Like Paulson With TARP, An Offer BP Couldn’t Refuse
This one pretty much speaks for itself.
---
Author: Conn Carroll
Source: Heritage Blog
---
On October 13, 2008, Treasury Secretary Henry Paulson summoned the CEOs of the nation’s largest banks into a gilded conference room at the Treasury Department just a stone’s throw away from the White House. Each CEO was then handed a one-page document that said their company would agree to sell hundreds of billions worth of equity to the federal government through the Troubled Asset Relief Program (TARP). “We plan to announce the program tomorrow – and that your nine firms will be the initial participants.” In case anyone missed the subtle message, Paulson added, “We don’t believe it is tenable to opt out, because doing so would leave you vulnerable and exposed.” Sure enough, just like a certain fictional band land leader once did, all nine CEOs signed their respective contracts.
Yesterday, history repeated itself. This time it was the executives of BP who were summoned directly to the White House to have a little chat with the President and Attorney General Eric Holder (who has threatened BP with criminal prosecution). The exact conversation may never be known, and by the end of their “no-nonsense business meeting” BP emerged from the Roosevelt Room to announce that they would “voluntarily” place $20 billion into an escrow account to begin covering claims associated with the Deepwater Horizon oil disaster and contribute another $100 million to a foundation that will support oil workers made unemployed by President Barack Obama’s indefinite ban on offshore oil drilling.
Don’t buy for a second any of the mainstream media’s line about this being good for BP. The White House made clear yesterday that the $20 billion was just a down payment and in no way represented a cap on BP’s liability. In fact, the President explicitly said that the fund would not preclude individuals or states from pressing claims in court, and that it would remain separate from BP’s liability for the damages to the environment. And these damages may include the costs of cleanup for damage far beyond what BP caused. The Washington Post today reports that a gulf restoration plan of the sort promised by President Obama could cost as much as $30 billion. That’s $50 billion in damages so far. And that does not include any future money, on top of the existing $100 million donation, the White House may press BP to pay to cover the unemployment caused by President Obama’s offshore drilling ban.
Yes, BP did get the White House to say they do not want to see BP driven into bankruptcy. But who does that promise really serve? Clinton administration Deputy Attorney General turned BP lawyer Jamie Gorelick explains: “We know what it looks like when a company is driven into bankruptcy. The claims that come first are the creditors, then the employees, then the environmental claims, and then the likes of shrimpers. This would not be a good result for anyone.” Now look at how the deal between the White House and BP is structured. BP is not handing over a $20 billion novelty check tomorrow. Instead they are set to pay $3 billion in the third quarter of this year, $2 billion in the fourth, and then $1.25 billion per quarter thereafter. In the meantime, BP has identified $20 billion worth of assets in the United States that the federal government now has a lien on. In the event of a bankruptcy, guess who gets to jump in line and have their claims honored first? Still guessing? Then ask Chrysler’s secured creditors.
Yesterday’s “voluntary” deal between BP and the Obama administration was nothing less than a continuation of President Barack Obama’s ongoing assault on the rule of law. Capitalism only succeeds if it is a profit and LOSS system. Well-managed firms should have every right to keep their profits, but mismanaged firms must be allowed to suffer losses. By all accounts of what transpired on the Deepwater Horizon, BP is a terribly mismanaged firm. If the damage they caused is great enough, they should be allowed to fail. Failure is a necessary component of capitalism. But this administration refuses to allow the rule of law to work. From Fannie Mae to Freddie Mac, from GM to Chrysler, from AIG to Citibank, our government continues to subvert the established rule of law. This lawlessness creates uncertainty in the business environment, and it is a huge reason why our economy is not recovering as it should be.
Last night on CNN former Clinton Administration message man James Carville said: “It looks as if President Obama applied a little old-school Chicago persuasion to the oil executives.” Making “offers you can’t refuse” may be a great way to run the mob, but it is no way to run a country.
---
Read the story with links provided >>
Jun 18, 2010 at 10:54 AM
Reader Comments (8)
CHANGE that Zombies will love next:AMEN
$7-a-gallon gas?
The folly of O's oil-spill 'fix'
Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/gallon_gas_9GlF3o1xIcIBelOV3k0RsK#ixzz0rDW85Pzp
Say good bye to the Internet. Dictator Hopetard is going to take care of those annoying anti-facist websites...
