Permalink
The government has the authority under law currently to 'federalize' the response to the oil spill and take full control of the efforts. It does not need to take control of the company.
OPA Section 4201 amended Section 311(c) of the CWA to provide the President (delegated to the USCG or EPA) with three options: perform cleanup immediately (“federalize” the spill), monitor the response efforts of the spiller, or direct the spiller’s cleanup activities.
Reich should learn more before he speaks, he is definitely pandering to the far left crowd who advocate nationalization.
June 1, 2010 10:33 AM | Reply | Permalink
You mean just like the Supreme Court upheld Truman's seizure of the steel mills? Oh wait...
Receivership isn't just some free-floating authority that Obama can invoke anytime he feels like it. If there's some specific legal authority for doing so here, neither Reich nor you have suggested what it is.
June 1, 2010 11:23 AM | Reply | Permalink
I apologize for injecting law into this discussion, but Bob's goal is made far easier since BP is already on probation.
http://www.allgov.com/controversies/viewnews/Judge_Asked_to_Revoke_BP_Probation_for_Earlier_Explosion_in_Texas_100512
To quote the 2009 Federal Sentencing guidelines:
"Upon a finding of a violation of a condition of probation, the court may extend the term of probation, impose more restrictive conditions of probation, or revoke probation and resentence the organization.
Application Notes:
1. Appointment of Master or Trustee.—In the event of repeated violations of conditions of probation, the appointment of a master or trustee may be appropriate to ensure compliance with court orders."
http://www.ussc.gov/2009guid/8f1_1.htm
June 1, 2010 8:16 AM | Reply | Permalink
Note the term 'repeated'. Also that pertains to compliance with that court's orders, that does not authorize seizing the company's assets.
June 1, 2010 9:01 AM | Reply | Permalink
Nationalise BP, seize their assets - put all the directors in prison - when I listen to some Americans I realise why they are so despised around the world - were they so concerned with the Union Carbide disater in Bhopal where thousands of Indians died? If the American nation wasn't so GREEDY for oil perhaps foreign oil companies wouldn't have to come to the US and drill in such deep waters - and of course, the US doesn't take any taxes or royalties from BP for their priveldge to drill there. And then you conveniently forgot to mention Transocean (who were the drillers), Halliburton (Cement work) and Cameron International (failed BOP) - is it because these companies have US heritage
This attitude is the same as the US has to terrorists - fund the IRA for years to kill British citizens and that's OK - get hit by a couple of aeroplanes and it's a global problem
Wake up America - you are not the only and most important people on this planet - the world does not revolve around you - understand this and you may be more liked globally
June 1, 2010 8:56 AM | Reply | Permalink
Nationalise BP, seize their assets - put all the directors in prison - when I listen to some Americans I realise why they are so despised around the world - were they so concerned with the Union Carbide disater in Bhopal where thousands of Indians died? If the American nation wasn't so GREEDY for oil perhaps foreign oil companies wouldn't have to come to the US and drill in such deep waters - and of course, the US doesn't take any taxes or royalties from BP for their priveldge to drill there. And then you conveniently forgot to mention Transocean (who were the drillers), Halliburton (Cement work) and Cameron International (failed BOP) - is it because these companies have US heritage
This attitude is the same as the US has to terrorists - fund the IRA for years to kill British citizens and that's OK - get hit by a couple of aeroplanes and it's a global problem
Wake up America - you are not the only and most important people on this planet - the world does not revolve around you - understand this and you may be more liked globally
June 1, 2010 8:57 AM | Reply | Permalink
This comment thread makes TPM's readership look like a bunch of total idiots.
June 1, 2010 9:01 AM | Reply | Permalink
Thank you so much for the unqualified universal condemnation. Since you are a TPM reader you've included yourself, which I'm sure you didn't mean to. Why don't you try again with qualified restrained language.
June 1, 2010 7:44 PM | Reply | Permalink
shorter Reich ... our Great Leader can solve any problem so let's put him in charge of this!!! seriouslt deranged thinking going on here.
June 1, 2010 9:04 AM | Reply | Permalink
Christ, Reich, maybe you could suggest some legal authority for this proposed course of action? Throwing a tantrum is all very well and good, but how about a practical, legal solution?
June 1, 2010 9:45 AM | Reply | Permalink
The U.S. Gov't can CREATE a legal authority.
"Private property?" Pluueezzze! There are no ABSOLUTE private property rights under law, no absolute protection under the U.S. Constitution.
Under libertarian dogma, we'd still have slavery, protected under the Constitution. But they were confiscated as contraband of war, beginning in New Orleans. And this disaster is surely both the moral and legal equivalent of WAR, especially here in our war-happy country above all!
For example, if I committed manslaughter with my car - my private property - and then tried to cover up the act by lying (as BP has), I'd be liable both for arrest and to have my vehicle confiscated by the state. No question about it.
It seems though, when the individual - and corporations are individuals under U.S. law - is in possession of lots of private property - the right wing dogma suddenly changes from "let's get tough on crime" to "let's coddle the criminal"!
Why should anyone take BPs word for what is happening? Quite likely this well could be spiked in short order. My own view is that they are lying, and want to keep pumping at all costs, by drilling a new well while letting the old one leak away. They don't want to lose the well. That's why BP wants to drag this out to August.
It is an abomination that we allow this criminal act to continue to be carried out unhindered, on the "word" of the criminal, in full public view.
Libertarian apologists better watch their dogma on this one, a lot of people are hopping mad right now. "Spill Baby Spill" won't fly as a slogan methinks.
First receivership, then the criminal trials of the execs. Then a fine that should be the equivalent of confiscation of BP's North American assets. To recover the private property of Louisiana's fishing and tourist industries. Screw BP AND their private property!
Anything less is a criminal injustice!
