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Thursday, June 17, 2010

The Bully's Pulpit

There is so much wrong with how Barack Obama has handled the Gulf oil spill, it's almost hard to know where to begin.

Put aside the ineptitude of the approval process and clean up response. For today, I'm focusing on the tentative settlement with BP. While many will cheer the fact that BP has committed $20 billion to compensate people in the Gulf region, no one should cheer very loudly.

Another Blow To The Due Process Clause

I am hard pressed to come up with a constitutionally more chilling presidential comment than the following statement made by Barack Obama Tuesday night (emphasis mine):
Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness.
Since when is a President's wish our command? Under what legal authority did the "rule of law" President make the decision as to how much a private entity would pay and then "inform" the private party that it must obey or face the harsh retribution of the federal government?

This is similar to what happened to the bond holders in GM and Chrysler, whose private property rights were trampled in the name of Obama's politics.

According to reports, BP also will pay compensation to people who lose their jobs not because of BP's conduct, but because of the Obama administration's policy decision to implement a drilling moratorium. We now have the specter of a private company being forced to pay for policy decisions.

Respect for the Due Process Clause of the Fifth Amendment is what separates us from North Korea or Venezuela (emphasis mine):
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
It is beyond me how any person who claims to be a civil libertarian can support this administration. Put aside issues of Gitmo, rendition or other aspects of the war on terror.

When it comes to the foundation of our domestic freedom, Obama has trampled the Constitution with vigor and lack of concern.

One Week's Worth of ObamaCare

The amount of money BP has committed over a multi-year period is roughly the equivalent of what the federal government will spend on ObamaCare in one week.

$20 billion is not chump change, by any means, and if actually paid promptly to people in the Gulf region will help ease some of the pain.

But don't kid yourselves, this is not about money. If the federal government wanted to get aid to people right away, it could have used some of the unspent Stimulus Plan money, and then sought reimbursement from BP through the legal process.

How interesting that the President who cares not about running up trillion dollar deficits to fund his social vision now cares so deeply about saving the federal government what amounts to an ObamaCare rounding error.

This was a pure political power play, in which the President could create a demon, and deflect attention away from his own failing conduct with regard to the Gulf.

Hurry Up And Wait

If the Constitution means nothing to you, and all you want is retribution, you will be left very unsatisfied.

The claims procedures apparently have not yet been worked out in detail. But if the 9/11 claims process is any indication, the process will not be fast. And claimants will be limited to compensation for economic losses, which will require that individuals give up whatever other claims they may have.

End result is that I would be surprised to see much money put in anyone's hands this calendar year.

A Nation of A Man, Not Laws

How often have you heard it said that we are a nation of laws, not men. But in the case of the Gulf claims process, we are a nation of one man, Kenneth Feinberg, who will determine all claims under $500,000.

No appeals, no second chances, not only for BP, but for individuals. The price of submitting to an arbitrary claims process is the loss of access to the judiciary and the legal process. That may be fine for many people, but it is a high price to pay as a nation supposedly of laws.

BP Will Be Happy

Many of you will think that I am defending BP, but that is not true. If anyone will be happy with the federalization of the claims process it will be BP. (Aside, BP is being represented by the ultimate Washington insider, Jamie Gorelick.)

BP is facing a financial death blow in the form of private lawsuits. Whether BP ultimately would succeed in defending those lawsuits based on federal liability caps is besides the point. The prospect of tens of thousands of lawsuits which might result in liability would haunt BP's business and stock price for years.

And since BP made various federal and state filings with regard to its oil drilling, there is the prospect of criminal charges for fraud, filing false statements, and other crimes which, though a stretch, would put enormous pressure on BP.

This is similar to the situation faced by tobacco companies, which won almost all of the lawsuits taken to trial.

Investigations, and threatened criminal proceedings, combined with the mass tort lawsuits, led big tobacco to the conclusion that its survival as an industry depended upon co-opting government through a slush fund. In the case of big tobacco, it was hundreds of billions of dollars, but it was a price worth paying because it ended the legal war and made government a partner, not an enemy.

You May Get What You Wished

This is a case where the imperial whim of the President, and the shrewd business acumen of BP, joined forces in the ultimate inside-the-beltway deal.

As they say, don't wish too hard for something, you just got it.

Update 10:53 a.m.: Just noticed that Jay Cost had a post of a similar name, The Pulpit of a Bully, which I did not see until after posting, which proves again that there are no new ideas on the internet and that great minds think alike.

The British press, meanwhile, is throwing around the "bully" word quite profusely, while the Boston Herald managed to squeeze it into an Editorial title twice, From bully pulpit to bully.

Also recommended, An Offer BP Couldn’t Refuse.

Related Posts:
Obama's Gulf Speech In One Sentence
"Eight Days In April," by Paul Krugman
Questions for the Presidential Address

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  1. Thank you! That's exactly what I was thinking. If this gets BP off the hook from any tort claims in civil court, they are getting off easy. And yet Obama and the Democrats who work so hard to demonize private industry (in public) have basically worked out a deal to benefit BP. The people getting screwed are the Gulf residents who have lost so much.

