How About We Try the Free Market Solution?

This makes no sense to me:

The White House said it backed “significantly” raising the cap on damages faced by energy firms that pollute the environment, as it demands BP pays in full for the Gulf oil spill.

Officials also hit out at fresh complaints by Republicans that it had not acted quickly enough in the immediate aftermath of an explosion on a rig in the Gulf of Mexico last month, which triggered the huge slick.

Under a law introduced after the Exxon Valdez oil tanker disaster in Alaska in 1989, oil companies are bound by law to pay for the full clean-up and containment costs of any oil seeping from their facilities after an accident.

But the legislation caps the damages for which the firm is liable at 75 million dollars unless the company is guilty of “gross negligence.” Bills introduced in the House and the Senate would fix the cap at 10 billion dollars.

Here’s a revolutionary idea- why don’t we get rid of the limit altogether! If BP or Exxon cuts corners and makes a hash of things, and they cause 60 billion dollars worth of damage, they are on the hook for the whole 60 billion dollars! And if they can’t pay for the whole bill, the company is liquidated, the shareholders get wiped out, and the company ceases to exist.

Why don’t we give that a shot? And don’t tell me it is because no one will then undertake oil drilling. Of course they will! They’ll just pass on the costs to the consumer. And should being really careful and safe cost too much money, then it might just make other forms of energy look cheaper by comparison, and spur investment in those energy types.

So how about it? No more immunity, no more corporate welfare, no more subsidizing industries that don’t even pay a damned penny in taxes in the US anymore. Exxon had billions in profit last year, and paid not one penny in taxes. I’d bet BP is in the same boat or close to it, so why should they make tons of money and force us to pay for their mistakes, especially when their mistakes were likely caused by attempts to make more money and underpay for the safety of their well.

We’ll just have to make our corporate persons pull themselves up by their bootstraps. It’s the American way, after all.

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92 replies
  1. 1
    A Guest says:

    Agreed, Cole.

    I am intrigued, and would like to receive your newsletter.

  2. 2
    Omnes Omnibus says:

    You are unAmerican, that’s what you are. They should ship you off the the Army; that’ll make a man out of you. Hippie.

  3. 3
    scav says:

    You want uncapped compensation? OK, uncapped liability — package deal.

  4. 4
    sherifffruitfly says:

    How about on the way to unbounded liability, we achieve the intermediate goal of a 3 orders of magnitude increase in liability?

    Durr.

  5. 5
    frankdawg says:

    yer a friggin commie!

    Seriously anyone that does not accept socializing the risk our brave corporate masters take is a nazi, fascist, commie pinko, liberal progressive. You will cause all the superhuman real American’s to go Gault leaving us with dust and ash.

    Business demands these gimmicks and when it blows up on us falls back on the argument that the government is a failure and the free market should rule. Then they come back & demand more government protection from the free market.

  6. 6
    Roger Moore says:

    Wait a second. I thought a free market is when big companies do WTFTW, and the government picks up the pieces when they blow something up. Are you telling me that the corporate media lied to me about how free markets work?

  7. 7
    The Dangerman says:

    What part of “privatizing the profits and socializing the losses” do you not understand? Commie.

  8. 8

    That would unfairly affect the hard working oil CEO’s rig workers. And people would bring frivolous lawsuits. Drill baby drill. Also.

  9. 9
    Short Bus Bully says:

    This post makes WAAAAY too much sense to be on the interwebz. I’m thinking that we face some kind of matter/anti-matter detonation if this page gets linked to CNBC…

    Beware.

  10. 10
    Elizabelle says:

    Sounds like a plan to me.

    Actually, I think the average Foxbot would go for it too. What’s not to like?

  11. 11
    aimai says:

    They are already passing the costs on to the consumer. Our cheap oil just got a whole lot more expensive, we just don’t know who to send the cash to just yet. Second of all, all the cutting of costs related to safety etc… didn’t so much as keep oil prices down (savings passed on to consumer) as keep profits high. Forcing the oil companies to pay some standard amount of net profits on safety–kind of like the medical loss ratio–would have been a good idea.

    aimai

  12. 12
    Joshua Norton says:

    Hey Sarah: How’s that “Drill, baby drill!” thing workin’ out fer ya?

