Please, God/goddess, if you’re upset and striking down false idols, could you check this out?
The White House and BP are telling the media there is a tentative agreement to have BP contribute "about $20 billion" over time to an escrow account to pay economic damages claims for BP’s oil disaster. I still think that’s a good concept but as always, the details matter.
But the leading lights (aka dim bulbs) of the Republican Party can’t seem to give up entirely on John Boehner’s initial view that taxpayers should bail out BP, one of the world’s largest TBTF corporations. Since the Obama Administration proposed the escrow mechanism, it’s important for Republicans to uncover the evil purposes and consequences of the scheme to maintain their view that civilization as we know it is under siege from White House socialists, or fascists, or government takeover zealots.
First, via Pat Caldwell at Minnesota Independent, Michelle Bachmann warns us about the implications of requiring corporations that cause harm to pay for their damages:
The president just called for creating a fund that would be administered by outsiders, which would be more of a redistribution-of-wealth fund. And now it appears like we’ll be looking at one more gateway for more government control, more money to government. If there is a disaster, why is it that government is the one who always seems to benefit after a disaster, and that’s of course what cap-and-trade would be.
We’re fortunate Ms. Bachmann has explained that holding negligent/reckless parties responsible for paying damages is really a socialist scheme to redistribute wealth. I had no idea how pernicious that centuries old Common Law tort concept is. I’m also grateful she slipped in that hit on cap-and-trade, because I never would have seen that a well established damage-claim process was related to schemes for slowing global climate change, though I guess in the grand scheme of things, it probably is.
Next, we have Mississippi’s Governor Haley Barbour, who explains the principles that should apply when corporations engage in inherently dangerous activities that kill workers and cause massive economic damage. Via ThinkProgress, here’s Barbour explaining it to Fox News:
BARBOUR: If BP is the responsible party under the law, they’re to pay for everything. I do worry that this idea of making them make a huge escrow fund is going to make it less likely that they’ll pay for everything. They need their capital to drill wells. They need their capital to produce income. … But this escrow bothers me that it’s going to make them less able to pay us what they owe us. And that concerns me. … [I]t bothers me to talk about causing an escrow to be made, which will — which makes it less likely that they’ll make the income that they need to pay us.
It’s reassuring Barbour is worried about BP’s ability to meet it’s promise to pay all legitimate claims, but it seems his concern is more to maintain BP’s profitability than ensure payments.
If I understand where Haley Barbour’s logic leads, the principle becomes: we shouldn’t require oil companies to comply with costly safety requirements, because that would cut into the profits they’ll need to pay for the damages they cause when they don’t comply with safety requirements. Therefore, damages liability should, a priori, always be limited by a corporation’s profit/earnings ability and never put its assets at risk. Now there’s a moral hazard for you.
I think that’s modern corporate capitalism. Behold the Republican Party, but watch out for the lightning.