What Shakedown?
Shakedowns of this kind have a long and undistinguished history. And let’s acknowledge that they aren’t partisan, or even American, in nature. Republican presidents have engaged in similar tactics, like the so-called “voluntary restraint agreement” the Reagan administration reached with Japanese automobile exporters. During the westward expansion of the United States, the federal government “negotiated” with sovereign Indian nations in a similar spirit. European powers engaged in a truly extraordinary shakedown of China during the 19th century, forcing a then-vulnerable empire to accept the spread of opium and surrender treaty ports like Hong Kong. Resentment of the West lingers still.
This seems a bit overstated. Dave Weigel reported earlier this week that some Republican members of Congress, including Louisiana’s Joseph Cao, had been pushing for BP to establish the fund weeks ago. BP voluntarily decided to establish the fund, and then after the fact Obama took some credit for the establishment of the fund. I don’t quite see how this is comparable to the disparity and abuse of power in the Opium Wars, the forced relocations of whole nations or communal riots in Ahmedabad. For that matter, I missed the part in all of this where “a stronger party, ignoring the conventions of a good-faith negotiation, all but forces a weaker party to bend to its will.”
It appears that the corporation responsible for the spill is attempting to take responsibility for the consequences of its negligence, and it doesn’t appear that much coercion was involved. I can understand that Reihan does not want to encourage a spirit of vindictiveness, and he probably doesn’t want to encourage anti-corporate populism that this spill has been fueling (if you’ll pardon the expression), but anything less than some gesture from BP like this one would have ensured that both would have become much stronger. I haven’t heard such tone-deaf arguments from the right since the Republican leadership was rallying around the financial industry to defeat a financial regulation bill that made major financial firms responsible for covering liquidation costs of failing firms. Back then we heard about how it was a fund for “endless bailouts,” and today we hear that this fund is a shakedown. There are other similarities between the two cases, except that in this case many people on the right are trying to be more pro-corporate than the corporation under scrutiny. Even if it this weren’t politically insane given the public’s mood, it would still be wrong on the merits.
I can much more readily imagine how people whose industries, beaches and wetlands are being wrecked every day by this spill might see the fund as an insulting attempt to buy sympathy and to try to ward off more significant payouts later on. When it comes to disparities of power, one could do worse than looking at the disparity between BP and the Gulf coast residents whose lands and livelihoods are being destroyed by the results of BP’s failures. It is only proper that these people are compensated for losses they incurred through no fault of their own.
Attacking the creation of this fund as somehow disreputable or comparable to grave, violent crimes not only shows a staggering disconnect with the views of most Americans, but it also hints at a bizarre favoritism for the interests of the economically powerful over people of modest and limited means. It is a favoritism that seems to have nothing to do with legitimate concerns about excessive or distorting government regulation or principled objections to unnecessary state interference in the marketplace. What exactly is the threat to orderly society here? This is not a case of a mob wielding torches and laying waste to BP’s corporate offices. It is not even a case of demagogic politicians imposing draconian penalties on the company.
What is worse is that Reihan is trying to advance this terrible argument by claiming that it is a matter of speaking up for the unsympathetic victim of injustice and inhumanity. Sometimes the despised are despised for good reason. That doesn’t mean that we abandon good judgment and reason and give in to ruthlessness, much less violence, but it does mean that we don’t complain that a culprit is being unfairly crucified when he offers to pay for his disastrous mistake.
Update: Reihan replies in the comments below, and elsewhere he says that he has changed his mind.
Is anyone making the typical GOP argument that the cost will just be passed onto the consumers?
Yeah, taxman. They did that in the first ten minutes. As though everyone didn’t already realize that we were going to take this one in the chops no matter what.
Who cares what the irrelevant Republicans are saying about the BP oil spill. Since the Republicans have zero influence on policy at the national level and since the Republicans pundit class is about the most irrelevant group in the media in the U.S. , what they say and who they say it to is irrelevant.
The only thing that is important is what the Obama Administration is doing and what action the Obama Administration is taking. Worrying about what the Republicans saying is no more relevant than worrying about what the libertarians or the green party is saying.
Daniel needs to get used to the reality that the U.S. is a one party state and the Democrats are the only relevant politicians. Nitpicking irrelevant Republicans may get Daniel a lot of credibility with liberal bloggers but it servers no other purpose.
