Robert Reich: "....It's A Contest between Citizenship Interests and Shareholder Interests"

[amborin]

BP: It’s Not a Contest Between the US and Britain; It’s a Contest Between Citizenship Interests and Shareholder Interests


"This from today’s Wall Street Journal:

In a letter sent Sunday to U.S. Coast Guard Rear Admiral James Watson, BP said it expects to have the capacity to capture between 40,000 and 53,000 barrels of oil a day by the end of June. That compares with 15,000 barrels a day now, out of a flow of 20,000 to 40,000 barrels scientists estimate are coming from the well.

BP, which said further enhancements will increase the collection capacity to as high as 80,000 barrels a day by mid-July, submitted its latest plan after Mr. Watson, the federal government’s second-in-command for the spill response, told the company Friday its previous plan was insufficient and gave BP a 48-hour deadline to come up with a revised approach.

Mr. Watson said in a statement Monday that “BP is now stepping up its efforts to contain the leaking oil,” noting that the new plan’s call for collecting 50,000 barrels of oil by the end of June is two weeks earlier than the previous timeline.

But the Journal isn’t telling the truth. BP is not capable of writing a letter or “saying” anything, “submitting” anything, or “stepping up its efforts.........You see, BP is not a person.
......Like any other corporation, BP is a collection of contracts. The collection includes employment contracts — with people who are paid to be executives, with others who are expert in how to plug holes a mile below the surface of the Gulf, and with lots of workers. There are contracts with BP’s creditors, who expect to be paid on time. There are contracts with numerous suppliers, with other companies like Halliburton, with the owners of tankers. And there are contracts with the U.S. government, which has leased part of the Gulf to BP for drilling.

At the center of this web of contracts are BP’s shareholders, who legally own BP. That means they own BP’s assets — oil reserves under land or ocean bed that BP as a corporation is entitled to, its physical capital (rigs, tankers, and so on), and its financial assets, which amount to tens of billions of dollars.
BP’s shareholders (including pensioners who have shares of pension funds, small investors who own shares in mutual funds, and major investors, all over the world) are interested in only one thing — maximizing the value of their shares. Over the last month and a half, these shareholders have got clobbered. Some have sold out to other investors who believe BP’s share values will rise. Others are holding on in the hope that they will.
It’s impossible for BP to commit to doing anything because BP is not a human being capable of making commitments. BP’s executives (like Tony Hayward) work for BP’s shareholders. They can be replaced by BP’s shareholders if BP’s shareholder aren’t satisifed with their performance. Or, more likely, BP’s shareholders can sell out to major investors who will then replace BP’s executives if they don’t like the job they’re doing.
It doesn’t matter if Tony Hayward is called to the White House. It doesn’t matter that President Obama says he’d like to fire him. Hayward’s first responsibility is to BP’s shareholders.

Some Americans are also be BP shareholders, but their interests as U.S. citizens aren’t represented in their roles as shareholders. Their citizenship interests are represented by our government, headed by the President.
As citizens, we want the hole in the Gulf plugged up as fast as possible, we want the spill contained, and we want everything cleaned up and damages paid — no matter how much it costs BP’s shareholders. But if we’re BP shareholders, we want to minimize all such expenditures — including our long-term liabilities.
Get it? There’s no conflict between Britain and the United States. The conflict is between two kinds of interests — shareholder interests and citizen interests.
And unless or until citizenship interests predominate in the Gulf — unless or until BP’s shareholders are forced by law to part with their assets to ensure the safety of the American public — shareholder interests will come first. That’s why it’s so important for the Administration (and, if necessary, Congress) to take steps to put BP America under temporary receivership, establish an escrow fund of at least $10 billion that BP must pay into, and whatever else is necessary to trump shareholder interests.

[Ichingcarpenter]

1. This is the battle that is lining up in the national discourse finally

We at DU have known this for years but finally its sinking into the public's consciousness.
Unfortunately most of the public consciousness is shaped by the TV corporate media
but pictures are worth a thousand words and it stopped the Vietnam War.

I do now see an opening that may bring the public around to their interests vs corporate interests
because of BP's ecocide

Nominated and kicked.

[amborin]

3. yes, DUers have known; as you say, let's hope reality sinks in for the rest of the public

[Newest Reality]

2. Exactly!

Thank you!

That is what I have been saying. Any contentions you have with the Great and Powerful Oz Head called BP are like boxing with a ghost. It is the people BEHIND the curtain, (known as the corporate veil) those well-paid actors who get richer and richer and lose nothing as they play the role they were chosen for and convince you that the game they are playing is not only real, but somehow being played with your interests, or the planet's, in mind.

BP is NOT a person. It is a fiction! Got that, now? If the corporate veil is NOT peirceed in this most grievous and Earth-shakiing matter, then the players win no matter what. They keep their wealth and probably retire or move on to play major parts in other corporate fictions if BP declares bankruptcy and pays out pennies on the dollar in the end. You lose! The planet loses! Profit continues while devastation ensues, all life be damned in the end.

If we do not call for the holy piercing of the corporate veil in this matter of negligence and malfeasance in the name of profit, then we have failed not only our own generation, but every one to come and every life form on the planet we call home and sanctuary. This is no small thing and it is pivotal in every way, so how can we let a fictive straw man held up to our faces be so compelling and allow it to rape our very essence as a species and what gives us life and being in the first place?

I don't know for sure, do you?

[amborin]

4. thanks for posting! "malfeasance in the name of profit" sums it up perfectly

[democrat2thecore]

5. Ahh....Robert Rech....a HERO!....he is sooo right -nt

[Ichingcarpenter]

6. I wouldn't call it a ' Contest' but a battle

other than that Robert did good.