  13. 13
    The Dangerman says:

    Actually, I might be able to understand having a cap; after all, a company like BP would go out and get insurance and I can’t imagine the premiums if they had to pay dollar for dollar for taking a shit on perhaps the entire Gulf Coast. The premiums would be atrocious or, in a worst case scenario, the insurance company rolls over and goes tits up after the disaster.

  14. 14
    Poopyman says:

    Silly Cole! The oil companies paid good money for those senators, and they’re determined to get their money’s worth.

  15. 15
    Hoyt says:

    To borrow the words of someone much smarter than I am, your logic is perfectly logical and totally insane.

  16. 16
    Steve says:

    Well, there are two answers. First, the liability cap of $75 million doesn’t have anything to do with the cleanup costs. BP is responsible for the entire removal, no matter how many billions of dollars it takes, including the costs of restoring damaged property, wildlife, etc.

    Second, the reason we have this fund is that it’s not always going to be a giant company like BP that bears responsibility for an oil spill. If a small company causes an oil spill, ok great, they’re bankrupt a thousand times over… but the taxpayer is left to pay the bill. So all the oil companies, big and small, are taxed to create this fund so taxpayers won’t be on the hook.

  17. 17
    El Cid says:

    I guess few much remember the gigantic hue & cry raised by Exxon and their right wing minions (followed dutifully by conservative Democrats) about how the evil enviro-whackoes were unfairly punishing Exxon with the $5 billion in punitive damages issued by an Alaska jury because they just wanted to kill the Amurkan oil industry, and that Exxon had done all it could to clean up?

    And then Exxon’s complaints were supported by appeals to federal courts and then by the Supreme Court?

    Exxon’s official position is that punitive damages greater than $25 million are not justified because the spill resulted from an accident, and because Exxon spent an estimated $2 billion cleaning up the spill and a further $1 billion to settle related civil and criminal charges. Attorneys for the plaintiffs contended that Exxon bore responsibility for the accident because the company “put a drunk in charge of a tanker in Prince William Sound.”

  18. 18
    bemused says:

    I’m curious much of US oil is actually refined here, gases americans’ cars & benefits our treasury.

  19. 19
    sunsin says:

    Why not? We seize the property of drug dealers, after all. Sauce for the goose…..

  20. 20
    Zifnab says:

    Exxon had billions in profit last year, and paid not one penny in taxes.

    Nonsense. They paid out $477k in taxes.
    http://www.opensecrets.org/ind.....38;ind=E01

    See – right there. Taxes paid to the government. Even did it up in pretty colors.

    (Does make you wonder why a Democratic Majority would continue backing an industry that funnels 87% of it’s kickbacks to Republican lawmakers.)

  21. 21
    Tonal Crow says:

    But but but they’ll Go Galt ™ if we force that Liberal Big Government regulation package down their throats!

  22. 22
    Svensker says:

    Silly wabbit, the free market is only for making profits, not for when there are bad consequences from making those profits.

  23. 23
    Booger says:

    We kinda need to keep in mind that we are still in the learning stages of this experiment in republican democracy hitched firmly to corporatist capitalism. 235 years isn’t really long enough for us to be basking in its unparalleled success, and we may be on the verge of finding out exactly how it doesn’t work in the long run.

    Sad to be witnessing this whole shooting match coming apart at the seams. Sorry, children. Our bad. Better luck next earth.

  24. 24
    Culture of Truth says:

    Why do you hate the free market?

  25. 25
    Culture of Truth says:

    U.S. businesses are the greatest in the world. Also they are incredibly fragile and must never be disturbed.

  26. 26
    Zifnab says:

    @Culture of Truth: Forget glass houses. More like porcelain skyscrapers.

  27. 27
    kdaug says:

    I keep circling back to the demand side of the equation.

    Even if every American switched to an electric vehicle (if anyone wants to get me a Tesla Roadster for Christmas they’ll be my BFF with an extra “forever”), the largest consumer of oil is still the U.S. Military.

    We haven’t come up with a way to power an AC-130 or M1A1 with batteries. Too damn heavy. Same thing with passenger airlines.

    I’m all for clean energy, and I know that the military is experimenting with biofuels in smaller fighter jets with some early successes, but until we come up with some other method of propulsion that can equal a jet engine, it’s in our national security interest to ensure that the flow of oil continues uninterrupted.

    That, naturally, leads to a light touch when it comes to oil and gas companies. Bankruptcy of one of the big energy-sector firms could potentially endanger supplies, and thus our national security – no matter how many people put solar panels on their roofs.