June 1, 2010 10:24 AM | Reply | Permalink
The U.S. Gov't can CREATE a legal authority.
"Private property?" Pluueezzze! There are no ABSOLUTE private property rights under law, no absolute protection under the U.S. Constitution.
Under libertarian dogma, we'd still have slavery, protected under the Constitution. But they were confiscated as contraband of war, beginning in New Orleans. And this disaster is surely both the moral and legal equivalent of WAR, especially here in our war-happy country above all!
For example, if I committed manslaughter with my car - my private property - and then tried to cover up the act by lying (as BP has), I'd be liable both for arrest and to have my vehicle confiscated by the state. No question about it.
It seems though, when the individual - and corporations are individuals under U.S. law - is in possession of lots of private property - the right wing dogma suddenly changes from "let's get tough on crime" to "let's coddle the criminal"!
Why should anyone take BPs word for what is happening? Quite likely this well could be spiked in short order. My own view is that they are lying, and want to keep pumping at all costs, by drilling a new well while letting the old one leak away. They don't want to lose the well. That's why BP wants to drag this out to August.
It is an abomination that we allow this criminal act to continue to be carried out unhindered, on the "word" of the criminal, in full public view.
Libertarian apologists better watch their dogma on this one, a lot of people are hopping mad right now. "Spill Baby Spill" won't fly as a slogan methinks.
First receivership, then the criminal trials of the execs. Then a fine that should be the equivalent of confiscation of BP's North American assets. To recover the private property of Louisiana's fishing and tourist industries. Screw BP AND their private property!
Anything less is a criminal injustice!
June 1, 2010 10:24 AM | Reply | Permalink
I'm no libertarian or conservative and certainly not a Republican but this Reich rant is seriously low on any informed facts or leagal reasoning.
June 1, 2010 10:46 AM | Reply | Permalink
I usually respect Mr. Reich's opinion, but not in this case...
The US never nationalized any of the big banks. To nationalize something is to take ownership of it directly. The US purchased significant or controlling stakes in the big banks, who, it is worthy of note, agreed to the terms of the respective deals.
Yes, technically the US could buy up BP stock until it had control of the corporation, assuming BP and all shareholders were willing to sell. Anyone think that will happen?
While technically legally possible, in reality the US Government cannot just seize a company. Period. Maybe if BP declared bankruptcy they can get involved.
Where the US does have leverage, and should use it, is in the granting of licenses, etc. They should absolutely (and may be quietly) holding the threat of revocation of any current licenses and complete refusal to grant future ones over BP's head based on performance.
But in reality, there is very little that the US can do regarding this leak. They do not have the equipment designed for this sort of work, nor the expertise to demand a specific solution (the best drillers, cappers, etc all work for the oil companies. It's their less-talented friends who make up the MMS). Also, from what I have heard from generally respectable voices, they are not really a lot of other good solutions to try.
What the US needs to start doing (and seems to have although in partisan fits and starts) is take the lessons learned here (for example, do not just believe an oil company when they say they can handle a blowout 10x this size, but in fact ask how they plan to do it and maybe make them even test the method), and use that to formulate strong and flexible regulations going forward.
How about ones like this:
In the event of an offshore leak, the well owner will responsible in the amount of 500 million dollars, per day, for any leak that exceeds 100 barrels per day, plus a fine of $10,000 per barrel. The 500 million fine would be placed into a fund to handle the impact of the leak and/or future leaks (for example, immediate loss of business payments to fishermen). In the event of a legal finding of negligence (accidents do happen), all fines double.
Watch how fast oil companies figure out recovery plans when a leak like this would cost 20 billion in fines..
June 1, 2010 12:01 PM | Reply | Permalink
Your solution is not much different than banning all offshore drilling. No company will take on the type of liability you are demanding. So, no oil except from the middle east. And expect to pay 6 to 10 bucks a gallon for it. That doesn't sound like a good plan to me.
Require a BOP that actually prevents blowouts. Require a backup plan, maybe a second well drilled in advance waiting to shut it down if needed. These things would increase cost, but not incur unlimited liability. We need oil, and we need to drill offshore. We just need to do it responsibly.
June 1, 2010 12:25 PM | Reply | Permalink
I was being a tad rhetorical in choosing very high numbers, but I think my point still stands. The problem here in a nutshell is that the overall risk/reward ratio for the oil companies is out of balance.
Corporations are driven by dollars. Effective regulation will establish a failure cost that outweighs the lack of effective safety mechanisms (i.e. it costs more to fail than to safely succeed), without specifying to the nth degree each step, which allows the companies to be innovative about how to accomplish it. In some cases this will mean not drilling where the risk of failure cannot be mitigated, and I don't find that to be a bad thing.
I'll leave it to the actuaries to figure out a penalty that meets that goal without being overly puntitive.
If the value actually balance, insurance can then be obtained against actual accidents.
June 1, 2010 3:38 PM | Reply | Permalink
I was being a tad rhetorical in choosing very high numbers, but I think my point still stands. The problem here in a nutshell is that the overall risk/reward ratio for the oil companies is out of balance.
Corporations are driven by dollars. Effective regulation will establish a failure cost that outweighs the lack of effective safety mechanisms (i.e. it costs more to fail than to safely succeed), without specifying to the nth degree each step, which allows the companies to be innovative about how to accomplish it. In some cases this will mean not drilling where the risk of failure cannot be mitigated, and I don't find that to be a bad thing.
I'll leave it to the actuaries to figure out a penalty that meets that goal without being overly puntitive.
If the value actually balance, insurance can then be obtained against actual accidents.
June 1, 2010 3:40 PM | Reply | Permalink
Wrong! We don't need to use "our"oil at all. As soon as we use it we no longer have it. Let's keep "our" oil where it belongs, 10 miles under the ocean, and use other nation's oil instead. The end game then is that we have "our" oil to continue to use, long after "their" oil is all used up.
