The Corporate Stranglehold: How BP Will Make out Like Bandits from Its Massive, Still Gushing Oil Di

[Donnachaidh]

http://www.alternet.org/economy/146999/the_corporate_stranglehold:_how_bp_will_make_out_like_bandits_from_its_massive,_still_gushing_oil_disaster/


The existing $75 million cap on damages for offshore drilling companies is a bailout every bit as disgusting as those recently bestowed upon Wall Street.
May 26, 2010 |



You've got to hand it to BP. After witnessing the Great Financial Crash of 2008, it seemed like it would be decades before any corporation could eclipse Wall Street's reckless rush to place its own short-term profits ahead of the public interest. But the epic drilling disaster off the Louisiana coast demonstrates that many of the problems that wrecked Wall Street are deeply embedded in other sectors of the American economy. Over the past 30 years, corporate titans have so thoroughly corrupted the notion of "free markets" that many of the world's riskiest businesses are not only insulated from regulatory supervision, they have been immunized from even minimum standards of market discipline.


Forget for a moment that the oil catastrophe is first and foremost an ecological massacre, and forget that burning fossil fuels creates an entirely distinct set of environmental nightmares. Instead, imagine that we live in an accountants' paradise in which everything can be described by the language of dollars and cents, assets and liabilities, profit and loss. In this world, both Wall Street and the oil industry are largely protected from the risks inherent in their everyday operations, pushing real costs onto others in order to boost their own balance sheets. On Wall Street, this phenomenon is called "too-big-to-fail." After the BP disaster, we might call the energy equivalent "too-big-to-drill."

Nobody working at Goldman Sachs, J.P. Morgan Chase or Citigroup seriously believes the U.S. government would ever allow their firm to fail, and the various bailouts of 2008 and 2009 proved them right. That scenario radically distorts the market, making massive and unnecessary risk-taking the rational choice for bigwig bankers. If their bets pay off, the bank books huge profits. If the bets backfire, the government will bail out the bank. Banks get to exclude very real costs from their quarterly earnings, artificially boosting their profits.

This distortion is so severe that economists call it "market failure." The market literally does not work. Instead of moving goods and services to people who want and need them, corporations simply extract profits from innocent bystanders. It is a form of theft, and the exact same scenario exists with the liability cap on offshore drilling.


MUCH more at the link above ---

[SidDithers]

1. Environmental fines and clean-up levies...

are not subject to the liabilities cap.

And those numbers will be huge.

Sid

[Donnachaidh]

2. and the 3 companies involved will spend DECADES pointing fingers at each other

So the people who will inevitably pay are the public. Corporations are not FORCED to do anything. They have the courts and legions of lawyers, as well as their well-paid-for Congressional stooges to make sure of that.