During the president's 20-minute address to the nation Tuesday, he vowed to set up a BP-stocked fund to pay out damages to oil spill victims. The escrow fund would directly compensate people such as fishermen and tourism industry workers whose businesses have been damaged by the oil. Is this the best way to right BP's wrongs?
- The Oil Fund Is Crucial, writes Patrick Caldwell at the Minnesota Independent: "Full details of how the escrow account would be operated are pending, but early reports describe the account as one run by an independent panel, and it is intended to hold BP liable for all damages accrued due to the oil spill. The account’s funds will go toward paying for both cleanup efforts and damages for individuals such as Gulf Coast fishermen whose livelihoods have been damaged by the sudden toxicity in the ocean and beaches. In effect, the fund will prevent the government (and by extension, American taxpayers) from being fiscally responsible for BP’s actions."
- No, It Threatens the Rule of Law, writes the Wall Street Journal editorial board: "The BP oil spill is already a calamity for the Gulf Coast ecosystem and economy, but now that Washington is looking to deflect all political blame it could also became a disaster for the rule of law... The White House knows it has no legal authority to demand such a corporate ATM card, but it is counting on public anger to coerce BP to go along."
- How to Punish BP? Revamp Our Whole Energy Sector, writes Daniel Gross at Newsweek. He scolds the president for not talking about this in his speech: "There was little mention of tough, controversial, but necessary initiatives such as placing a price on carbon, or sharply raising the tax on gasoline, or instituting a cap-and-trade regime. Obama's speech was like a PowerPoint presentation with the last few slides missing."
- BP's Fines Should Also Fund a Foundation, writes Matt Petersen at The Huffington Post: "Mr. President, in addition to demanding BP put billions of dollars into escrow to pay for restoration, require BP to deposit $2.5 billion into an independent foundation as part of the fines the Justice Department needs to make them pay. The foundation would fund environmental, conservation, and clean energy initiatives along the Gulf Coast. There is a dearth of grant makers -- and hence, environmental organizations -- that are actually located along the Gulf Coast and/or that fund groups located there. We need to change that."
- We Need a New Legal Strategy for Holding Companies Accountable, writes Richard Epstein at The Wall Street Journal: "The best way to deter future spills is to expose drillers to the full costs of any mistake and not let any company without proper insurance near an oil derrick...A tough liability system does more than provide compensation for serious harms after the fact. It also sorts out the wheat from the chaff—so that in this case companies with weak safety profiles don't get within a mile of an oil derrick. Solid insurance underwriting is likely to do a better job in pricing risk than any program of direct government oversight. Only strong players, highly incentivized and fully bonded, need apply for a permit to operate."