Furthermore, what's wrong with even $10 a gallon gasoline? Even if we continue on our present path, changing nothing, we will pay that much per gallon in a very few years. We need to face the fact that the oil supplies for the world are finite, and they have to run out eventually.
June 1, 2010 11:22 PM | Reply | Permalink
$10.00 per gallon?
In the 1960's gasoline in the USA was $.26 - $.27 per gallon.
Now, 50 years later in the 2010's it is $2.60 - $2.70 per gallon.
Projecting this another 50 years to the 2060's, gasoline will cost $26 - $27 per gallon. And that is assuming a steady supply of crude oil.
.
June 2, 2010 3:54 PM | Reply | Permalink
Now that BP has hired Dick Cheney's flack, their credibility is less than zero.
June 1, 2010 1:15 PM | Reply | Permalink
Reich and those echoing his call for putting BP into temporary receivership are simply experiencing the impending, inevitable frustration of knowing that BP will likely foul the entire Gulf, and that the American taxpayers will end up footing the bill. Ecosystems will perish, species will disappear, many will lose their livelihoods, and more will have their health negatively impacted as a result of our greed for energy, and the behind-the-scenes fellating that accompanies it.
Personally, I'd like to kick Tony Hayward in the balls every hour on the hour, 24/7, until he coughed them up in a bloody puddle.
That won't clean the crude off any grebes, but it might clue some of these greedy fuckers in as to how close to the edge of the civilized envelope they're navigating...
June 1, 2010 1:23 PM | Reply | Permalink
The oil from the BP rig isn't even 'ours,' since it's sold on the international market, and we pay the same as anybody else.
So, here's an idea; why don't we just create a National Oil Company? Since they wouldn't be so goddamn concerned about squeezing every little buck out of an oil well, that real safety regulations could be put into place. It might not make its executives as filthy rich, but then again, I don't think there'd be a problem attracting workers and even management.
Of course, such a common sense idea would be rejected out of hand by the corporatists as bad because of blah blah blah, Q.E.D. On the other hand, show me a nationalized oil company that's doing poorly.
http://en.wikipedia.org/wiki/National_oil_company
June 1, 2010 1:38 PM | Reply | Permalink
Hey! You Socialist Commie Fascist whatever! How dare you interfere in the ability of the very wealthy to accumulate ever more wealth. That's downright un-American, Christian, yes, but un-American. That would be as bad as taxing the income of hedge fund managers.
June 1, 2010 11:27 PM | Reply | Permalink
Why do you hate America so much, Hoppy? ;)
A belated Memorial Day thanks to you, my friend...
June 2, 2010 10:48 AM | Reply | Permalink
This is the only way the public will know what's going on, be confident enough resources are being put to stopping the gusher, ensure BP's strategy is correct, know the government has enough clout to force BP to use a different one if necessary, and be sure the President is ultimately in charge.
...
As it is now, BP continues to be responsible primarily to its shareholders, not to the American public. As a result, the public continues to worry that a private for-profit corporation is responsible for stopping a public tragedy.
I agree with Mr Reich that in government receivership the likelihood of a quick resolution is improved, but I think he's wrong on the politics. I don't see why this American public is going to have more faith in the government's ability to get this done than BP's. The public won't know what's going on, because they listen to Rush Limbaugh. They won't believe the President is in charge, but they will blame him even more the longer the leak goes on (granted, they will anyway). The public will worry that the government is responsible for stopping a public tragedy, because the public is told over and over to believe that government can't find its way out of a paper bag.
June 1, 2010 2:00 PM | Reply | Permalink
sorry for the multiple posts -- I kept getting a Movable type request error.
June 1, 2010 2:02 PM | Reply | Permalink
This is the only way the public will know what's going on, be confident enough resources are being put to stopping the gusher, ensure BP's strategy is correct, know the government has enough clout to force BP to use a different one if necessary, and be sure the President is ultimately in charge.
...
As it is now, BP continues to be responsible primarily to its shareholders, not to the American public. As a result, the public continues to worry that a private for-profit corporation is responsible for stopping a public tragedy.
I agree with Mr Reich that in government receivership the likelihood of a quick resolution is improved, but I think he's wrong on the politics. I don't see why this American public is going to have more faith in the government's ability to get this done than BP's. The public won't know what's going on, because they listen to Rush Limbaugh. They won't believe the President is in charge, but they will blame him even more the longer the leak goes on (granted, they will anyway). The public will worry that the government is responsible for stopping a public tragedy, because the public is told over and over to believe that government can't find its way out of a paper bag.
June 1, 2010 2:00 PM | Reply | Permalink
This is the only way the public will know what's going on, be confident enough resources are being put to stopping the gusher, ensure BP's strategy is correct, know the government has enough clout to force BP to use a different one if necessary, and be sure the President is ultimately in charge.
...
As it is now, BP continues to be responsible primarily to its shareholders, not to the American public. As a result, the public continues to worry that a private for-profit corporation is responsible for stopping a public tragedy.
I agree with Mr Reich that in government receivership the likelihood of a quick resolution is improved, but I think he's wrong on the politics. I don't see why this American public is going to have more faith in the government's ability to get this done than BP's. The public won't know what's going on, because they listen to Rush Limbaugh. They won't believe the President is in charge, but they will blame him even more the longer the leak goes on (granted, they will anyway). The public will worry that the government is responsible for stopping a public tragedy, because the public is told over and over to believe that government can't find its way out of a paper bag.
June 1, 2010 2:01 PM | Reply | Permalink
Reich is simply a fool. The '90 OPA gives Obama all the authority necessary to federalize the response to this spill. There is no need to talk about 'receivership' or nationalization. Follow the law.
June 1, 2010 4:21 PM | Reply | Permalink
Under what legal authority would such an action by moved forward? What Court handled this matter? Who is the plaintiff, and who the defendant?
