Should a Goal of the Federal Government be to put BP out of Business?

[BrentWil]

BP will survive. That seems very clear from the past few days. With a 75 million dollar limit on economic damages, taking in over 16 billion a year, and with as much cash as they have on hand, they will survive.

However, in a FREE MARKET, the little guy would have been able to collect any damages that were due him. In other words, there would be no 75 million dollar limit. Without this, the ability of BP to survive might not happen. With that being the case, it would have had a effected the way other companies do business.

The threat is no longer there because of lobbing efforts that took place in the 90s. However, as a means to correct that, should the federal government make it a priority to try to put BP out of Business? This would effect the market and the business practices of other companies. As a follow up, could they put them out of business?

[villager]

1. All oil companies, actually

n/t

[BrentWil]

2. Well that would cause the death of billions, so I can't support that. NT

[villager]

4. Actually, oil companies are causing the death of billions -- climate change, et al

Phasing them out of existence -- along with dependence on their project -- is probably the last gasp strategy we have left to support...

[BrentWil]

14. Really? Billions? Got any evidence?

They are causing long term damage, but a total change from Oil would ensure that we could not feed our current population. Billions would die of starvation.

[villager]

19. You go ahead and keep defending 'em, BrentWil.. enjoy...

:hi:

[BrentWil]

25. Who is defending them? I think they should pay for the damages that they have done

The 75 million limit is total BS

[villager]

38. Suddenly, we're back to having a mutual agreement point...

...on which to base an amiable discussion!

I do think we need to end our addiction to their pusher-man products, however...

[BrentWil]

40. I think that needs to be done, but the best way of doing it is raising the price of it.

That will make the market develop alternatives.

[Oregone]

6. Then lets drill our way into polluted, over developed oblivion then

Sounds less painful, eh?

[BrentWil]

13. I would suggest a carbon tax that slowly increases the cost of oil and provides the market with the

economic rational to fundamentally change the economy.

[Oregone]

16. Yeah, cause consumption taxes can create Utopia

The invisible hand just needs a little magic tax push now and then.

[BrentWil]

18. Did anyone say "utopia". However, if you make something more expensive, it makes developing an

alternative to that something a lot more profitable.

[Oregone]

23. Sounds like a free market indeed

:rofl:

[BrentWil]

26. I would say it is a regulation that moves the market and gets it to move our society to a place it

needs to be.. namely using a lot less oil.

[The Magistrate]

3. There Is To Be said, Sir, for Doing An 'Arthur Andersen' Here, Pour Encourager Les Autres

It would have to be well timed; they would have to be milked civilly before being extinguished criminally.

[conscious evolution]

15. I agree

make them pay then shut their ass'es down.

[BrentWil]

21. What legal means does the government have to do this with current law? Should they go outside the

law in this case?

[The Magistrate]

36. The Company has Committed Numerous Felonies, Sir

Its charter as a corporation can be held forfeit in consequence.

This should not be done till the maximum in civil awards and criminal fines has been extracted, however.

The the coup de grace can be administered, and the shareholders billed for the bullet, in lieu of any family....

[Oregone]

5. Well, it should be to cap the oil and clean the mess, as well as assign liability

But seizing these assets would remove financial conflict of interest with the management involved in solving this problem, as well as provide future finances to pay out the liability. No, the government's goal shouldn't be about putting BP out of business, but rather assuming ownership of future BP operations in the US. The proceeds will be greatly needed for cleanup and compensation, there will be no more fiscal barriers to proper mitigation of this disaster, and the government can directly regulate to prevent future disasters.

Thank you for listening.

[BrentWil]

10. The government controlling the Oil Business hasn't worked out for the environment in the past

The Ixtoc I Spill would be a key example. If the interests are intertwined, there tends to be abuse. I think those who regulate something should not be the same as those who profit from it. That was one of the problems the BP spill.

[Oregone]

12. The same could be said about private industry. Fuck them

If its all going to hell no matter what, at least the people can profit from it if the government is the owner.

[BrentWil]

17. Yeah, the Mexican people are SOOOO much better off because their government runs Pemex NT

[Oregone]

24. They are no worse off than if Tony Hayward ran it

Why burn the potential to profit? Ridiculous.

[BrentWil]

28. Really? Permex lost 7.32 billion in 2009. BP and other oil companies pay the US billions in taxes

Who is losing again?

[Oregone]

30. Yes, and Mexico is the United States

:rofl:

And management of these holdings lost em quite a bit this year, paying for cleanup and all.