"The Federal Communications Commission (FCC) voted on Thursday to begin the formal process of bringing the Internet under greater federal control – a move sought by both President Barack Obama and FCC Chairnman Julius Genachowski.
This step comes after the federal D.C. Circuit Court of Appeals in April rebuked the FCC in its attempt to enforce a controversial regulatory doctrine called Net Neutrality, which would allow the government to prevent private Internet providers from deciding which applications they can use."
You were helpless to stop his Deathcare Mandate - how are you going to stop his takeover of Free Speech?
By Eric Fry
These non-traditional success stories illustrate very poignantly that the Land of Opportunity is offering fewer opportunities these days. Maybe the legendary American economic engine can dust itself off and resume powering the kinds of entrepreneurial activities that generate significant employment growth and national wealth. But we aren’t holding our breath.
And neither are foreign nationals who obtain post-graduate degrees from American universities. In the recent past, Ninety-two percent of Chinese Ph.D.s in science and engineering would remain in the United States for at least five years after their studies…and 85 percent of Indians.
But according to a recent survey of more than 1,200 foreign-born Ph.D. students, the percentage of Chinese who plan to stay in the US after graduation has tumbled to just 54%, while the number of Indians who expect to remain is only 58%. What’s more, only 7% of Chinese students surveyed and 25% of Indian students believe that the American economy’s best days still lay ahead. But overwhelming majorities of both Indian and Chinese students believe their home countries’ best days still lay ahead.
These survey results do not guarantee that America’s best days are behind her, but neither do these statistics inspire much confidence that America’s best days lie ahead.
http://dailyreckoning.com/surrounded-by-bursting-bubbles-in-the-land-of-opportunity/
Yes, the bloom is off the rose. Someone finally had the guts to tell the truth about the naive little twit running the country into the ground. The little moron sure does have thin skin and you can really tell when the truth comes out by the level of his anger.
This administration has completely fallen apart and we are paying dearly for it. Amateur hour at it's worst.
______
Furious President Obama summons Gen. Stanley McChrystal to D.C.
The top commander in Afghanistan, Gen. Stanley McChrystal, has been summoned to the White House to explain biting and unflattering remarks he made to a freelance writer about President Barack Obama and others in the Obama administration.
The face-to-face comes as pundits are already calling for McChrystal to resign for insubordination.
McChrystal has been instructed to fly from Kabul to Washington today to attend Obama’s regular monthly security team meeting tomorrow at the White House.
An administration official says McChrystal was asked to attend in person rather than by secure video teleconference, “where he will have to explain to the Pentagon and the commander in chief his quotes about his colleagues in the piece.”
Both Defense Secretary Robert Gates and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, have spoken with McChrystal. Capt. John Kirby, a spokesman for Mullen, said “the chairman spoke to General McChrystal last night and expressed his deep disappointment with the article and with the comments expressed therein.”
McChrystal and his top aides appeared to let their guard down during a series of interviews and visits with Michael Hastings, a freelance writer for the magazine Rolling Stone.
The article, titled “The Runaway General,” appears in the magazine later this week. It contains a number of jabs by McChrystal and his staff aimed not only at the President but at Vice President Biden, special envoy Richard Holbrooke, Karl Eikenberry, the ambassador to Afghanistan, and others.
McChrystal described his first meeting with Obama as disappointing and said that Obama was unprepared for the meeting.
National Security Advisor Jim Jones is described by a McChrystal aide as a “clown” stuck in 1985.
Others aides joked about Biden’s last name as sounding like “Bite me” since Biden opposed the surge.
http://www.politico.com/news/stories/0610/38837.html#ixzz0raTptfKK
As Rev Manning, says, that long legged Mac-Daddys world is starting to unravle and come Sep. he will have a run-a-way train wreck on his hands.
http://www.resistnet.com/group/mississippiresistance/forum/topic/show?id=2600775:Topic:1385453
If not before that. They said by this spring BHO was going to have a full blowen "Come-a-Part"......looks like they fell short by only 6 mo. As the late Tim Russert always said, this is gona be big, realy big. Have yr 6-pac & bowl of popcorn ready. Keep yr Powder Dry............
Well, there goes the rest of the UNIVERSE.