Posted on 06/23/2010 9:19:12 AM PDT by Kaslin
When eight British soldiers were indicted in Boston for murder in 1770 after five people were shot to death in a rioting crowd that was pelting the soldiers with projectiles, a young lawyer named John Adams took up the soldiers' case because he had a point to prove: Americans believed in -- and lived by -- the rule of law.
"The law, in all vicissitudes of government, fluctuations of the passions or flights of enthusiasm, will preserve a steady undeviating course; it will not bend to the uncertain wishes, imaginations and wanton tempers of men," Adams said in his summation to the jury in the trial of the soldiers.
America did not disappoint Adams. Six of the eight soldiers he defended were acquitted, and two were convicted of manslaughter, not murder. The jury listened to the evidence and returned a fair verdict based on the facts. (For a good summary of the case, see the "Famous Trials" website maintained by professor Douglas O. Linder at the University of Missouri-Kansas City Law School.)
When President Barack Obama was coming under increasing political heat for his response to the oil spill in the Gulf of Mexico, he decided to give his first-ever nationally televised speech from the Oval Office. But Obama is no John Adams, and preserving due process of law was not on his mind.
Many Americans were understandably angry at both BP and Obama, and Obama wanted to deflect the anger from himself by capitalizing on the resentment of BP. He would show, once again, he was the bully in chief.
"Tomorrow," said Obama, "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. And this fund will not be controlled by BP. In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent third party."
Now, the key words in this statement were "inform him." This was not a request. Indeed, the day before, The Washington Post said Obama would "demand" that BP turn over the money he wanted set up in this fund.
When considering Obama's action, it worth remembering that BP was not trying to disclaim responsibility for damage done by the oil spill, nor was it refusing to pay legitimate claims. As of this past Saturday, The New York Times reported, BP had already distributed 25,000 checks worth $63 million to people claiming damage from the spill. Company official had repeatedly insisted they would pay all legitimate claims.
But at his meeting with BP executives, with criminal and civil federal investigations looking into the gulf spill, Obama convinced the BP executives to surrender to an "escrow account" $20 billion of BP shareholders' money.
This "escrow account" will be managed by a Washington lawyer, who will oversee the distribution of funds to claimants. But Obama personally guaranteed that claims will be paid. "The people of the gulf have my commitment that BP will meet its obligations to them," Obama said. His political goal was to position himself as a champion of the little guy against big oil.
The owners of BP are ordinary people. You might be one yourself. According to The Washington Post, 40 percent of BP's stock is held in the United States. In Great Britain, according to the Post, one of every seven pounds -- or 14 percent -- paid in dividends to pension funds is paid by BP.
After the company's executives met with Obama, BP said it would suspend its dividend payments for three quarters -- meaning $7.8 billion would not be paid to pension funds, to retirees who invested in BP and to other shareholders.
The Fifth Amendment of our Constitution says: "No person shall be ... deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."
In this case, BP's executives caved to Obama, preferring to cut their own political and public-relations losses rather than insist that due process of law be observed through the normal channels of American justice as they moved forward with their stated commitment to make restitution to those injured by the oil spill. But this sets a bad precedent for people who value property rights.
America will soon face a great financial crisis. The unprecedented federal deficits coming as a result of the welfare state that liberals have build up over the past 75 years will require the government to either dramatically diminish the entitlement benefits they have promised or dramatically increase government revenues. When that crisis comes, liberal politicians just might see the modest wealth accumulated by those middle-class Americans who actually saved -- by investing in such things as, say, BP stock -- as an attractive source of revenue to keep the dole flowing.
A president who has established a pattern of using executive power to unilaterally bully and intimidate corporate executives into surrendering their stockholders' property will be a happy precedent for them -- and a dangerous one for private property rights and the rule of law.
I don’t think they don’t need to vote out the leadership to do that. I’m not certain what British law on this is today, but I’m pretty sure shareholders can still bring derivative suits against the officers and Board on behalf of the corporation.