  28. 28
    El Cid says:

    @kdaug: The most effective way we could reduce the amount of fuel used per a given set of miles would be to improve by a few miles per gallon the vehicles with the lowest fuel efficiency.

    So, things like government programs to incentivize tire pressure checks and other things right wingers would scream OBAMA = GAY and OBAMA = STALIN and whatever else to get a 12 mpg vehicle to 14 or 15.

  29. 29
    cleek says:

    IIRC, that $75M is only the federal limit. they can still be sued by states.

  30. 30
    Trevor B says:

    @kdaug: @kdaug: they did just test a F-17 or something like that flying on home grown biofuel, it was big news here in Montana. But any news is big news if your state has less than a million people in it.

  31. 31
    El Cid says:

    @Booger: No, I’m pretty sure I’ve been repeatedly told that we’ve pretty much achieved the system of government and economy that will ever reign, democracy has basically been figured out, any different economic system is ridiculous to think about, and so on. A mere 150 or so years into industrial capitalism, we achieved all we needed to achieve except for minor fixes, and human civilization has basically risen to its greatest height, and only weirdo utopians ask themselves about any different possibilities.

  32. 32
    Jamie says:

    naah, that would be too easy, what are you, some side of commie?

  33. 33
    Jamie says:

    naah, that would be too easy, what are you, some kind of commie?

  34. 34
    Culture of Truth says:

    The U.S. military, largest by far on earth, is a large consumer of oil. So it’s in our interest to have it flow uninterrupted. And why do we need such a huge military? To secure the flow of oil, of course.

  35. 35

    Is it just my puter or is trying to open the comments in the last thread shutting down anyone else’s browser?

    Anyhoo OT (it would have been on topic in the last thread)

    Great Moments in Birferism. Animated film of one of Orly Taitz’s hearings before Judge Land in Georgia (the one that ended up slapping her with 20K in sanctions) The “script” is actually the verbatim transcript of the hearing.

    http://www.youtube.com/watch?v=CUi12XCSjHE

    Enjoy

  36. 36
    Zifnab says:

    @cleek: Are they going to be suing in the Republican controlled enclave of Louisiana, the Republican dominated state of Alabama, or the future Free Nation of Texas? Somehow I don’t see President Perry and the Texas Supreme Court smiling on the economic hardship the oil companies will face.

  37. 37
    Jamie says:

    oops, proof read first, then print.

  38. 38
    trollhattan says:

    But, but, but…tort reform! Trial lawyers. (BTW, are there no Republican trial lawyers? What exactly is a “trial lawyer” and after the trial period, do you have to decide whether to keep or return your lawyer?)

  39. 39
    kdaug says:

    @Trevor B: Yeah, that’s what I was referring to – Obama did a presser in front of it.

    But that’s WAY lighter than an AC-130 or a 787. And IIRC, it was a 50/50 mix of biofuel and normal jet fuel. Like I said, early success on a prototype, but we ain’t there yet.

  40. 40
    cleek says:

    @Zifnab:
    don’t know about those states. but maybe Florida.

  41. 41
    MikeJ says:

    @trollhattan: I’ve always thought the furore over “trial lawyers” was even dumber than most of their arguments. Who do they think defends people being sued?

  42. 42
    Culture of Truth says:

    I’ve heard tell of the legendary trial lawyers of America – vicious creatures, I tell ya – though no man has seen one and lived. Folks say they prowl the streets of that land, attacking innocent corporate persons – some say they is what killed the economy of many decent and wholesome nation.

  43. 43
    kdaug says:

    @El Cid: Yeah, remember the shit he got in the campaign for suggesting everyone check their tire pressure?

    If memory serves, McCain’s camp started handing out pressure gauges to mock him.

    He was right, of course, but it never ceases to amaze the depths of stupidity exhibited by some of our fellow Americans.

  44. 44
    Omnes Omnibus says:

    @MikeJ:

    Who do they think defends people being sued?

    Defense attorneys, but not the evil criminal defense attorneys. Duh.

  45. 45
    Mark S. says:

    Jesus, I knew corporations got out of a lot of federal taxes but I never would have guessed two-thirds of them didn’t pay any last year. I’m bookmarking that link for the next time I run into someone who claims we tax our corporations too much.