BTW, Crown Corps net billions where I live, in everything from retail to energy to transportation. Not every government is the same, nor would every government express ownership of an industry in the same manner.

[BrentWil]

41. What has the Crown Corps companies developed as far as new and innovated products

Do they compete on a level playing field? Do they make more money for the state then a taxed free (and actually free) market?

[Oregone]

43. Do a bit of research and enjoy what you find

The power companies alone are doing a tremendous job breaking new ground just to start.


"Do they compete on a level playing field?"

Does anybody? If Bill Gates wanted to get into any field with his deep pockets, the concept of a level playing field is a laughable joke. It just doesn't exist, and it never has. Their function isn't to be "fair". Its to provide a good or service to the population and provide government revenue. There doesn't exist some fantasy idealogical concept to prevent them from doing this effectively.


"Do they make more money for the state then a taxed free (and actually free) market?"

Some exist to provide services that promote mobility (and thereby, increased future tax revenue) or perform a critical economic function (like ferrying people around or entitlements). Providing these services could create a loss, and in the US, they would just be considered branches of the government instead of independent entities. But considering that...

I would venture to estimate that yes, they provide much more government revenues (either directly, by allowing the economy to work efficiently, or by promoting mobility) than letting private industry handle those functions and taxing them. First off, most Crown Corps actually do pay consumption taxes as the private sector would (GST/PST or future HST). On top of that, the government isn't simply allowed to take a small portion of their profits, and then capital gains on the dividends. All those profits can go to the government coffers if need be. Now, we also aren't just talking little sums of money:

http://www.financialpost.com/news/fp500/crown-corporations.html?sort=profit&order=d

Historically speaking, Crown Corporations have a massive track record of positive contributions to the government budgets. The biggest controversies concerning them is when the government needs quick cash, and they sell off the assets in sweet heart deals to private industry. Investors drool at the chance to get their hands on Crown Corporations. Time and again, long term profits of these assets always proves to outweigh any quick lump sum the government gets for selling them. The people always lose when they get privatized.

[BrentWil]

44. Interesting?

So an Ipad isn't a good service? Is Microsoft still the largest tech firm? When did Google start again?

You would venture to say yes? Well, I would venture no.

[Oregone]

46. Thats dumb

Crown corporations aren't about a complete takeover of private industry. Canada has had them, and private industry has still provided such innovations as RIM's Blackberry. They coexist TOGETHER in a MIXED economy. Neither is the economy completely private or public.


"Well, I would venture no."

You simply have no idea what you are talking about. There is no way to look at the revenues these critical companies provide for the people and suggest that. They do not inhibit the private industry in their own fields, and they help all the people function on the path to innovation. Even private businesses gain by utilizing the services they provide, such as the cheap, green energy BC Hydro allows private businesses to use in my province.

Suggesting the invisible hand will always provide the most government revenue is simply religion.

[BrentWil]

47. Religion or peer reviewed studies?

Title: The financial and operating performance of privatized firms during the 1990s
Author(s): D'Souza J, Megginson WL
Source: JOURNAL OF FINANCE Volume: 54 Issue: 4 Pages: 1397-1438 Published: AUG 1999

This study compares the pre and postprivatization financial and operat-ing performance of 85 companies from 28 countries (15 industrialized and 13
nonindustrialized) that experience full or partial privatization through public share offerings during the period from 1990 to 1996. The sample of companies being privatized in the 1990s is quite different from the sample that was privatized prior to 1990, particularly with respect to the much heavier representation of firms from the utility and telecommunication industries. We document significant increases in the mean and median levels of profitability, real sales, operating efficiency, and dividend payout for our full sample firms after privatization.

Title: British privatization: Evaluating the results
Author(s): Miller AN
Source: COLUMBIA JOURNAL OF WORLD BUSINESS Volume: 30 Issue: 4 Pages: 82-98 Published: WIN 1995

Clearly, the British privatization program, now in its second decade, has achieved most of the objectives established by the U.K. government. The results reviewed here show unequivocally that the size and scope of government have been reduced, political interference in management decisions has decreased, government funds formerly allocated to nationalized industries have been freed for use in other programs, domestic investment has increased, privatized businesses are earning higher returns than when they were government owned, new sources of tax revenue have been generated, equity ownership by the general public and employees of privatized firms has increased and a free market economy is emerging.

Title: From state to market: A survey of empirical studies on privatization
Author(s): Megginson WL, Netter JR
Source: JOURNAL OF ECONOMIC LITERATURE Volume: 39 Issue: 2 Pages: 321-389 Published: JUN 2001

Private ownership is associated with better firm level performance than is continued state ownership.

