Yesterday, I wondered whether Obama and the Democrats — by bullying BP into cancelling its dividend — were trying to sink BP’s stock. Well, if so, they have upped the ante and are succeeding This report tells us:
The Obama Administration ratcheted up its demands on Wednesday that BP PLC cover all costs stemming from the Gulf of Mexico oil spill, including millions of dollars in salaries of oil-industry workers laid off because of the federal moratorium on deep-water drilling. The sudden increase in BP’s potential liabilities — along with growing evidence that even more oil than expected is gushing from BP’s crippled well — helped send BP’s shares plummeting almost 16% in New York, to $29.20. The stock has lost close to half its value, more than $82 billion, in the seven weeks since the spill started.
Whoa, the Obama team wants BP to pay for the administration’s dopey idea to halt deep-water drilling? Yup. Is this legal? No:
Several legal experts said they couldn’t think of any law or precedent that would allow the U.S. to try to recover damages from BP on behalf of rig workers thrown out of work by a government moratorium on deep offshore drilling. “I’m not aware of anything out there that would allow (President Obama) to latch onto a legal remedy on behalf of the out-of-work workers,” said Benjamin A. Escobar Jr., a Houston-based labor and employment attorney for Beirne Maynard & Parsons. “I think he’s in for a real court fight on these issues.”
Keep in mind that it is the government’s heavy hand that is primarily responsible for sinking BP’s stock — and potentially the livelihood of employees and shareholders:
“There is no objective justification for this share price movement. BP faces this situation as a strong company,” said BP chief executive Tony Hayward in an interview at the company’s Houston crisis center. “We have significant capacity and flexibility in dealing with the cost of responding to the incident, the environmental remediation and the payment of legitimate claims.”
Aside from the complete absence of legal authority, it’s rather nervy — even for this president — to ask BP to pay for his mistakes. What’s next — fining employers for laying off workers despite his non-stimulus plan? While he lectures students about not passing the buck, he has no peer when it comes to buck passing. He should take some of the advice he doled out to high-school graduates:
Don’t make excuses. Take responsibility not just for your successes, but for your failures as well. … It’s the easiest thing in the world to start looking around for someone to blame.
As for the bullying of business, this is simply the natural extension of the administration’s abject lawlessness — stomping on the rights of car-company bond holders, snatching bonuses away from AIG executives, pushing for mortgage cram-downs — which views contracts and statutes as mere annoyances. This is what comes from electing people with no private-sector experience and no understanding that the rule of law is central to our economic prosperity.