Due process, after all, is what it is about. From the Cornell Law Library, the following definition:
"A remedy in which the court appoints a person to temporarily manage a piece of property that is in the defendant's possession. This remedy is available only when the plaintiff is asserting an equity claim in which the piece of property is the subject matter of the equity claim. Also, for the court to grant this remedy there also must be a danger that the defendant will damage or severely diminish the value of the property during the time that the cause of action is pending."
June 1, 2010 3:18 PM | Reply | Permalink
If I'm not mistaken, this is not an American company. I can just hear it now from the rethugs. Obama took over the banks, the car companies, health care, whatever else I've forgotten, and now he's taking over foreign companies. Then we'll have some nazi, marxist, maoist, socialist, communist goodies thrown in. Poor President Obama can't win for losing.
I live on the Gulf Coast, I'm sick about what's happening, but I fail to see what on earth anyone thinks Obama can do about this disaster. Politics make me ill.
June 1, 2010 5:07 PM | Reply | Permalink
Conservatives have never had a problem supporting "imminent domain" laws, taking over the property and businesses of the poor against their will, for the sake of highways, corporate development and the like. But talk about seizing BP's American operations and it's like "oh, no, noo...they can't do that. You can't take over a private company." If Sal's Pizza can be seized to benefit the Jersey Turnpike, then BP can be seized to benefit the Gulf state residents.
June 1, 2010 8:25 PM | Reply | Permalink
Conservatives have never had a problem supporting "imminent domain" laws, taking over the property and businesses of the poor against their will, for the sake of highways, corporate development and the like. But talk about seizing BP's American operations and it's like "oh, no, noo...they can't do that. You can't take over a private company." If Sal's Pizza can be seized to benefit the Jersey Turnpike, then BP can be seized to benefit the Gulf state residents.
June 1, 2010 8:26 PM | Reply | Permalink
Conservatives have never had a problem supporting "imminent domain" laws, taking over the property and businesses of the poor against their will, for the sake of highways, corporate development and the like. But talk about seizing BP's American operations and it's like "oh, no, noo...they can't do that. You can't take over a private company." If Sal's Pizza can be seized to benefit the Jersey Turnpike, then BP can be seized to benefit the Gulf state residents.
June 1, 2010 8:27 PM | Reply | Permalink
Conservatives have never had a problem supporting "imminent domain" laws, taking over the property and businesses of the poor against their will, for the sake of highways, corporate development and the like. But talk about seizing BP's American operations and it's like "oh, no, noo...they can't do that. You can't take over a private company." If Sal's Pizza can be seized to benefit the Jersey Turnpike, then BP can be seized to benefit the Gulf state residents.
June 1, 2010 8:28 PM | Reply | Permalink
When 'Sals Pizza' is taken by eminent domain the owner is compensated for the fair value of his business, it isn't just taken away. And for the record, it was not conservatives, but liberals that wrote the 'Kelo v New London' ruling that allowed private property to be taken for the benefit of a corporation.
June 1, 2010 10:09 PM | Reply | Permalink
Sorry about the multiple posts. Had a little computer error.
June 1, 2010 8:31 PM | Reply | Permalink
Everyone is ignoring the real issue here. Our government is responsible for overseeing offshore drilling. They are responsible for making sure that all safety precautions are in place and enforced before, during, and after exploratory wells are drilled, especially at depths over one mile. Compare US policy with EU Policy in offshore well sites in the north sea, where average wave height is much greater than the sleepy gulf. This means it is more difficult to drill in the North sea than it is in the gulf, but, because of regulatory oversight, it is safer to drill there. You have an agency that receives a majority of its funding from the customer it is supposed to be regulating. This is the same problem we have with coal mining. Have we (the government) fixed anything in either venue? The answer to every bureaucrat's/socialists dream is take over once the "cow has left the barn". Never worry about locking the barn door. Lets blame this also on Bush. It must be his fault. Obama waited over 30 days before he even acknowledged the oil spill. If GWB had done this the liberals would have had their panties so bunched up, it would have made their faces red(der). The top kill option, would have worked at shallower depths. Maybe everyone should go to the NOLA site to read up on what caused the leak in the first place http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/05/safety_fluid_was_removed_befor.html
I guess it is easier to take over a company than analyze facts. Fact is, BP is doing the best job any company can, given the circumstances. This does not mean that Obama cannot provide oversight, and collect opinions from experts, and hold BPs feet to the fire. That is his job. This is what happens when you hire a rookie to do a president's job. Anyway, every one whose ever worked for an offshore drilling equipment manufacturer, raise your hand! You (and I) have enough knowledge to provide comments based in reality. The rest of you, learn and study. Then comment based upon your new-found knowledge.
June 2, 2010 5:12 PM | Reply | Permalink
Everyone is ignoring the real issue here. Our government is responsible for overseeing offshore drilling. They are responsible for making sure that all safety precautions are in place and enforced before, during, and after exploratory wells are drilled, especially at depths over one mile. Compare US policy with EU Policy in offshore well sites in the north sea, where average wave height is much greater than the sleepy gulf. This means it is more difficult to drill in the North sea than it is in the gulf, but, because of regulatory oversight, it is safer to drill there. You have an agency that receives a majority of its funding from the customer it is supposed to be regulating. This is the same problem we have with coal mining. Have we (the government) fixed anything in either venue? The answer to every bureaucrat's/socialists dream is take over once the "cow has left the barn". Never worry about locking the barn door. Lets blame this also on Bush. It must be his fault. Obama waited over 30 days before he even acknowledged the oil spill. If GWB had done this the liberals would have had their panties so bunched up, it would have made their faces red(der). The top kill option, would have worked at shallower depths. Maybe everyone should go to the NOLA site to read up on what caused the leak in the first place http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/05/safety_fluid_was_removed_befor.html
I guess it is easier to take over a company than analyze facts. Fact is, BP is doing the best job any company can, given the circumstances. This does not mean that Obama cannot provide oversight, and collect opinions from experts, and hold BPs feet to the fire. That is his job. This is what happens when you hire a rookie to do a president's job. Anyway, every one whose ever worked for an offshore drilling equipment manufacturer, raise your hand! You (and I) have enough knowledge to provide comments based in reality. The rest of you, learn and study. Then comment based upon your new-found knowledge.