I think the religion might be on your side. I am simply trying to determine what is the best path to deal with what are real and legit problems.

[Oregone]

48. Did you find links to those posted on The Weekly Standard?

"I am simply trying to determine what is the best path to deal with what are real and legit problems. "

You aren't trying to determine anything. You are just parroting right-wing talking points about privatization. Next thing we know, you will be advocating a private takeover of all government function, including Social Security, Department of Education and Medicare. Its just shameful.

And transparent.

[BrentWil]

49. No, I got them by using web of Science..

Here is the link. http://wokinfo.com/products_tools/multidisciplinary/webofscience/

If you would like, I would welcome a discussion on the relevant academic literature. There are many various search tools to find articles and studies, if you would like to discuss methodology. However, attacking me does not prove an argument. As I said, I seek only pragmatic solutions to problems in a way that helps society. I am sorry if that does not conform to your orthodoxy..

[Oregone]

50. You seek nothing

Since you've joined DU, you have done little else but advocate privatization of the public sector. There is no discussion here. There is no learning to be had. You appear to have a single, sole agenda. If you were "determining" and "seeking", you would actually respond directly, and intuitively to information presented to you. You act in a contrary manner, erecting straw mans and going into tangents, ignoring the information before you. You mention Google?

:rofl:

To argue that taxing and regulating (in a manner that is proven to fail) private companies amounts to more revenue than collecting 100% of the profits is absurdity. The reality is that neither could be entirely argued in full, as it depends on context. In some contexts, with some effective management, a publicly owned corporation can out perform a private corporation...and some governments would not be so great at this task; it often determines if a government is more trustworthy and competent than private, wealthy investors. A change of ownership does not even suggest a change in executive management, a point you would never entirely consider

[BrentWil]

53. People are the problem. They are dishonest and seek their own advantage.

Give that power to the government, and you have abuses. Give that power to big business, and you have abuse. I seek to lay interests against one another to create a level playing field while at the same time creating a system that redistributes a good portion of wealth to those in need in a way that the person can use it to better themselves. If you think that is a conservative position, you are free to do so. However, I do not think I would be welcome at Free Republic.

I provided you with studies, in hopes of having a discussion. However, you wish to insult.

[Oregone]

54. Give that power to a trustworthy government, and you will not have such abuses

You would rather talk about the failures of Mexico than recognize the success of Crown Corporations in Canada, which add billions in public revenues annually. In the face of one of the biggest environmental disasters in history, you try to obfuscate a government approach with demagoguery about Mexico's inability to run a corporation (and they can't run a state either). IT really doesn't appear you care about "determining" anything to be honest.

[BrentWil]

55. You keep giving this example of the Crown corp, yet you give no real evidence.

What is the total net profit from each of the corporations? How would that compare to tax revenue from many private corporations. Are they able to compete internationally? Do they succeed when they try? Are they innovative? What products do they develop?

Those are simple questions that YOU need to answer to defend your position.

[Oregone]

56. I already posted a link you didn't read

http://www.financialpost.com/news/fp500/crown-corporations.html?sort=profit&order=d

We are talking about many billions in government revenue.


"How would that compare to tax revenue from many private corporations"

The government collects GST/PST or HST on purchases (unless its in health care industry) and 100% of profits. When these assets are privatized, the government can only collect a small portion of profits via taxation of profits & capital gains. Just considering the power monopolies, which cannot actually expand market share, they would have to almost triple their prices to customers to provide more tax revenue if privatized; and if you ask me, thats a losing proposition for the people and businesses that use that power.


"Are they able to compete internationally?"

That isn't their function, but they do. Quick example: http://www.cbc.ca/canada/montreal/story/2010/03/11/mtl-qc-vermont-power-deal.html

Providing reliable and affordable services to the private industry helps them become more internationally competitive too.


"Are they innovative?"

Yes. Have you not researched this yet? Even the RCM is constantly developing new technologies for simply their minting processes. They have deep pockets and are highly encouraged to become more efficient and advance by the government. Their executives are paid very, very well to make this happen. CEO of Crown Corps are treated quite well, and often reach pensions of over $20-$30K a month

In terms of just marketing and business innovations, one difference I recently experience is just private American ferry compared to BC ferries. On BCF, you can get executive buffets, spa services, high-end lounges, and access to all type of retail (if you can afford it). On the BBF (American, privatized), you get to buy liquor duty-free on their shitty ship. Big deal.