From what I can tell, though, it would be a hard case to make under British law (and probable under the law of any US state as well) that the officers and directors breached their fiduciary duty here. You have something called the Business Judgment Rule in the US, and by statute in the UK, directors have a duty to “promote the success of the company”, while having regard for “the impact of the company’s operations on the community and the environment,
(e)the desirability of the company maintaining a reputation for high standards of business conduct.”
While I agree that BP’s management didn’t act in their shareholders’ best interests here, it will be very hard to sue them for it.
Q: Do BP Shareholders have rights?
A: No.
We’re a Kleptocracy.
I supported TARP at the time, because I didn’t want to see a depression era collapse of the banking system, and the financial sector at large.
After having watched how the funds were used, I believe you were right. I am not buying into the MSNBC anything, and I think you should acknowledge that if the banking and financial sector had collapsed, we wouldn’t like that either.
I spent over eight years having folks tell me that Bush was the savior of the human race. I didn’t agree, but I at least expected him to be truthful, as he saw it.
He wasn’t. He flat ass lied about the need to pump money into the banking system “TODAY” or else. Hardly any of those funds were pumped in quickly, and the model had been set, the government was going to assume massive amounts of debt to save us.
I hadn’t realized how that spending would go viral, more massive additional debt added without so much as an objection.
I had also not realized how the government would use those funds to take ownership interest in the public sector entities.
Fascism wasn’t Obama’s brain-child. It actually started under our own village idiot.
I was wrong, but then I didn’t have all the information Bush did, and I trusted the man when I should have known better.
At least I’m willing to admit it.
For waht it’s worth, I agree with you, and think that BP did in fact act in a way they thought best for their shareholders. I was just pointing out that, while Obama’s actions are unseemly and unbecoming the leader of the most powerful, best country in the world (and much more that like a 3rd-world tinpot dictator), that the shareholders still had rights they could attempt to exercise.
And what I mean by that is, BP essentially got Obama to “force” them to turn over the responsibility for handling claims to a 3rd party.
Now, when a claim is disallowed, BP gets no blame for it. There were certainly going to be claims disallowed, and each one was going to get big press time, and even if the claims were false, BP was going to suffer.
Now there’s a 3rd party that will feel obligation to prove they are doing their job by rejecting claims, and when they do, the victims will have to rant about Obama and the government, not BP.
I didn’t see any “rights” afforded GM shareholders OR bondholders, who usually have more rights than shareholders.
No, we would have hated it. The mistakes of the past could not be undone even though politicians will always lie and tell us they can be, just to get power. McCain and Obama would fix it all with tax cuts, although not the same idea of tax cuts. But same idea, all candy. The bailouts resulted in a few even bigger banks as they bought up smaller banks with TARP money (why would this not happen?) . Too big to fail became even bigger.
Bailouts are like economic Keynesian stimuluses, they just delay the pain and the healing...in fact the current state proves it, we are in an endless recession as far as jobs go.
SS reform in the 1980s solved nothing, it just moved the problem until after the deaths of those that passed it. But the time when the pain can no longer be delayed is coming much sooner than ever before. The elected and the MSM are all about NOW, but they call it investments.
I agree with your comments. The true cost of the government tax credits for home buyers is now coming into focus. Just ended in April, they caused the 33% drop in new home sales in May.
And what happened to the auto industry, after government stimulus there? Why a big drop in new car sales of course.
The free market MUST be allowed to find it’s own equilibrium.
You’d think the lessons would be learned by now...
If some big banks failed , the federal government could have honored FDIC, the failed banks would have to be sold for pennies. Lending would be cut back except for those with great credit, worse than now. It would be ugly.
The US is so dependent on government economic stimulus now, primarily Bush and Obama, that significant cuts in spending would crash the current economy. And tax increases would be demanded politically to go with the spending cuts to make things worse (actually consumption taxes make the most sense, investment taxes make the least sense) .
