BP Meets Chicago
Something still strikes me as odd about that $20 billion BP-Obama meeting last week. I don't believe for one second that BP could have been "shaken down" that easily -- and in fact I doubt that any individual, even the Chairman or CEO, would have had the authority to make that kind of commitment without the prior approval of the Board of Directors. And it's not clear to me what leverage -- above and beyond that which the courts, the EPA, and Congress already have -- Obama could have had to "shake down" BP. No, what this smells like to me -- and this is pure speculation -- is a Really Big Chicago-style "deal." BP had to have figured that they were going to spend at least $20 billion on this, so they had nothing to lose in offering to set up the escrow fund. Obama gets two things out of this -- he gets to look "tough on BP" and "in control" just when he needed it. And his administration gets to be the one writing checks, dispensing help and largesse. What does BP get? I dunno -- but I'd bet Tony Hayward's salary (if I had it) there's something.
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May '10
Re: BP Meets Chicago
Is it more likely that Obama pressured BP directly or that he cut some deal with the British government to apply the pressure for him?
May '10
Re: BP Meets Chicago
I see a Republican Congressman is now claiming that the fund wasn't even President Obama's idea.
May '10
Re: BP Meets Chicago
What does BP get? Relieved of the no-win situation of having day-to-day responsibility for satisfying a lot of really angry people. In fact, the Administration might very soon conclude that it would have been better off letting BP continue carrying this burden.
May '10
Re: BP Meets Chicago
What does it mean to put money in "escrow" in this context? Is the money actually being deposited somewhere? Isn't this kind of risk the subject of insurance and reinsurance? Has BP actually made a transfer at all?
May '10
Re: BP Meets Chicago
I spoke to a friend of mine this weekend who works in commercial insurance and he basically said it means nothing. BP has not relinquished its rights to evaluate the claims and he says don't believe for a second that they will simply let the government spend the $20B as they see fit. They did not after all give the money to the government but placed it in escrow. It cannot leave escrow without BP's permission. We are in the very early innings of this says my friend and no one has been shaken down.
May '10
Re: BP Meets Chicago
Trace Urdan, hope that reality gets out... I am going to tweet it right now.
May '10
Re: BP Meets Chicago
The list of people affected by the spill is growing exponentially. I talked to an auto parts dealer the other day who told me that some of the dealerships he works with in south Louisiana have seen their sales fall by over half. I wonder how far down the food chain BP will be liable for.
Re: BP Meets Chicago
In other shakedown news, Trace and all, it's Levin vs. O'Reilly. Incredible!
Jun '10
Re: BP Meets Chicago
My understanding was BP gets to limit its losses as a result of the moratorium on drilling (as the decision was a political one from the WH) to a mere $100m when the true cost is likely to be hundreds of times that amount.
May '10
Re: BP Meets Chicago
That is quite the clip. If there is a man in radio who can sustain an angry tone for longer than Mark Levin I don't know who it is. Its also a great example of the problem with his approach to political argument. Bill O'Reilly makes an argument about the fund, and rather than grapple with it, Levin simply calls him a "phony populist," as if to say, "he's a disingenuous hack, and that's all you have to know."
I actually share Mr. Levin's concern about the constitutional questions surrounding the fund, as I've noted elsewhere at Ricochet, but surely Mr. Levin should acknowledge that we don't even have a very clear picture of how it came about before he asserts the predictable notion, where so many of his rants end, that this is "tyranny." Is it perhaps a bit more complicated than that? Will folks who support the fund really be persuaded by a pronouncement at that level of abstraction, especially when they surely don't include "desire for tyranny" in their reasoning?