Capitalists believe in the free market. Far too many conservatives believe that society should be oriented to the benefit of the rich and powerful, with everyone else getting by on whatever the rich and powerful deign to trickle down to them. That’s not capitalism. That’s feudalism.
And could Larison just take some pictures of himself in a thong and send them to superdestroyer? Maybe that will finally satiate him.
Mike
Absolutely right, Daniel.
We’ve had claims procedures–such as workers’ comp–for a century. Thousands of individual lawsuits would not work. Absent something like this, the federal courts would consolidate all the cases, twist arms for a settlement, and we’d be pretty much where we are.
The GOP remains the “stupid party.”
Mbunge,
Do you really think that the progressives really care about the middle class or blue collar families. The attorneys involved in the claims will probably get somewhere between 40% and 50%. The shakedown is not the government but the American Bar Association.
If Daniel would think about anything other than nitpicking irrelevant Republicans, he would be able to write about the massive advantage that the oil spill is giving to the big government, nanny state Democrats. How will putting 1000/s of more pages of regulations on the books going to help the middle class.
I can’t decide what is more cringe-inducing in Reihan’s article: comparing the “shakedown” to how the US treated American Indians and BP to people who were burned alive, or the part where he talks about the gentle, pastor-like Barton and states that his remarks were a loose, off-the-cuff moment.
Perhaps he’s getting worried about losing his sinecure at NRO and feels a need to prove his Party loyalty.
As I recall, Senator LeMieux of Florida, the Republican appointed by Gov. Charlie Crist to replace Mel Martinez, was calling for a revolving escrow account of $1 billion (to be replenished each time when exhausted) more than a month ago. That would have served the same purpose as the deal finally agreed to by BP, $5 billion a year for each of the next four years, but it would have placed less financial strain on BP. I fail to see what great Republican principles are violated by making BP pay for the direct harm caused by BP’s negligence, especially when that negligence threatens to destroy one of the great natural resources of the U.S. and the world.
I am a little bothered by the example I heard cited twice by Kenneth Fineberg about the restaurant in Nevada which is losing business because Gulf shrimp are not available. The way he described that situation appeared to leave open the possibility that he thought it might have a shot at recovery if it made a “good case.” Give me a break.
Polluter pay type rules and regulations should be held up as common-sense things, but doing so is always presumed to be “bad” for the consumer, as if free and never-ending gas and electricity is theres to be had, just like how endless credit and home-ownership was presumed to be everyone’s “right”. Instead the cost of the clean up gets borne by all, regardless of the actual amount of use, just as the financial melt-down’s costs are borne by all, while the profits are reaped by a few.
And its not immediately apparent why regulations about specific, dangerous industries is a bad thing. This is not to “demonize” extractive industries, but to acknowledge that they, and the workers they employ, are involved in what are dangerous and at times potentially hazardous work and that theres needs to be enforced rules so that some companies don’t run roughshod over another and the people who live around them. Certainly this can manifest in NIMBY tendencies or cost-prohibitive regulations, but the flip-side of letting companies do what they want means leaving the tax-payer on the hook for the cleanup. And I don’t feel the desire to keep reaching into my pocketbook everytime a company too big to fail decides to do exactly that.
Let’s not forget the racial aspects of this as well. Shakedown indeed.
Let’s not neglect the bigger picture here. Obama was under increasing pressure to place BP in receivership. People were making up numbers for potential liability. BP’s stock was getting pounded and was fast becoming a takeover target. This did BP huge favors. First, it put an official starting number on relief efforts. Second, it removed the demands for BP to be placed in receivership. Third, it allowed BP’s stock price to recover, lessening the odds of them being taken over. Make no mistake: BP acted in its best interests.
Wait, what? How exactly would a British company be put into receivership by the American government without an amazingly nasty trans-Atlantic dispute happening? How would that be legal at all? Its not like they owe taxes, or are a financial institution whom can be put into receivership for being insolvent. I don’t think anyone has ever realistically suggested that BP be taken over.
The article may well have been based on a faulty premise — that the White House was indeed the driving force behind the fund. If the WH was not in fact the driving force, well, it wasn’t a negotiation of any kind. Rather, the president took credit after-the-fact for a shrewd business decision on behalf of BP to limit its downside risk.
