“No Man’s life liberty or property is safe while the legislature is in session”.

- attributed to NY State Judge Gideon Tucker

Wednesday, June 16, 2010

The Mugging of BP by Wonderboy & Co.

It seems to be nearly-official. Wonderboy's administration has mugged BP and extorted a rumored $20B escrow fund to be overseen and disbursed by Democratic party hack Ken Feinberg.

Feinberg last worked to damage private enterprise as the First Rookie's "pay czar," a totally unconstitutional invention used to strong-arm those banks unwise enough to have taken TARP money. Including those forced to take it, such as Chase and Wells Fargo.

As I write this, on day 58 of the BP oil gusher crisis, Wonderboy's scheduled 30 minute meeting with senior BP executives has lasted for over four hours. You might wonder why it took the smartest president in history 57 days to manage to squeeze a meeting with the chairman and CEO of BP into his schedule.

Probably because Wonderboy is a campaigner and speechifier, not a problem-solver. And the BP mess is a problem. Thus, a situation from which to distance himself for as long as possible. Until, that is, the poll numbers have gotten so bad that he has been forced to even give an Oval Office address to explain his dismal, inept performance.

But, back to corporate mugging.

One CNBC guest put it eloquently this morning when he suggested that BP decide how to manage its financial exposure to the Gulf incident, and let investors appropriately set the company's share price in reaction to those management choices.

As I finish this post, the BP officials are speaking after the meeting. Reports now claim that BP agreed to a $100MM initial fund, with the earlier-rumored $20B commitment, and a third party to administer it. The BP chairman has announced the suspension of BP's dividend for the remainder of 2010.

Mugging on a smaller scale, but mugging, just the same. Were BP's rights to continue exploring and producing oil and gas in the US used to intimidate the firm into this settlement? Will we ever know this, if they were?

Time will tell.

But this much is certain. Rather than invite BP to work with the administration early on to stop the oil gusher, clean up the damage, and make arrangements to pay for the costs of these efforts, Wonderboy instead chose to bully, intimidate and generally threaten a private, publicly-held corporation to do government's bidding without appeal.

As a recent Wall Street Journal editorial noted, this is how third world countries operate. Not how the world's companies and investors have come to expect the United States to behave.

Until Wonderboy & Co. came to town.

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