We're Sorry You Dumped Oil On Us
Here's another example of the twisted logic of market fundamentalism: At today's congressional hearings on the BP oil spill, Representative Joe Barton (R, Texas) issued an apology to BP CEO Tony Hayward. Barton is ashamed that the White House has asked BP to set aside $20 billion to help oil spill victims, calling the request a 'shake-down.' You have to see the video to fully appreciate Barton's sense of shame.
How dare the President of the United States ask a private multinational company to take responsiblity for the consequences of its actions? But wait, you say. Wouldn't a true believer in the free market oppose externalities and expect a private company to pay for the damages it causes? You would be correct. Except that, you would be expecting consistency in thought and action on the part of ideologues. In the real world, it is difficult to be consistently 'free market.' The case of BP points out an inherent contradiction: somebody has to pay, and, yes, it should be the party that is responsible. But who is going to make them pay, especially if it is not in the company's interests to do so? Well, that would be government, or independent agents acting under the aegis of a government. But, market fundamentalists don't believe government should play this kind of role.
As it happens, BP has agreed to set up the escrow account and they've issued an apology to boot. Is this move on BP's part merely a market adjustment that would have happened anyway? Or is it an attempt to stave off the threat of tougher action? Given the size of the disaster, $20 billion probably won't be enough. While the White House noted that the $20 billion in not a ceiling on BP's obligations, it is hard to trust that BP will do the right thing and take full responsibility for all legitimate claims in a timely manner. Past experience does not inspire confidence. Claims related to the 1989 Exxon Valdez spill dragged on for twenty years. Full clean up and restoration were never completed. Will the White House keep pressing BP to make payouts on a reasonable timetable? Will we pursue BP to pay civil penalties under the Clean Water Act? Are they off the hook for any illegal activities they may have engaged in before and after the explosion (falsifications of safety records, attempts to cover-up the severity of the ongoing spill, etc)?
The decision to set aside $20 billion is a step in the right direction. But it is only one small step. I still think temporary receivership is called for in this case. Apologies aside, why should we trust BP to do the right thing for the 'little people'?
-- Sandra Hinson
