And BP could be on the hook for a whole lot of that money. Or not. Depends on who you ask.
The happy talk about from BP (BP) about how it will do everything to "make it right" in the Gulf is quickly dissipating.
The straw that broke the camel's back: Noise out of Washington that BP ought to pay the salaries of everyone that's lost their job due to the spill.
An anonymous BP source, presumably someone senior that wants to get a message out, told Reuters: "At some point a line has to be drawn," in response to the new suggestions.
See, the company's already valued at less than half its assets, meaning that at this point they'd actually make more money from closing up shop and selling everything off than they would by continuing operations. That is, if they could find a buyer.
But look at how much money BP saved by cutting corners and ignoring safety regulations! Yeah, this is the big league in the financial world, swimming with the sharks, except it turns out that the sharks are really just jackasses. The brilliant idea to cut costs to increase profits might just bring down the company. Turns out that Wall Street financial genius types are just as stupid when they're not actually from Wall Street. I guess that no matter where they come from, Masters of the Corporate Universe are most often fools.
So what are the odds of BP actually covering all the costs related to their disaster? Probably not good. And that's if we assume the company survives their brilliant plan to make lots of money. Because despite Enron and Goldman Sachs and Bear Stearns and Lehman Brothers and Bank of America and now BP, there are people who still believe that corporate America is populated with something other than worthless boobs and crooks.
Take just paying for the cleanup. One idea is to raise the ridiculously low $75 million liability cap for oil companies. But it turns out that this is bad, because it would discourage companies from doing stupid things like drilling where Deepwater Horizon drilled. That's the position of Alaska Sen. Lisa Murkowski. See, this little kerfuffle aside, offshore drilling is safe, safe, safe and we don't need to worry. Of course, logic would dictate that if we didn't have to worry, neither would oil companies and the liability would be no disincentive at all. But Murkowski is just displaying the same level of genius that any top corporate CEO might.
So how about we raise taxes on oil companies to pay for spills? That's an idea.
"No, no, no, no, no!" says the GOP. No new taxes! And the average taxpayer can't be on the hook either, but the federal government has to clean up the spill and Republicans say Barack Obama just isn't doing enough. So we can't raise liability for BP to pay for it, we can't raise taxes to pay for it, but big gummint's got to go out there and clean it all up now -- apparently funded by unicorn farts and rainbows, because we can't ever increase the deficit.
Can we sue BP to pay for this? We could, but I wouldn't hold my breath for a big payout.
Since BP's ruptured well began spewing crude into the Gulf of Mexico, more than 150 lawsuits have been filed in federal courts seeking damages for the harm that the environmental disaster has dealt to the livelihood of coastal fishermen and business owners. But finding judges to hear these spill-related lawsuits against BP, Halliburton and Transocean may be a challenge. More than half of the "64 active or senior judges in key Gulf Coast districts in Louisiana, Texas, Alabama, Mississippi and Florida" have ties to industry, according to The Associated Press.
Some judges own stocks or bonds in the companies named in the lawsuits. Some are related to plaintiffs' attorneys. Others even receive royalties from oil and gas companies. One judge, according to financial disclosure statements, is a member of Houston's Petroleum Club, an "exclusive, handsome club of, and for, men of the oil industry," reported AP.
Something has to change. And it starts with one thing; change our perception of the corporate world. The next time someone tells you that the private sector is filled with geniuses and markets can solve any problem, go ahead and ask them if their untreated head wound keeps them up at night. We have to kill the idea that corporate morons have some special wisdom, when all the evidence points to the contrary. We need to start thinking of corporate suits as compete idiots, mentally helpless and unable to tie their own goddam shoes.
It may not be universally true, but this attitude would limit the damage from those who are.
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