Why Obama Should Put BP Under Temporary Receivership (Robert Reich)

[jefferson_dem]

Why Obama Should Put BP Under Temporary Receivership
Monday, May 31, 2010

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 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.

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http://robertreich.org/

[Orrex]

1. That's brilliant, and a great response to the argument that we can't "nationalize" BP

Reich kicks ass!

[wordpix]

2. totally agree with this, and BP won't get away with their cap on liability

[Lifelong Protester]

3. Corporations cannot be trusted.

I think Reich is right. Let the lying stop.

[ProSense]

4. Reich is really not offering a solution to anything

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.

<...>

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.

First of all, an oil company isn't a financial services company. The government can run a bank, it does not have the expertise, as Reich points out, to run an oil rig.

Secondly, Reich is basically saying nationalize BP and let them continue to work.

This entire logic is flawed: The government, with no expertise, should nationalize BP and allow them to continue doing what they are doing.

The only thing this does is open the government up to liability.

[On the Road]

5. If Obama Had Taken This Advice from the Outset,

it would have been a dream for the Republicans. Assuming, that is, that the federal government has no better solutions than the oil industry.

First, Obama would be overturning the law establishing oil company responsbility for cleanup operations. Then, by pretty much any reasonable expectations, he would fail at bringing the leak under control in a time period people would think is reasonable.

If you think the public outrage is bad now, that would not only amplify it but direct it squarely (and with some justification) at the administration.

[TheWebHead]

6. not sure how this would do anything to help stop the leak

and it surely would create a crash of the financial markets if they sense any Putin/Chavez-esque actions like this no matter what the perhaps justifiable circumstances would be.

[harkadog]

7. No legal basis for this at all.

The government was able to take over GM by loaning them money in return for stock because they were bankrupt. The same thing happened with the banks. BP is not bankrupt and so there is no legal way to take over the company.

[Phx_Dem]

8. Reich is an idiot.

Obama NEVER EVER said BP was in charge. In fact, he said exactly the opposite. He said they come up with the proposed solutions with input from the many civilian and governemntscientists, engineers and psycists, but the government approves the proposals.

And, has Reich seen those underwater robots that BP is using to do the extremely delicate work? Well guess what, genius, we don't know how to operate them. It's like doing extremely delicate brain surgery through a surgical microsope. So, Reich thinks the hospital administrators should kick the brain surgeon out of the operating room and finish the surgery themselves.

Pass.

[Orrex]

10. Did you not read the article?

Here's what you wrote:

And, has Reich seen those underwater robots that BP is using to do the extremely delicate work? Well guess what, genius, we don't know how to operate them. It's like doing extremely delicate brain surgery through a surgical microsope. So, Reich thinks the hospital administrators should kick the brain surgeon out of the operating room and finish the surgery themselves.

And here's the part you apparently missed:

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.

Nowhere does Reich suggest that Obama should kick the experts out of the field. Instead, Reich argues (correctly), Obama should take control of the company so that the company is working on behalf of the public that it's currently screwing over.


Reich is far from an idiot, even if you respond to him without reading what he wrote.

[volvoblue]

9. Can anyone say British P? An international company that is

from another country....hello