June 2, 2010 5:13 PM | Reply | Permalink
Everyone is ignoring the real issue here. Our government is responsible for overseeing offshore drilling. They are responsible for making sure that all safety precautions are in place and enforced before, during, and after exploratory wells are drilled, especially at depths over one mile. Compare US policy with EU Policy in offshore well sites in the north sea, where average wave height is much greater than the sleepy gulf. This means it is more difficult to drill in the North sea than it is in the gulf, but, because of regulatory oversight, it is safer to drill there. You have an agency that receives a majority of its funding from the customer it is supposed to be regulating. This is the same problem we have with coal mining. Have we (the government) fixed anything in either venue? The answer to every bureaucrat's/socialists dream is take over once the "cow has left the barn". Never worry about locking the barn door. Lets blame this also on Bush. It must be his fault. Obama waited over 30 days before he even acknowledged the oil spill. If GWB had done this the liberals would have had their panties so bunched up, it would have made their faces red(der). The top kill option, would have worked at shallower depths. Maybe everyone should go to the NOLA site to read up on what caused the leak in the first place
"http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/05/safety_fluid_was_removed_befor.html"
I guess it is easier to take over a company than analyze facts. Fact is, BP is doing the best job any company can, given the circumstances. This does not mean that Obama cannot provide oversight, and collect opinions from experts, and hold BPs feet to the fire. That is his job. This is what happens when you hire a rookie to do a president's job. Anyway, every one whose ever worked for an offshore drilling equipment manufacturer, raise your hand! You (and I) have enough knowledge to provide comments based in reality. The rest of you, learn and study. Then comment based upon your new-found knowledge.
June 2, 2010 5:14 PM | Reply | Permalink
Everyone is ignoring the real issue here. Our government is responsible for overseeing offshore drilling. They are responsible for making sure that all safety precautions are in place and enforced before, during, and after exploratory wells are drilled, especially at depths over one mile. Compare US policy with EU Policy in offshore well sites in the north sea, where average wave height is much greater than the sleepy gulf. This means it is more difficult to drill in the North sea than it is in the gulf, but, because of regulatory oversight, it is safer to drill there. You have an agency that receives a majority of its funding from the customer it is supposed to be regulating. This is the same problem we have with coal mining. Have we (the government) fixed anything in either venue? The answer to every bureaucrat's/socialists dream is take over once the "cow has left the barn". Never worry about locking the barn door. Lets blame this also on Bush. It must be his fault. Obama waited over 30 days before he even acknowledged the oil spill. If GWB had done this the liberals would have had their panties so bunched up, it would have made their faces red(der). The top kill option, would have worked at shallower depths. Maybe everyone should go to the NOLA site to read up on what caused the leak in the first place.
I guess it is easier to take over a company than analyze facts. Fact is, BP is doing the best job any company can, given the circumstances. This does not mean that Obama cannot provide oversight, and collect opinions from experts, and hold BPs feet to the fire. That is his job. This is what happens when you hire a rookie to do a president's job. Anyway, every one whose ever worked for an offshore drilling equipment manufacturer, raise your hand! You (and I) have enough knowledge to provide comments based in reality. The rest of you, learn and study. Then comment based upon your new-found knowledge.
June 2, 2010 5:15 PM | Reply | Permalink
Everyone is ignoring the real issue here. Our government is responsible for overseeing offshore drilling. They are responsible for making sure that all safety precautions are in place and enforced before, during, and after exploratory wells are drilled, especially at depths over one mile. Compare US policy with EU Policy in offshore well sites in the north sea, where average wave height is much greater than the sleepy gulf. This means it is more difficult to drill in the North sea than it is in the gulf, but, because of regulatory oversight, it is safer to drill there. You have an agency that receives a majority of its funding from the customer it is supposed to be regulating. This is the same problem we have with coal mining. Have we (the government) fixed anything in either venue? The answer to every bureaucrat's/socialists dream is take over once the "cow has left the barn". Never worry about locking the barn door. Lets blame this also on Bush. It must be his fault. Obama waited over 30 days before he even acknowledged the oil spill. If GWB had done this the liberals would have had their panties so bunched up, it would have made their faces red(der). The top kill option, would have worked at shallower depths. Maybe everyone should go to the NOLA site to read up on what caused the leak in the first place http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/05/safety_fluid_was_removed_befor.html
I guess it is easier to take over a company than analyze facts. Fact is, BP is doing the best job any company can, given the circumstances. This does not mean that Obama cannot provide oversight, and collect opinions from experts, and hold BPs feet to the fire. That is his job. This is what happens when you hire a rookie to do a president's job. Anyway, every one whose ever worked for an offshore drilling equipment manufacturer, raise your hand! You (and I) have enough knowledge to provide comments based in reality. The rest of you, learn and study. Then comment based upon your new-found knowledge.