It’s not clear to me that this narrative fits the needs of the president. But it could certainly be true.
And I’ll happily accept that my argument was hotheaded. But it certainly had nothing to do with currying favor with anyone.
Gosh, I’m all for regulating extractive industries. And I also suggested that Barton was a hypocrite insofar as his “sympathy” doesn’t extend to weak claimants — single mothers on TANF, etc.
My sense is that you might have read the DP World case differently than I did. I think of that as a salient precedent for what we’re seeing now. But again, I could be off-base here.
This whole episode has been a stark reminder that movement conservatism has become a crass ideology that is utterly incapable and unwilling to represent the middle class. I knew all was lost when I saw Joe The Plumber arguing with Obama about tax increases for those earning upwards of 250k.
superdestroyer:
“Who cares what the irrelevant Republicans are saying about the BP oil spill. Since the Republicans have zero influence on policy at the national level and since the Republicans pundit class is about the most irrelevant group in the media in the U.S. , what they say and who they say it to is irrelevant”
Can anybody remember the last time that SD did *not* lie?
After watching the GOP Senators block most productive work for the past 2 years, and watching the GOP pundit class spin reasonably successfully, no honest person could write what he wrote.
Sean S.:
“Wait, what? How exactly would a British company be put into receivership by the American government without an amazingly nasty trans-Atlantic dispute happening? How would that be legal at all? Its not like they owe taxes, or are a financial institution whom can be put into receivership for being insolvent. I don’t think anyone has ever realistically suggested that BP be taken over.”
Probably not directly ‘put into receivership’, but the US could seize all US assets, which would include all oil leases on US property. To the extent that any BP or any of its subsidiaries are traded in US stock markets, the US could seize those shares.
The US could also prosecute the top executives and the board of directors, and send requests for extradition to all of the countries with which the US has extradition treaties, which includes the UK. Not that the UK would extradit big-shot executives, but those guys had best not set foot in any of a hundred-odd countries for the rest of their lives.
“Do you really think that the progressives really care about the middle class or blue collar families.”
Uh, considering that progressives have been responsible for most of the positive advances made in society for middle class and blue collar families over the last 100+years, usually over the frothy opposition of conservatives, yeah.
Conservatives and conservatism have their part to play in politics, but taking care of the middle and working classes generally isn’t it.
Mike
Reihan, thanks for your response. I hope we can agree that the premise was faulty and that this mistake led to a lot of the more extravagant claims in the article. My post was a bit hot-headed as well, but that was hard to avoid once there was a comparison of a basically voluntary escrow fund to the consequences of riots and colonial wars. I think I understand that you were trying to go against the prevailing attitude of the moment and warn against the potential for abuse in unevenly-balanced power relationships, but it came off very badly. If I read too much into the article, I regret jumping to conclusions and I will be glad to be wrong.
Actually, I didn’t quite say that I changed my mind — rather, I’m saying that the narrative that you and others are advancing (BP was acting out of self-interest) makes sense, and that the White House was behaving opportunistically when it characterized the fund as a kind of negotiated settlement instead of a unilateral decision by BP in response to public pressure.
But it is also possible that the White House was telling the truth.
FWIW:
EMANUEL: And by — wait a second, and also, Jake, is they originally weren’t thinking about $20 billion. And they originally weren’t thinking about an escrow account and forcing them to do that. There are certain things that they had to be pushed — not certain things, like a lot of things that they had to be pushed to do. And pushed to do faster, more of.
http://abcnews.go.com/thisweek/week-transcript-rahm-emanuel/story?id=10962588
For months the White House has been under growing pressure for being too passive and ineffective in response to the spill, so it would seem to make the most sense that they seized on the creation of this fund as proof that they were “doing something” and “leading” when they were not responsible for making it happen. Maybe the administration pushed for a larger fund, but at that point it isn’t really a question of the government compelling BP to do something that it wasn’t already going to do.
As you said, it is politically useful to appear to be the ones who put the screws to BP, and so they have positioned themselves accordingly. Unfortunately, this is the sort of executive domination that many people seem to crave. When the public already thinks that the White House and Congress are too friendly with corporate and financial interests and believes that the government is doing far more for them than for the public, there is no advantage in announcing that BP took the initiative here.
