Obama Twists Arms at BP, Setting Off a Debate on Tactics

[TomCADem]

Source: NY Times

WASHINGTON — First there was General Motors, whose chief executive was summarily dismissed by the White House shortly before the government became the company’s majority shareholder. Chrysler was forced into a merger. At the banks that received government bailouts, executive pay was curbed; at insurance companies seeking to jack up premiums, scathing criticism led to rollbacks.

But President Obama’s successful move to force BP to establish a $20 billion compensation fund that the company will have no voice in allocating — just a down payment, the president insisted — may have been the most vivid example of what he recently called his determination to step in and do “what individuals couldn’t do and corporations wouldn’t do.”

With that display of raw arm-twisting, Mr. Obama reinvigorated a debate about the renewed reach of government power, or, alternatively, the power of government overreach. It is an argument that has come to define Mr. Obama’s first 18 months in office, and one that Mr. Obama clearly hopes to make a central issue in November’s midterm elections.

To Mr. Obama, this is all about rebalancing the books after two decades in which multinationals sometimes acted like mini-states beyond government reach, abetted by a faith in markets that, as Mr. Obama put it at Carnegie Mellon University a few weeks ago, “gutted regulations and put industry insiders in charge of industry oversight.” When Representative Joe L. Barton, the Texas Republican, opened hearings Thursday about the gulf oil gusher by accusing Mr. Obama of an unconstitutional “shakedown” of BP to create a “slush fund,” he was giving voice to an alternative narrative, a bubbling certainty in corporate suites that Mr. Obama, whenever faced with crisis that involves private-sector players, reveals himself to be viscerally antibusiness.


Read more: http://www.nytimes.com/2010/06/18/us/18assess.html?hp

---

This article puts the Joe Barton (R) apology to BP into context. On the far left, anything short of nationalization of BP by the federal government is failure. On the far corporate right, anything short of complete public subsidization of BP is tyranny.

[MineralMan]

1. What? President Obama is "Antibusiness?"

Wait...I thought he was a corporatist. I keep reading that here. I'm soooo confused, now. Who am I to believe?

I guess I'll just have to think for myself, then...drat!

[Frances]

2. My feelings exactly

The right wing castigates him for taking power that they think justly belongs to BP and other corporations

The left wing castigates him for whatever

It's a lose-lose situation for Obama

[MineralMan]

3. Well, it's a lose-lose situation for somebody, certainly.

I don't think it's President Obama, though. He seems to have chosen a win-win path, as far as I can see. Perhaps its his detractors from whatever side who are in a lose-lose situation.

[pinboy3niner]

8. "This president needs to tell BP 'I'm your daddy, I'm in charge, you're going to do what we say."

Carville spoke for a lot of folks who wanted Obama to come down hard on BP. A classic case of "Doomed if you do and doomed if you don't." :)

[MineralMan]

9. Not having been in the room, I'm not sure what he said to the BP

assholes. He probably put it more politely than you did, though. That's his style. Whatever he did worked, though.

Now, personally, I'd like to see the entire BP Board of Directors and top executives given a perp walk and charged with criminal negligence. That would be good. Perhaps we'll see that yet. The criminal investigations are far from being finished. What a glorious day it would be to give these assholes their days in criminal court. Yessiree...a glorious day.

[JDPriestly]

13. I suspect that's why the Republicans are worried.

One of the Republicans mentioned that the Attorney General was in the room when Hayward and the President spoke. A criminal investigation is being conducted. That is probably why Hayward refused to talk about anything yesterday. He and a lot of other folks at BP are worried about criminal charges. And rightfully so.

My question is: Did Obama strike a deal, a sort of peremptory plea bargain, with Hayward day before yesterday? Is the $20,000,000,000 fund a sort of plan to permit the Attorney General to ask for a lighter sentence for those responsible for this leak at BP when charges are brought?

It seems odd for a criminal to pay for the crime before the charges are brought, before trial, before sentencing. But then, I can't think of a crime this serious in the history of mankind.

[pinboy3niner]

14. Not my words--that was a direct quote from Carville...

who later would clobber the President on his Oval Office address. (Some people you can't please ANYTIME.)

I'm with you all the way on that perp walk, MineralMan. A glorious day, indeed! :)

[sabrina 1]

19. He probably pointed out the inevitable results of the disaster

and the fact that neither they nor he can ignore the public outrage that is only going to grow as this disaster unfolds. He actually may be their best friend at this point. No doubt he informed them that it might mitigate some of that anger if he could tell the American people that BP had agreed to this payment and explained that there was no way even he could tell the American people that BP would monitor the dispersal of the funds. No doubt BP has received that message themselves by now.

He may also have learned from his bail-out of Wall St. what happens when you let the perpetrators manage the money. The Special Tarp Investigator has discovered that millions of the funds set aside to help renotiate mortgages to help keep Americans in their homes, has not been used for that purpose. Why were those funds not placed in the hands of a neutral entity?

Obama is not anti-business by any means. If he was he would not have placed the likes of Geithner in his cabinet. They got away with bailing out their corporate buddies, but I'm sure that Obama realizes that the enormity of this disaster has awakened the American people to the collusion of government in the selling out of this country's resources and its safety.

I am sure that both he and those BP officials agreed to this as it was advantageous to both of them.

The company's operations in the Gulf should be taken over and their assets seized. The management of their operations on U.S. property should be handed over to the U.S. government. And a lot of thought should be given to nationalizing resources such as oil and natural gas. If we have not learned by now that the continued privatization of these resources is a threat to our national security, we will never learn and there will be more disasters like this. Or like the mine disaster.