June 2, 2010 5:16 PM | Reply | Permalink
Everyone is ignoring the real issue here. Our government is responsible for overseeing offshore drilling. They are responsible for making sure that all safety precautions are in place and enforced before, during, and after exploratory wells are drilled, especially at depths over one mile. Compare US policy with EU Policy in offshore well sites in the north sea, where average wave height is much greater than the sleepy gulf. This means it is more difficult to drill in the North sea than it is in the gulf, but, because of regulatory oversight, it is safer to drill there. You have an agency that receives a majority of its funding from the customer it is supposed to be regulating. This is the same problem we have with coal mining. Have we (the government) fixed anything in either venue? The answer to every bureaucrat's/socialists dream is take over once the "cow has left the barn". Never worry about locking the barn door. Lets blame this also on Bush. It must be his fault. Obama waited over 30 days before he even acknowledged the oil spill. If GWB had done this the liberals would have had their panties so bunched up, it would have made their faces red(der). The top kill option, would have worked at shallower depths. Maybe everyone should go to the NOLA site to read up on what caused the leak in the first place http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/05/safety_fluid_was_removed_befor.html
I guess it is easier to take over a company than analyze facts. Fact is, BP is doing the best job any company can, given the circumstances. This does not mean that Obama cannot provide oversight, and collect opinions from experts, and hold BPs feet to the fire. That is his job. This is what happens when you hire a rookie to do a president's job. Anyway, every one whose ever worked for an offshore drilling equipment manufacturer, raise your hand! You (and I) have enough knowledge to provide comments based in reality. The rest of you, learn and study. Then comment based upon your new-found knowledge.
June 2, 2010 5:17 PM | Reply | Permalink
"No president would allow a nuclear reactor owned by a private for-profit company to melt down in the United States while remaining under the direct control of that company."
Sorry Mr. Reich, but apparently you don't understand the Nuclear Regulator/Licensee relationship very well. If you read some history about the TMI accident, you will see that none of the lessons learned involved federalizing a nuclear power while in the midst of managing an emergency situation. President Jimmy Carter "toured" TMI, but did not "federalize" it. The NRC knows that the operators are the best ones to manage the plant, the NRC and state and federal agencies are the best to manage the evacuation. Each plays to their strength. The gov't did require that all nuclear operators obtain an enormous liability insurance policy (in case of future events).
The federal response to the oil spill leaves me with the impression that the MMS has a lot to learn from the TMI accident. If the MMS agency is so important to the public health and safety, it should not have a conflict of interest between promotion of gas and oil drilling vs. regulation of them. Remove conflict of interest (promote vs. regulate) from within the agency. The Atomic Energy Commission was stripped of it's "promotion" responsibilities when it became the NRC, the same can be done for the MMS. Once that fundamental change is made, the rest (additional regulation for redundancy of BOPs, catastrophic liability insurance, emergency planning, etc.) will flow naturally.
June 2, 2010 10:49 PM | Reply | Permalink
"No president would allow a nuclear reactor owned by a private for-profit company to melt down in the United States while remaining under the direct control of that company."
Sorry Mr. Reich, but apparently you don't understand the Nuclear Regulator/Licensee relationship very well. If you read some history about the TMI accident, you will see that none of the lessons learned involved federalizing a nuclear power while in the midst of managing an emergency situation. President Jimmy Carter "toured" TMI, but did not "federalize" it. The NRC knows that the operators are the best ones to manage the plant, the NRC and state and federal agencies are the best to manage the evacuation. Each plays to their strength. The gov't did require that all nuclear operators obtain an enormous liability insurance policy (in case of future events).
The federal response to the oil spill leaves me with the impression that the MMS has a lot to learn from the TMI accident. If the MMS agency is so important to the public health and safety, it should not have a conflict of interest between promotion of gas and oil drilling vs. regulation of them. Remove conflict of interest (promote vs. regulate) from within the agency. The Atomic Energy Commission was stripped of it's "promotion" responsibilities when it became the NRC, the same can be done for the MMS. Once that fundamental change is made, the rest (additional regulation for redundancy of BOPs, catastrophic liability insurance, emergency planning, etc.) will flow naturally.
June 2, 2010 10:50 PM | Reply | Permalink
I have always suspected that the Democrat party had become totally Communist and simply wears the label "Democrat" to avoid discovery by those that think the Democrat party is still what it once was in the day of Kennedy. But alas, it has gone to the Dark Side. Indeed, Mr. Reich's recommendation is right out of the Communist play book: "if something goes wrong in a capitalist business, its the government's job to take it over." Well, goodbye America, land of the free and home of the brave; land of personal responsibility. The governement is going to solve all of your problems. We are now a socialist/communist country. And I miss the days of Dwight D. Eisenhower and Ronald Reagan - they're gone forever, Commrades.
June 3, 2010 10:16 AM | Reply | Permalink
I'm stunned at the extent to which smart people like Robert Reich live in Fantasyland about the spill. It's obvious that he has no corporate experience whatsoever; if he had, he'd think twice about the rose-colored assumptions he makes here.
1. "We are not getting the truth from BP." How will making Barack Obama CEO of BP America change this? Reich can't seriously think that the management of BP will suddenly start providing hard truths once the government to be in charge. If anything, there's the strong possibility that it would become even more secretive. We're better off ignoring them and listening to independent experts. BP has no credibility, and putting them into receivership won't change that.
2. "We have no way to be sure BP is devoting enough resources to stopping the gusher." And putting them into receivership won't change that because the government will still depend on them for accurate information. It would take long past August for the new management to determine one way or another whether BP has devoted adequate resources to stopping the spill; again, a takeover could well *reduce* cooperation. Even as feckless a company as BP has an interest in stopping the spill. The rotten truth is that the best shot has already been taken and they're down to desperate measures. Why have the government take direct responsibilities for attempts that have extremely long odds?
3. "BP's new strategy for stopping the gusher is highly risky." All the strategies are risky. And it's not accurate to say that BP is doing all of the weighing. Reich himself contradicts that in his next point.
4. "Right now, the U.S. government has no authority to force BP to adopt a different strategy." Then how did Steven Chu get them to stop the top kill? And President Obama has been explicit on this point: Every strategy is subject to government approval. You can believe the president or not, but if you don't, surely you don't think it's a good idea for him to take over BP.