There is no good way out of this. It’s like a alcoholic drinking quarts of vodka every day, going dry brings on DTs, possibly coma and death. So on Intervention the parents buy their kids more booze, “What is the alternative?? “ they aways ask. The answer is ‘pain’ and ‘more pain’.
Cuts in taxes do pay off. Here’s why.
If the government cuts taxes on small businesses, those businesses can afford to hire new employees. Those new employees pay taxes and the net sum is a gain in the revenues to the government
Under Ronald Reagan, the federal government’s receipts doubled. This was due in no small measure to tax cuts.
The problem was, Congress tripled expenditures during the same time frame.
There is a painless way out of this. Cut government spending and reduce taxes.
Then start a gradual reduction in government workers.
Cutting taxes while increasing spending is the most popular and gets lots of rationalizations by both parties for their side, but solves nothing. It’s just screwing future generations for the present. But it’s all we can expect now.
My problem is when both sides look us in the face and tell us that tax cuts and spending are going to increase tax revenue to fix the deficit. It’s all we get.
I believe we have to guit spending immediately. We could save trillions if Obambi would just pull his head out of his...
If he can’t, then I pray we win back Congress in November, so we can do it starting in January 2011.
And who am I kidding? He obviously can’t.
You are really kidding yourself assuming Republicans would do it if they had a chance. They might cut small things like ACORN, then Obama will veto the bill and tell voters Republicans want them to starve to make the rich more $$$. Then Republicans and Obama will make a bipartision deal to increase spending and cut some taxes.
When you say 'we' do you mean Republicans? I consider Rs and Ds : 'bad' and 'worse'.
FROM WHAT I HAVE SEEN UP TO TODAY, IS REPUBLICANS WHO ONLY GO PUBLIC WHEN THEY DEMAND AN APOLOGY FROM A FELLOW REPUBLICAN FOR CRITICIZING OBAMA
End of rant.
If I had been the CEO of BP, I would have “informed” Obama that he had no right to demand anything from me.
After the Republicans took control of Congress in 1994, they cut spending and brought federal expenditures to a nearly balanced status. Then Bush took over and all bets were off.
I recognize it’s dumb and dumber back there, but the reality is that Congress can balance the budget, and over time begin to whittle down the massive debt.
Increase receipts by lowering taxes and spurring new economic activity, job hires, corporate, and small business growth. Then limit spending until receipts grow beyond the outlay.
Reagan would have accomplished this if the idiots in Congress had kept spending down to a 25% growth rate during his term in the White House.
Yes, the Republican party sucks. More accurately, the leadership is out to lunch. They might just as well join the Democrat party in light of what they support.
Even the new Queen of the Frozen tundra can’t guite grasp that you don’t put a guy like McCain back in office.
None the less, the example from 1994, relating to how federal spending was brought down to a near balanced status, reveals it can be done, and in short order.
If we could double receipts under Reagan, and we did, then we can do that again with the proper stimulus. Tax cuts worked the last time.
All we need to do is get a Congressional majority that will get spending under control. It can be done. We’ve done it before.
Reagan was president and wouldn't technically be doing the spending himself , but he had his priorities and limiting deficit growth was not one of them. And yes the economy will get moving temporarily if you apply stimulus by cutting taxes and increasing spending(and it will get you re-elected most of the time) at the same time, even Keynes would agree to that. The problem is the ‘net’ revenue is negative and gets more negative. That is called the Santa Claus economic theory that more candy makes us healthy when we are overweight. (We need energy to exercise e right?)
Eventually we hit a wall. .
Please stick to the comments I made in my post. At no time did I state that we should continue deficit spending. Instead I stated we needed to cut spending to balance the books, and begin to pay off debt.
Reagan pushed through the tax cuts. They doubled the federal tax receipts. Please don’t tell me this was a net loss. It wasn’t and you should know it.
The president cannot control everything Congress does. Spending did skyrocket. He wasn’t introducing large new public mandate spending programs.
*
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.