[amborin]

7. Reich on the prez's speech: 'Missed Opportunity":

"......The man who electrified the nation with his speech at the Democratic National Convention of 2004 put it to sleep tonight. President Obama’s address to the nation from the Oval Office was, to be frank, vapid. If you watched with the sound off you might have thought he was giving a lecture on the history of the Interstate Highway System. He didn’t have to be angry but he had at least to show passion and conviction. It is, after all, the worst environmental crisis in the history of the nation.

With the sound on, his words hung in the air with all the force of a fundraiser for your local public access TV station. Everything seemed to be in the passive tense. He had authorized deepwater drilling because he “was assured” it was safe. But who assured him? How does he feel about being so brazenly misled? He said he wanted to “understand” why that was mistaken. Understand? He’s the President of the United States and it was a major decision. Isn’t he determined to find out how his advisors could have been so terribly wrong?

Tomorrow he’s “informing” the president of BP of BP’s financial obligations. “Informing” is what you do when you phone the newspaper to tell them it wasn’t delivered today. Why not “directing” or “ordering?”

The President distinguished what has happened in the Gulf of Mexico from a tornado or hurricane because they are over quickly while the leak is an ongoing crisis, lasting many weeks and perhaps months more. He likened it to an “epidemic.” But the real difference has nothing to do with time. Tornadoes and hurricanes are natural disasters. Epidemics occur because germs mutate and spread. The spill occurred because of the recklessness and ruthlessness of a giant oil company in pursuit of profit.

And what has the nation learned from all this? The same lesson we’ve known for decades, according to the President. We must end our dependence on oil. But if we’ve known this for decades, why haven’t we done anything about it? The President endorsed the cap-and-trade bill that emerged from the House (without calling it cap-and-trade) but didn’t call for the only thing that may actually work: a tax on carbon.

I’m a fan of Barack Obama. I campaigned for him and I believe in him. I think he has a first-class temperament. I have been deeply moved and startled by his ability to speak about the nation’s most intractable problems. But he failed tonight to rise to the occasion. Is it because he’s not getting good advice, or because he’s psychologically incapable of expressing the moral outrage the nation feels?

Or is it something deeper?

Whether it’s Wall Street or health insurers or oil companies, we are approaching a turning point as a nation. The top executives of powerful corporations are pursuing profits in ways that menace the nation. We have not seen the likes since the late nineteenth century when the “robber barons” of finance, oil, railroads and steel ran roughshod over America. Now, as then, they are using their wealth and influence to buy off legislators and intimidate the regions that depend on them for jobs. Now, as then, they are threatening the safety and security of our people.

This is not to impugn the integrity of all business leaders or to suggest that private enterprise is inherently evil or dangerous. It is merely to state a fact that more and more Americans are beginning to know in their bones.

I’m sure our president knows it too. He must tell is like it is — not with rancor but with the passionand conviction of a leader who recognizes what is happening and rallies the nation behind him."

[laughingliberal]

9. delete wrong place

[laughingliberal]

10. delete wrong place

[laughingliberal]

12. +1000 nt

[me b zola]

8. K&R

[Guy Whitey Corngood]

11. And guess which one's coming out on top. nt

[laughingliberal]

13. K & R nt

[wiggs]

14. Correct but IMHO a narrow analysis. I believe that BP and other global

corporations are indeed sociopathic sharks in our economy and society, made for one thing: eating their way through our economies and making money for shareholders, boards and CEOs. And I agree that BP will ignore citizen interests unless forced to address citizen concerns.

But you can bet that the WH has received calls from Britain, India, other countries who have billions of dollars worth of BP contracts going that provide jobs, fulfillment of promises, wealth creation for powerful people, employment for citizens, joint investment in projects, etc.. And don't forget that BP was involved in Cheney's energy meetings and has a lions share of new contracts for Iraq oil. They know where the skeletons are (literally, probably) and along with other countries has probably reminded Obama on many occasions just how important and connected they are. Surely, BP is not letting the US treat this crisis as though it exists in a vacuum...they will not only be saying they are way too big to fail but they are way too important in terms of greasing the wheels and being friends with us to be allowed to decline.

BP is like a country (remember that something like 60 of the world's top 100 economies are corporations) that has contracts, treaties, agreements, ties, investments, business interests, payoffs, donations, etc.. I can imagine that there are complicated, inter-related, numerous considerations to every decision involving stepping on BP's throat. Not easy or simple. Some of the agencies calling for something less than a death penalty for BP are probably our own states.

Obama is walking a fine line and balancing hundreds of competing interests...not just balancing the relationship between citizens and shareholders.

[amborin]

16. pretty much that same argument was used to justify bailing out AIG: that its worldwide web of inter

connections was too vast, and the consequences of its demise too devastating, to alllow AIG to go under; the too big to fail mantra, as you said; but we know that all the Maiden Lane handouts to AIG from the NY Fed, and the subsequent additional massive bailouts to AIG and the other Wall Street perps were wrong; it's time for Obama to take a stand for ordinary US citizens

[wiggs]

18. yeah...I'm not arguing that Obama should in all cases temper his strategy in response

to all the pleas he's likely getting from all corners of the earth where BP is operating...but I'm acknowledging that his task is difficult and complex and he can't ignore the rest of the world in this issue.

Too big to fail is a big problem in my opinion.

[amborin]

19. our

ecosystem is too big to fail, too; too interconnected, etc......

all anyone can say is: so far, this catastrophe has been badly mishandled; and so much is at stake; what's at stake is vastly more crucial than anyone's economic fortune

[blindpig]

15. Surely he knows better...

The business of America is business. It should be our business to kill Capitalism.

[amborin]

17. agree....

it's America, incorporated; but while we're waiting for the revolution....