So, to Reihan, the only two possibilities here are (1) a “shakedown,” (presumably orchestrated by the Chicago thug in the Oval Office) or (2) “the president took credit after-the-fact.”
All movement conservatives can come together to agree that regardless of the facts– we can find them out later, or not– whatever Obama did was Very, Very Bad.
It is really a shame to see someone as capable and intelligent as Reihan Salam embrace the role of the propagandist. But, given that there is no policy content to movement conservatism, and its degeneration into a series of tribal impulses, it’s no surprise. If you want to be a careerist conservative, you have to oppose whatever the Obama administration does.
Have I ever characterized Barack Obama as a “Chicago thug”? You can insult me all you’d like, but your premise rests on the idea that I didn’t subject Republicans to the same scrutiny when they were in power. And that’s just not true. I opposed President Bush’s reelection for many of the reasons I find myself criticizing President Obama.
I speak for myself, not for “movement conservatism” — a term that strikes me as pretty imprecise.
And I’m not sure how effective a “propagandist” I am when I say that a Republican president would have done exactly the same thing — which I said explicitly in the piece that you may or may not have read to completion.
The point is, you appear to view your goal in writing about the fund as coming up with negative terms to describe the process and the result. Without knowing the facts, you called the fund a “shakedown.” Apprised of a fact, you cast the fund in an equal and opposite negative light.
Your “shakedown” term (which you now admit was unwarranted) is part and parcel of the right-wing paramedia’s attempt to brand Obama as a thuggish machine politician. (When they’re not branding him as a distant, ineffectual, effete intellectual).
Your claim that the president is claiming credit where none is due does not appear to be grounded in a careful appreciation of the facts surrounding the decision to create the fund. The possibility that the fund was the result of discussions between the two parties, each pursuing their own interests, is politically incorrect to you, so you decline to consider it. The only views you permit yourself to consider are that Obama overpowered the will of those poor hopeless underdogs at BP, or alternatively that he cynically claimed credit for the shrewd, self-interested plans of the titans of industry at BP.
Your granting of the theoretical possibility that some hypothetical Republican might engage in the same imagined offense in a parallel universe is not at all the point the reader takes away from your assertion that the president is seizing credit where none is due.
Now, I am unaware of what you wrote in 2004, so this point may not apply to you: that one’s expressed support for or against one given candidate or proposition is not the fairest way to evaluate one’s role as a writer. Consider Glenn Reynolds, nominal supporter of gay rights, who cheerfully ignores issues of concern to gays 99% of the time.
My view is that mainstream conservatives have cast aside all policy beliefs in exchange for embracing their tribal identity. Your effort to cast the BP fund in a negative light, whether it was created at the behest of BP or of Obama, fits into this view.
Thanks for reading and replying.
BarryD,
The last time anyone looked, the pundits are the right have not had any effect on policy in at least three years. The Democrats have gotten whatever they want when the Democrats have been willing to accept responsibility for the decision.
The last time I looked the Republicans are a minority and losing ground in the demographic race with the automatic Democratic Party voters in the U.S.
Of course, Daniel loves to pretend that Republicans really affect policy and that a conservative party in the U.S. can exist if it would become isolationist and let Russia, Turkey, Iran, China do whatever they want.
Of course, since Daniel does not care about domestic politics or policy, Daniel keeps forgetting that less than have the children who will be starting second grade are white and that non-whites automatically vote for big spending, big government Democrats.
So instead of worrying about irrelevant Republicans and inept neo-cons, maybe the paleo-cons should think about what foreign policy (and domestic policy) will be like in a country that is less than half white.
If Daniel wants a country that is isolationist and punishes the private sector, the U.S. is on the course that will achieve what Daniel wants.
“The last time anyone looked, the pundits are the right have not had any effect on policy in at least three years. The Democrats have gotten whatever they want when the Democrats have been willing to accept responsibility for the decision.”
Yeah, ’cause in a world where Rush Limbaugh, Fox News and the rest did not exist, every single government action of the last three years would have been exactly the same. Sheesh.
Mike
SuperDestroyer: “(nothing, once lies have been removed).”