5. "The President is not legally in charge." Yes, he is. As for the condescending discourse about pronouns, look at this way: Suppose Robert Reich tells someone about work a graduate assistant does under his direction. When it comes to authority, Reich will refer to himself; when it comes to the work being done, he'll refer to the assistant. Will that actually be difficult to understand?
As far as stopping the spill, I don't want to let BP off the hook by taking them over. Cleanup is another matter: Putting them under the direct authority of FEMA makes some sense -- although in practice it will be trickier than it sounds -- because the government won't need to rely on BP for information or expertise. FEMA has the latter and won't need BP for the former, and the direct authority to commandeer BP's resources is attractive.
Everyone seems to think that stopping a leak a mile deep is simple. It's not. In fact, stopping it with some means other than the relief wells is probably impossible. It's time educate the public about the federal role in the cleanup and to consider taking over BP for that.
June 4, 2010 4:30 AM | Reply | Permalink
I'm stunned at the extent to which smart people like Robert Reich live in Fantasyland about the spill. It's obvious that he has no corporate experience whatsoever; if he had, he'd think twice about the rose-colored assumptions he makes here.
1. "We are not getting the truth from BP." How will making Barack Obama CEO of BP America change this? Reich can't seriously think that the management of BP will suddenly start providing hard truths once the government to be in charge. If anything, there's the strong possibility that it would become even more secretive. We're better off ignoring them and listening to independent experts. BP has no credibility, and putting them into receivership won't change that.
2. "We have no way to be sure BP is devoting enough resources to stopping the gusher." And putting them into receivership won't change that because the government will still depend on them for accurate information. It would take long past August for the new management to determine one way or another whether BP has devoted adequate resources to stopping the spill; again, a takeover could well *reduce* cooperation. Even as feckless a company as BP has an interest in stopping the spill. The rotten truth is that the best shot has already been taken and they're down to desperate measures. Why have the government take direct responsibilities for attempts that have extremely long odds?
3. "BP's new strategy for stopping the gusher is highly risky." All the strategies are risky. And it's not accurate to say that BP is doing all of the weighing. Reich himself contradicts that in his next point.
4. "Right now, the U.S. government has no authority to force BP to adopt a different strategy." Then how did Steven Chu get them to stop the top kill? And President Obama has been explicit on this point: Every strategy is subject to government approval. You can believe the president or not, but if you don't, surely you don't think it's a good idea for him to take over BP.
5. "The President is not legally in charge." Yes, he is. As for the condescending discourse about pronouns, look at this way: Suppose Robert Reich tells someone about work a graduate assistant does under his direction. When it comes to authority, Reich will refer to himself; when it comes to the work being done, he'll refer to the assistant. Will that actually be difficult to understand?
As far as stopping the spill, I don't want to let BP off the hook by taking them over. Cleanup is another matter: Putting them under the direct authority of FEMA makes some sense -- although in practice it will be trickier than it sounds -- because the government won't need to rely on BP for information or expertise. FEMA has the latter and won't need BP for the former, and the direct authority to commandeer BP's resources is attractive.
Everyone seems to think that stopping a leak a mile deep is simple. It's not. In fact, stopping it with some means other than the relief wells is probably impossible. It's time educate the public about the federal role in the cleanup and to consider taking over BP for that.
June 4, 2010 4:41 AM | Reply | Permalink
To Robert Reich:First off BP is not GM. It is a multinational corporation of Britain or don't you get the BP part? The brits are already screaming that we are destroying their pensions because BP is one of their companies get it?
You're comparing apples to oranges and with the analogy of a nuclear reactor. No freaking way we should even have a foreign country running one in or off shore of this country that was a stupid statement in itself!
Today the entire oil industry sent up a red flag when they zeroxed copies of their emergency plans and quite frankly as bad as this is this was a good thing to find out NOW! It shows the arrogance of the oil companies and kind of reminded me of the auto industry and actually CORPORATIONS in general!
The 5th amendment protects private property rights. The President has no authority to 'nationalize' anything, and Congress can't give it to him. As quoted from others on this list!
Besides it could start another war over oil and we don't need that right now!
Once again its soooo easy to armchair quarterback and the media sure are doing it. Picking apart every stinking word or sentence as not enough shows nothing but ignorance on your part because actually you wouldn't know what to freakin' do yourself!
June 16, 2010 8:25 PM | Reply | Permalink
I don't know why obama doing all this thing....
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December 9, 2010 4:57 AM | Reply | Permalink
Receivership, nationalization, prison for the upper executives, a thorough investigation of the first two to three weeks of response when, indeed, I think there is every reason to think BP - not the thinking man's company - did underestimate the problem, and was trying to treat it as a problem that needed to be solved in such a way that they could produce oil from their property.
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December 28, 2010 11:48 PM | Reply | Permalink
I'm no libertarian or conservative and certainly not a Republican but this Reich rant is seriously low on any informed facts or legal car transport reasoning.
December 29, 2010 11:23 PM | Reply | Permalink
You get congress to pass a special authorization and it's done. Nothing in the constitution protects anyone's right to wreck a coast line and besides, even if it did... BP is a foreign company. If we can send foreigners to Gitmo and debate their rights later we can certainly nationalize BP tech house!
December 29, 2010 11:23 PM | Reply | Permalink
The 5th amendment protects private property rights. The President has no authority to 'nationalize' anything, and Congress can't give it to him. This is not a banana republic auto transport.
December 29, 2010 11:24 PM | Reply | Permalink
Reich is simply a fool. The '90 OPA gives Obama all the authority necessary to federalize the response to this spill. There is no need to talk about 'receivership' or nationalization. Follow the car transport law.
