Tag Archives: corporatism

Our Inescapable Relationship with BP

24 May

Now, a week into summer, I’m going to try to start posting more frequently.

As oil continues to gush into the gulf, the primary focus remains (rightly) on stopping the leak and putting an end to the slow motion environmental disaster occurring along the coast. A new approach will be attempted before the end of the week to plug the gusher. Hopefully that will do the job.

But as the disaster continues, I’ve found myself contemplating the deeper issues that the spill exposes, even beyond the environmental dimensions, which are huge.

I’ve been thinking about what this whole situation means for the relationship between government and corporations. The spill is yet another flashpoint in many flashpoints since the financial crisis began in the fall of 2008 that have forced this nation to examine and renegotiate the relationship between the institutions of business and the state.

In the case of BP, the relationship is complex. Here we are, with this huge problem that we are told only BP is capable of solving where BP also caused the problem. Now, I like that the BP has to solve it. And pay for the consequences that the spill will have. That’s only just. And I also really do believe they are trying to stop it as best as they can.

But what is disturbing to me is that we have a situation where the government has allowed a corporation to undertake an activity in which the government has no viable way of stopping. This should be chilling, especially when the activity is oil drilling, where the consequences of something going wrong can and are being shown to be so destructive.

As a country we’ve decided that in other areas of the economy, government should have the expertise and the necessary power to reverse or stop the bad decisions of corporations and the private market. That’s why we have the Federal Reserve, which is capable of taking large scale action to essentially stop bad stuff from happening when corporations mess up. See: bailouts.

I think that’s a reasonable power. The government has a responsibility to the economy as a whole because corporations only have an obligation to themselves. Some entity – in this case the government – needs to oversee the market and correct market failures. That may be liberalism, but it’s certainly not socialism.

But if we have this type of mechanism for financial markets, why don’t we have it for oil drilling? We have regulation, which in this case was horribly ineffective and needs to be improved. But why did we allow a company to take an action, to drill at a depth so deep that our government does not have the ability to stop a spill if it occurs?

We allowed the capability of enterprise to outpace the capability of government. This, I think, was a fatal error.

We are now in the middle of a massive environmental disaster and we are beholden to the very same company who caused the spill to now stop it. We have no recourse. There is no second option.

What if BP suddenly decided to walk away and give up? It’s not an American company, what could we really do? We could sue, and we would win billions, but it probably would only dent the company, as BP is awash in billions more. But beyond that, we probably wouldn’t, because we need their oil.

That’s the system. It is, unfortunately, at this moment inescapable.

It’s seems to me that once the oil stops, once the destruction has been wrought, we as a nation must ensure that a corporation never again has so much power to wreck havoc on the land and water of the United States.

Another note on the oil:

Andrew Revkin, an environmental reporter for The New York Times, wrote today that President Obama now has the power and the obligation to take over the oil response from BP.


Today is the day to accuse big corporations of wrongdoing

16 Apr

There’s a couple of big stories coming out today.

First – The former president of Blackwater along with other top executives have been indicted on weapons charges. Blackwater is the largest State Department contractor and throughout the years has been involved in a number of questionable situations in Iraq and overseas generally.

Second – The Securities and Exchange Commission today accused Goldman Sachs of deceiving investors. Goldman was one of the firms in the middle of the financial collapse.

Have a great Friday.