If you’d like to make an argument which is *not* a pack of lies, I’ll be happy to read it.
Also, what MBunge said.
Daniel, you’re letting Reihan off of the hook so easily. As you’ve pointed out, the base situation is that BP is criminally and civilly liable for a massive amount of stuff (not that I expect actual, successful criminal prosecutions of high-ranking people). When Reihan says ‘Chicago shakedown’, WTF does he mean? That even a president somehow backed down an innocent oil mega-corp, which clearly has a few hundred members of Congress in its pocket?
IMHO, Obama called BP’s guys in, and told them that they weren’t going to shovel all of the money out to the shareholders, and then declare bankruptcy. He did this by threatening legal action, extremely well-justified legal action.
Which is what he *should* have been doing. I understand that Reihan, as a Republican, has a hard time understanding it when a politician acts against guilty megacorps, but that doesn’t excuse his dishonesty.
Barry,
Let me see.
Is the fact that whites are a shrinking portion of the population a lie? NO.
Is the fact that non-whites over for and support Democrats and liberals by an overwhelmingly margin a lie? NO.
is that fact that the Congressional Black Caucus and the Congressional Hispanic Caucus have zero interests in foreign policy and are both isolationship a lie?
Maybe you can point to all of the blog posts where Daniel posts about domestic policy. I find them few, far between, and with a lack of ideas.
Maybe you can point to a policy that was implemented because Rush LImbaugh or Fox news pushed for it. Maybe you could even mention a policy that was changed because Rush Limbuagh, Glenn Beck, or Fox news talked about it. I cannot think of one.
The only issue in politics is whether the Democrats are willing to take responsibility for and accept the long term consequences of. As long as the Democrats want more spending and bigger government government but do not want to take responsbility for the economic impacts of higher taxes and bigger government, then the one party state will in a bind.
I guess nitpicking the irrelevant Republicans like Mitt Romney, back Benchers Republicans or neo-cons fits into the liberal mode of worrying about the irrelevant instead of worrying about actual policy and those that can influence it.
superdestroyer, what MBunge said.
“Is the fact that whites are a shrinking portion of the population a lie? NO.
Is the fact that non-whites over for and support Democrats and liberals by an overwhelmingly margin a lie? NO.”
I just want to point out that THIS is the modern face of white racism in America. The only reason for any conservative or Republican to be worried about either of those two propositions is if you believe there is something inherent in white majority rule that needs to be preserved OR that there is something inherent in non-whites that prevents them from supporting GOP or conservative ideas.
Mike
I have another comment for Reihan – if you noticed [and even if you didn't :) ], an Obama-imposed moratorium on deepwater offshore drilling in the Gulf was overturned by something called a ‘Federal Judge’. This ‘Federal Judge’ apparently has some sort of mystic powers that enable him to overturn even Chicago-leval Shakedowns (perhaps he has the Ring of Elliot Ness?). Various oil companies had something called ‘lawyers’, who did some mystic ritual called ‘filing papers’ with this ‘Federal Judge’ – does ‘lawyer’ mean ‘sorceror’? It’s all so complicated!!
Anyway, perhaps BP should talk to the various companies, and get some of these ‘lawyers’ to work for BP. Then these ‘lawyers’ could ‘file papers’ with the ‘Federal Judge’, and get that (power? god? demon? spirit being?) to ‘overturn’ the Chicago Shakedown of BP.
Unless – just unless, just hypothetically – when Obama was Shaking Down BP, it was because (a) what Obama was doing was stone cold legal and (b) because Obama had a bunch of guys standing behind him holding a few metric tons of evidence of wrongdoing which could be used to put BP through the grinder.
MBunge,
The current race based spoils system in an inherent part of the system that keeps non-whites in the Democratic party and will always keep them in the Democratic Party. As long as the Democrats can say that they will tax the rich (read whites) and give money to non-whites, then all non-whites will stay home with the more liberal party.
In the U.S. today it is impossible to make a conservative proposal or support a conservative position without being called a racist. Even proposing to enforce the current immigraiton laws will get any conservative political into trouble for being a racist.
As the U.S. becomes a non-white country with laws on the books making it legal to discriminate against whites, then all non-whites will stay at home in the Democratic party.