  46. 46
    Svensker says:

    @kdaug:

    Bankruptcy of one of the big energy-sector firms could potentially endanger supplies, and thus our national security – no matter how many people put solar panels on their roofs.

    Having a much smaller military would INCREASE our national security. Besides which, it’s time for us all to know how much we really spend on gasoline and oil, as well as how much we actually spend on the military. If we want to keep having all this big military and gas guzzling lifestyles, let’s pay for it instead of pretending everything is free and charging it to the future ferkryssake.

  47. 47

    […] statutory liability cap that oil companies enjoy for damages caused by offshore drilling accidents, John Cole makes this point: Here’s a revolutionary idea- why don’t we get rid of the limit altogether! If BP or Exxon cuts […]

  48. 48
    kdaug says:

    @Culture of Truth: Bingo. But you try touching that sacred cow.

    Earlier this week Sec. Def. Gates mentioned he looking at reducing our aircraft carrier battle groups from 11 down to something more reasonable, since NO OTHER DAMN COUNTRY HAS EVEN ONE of comparable capability.

    Half the senate shit it’s pants, both parties.

  49. 49
    Cacti says:

    Well, the problem is, in the wake of the Exxon Valdez lawsuits, our corporate Supreme Court found an imaginary Constitutional Right to have punitive damages capped.

  50. 50
    Zach says:

    “Here’s a revolutionary idea- why don’t we get rid of the limit altogether! If BP or Exxon cuts corners and makes a hash of things, and they cause 60 billion dollars worth of damage, they are on the hook for the whole 60 billion dollars! And if they can’t pay for the whole bill, the company is liquidated, the shareholders get wiped out, and the company ceases to exist.”

    Because some catastrophic accidents really can’t be prevented in any reasonable way (this isn’t one of those) and sending companies into bankruptcy won’t help anything or provide much incentive for folks to act differently in the future. An industry-funded insurance fund and capped damages in catastrophe is the model that the country’s taken for other industries such as nuclear power (Price-Anderson Act). It allows these industries to exist instead of having to cope with what’s basically an infinite downside. Obviously, it’s up to the government to determine whether subsidizing catastrophic risks is worthwhile or not.

    I would prefer if the bills indemnifying corporations from paying damages would allow for the government to sue for compensatory damages over the cap if some degree of gross negligence can be proven. In this case, as far as we’ve learned, BP et al were acting within the law and within their spill prevention and mitigation plan that had been approved by the government as sufficient.

  51. 51
    Common Sense says:

    @Mark S.:

    Jesus, I knew corporations got out of a lot of federal taxes but I never would have guessed two-thirds of them didn’t pay any last year. I’m bookmarking that link for the next time I run into someone who claims we tax our corporations too much.

    Woulda been handy during the whole “half of Americans don’t pay any income tax” brouhaha.

  52. 52
    Ed Drone says:

    @kdaug:

    If memory serves, McCain’s camp started handing out pressure gauges to mock him.

    I think those would be real collectors’ items about now, you know? Are they labeled or something, or were they just cheap gauges? If I had any money, I would invest in a few dozen of those, if there were that many available.

    Ed

  53. 53
    mistersnrub says:

    Wapo chat with founder of Tea Party Nation.

    FUCK this guy. What a contemptible idiot.

  54. 54
    Cris says:

    I’d hit the “Like” button on Zach’s comment but I don’t want his app added to my profile.

  55. 55
    trollhattan says:

    @mistersnrub:

    Yeah, saw that. Here’s where we’re supposed to note “Ignorance is a feature, not a bug” WRT the baggers.

    Well-honed anger trumps fancy elitist booklearnin’ any day.

  56. 56
    Zifnab says:

    @mistersnrub:

    Are You Smarter Than a Fifth Grader: Jeff Foxworthy Washington, D.C.: Judson — Are you willing to admit that taxes have actually gone down for the vast majority of Americans under President Obama?

    Judson Phillips: No

    Well, that just about says it all, doesn’t it.

  57. 57
    MikeJ says:

    @Zach: BP makes $5billion per quarter profit. $60 billion in damages means that they break even for 3 years before they go back to making tons of money.

    Compare this to what happens when a physical person acts negligently and, oh, drives drunk. Do you think it possible that the physical person might face expenses in excess of 3 times his yearly disposable income?