$20 billion will not come close to covering the cost of this disaster. But it was a good step in the PR department. We'll have to see what happens to those funds. It would help if someone would start paying the clean-up crews.

[JDPriestly]

12. Obama has not explained to the public what principles he applies

in deciding when to intervene. That is the problem. He has not clearly explained his point of view on curbing in the lawlessness of some of these corporations.

He needs to make the irresponsibility of corporations an issue. Prior presidents did not do this, and things have gotten way out of hand. The corporations have bought the government. For years, companies have polluted our rivers and fields, our air and food sources, and rather than pay for cleaning up their messes, they pay for their friend's elections to Congress and appointments to the courts. Friends in the government cost less than toxic waste clean-ups.

This BP catastrophe is Obama's chance to talk to the American people about the excesses of the corporations, about their takeover of our environment as well as our economy and our government.

Generally, people are confused about what is going on. We have been fed so much claptrap about the "free market." Many, maybe most, people actually believe because that is the only story we have heard. In fact, we do not have free, competitive marketplace. We have a gigantic network of interlocking trusts that run the world. World trade, free trade is not about the free exchange of LABOR and goods. It is only about the free exchange of goods.

Obama is doing the right thing in trying to unlock the hold those trusts with their interlocking boards of directors, their secret clubs and meetings, etc., have on the our lives. But he needs to explain to the American people why he is doing this. He needs to evoke the great tradition of Teddy Roosevelt in his support.

He needs to tell people the story of the Robber Baron era in this country and how it led to many many booms and busts in the late 19th century. Obama needs to take back the narrative on the role of business in our society. Let's hope he does that.

[TomCADem]

17. Maybe the solution depends on the specific facts? One size does not fit all...

I know it does not sound idealogically pure, but sometimes the appropriate policy depends on the facts. Yes, it does not fit into a soundbite, but when does one's personal life fit so neatly into a soundbite. Heck, in California, you had Mike Duvall's who stated principles were easily understood. He had a 100% score from some family values groups. But, then he was busted for bragging about getting sexual favors from a lobbyist on a hot mike. Obama's book the Audacity of Hope is actually a pretty good insight into how Obama has governed. No real surprises on my end.

[goclark]

4. With you Mineral Man nt

[superconnected]

5. Basically, we should make everyone in the Gulf pay BP for this disaster.

How dare they question this giant that has (reportedly) given them their biggest piece of financial lively-hood by employing them. So what if the oil rig was severely dangerous and even killed some of them. We must bow to the almighty BP and stop this unfair attack of making *them* pay for this. How anti-corporation. It will cost us jobs and money if we don't bow to BP now.

Repubilcanism - a brain diseases much like aphasia where victims reverse the correct order of things and constantly say one thing when they mean another.

If these Republicans are serious, then they belong in Mental institutes, and not jails.

[elleng]

6. What an obnoxious characterization!

[kestrel91316]

7. My preference would have been for him to BREAK some arms......

[rocktivity]

10. But when Bush did things like this, the media called it "moral courage"

I suspect the only people doing this debating are talking to themselves.

:eyes:
rocktivity

[mwooldri]

11. In a little defence of BP...

BP have said time and time again that they will take all measures necessary to clean up the mess and make all necessary payments. I don't think the President twisted BP's arm that hard at all - the stock market acted positively to that because BP stock value went up after this announcement, because it works out good for BP since they won't have to be lawyering up so much - they can let the 3rd party do all that stuff.

Congressman Barton is a fool... he probably didn't realise that the White House and BP may well have been working out a deal for some time about how BP pays for its damages and put it in a way that the President is seen to be "doing something". Just Mr. Obama being pragmatic again.

[Uncle Joe]

15. I agree with your take on it.

I believed they had worked out this 20 billion escrow before President Obama gave his national address the other night.

[DFLforever]

16. I don't think Barton was just speaking to BP

I think he was addressing all the energy companies that depend on the support of GOP reps and senators, especially those from the oil states. He was reminding them that they were still their guys.

[TomCADem]

20. Barton Is Hardly Alone. Newt Gingrich, Bachmann, Don Young, Sharron Angle...

...and several other prominent Republicans have either defended Barton or made similar comments. Barton is hardly an outlier. Here is Rep. Don Young:

http://www.huffingtonpost.com/2010/06/03/don-young-gulf-oil-spill-environmental-disaster_n_599392.html

Don't worry about the oil spilling into the Gulf, Rep. Don Young (R-Alaska) says, because the worst spill in U.S. history is "not an environmental disaster," just nature taking its course.

"This is not an environmental disaster, and I will say that again and again because it is a natural phenomenon," Young said after Congressional hearings last week. "Oil has seeped into this ocean for centuries, will continue to do it. During World War II there was over 10 million barrels of oil spilt from ships, and no natural catastrophe. ... We will lose some birds, we will lose some fixed sealife, but overall it will recover."

Young, of course, has notoriously close and longstanding ties with oil companies, and went on to criticize the Obama administration's stated moratorium on new offshore drilling permits in the wake of the Gulf spill.

[G_j]

21. I'm not sold on the arm twisting thing..

Sounds like they came to some sort of agreement, as they knew they had to.

[Hawkowl]

18. I'm far left

And I consider a $20 Billion down-payment a resounding success. Not a complete victory but a large victory none the less.

A complete victory would entail using this disaster as a springboard to complete energy independence. I mean Obama could use this as FDR used Pear Harbor or W used 911, by developing a Manhattan Project or Marshall Plan on moving the country completely off fossil fuels.