  2. I teach a college level government class on Tuesday evenings, and had just listened to the speech before my class began. When my students asked me about it, my response was that the president gave a lousy speech in which he abrogated the Constitution and declared himself dictator.

    Everybody laughed.

    But I got several emails the next morning from students who noted that I wasn't far off the mark.

  3. I predict that a class action suit by BP shreholders will invalidate the 20 billion dollar fund "agreement" ... any agreement made via coersion is hardly an "agreement"

  4. There is another cautionary lesson in all of this and that is be careful what you wish for. "Due process" means lawyers. I am hearing many people defend Obama's diktat with the argument "due process is just another way of saying let's turn this over to the lawyers". That is factually correct but is not a valid defense for discarding the constitution.

    (And no, I am not a lawyer nor any way employed in the legal profession.)

    A free society is only possible when the consensus of society is formed around people of virtue. Government itself is a necessary evil because people are not angels. The further away people become from being angels, the more we rely on the law to defend us from the devil. Lawyers may be expensive, but you can't have due process without them.

    So if you support the constitution, don't fall for the cynical knee jerk argument that due process only delays solutions while making lawyers wealthy. The law is what protects us from the devil not politically expedient demagoguery.

  5. I have read that the constitution of the USSR had freedom of the press, freedom of speech, freedom of assembly and other things that gave the USSR the pretension of being a nation of laws created democratically.

    And then the apparatus ignored it. Which is much like how we treat the Constitution today. The spectacle of the DoJ operating as an arm of thug government and the President acting as godfather-in-chief shows how no piece of paper is a defense against actual or would-be tyrants. Individuals are required to stand against this corruption.

    Machiavelli wrote about this in Discourses:

    "Thus monarchy becomes tyranny; aristocracy degenerates into oligarchy; and the popular government lapses readily into licentiousness. So that a legislator who gives to a state which he founds, either of these three forms of government, constitutes it but for a brief time; for no precautions can prevent either one of the three that are reputed good, from degenerating into its opposite kind; so great are in these the attractions and resemblances between the good and the evil."

    By granting ever more power to the government we have made it possible for politicians to bribe constituents. Those politicians and their supporters can nothing at all about the greater good--only their self-interest. And they will follow their self-interest into disaster for all (e.g. Greece or California).

  6. Isn't this the same Jamie Gorelick whose memo caused the non-sharing of security information right before 9/11 and then got to sit in judgement of herself on the 9/11 Commission? That Jamie Gorelick? (sarcasm implied)

  7. independent

    Also the same Jamie Gorelick that collected millions of dollars ($26,466,834 to be exact) from Fannie Mae as part of the robbery of public money conducted by Obama buddy Franklin Raines (which arguably was one of the reasons for the recent financial crash). Jamie helped cover up the $10 Billion robbery.

    We are in the best of hands here...

  8. We are already living in a tyranny, if Obama can say "I will do the following", that action is not supported by law, and his own party will not stand against him.

    A tyranny is not just one willful man, but a large faction that says the law and constitution does not matter. If the populace is so stupid as to support or endure this lawlessness, then we have an established tyranny.

    This is asymmetrical warfare. The Democrats flout the law, then say "under the law, you can't do anything except vote us out". The desire for law and order among most people is used as a shield against any action to stop the lawbreaking of that group.

    Obama's and the Democrat's actions are not just allowing more destruction by oil in the Gulf. They are weakening the rule of law, or possibly are revealing that the law in our great country is a thin tissue, long hiding the arbitrary power of the government and the tyranny of Congress.

    It will be interesting to see if the productive people of the U.S. will be made slaves to onerous taxes and distributionist policies because they respect "the law". Or, will they conclude that "the law" is an instrument of oppression when it is wielded by people who selectively break it.

  9. What bothers me is that not only is more power focused in the Executive Branch, the FOX is now in charge of the billions for the Gulf Coast Chickens whose livelihoods stand in ruins. Who is overseeing the Pay Czar? What accountability is there? What is the application form for funds?

  10. "The Bully's Pulpit"

    I am pretty-darn-sure that this usage is the way Mr. Obama has understood the term "bully pulpit" all along. There seems to be a whole lot of "He who knows not, and knows not that he knows not, is a fool--" in our dear Mr. Obama's case.

  11. When you look back at the 2008 election, it easy to see how "Hope and Change" was a much more palatable slogan than "Screw the Constitution, I'll do whatever I damn well please." How easily we were duped...

    That being said, nobody loves a witch hunt more than a bunch of idiots who are coming up for reelection in a few months. Lord help us.

  12. So Obama is not only illegally and cruelly forcing BP to set aside $20 billion for compensation claims, he's also making a sleazy inside-the-beltway deal that nobody will be happier with than BP? Well then.

    I was also unaware that ObamaCare is going to cost in excess of $1 trillion per year, i.e. almost twice as much as all of Medicare. Citation please?