My guess is that is one of the reasons that Daniel does not care about domestic policy. Why care about the domestic policies of a country that Daniel plans to leave for some place in Eastern Europe.
Superdestroy, nice pile there – spread it on your garden, and it’ll enable your plants to grow Big and Strong.
“As long as the Democrats can say that they will tax the rich (read whites) and give money to non-whites, then all non-whites will stay home with the more liberal party.”
You know, as soon as I hit Submit Comment, I wondered if the whole “modern face of white racism in America” was a bit much. Thanks for reassuring me I was right on the money.
Mike
Mbunge,
If you want to see the future, look at Rep. Steve Cohen (D-TN). He is the only non-black who represents a majority black district. he is extremely liberal and is to the left of Bernie Sanders. He pushes for apologies for slavery and pushes for race based government programs.
When you realize that 47% of the U.S. does not pay income taxes and that most blacks and Hispanics fill in that category, you should realize that there is no future in America for any conservative party.
If you want to see the future, look at Baltimore, DC, Chicago, El Paso, or Los Angeles. At least Daniel gets is isolationist foreign policy because blacks, hispanics, and government employees know that every dollar spent abroad is a dollar that they did not get.
“When you realize that 47% of the U.S. does not pay income taxes”
Bullshit. First, those people pay plenty of sales and other forms of taxes. Second, most of them pay state income taxes. Third, they actually pay federal income taxes but simply get refunds because of provisions within the tax code. Fourth, it’s hardly surprising to find the number of folks “not paying income taxes” has skyrocketed given that SO MANY OF THEM HAVE LOST JOBS AND INCOME IN THE GREATEST ECONOMIC CRISIS IN 20 YEARS AND THE GREATEST FINANCIAL CRISIS SINCE THE GREAT DEPRESSION.
I have to say, I often think the worst thing about racism isn’t the actual racism but the stupidity that always follows it.
Mike
Mbunge,
If one does not pay federal income taxes, i doubt if they are paying state income taxes. The may be paying sales taxes but most of them are probably receiving much more in government spending than they will ever pay.
As the parasite class grows relatives to the overall population, no conservative party can survive and more people like Daniel will be looking for a good safe, majority white county to emigate to. Then the U.S. will look like Mexico or Brazil with a small patron class and a huge peon class. Then the few countries that try to do business will either pay huge amounts of shakedown money or leave the country.
“If one does not pay federal income taxes, i doubt if they are paying state income taxes. The may be paying sales taxes but most of them are probably receiving much more in government spending than they will ever pay.”
Translation – “I don’t have any facts to back up my bigotry but that won’t stop me.”
Mike
MBunge,,
Please hold yourself to your own standard and provide cites that show that most of the 47% that did not pay federal income taxex did in fact pay state income taxes. I await your evidence.
“Please hold yourself to your own standard and provide cites that show that most of the 47% that did not pay federal income taxex did in fact pay state income taxes. I await your evidence.”
Google “47% not pay federal income taxes” and read the AP story on the initial study that made the claim. Oh, I’m sorry. I’m asking you to expose yourself to information sources that might conflict with your bigotry. I could just ask you to use common sense and understand that state income tax systems don’t offer the same sort of tax breaks as the federal system, but I wouldn’t want you to blow a brain fuse. You’d have to think about WHY so many folks aren’t paying federal income taxes instead of just seizing on the data to support your prejudices.
Mike
Mbunge,
If you look at http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1 which is the AP story, you see see the line Many also pay state or local taxes on sales, income and property.
This implies that the who pay no income taxes or actually get more back than they paid in will have to pay some sales or property taxes. The article and none of the others state that most of the none payers are still paying state income states.
If you look at http://money.cnn.com/2009/09/30/pf/taxes/who_pays_taxes/index.htm
You will see When considering federal income taxes in combination with payroll taxes, the percent of households with a net liability of zero or less is estimated to be 24% this year, according to the Tax Policy Center’s estimates.
That means tha about half of those paying no income taxes are actually receiving more money back in tax credits that it covers everything they paid in SS and Medicare. Those people are most defintely Democratic voters and will keep voting for high taxes (on others) and big spending (on themselves).
The problem for the U.S. is that 24% will soon be 50% of adults.