  58. 58
    trollhattan says:

    @Culture of Truth:

    Heh, indeedie! Urban Trial Lawyah Terrah!

    They’re like ill-tempered urban bears, and we all know about bears and their tricks.

    http://www.thingsbearslove.com/

  59. 59
    kdaug says:

    @Ed Drone: Couldn’t tell ya. I have a personal aversion to the sub-Epsilons.

  60. 60
    Zuzu's Petals says:

    Well the idea of a $75 million liability cap can be a little misleading.

    It appears BP can pay up to another $1 billion in liability claims from the Oil Spill Liability Trust Fund established by the same act that established the $75 million cap. It is funded by a tax the oil companies pay on each barrel of oil they produce or import here.

    See also Steve @16.

  61. 61
    Kirk Spencer says:

    @Culture of Truth: Actually…

    There is a close correlation between GDP per capita and energy per capita. Oil is still the one of the most powerful energy per volume/weight source available, and is the most powerful period for motive energy sources.

    So you’re skipping a step in your circle. The military needs the oil to protect our interests in oil producing areas because of our lifestyle – not just cars, but manufacturing and farming and all the rest.

    I’ve argued on several military lists that THE strategic initiative this nation should be focused upon is energy that’s non-carbon, motive, and competitive. It defunds terrorists. It liberates us from an external strategic dependency. It drastically reduces the need for our military presence in several regions. Climate and environmental issues are just really important bonuses.

  62. 62
    ljdramone says:

    @kdaug: What really matters here is “energy density” — how much power is available from a given weight of fuel + powerplant.

    We’re not going to be able to beat the energy density of liquid fuel + one or more gas turbine engines anytime soon, so a “greener” military is not going to be flying battery-powered electric aircraft.

    Pretty much every engine in every modern military vehicle is either a gas turbine or a diesel, though, and gas turbines and diesels are not that particular about what kind of liquid fuel you burn in them.

    I don’t see any reason the US military couldn’t use biodiesel or the “bio-” equivalent of Jet-A. Yes, it is cheaper to just pump oil out of the ground than it is to grow plants that produce oils, but there aren’t any technological barriers that prevent biological oils from being refined into liquid fuel.

  63. 63
    patrick II says:

    I am confused — is there not something in the constitution about applying laws retroactively? Can we make BP pay 10 billion when the accident happened before any law that can now be passed upscaling their responsibilities?

  64. 64
    mistersnrub says:

    Alexandria, Va.: Are you willing to admit that marginal tax rates went up for the majority of Americans during the Reagan administration? Do you know the difference between average and marginal tax rates? Could you answer a simple econ 101 questions regarding the impact of progressive taxation on the labor-leisure choice?

    Judson Phillips: No.

    Liberals are just as American as you are and you and your movement has no right to question people’s patriotism or Americanness just because they disagree with you.

    Judson Phillips: Yes we do. You folks in the left do far worse. Patriotism is not something that cannot be measured. It can be. And you folks on the left, as a general rule are not patriotic. You do not love this country. You are embarrassed by us.

    I hate to tell you this, but those of us in fly over country are the real americans.

    GAAAAAAHHHHH!

  65. 65
    MikeJ says:

    @patrick II: We can make sure that the next person to do it has to pay. Like we should have after Valdez.

  66. 66
    Zifnab says:

    @Zuzu’s Petals: Unfortunately, the estimates on the spill rise well over the $1 billion threshold.

    What’s more – and correct me if I’m wrong – BP is a publicly traded corporation. One major benefit of a corporation is that the stock holders are only entitled to liability up to the value of the company. So we’ve already got liability protection in the form of the Limited Liability Corporation.

    Why, exactly, do we need additional liability caps that extend past what the general law offers? If the damages you’ve incurred create a multi-billion dollar mess, what interest does the public have in shielding you from liability? It seems like you are no longer serving the public good in any reasonable respect.

  67. 67
    trollhattan says:

    BP, no slouch in the lubricant department, knows that money is the bestest lubricant of all, even spread thinly but widely. Here’s an accounting of their small political gifts just in California over the last decade.

    http://www.sacbee.com/2010/05/.....z0n6ua0IWN

  68. 68
    Zach says:

    @MikeJ: I generally agree that they could/should pay more, but see the value in having an industry-wide fund that’s funded to levels below the absolute worst-case scenario. If the million-gallon-per-day worst case for this incident occurred and lasted for weeks, the losses would be huge. But yeah, fixing something on the scale of what’s happened so far should be within the scope of the fund and it’s presently too small.