December 29, 2010 11:25 PM | Reply | Permalink
By the time Congress and the Fed Govt would make that a reality, BP will have drilled 2 new wells to stop the leak and we will all have moved on by then.
Focus on pressuring BP to complete the work, compensate affected people and stop with this line of over-the-top bluster by folks like Reich & Carville.
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January 27, 2011 12:02 AM | Reply | Permalink
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Receivership, nationalization, prison for the upper executives, a thorough investigation of the first two to three weeks of response when, indeed, I think there is every reason to think BP - not the thinking man's company - did underestimate the problem, and was trying to treat it as a problem that needed to be solved in such a way that they could produce oil from their property.
January 27, 2011 12:02 AM | Reply | Permalink
Phim
I'm sorry but you are completely wrong. If I own 100% of the stock, I own the corporation and all of it's assets. Stock in a company represents fractional ownership of the company, arguing that stock does not constitute property is just plain stupid. Your argument is no different than claiming that money itself is not property. And your thoughts on stock ownership are also off base. Even for a giant corporation like Exxon, more than 50% of it's stock is owned by non-institutional investors. (figures not available for BP) Many of those institutional investors are 401k plan managers, holding the shares of millions of workers retirement funds.Really, your argument is just plain stupid, period. In effect you are arguing that the government can seize all the assets of any corporation at will and since a company has no 14th or 5th amendment rights, no one has a basis to file an objection.
January 27, 2011 12:06 AM | Reply | Permalink
thanks The federal response to the oil spill leaves me with the impression that the MMS has a lot to learn from the TMI accident. If the MMS agency is so important to the public health adventure games
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It would take long past August for the new management to determine one way or another whether BP has devoted adequate resources to stopping the spill; again, a takeover could well *reduce* cooperation. Focus on pressuring BP to complete the work, compensate affected people and stop with this line of over-the-top bluster by folks like Reich & Carville
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August for the new management to determine one way or another whether BP has devoted adequate resources to stopping the spill; again, a takeover could well *reduce* cooperation. Focus on pressuring BP to complete the work, compensate affected people
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February 2, 2011 12:21 PM | Reply | Permalink
I realise why they are so despised around the world - were they so concerned with the Union Carbide disater in Bhopal where thousands of Indians died? If the American nation wasn't so GREEDY for oil perhaps foreign oil companies wouldn't have to come to the US and drill in such deep waters - and of course, the US doesn't take any taxes or royalties from BP
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BP is devoting enough resources to stopping the gusher. BP is now saying it has no immediate way to stop up the well until August, when a new "relief" well will reach the gushing well bore, enabling its engineers to install cement plugs. August? If government were in direct control of BP's north American assets
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BP continues to be responsible primarily to its shareholders, not to the American public. As a result, the public continues to worry that a private for-profit corporation is responsible
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This is the only way the public will know what's going on, be confident enough resources are being put to stopping the gusher, ensure BP's strategy is correct, know the government has enough clout to force BP
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February 8, 2011 5:47 AM | Reply | Permalink
hich gives the government authority to take over BP's operations in the Gulf of Mexico until the gusher is stopped. This is the only way the public will know what's going on, be confident enough resources are being put to stopping the gusher, ensure BP's strategy is correct, know the government has enough clout to force BP to use a different one if necessary, and be sure the President is ultimately in charge.
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It's time for the federal government to put BP under temporary receivership, which gives the government authority to take over BP's operations in the Gulf of Mexico until the gusher is stopped. This is the only way the public will know what's going on, be confident enough resources are being put to stopping the gusher, ensure BP's strategy is correct, know the government has enough clout to force BP to use a different one if necessary, and be sure the President is ultimately in charge.
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Still quite hot topic I see. Well in my opinion BP should pay very hard money for that disaster.
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We have no way to be sure BP is devoting enough resources to stopping the gusher. BP is now saying it has no immediate way to stop up the well until August, when a new "relief" well will reach the gushing well bore, enabling its engineers to install cement plugs. August? If government were in direct control of BP's north American assets, it would be able to devote whatever of those assets are necessary to stopping up the well right away.
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February 25, 2011 6:39 AM | Reply | Permalink
I believe the BP oil spill was a terrible disaster but tihngs like that can happen. My concern is about not punishing the ones who are to blame. BP has undergone such lengthy and costly maneuvers but admitting defeat and paying up billions wouldn't have been the better alternative indeed.
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The federal response to the oil spill leaves me with the impression that the MMS has a lot to learn from the TMI accident. If the MMS agency is so important to the public health and safety, it should not have a conflict of interest between promotion of gas and oil drilling vs. regulation of them. بلاك بيري اي فون Remove conflict of interest (promote vs. regulate) from within the agency. The Atomic Energy Commission was stripped of it's "promotion" responsibilities when it became the NRC, the same can be done for the MMS. Once that fundamental change is made, the rest (additional regulation for redundancy of BOPs, catastrophic liability insurance, emergency planning, etc.) will flow naturally.
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. That is his job. This is what happens when you hire a rookie to do a president's job. Anyway, every one whose ever worked for an offshore drilling equipment manufacturer, raise your hand! You (and I) have enough knowledge to provide comments based in reality. The rest of you, learn and study. Then comment based upon your new-found knowledge.
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Reich is simply a fool. The '90 OPA gives Obama all the authority necessary to federalize the response to this spill. Harga Jual Blackberry iPhone Laptop Murah There is no need to talk about 'receivership' or nationalization. Follow the law. Kecil Jadi Kawan, Besar Jadi Lawan
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Of course Obama has the authority to seize BP's assets, at least in the US and probably in our hemisphere. Fact is, BP applied for licenses to do business in the US. Our government can and should do everything to make sure that our taxpayers don't clean up BP's mess.
We entirely have the authority to nationalize BP right now and we have good cause. But if the royal crown disagrees, I suppose Britain is within its rights to oppose us.
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