How do you punish BP?
Whoa! Before you all jump on me for being some kind of a socialist mole in this capitalist economy hear me out.
When I was back in law school one of the biggest concepts we discussed was how the sentencing should fit the crime or tort. The old "What would God do ?" argument.God would turn back time and make it so the victims would forget the pain and they would be back exactly in the position they were before the incident and the perpetrator would be appropriately punished and could never do that dastardly deed again.
Courts can't do that. They can only restrict the offenders freedom with jail time and award the victims money damages. The pain and loss is still there and there is almost no way the court can make sure it will never happen again.
Was this oil spill an accident? If your definition of an accident is something that was unforeseeable and unavoidable then a big NO! Every environmental group warned that there would be an off shore oil rig spill so the unforeseeable excuse is out the window. Was it unavoidable? Another big NO! They will have to prove how they will avoid the same occurrence in the future or they'll never be allowed to drill another off shore well.
I watched the Washington hearings and heard BP ( BP) , Halliburton ( HAL ) and Transocean (RIG ) management not take responsibility and blame it on each other. It was almost like listening to recordings of the Nuremberg Trial after WWII. " I was just a lowly soldier following orders". Just more choruses of the " I was not a Nazi Polka".
I've read where business in the Gulf region is down 30%. Who will pay the waitresses who will be taking home 30% less tips. Who will pay the maids working in the small hotels and motels when 30% of them are laid off. Who will pay the small business owner whose receipts are 30% less?
I live all the way in Charlotte and read that seafood prices even in our region have sky rocketed. Who will pay the owners of every seafood restaurant across the country who will see their profit margin squeezed because their costs are rising but they can't raise prices to offset it. Who will pay me and you, the patrons of seafood restaurants who raised their prices?
This oil spill is not just an environmental disaster but an economic disaster as well that has ripple effects all across out country and even the world. If we wait months and years for all this to go through the court system can you see all the little people who will lose money but not be reimbursed a dime?
Who got rich because of all the shortcuts taken? The Board, Management and Stockholders of BP, Halliburton and Transocean. Who are the ones who are paying for their greedy mistakes: the little people get kicked in the butt again. How can you punish the Board, Management and stockholders of the 3 horsemen of destruction?
All the courts can do is restrict the freedom and punish with monetary fines. That leaves jail time of the Board, Management and loss of your investment for the stockholders.Who will help the waitresses, maids and small business owners pay their bills next month? Not the Board, Management and stockholders of BP, Halliburton and Transocean.
You are the judge and jury. You see the crime unfold daily on TV. You see and feel the pain of the countless victims across the country. What do you think the punishment should be?
Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com
Disclosure: I hold no positions in BP, HAL or RIG at the time of publication