    It’s also worth thinking about how wasteful, inconvenient, and ultimately unfair it might be to let these sorts of things work themselves out in the normal litigation process. This would be like the 9/11 settlement times a million; it’d take a decade and a half to sort out (using Exxon-Valdez as a measuring stick). Giving the government the power & funds to compensate folks more rapidly has its benefits.

    Lastly, disbursing $60B in settlements would mean $60B less would be available for future exploration, R&D, etc. It’d inevitably decrease future profits; it’s not like things would just continue apace after the company paid out a third or so of its market cap in damages.

  69. 69
    flukebucket says:

    @mistersnrub:

    Wapo chat with founder of Tea Party Nation.

    Man that was hard to read. The guy totally embarrassed himself and does not realize it.

  70. 70
    kdaug says:

    If I understand this correctly, the $75m cap doesn’t apply to lawsuits. BP is liable for all cleanup costs, plus $75m in damages.

    But federal class-action lawsuit? They’re on their own.

    That’s why they’re trying to pass out $5K checks and/or hiring locals to help with the cleanup – part of the contract is that they’re forbidden to join a class-action.

    By watching what they do, you can see what they’re really afraid of.

  71. 71
    twiffer says:

    @The Dangerman: nah, the insurance company just claims they can’t pay and asks for the gov. to cover it. just like they did with flood damage.

  72. 72
    Zuzu's Petals says:

    @Zifnab: @Zifnab:

    I’m not sure what your point is here. First, the cleanup costs are not capped, if those are the estimates you’re talking about.

    Second, what does stockholder protection under the LLC Act have to do with corporate tort liability? Are you suggesting that individual stockholders be held liable beyond the value of the company? Could you explain more please?

    Third, I’m not arguing for or against liability caps. I was just pointing out that there are funds available beyond the $75 million cap.

  73. 73
    trollhattan says:

    @flukebucket:

    But it’s just the gotcha media doin’ their gotcha thing, don’tchaknow? Real Patriots(tm) know this.

  74. 74
    daryljfontaine says:

    @flukebucket: Yep. Fucking asshat commits fucking asshattery.

    Anyone who was an “undecided voter” reading that chat who didn’t have their head crammed firmly in their rectum would see a whiny insular retard (satire!) with an exhaustive repertoire of falsehoods-presented-as-facts insulting anyone who chose to disagree with him. Not the way to win converts. I firmly endorse his continued position as the spokesman of his movement.

    D

  75. 75
    Zuzu's Petals says:

    @flukebucket:

    God, I found myself clutching my keyboard wanting to just type out correction after correction to his nonsense.

  76. 76
    flukebucket says:

    I firmly endorse his continued position as the spokesman of his movement.

    I second that motion. Anybody who can read that and still be a part of that “movement” is too far gone to reach.

  77. 77
    MikeJ says:

    @Zach:

    It’d inevitably decrease future profits;

    This is a feature, not a bug. We want to discourage spills, not subsidize them.

  78. 78
    gwangung says:

    @flukebucket:

    Anybody who can read that and still be a part of that “movement” is too far gone to reach.

    Isn’t that most of them?

  79. 79
    sparky says:

    you are SUCH a silly man mistah Cole–

    can’t put corporations out of business because (a) they might be too big to fail and (b) they are, as the Supreme Court recently reminded us, people! so in addition to the danger that they might fall on you, it would be wrong of you to cause them economic pain. of course, as it is ok to cause pain to mere flesh and blood humans, and actually kill them, perhaps we should simply say that corporations are “only human”.

    Corporations: Humans 2.0!

  80. 80
    Coastal Mike says:

    Being at the mercy of the transnational oil giants is just as bad as being at the mercy of the oil sheiks.

  81. 81

    […] in Business, Daily life, Government, Law at 12:30 pm by LeisureGuy John Cole of Balloon Juice: his makes no sense to me: The White House said it backed “significantly” raising the cap on […]

  82. 82

    John, your good idea won’t work. It just makes too much damn sense.