"What products do they develop?"

Depends on the crown corporation:

http://en.wikipedia.org/wiki/Crown_corporations_of_Canada

They've been involved in everything from territorial exploration (HBC), transportation, energy, etc. And their services in this field symbioticly help private industry that utilizes them.

Just take some time to read about how these government assets operate. They have boards, CEOs, budgets, profits, the full deal. They innovate, serve, produce. They do a great job, and their function isn't to shut down private industry, but to augment the economy in a safe and efficient manner that produces a synergistic result with private industry.

Canada isn't Mexico. But its not the US either. This all depends on the country, government, current economy, etc. No one size fits all here

[BrentWil]

57. Thanks. I would suggest you take a look at some of the studies I have provided and others.

Challenging ones beliefs are important.

[Oregone]

58. Its not necessarily a "belief"

Canada is not a despot government. They tend to manage a tad bit better finding appropriate CEOs to manage their businesses ethically, and hard data exists regarding profits. Last I checked, the US is only partially a despot government. :)

Some smaller nations have despots no more trustworthy than pimps, and less knowledgeable on how to run enterprise.

Data exists to challenge either view, and perhaps being pro-privatization or anti-privatization without context is short-sighted

[BrentWil]

60. Any time you take culture out of the equation, it is of course short sighted..

Some governments do work better then others. That is clear and I do not question that.

[bluestateguy]

7. BP is worth over 500 billion $.

The government should say: "hand it over".

[Oregone]

8. Not their US assets

You are talking about all of BP, right? The US only has authority over US holdings.

[BrentWil]

11. That would be illegal. There is no current legal authority for the government to do this.

Is it worth the government breaking the law to do something that would happen if the 75 million cap wasn't there?

[conscious evolution]

20. That figure doesn't even come close

when you add in the value of all the other corporations they own stock in.

[BrentWil]

45. That is normally counted in market capitalization NT

[customerserviceguy]

9. It won't happen

I recall President Obama saying something this last week about BP should survive. If he wouldn't kill it, who would?

[johnnie]

22. I guess we could go to war with the UK again

And then convince the rest of their world market to join us. Yeah, it might work. USA! USA! USA!

[Hosnon]

27. No. Your post smells of conservatism so I'd like to point out that liability caps are

a brainchild of the right.

But if the free market says that BP should be destroyed, so be it.

[BrentWil]

29. I think the cap should not have been there. If you didn't have it, you wouldn't have had that kind

of drilling. If a company knows it will have to pay full damages, then the company won't act in such a risky matter.

Also, I believe the cap was in a Bill introduced by Walter Jones Sr in the 1990s. I believe in was a dem, but a conservative dem.

[Hosnon]

32. I agree that liability caps are a bad idea, especially in personal injury litigation.

I don't know what should happen to BP but I know they should compensate everyone in any way damaged by this. If that results in the end of the company, so be it - that's how the free market works.

And that includes seafood restaurants nationwide who have seen an increase in the cost of their supply. Even if they pass it to the consumer, less people will buy a more expensive product. The lost profit should be paid out by BP.

[BrentWil]

39. I have always thought that if you damage someone, you should have to pay them

That is a VERY basic way to keep companies from doing risky behavior. If the cap wasn't there, I doubt you would see off shore drilling or much more limited off shore drilling

[Name removed]

33. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Synicus Maximus]

31. Did ya'll miss where BP put up $20 Billion to start covering

damages and another $100 Million for oil workers that are idle? They should pay but the $75 Million figure was their legal limit and they have far exceeded that.

[BrentWil]

35. They should pay whatever their damages were no matter the amount NT

[BelgianMadCow]

34. Stupid question

It would seem there are much more burning questions for the government. Helping the people in the Gulf for example. A bankrupt BP won't pay the escrow funds (destined to be spread :grr: over 4 years).

[MiniMe]

37. +1

Bankrupting BP or putting them out of business won't help paying for the clean-up. I want them to pay for every penny of the damage they have caused to peoples lives and livelihoods. If BP can't do it, the government will be responsible for it.

[BrentWil]

42. But they won't pay for that. THey will pay for the clean up, but they have

a 75 million cap on economic damage. If they did have to pay, that would be huge and it would change the way the Oil industry operates.

[TexasObserver]

51. No.

[WeDidIt]

52. No n/t

[SmileyRose]

59. NO - The Goal of the federal government should be to stop helping BP stay in business.

Let them sink or swim by their own merits.