  83. 83
    b-psycho says:

    What’s ironic about John’s proposal is it would actually be the free market answer, yet the loudest “markets, fuck yeah!!” types would want nothing to do with it…

  84. 84
    frankdawg says:

    @Mark S.:

    The common claim is that US corp tax rates are the highest in the industrialized world & then they compare the “economic miracle” states like Ireland and Spain (please don’t look now!) who have much lower RATES.

    What the chose not to mention is that coprs pay much less in actual taxes in the US than they do in those other countries because they have more loopholes here.

    Also unmentioned is that many of these same companies get Federal money for one thing or another & actually end up paying negative taxes. Sort of like living in a red state, get more than you pay in whine about how unfair it all is.

  85. 85
    Joseph Nobles says:

    There’s already an implicit limit on liabilities. It’s called corporation. I don’t understand why there needs to be a legal limit to damages as well.

  86. 86
    MTiffany says:

    “no more subsidizing industries that don’t even pay a damned penny in taxes in the US anymore.”

    Hell, those companies don’t even pay royalties on the mineral wealth they extract from US public lands.

  87. 87
    MikeBoyScout says:

    Funny. None of the Randroid Glibertarian bloggers have asked this question.
    Did they already go Galt and we suffer the consequences of not having their pro market fundamentalist wisdom?

    McMegan? McMegan?? McMegan???

    Ron Paul? Ron??
    Rand Paul? Rand?? Roid???

  88. 88
    TomG says:

    “why don’t we get rid of the limit altogether! If BP or Exxon cuts corners and makes a hash of things, and they cause 60 billion dollars worth of damage, they are on the hook for the whole 60 billion dollars! And if they can’t pay for the whole bill, the company is liquidated, the shareholders get wiped out, and the company ceases to exist.

    Why don’t we give that a shot? And don’t tell me it is because no one will then undertake oil drilling. Of course they will! They’ll just pass on the costs to the consumer. And should being really careful and safe cost too much money, then it might just make other forms of energy look cheaper by comparison, and spur investment in those energy types.”

    Actually, that is the real libertarian position. Or was that your point ?

  89. 89
    Zifnab says:

    @Zuzu’s Petals: The general clean-up is not capped. But personal liability is. And while it’s certainly swell that BP won’t be let off the hook for the tens or hundreds of millions in damages to the Gulf and the waterfront itself, it’s small consolation to the fisherman bankrupted by the disaster or the home owner whose property value is completely destroyed.

    We’re talking about tens of billions of dollars in economic damages that are expected to be covered by a little over $1 billion in liability coverage.

    And I’m not suggesting they go after individual stockholders. I am suggesting that a hard $75 million corporate liability cap and a $1 billion fund is too small. And that if the company incurs a debt so huge that the company has to be dissolved to front the cost… then the company should be dissolved to front the cost. If BP is worth $100 billion and it incurs $100 billion in damages, you need to get your $100 billion.

    There will be an argument that destroying a multi-national company like this will cause further harm to the economy as it increases unemployment and destroys working capital. But, at that point, I’d be forced to reference you to the massive amount of unemployment and destroyed working capital that that business caused.

    From where I’m sitting, these liability caps are just another variation on Too Big To Fail.

  90. 90
    les says:

    We’ll just have to make our corporate persons pull themselves up by their bootstraps. It’s the American way, after all.

    Jebus, John, you’ve gone totally ponies and rainbows, haven’t ya?

  91. 91
    Zuzu's Petals says:

    @Zifnab:

    Yes, I’m aware that the $75 million cap is for liability only. I thought I made that clear.

    As to the rest, thanks for clarifying your point.

  92. 92

    […] John Cole has a revolutionary idea — let’s let the free market take care of things. His brilliant idea? Make the oil companies responsible for the total clean up cost of their oil spills. If they can’t pay, they go bankrupt. That might make them a bit more safety conscience. […]

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  1. […] John Cole has a revolutionary idea — let’s let the free market take care of things. His brilliant idea? Make the oil companies responsible for the total clean up cost of their oil spills. If they can’t pay, they go bankrupt. That might make them a bit more safety conscience. […]

  2. […] in Business, Daily life, Government, Law at 12:30 pm by LeisureGuy John Cole of Balloon Juice: his makes no sense to me: The White House said it backed “significantly” raising the cap on […]

  3. […] statutory liability cap that oil companies enjoy for damages caused by offshore drilling accidents, John Cole makes this point: Here’s a revolutionary idea- why don’t we get rid of the limit altogether! If BP or Exxon cuts […]

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